Congressional Hearings
THE FISCAL YEAR 2019 DEPARTMENT OF ENERGY BUDGET
Congressional Hearings
SuDoc ClassNumber: Y 4.C 73/8
Congress: House of Representatives
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| AUTHORITYID | CHAMBER | TYPE | COMMITTEENAME |
|---|---|---|---|
| hsif00 | H | S | Committee on Energy and Commerce |
[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE FISCAL YEAR 2019 DEPARTMENT OF ENERGY BUDGET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 12, 2018
__________
Serial No. 115-117
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
31-172 PDF WASHINGTON : 2019
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COMMITTEE ON ENERGY AND COMMERCE
GREG WALDEN, Oregon
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
FRED UPTON, Michigan BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
MICHAEL C. BURGESS, Texas ELIOT L. ENGEL, New York
MARSHA BLACKBURN, Tennessee GENE GREEN, Texas
STEVE SCALISE, Louisiana DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio MICHAEL F. DOYLE, Pennsylvania
CATHY McMORRIS RODGERS, Washington JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
ADAM KINZINGER, Illinois PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida PAUL TONKO, New York
BILL JOHNSON, Ohio YVETTE D. CLARKE, New York
BILLY LONG, Missouri DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana KURT SCHRADER, Oregon
BILL FLORES, Texas JOSEPH P. KENNEDY, III,
SUSAN W. BROOKS, Indiana Massachusetts
MARKWAYNE MULLIN, Oklahoma TONY CARDENAS, California
RICHARD HUDSON, North Carolina RAUL RUIZ, California
CHRIS COLLINS, New York SCOTT H. PETERS, California
KEVIN CRAMER, North Dakota DEBBIE DINGELL, Michigan
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
JEFF DUNCAN, South Carolina
Subcommittee on Energy
FRED UPTON, Michigan
Chairman
PETE OLSON, Texas BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
JOE BARTON, Texas JERRY McNERNEY, California
JOHN SHIMKUS, Illinois SCOTT H. PETERS, California
ROBERT E. LATTA, Ohio GENE GREEN, Texas
GREGG HARPER, Mississippi MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia KATHY CASTOR, Florida
ADAM KINZINGER, Illinois JOHN P. SARBANES, Maryland
H. MORGAN GRIFFITH, Virginia PETER WELCH, Vermont
BILL JOHNSON, Ohio PAUL TONKO, New York
BILLY LONG, Missouri DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana KURT SCHRADER, Oregon
BILL FLORES, Texas JOSEPH P. KENNEDY, III,
MARKWAYNE MULLIN, Oklahoma Massachusetts
RICHARD HUDSON, North Carolina G.K. BUTTERFIELD, North Carolina
KEVIN CRAMER, North Dakota FRANK PALLONE, Jr., New Jersey (ex
TIM WALBERG, Michigan officio)
JEFF DUNCAN, South Carolina
GREG WALDEN, Oregon (ex officio)
C O N T E N T S
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Page
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 2
Prepared statement........................................... 3
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 4
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 5
Prepared statement........................................... 7
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 8
Witnesses
Rick Perry, Secretary, U.S. Department of Energy................. 9
Prepared statement........................................... 12
Answers to submitted questions \1\........................... 121
Submitted Material
Statement of 23 bipartisan Members of Congress................... 74
Letter to President Donald Trump from Members of Congress........ 77
Statement of Representative David B. McKinley.................... 81
Letter to Director Mick Mulvaney from Pacific Northwest
delegation..................................................... 85
Statement of the Utilities Technology Council.................... 88
Statement of the R Street Institute.............................. 90
Letter to President Donald Trump from Members of Congress........ 92
Letter to President Donald Trump from the International
Brotherhood of Teamsters....................................... 94
Letter to President Donald Trump from the United Mine Workers of
America........................................................ 96
Letter to President Donald Trump from the International
Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths,
and Forgers and Helpers........................................ 98
Letter to President Donald Trump from the Utility Workers Union
of America..................................................... 100
Letter to Secretary Perry from the Energy Industry Trade
Association.................................................... 102
Letter to Secretary Perry from the Pennsylvania Public Utility
Commission..................................................... 107
Letter to Secretary Perry from FirstEnergy \2\
Response letter to Secretary Perry from PJM...................... 113
Letter from NEI to Chairman Walden............................... 115
----------
\1\ The committee did not receive a response to Mr. Perry's
submitted questions for the record by the time of printing.
\2\ The information can be found at: https://docs.house.gov/
meetings/IF/IF03/20180412/108114/HHRG-115-IF03-20180412-
SD049.pdf.
THE FISCAL YEAR 2019 DEPARTMENT OF ENERGY BUDGET
----------
THURSDAY, APRIL 12, 2018
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2123 Rayburn House Office Building, Hon. Fred Upton
(chairman of the subcommittee) presiding.
Members present: Representatives Upton, Olson, Barton,
Shimkus, Latta, Harper, McKinley, Kinzinger, Griffith, Johnson,
Long, Bucshon, Flores, Mullin, Hudson, Cramer, Walberg, Duncan,
Walden (ex officio), Rush, McNerney, Peters, Green, Doyle,
Castor, Sarbanes, Tonko, Loebsack, Schrader, Kennedy,
Butterfield, and Pallone (ex officio).
Staff present: Mike Bloomquist, Staff Director; Samantha
Bopp, Staff Assistant; Daniel Butler, Staff Assistant; Kelly
Collins, Legislative Clerk, Energy/Environment; Wyatt
Ellertson, Professional Staff, Energy/Environment; Adam Fromm,
Director of Outreach and Coalitions; Jordan Haverly, Policy
Coordinator, Environment; Ben Lieberman, Senior Counsel,
Energy; Mary Martin, Chief Counsel, Energy/Environment; Drew
McDowell, Executive Assistant; Brandon Mooney, Deputy Chief
Counsel, Energy; Mark Ratner, Policy Coordinator; Annelise
Rickert, Counsel, Energy; Dan Schneider, Press Secretary; Peter
Spencer, Professional Staff Member, Energy; Jason Stanek,
Senior Counsel, Energy; Austin Stonebraker, Press Assistant;
Hamlin Wade, Special Advisor, External Affairs; Everett
Winnick, Director of Information Technology; Andy Zach, Senior
Professional Staff Member, Environment; Priscilla Barbour,
Minority Energy Fellow; Jeff Carroll, Minority Staff Director;
Jean Fruci, Minority Energy and Environment Policy Advisor;
Tiffany Guarascio, Minority Deputy Staff Director and Chief
Health Advisor; Zach Kahan, Minority Outreach and Member
Service Coordinator; Rick Kessler, Minority Senior Advisor and
Staff Director, Energy and Environment; Jourdan Lewis, Minority
Staff Assistant; John Marshall, Minority Policy Coordinator;
Alexander Ratner, Minority Policy Analyst; Tim Robinson,
Minority Chief Counsel; Tuley Wright, Minority Energy and
Environment Policy Advisor; C.J. Young, Minority Press
Secretary; and Catherine Zander, Minority Environment Fellow.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Good morning, everyone. So it has been 6 months
to the day, Mr. Secretary, since you last appeared here and I
certainly welcome you back. We all do. And at that October 12th
hearing we talked about your efforts to refocus the
Department's limited budget resources to address what you see
as the most pressing challenges.
You outlined a number of priorities which included
promoting the Nation's energy security, strengthening the
Nation's national security and nuclear deterrent, spurring
innovation, and yes, cleaning up the legacy Cold War sites. The
proposed $30.6 billion budget that we are discussing today
reflects those priorities.
There is $15 billion for the National Nuclear Security
Administration which would continue critical spending for DOE's
defense and national security programs at a level some $2
billion higher than the previous administration spending. The
budget maintains about $5.5 billion dollars for the Office of
Science and its fundamental and basic research programs which
is the seed bed for innovation. That is up somewhat from the
previous administration spending. And there is $6.6 billion for
the Office of Environmental Management, the highest level in
some 15 years.
Concerning the various energy programs, the budget provides
$2.5 billion which represents a substantial cut, overall, from
the previous spending across these programs. And I would
encourage you to continue working with the committee to
identify additional authorities that you need to be more
effective and I know that you will do that.
We also need to recognize that as our energy systems,
market mechanisms, and Federal and State environmental policies
become more entangled, existing and emerging hazards to energy
systems may have far more reaching consequences than we may be
accustomed to. For example, a successful cyber attack on
certain business systems would certainly undermine confidence
in energy trading systems even if it doesn't pose a threat to
physical operations.
A major cold event like January's bomb cyclone can lead to
severe shortages in power or energy when people need it most
or, as testimony at our second modernization hearing this year
noted, factors that lead to the decline in our Nation's nuclear
infrastructure can undermine long-term national security and
the international leadership on nonproliferation and safety.
So these energy policies and energy securities present
serious challenges, no question, challenges that transcend our
current market setup. It is essential for you as Secretary of
Energy to survey energy and national security risks, to
identify the implication of our existing energy policy and
energy infrastructure, recommend appropriate action, and help
us make more informed policy decisions. Your budget should
provide the resources for you to do that work and your
leadership should focus on tackling those large and
consequential questions.
I look forward to this morning's discussions and would
yield for an opening statement to the ranking member of the
Energy Subcommittee, Mr. Rush from Illinois.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
It has been 6 months to the day since you last appeared
here, Secretary Perry, and I welcome you back. At our October
12 hearing, we talked about your efforts to refocus the
Department's limited budget resources to address what you see
as the most pressing challenges.
You outlined several priorities, which included: promoting
the Nation's energy security, strengthening the Nation's
national security and nuclear deterrent, spurring innovation,
and cleaning up the legacy Cold War sites.
The proposed $30.6 billion budget we are discussing today
reflects those priorities. There is $15 billion for the
National Nuclear Security Administration, which would continue
critical spending for DOE's defense and national security
programs at a level some $2 billion higher than the previous
Administration's spending.
The budget maintains about $5.4 billion for the Office of
Science and its fundamental and basic research programs, which
is the seedbed for innovation. This is up somewhat from the
previous Administration's spending. And there is $6.6 billion
for the Office of Environmental Management--the highest level
in 15 years.
Concerning the various energy programs, the budget provides
$2.5 billion, which represents a substantial cut overall from
previous spending across these programs. This has raised
questions and concerns from Congress, which I am sure you are
prepared to discuss today.
The questions the budget raises are important. Examining
spending priorities in an era of constrained budgets,
identifying ways to get more out of each taxpayer dollar spent,
focusing resources on the most essential and pressing problems
are critical for successful Secretarial management.
This Committee's work on DOE modernization is intended to
strengthen your ability as Secretary to manage and execute the
Department's missions.
Our most critical modernization priority right now is to
make sure the Department can confront the emerging threats to
our nation's energy security.
This involves enhancing the Department's cybersecurity and
emergency response capabilities, which are needed for a wide
range of emerging threats to our energy systems.
Your new office to focus on cybersecurity and energy
emergencies makes sense. It is responsive to concerns this
Committee has raised over the years that DOE's energy security
functions were buried in programs with other priorities.
While this action is a positive step, I think the
Department and policy makers must do more to address emerging
threats and other hazards to our energy systems--natural and
man-made.
This is why we are moving several bi-partisan bills to
strengthen and clarify DOE's cyber security and emergency
authorities through the Committee process. And I would
encourage you to continue working with the Committee to
identify additional authorities you need to be more effective.
We also need to recognize that, as our energy systems,
market mechanisms, and Federal and State environmental policies
become more entangled, existing and emerging hazards to energy
systems may have more far reaching consequences than we may be
accustomed to.
For example, a successful cyber-attack on certain business
systems could undermine confidence in energy trading systems,
even if it doesn't pose a threat to physical operations. A
major cold event, like January's ``bomb cyclone,'' can lead to
severe shortages in power or energy when people need it most.
Or, as testimony at our second modernization hearing this year
noted, factors that lead to the decline in our nation's nuclear
infrastructure can undermine long term national security and
international leadership on nonproliferation and safety.
These energy policy and energy security present serious
challenges--challenges that transcend our current market set
up. It is essential for you, as the Secretary of Energy to
survey energy and national security risks, to identify the
implications of our existing energy policies and energy
infrastructure, recommend appropriateaction--and help us make
more informed policy decisions.
Your budget should provide the resources for you to do this
work. And your leadership should focus on tackling these large
and consequential questions. I look forward to this morning's
discussion.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Good morning. I want to thank you, Mr. Chairman,
and I want to welcome you, Mr. Secretary. And, Mr. Secretary, I
really like how you entered into the room. You came over and
shook hands on our side of the aisle, here, and your personal
touch means a lot. And in this era of extremism on both sides,
really, the human touch you exhibited means a lot to me and I
want to thank you for it.
Mr. Secretary, I look forward to working with your office
to ensure that the Department moves the Nation's energy
policies forward in a way that benefits all Americans and,
indeed, benefits all communities. History has shown all of us
the importance of having people with different perspectives and
different life experiences at the proverbial table when
important and consequential decisions are initially being
considered.
So when I talk about having diversity in leadership
positions at DOE, it is not just for the sake of having
diversity. But rather, it helps to ensure that specific groups
or communities aren't being excluded whether it is intentional
or not. When decisions are being made regarding which
universities are awarded research grants, or which businesses
can receive contracts, or even how a specific policy might
impact a particular community, having a sense of diversity,
having real diversity in demographics and in opinion, helps to
make sure certain groups aren't being left out. So, Mr.
Secretary, I look forward to meeting with you soon to discuss
your thoughts on this very issue and to see how we might be
able to work together to make sure that the Department is
providing aid and resources to all communities in a way that is
sustainable regardless of the administration that is in office.
Mr. Secretary, besides the objective of making sure the
Department elects inclusive policies I also have strong views
in regards to the fiscal year 2019 budget proposal that was put
forth by the administration. Specifically, this budget proposal
will cut the Office of Energy Efficiency and Renewable Energy
by 70 percent from fiscal year 2018 levels with over $600
million of these reductions coming from energy efficiency
programs.
These proposed cuts are a nonstarter as far as I am
concerned. They would severely and negatively impact low-income
families throughout my home State of Illinois and the Nation by
eliminating extremely popular and much-needed initiatives such
as the Weatherization Assistance Program and the STAR ENERGY
program. Additionally, the proposal would increase funding for
the Office of Science, which funds the 17 national
laboratories, by $869 million from fiscal year 2018 levels,
eliminating the Advanced Research Program Agency, slash,
Energy, or ARPA-E.
The budget proposal would also get rid of all DOE loan
programs including the Title XVII innovative clean energy
projects loan program and the Advanced Technology Vehicles
Manufacturing loan program. Mr. Secretary, this fiscal year
2019 budget proposal reflects exactly the wrong vision for the
nNation and it would take us backwards on critical issues like
climate change, while also hampering American innovation and
global competitiveness.
Mr. Secretary, again I want to thank you for being here and
I look forward to working with you to address these important
issues going forward. With that, I yield back the balance of my
time.
Mr. Upton. The gentleman yields back. The chair would
recognize the chair of the full committee for an opening
statement, the gentleman from the good State of Oregon, Mr.
Walden, for 5 minutes.
Mr. Walden. Last time it was the great State of Oregon.
Mr. Upton. I know.
Mr. Walden. I don't know how we slid downhill.
Mr. Upton. Michigan is the great State. Oregon is a good
State.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Oh, I see.
I want to start of course by welcoming the Secretary and
Mr. Vonglis, thank you both for being here. I believe it is the
Secretary's second visit before our committee and we appreciate
that. We like regular visitors here. We don't give, you know,
Hilton Honor points or anything for your stays, but we do
appreciate your being here and especially to discuss the fiscal
year 2019 budget request from the President.
As we have explored through the DOE modernization hearings,
lots has changed at the Department of Energy over the 40 years
since it was first created especially on the national security
and energy front. And I know that is a passion of yours on
cybersecurity, Mr. Secretary, and protecting our energy grid,
our gas pipeline system and all from attack. Under your
leadership, Mr. Secretary, the Department is undertaking a very
ambitious set of reforms to strengthen our energy security, to
reduce regulatory burdens, and to spur economic growth in
America. Today's hearing will provide you with an opportunity
to update the committee on the progress made toward achieving
those goals and to discuss how the budget request will help
further DOE's mission to advance the national economic and
energy security of the United States.
As we have discussed before, DOE and Congress must work
cooperatively to adapt management and mission priorities to
reflect the realities of today's world. At my direction,
Chairman Upton and Vice Chairman Barton have been working with
Mr. Rush and others in terms of how do we organize the
Department of Energy for the next generation. And we appreciate
that work that is underway and we also appreciate the work of
your team, Mr. Secretary, to give us counsel and guidance from
time to time as we work on legislation here to strengthen the
physical security and cybersecurity of the Nation's electric
grid and pipelines and streamline the process for reviewing LNG
export applications.
The Department of Energy has been a good partner and we
appreciate the testimony and your assistance in fine tuning
these bills. It is my expectation this constructive approach
will continue to pay off as we dig deeper to address DOE's core
missions of nuclear energy, environmental cleanup, and mission-
enabling science.
The President's fiscal year 2019 budget requests $30.9
billion for the Department to deliver on its commitments to the
American people. Almost half that budget would go toward the
Department's nuclear security mission, roughly a quarter would
be spent on environmental management, the remaining amount
would go toward DOE's energy and science programs. I am pleased
to see that the budget also includes funding to fulfill the
Department of Energy's legacy cleanup responsibilities
including at the Hanford Site.
Now it is located along the Columbia River, you and I both
went there last August and I appreciated your doing that and
touring McNary Dam as well. The cleanup work at Hanford
requires deliberate, careful, and very clear oversight by the
Department of Energy and we will continue to monitor the
projects, particularly involving worker safety.
As we talked before the hearing, Mr. Secretary, I would
love to explore your views on what has happened recently there
with some potential radiation emissions from dust and the
effect on workers and the overall cleanup. While many technical
and logistical challenges remain, we are beginning to see some
progress and I trust your renewed focus on Hanford will
accelerate the results of cleaning up that mess.
I am pleased the budget includes funding to restart Yucca
Mountain project--Mr. Shimkus also probably shares some
happiness with that move--so the waste currently sited at
Hanford and around the country will be permanently disposed of.
That remains a big priority for this committee. We will get
Yucca legislation to the floor. We passed it out here on a big
bipartisan vote, we want to get it down to the President's
desk.
This year's budget request is notable in its emphasis on
energy security, in particular in combating physical and cyber
attacks to our nation's energy infrastructure. As the sector-
specific agency for cybersecurity for the energy sector, the
Department of Energy must ensure unity of effort and serve as
the day-to-day referral interface for the prioritization and
coordination of activities across the government.
As I said, I got a firsthand look at some of DOE's testing
capabilities and unique facilities and advanced tools during a
recent visit to the Idaho National Laboratory in Idaho Falls.
Mike Simpson, my colleague from Idaho, and I were there. Your
experts are working to protect our economy and safety of our
citizens from hackers who are waging a continuous cyber war on
our critical infrastructure in this country.
Just last month for the first time ever, the Department of
Homeland Security and the FBI jointly issued an alert formally
accusing the Russian government of a widespread hacking
campaign targeting a wide swath of our energy infrastructure
including our grid, pipelines, and nuclear facilities. I
commend you, Mr. Secretary, for taking this threat as seriously
as you do and for your efforts to improve the Department's
ability to detect and respond to these emergency threats.
While the Department works to keep the lights on in the
event of a cyber attack, it is also working to improve the
resiliency and reliability of the electric grid in the face of
a rapidly changing power generation mix. So, Mr. Secretary, we
appreciate that. I will have questions for you about making
sure that the Bonneville Power Administration remains a vibrant
part of the Northwest infrastructure. I know the administration
may have a different view on that but we will overcome that.
So thank you, Mr. Secretary, delighted to have you here,
and I yield back the balance of my time.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
I'd like to begin by welcoming Secretary Perry to his
second appearance before the Energy and Commerce Committee to
discuss the President's Fiscal Year 2019 Budget Request for the
Department of Energy. As we've explored through our ``DOE
Modernization'' hearings, a lot has changed since Congress
created the department over 40 years ago--especially on the
national security and energy security front.
Under the Secretary's leadership, the department is
undertaking ambitious reforms to strengthen our energy
security, reduce regulatory burdens, and spur economic growth.
Today's hearing will provide the secretary with an opportunity
to update the committee on the progress made toward achieving
the goals he set for the department, and to discuss how the
budget request will help further DOE's mission to advance the
national, economic, and energy security of the United States.
As we've discussed before, DOE and Congress must work
cooperatively to adapt its management and mission priorities to
reflect the realities of today. At my direction, Chairman Upton
and Vice Chairman Barton have begun this work, and it's
starting to bear fruit. Over the last few months, the committee
has held legislative hearings on bipartisan bills to enhance
DOE's emergency response capabilities, strengthen the physical
security and cybersecurity of the nation's electric grid and
pipelines, and streamline the process for reviewing LNG export
applications. DOE has been a good partner, contributing
testimony and technical assistance to help fine-tune these
bills. It's my expectation that this constructive approach will
continue to pay off as we dig deeper to address DOE's core
missions of nuclear energy, environmental cleanup, and mission-
enabling science.
The President's FY 2019 budget requests $30.9 billion
dollars for the Department of Energy to deliver on its
commitments to the American people. Almost half of the budget
would go toward the department's nuclear security mission,
roughly a quarter would be spent on environmental management,
and the remaining amount would go toward DOE's energy and
science programs.
I'm pleased to see that the budget also includes funding to
fulfill DOE's legacy cleanup responsibilities, including the
Hanford Site, which is located just across the Columbia River
from my constituents. The secretary and I toured Hanford
together last year. The cleanup work at Hanford requires
deliberate oversight by DOE and we will continue to monitor the
projects, particularly when involving worker safety. While many
technical and logistical challenges remain, we're beginning to
see some progress and I trust that Secretary Perry's renewed
focus on Hanford will accelerate these results. I'm pleased the
budget includes funding to restart the Yucca Mountain project,
so the waste currently sitting at Hanford, and around the
country, will be permanently disposed.
This year's budget request is notable in its emphasis on
energy security, in particular, combating physical and cyber-
attacks to our nation's energy infrastructure. As the sector-
specific agency for cybersecurity for the energy sector, DOE
must ensure unity of effort and serve as the day-to-day federal
interface for the prioritization and coordination of activities
across government.
I got a firsthand look at some of DOE's testing
capabilities, unique facilities, and advanced tools during my
recent tour of Idaho National Laboratory, where our experts are
working to protect our economy and the safety of our citizens
from the hackers who are waging cyberwar on our critical
infrastructure. Just last month, for the first time ever, the
Department of Homeland Security and the FBI jointly issued an
alert, formally accusing the Russian government of a widespread
hacking campaign targeting a wide swath of our energy
infrastructure, including our grid, pipelines, and nuclear
facilities. I commend the Secretary for taking this threat
seriously, and for his efforts to improve the department's
ability to detect and respond to these emerging threats.
While the department works to keep the lights on in the
event of a cyber-attack, it is also working to improve the
resiliency and reliability of the electric grid in the face of
a rapidly changing power generation mix. Congress has provided
the secretary with a variety of tools to address grid
reliability, including Emergency Order authority under Section
202(c) of the Federal Power Act to avert a power crisis. While
this authority has been rarely used in the past, DOE has
already received two requests within the past 12 months,
including a potentially precedent-setting request involving
struggling coal and nuclear plants in the Midwest.
As I've stated before, I support an all-of-the-above
approach, and feel strongly that a diverse generation mix is
essential to our nation's energy security. I look forward to
continue working with Secretary Perry as he weighs these
important issues.
Mr. Upton. The gentleman yields back. The chair would
recognize the ranking member of the full committee, the
gentleman from New Jersey, Mr. Pallone, for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman.
Secretary Perry, welcome back. I hope you feel welcome,
because judging by President Trump's fiscal year 2019 budget, I
think here in Congress we have more confidence in you and your
Department than in the President. I say that because we
recently passed a bipartisan omnibus appropriations bill that
not only increased funding for many DOE programs above the
President's budget request, but also increased funding above
2017 enacted levels.
And I am glad that Congress is going on record that it will
not accept these severe cuts being proposed by the President. I
don't envy the position you are in today, having to defend a
Department of Energy budget that slashes funding for clean
energy research, walks away from popular efficiency programs
that save consumers money, eliminates programs that fund
cutting-edge energy research, and helps low-income families
weatherize their homes.
And this budget also slashes federal investments in DOE
programs that help mitigate carbon emissions which are, as the
science clearly shows, the main drive of climate change. The
President's budget proposes a particularly crippling 70 percent
cut to DOE's Office of Energy Efficiency and Renewable Energy
and that office has succeeded in growing clean energy
technology deployment, developing cost-saving energy efficiency
programs, and promoting advanced vehicles and alternate fuels.
If we put the brakes on clean energy research, development, and
deployment, we risk falling behind countries like China that
are prioritizing clean energy investments that are spurring new
industries and creating jobs and this is not a way to grow and
expand our economy, in my opinion.
I am also very concerned about the budget cuts to
efficiency programs. My frustration is compounded by the fact
that this administration has been slow-walking the publication
of four product efficiency standards that were completed over a
year ago. I simply do not understand why you would block the
completion of these standards which are cost effective and will
save consumers money. The standards have also been fully
negotiated. The U.S. District Court has ordered DOE to finally
publish these standards, but the Trump administration is
currently wasting taxpayer money to appeal the order. The law
requires the DOE to publish these standards and it should be
done immediately.
The budget proposal also makes several misguided changes to
the structure of the power marketing administrations, PMAs. It
directs the Federal Government to sell off a large portion of
the transmission system in several PMAs; it also requires the
PMAs to charge consumers for electricity based on the rates of
comparable private utilities instead of simply recouping costs.
And both of these actions, I think, are ill-conceived and will
lead to higher electricity bills for those who purchase
electricity from a PMA and that is clearly bad for consumers.
Another proposal I find especially foolish is the
President's plan to abolish the Northeast Gasoline Supply
Reserve which was launched after several gasoline shortages
during Superstorm Sandy. The administration's reasoning for
this shortsighted proposal that the reserve, and I quote, has
not been utilized since its establishment. By that logic, we
might as well discard the Federal Government's stockpile of
smallpox vaccines because the vaccines have not been used since
the stockpile was created. And I have introduced legislation to
authorize the reserve. I would prefer to work with you, Mr.
Secretary, to perfect and move that legislation, but I
certainly will fight any attempt to eliminate the reserve.
And, finally, I must address the recent request the
Department received from FirstEnergy and Murray Energy to use
section 202(c) of the Federal Power Act to keep the companies'
cash-strapped coal and nuclear plants operational. Mr.
Secretary, judging by your recent statements and those of
Assistant Secretary Walker, it sounds like you appreciate that
section 202(c) is for serious grid emergencies as explicitly
designed in the statute and not designed to bail out power
plants that are losing money.
So this request by FirstEnergy, in my opinion, is like
calling 911 because your credit card got declined. It has
united Republicans, Democrats, energy companies and
environmental groups, regulators, and consumers in opposition
because it is clearly and simply not just inappropriate but, I
think, illegal.
So again thank you for testifying before our committee
today. I know you were here before and, believe me, we
appreciate the fact that you as a Cabinet member don't hesitate
to come here. Thank you.
I yield back, Mr. Chairman.
Mr. Upton. The gentleman yields back. And I would just echo
many of the positive comments from both sides of aisle that we
do appreciate your presence here and your frequent visits to
Capitol Hill and ability to reach out again to both sides. And,
Mr. Secretary, you are recognized to give an opening statement
and then we will proceed with questions.
STATEMENT OF THE HONORABLE RICK PERRY, SECRETARY, U.S.
DEPARTMENT OF ENERGY
Secretary Perry. Thank you, Mr. Chairman. And Chairman
Walden, thank you for your comments. And Ranking Member Rush
and along to each of you, it is my privilege to be back in
front of you again. And, Mr. Rush, just as a side comment, I
hope that we all can reflect a real civility and, frankly,
brotherly and sisterly love as we go forward in this process.
And it is my honor to get to serve this country once again in
this role that I have today and it is a great privilege to be
interacting with each of you as public servants. You all
sacrifice to serve this country and I am greatly appreciative
of that.
This budget represents a request to the American people
through their representatives in Congress to fund the
priorities of this Department. It underscores DOE's commitment
to stewardship, accountability, service; I hope that our
interactions with you and other committees of Congress over the
past year have underscored that commitment. Our DOE leadership
team has appeared before congressional committees 23 times in
2017 and we are proud of the strong relationship that we have
built on the Hill.
When I first appeared before this committee last year, I
committed DOE to advancing several key objectives. I noted that
we needed to accelerate our exascale computing capability; to
modernize our nuclear arsenal; to continue to address the
environmental legacy of the Cold War; advance domestic energy
production; better protect our energy infrastructure. This
fiscal year 2019 $30.6 billion budget request for the
Department seeks to advance these and other goals.
Mr. Chairman, DOE's supercomputing and other advanced
technology capabilities play a crucial role in combating
threats to our energy and national security infrastructure. As
this committee knows from its strong bipartisan support of the
21st Century Cures legislation, these supercomputing assets are
also critical to finding cures for cancer, cardiovascular
disease, and other health challenges.
In the Precision Medicine Initiative section of the Cures
Act, section 2011, you encouraged the Secretary of Health and
Human Services to coordinate with the Secretary of Energy to
identify and address the technology needs for the initiative.
So last week I met with HHS Assistant Secretary for Health and
the Surgeon General to discuss how we can work together to
address these goals and further utilize our capacity to address
similar health problems faced by American veterans.
Mr. McNerney, you and I had talked about this with a
little more specificity and I hope to be able to come up and
sit down with you because I know that you have a very real
interest in this particular area and I just think there is
extraordinary opportunity here.
On a parallel track, DOE has been working with the VA to
utilize information from millions of cancer patients' records
to determine optimal treatment. We are now bringing these tools
to bear on veterans' health issues ranging from traumatic brain
injury to suicide prevention, prostate cancer, cardiovascular
disease; in addition, we recently announced a major RFP to
accelerate our efforts to regain American leadership in
supercomputing. The machines we will build and will deploy will
be 50 to 100 times faster than any of our current computers and
will hold immense potential to help to answer the most
challenging questions in science and medicine and national
security.
Regarding national security let me say that the United
States Government has no greater or more solemn duty than to
protect its citizens. Because nuclear deterrents are critical
to our defense, last year we promised a much-needed upgrading
of our arsenal. This year we requested an 8.3 percent increase
to align ourselves with the President's Nuclear Posture Review
and the National Security Strategy. We also focused on
addressing the environmental legacy left at the Department's
sites and this year we are requesting additional funds for that
obligation.
We also have a duty to advance American energy
independence. Thanks to ingenuity, innovation, we are on the
cusp of realizing that objective. In the coming years we will
produce an abundance of energy from a diverse number of
sources. Not only are we becoming energy independent, we are
exporting to our friends, our allies, and our partners. Just
last year we became a net exporter of natural gas and today we
are exporting LNG to 27 countries on five different continents.
And as our economy expanded and the energy development
reached new heights, our environment became cleaner. From 2005
to 2017, we led the world in reducing carbon emissions cutting
them by 14 percent over that time. The lesson is clear, we
don't have to choose between growing our economy and caring for
our environment and that is the heart of the new energy realism
that I recently described.
To drive further, energy innovations we are requesting
continued funding for our energy program offices as well as
more funding for research in fossil fuels and nuclear power
including small nuclear reactors, the modular reactors. At the
Department we have a duty to ensure our energy actually
delivers to its place of use without interruption. Our national
and economic security depend on a diversity of fuel sources and
the ability to deliver electricity where and when consumers
need it.
My greatest focus as the Secretary of Energy is to ensure
that our grid is not only reliable but that it is resilient.
That is why last year I promised to step up our efforts to
protect and maintain America's energy infrastructure in the
face of all hazards. The devastation caused by the 2017
hurricanes highlighted the importance of improving grid
reliability and resilience in the face of natural disasters. We
also need to protect it from manmade attacks including cyber
attacks. So this year we have requested funding increases to
strengthen cybersecurity as well as the Department's cyber
defenses. We are also seeking to establish a new Office of
Cybersecurity, Energy Security, and Emergency Response which
will be led by a new assistant secretary.
Now since many of our nation's greatest energy
breakthroughs have come through the work of our national
laboratories, we need to ensure their ability to innovate.
Meeting the people driving our innovation agenda and imploring
them to reach even higher are some of the reasons I am
committed to visit each of our national labs. Thus far, I have
visited 13 of those 17 labs and also visited other key DOE
sites. At each site one thing was made abundantly clear, those
who work for the Department are patriots committed to serving
the American people.
In the end it will be you, our elected representatives, who
will decide how to best allocate the resources of our
hardworking taxpayers. My pledge to you is that we will do our
best to use those resources wisely and in pursuit of the vital
goals that I have just outlined. Thank you and it is my
privilege again to be in front of you and attempt to answer
your questions.
[The prepared statement of Secretary Perry follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Upton. Well, thank you, Mr. Secretary. At this point we
will move to questions from both sides. We appreciate again
your presence here.
I want to first ask, going back to what Chairman Walden
said, the great State of Michigan, one of the reasons why it is
such a great state is because of the Great Lakes. And I would
like to talk to you briefly about the Straits of Mackinac which
you know that we both deeply care about. About a week and a
half ago, we learned that two high voltage transmission cables
that run under the straits near the Mackinac Bridge were
destroyed by a ship's anchor and was taken out of service.
Enbridge's Line 5 which carries not only crude oil, light
crude, and also propane, also runs under the straits only a
short distance away, was also struck by that same anchor and
the pipeline was damaged. It was a near miss. It could have
been catastrophic for sure.
And even though the strike on Line 5 did not cause an oil
spill, that is something we all worry about. Earlier, Governor
Snyder and I reached an agreement with Enbridge who maintains
that line to look at a number of options to replace that line.
In my view, it needs to be directionally drilled in terms of a
new line that needs to replace the existing line. I know that
they are looking at a number of different options, and
particularly with the events of the last 2 weeks it prompts us
to try and expedite that process even faster.
A couple questions I have as I work with the governor's
office and others, can you help us in looking at a replacement
for this line as it relates to the permitting that would be
required and other efforts within the administration to replace
that Line 5 with a safer option than we have today?
Secretary Perry. Yes. Well, the short answer is yes. But if
I could just expand a moment, I think it is really important
for us to recognize that our infrastructure not only in some
cases as this one, I would suggest, is aging, but also the
expansion of that infrastructure to be able to take advantage
of this new energy resource, if you will. Twelve years ago
there was a fellow traveling around the country making a pretty
good living giving a speech about peak oil, and the world has
so changed and America is in such a different position and
being able to move those resources safely and efficiently is
really important to the economy and to the national security of
this country.
Mr. Upton. Well, you might remember that there was an
Enbridge pipeline break a number of years ago and when that
happened we actually passed the Upton-Dingell bill and it
passed with maybe one vote against it in the Congress. We
upgraded all of the safety standards and fines for new
pipelines, and one of the provisions in that bill in fact was
that any new pipeline built that goes underneath a body, a
significant body of water, major river, et cetera, certainly
the Straits of Mackinac, would have to be buried underneath
that lake or riverbed and not be trenched or simply laid on the
top.
So what I have been pushing Enbridge to do, and I know the
governor is on board as well, is to actually go underneath and
use that technology that is available today so that we can get
this thing replaced. One other question relating to that, can
you ask your department of energy and reliability to actually
study what would happen if this line went out for some type of
duration? It leads to a major refinery over in Detroit and then
that oil is refined and wholesaled throughout the Midwest. And
I would like to know what the impact might be particularly on
the consumers, and if you could help us get that, that would be
good.
Secretary Perry. I would be happy to do that, Mr. Chairman.
Your common, or let me put it this way, I think our common
sense, collectively, tells us that if we lose a major line to a
refinery like that, that it is going to have a negative impact
not only on the consuming public, but also I will suggest, and
it is one of the things I think you are very wise to ask us to
take a look at this, on the national security side of it.
I don't know where that fuel goes in its final stages, but
you all have major military bases in that part of the country
and it could have a negative impact on their ability to have
fuel available for the security of this nation.
Mr. Upton. The last question I have is while we are talking
about pipeline safety I want to turn to the recent news
regarding cyber attacks on pipelines and as you know that there
was a published report just in the last week or two as to a
cyber attack on one of our pipelines here. I know that that is
almost a daily occurrence.
Why is it so important that DOE take a strong role in
coordinating the federal response? You may know that I have a
bill, H.R. 5175, the Pipeline and LNG Facility Cybersecurity
Preparedness Act, which would enhance DOE's ability to
coordinate pipeline security and emergency response. Can you
work with us as we move that bill forward?
Secretary Perry. Yes, sir. Obviously, the world has really
changed from the standpoint of, and it is not just a few times.
It is thousands of times a day that there are bad actors out
there whether they are nation states or whether they are just a
single individual with ill intent in mind that are trying to
penetrate into systems all across this country, some of them
that could have catastrophic impact on our ability to deliver
energy.
It is the reason that we have asked for these additional
funds to stand up this office that we refer to as CESER or
Cybersecurity. I want to thank Joe Barton for the work that he
has done on reorg to help us from the standpoint of modernizing
the agency to look at the changes that have just happened,
let's say, in the last decade in this country relative to the
new energy resources we have available, the infrastructure that
we are going to need, and the security and resiliency of that
infrastructure, obviously including the grid that is out there.
Mr. Upton. Thank you much. I would yield to the ranking
member, Mr. Rush.
Mr. Rush. Well, thank you, Mr. Chairman. Mr. Secretary,
again I want to thank you for agreeing to meet with me in the
near future to discuss ways that we can ensure that the
Department of Energy reflects the nation's diversity not only
within the mid-level staff levels, but also within the highest
levels of the decision making process and positions. With your
help, Mr. Secretary, I want to ensure that we have diverse
perspectives structurally in the most critical areas, and these
areas include within your office, the Institutional Review
Board, the Energy Advisory Board, the Senior Executive Service,
now, and of course at the highest levels of the national labs.
That said, Mr. Secretary, what is the justification for
cutting the Office or Energy Efficiency and Renewable Energy by
70 percent from fiscal year 2018 levels? As you know, energy
efficiency is one of the few issue items that enjoys widespread
bipartisan support here in the Congress. Initiatives like the
Weatherization Assistance Program are extremely popular not
only with policymakers here, but really all across the country
as it helps to conserve energy while also lowering utility
bills for low-income families. Why is the administration
proposing to cut or completely eliminate these critical
programs?
Secretary Perry. Mr. Chairman, Ranking Member, thank you.
Let me address, you asked two questions. On the focus on
minorities and minorities at the DOE, I think we are focused on
that. Twenty seven percent of our entire enterprise is made up
by minorities. I think it is really important to bring to the
committee's attention that we also have a focus on small
business contracting at the laboratories so that women-owned
and minority-owned businesses have the expertise to be able to
make their way through the myriad contracting issues that are
there.
One of the other things I am really proud of is that we
have a program at the DOE to promote diversity in the STEM area
back in both high schools and colleges to be able to get young
diverse members of our society pointed in the right direction,
engineering, math, science, technology, those, and I am really
proud of what DOE is doing in that line. And I want to come and
sit down with you in your office and talk more about this and
the ways that we can do better.
Let me shift over to the EERE and to your concerns. And I
heard Mr. Pallone's concerns as well dealing with EERE and the
reductions there and I want to try to explain them in this way
and then have one comment at the end of that. One of the things
that we have seen is that as technology has become more mature,
for instance, both solar and wind, and I try to remind folks
that while I was the Governor of Texas we produced more wind
energy than any other state in the Nation, passed up every
state in the country and produced more wind energy than five
countries and I am committed to having that diverse portfolio,
but those are now becoming mature in the sense of their market,
marketability and going to the market and being commercialized.
So the dollars that have historically been spent to bring
those up to the place where they can be mature, we don't feel
like those dollars need to be expended now. Are there other
areas that we need to be focused on and yes, grid integration
is a great example of it, energy storage, kind of beyond
batteries, if you will. Another DOE area that we are focusing
on is in hydrogen R&D. Those are early stage and that is where
you are going to see us focused with the dollars.
So, we will always have a give-and-take back-and-forth
about are you spending enough here, are you spending enough
there, and I respect that. As a former appropriator, as a
former agency head, and then as a CEO as the governor, I really
respect the authorizers, the appropriators, and the
administrative or the executive side of this. I know what my
job is, and my job is to work with you, which I will do on a
daily basis to find that appropriate ground. But I will promise
you this that where you appropriate and where you authorize we
will work to make you very proud that we manage it absolutely
the most efficient way that it can be.
Mr. Rush. I yield back, Mr. Chair.
Mr. Upton. The chair would recognize the gentleman from
Oregon, a good state, Mr. Walden.
Mr. Walden. We are a good state now, thanks. Thank you, Mr.
Chairman. And, Mr. Secretary, again thank you for being here.
Before I say anything we should also draw attention to the fact
it is Mr. Walberg's birthday today so happy birthday--from
Michigan, the great State of Michigan.
Mr. Secretary, I want to start by talking about Bonneville
Power Administration. I appreciate your most recent comments
about respecting the will of the authorizers, which is what we
are. So along those lines, this idea of selling off the
electric transmission assets and abandoning cost-based rates
proposal has been roundly rejected by virtually every member of
the Pacific Northwest congressional delegation. It is the one
idea--bad idea--that unites all of us in the Northwest. I am
afraid this move could do nothing but harm my constituents,
drive up electricity costs, hurt consumers across the region;
so can you assure me the DOE will leave Bonneville alone unless
Congress provides explicit authorization--that authorization
word again there, Mr. Secretary.
Secretary Perry. Yes, sir.
Mr. Walden. Thank you. Now moving along, as you know the
Hanford Site is just across the river from many of my
constituents. And not only are safe and secure operations a
concern, and I appreciate your commitment not only to that and
the lab nearby but also the help to do the cleanup here, the
Committee right now is working with the GAO to identify some
options for improving operational performance. Will you work
with us on this as we develop findings?
Secretary Perry. Yes, sir.
Mr. Walden. Thank you. Let me ask a broader question. As we
look at modernizing the Department we are focusing on emergency
and security issues, but also how the Department can better
expend its limited resources. We are also cognizant of the
Department's vast technological capabilities which can help
accelerate innovation across national security, energy,
manufacturing, even medicine as you have referenced in your
testimony, but we also have to watch our taxpayers' wallets.
Can you speak to your support of DOE's science, technology,
computing facilities and how best to enable innovation in the
private sector while tentatively managing limited taxpayer
resources?
How are you going to balance all that because your labs are
doing amazing work. It is phenomenal. And for our committee
members, if you haven't interacted with these labs we should
figure out a way to do that and get some briefings. It is
really terrific, the work that is being done there. So, Mr.
Secretary, what can you tell us about how to balance all that
and where you are headed in terms of the direction of the labs
and, yes.
Secretary Perry. Technology transfer is, I think, one of
the real goals of this agency from the standpoint of working
with the labs and we are consolidating the EERE's tech-to-
market functions over in the Office of Technology Transfer. And
just as a bit of a background I have a fairly substantial
amount of experience with that. We created some programs while
I was the Governor of Texas, the Emerging Technology Fund which
basically is taking a very, very early stage technology and
getting it to the market.
So I have had some experience of dealing with that as the
Governor of Texas which, I am not going to say this is apples-
to-apples, but the point is we have in place the Office of
Technology Transfer and it is looking at how to coordinate best
practices across the complex and to, whether it is agreement
provisions and abilities to consider equities and licensing,
there is a host of areas.
And I don't want to drill down all that deep, but the point
is we are sensitive to one of our goals in a limited budget
situation is to be able to help these technologies get to
maturation, if you will, or at least to the point where they
are ready to be commercialized in the private sector.
Mr. Walden. All right, good. And in conclusion for my few
minutes here, this work on reorganizing and modernizing the
structure of your agency is something that I take seriously. It
is a goal for our committee and I know Mr. Barton is leading
that effort and working with Mr. Rush and others to get that
done.
So we take it seriously here, we want you to know that. We
look forward to a partnership to look at how to reauthorize and
modernize the agency. Our committee has a pretty good track
record looking at other agencies, and like the FCC we
reauthorized for the first time since 1990, your agency is one
that goes back before that. And so we look forward to
continuing to work with you on that effort and so we want to
move forward.
I will thank the chairman for this hearing and return the
balance of my time.
Mr. Upton. The gentleman yields back. The chair recognizes
the gentleman from New Jersey, Mr. Pallone.
Mr. Pallone. Thank you, Mr. Chairman. Mr. Secretary, how
many LNG export applications to Non-Free Trade Agreement
countries are currently pending before the DOE, if you will?
Secretary Perry. There is 19, correct? I think there is 19.
Mr. Pallone. Do you believe that----
Secretary Perry. Let me, I will get you the----
Mr. Pallone. Yes. I will accept that. And if you want to
get back to me if you think it is slightly wrong, please do. Do
you believe that the DOE should continue to have a role in
approving the LNG export applications, yes or no?
Secretary Perry. Yes, sir.
Mr. Pallone. And does the EPA, now I am talking about the
EPA, does the EPA play any role in DOE's public interest
determination process, yes or no?
Secretary Perry. I am sure they do, but I am no expert on
how the EPA functions, sir.
Mr. Pallone. OK. Well, whether or not you agree that the
U.S. Government should be promoting exports of American LNG
that is an activity that would clearly fall within the mission
of your Department or maybe the Department of Commerce. But as
you know, I think late last year EPA Administrator Scott Pruitt
traveled to Morocco to pitch that country on buying LNG from
the U.S. Obviously I am very concerned that that doesn't fall
within the EPA's mission. Do you think that this falls within
EPA's mission?
Secretary Perry. Mr. Pallone, I am going to leave that up
to you. I try to stay in my lane as best I can. So again as I
shared with you, I don't know what EPA's statutory
responsibility and authorizations are relative to promoting
energy sales and/or what else might have been going on that I
don't know about on that trip. So I think it would be a little
inappropriate for me to be making a public or private
observation about that.
Mr. Pallone. All right. Well, let me just ask. I think I
know your answer, but did you or your Department have any role
in Mr. Pruitt's Morocco trip?
Secretary Perry. Again there may have been some staff-to-
staff level conversations that I am not privy to, but from the
standpoint of Secretary-to-Secretary I don't recall any
conversations relative to an EPA trip to Morocco.
Mr. Pallone. All right, thank you. I just wanted to point
out that when Administrator Pruitt testified before this
committee late last year he used the phrase ``core mission''
many times and argued that he was working to take EPA back to
focusing on its basic responsibilities. And I found it strange
that Administrator Pruitt thinks that visiting foreign
countries to promote the sale of fossil fuels from private
companies falls within the EPA's core mission. I don't think it
does.
But let me ask you a second question, Mr. Secretary. I note
that the Department has established a web page and email
address to accept public comments and requests regarding
emergency must-run orders under the Federal Power Act, section
202(c). And I am supportive of efforts to expand public
participation in government processes, however, I don't see
anything on that web page that indicates that these comments,
whether as-is or redacted, will be posted for the public to
see.
If you want me to repeat this I will, but I am basically
trying to get a commitment from you to posting the comments you
receive on your website or at the very least providing this
committee in real time the comments you received on this matter
for all of us here to review. Is that something you can commit
to?
Secretary Perry. Yes, sir. And I think we have a place for
public comments because this 202(c) is just now being analyzed
and I don't think we even have a process in place yet for the
public----
Mr. Pallone. You do have on the website a page and email
address to accept public comments and requests regarding the
Federal Power Act section 202, but I just want to make sure
that they will be posted for the public to see. That is what I
am asking.
Secretary Perry. Yes, sir. We will.
Mr. Pallone. All right, thank you so much. I yield back.
Mr. Upton. The chair recognizes the vice chair of the
Energy Subcommittee, the gentleman from Texas, the good State
of Texas. Oh, Mr. Barton, I am sorry. Mr. Barton, I recognize
Mr. Barton, the vice chair of the full committee.
Mr. Barton. All right. Well, you sometimes are too many
Texans, right?
Mr. Upton. Mr. Barton, whose picture is right above you on
the right, is recognized for 5 minutes.
Mr. Barton. As Mr. Upton's is right up there.
First of all, welcome, Mr. Secretary.
Secretary Perry. Yes, sir.
Mr. Barton. I think you and I should acknowledge at the
beginning that our basketball team got hammered by Mr. Upton's
team in the Sweet 16.
Mr. Upton. One point.
Mr. Barton. One, we got beat 27 points. My lord, they put
it to us. So I know I can't speak for Secretary Perry, but I
wasn't real happy that afternoon.
Mr. Upton. Thinking about Houston that was the three-
pointer there.
Mr. Barton. Yes, the game before you barely won, you put
the wood to us. Anyway, we are glad to have you, Mr. Secretary.
Secretary Perry. Yes, sir.
Mr. Barton. I am tempted to go down the rabbit hole that
Mr. Pallone introduced about your colleague at the EPA, but I
don't think so. I will say on my own behalf that any Cabinet
Secretary that encourages things that are of strategic interest
to the United States of America in his overseas travels is not
necessarily a bad thing. And I am glad to learn that Mr.
Pallone agrees that there are limits to what EPA should be
involved with. So in that sense it was a good exchange.
I want to ask a few budget questions, but I am going to ask
one policy question. You probably can't read this. This is
today's business section of the Wall Street Journal. It says
oil hits highest price since 2014. I am sure you read that
before you came up here. And inside it has another article
about Treasury bonds are beginning to inch up and tension in
the marketplace over that.
What, if anything, should the Department of Energy under
your stewardship do with the Strategic Petroleum Reserve to try
to, I am not going to say manage the market, but make sure oil
prices don't go too high in the near term, if anything?
Secretary Perry. Well, Mr. Chairman, I think one of the
things that DOE needs to do and can do from the standpoint of
making sure that there is a ready supply of energy, whether it
is renewables, whether it is hydro, whether it is nuclear,
whether it is coal, whether it is natural gas, the Strategic
Petroleum Reserve, I think you bring up a really interesting
opportunity for this body and for Congress and the
administration to have, and obviously the public to have an
open conversation about is the SPRO the way that it is
structured today the proper structure? Is there enough, too
much? Is the operation of it on a yearly basis, the cost of the
upkeep of that in our best interest?
I will leave that to all of us, collectively, to have that
conversation. But it was put in place after World War II and
there may be, and after the shortage of the '70s when we saw
the need for that really exploding, if you will. And I think
the question now is that with the resources that the United
States has with the new innovation, with the new energy
portfolio that we have, does the Strategic Petroleum Reserve
need to stay in its current form? I am not ready to sit here
and tell you I know the answer to that, but I think it is
important the issue that you brought up that we need to have
that conversation.
Mr. Barton. The GAO has done a study of the Strategic
Petroleum Reserve and it basically says we need to do more
study. You and I are going to meet next week and I think we are
also going to have the staff begin to meet also with our
friends on the minority side and that will be something that we
bring up.
I have a few quick just dollar questions since this is----
Secretary Perry. I will try to give you yes or no answers,
sir.
Mr. Barton. Yes. Do you support us funding Yucca Mountain,
us, the government, funding Yucca Mountain? I hope you say yes.
Secretary Perry. The dollars that you all are going to
appropriate we will spend efficiently and appropriately, yes.
Mr. Barton. OK, finally. We have a Northeast Home Heating
Oil Reserve that I put into a bill with Congressman Markey back
in, oh, about 10 years ago. We spend $10 million a year on it.
It has never been used. Is that maybe something we could save a
little money on?
Secretary Perry. Well, certainly, when you have dollars
sitting in an account that is not being used it is----
Mr. Barton. Something to look at.
Secretary Perry. Yes.
Mr. Barton. OK. And you have $159 million in your budget
for something called Legacy Management. Do you happen to know
what that is?
Secretary Perry. Yes, sir. Those are areas that older
facilities that, on the cleanup side that is over in EM.
Mr. Barton. I am very proud that you knew what it was.
Secretary Perry. Yes, sir. The Cold War cost a lot of money
as did the Manhattan Project. Still costing us a lot of money
but it was worth it, sir.
Mr. Barton. Let's see if we can save some money there.
Thank you, Mr. Chairman. And thank you, Mr. Secretary.
Mr. Upton. The gentleman's time is expired.
The gentleman from California, Mr. McNerney.
Mr. McNerney. I thank the chairman.
Mr. Secretary, I really appreciate your interest in
veterans issues and particularly using science and computing
power to make advances in PTSD and traumatic brain injuries and
other veteran-centric issues and I look forward to any
collaboration----
Secretary Perry. Yes, sir.
Mr. McNerney [continuing]. Between us in the future. There
is two issues I want to bring up today. One is resiliency of
the electric grid, especially in the face of the wildfires we
had in California, and other threats that we are seeing and
ARPA-E funding. Regarding resilience, does the DOE have any
tools to help ensure resilience despite some of the gaps we
have in our current law? Are there any tools that we can use
that you can use to help us make our grid more resilient to
these things in California and elsewhere?
Secretary Perry. Obviously the test grid, if you will, at
Idaho National Lab is one of the resources that we have
available where we can literally go in and break that grid and
to see what happens and how to address it.
Mr. McNerney. Well, what I am really thinking about is
Federal tools to work between the DOI and the Forest Service to
ensure rights of way so that brush can be cleared in Federal
lands, those kind of things.
Secretary Perry. I am sorry. I was going down a different
path here.
Mr. McNerney. Sure.
Secretary Perry. Let me get back to you. I don't off the
top of my head know that we have any resources available for
that specific----
Mr. McNerney. Or authorities.
Secretary Perry. Or authority, yes, sir.
Mr. McNerney. Thank you.
Secretary Perry. But I will get back to you.
Mr. McNerney. Well, the current budget proposal reduces
funding for resilience and reliability from $89 billion in 2017
to $61 billion in 2019. And we have seen an increase in some of
these threats, wildfires, hurricanes, storms and so on, so that
budget direction seems to be going the wrong way. I think we
need increase in that so that is a point of recommendations.
Secretary Perry. Yes, sir. Mr. McNerney, I don't want to
quibble with you about the issue of is it a reduction of
dollars or, one of the things that we have done, I believe, in
that particular line item is that we bifurcated it. And that is
where cybersecurity, and we split that historic line item up
and are creating this new office of cybersecurity emergency
response and that has an 8.3 percent, yes sir, I think that is
right. It has a substantial increase over on that side and you
may be seeing the EERE budget that is lower.
But the commitment to resiliency and to reliability from my
perspective has actually increased. And so let me come over and
sit down with you and we can look at this a little closer to
make sure that--I know what you want to do and I want to get to
the same place that you are. I think the membership wants to
get from the standpoint of making sure that we have the
resiliency, the reliability in our grid.
Mr. McNerney. And of course then that applies to the whole
country not just to California.
Secretary Perry. Yes, sir.
Mr. McNerney. Regarding ARPA-E, this program is designed to
help keep the United States at the forefront of energy
innovation. Energy innovation, I think that is a key element in
ensuring our strong market position on energy issues. How
determined is the administration in eliminating this program?
Secretary Perry. It shows up on the budget. I am a good
enough historian to understand that we are going to do what the
Congress wants to do on this. As a former CEO of the State of
Texas I put some budgets forward from time to time that
actually had zero line items in them. And----
Mr. McNerney. That is kind of the same answer you gave 6
months ago so.
Secretary Perry. Yes, sir. And that was not particularly
well received by the appropriators.
Mr. McNerney. OK. Mr. Secretary, do you support robust
funding for fusion energy research and development?
Secretary Perry. Yes, sir.
Mr. McNerney. Thank you. Your predecessor was deeply
involved in the negotiations for the Iran nuclear agreement.
This administration has considered scrapping that agreement.
Are you involved in those deliberations?
Secretary Perry. Well, being on the National Security
Council, yes, sir, to some degree. I would not put myself as
the lead negotiator, but certainly am involved with the
conversations generally in rooms that we can't be having
conversations with here.
Mr. McNerney. Can you disclose your opinion on that?
Secretary Perry. Well, I think like any of our deals
whether it is NAFTA, whether it is JCPOA, whether it is the
negotiations that are ongoing with Saudi Arabia for a civil
nuclear agreement, we need to get the best agreement that we
can get. I think one of our main responsibilities is to, in the
nonproliferation area is to make sure that the fewer
individuals who have access to those types of materials that
can be made into weapons we need to restrict that so.
Mr. McNerney. The agreement is already in place.
Secretary Perry. I understand that, but so is NAFTA and we
are renegotiating NAFTA. So I think the administration's point
is can we re-engage and get a better deal. I don't have a
problem in the world with that no matter what it might be,
whether it is NAFTA, whether it is JCPOA. We have people
renegotiating LNG deals that they signed 3 years ago.
Mr. McNerney. I think the chairman is going to cut us off
here so thank you.
Secretary Perry. I know. Yes, sir. Thank you.
Mr. McNerney. Thank you, Mr. Secretary.
Mr. Upton. The chair recognizes now the vice chair of the
powerful Energy Subcommittee, Mr. Olson, from the great State
of Texas.
Mr. Olson. I thank the chair.
And, Secretary Perry, a big old Texas howdy.
Secretary Perry. Howdy.
Mr. Olson. It is great to have you back before the panel.
As a personal note, I am glad you did not leave DOE for VA as
was rumored. Houston Texans are happy to have your hat hang
where it is hanging today.
Secretary Perry. Yes, sir.
Mr. Olson. I want to talk about section 202(c) of the
Federal Power Act. I was one of the members of last Congress to
lead an effort to amend section 202(c). That change was signed
into law. The intent was limited. Talking about ``continuance
of war'' or a ``sudden increase in demand for electric energy,
or a shortage of electric energy,'' there have been proposals
to help failing coal and nuclear plants through section 202(c).
I support coal and nuclear power and I believe we have to have
a diverse grid. Hurricane Harvey showed that dramatically.
In my district, as you know, NRG's Parish power plant has
four coal generators and four natural gas generators. Fifty
inches of rain or more wiped out that coal, made it wet. They
ramped up natural gas production at that facility. Forty miles
south is the South Texas Nuclear power plant in Bay City. That
never had a flicker despite having the brunt of Harvey's force.
Could you please talk about your view of section 202(c) and the
powers it gives you?
Secretary Perry. Yes, sir. And if I may, I would like to go
back and just if I could very quickly clarify a conversation
with Mr. Pallone where we talked about the email address on the
202(c) comments. And we have an address that is on our website
that is the destination for correspondence for this and future
applications. So it is not a formal comment period because
there has been no formal comment opened up so I just wanted to
clarify that.
The 202(c) is in place and I think you did a very good job,
Mr. Olson, of basically laying out why a 202(c) could be used
in this case. When we look at national security in particular,
if you are in New York City and Wall Street were to lose power,
I think anyone would say that puts our national security in
jeopardy. We have military bases in a lot of different places
around the country that rely upon their energy from the grid.
Losing power to that grid would put our national security at
risk.
So this administration looks at the national grid and the
resiliency of it as well as the reliability of it as a national
security issue. Having a very broad portfolio of renewables, of
natural gas, of coal, of nuclear, of hydro, those are, we
think, instrumental in being able to send the message across
this country that whether it is in your private life or whether
it is in your public life and I am talking about national
security at that particular point in time versus why should
anyone be put in the situation of having to choose between
turning the lights on and keeping my family warm.
And this administration believes strongly that if we don't
have a diverse portfolio and to try to keep these plants online
obviously doing it with as much sensitivity as we can to the
environment, and again in my opening remarks I made a comment
that with 14 percent decrease in carbon emissions in this
country that is leading the world. So the innovation and the
technology that we have coming out of this country, but it is
imperative that we don't allow political decisions to be made
relative to our electrical, or excuse me, our power security in
this country.
Mr. Olson. Yes, sir. One further question on India, I went
there last week on a mission to talk about LNG being exported
to the great nation of India and they were gushing, guess who
is coming this week or the next couple days, Secretary Rick
Perry. You get there and find out that Prime Minister Modi has
a very aggressive plan to clean up their extremely dirty air
and that is with renewables, mostly wind and solar.
But the energy minister and their foreign secretary stated
over and over that LNG natural gas is the economy of the now.
The future is renewables. As you know, we have had a private
contract between Cheniere and a company, a group called GAIL,
there in India to export approximately seven metric tons of
liquefied natural gas over the next 20 years. We agree that to
make this viable and to make that transition they want to make
they have to have better battery power, better storage and
better power lines, and also make wind viable. So I want you to
take that technology message to them. We are going to help you.
And so any comments about your trip to India?
Secretary Perry. Yes, sir. Two weeks ago, the first
molecules of U.S. natural gas arrived at GAIL. I think the
issue for them is to build out their infrastructure to be able
to move that gas around. Not unlike, Mr. Chairman, what we have
in this country. Yes, we are way ahead of them, but the point
is if you are really going to be able to satisfy the economic
needs and satisfy the national security needs of your people
you are going to have to have the distribution system as well.
So that is another area. U.S. pipeline technology, U.S.
pipeline companies, I think there is a real opportunity in not
just India, but India is obviously a huge market in our ability
to deliver U.S. innovation, U.S. natural resources into that
country are a great opportunity and that is the real driving
factor of why we are headed that way.
Mr. Olson. Namaste. I yield back.
Mr. Upton. The chair recognizes the gentleman from
California, Mr. Peters.
Mr. Peters. Thank you, Mr. Chairman.
And I thank you, Mr. Secretary, for being here. I have the
exact quote I will just read to you. When I asked you about the
budget that was proposed by the President you said I didn't
write this budget, my job is to defend it which from time to
time is counter to what I think is good. So I know you are here
to do a job, but maybe we can----
Secretary Perry. Yes, sir.
Mr. Peters [continuing]. Get some of your personal opinions
on this. The budget makes cuts to the Office of Science which
includes an important project named the International Thermal
Nuclear Experimental Reactor which is sometimes referred to as
ITER. Here is a program where the United States is one in an
international partnership developing energy of the future by
proving we can make fusion work. The U.S. contributes 9 percent
of the project funding, but 80 percent of it is spent in the
United States and we have access to one hundred percent of the
intellectual property. And perhaps most important, when the
technology is proven we can be part of the group that has
ownership with monetizing capabilities instead of being a
country that has to buy into the group.
So with all these benefits, why does the budget cut
contributions to ITER?
Secretary Perry. Mr. Peters, I think the basic messaging
here on the reduction in that line item was, this is my
observation just being a manager and having been in
negotiations before, it was really poorly managed. And I think
you know that. You all have been briefed on it. The previous
management of ITER was very, very poor. They wasted a lot of
money.
And they have new management in there. Mr. Bigot came over
and we sat down and discussed this. I was impressed with his
focus, his understanding, his recognition of the poor
management before. We have as a matter of fact out of your
district a couple of projects that are being funded, the
Solenoid, $75 million, and I think another aspect of the
project that is ongoing that General Atomics is the deliverer,
the manufacturer of, and we certainly support that and are
funding that.
But with that said, if this committee and if Congress in a
whole get comfortable along with obviously the administration,
that it is headed in the right direction, we will make sure
that the U.S. dollars that are expended there are expended
properly and that there is good oversight and that we have the
proper outcomes that we would be looking for.
Mr. Peters. I appreciate the comment about the management.
That is fair. Now that we have improved that, I certainly hope
we appreciate the leverage that we get out of this potential.
Secretary Perry. Yes, sir. Thank you.
Mr. Peters. And so just outside my district, San Diego Gas
& Electric built and it runs the largest lithium ion battery in
the world as part of its grid operations. It is proving that
projects like this can be a valuable part of the grid
particularly for resiliency and safety. How does the DOE budget
ensure new technologies for grid resiliency can be implemented
and tested properly?
Secretary Perry. And that goes right to the heart of our
both Office of Science, Paul Dabbar, who is now the assistant
secretary there I have great faith in his focus, and
particularly we are supporters of, I have said before, the
battery storage, the holy grail of electric power. I believe
that. DOE and DOE labs working with private sector
organizations like your constituents or right outside of your
district are going to be key to that. So I am confident that
what is happening in our national labs, the funding of those is
appropriate to meet the needs of the battery challenges that
face us.
Mr. Peters. Thank you. And just with respect to NAFTA, do
you think that the disruption of NAFTA will have a negative
impact on energy prices for Americans and supplies for U.S.
energy companies who sell to Mexico and Canada, even the way we
talk about it right now?
Secretary Perry. Not necessarily. I think generally
speaking people are able to divorce the rhetoric with reality.
For instance, Ray Washburne, who is the head of OPIC, he and I
have had conversations with my counterpart in Mexico and
private sector operators in the U.S. and their Mexican counter
partners, if you will, to invest in Mexico's energy
infrastructure. So I feel confident. I think there is an
extraordinary opportunity there.
Mr. Peters. I am going to run out of time. I appreciate
what you say about rhetoric. I have got to tell you that NAFTA
is so important----
Secretary Perry. Yes, sir.
Mr. Peters [continuing]. To our country and to my district
in particular and I understand the talk about improving it. I
think we had more leverage when we were dealing with 11 other
countries. We could offer more to Mexico. But I certainly don't
want to go backwards and some of the talk is, it looks like
rhetoric is turning into policy and it concerns me. I just want
to express that to you.
Secretary Perry. Mr. Peters, just as an aside, every time I
see Ambassador Lighthizer I tell him we have got to get a deal.
Get a good deal, but we have got to get a deal.
Mr. Upton. Mr. Latta?
Mr. Latta. Thank you, Mr. Chairman. And, Mr. Secretary,
thanks very much for being with us again today. I really
appreciate seeing you. And I think it is really important,
because also in reading your testimony about cybersecurity it
is a big issue and in recent weeks we have read news stories
about malicious agents working to undermine the safety and
security of our nation's energy infrastructure. According to
the Department of Homeland Security, this includes Russian
cyber attacks that have remotely targeted the power grid,
energy, nuclear, and commercial facilities in critical
manufacturing sectors. More recently, we have seen cyber
attacks against the electronic communication systems of several
American pipeline companies. DHS is still working to determine
who is responsible for these specific attacks.
And I believe from your response from the chairman of the
subcommittee, the gentleman from Michigan, that you would agree
that more needs to be done to address these attacks on our
energy infrastructure. Is DOE working with DHS to identify the
vulnerabilities that were exploited through these attacks and
rectifying them and, if so, can you tell us what might be done
and what is being done?
Secretary Perry. Well, there is nothing more essential to
America's national interest and for that matter our national
security than our energy supply. The Department of Energy plays
a very important role with that. We are the specific agency
that deals with the energy side of particularly grid security,
but we are also working with the other sectors, or not the
other sectors but the other agencies as well, DHS, Department
of Transportation, and DHS and Transportation Department leads
cybersecurity support to pipelines. DOE works closely with them
and other departments and we have some other stakeholders to
protect the energy sector including the secure transport of our
oil and gas. So we recognize the real challenges there.
One of the reasons that we are asking for the additional
dollars to stand up this office of cybersecurity that we refer
to as CESER, C-E-S-E-R, is so that we can focus the resources,
use our national labs, working with these other agencies of
government, to assure the American people that we have done
everything within reason possible to protect the American
people from these cyber attacks that are only increasing in
intensity and frequency.
Mr. Latta. Thank you. Given the nature of these threats, I
believe it is more important than ever that Congress acts. That
is why I have worked with my colleague, Representative
McNerney, to introduce two bipartisan pieces of legislation to
address the threat of cyber attacks. These two bills, H.R.
5239, the Cyber Sense Act, and H.R. 5240, the Enhancing Grid
Security Through Public-Private Partnerships Act, was the
subject of a legislative hearing held in this subcommittee last
month.
Under H.R. 5239, the Secretary of Energy would be directed
to establish a voluntary cyber sense program to identify and
promote cyber secure products intended for these in the bulk
power system. And do you believe that this policy would help
improve the safety and security of our energy infrastructure
and address these threats?
Secretary Perry. It certainly on its face sounds like it.
We will work with you in any way that we can to flesh out any
details and information that we have privy to.
Mr. Latta. I really appreciate that. Thank you. And along
with Representative McNerney, I am also the co-chair of the
Grid Innovation Caucus here in the House. The purpose of this
caucus is to discuss the challenges facing the electric grid
and to come up with ways that we can enhance its capabilities
and securities. In addition to guarding against the threat of
cyber attacks, will you go into more detail about other ways in
which DOE is trying to improve the electric grid's capabilities
to protect it from these cyber attacks?
Secretary Perry. Yes, sir. We will work with you in----
Mr. Latta. Well, I really appreciate it. Thank you very
much, Mr. Chairman. I yield back the balance of my time.
Mr. Upton. The gentleman from Pennsylvania is recognized.
Mr. Doyle. Thank you, Mr. Chairman.
Mr. Secretary, welcome back.
Secretary Perry. Mr. Doyle.
Mr. Doyle. Like many on this panel, I am greatly concerned
by the premature closures of nuclear plants around this
country. John Hanger who was former Secretary of the DEP in
Pennsylvania and head of the Public Utility Commission in my
state put it succinctly. He said there are now 18 nuclear units
that have closed or are scheduled for closure in the last 5
years. Three are in my State of Pennsylvania, Beaver Valley I
and II, and Three Mile Island. Those three nuclear units
generated 22 terawatt hours of energy in 2017, all the wind and
solar in Pennsylvania generated 4 terawatt hours in 2017. This
is putting my State at the edge of a clean air climate
disaster.
Secretary Perry, I echo his concerns and would add that
these nuclear plants not only provide good family supporting
jobs, but also affordable, reliable, and greenhouse gas-free
electricity. I just saw an interesting study that has come out
by a think tank The Third Way that takes a look at the effect
of these retirements of the nuclear portfolio and how it
affects our ability to meet our climate change goals to reduce
greenhouse gases below, 80 percent below 2005 levels by 2050.
It would be virtually impossible for us to make that up,
because as every nuclear plant retires even if we start greatly
upping our renewables, they would have to make up for that loss
before we start to add more carbon-free energy to our cycle. So
I think it is a real problem.
I know FirstEnergy recently filed this 202(c) request with
your Department and I saw you quoted as saying that that may
not be the most appropriate and efficient way to deal with
this, but it is not the only way. And while I applaud your
caution on the 202(c) request, I am curious what other options
you think are on the table. Is this something that can be
settled at DOE or in Congress or at FERC? What are the other
ways that this might be dealt with?
Secretary Perry. Mr. Doyle, let me just say you are
absolutely correct, very prescient in your observation about
this country and the ability to deliver the energy needs with
the premature in particular taking offline of coal and nuclear
plants. I, like you, share a great concern about our ability to
stay economically viable, but more importantly from a national
security standpoint of taking care----
Mr. Doyle. And an environmental standpoint if we are ever
going to meet our goals for climate change.
Secretary Perry. Absolutely. So to address the specific
question, if you will recall, I want to say 6, 7 months ago, we
put a 403 request in to the Federal Energy Regulatory
Commission, to FERC, which we thought was an appropriate way to
address this. They obviously did not. The 202(c) is an option.
I would like to work with you and members of Congress on any
other options that are out there that are reasonable that get
the result of which we need in the result from my perspective
is a diverse portfolio. And let me just add, I think it is
really important for this country to have a nuclear, civil
nuclear program in place. Too many previous administrations
made some decisions that from my perspective put particularly
the nuclear energy industry in jeopardy and we now see the
results of that whether it was regulations, whether it was not
supporting them in various----
Mr. Doyle. Mr. Secretary, I would be happy to work with you
on ideas to ensure that we keep our nation's leading source of
carbon-free power online.
Let me ask you another question. Existing energy markets
they don't seem to consider the environmental attributes of
nuclear power, but there are some States like New York and
Illinois that have implemented strategies focused on ensuring
that the environmental benefits of nuclear are recognized.
Other States, including mine in Pennsylvania, are considering
similar strategies, but I understand that some parties are
proposing rule changes at PJM that could punish these States by
making it more difficult for certain plants or units to
participate in the markets. Do you think that is good policy?
Secretary Perry. I think any policy that restricts your
diversity of your energy portfolio is not necessarily good
policy. I think it is shortsighted.
Mr. Doyle. I see my time is up. Thank you, Mr. Chairman.
Mr. Upton. Mr. Shimkus?
Mr. Shimkus. Thank you. Mr. Secretary, welcome. Since you
appeared before us, our nation's nuclear waste management has
passed a few notable anniversaries. December marked the 35th
anniversary of passage of the Nuclear Waste Policy Act of 1982
which formalized the Federal Government's nuclear waste
management program, as well as the 30th anniversary when
Congress designated Yucca Mountain in Nevada the site as the
location of our nation's first repository. Of greater
consequence, January 31st marked the 20th anniversary from the
year in which DOE was legally required to take title to spent
nuclear fuel for disposal at Yucca Mountain. Since then
American taxpayers have been paying billions of dollars to
manage spent nuclear fuel in 121 communities around the
country.
Secretary Perry, I would like to run through a few numbers
with you quickly, and you probably know some of these and we
can just kind of stick to the numbers because I have another
question I want to get to.
Secretary Perry. Yes, sir.
Mr. Shimkus. As of the end of fiscal year 2017, what is the
approximate amount rate payers paid into the Nuclear Waste Fund
to construct/oversee our nuclear waste management program?
Secretary Perry. It is approaching $40 billion. I think it
is about $37, $37.7 billion.
Mr. Shimkus. And those are rate payers, people from states
that had nuclear power that have paid in to solve this problem.
Secretary Perry. That is correct.
Mr. Shimkus. How much did the value of the Nuclear Waste
Fund increase during fiscal year 2017?
Secretary Perry. Almost $2 billion, I think $1.7 billion is
the specific.
Mr. Shimkus. That is the accrued interest on the base of
the account.
Secretary Perry. Right.
Mr. Shimkus. As of the end of fiscal year 2017, what is the
total cumulative liability cost including future payments
because Yucca Mountain is not yet open?
Secretary Perry. Just a touch over $34 billion.
Mr. Shimkus. So that is payments that we are liable for
because we are not complying with law.
Secretary Perry. That is correct.
Mr. Shimkus. And you are saying then the $30-plus billion.
Secretary Perry. Yes.
Mr. Shimkus. How much did American taxpayers pay in legal
costs during the fiscal year 2017 because Yucca Mountain is not
open?
Secretary Perry. $700 million.
Mr. Shimkus. So for my colleagues, we move this bill, this
an issue I am fighting with appropriators and budgeteers. This
is money that taxpayers are paying that is really not on the
books and it accrues to almost $800 million. What was the total
increase in fiscal year 2017 in taxpayer liability in both
actual payments as well as future projected liabilities?
Secretary Perry. That one grew substantially, $3.3 billion.
Mr. Shimkus. If you break this total cost down to a daily
cost to taxpayers that escalated during just last year how much
are taxpayers liable for on a daily basis?
Secretary Perry. $9 million per day.
Mr. Shimkus. That is a day. That is money that we could do,
help our national defense, Title I programs, anything. That is
just being paid because we are not complying with the law. So
when people wonder why I get so focused, these are some of the
reasons why. Last question in this area, how much was provided
to the Department in fiscal year 2017--and I think I can add
2018 now--from the Nuclear Waste Fund for DOE to move forward
with our Nuclear Waste Program and ultimately reduce our
taxpayers' legal payments?
That is a zero, I am assuming. Not a one, it is a zero.
Secretary Perry. That is a zero.
Mr. Shimkus. OK. And that is our liability as authorizers
to push our appropriators to do what----
Secretary Perry. And, I think, Mr. Shimkus, that is the
reason that the administration requested $110 million for the
legal process to go forward, to be able to get the answer of
whether or not this facility is in fact what you all in
Congress have said it is.
Mr. Shimkus. Yes. So the appropriation money is really to
do the final adjudication with the Nuclear Regulatory
Commission with you as an intervener with the State of Nevada
to clarify the science. And that is the last part before we can
then really start moving and addressing this.
With my 30 seconds left, I won't read the whole question
but you have talked about the DOE and the great work it does.
Obviously I am also very much engaged in the renewable fuel
debate in this country. DOE has done a lot of good work on a
study, I have quoted it before, the Co-Optima study. Are you
familiar with it and what is your thoughts on it?
Secretary Perry. Say it again, sir?
Mr. Shimkus. The Co-Optima study?
Secretary Perry. I am not.
Mr. Shimkus. It is the high octane, it basically is
addressing the high octane issue. We have a hearing tomorrow.
Secretary Perry. I will get up to speed on it and get back
with you and have a conversation.
Mr. Shimkus. Not a problem, I appreciate your time. Thank
you.
Secretary Perry. Yes, sir.
Mr. Upton. The gentlelady from Florida.
Ms. Castor. Thank you, Chairman Upton. Good morning,
Secretary Perry. Yesterday in our Oversight Committee we had
Bruce Walker, your Assistant Secretary of Electricity Delivery
and Energy Reliability who gave us an update on restoration of
the grid in Puerto Rico. And I think everyone was very
heartened by what he had to say and what the Department is
doing to build a more resilient grid, a more modern grid,
tapping the expertise of our national laboratories and working
with private sector partners and researchers there on the
ground.
And now Congress has provided the funds and overridden some
of the language in the Stafford Act that says you have to just
rebuild what was there, which if we did that that would not
protect the taxpayers. So thank you and we will be watching for
the modeling he said is necessary to do something very
innovative there.
But then we get the budget request. And I am very concerned
about how anti-consumer the administration's budget request is
by eliminating our weatherization initiatives and energy
efficiency initiatives that really help put money back in the
pockets of consumers. This will hurt real people out there in
the world. And then it is a budget request that sidelines
science with devastating proposed cuts to clean energy
research, smart grid R&D, and energy storage.
And I think in doing this kind of budget request really
cedes America's leadership and it says to consumers you are
going to have to pay more. And you know how competitive we are
out in the world, it just doesn't meet the challenges that we
currently face with the cost of the changing climate and
watching the transformation in the energy sector.
The EIA has said wind, solar, and hydro now account for 18
percent of the energy generation in America. Solar is the
fastest growing source of new energy worldwide because of its
declining cost. And yet, and you have said it yourself in
testimony energy storage is the Holy Grail and yet what you
said certainly doesn't match the budget request because
developments and innovations in energy storage are absolutely
crucial for modernizing our electric system.
The U.S. just hit a major milestone. We now have capacity
to store 1 billion watts of power for an hour and while the
U.S. is still leading in energy storage development, everyone
says China is likely to pass us in the next 5 years. So it is
very troubling your budget proposes to cut energy storage R&D
by almost 75 percent.
And let me read to you directly from your budget request,
so folks, get a handle on this. You want to discontinue support
for engagements with States, utilities, and storage providers
for conducting grid-scale field tests and trials. Discontinue
support for engagement with State and Federal regulatory
officials on efforts to understand regional market barriers to
energy storage deployment. Discontinue support to States and
regional entities on procurement, commissioning, and techno-
economic analysis of deployed systems. Eliminate support for
new collaborative test bed and field trials. Discontinue
support for development of enhanced tools and data to U.S.
industry for development and use of grid-scale batteries. And
this goes on.
But why, you talk about energy dominance, but this is like
waving white flags. Why would you propose such devastating cuts
for a technology that would only increase the use of clean
energy especially when our U.S. industries are in the fight of
their life with China? So how do you explain that?
Secretary Perry. Ms. Castor, thank you for recognizing the
great job that was done by particularly the private sector down
in Puerto Rico. They were men and women who left their families
for long periods of time. I was on a call yesterday with the
subsector council and just said thank you as you have today. So
thank you for recognizing that.
Let me just briefly address your concerns here particularly
on the issue of--and again I don't want to go back over what I
talked with Mr. Rush about, but we see a lot of the dollars
that have flowed into this area before particularly on wind and
solar as areas where they are being substantially more mature.
The cost of those have gone down. I think each one of them 65
percent at least over previous year to date costs. So we have
seen some substantial decreases in the cost of getting those
technologies to the marketplace.
And I think we are going through a shifting to battery
storage and beyond batteries, if you will, which is a new focus
in the fiscal year 2019 budget that we are going to be within
EERE we are taking a holistic approach to energy storage. Early
stage R&D is focused on controllable loads, on hybrid systems,
new energy storage technologies, and again, this process is
about finding the right balance and we are going to work with
you to find that right balance.
I not only recognize but respect your position here and you
are absolutely correct. We have a huge challenge with China not
just in this area but in a host of other ones. Supercomputing
is one of them that I will suggest to you is at the top of that
list. If we don't get that one right we are in trouble.
Mr. Upton. Thank you.
The gentleman from West Virginia, Mr. McKinley.
Mr. McKinley. Thank you, Mr. Chairman. And thank you, Mr.
Secretary, for particularly for your interest in preventing the
premature closing of our country's coal and nuclear power
plants.
But let me speak to a broader audience. This committee has
held numerous hearings on this topic of grid reliability over
the past few years. During that time, your last 10 years, 531
coal-fired units and 11 nuclear plants have been closed. Their
output has been replaced with gas plants, but unfortunately
only half of those plants have a firm supply for gas, meaning
without a supply contract in a cold spell gas is understandably
diverted from creating electricity for home residential
heating. And according to NERC, in the past 3 years America has
experienced over 4,000 forced outages of power plants across
America due to a lack of fuel. Ninety four percent of those
outages were gas-driven power plants.
So this should not, unfortunately, these statistics don't
give me the confidence that closing more coal units and nuclear
power plants is a dependable option for national security. And
you have been talking about national security throughout your
presentation today. For example, nationally, in January, NETL
reported without the resilience of coal the East Coast would
have suffered severe electrical shortages, leading, likely, to
widespread blackouts.
And earlier this year, ISO concluded the possibility that
power plants won't be able to get the fuel they need to run is
the foremost challenge to a reliable power grid in New England.
According to PJM, the PJM's market, it can also be shown that
the demand for the grid could not have been met without coal.
These are all quotes that are coming from major sources, major
reliable sources.
So taking these reports in consideration, can you just
imagine what our grid stability was going to look like with
dependability and resilience if we have fewer coal and nuclear
plants? Mr. Secretary, you and I have had numbers of
conversations about it and this committee has been saying all
along that our fuel security is a national security issue.
So, Mr. Chairman, I would like to submit for the record a
series of documents, a letter that we have from 23 bipartisan
members of Congress asking you to invoke 202(c). I have another
letter that is written to the President, bipartisan support for
some kind of implementation to save our aging coal and nuclear
power plants. And we have four other letters of support from
labor unions across the country and interest in saving and
implementing 202(c).
[The information appears at the conclusion of the hearing.]
Quite frankly, Mr. Secretary, I believe it is time. You
tried the 403. Some form of 202(c) or some other emergency act
is necessary if we are going to have national security. So I am
calling on you to use whatever legal power you have so that we
can meet the challenges that our manufacturers need and our
communities need all across America with having a reliable grid
system.
So I would like to have your thoughts. Last Thursday I was
with the President and he specifically said, I think in a crowd
in West Virginia, I think we can work something out on 202(c).
I know he has had conversations with you about that. Can you
share the extent of not your private conversations, where do
you think we are going with 202(c) or some component of that?
Thank you.
Secretary Perry. Mr. McKinley, I hope that your remarks
have been televised and we can put them up because you have
succinctly made the point for exactly what has to happen in
this country from the standpoint of being able to protect the
resiliency and the reliability of our electrical grid. And if
you do not have sufficient coal and nuclear plants, the day is
coming when particularly in the Northeastern part of the United
States because of other restrictions that they have on energy
flowing into that part of the world that the national security
of this country is jeopardized.
I don't think that is appropriate in any way. Political
decisions that put people's lives in jeopardy are inappropriate
and I think this President understands that. He has had
multiple conversations with me and others in his administration
to find a solution to that. That is exactly what we are working
on today. There are a numberm, as you said 202(c) is one of
those, there may be other options which we need to look at as
well.
Mr. McKinley. Are we getting close to a decision?
Secretary Perry. Expedition is of importance.
Mr. McKinley. Thank you. Thank you, Mr. Secretary, and I
yield back.
Mr. Upton. The gentleman's time is expired.
The gentleman from Maryland, Mr. Sarbanes.
Mr. Sarbanes. Thank you, Mr. Chairman.
Thank you, Secretary Perry, for being here. Last October
when you were here we talked about these ongoing threats to our
national security, a little bit different from what you were
just speaking about, which is the national security associated
with maintaining a kind of diversified portfolio of energy
sources. This is more about the cyber attacks that are coming
in and we already know that there has been hacking attempts by
the Russians against our elections last year.
But we now know last month the Department of Homeland
Security, FBI, publicly accused the Russian Government cyber
actors of a multi-stage intrusion campaign that is going after
the energy infrastructure. And I assume, I know that you view
that as intolerable those kinds of attacks on our energy
security framework, presumably.
Secretary Perry. Oh, absolutely. Yes, sir.
Mr. Sarbanes. And in the budget for fiscal year 2019 there
is $96 million proposed for a new office to address cyber
threats coming in against the energy sector and I appreciate
that attention being given. I think we need a little bit more
knowledge here in Congress to be able to respond appropriately
to the proposal with respect to cybersecurity in combating
these cyber threats. And last October you may recall I asked
whether you would be willing to come and do a briefing on that
specific topic. We haven't had that yet so I would like to
reiterate that request for a briefing.
We can try to work with the committee. Obviously
Congressman Latta, McNerney, and others have a real interest in
this. I am sure the chairman does as well. So I just wanted to
ask if you would be willing to work with the committee and our
office to try to get that kind of a briefing together.
Secretary Perry. Yes, sir. We will work with the committee.
Mr. Sarbanes. Thank you very much. I want to talk now about
a proposed cut in the budget. It is a 70 percent cut to the
Office of Energy Efficiency and Renewable Energy for fiscal
year 2019. This program, the EERE program, as many colleagues
of mine have been pointing out, has been a very smart return on
investment for taxpayers, a net benefit of $230 billion when
you look at what has resulted from it.
I wanted to talk a little bit about what it means in my own
district. One of the programs inside the EERE program or
initiatives was the SunShot Initiative and that has been
targeted for a 67 percent cut. This initiative was one where
the Department of Energy would set a goal of capturing the
potential of solar technology, which everybody acknowledges is
critical in making solar electricity more affordable, by 2020.
In Baltimore we actually worked with the Department of Energy
to bring that potential to low-income homeowners so that all
communities would be able to take advantage of low cost solar
and energy.
So it has meant a great deal to Baltimore. Over the last
few years we have been able to put in 53 rooftop solar
installations for low-income homeowners. There is 990
additional ones planned over the next 2 years and with DOE's
continued support the Baltimore Shines model, which is our
local sort of version of the SunShot Initiative, if you will.
This can really be a model across the country and we think can
lead in terms of what it means to have diversified financing
for low-income solar installation.
So the basic question here is does your Department remain
committed to the goals of the SunShot Initiative which seems to
be like the terminology of it or the name of it is being pushed
aside. It is hard to keep track of where your commitment is and
the Department's commitment is to this solar technology
advancement is. And will you maintain the same commitment
within the Solar Energy Technologies Office that has been a
hallmark up to this point and further commit to making sure
that low-income communities are in a position to take advantage
of these low-cost energy and skilled job opportunities which
are available within the solar technology industry?
Secretary Perry. Yes, sir. Mr. Sarbanes, let me work with
you. I am not that knowledgeable with that specific program
from a granular standpoint and I want to be able to give you an
appropriate answer so I will follow up.
Mr. Sarbanes. I appreciate that. I think if you look
inside the Department's data on this it is quite impressive and
we can help present some of that back to you as well.
Secretary Perry. Yes, sir.
Mr. Sarbanes. Thank you.
Mr. Upton. Mr. Kinzinger?
Mr. Kinzinger. Thank you, Mr. Chairman. If I can get Mr.
Flores' attention for a second, yes, there you go. Thanks.
Mr. Secretary, thank you for being here. As you may or may
not know I have four nuclear power plants in my district which
is the most of any in the country. It is eight reactors.
Obviously that is many locations for spent fuel storage and so
nuclear is extremely important not just for our domestic energy
production, but one of the things last time you were here you
and I talked a little about was energy as a tool of national
security and the importance of that and the role that that
plays.
Just this week you made the point that every molecule of
American gas that goes into Europe is a molecule that they
don't have to get from Russia and be held hostage. I know you
are aware the Russians are building or considering about 55
nuclear projects around the globe and for China that number is
closer to 200 projects. Does your sentiment about Russian
natural gas apply to nuclear power as well, sir?
Secretary Perry. Yes, sir. It does. And I think it goes
right to the heart of the agreement with Saudi Arabia that is
being negotiated now, the 123 Agreement, in the standpoint of
if we do not succeed in that effort the alternatives are China
or Russia. Number one, neither of those countries care about
nonproliferation, and the other one is we will lose the
opportunity to develop our supply chain and our intellectual
chain that will further put America at a disadvantage. And not
just in the civil nuclear side, but sometime down the road on
our ability to protect this country from a weapons standpoint.
So this is a critical time in American history relative to
supporting nuclear energy, civil nuclear energy.
Mr. Kinzinger. Thank you. And I appreciate that your budget
request prioritizes nuclear energy research, nuclear security,
and of course Yucca Mountain. However, I remain deeply
concerned about the state of our domestic nuclear industry as
we have talked about. I have introduced legislation with my
friend, Mr. Doyle, to make common sense reforms at the NRC to
provide existing plants some relief, but without a strong
domestic industry how do we expect American technology and,
more importantly, safety culture and nonproliferation standards
to compete with state-run power companies like Russia and
China. So, overall, what is the DOE currently doing or planning
to do to support our domestic industry and reaffirm our global
leadership?
Secretary Perry. Well, obviously the administration is the
message is clear not just on the nuclear side but coal as well
and it is not just those two. This administration is committed
to a broad portfolio of renewables of gas, of hydro, coal, and
nuclear.
Mr. Kinzinger. And while I believe that H.R. 1320 is part
of the solution, there are several options to put the domestic
nuclear industry on steadier ground and increase our global
competitiveness. Can you elaborate as much as you can on DOE's
Light Water Reactor Sustainability Program which is looking at
extending existing licenses from 60 to 80 years?
Secretary Perry. Yes, sir. We will continue to promote
those technologies as best we can. We think that again this
plays into the diverse portfolio and new technologies whether
it is clean coal technologies, whether it is--I was on the West
Coast at Livermore Lab 2 weeks ago looking at technologies that
are making our wind turbines more efficient. So there is a host
of innovation rather than regulation is the real motto here
from our perspective.
And whether it is in the nuclear side of things, whether it
is in the fossil fuels, whether it is in the renewables, the
national labs and the dollars that you all are authorizing for
these national labs will go a long way toward making America
more competitive in the global energy marketplace.
Mr. Kinzinger. Thank you. And, lastly, do you believe that
wholesale energy markets can do a better job at valuing the
unique resource attributes of nuclear power, and if so how can
DOE and Congress help to reform these energy markets? What role
can we play in doing so?
Secretary Perry. Well, I think one of the roles that DOE
needs to play in this is to rebalance that obviously previous
to this administration coming into place there were some thumbs
on the market and at least we should take that pressure off of
the direction that those markets were headed. Obviously there
were some political considerations in the previous
administration that they were not fond of coal, they were not
fond of nuclear, and both of those industries paid a price for
it. They had their favorites in the arena and they supported
those. What we are looking at is to rebalance, if you will, to
take the thumb off of the market scale.
But with that in mind, the more important issue is one of
national security. Being able to know without a doubt that the
energy supply will be there when we need it whether it is from
a cyber attack that stops the transmission of gas somewhere,
whether it is a hurricane that hits the, God forbid, not again,
the northeastern part of this country, the national security
side of this is even more important than the economic side of
it.
Mr. Kinzinger. Thank you, Mr. Secretary. I appreciate you
being here and I yield back.
Mr. Olson [presiding]. Time has expired.
Mr. Tonko for 5 minutes of questions.
Mr. Tonko. Thank you, Mr. Chair.
Welcome, Secretary Perry, and thank you for returning
before the committee. Over the past year I haven't agreed with
all of your decisions or priorities. I thought the notice of
proposed rulemaking was incredibly misguided, but overall, and
it might surprise you to hear me say this, I think you have
done a fine job as Secretary.
Secretary Perry. Yes, sir.
Mr. Tonko. As far as I am aware there have been no major
scandals or extravagant waste of taxpayer dollars. You have
visited many national labs and it seems like you believe in the
mission of the agency, all of which is more than I can say for
some of your cabinet counterparts.
With that said, I am concerned by a number of the proposed
cuts in fiscal year 2019's requests. Many of them have been
mentioned already, EERE, the Office of Science, grid
modernization programs, and the elimination of ARPA-E. In the
past you have stated support for ARPA-E and DOE's innovation
budget. Last year you testified that energy innovation is a
part of DOE's core mission and I think you might agree that
cuts of the magnitude that have been proposed are not good for
the future of America's global energy leadership.
So I would encourage you to push back on OMB to ensure
innovation continues to be a top priority of the agency.
Specifically, now that Congress has appropriated fiscal year
2018 funding for programs that the previous request proposed
eliminating, I expect we won't see a repeat of last year's
impoundment of ARPA-E funds or a delay of weatherization
funding to states which they are expecting on July 1.
But I want to focus on a different issue. Mr. Secretary,
are you familiar with this recent National Energy Technology
Laboratory report entitled, ``Reliability, Resilience and the
Oncoming Wave of Retiring Baseload Units''? It is dated March
18th, or March 13th, excuse me, 2018 and it was posted on DOE's
website on March 27th.
Secretary Perry. I am not an expert at it, but I am
certainly familiar with it.
Mr. Tonko. OK. Are you aware of any DOE political officials
that discussed this report as it was being developed by NETL?
Secretary Perry. I am not.
Mr. Tonko. Would you be willing to share any communications
between DOE officials and NETL about the report with the
committee?
Secretary Perry. I would be happy to.
Mr. Tonko. Thank you. The reason I ask is because this
report is cited numerous times in FirstEnergy's section 202(c)
request which was submitted just 2 days after the report was
published on DOE's website. I want to take issue with how the
report represents the data to conclude coal made the grid more
resilient during the bomb cyclone.
I think most economists and grid operators agree on what
happened. There was greater electricity demand, prices
increased, and that allowed marginal power generators to come
online. In PJM those are coal plants that under normal
circumstances are not economically competitive. We saw
electricity markets at work. When demand increased, more
expensive generators could operate. This is evidence of coal's
cost, not its resilience. In fact, according to PJM, at times
coal plants experienced higher failure rates than other
resources.
This notion that the only thing standing between us and
blackouts is aging coal plants is just not accurate. What we
might agree about, but I suspect for different reasons, is the
premature closure of a significant amount of clean energy
resources would be bad for air pollution as well as our short
and long-term emissions reduction goals. If that is the case,
we should look at what has been done by States, States such as
my home State of New York, to preserve and compensate zero
emissions generation. Or if you prefer an in-market solution,
consider what New York's ISO is working on to develop to price
carbon within the market.
These options are not without their flaws or opponents, but
they do represent a serious path forward to address some of the
issues you have been discussing this past year. But ultimately
these are policy decisions for States or for Congress. Acting
under the pretense of an emergency to justify unilateral agency
action is not good for consumers or the people responsible for
operating our grid.
So, Secretary Perry, do you have any thoughts on the role
or appropriateness of States taking action to support zero
emission generators through clean energy standards or similar
programs?
Secretary Perry. No, sir. I encourage States to get
involved with making their states more competitive. I certainly
did that when I was the Governor of Texas and we saw a
reduction, almost 20 percent of total carbon footprint, over 60
percent of both CNOx and SOx during that
period of time. So the point is, states can have a real role in
this.
With that said, from my perspective this issue that we are
facing and I recognize--and by the way thank you for your kind
remarks. My wife doesn't even agree with me all the time, so--
--
Mr. Tonko. OK. Well, I need to meet her then.
Secretary Perry. Yes, sir. I am going to show her this, if
you don't mind. But the point is that there are real national
security implications here. And I will finish with this. As the
Governor of Texas I brought in ERCOT, which is our big Electric
Reliability Council that oversees our generation in Texas. And
I think it was late spring of one year we had had a very hot
summer, which we typically do in Texas, and we had had some
brownouts. We were trying to manage the system.
And I shared with them, I said, listen, you are the expert
here, but I don't want to get a phone call from citizens of
this state because you weren't prepared and you didn't put in
place the needed generation capacity to be able to deliver
electricity to a city like Dallas that has had 15 straight days
of 105-plus degree temperature and a grandmother has died. I
said that is not a conversation that I am going to accept, and
the same is true as the Secretary of Energy.
And the administration is focused on making sure that we
have the resiliency and the reliability of our grid, and I want
to work with you. I will work with the states as well to find
the solutions to this. But I don't think we have time to be
studying this anymore to the standpoint of oh, let's just kick
the can down the road. I think we are facing with these plants
being scheduled, some of them prematurely, to come offline, I
just don't want a call from somebody in Upstate New York
because the power has gone out because we didn't have the
political courage to put into place a strategy that made sure
that a citizen of New York is never going to have to make the
decision of whether or not we are going to turn the lights on
or are we going to keep our family warm.
Mr. Tonko. I have exhausted my time. I would just say that
New York did make certain that they had their power supplies
met and with zero emissions being the guiding force. So I think
that is the difference here.
But I yield back, Mr. Chair.
Mr. Olson. Time is expired.
Mr. Griffith, 5 minutes for questions, please.
Mr. Griffith. Thank you, Mr. Secretary. I appreciate you
being here. All my questions have gone out the window because
of comments that have been made of recent or at least a lot of
them have.
You were very kind to the previous administration to say
they put their thumbs on the scale when they were looking at
various energy sources. In my district which has got natural
gas, predominantly coal, we felt like it wasn't a thumb on the
scale, we felt like it was a boot on our necks. We had
thousands of jobs lost, families disrupted, communities losing
businesses left and right, hospitals closing down because they
no longer had the big employer at the coal mine to pump in the
insurance into the hospital and the money coming in there. It
was devastating.
And so I was kind of surprised, one, that Mr. McKinley
missed the NETL report in his detail. He kept going. I guess he
had to have some time for questions and so he left that one
out. But further that Mr. Tonko doesn't understand. And he is a
good man, but he doesn't understand. It would be easy for
people who were that desperate like a thirsty man in the desert
who finally discovers an oasis to consume that NETL report and
put out the request for 202(c) relief within 2 days because the
coal community has been desperate until you all have come along
and not wanting to put your finger on the scale at all but
wanting to make sure that there is an all-of-the-above strategy
for the United States, and I thank you. Would you like to make
any comment before I go on?
Secretary Perry. Go right ahead, sir.
Mr. Griffith. All right. So I appreciate that and I do have
this to say although it is not your Department. He indicated
that, the fact that we had to use the coal and it cost more
that that was the markets at work. It is also Federal
regulation. Because what we need to do is we need to look at
the New Source Review rules, because when a coal-fired power
plant and lots of other businesses that use coal for power go
in and they want to make one little change, even if it makes
that plant more efficient, they have to then comply with all
kinds of regulations.
I have a facility in my district which is not a power
plant, another facility that I toured a number of years ago and
they had a kink in their conveyor belt because at one time
there had been a part of their paint shop on the end of the
conveyor belt. They no longer had that paint shop or that
painting capacity, I think it was lacquer, but they left the
kink. And so we walked over the conveyor belt once and then we
walked over it a second time where it just went out into empty
space, and the owner said that because he had to meet those EPA
regulations it was easier just to leave the kink in the
conveyor belt than to make his process more efficient. We need
to make some changes there and I hope you would agree with that
even though I know it is EPA's turf.
Secretary Perry. Right. Mr. Griffith, I think you bring in
a very high level way what this administration is focused on.
The President has given clear directives to people like myself,
Scott Pruitt, Secretary Zinke from a regulatory standpoint that
getting rid of regulations where the costs outweigh the
benefits is one of the real goals. And it has been, I think,
very successful to date.
And the key here is having some common sense applied, being
able to recognize that we have overregulated this country and
those overregulations have cost this country a huge amount of
jobs and untold wealth.
So you were spot on from the standpoint of the single most
important thing I learned as a governor that tax policy is
important. You don't overtax, but businesses know how to deal
with that. It is when you have a regulatory environment that is
strangled where you will lose your businesses. It is one of the
reasons we were able to bring a lot of businesses out of
California to Texas, no offense to anybody from California that
is here. But the point is they were overregulating and
businesses want to get out of that environment.
So the regulation side of what you are talking about is
incredibly important. It is not just about being able to
address the national security side of things, the issues that
we talk about whether it is a 202 or whether it is some other
avenue towards making sure we have a reliable portfolio, but
the regulatory environment in this country has to be addressed.
Mr. Griffith. And I could not agree more. And I appreciate
all the work that you all are doing in the administration to
get this straightened out because it really has, I think, hurt
our country.
That being said, let me switch to more positive things. Ms.
Castor complimented you on the testimony of one of your folks
at the O&I subcommittee yesterday related to Puerto Rico. I
think that they are doing great work down there and we
appreciate it, but I think we can also use that as a test bed
for other areas that might get isolated in a disaster and look
at doing microgrids and other things that we can move this
country forward to make sure that we have our grid resilient.
We have a perfect example. We are going to spend a lot of money
there anyway. Let's spend it doing experiments to see how we
can build the system for the rest of the country as well.
And with that, I know you agree but I have to yield back.
Secretary Perry. Yes, sir.
Mr. Olson. Time is expired.
Mr. Loebsack, 5 minutes for questions.
Mr. Loebsack. Thank you, Mr. Chair.
Great to see you again, Mr. Secretary.
Secretary Perry. Sure, thank you.
Mr. Loebsack. We don't have a lot in common, Iowa and
Texas, but we do have wind energy in common.
Secretary Perry. I have spent a lot of time in your home
state, sir.
Mr. Loebsack. I am aware of that too. That is right. Seems
like ages ago, but I am aware of that. Thank you. But I am
happy about your support for wind energy. As you know that
constitutes about 37, 38 percent of the electricity generated
in the State of Iowa so it is really a great program. And thank
you for coming back to this committee. I do appreciate the
accountability that you demonstrate here. I think all of us do
on a bipartisan basis.
As you know of course my home State of Iowa does lead the
Nation in biofuels production. It is an integral part of our
economy, the farm economy, and right now the farm economy is
suffering. We have concerns about trade issues too, we don't
need to get into that today. But that is certainly a bipartisan
concern that we have in the State of Iowa, what is happening on
that front. And I am sure that you are aware of the recent
press reports about the waivers that the EPA has granted the
small refineries to release them from their obligations under
the Renewable Fuel Standard program including, actually, some
of the Nation's largest and most profitable refiners.
And as you can imagine, the biofuels community has
significant concerns about the apparent increase in the
awarding of these waivers by the EPA and about the implications
for the biofuels industry, the corn market and of course the
farmers who depend upon the market and the workers in the
industry, all the John Deere and a lot of other, the implement
companies that are all related to this as well economically.
And the small refinery waiver process as you know requires the
EPA to consult with the DOE and with you, the Secretary of
Energy in particular, in review of the exemption petitions and
unfortunately there is not a lot of transparency, if any, in
this process.
So I do want to ask you, has the EPA consulted with the DOE
on their issuance of these waivers as required by law?
Secretary Perry. Yes, sir. I would suggest to you they
have. I don't know the intensity and that may be the wrong
word, but the depth of those negotiations and what--I know that
they use us as the agency to advise them about how this would
impact the energy sector. So, but for clarity purposes, EPA is
who hands out those.
Mr. Loebsack. Right. But they are required by law to
consult with DOE, with the Secretary of Energy, right?
Secretary Perry. But they do consult with us. Yes, sir.
Mr. Loebsack. Does your office recommend that EPA adopt any
small refinery waivers this year, and if so what waivers did
you recommend?
Secretary Perry. Let me go back and get the details of that
for you so that I can give you specific and correct
information.
Mr. Loebsack. Yes and I really do appreciate that because
what I am going to ask you then, moving forward, just yesterday
your counterpart at the USDA, Secretary Sonny Perdue, indicated
that he believes the EPA is misusing the hardship waivers. And
as you know our governor is in town today too and she is trying
to get through to the President to talk to him about the RFS.
Secretary Perry. Yes, sir.
Mr. Loebsack. Do you agree with Secretary Perdue that the
EPA has misused the hardship waivers?
Secretary Perry. I can't speak to that because I don't know
the details of the issue. If I could just add one side of the
story, one of the things that we are working on is to find some
other, it would be, number one, I know my Iowa corn farmers
pretty well and they really don't care where this ethanol goes
as long as it gets to go somewhere.
Mr. Loebsack. I just had a meeting with a number of them
last weekend.
Secretary Perry. Yes, sir. And I respect that having been a
former agricultural commissioner of the State of Texas. We are
in conversations with my counterpart in Mexico and we were
talking to him as late as this last month about being able to
move U.S. ethanol into Mexico into their fuel mix because they
are in the process of we understand that they are going to be
mandating some ethanol.
Mr. Loebsack. And I really appreciate that. And we have to
keep in mind too that we are talking about a lot of production
of corn here in the country and of course around the world and
ethanol is obviously one use of that corn. There is no
question. But we have to make sure in those NAFTA
renegotiations that we don't get our corn market in Mexico cut
off as well.
So I just have some questions. I don't have time to go
through them here, but I do want to submit these questions for
the record having to do with the total number of refinery
waiver applications that the DOE evaluated for the last 5
years. So a number of those and I would like to submit those
for the record, Mr. Chair.
Secretary Perry. So we will have them ready for you.
Mr. Loebsack. And thanks for your time today. I appreciate
it. And we look forward to your answers to our questions.
Secretary Perry. Yes, sir.
Mr. Loebsack. Thanks, Mr. Secretary. I appreciate it. I
yield back.
Mr. Olson. Thank you.
Mr. Johnson, 5 minutes of questions.
Mr. Johnson. Thank you, Mr. Chairman.
Mr. Secretary, good to see you again.
Secretary Perry. Thank you, sir.
Mr. Johnson. I sure enjoyed our trip down to Piketon a few
months ago.
Secretary Perry. Yes, sir.
Mr. Johnson. You and I had extensive discussions when we
were there and, like you, I support an all-of-the-above energy
policy and I know you believe that as well. My district in
Eastern and Southeastern Ohio, and you and I have talked about
that a little bit as well, is no stranger to the benefits of a
diverse generation with our abundance of both coal and natural
gas. Many of the coal plants in the 6th District of Ohio, along
the Ohio River are not only a reliable source of power but they
are the strong economic drivers for the communities in which
they exist. The people rely on them there for good paying jobs.
So I worry about the recent retirements and announced
retirements of coal plants especially as Federal and State laws
and regulations have played a major role in affecting these
plants over the years. I know you have repeatedly expressed
similar concerns and have pushed FERC on these issues. So my
first question, are you satisfied with FERC's work to date on
this issue and do you believe FERC and the RTOs and the ISOs
are taking the right approach to these issues?
Secretary Perry. Well, relative to the 403 that we sent up,
I would have to be on the opposing side of, I wouldn't have
sent them our recommendations if we didn't think they were
correct. So, that is the only dealings that I have had with
them to date.
Mr. Johnson. Sure.
Secretary Perry. So my first experience of picking up that
potato was it was pretty hot.
Mr. Johnson. Yes, yes. Well, second question, you state
that the fiscal year 2019 DOE budget will help improve grid
resilience and support generation diversity. Can you provide
examples on how DOE will work towards these objectives?
Secretary Perry. Well, obviously having grid diversity has
to do with having resource diversity. One of our challenges is
that in the course of the last decade the resources have
changed drastically. You think back to 2005, just as Hurricane
Katrina was coming into the Gulf Coast there was a fellow
giving a speech about peak oil. Fast forward 10 years and the
United States is in the process of becoming the number one oil
and gas producing country in the world. I mean that literally
happened in a decade, the explosion of renewables and the grid
being able to manage all of that and so the technology to
manage the grid. And I put that into the resiliency side and
the reliability side.
So the challenges that are out in the world today and how
quickly they came is a great testament to our national labs and
the innovation that comes out of those national labs and our
private sector working together in many cases. So the way we
look at this is we have been blessed with a lot of resources.
How you manage those resources both with innovation and with
common sense, common sense part of this from my perspective is
don't restrict resources getting into your grid that could put
your national security in jeopardy, for instance.
So all of this is, it is quite a challenge, Mr. Johnson, as
you know, but I am quite confident we are up to it and we will
find the solutions that challenge us as a country.
Mr. Johnson. Yes. Well, thank you, Mr. Secretary.
Shifting gears just a little bit, when we were at Piketon,
you and I, and I appreciate your support of all the stuff that
is going on down at Piketon as well. I appreciate that very
much. You have made reference to an Appalachian plan which
relates to infrastructure to take advantage of our natural gas
resources and other industrial resources in West Virginia and
Ohio. Can you elaborate quickly what that vision looks like?
Secretary Perry. Yes, sir. As the Governor of Texas I used
to fret greatly in August and September about a Category 5
hurricane coming up the Houston Ship Channel, Mr. Olson, and
creating havoc in the petrochemical footprint in the State of
Texas which would have negative effect all over this country.
Having a duplication of that somewhere made a lot of sense to
me and why not put it where the resource is which is in the
Appalachian region. You are sitting on top of the Marcellus,
the Utica.
So if government will not be an impediment from a
regulatory standpoint in particular, the private sector will
come and fund that. This isn't a matter of coming to Congress
and saying hey, will you put millions of dollars into this.
Just don't get in the way.
Mr. Johnson. There you go.
Secretary Perry. And help those States, West Virginia,
Pennsylvania, Ohio, Kentucky, put that plan together. We are in
the, I am not going to say nascent but we are in the early
stages of conversation coordinating with those states,
coordinating with other agencies to be able to lay out a plan
hopefully before this year is out so that there is a clear
opportunity for this country to have a duplication of that
petrochemical footprint in the Gulf Coast of Texas in the
Appalachian region. The economic impact would be stunning. More
importantly, the national security side of it would be far-
reaching.
Mr. Johnson. Makes perfect sense.
Thank you, Mr. Chairman. I yield back.
Mr. Olson. The gentleman yields back.
Mr. Schrader, 5 minutes for questions.
Mr. Schrader. Thank you, Mr. Chairman. And thank you, Mr.
Secretary, for being here. It is nice to have a normal and
competent member of the administration before the committee
here.
I would like to go back to Chairman Walden's comments
regarding the Power Marketing Administrations. As you might
imagine that is a bipartisan issue in my part of the country.
On page 14 of your testimony you state budget proposes a sale
of transmission assets of the Western Area Power
Administration, Bonneville Power Administration, and
Southwestern Power Administration and to reform the laws
governing how the PMAs establish power rates, et cetera.
Frankly, as a member of Congress in the Pacific Northwest,
very concerned about the administration's continued insistence
we sell off transmission assets at the Bonneville Power
Administration and require them to sell power at market rates.
Mr. Chairman, I guess I would like to enter into the record the
bipartisan letter the Pacific Northwest delegation sent to OMB
Director Mr. Mulvaney opposing this proposal in the 2019
budget.
Mr. Olson. Without objection, so ordered.
(The information appears at the conclusion of the hearing.]
Mr. Schrader. Thank you. The BPA is a nonprofit Federal
wholesale utility and power marketer that receives no
congressional appropriations. I repeat that, no congressional
appropriations, and must recover its costs with revenues it
earns like the private sector from selling wholesale power and
transmission services. BPA provides approximately half the
electricity used in the Pacific Northwest and operates three-
quarters of the region's high voltage transmission grid.
Selling off these transmission assets would fragment the grid,
be devastating to the region, and provide a meager one-time
asset that would not have any long-term beneficial effects with
regard to our economy.
By requiring BPA to sell power at market rates would
essentially be the death knell of BPA. BPA serves the public
interest and has other obligations and as such BPA markets its
power at cost. Historically, it has provided some of the lowest
cost electricity in the Nation, natural gas having put some
pressure on it obviously at this point. And that coupled with
BPA's increased court-mandated spill and fish recovery
operations, which account now for a third of the rates that
Pacific Northwest folks pay and that Treasury consequently does
not have to pay, has put additional cost pressures on the
agency and driven their costs up some.
Requiring BPA to sell its power at market rates would drive
them into the red, make them unable to meet their obligations
to the Treasury, actually costing taxpayer money, strand the
Federal Government with a very expensive, nonfunctioning asset
and put fFederal taxpayers on the hook for the fish mitigation
costs which come to the tune of almost a billion, or I think a
little over a billion dollars a year.
There has been overwhelming bipartisan, bicameral
opposition as the chairman of the full committee testified to,
opposition to the administration's proposal. Eight members of
this committee including my fellow Northwest colleagues, Ms.
McMorris Rodgers and Chairman Walden, sent a letter to our
budget committee this year that I referenced asking them to
reject the proposal, yet once again it seems like we are here.
So our region already produces some of the cleanest power
that we have talked about, very affordable. We repay the
Treasury with interest. So if you can explain to me what
problem the administration is actually trying to solve with
this proposal.
Secretary Perry. Mr. Schrader, let me just remark that
maybe it is my best addition here would be I am reminded of a
Kenny Rogers song where he talked about you need to know when
to hold 'em and know when to fold 'em.
Mr. Schrader. I understand and appreciate that response and
appreciate your----
Secretary Perry. Congress has been very clear about this
issue. I will be more than happy to carry the message back.
Mr. Schrader. Thank you very much, Mr. Secretary. Thank you
for being here.
Secretary Perry. Yes, sir.
Mr. Olson. The gentleman yields back.
Dr. Bucshon, 5 minutes of questions.
Mr. Bucshon. Welcome, Secretary Perry, from Southwest
Indiana.
Secretary Perry. Yes, sir.
Mr. Bucshon. This committee has spent most of this Congress
examining the country's electrical grid and throughout our
hearings experts have stressed to us the importance of a
reliable and resilient electrical grid. There are many sources
of energy that can power the grid. However, coal-fired
electricity is one of the most reliable fuel secure and
affordable energy sources. This was evident during the 2014
polar vortex and again most recently with the bomb cyclone. It
was the reliable baseload power plants such as coal and nuclear
that prevented blackouts in many regions of the country.
Even with its reliability, coal-fired plants continue to
retire at alarming numbers, and I know Mr. Johnson just
mentioned this. Since 2010 more than one-third of the Nation's
coal-fired power plants have shut down or announced plans to
close. That is the equivalent of shutting down the entire
electricity supply for Indiana, Ohio, Illinois, and Kentucky.
Thirty nine coal power plants, power generating units have been
forced to close in my home State of Indiana alone.
The 8th District of Indiana which I represent is home to
all the coal mines in the State of Indiana which is responsible
for more than 70 percent of the State's energy. Without
traditional baseload energy sources such as coal being properly
valued in wholesale markets plants continue to be at risk of
retiring, leaving many of my constituents at risk of losing
their jobs, seeing higher electrical bills, and providing less
reliable energy to power our homes.
This is why I have introduced H.R. 5270, the Electricity
Reliability and Fuel Security Act, which would create a
temporary tax credit covering a small portion of the cost to
operate and maintain existing coal-fired power plants. I
believe the temporary tax credit which would last for 5 years
is necessary to avoid more coal retirements while Congress, the
administration, and grid operators work together to ensure the
grid remains reliable and resilient.
Secretary Perry, do you think that you would be supportive
of this legislation and the other efforts that Congress, DOE,
FERC, and the grid operators are taking to properly value coal
to prevent more power plant retirements and provide our nation
with a more reliable and secure grid?
Secretary Perry. Yes, sir. Mr. Bucshon, I think it is
important that we put into place some processes that assure
this country has a reliable and resilient grid and coal is
going to be a part of that and coal is going to be a part of
the future energy supply of the world. By 2040, the estimate is
at 77 percent of the energy produced in the world will still be
fossil fuel, coal will be playing a major part of that.
Our goal and our part to play in this is that U.S. coal
imports are up 61 percent from a year ago, we are going to
continue. When I go to India we are not just going to be
talking about LNG. We are going to be talking about coal and
clean coal technology that is developed in this country. We
want them, they are going to burn coal and we want them to use
our technology to be able to remove the emissions that are
harming the environment in that part of the world and globally
as well.
So any reasonable approach to making sure that we have a
reliable energy source in this country we are going to be
working with and we certainly think your legislation is
reasonable and heads in that direction.
Mr. Bucshon. Thank you very much for being here, Secretary.
Secretary Perry. Yes, sir.
Mr. Bucshon. Thanks for your work.
Mr. Chairman, I yield back.
Mr. Olson. The gentleman yields back.
The chairman calls upon the gentleman from Texas, Mr.
Flores, for 5 minutes of questions.
Mr. Flores. Thank you, Mr. Chairman. Mr. Secretary, I think
you and I are equally supportive of LNG and we recognize the
incredible importance of LNG exports not only in terms of our
balance of trade and economic opportunity, but also the
geopolitical position that it places us in vis-a-vis some of
the threats that we face around the world.
I know that you have taken some good steps to improve DOE's
permitting process when it comes to LNG to clear the backlog of
the applications that were pending that you inherited from the
last administration, but I also understand that FERC is
understaffed and that they are overwhelmed with their own
backlog. Is there anything that you as the Secretary of DOE can
do to help FERC with their backlog?
Secretary Perry. I would be more than happy to have this
conversation with the chairman and we are more than happy to
assist them in any way we can.
Mr. Flores. OK. It was my understanding you might be in a
position to move some folks from Sandia temporarily to FERC to
help with that. Anyway, if you can answer that supplementally
for us that would be great. So, now with LNG out of the way,
the next area that I am particularly focused on today is
nuclear, particularly advanced nuclear technologies. The alma
mater that you and I share, which I am pleased to represent, is
a partner on some of DOE's university engineering university
programs. I understand that the administration is conducting a
wide range in review of nuclear policy, but while we await the
outcome of that broader review what are the most important
policies that Congress can advance now in the short term, in
the near term?
Secretary Perry. I am sorry?
Mr. Flores. What are the most important policies that
Congress can advance in the near term while we wait for the
administration to finish its overall nuclear review policy?
Secretary Perry. Well, certainly I think that making sure
that the resources are appropriate on this national nuclear
policy review, and we have for too long, I guess, Mr. Flores,
this country has kind of put nuclear, our arsenal on the back
burner, if you will.
Mr. Flores. Right.
Secretary Perry. The mid '90s and the Peace dividend and
the world was going to live happily ever after and that is not
the case. And we came to our senses, if you will, or the world
became a little clearer in view and we saw that maybe we need
to make sure that we have a nuclear arsenal that is modern.
These things, they age just like any other infrastructure.
Being able to modernize it, being able to look at new systems,
whether it is delivery or whether it is the actual arsenal
itself, is very much an important role that you in Congress are
going to play from being able to fund it for one thing.
Mr. Flores. Sure.
Secretary Perry. We have a new administrator of the NNSA, a
very capable individual who I think you will find very good to
work with, very knowledgeable, and a good partner in this.
Mr. Flores. When we look at the nuclear technology of the
future, advanced nuclear reactors and small modular reactors,
any time you have a first-mover technology like that there are
some challenges in terms of trying to help, that our nuclear
innovators face in terms of trying to get them off the ground
so that they can move forward and get it into a position to be
a commercially viable power generation source.
I would ask you if you would have your staff work with us
so we can try to figure out what those challenges are and what
Congress can do to develop the statutory framework to be able
to address those challenges.
Secretary Perry. Yes, sir. We think SMRs are incredibly
important going into the future, the application that they can
play particularly in for our national security. If the concern
is about keeping these devices secure, obviously being on a
United States military base is as secure a site as you can
have. So, SMRs are going to play a very, very important role in
the diversity of our portfolio energy production-wise going
forward.
Mr. Flores. OK. Well, thank you, Mr. Secretary. I have
reached the end of my time. I do have additional questions that
we will submit supplementally and I look forward----
Secretary Perry. Yes, sir.
Mr. Flores [continuing]. To working with you as we address
our nation's energy policy. I yield back.
Mr. Olson. Time has expired.
Mr. Cramer, 5 minutes for questions.
Mr. Cramer. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for being with us again. Thank
you for your excellent leadership at the very important agency.
Before I drill down into what is most important to me today is
specifically the fossil energy research and development budget,
I want to associate myself with Mr. Peters' comments about
ITER. Even though San Diego is a long ways from North Dakota,
his point about leveraging that resource, I think was made
well. And I also want to associate myself with the fact that I
do feel like there is a greater confidence given recent changes
in leadership.
Secretary Perry. Yes, sir.
Mr. Cramer. And I appreciate your attention to that and
your vast knowledge of it, so thank you for that. With that, I
do want to get to the more concerning topic for me and that is
the administration seems to be sort of sliding away from a
commitment to at least if not pilot scale, commercialization
gap with demonstration projects in the fossil energy R&D,
particularly as it relates to where I think the folks ought to
be and that is carbon capture and utilization and storage of
CO2 from coal-fired power plants.
Now we know and we appreciate in North Dakota your role,
your agency's role in partnering with the Energy &
Environmental Research Center at the University of North Dakota
and some of our utilities, particularly Minnkota Power, in
looking for some opportunity, testing some opportunity for
Allam cycle or, and some of these technologies that will
bridge, bridge coal, coal's past, and coal's future as a clean
resource. But without the gap being filled or at least
supplemented by the taxpayers, I don't know that we can get
there, quite honestly, and yet we need it so badly.
Specifically, the administration's fiscal year 2019 budget
proposal moves away from the research and development of carbon
capture in reducing its R&D roughly 75 percent relative to
fiscal year 2018. And of course both in '17 and '18, the
Congress itself has had to sort of step it up. So given the
fossil energy R&D request as a whole was increased relative to
the President's request of fiscal year 2018, can you explain
why the Department shifted so dramatically from carbon capture
R&D?
Secretary Perry. Yes, sir. Here is my observation is that
the fiscal year 2019 budget will not impact the current
activities that the Department has funded up in your part of
the world. Plain CO2 reduction, Regional Carbon
Sequestration Partnership, that is going to continue on; a
feasibility study on the Tundra project, that one is in that
money stream for fiscal year 2019. The CarbonSAFE, S-A-F-E,
activities, those are funded as well.
Additionally, on the carbon capture issue, last year in
about May, I was in China for the Clean Energy Ministerial and
we were able to get CCUS placed into that. Now obviously these
are not dollars that are going to be spent in North Dakota and
I understand that. But I think from the standpoint of the
commitment of the agency to the carbon capture, utilization,
sequestration--and actually yesterday Chairman Alexander in the
Senate was talking about being able to find obviously using our
national labs, using our universities that we have
relationships with a use for carbon dioxide.
And again there is no eureka moment here, but, those are
the exciting technologies and opportunities that we think are
out there in the future that we are going to be looking at
funding and, I hope you know that our commitment is very strong
to that. Senator Hoeven, my former governor colleague, he and I
talked at some length yesterday about the opportunities that we
can work on together with North Dakota and DOE.
Mr. Cramer. In my remaining seconds let me, first of all,
strongly encourage you and invite you to North Dakota as it now
warms up and thaws out to come and see the work at the
University of North Dakota.
Secretary Perry. Yes, sir.
Mr. Cramer. Secondly, I want to ask for your assistance in
advocating with us for the 45Q tax credit which was slightly
improved in the most recent bill but not very useful until we
reconcile IRS and EPA rules so that it is more useful for these
types of projects. It is essential. And then there is another
credit, the refined coal credit that I think just has to be
extended so we can build this bridge again between basic
research and commercialization. We are at the cusp and we run
the risk of losing all those opportunities. As you said,
innovation not regulation is our motto. I like it. Let's live
with it. Thank you.
Thank you, Mr. Chairman.
Mr. Olson. Time is expired.
Mr. Green from Texas, 5 minutes for questions. Are you
ready, Mr. Green?
Mr. Green. Yes, Mr. Chairman.
I want to welcome the Secretary. My other job is I am the
ranking member on the Health Subcommittee and we just finished
a hearing upstairs, Mr. Secretary. And you and I have known
each other since we could actually play basketball in the state
capital. I want to thank Chairman Upton and Ranking Member Rush
for having this hearing today and Secretary Perry for taking
the time to testify with us.
DOE has many important missions in ensuring the adequate
funding for the agencies essential. The President's budget
fiscal year 2019 is a 3.8 cut from the fiscal year 2018 enacted
level. Much of these cuts hit clean energy programs, grid
operations, and next generation energy technologies. I am
concerned that these cuts in these programs could have grave
consequences to the environment at a time when many nuclear
plants are going offline. Currently, there are four planned
deactivation of nuclear plants in Ohio and Pennsylvania which
generate 40 million megawatts of electricity, and PJM, more
than all the power from wind and solar combined in PJM.
FirstEnergy Corporation recently filed a 202 request
stating that immediate aid was needed for all coal and nuclear
plants within PJM, not just their own. I have worked with many
of my colleagues on this committee over the decades to updates
to the Federal Power Act throughout the years including changes
to the section 202(c). The current request concerns me in many
ways. Section 202 has been used in the past for immediate
crises from the California energy crisis in 2000 to the East
Coast blackouts in 2003. The mechanism has historically been
used on a short-term basis.
At a Bloomberg event recently, when asked to define an
emergency you responded that you flip a light switch on and
nothing happens. I agree with that characterization. Can you
elaborate on that quote and what is in your mind and
constitutes an emergency that justifies the use of 202(c)?
Secretary Perry. Yes, sir. I think the observation is a
very simplistic one that I use, but I think it cut right to the
core. When you have a use for your energy, whether it be a Wall
Street financial institution, whether it be at the Federal
Reserve and the computers that are there, whether it is on a
military base to secure this country's liberties and freedoms,
or if it is in your home and you have an all-electric home and
it is a chill factor of minus 20 in the Northeast somewhere and
you call for that power and it is not there that is an
emergency.
And that is exactly the point that I was trying to make in
a very simplistic approach, but I think it did make the point
that if you don't have this electricity, if you don't have this
reliable source, then we have a real challenge and a real
problem in this country and that is the reliability and the
resiliency issue of this grid. And being able to guarantee to
the American people that that will be there is one of our
roles, you as a United States Congressman and me as the
Secretary of Energy.
So from my perspective, having a diverse portfolio is one
of the things that we did in your home state over the course of
the, particularly in the 2000s when they deregulated the energy
market and we had this diverse, we developed more wind energy
than any other state in the Nation, the gas that came online,
the other incentives that the state, and I think Mr. Tonko was
talking about giving states some of this responsibility and I
totally agree with that.
But my point is the time for study is over, again from my
perspective. We have got to act on this because I don't want to
wake up next winter with a polar vortex that is bigger than the
one that we had before and having taken some nuclear plants and
some coal plants offline and not having that energy available
to protect the citizens' safety and/or their security.
Mr. Green. Can you elaborate on the potential tools at DOE
you feel could be better suited to securing a valuable
emissions-free nuclear plants, for example?
Secretary Perry. Yes, sir. Well, this one is going to be a
bit of a bank shot, but I think it makes the point, Gene, that
we are in the process of, previous administrations, not just
the last administration but if you go all the way back probably
20-25 years, previous administrations have not put into place,
didn't respect the nuclear power industry. I think they
overregulated them. They put a lot of cost on them through
regulations. The last administration took away our ability to
process high-assay uranium for the purposes of civil nuclear.
That was started by the administration before the Obama
administration but they shut that down and then the private
sector has no place for that fuel.
My point with all of this is we are at a critical place
here today that if we don't send some messages whether it is
making a good agreement with the Saudi Arabians to help them
develop their civil nuclear program so that American
contractors are going to have the supply chain to do that, that
our universities don't have the incentives to put young men and
women into the nuclear engineering field, all of that is going
to come to a head and we are going to be at a critical position
and I think it is sooner than we realize.
And if we don't have a civil nuclear program that is
robust, it will soon have an impact on our ability to keep our
weapons programs at the place because we won't have the
intellectual capability coming up through our national labs to
do this. You bring up an incredibly important issue, Mr. Green.
Mr. Green. Well, reliability is really important, like you
said, when you turn on the light switch and they can't or the
air conditioner or the heater, most of our problems in Texas
when it gets real warm in the summer. Back we were joking
yesterday, without air conditioning and elevators there would
not be a Houston, Texas because of the heat from, literally,
1st of May to the end of September.
While I disagree with the recent notice of public review
directed to FERC in the section 202 filing, I do think it is
important we look at planned retirements across the country.
While not rising to the level of immediate emergency, this is
an issue both DOE and Congress should address putting forward.
Obviously in Texas we have two nuclear power plants. Now we
have an abundance of natural gas, and of course producing more
wind power that was created during your administration when you
were governor than any other State in the Union. So, and
hopefully we will do some solar.
But in the Northeast they don't have the ability to do that
oftentimes with wind or solar so it is basically older
production whether it be coal or nuclear power. And that is why
we need to see how we can do it because those folks, we don't
want those folks freezing in the dark. But anyway I want to
follow what the Department of Energy does and hopefully our
committee will work with you on making sure that reliability is
important, but we also need to see as best we can how we get it
done.
Secretary Perry. Yes, sir.
Mr. Olson. My friend's time is expired.
I will call upon the gentleman from Oklahoma for 5 minutes
for questions.
Mr. Mullin. Man, Texans do stick together. No, I am
kidding. Anyways, hey, thank you, Mr. Chairman.
Mr. Green. Well, Mr. Chairman, Oklahoma also steals
football players from A&M and University of Texas and my alma
mater University of Houston.
Mr. Mullin. No, we don't steal. We recruit better. I mean
obviously they want to go to, you know, a climate that they can
live in. Anyway, hey, thank you.
And, Secretary Perry, I want to remind you of a time you
met my son in Leader McCarthy's office. My boy wasn't very big
at the time and he was talking to you. He was kind of like most
little boys, he was looking around and you grabbed him by the
shoulders and you set him on the chair and you said, young man,
look at me in the eyes when you talk to me. And I had told my
son that since the day he was born, and I really appreciate
that. That meant a lot.
Secretary Perry. I hope I did it in a very respectful way.
Mr. Mullin. Oh, you did a hundred percent, but that is how
we raise our kids. We are in Oklahoma too, and you look him in
the eye and if he is not looking you in the eye I had probably
thumped him in the head. It is just, that is called respect. So
I appreciate that. That meant a lot to me.
I want to talk to you obviously about Yucca Mountain and
DOE's requirements. Can you summarize DOE's legal requirements
pertaining to Yucca Mountain's licensing application?
Secretary Perry. Yes, sir. This body as authorizers and the
appropriations process has, and I think the President's budget,
$110 million for the licensing to go forward. And I look at
that as a way to get following the law. The law says that we
will do this. There is an additional $10 million in that
appropriation request for temporary storage as well.
Mr. Mullin. Is DOE required to create the Office of Civil
Radioactive Waste Management to manage all these activities?
Secretary Perry. Yes, by law.
Mr. Mullin. In your last organizational chart for DOE was
this office included in it?
Secretary Perry. I can't answer that. You may know the
answer to that.
Mr. Mullin. Yes, I do, obviously. The answer to that is no.
And as you alluded to a while ago, you are required by law to
have that. Can you explain maybe why it was left out?
Secretary Perry. Well, here would be my stab at that is
that just because it is not named and doesn't have a line item
does not mean that its duties are not covered in the agency.
Mr. Mullin. Do you know who is covering that then? And I
say that because we really aren't seeing any----
Secretary Perry. Can I get back with you and answer these
questions after I have had some time to dig down into it and
get you the proper answers?
Mr. Mullin. Yes, absolutely.
Secretary Perry. Yes.
Mr. Mullin. Because what I am trying to fish for here is if
it is from the appropriation process, if that is why the office
isn't manned, if that is why the duties of that office aren't
being done, then for the Committee's purpose we need to know
and we need to know what is keeping it from happening. And like
I said, if it is from the appropriation perspective we also
need to know what it is going to take to do that.
I think Mr. Shimkus alluded to how much it was costing the
taxpayers right now just from the lawsuits that are taking
place from the storage that we are supposed to taking care of
as the United States Government and so I want to be able to
help you. I want to work with you on it. So if you could please
get back to my office.
Secretary Perry. Yes, sir.
Mr. Mullin. Let us know how we can help you because that
was really the line of the questions what I was going to, and I
will actually yield back the remainder of my time.
Mr. Olson. Thank you to my friend from Oklahoma.
Mr. Walberg, 5 minutes for questions, sir.
Mr. Walberg. Thank you, Mr. Chairman.
And thank you, Mr. Secretary, for always being open to be
here and answer the questions. Thank you for the energy you put
into being the Secretary of Energy as well. It is encouraging
for those of us in the northern climes to know that that is
actually happening.
I have the privilege of representing the energy district of
the State of Michigan. Over 30 percent of all energy produced
in Michigan is produced in my district. It is a fleet of all-
of-the-above and some of that fleet sits right on one of the
Great Lakes, Lake Erie, and so we are definitely concerned with
cybersecurity. The challenge is not only that we are able to
turn the lights on at any time but the environmental issues
that go on thinking of the proximity there in the Great Lakes.
You recently formed the new Cybersecurity, Energy Security,
and Emergency Response office. I think that certainly shows
that you believe that elevating cybersecurity functions to a
Senate-confirmed assistant secretary level will help
intergovernmental and interagency communications and
multidirectional information sharing with the Department of
Energy's ability to appropriately and quickly address cyber-
related emergencies, and I thank you for that.
My concern is the sustainability of the Department of
Energy's leadership on this important issue. Cybersecurity was
not a surpassing concern back in 1977 when the Department was
organized. It certainly is today. In my bill with my colleague
and Ranking Member Rush, H.R. 5174, we specify functions
related to cybersecurity and emergency response that we believe
should be specifically led by a Senate-confirmed assistant
secretary. Will you work with us to ensure that we can elevate
that, Secretary, to law?
Secretary Perry. Yes, sir.
Mr. Walberg. I appreciate that. Over the past 7 months you
have had a lot of experience in dealing with emergency action
in your Department. During appearances before the Committee in
January, your Deputy Secretary and Undersecretary for Energy
said that expectations for DOE's emergency response exceeded
its authorities, if I recollect correctly. From your experience
to date, do you think there may be some additional tools or
authorities DOE could use to help improve the ability of the
agency's deployment of resources in an emergency?
Secretary Perry. Yes, sir. I think it is always a
thoughtful conversation to have to discuss with Congress and
other agencies to make sure, we complement when we need to
complement. But if there is a direct line of authority that it
is very clear, very precise so that no one gets confused about
particularly during an emergency situation who is in charge.
Mr. Walberg. I appreciate that and we would definitely want
to work together with you on that. We want to examine things
like surge funding or some other mechanism to enable DOE to
have access to resources so the Department can respond more
rapidly. So we hope that you can work with us on that.
Secretary Perry. Yes, sir. Thank you.
Mr. Walberg. Thank you, Mr. Chairman. I yield back.
Mr. Olson. The gentleman yields back.
The gentleman from South Carolina, Mr. Duncan, for 5
minutes.
Mr. Duncan. Thank you, Mr. Chairman.
And, Mr. Secretary, thank you for being here. I just want
to lend my support at the outset here for the Nuclear Waste
Policy Amendments Act that Chairman Shimkus and Markwayne
Mullin from Oklahoma have mentioned. Getting Yucca Mountain
back on track is imperative because we have a lot of waste
sitting around this country and some of that is sitting at a
place you visited back in February.
And I want to thank you for visiting the Savannah River
Site and Savannah River National Laboratory this year. SRS is
an integral part in the Department of Energy's industrial
complex responsible for environmental stewardship and cleanup,
waste management, and disposition of nuclear materials, along
with a lot of other missions, ongoing missions that Savannah
River Site has and I thank you for recognizing the important
role of SRS through the DOE's fiscal year 2019 budget. I
believe it provided for about $1.7 billion, $287 million above
enacted 2017 levels.
I am on the Cleanup Caucus and we are concerned about
environmental management and cleaning up the tank farms at
sites like Savannah River Site, Hanford, and others. And the
South Carolina Department of Health and Environmental Control
describes the liquid waste management at SRS as the single
greatest environmental risk in South Carolina. There are more
than 30 years of nuclear weapons material that has been
produced in South Carolina sitting in those tank farms and the
ongoing environmental management efforts are there.
We also have the ability through the Defense Waste
Processing Facility at SRS to vitrify that high level nuclear
waste, turn it to glass so that it no longer poses a threat to
leakage through those tanks and into the ground and aquifers.
So the DOE's fiscal year 2019 budget requests an additional 74
million for SRS cleanup programs from the 2016 levels, emphasis
on the liquid tank waste cleanup project.
What are DOE's top cleanup priorities for the site and how
is your particular attention as Secretary going to facilitate
tangible cleanup progress in South Carolina?
Secretary Perry. Obviously we have a court-mandated
requirement that we are very sensitive to in making sure that
we have the resources to be able to do that. We have had the
discussion substantially over the last year since I have been
at DOE over the issue of how to deal with the plutonium and
clean that up.
While I was out there I saw some good progress that is
being made from the standpoint of the vitrification process
that is going on there and the tanks that are going to be used
to store that, being able to move the plutonium out of South
Carolina. And we are already doing that with the D&D process,
but to get that substantially more robust to be able to move
that waste out of there on an expedited schedule is obviously
high on our priority list, if not the highest priority there.
Mr. Duncan. Well, I appreciate that, Mr. Secretary. And
whether it is at Hanford with their waste facility trying to
vitrify the waste that is coming out of their tank farms,
ultimately this high level radioactive waste needs to go to
Yucca Mountain and right now the vitrified waste is sitting on
a concrete slab under a metal building at Savannah River Site.
It is actually down in the concrete as you saw.
Secretary Perry. Yes, sir.
Mr. Duncan. Let me shift gears but stay at Savannah River
Site because we have the MOX facility down there. We are under
obligation under the Non-Proliferation Treaty with countries
like Russia to do something with the Nation's plutonium that is
coming out of the nonproliferation aspects and I believe the
MOX facility at SRS is the right thing to do with that
plutonium. Currently, we are committed to rid the world of
about, I think, enough plutonium to make 17,000 nuclear
weapons.
So I would love to see the continuation of construction at
the MOX program and eventually completion. We have already
spent a ton of money down there and I truly believe we can
bring more efficiency to the project and it can be completed in
a third of time and for almost half the additional cost than
what the NNSA predicts. You indicated in your testimony that
the 2019 budget continues termination activities for the MOX
but provides $220 million for use toward orderly, safe closure
for the project. What do you envision for the future of this
site, the MOX facility, and if not MOX, what do you determine
to be the most efficient and effective way to remove the
plutonium from South Carolina?
We didn't ask for the plutonium to come there. It is stored
on site. It is not a long-term storage facility. It was brought
there in order to be turned into mixed oxide fuel to be used in
nuclear reactors around the country. That is what the purpose
was.
Secretary Perry. Yes, sir.
Mr. Duncan. We spent a lot of money. Where are we going
from here?
Secretary Perry. Yes, sir. And I will try to be as brief as
I can. The issue on the reason that got started was an
agreement with the Russians. The Russians have unilaterally
walked away from that agreement. They said they would come back
to the table if we met certain requirements and you know what
those are, and they are unacceptable. They are asking us to do
things that this country is not going to do to come back and
sit down at the table.
So the way I look at that is they have walked away and we
have to look at our options. This is a facility that is
obscenely over budget. And again I don't want to rehash and
relitigate all these numbers, but the fact is there is an
alternative and the alternative is dilute and dispose which we
are using now as a matter of fact shipping plutonium out of
South Carolina to WIPP at this particular point in time. We
think that is----
Mr. Duncan. The EPA has said that WIPP is not an acceptable
site. Yucca might be. The thing is, Russia has walked away but
the facts of the matter are we have plutonium sitting in South
Carolina that has come out of that nonproliferation agreement.
WIPP is not going to be ready. Yucca, we are struggling around
here to fund that. MOX is absolutely the right facility and I
would love to sit down with you and talk with you about that at
some point.
Mr. Chairman, thanks for the leniency and I yield back.
Secretary Perry. You are on.
Mr. Olson. The time is expired.
Mr. Long, 5 minutes for questions.
Mr. Long. Thank you, Mr. Chairman.
And thank you, Secretary Perry, for being here today.
Secretary Perry. Yes, sir.
Mr. Long. Texas A&M University, where is that located?
Secretary Perry. Where is it located?
Mr. Long. Yes.
Mr. Olson. College Station, Texas.
Secretary Perry. It is, some would say that----
Mr. Long. I don't believe I yielded to you, did I?
Secretary Perry. Some would say it is of the epicenter of
the world, but we will just leave it at it is in Brazos County,
Texas.
Mr. Long. College Station, Texas?
Secretary Perry. In the city of College Station.
Mr. Long. And that is the only campus?
Secretary Perry. No, sir. It is the main campus.
There are----
Mr. Long. I didn't ask you about the main campus. I said
where is it located?
Secretary Perry. Oh, it is in College Station, Texas on
Highway 6 and it goes both ways.
Mr. Long. That is the only campus?
Secretary Perry. It is the only main campus.
Mr. Long. Where are the other campuses?
Secretary Perry. The other campuses are----
Mr. Long. Outside of this country, I will cut to the chase.
Secretary Perry. They are in a lot of different places.
John Dalton----
Mr. Long. Like Qatar?
Secretary Perry. And there is one in the country of Qatar
right out of Doha.
Mr. Long. I was in Qatar 10 days ago.
Secretary Perry. Yes, sir.
Mr. Long. And walked in and they are all Aggie there, trust
me.
Secretary Perry. Sure.
Mr. Long. They are very, very happy with their affiliation
and the students are doing great. Your picture was right there
on the wall as I walked in and they are Aggie through and
through. So I was pleased to see your picture on the wall when
we went in and toured Texas A&M in Qatar just the other day.
Speaking of universities, I would like to speak about
another university. In recent hearings with your senior
Department of Energy leadership I asked about the Department of
Energy's support of the University of Missouri's MURR Nuclear
Reactor. The MURR reactor trains nuclear engineers, some of who
are funded through Department of Energy's Nuclear Energy
University Program.
Private companies in coordination with the University are
seeking approval to produce lifesaving medical isotopes in
partnership with the National Nuclear Security Administration,
NNSA. And the University is currently studying a partnership
with the NNSA to convert the reactor to use low-enriched
uranium instead of highly enriched uranium or HEU. I have got
to tell you I was disappointed to see that the Integrated
University Programs were defunded in your fiscal year 2019
budget, but I hope you see the value in these activities as we
do at the University of Missouri.
Will you please talk about the importance of our nuclear
research infrastructure and how the Department of Energy
supports this critical work particularly in its university
programs?
Secretary Perry. Yes, sir. I think you are making reference
to the research reactor there at the University of Missouri and
it is in medical isotopes and the manufacture of medical
isotopes and there are a number of places across the country
that we are partnering with that. It is for precision medicine
for some of the things that we talked about with Mr. McNerney.
On our ability to practice precision medicine these facilities
are really going to be important.
Mr. Long. They are very important.
Secretary Perry. We want to work with you and----
Mr. Long. All right, thank you. With the ever-increasing
cyber threats to the grid, I am pleased that the steps have
been taken to create CESER, the Office of Cyber-, Energy
Security, and Emergency Response and I look forward to that
office getting up and running. In your opinion, since your
confirmation has the electric grid become more or less
responsive to cybersecurity threats?
Secretary Perry. Well, I think the threat has increased but
that shouldn't shock anyone. I think the threat potential is
greater today than it was a year ago. Are we more resilient? I
can't answer that with great definition. What I think is that
we are exposed in certain areas. We need to be all hands on
deck. That is the reason we are asking for the cyber office to
be stood up.
With that said, our national labs are making some, I think,
good inroads in both the defensive and offensive ways to deal
with those that would attack our electrical grid.
Mr. Long. Let me ask you one more question and I will be
about out of time at the end of this probably, but the fiscal
year 2019 budget calls for $96 million in funding for the
CESER, or for CESER. Can you explain a little bit about the
program and how this money will be used to ensure we are
securing our grid from the continuous cyber threats that we
face?
Secretary Perry. Well, the focus is on the cyber threats
from both state actors, and we are talking about a year ago,
Russia with Petya. We saw the impact on that. We have seen what
has happened in Ukraine with two attacks on their power grid.
The Iranians are who attacked the Aramco Electrical or their
control panels. So nation state attacks are very real. As late
as this last week we had conversations about, what can we
expect with the Syrian issue. Should we be on more heightened
alert? And I would suggest to you yes.
So the issue is this Office of Cybersecurity, our national
labs working with the private sector, working with
universities, I don't think it has ever been more important for
us to be able to maintain the national security of this country
relative to our grid, both as we have talked about at length
here today about the resources to be able to keep the power to
that grid, but also to protect that grid from cyber attacks is
as important as it has ever been in our country's history.
Mr. Long. Thank you. And thanks for being here today. It
has been a long hearing and I am sure you are kind of tired.
And I yield back.
Mr. Olson. Time is expired.
The gentleman from Massachusetts has 5 minutes for
questions, Mr. Kennedy.
Mr. Kennedy. One more to go, Mr. Secretary. Thank you.
Thank you for your patience. Thank you for spending so much
time with us and I will echo the comments of our colleagues,
thank you for being so accessible, grateful that you are here.
As our nation makes the transition from a 20th to 21st
century energy economy we know that innovative sources of power
will be an important part of that generation mix. Wind power is
a steadily growing portion of the energy sector that provides
clean power to millions of Americans and creates thousands of
jobs across our country. Your home State of Texas, Mr.
Secretary, during your tenure as governor wind power resources
and energy grew by leaps and bounds. It is my understanding
that according to ERCOT, wind made up 17 percent of the fuel
mix in 2017.
So I wanted to ask you, I think, a pretty general question
to start. Do you agree, Mr. Secretary, that wind energy is an
important part of our nation's power sector?
Secretary Perry. Yes, sir.
Mr. Kennedy. So despite this growth, and I appreciate the
answer, we have only one offshore wind project coming online in
the United States. Other nations such as the U.K, Germany, and
China have developed these projects in their own waters. My
home State of Massachusetts proposes to be a leader in this
effort. In my district we have made significant investments in
Fall River and in Dartmouth and just across the border, the
district in New Bedford, to become a national leader in
offshore wind. Just recently, the Department of Interior
announced proposed sales of two areas off the coast of
Massachusetts to develop offshore wind.
Yet, unfortunately, Mr. Secretary, America risks being left
behind as our allies and peers lead the growth of an industry
that remains largely dormant here despite the potential to
boost the economy and create jobs. Even more concerning, I know
you have already touched on this a bit, is this year's budget
request from the Trump administration that included a 72
percent cut in the DOE Office of Energy Efficiency and
Renewable Energy.
I am not going to make you comment on that again. I think
you have been pretty clear about where you stand on that cut.
But I do want to ask you how DOE is going to continue to
support research and development of offshore wind.
Secretary Perry. Mr. Kennedy, we discussed, this is an
industry that is becoming mature. And so the private sector,
the states, if, in my home state one of the reasons we had that
big wind energy growth was that the state invested in the CREZ
lines. We didn't subsidize the specific projects, but we
basically said we are going to build these lines if you all
will commit to building all these farms out. They did and you
know what the results are. So I think not only the state but
the private sector has the place to play this.
Here is what I will tell you that the DOE is going to
continue to play a role in this, this is important. And again
we were in Livermore this last week and the technology that is
coming out of there, and this is on again rotor technology that
makes these turbines substantially more efficient so that, then
that gets commercialized and goes into the private sector where
it makes it even more of a commercialized product in the market
and more competitive.
Mr. Kennedy. More viable.
Secretary Perry. So my point is we are going to continue to
be a partner, maybe not as big as we were when wind and solar
was more in its infancy, we are shifting over to batteries and
beyond battery to hydrogen fuels and some of the more immature
but may have great potential energy sources in the future. So I
am a big believer in wind and I hope that Massachusetts and
other states that want to see a diverse portfolio, I don't
think it is a good idea to have Russian molecules of gas in
Boston Harbor. But if you can't get it from the West you are
going to get it from somewhere and I think that is another
debate or discussion that we can have into the future about how
we make sure that this entire country has got an infrastructure
that will allow for all of our citizens to enjoy this energy
revolution that is occurring in America.
Mr. Kennedy. And, Mr. Secretary, I appreciate that. I would
agree with you it obviously gets complex as you try to look at
the local resources and the voices of the local community. We
do have a vibrant local community that is, I think, ready and
willing to make this investment in coordination with our
Federal Government partners, DOI, DOE, and I would ask just for
you to keep it on your radar and as we to be a partner as we
have seen and as we saw under your stewardship in Texas to see
the growth of wind industry there.
Just to finish this to make sure that the point is clear
and I think it is, in 2017 the Clean Energy States Alliance, a
coalition of state energy agencies, released three reports on
the future of offshore wind in the Northeast, the reports which
were actually partially funded by DOE that projected that
offshore wind projects in the Northeast have the potential to
add more than 35,000 jobs in the region.
My colleagues, Niki Tsongas and Bill Keating, just
introduced a bill that would create a grant program to support
offshore wind job training including partnerships with colleges
and universities and nonprofits and unions and local
governments. Investment in that wind energy is more than just a
clean energy future especially in my district, sir. It
represents jobs, economic development, opportunity, education,
and a whole new industry base and expertise that is homegrown.
I know the DOE mission is to ``ensure America's energy
security and prosperity by addressing its energy,
environmental, and nuclear challenges through transformative
science and technological solutions.'' So I would hope that you
would continue to focus on how we can partner with you,
understanding there has got to be a private sector component to
this and a state component to this.
Secretary Perry. Yes, sir.
Mr. Kennedy. But I think we have seen there is a
willingness to do so and we are going to need your help.
Secretary Perry. And, Mr. Kennedy, one of the things that I
will offer you and to make the introduction, the university in
Texas that probably has as good of wind energy history and
experience and expertise is Texas Tech in Lubbock, Texas. And
getting the states to work with each other that may be a great
opportunity. There used to be a real good Boston to Austin
connectivity so Boston to Lubbock might be OK too.
Mr. Kennedy. I appreciate that, sir. As long as we aren't
talking football we are in good shape.
Secretary Perry. Yes, sir.
Mr. Kennedy. Thank you, sir.
Mr. Olson. Time has expired.
Seeing that no further members wishing to ask questions, I
would like to thank Secretary Perry for coming this afternoon.
And I trust, sir, that the proceedings you talked with before
did not happen here today. You know what I am talking about,
correct?
Secretary Perry. That is correct.
Mr. Olson. And you are cleared now to depart the pattern
with a proud, loud Aggie whoo.
And before we conclude I would like to ask unanimous
consent to submit the following documents for the record:
Letters from the Utilities Technology Council; a statement from
the R Street Institute; three letters to the President from
Members of Congress; a letter to the President from the
International Brotherhood of Teamsters; a letter to the
President from United Mine Workers of America; a letter to the
President from the International Brotherhood of Boilermakers,
Iron Shipbuilders, Blacksmiths, and Forgers and Helpers; a
letter to the President from the Utility Workers Union of
America; a letter to Secretary Perry from the Energy Industry
Trade Association; a letter to Secretary Perry from the
Pennsylvania Public Utility Commission; a letter to Secretary
Perry from FirstEnergy \*\; a response letter from PJM to
Secretary Perry; a letter from NEI to Chairman Walden.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
---------------------------------------------------------------------------
\*\ The information has been retained in committee files and can be
found at: https://docs.house.gov/meetings/IF/IF03/20180412/108114/HHRG-
115-IF03-20180412-SD049.pdf.
---------------------------------------------------------------------------
Mr. Olson. Pursuant to committee rules, I remind members
that they have 10 business days to submit additional questions
for the record and ask that the witnesses submit their response
within 10 business days upon receipt of the questions. Without
objection, the subcommittee is adjourned.
[Whereupon, at 1:21 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]
| MEMBERNAME | BIOGUIDEID | GPOID | CHAMBER | PARTY | ROLE | STATE | CONGRESS | AUTHORITYID |
|---|---|---|---|---|---|---|---|---|
| Rush, Bobby L. | R000515 | 7921 | H | D | COMMMEMBER | IL | 115 | 1003 |
| Upton, Fred | U000031 | 7991 | H | R | COMMMEMBER | MI | 115 | 1177 |
| DeGette, Diana | D000197 | 7859 | H | D | COMMMEMBER | CO | 115 | 1479 |
| Shimkus, John | S000364 | 7939 | H | R | COMMMEMBER | IL | 115 | 1527 |
| Schakowsky, Janice D. | S001145 | 7929 | H | D | COMMMEMBER | IL | 115 | 1588 |
| Walden, Greg | W000791 | 8115 | H | R | COMMMEMBER | OR | 115 | 1596 |
| Blackburn, Marsha | B001243 | 8154 | H | R | COMMMEMBER | TN | 115 | 1748 |
| Burgess, Michael C. | B001248 | 8182 | H | R | COMMMEMBER | TX | 115 | 1751 |
| McMorris Rodgers, Cathy | M001159 | 8209 | H | R | COMMMEMBER | WA | 115 | 1809 |
| Matsui, Doris O. | M001163 | 7810 | H | D | COMMMEMBER | CA | 115 | 1814 |
| McNerney, Jerry | M001166 | 7816 | H | D | COMMMEMBER | CA | 115 | 1832 |
| Bilirakis, Gus M. | B001257 | 7881 | H | R | COMMMEMBER | FL | 115 | 1838 |
| Castor, Kathy | C001066 | 7883 | H | D | COMMMEMBER | FL | 115 | 1839 |
| Loebsack, David | L000565 | 7915 | H | D | COMMMEMBER | IA | 115 | 1846 |
| Sarbanes, John P. | S001168 | 7978 | H | D | COMMMEMBER | MD | 115 | 1854 |
| Walberg, Tim | W000798 | 7992 | H | R | COMMMEMBER | MI | 115 | 1855 |
| Clarke, Yvette D. | C001067 | 8072 | H | D | COMMMEMBER | NY | 115 | 1864 |
| Welch, Peter | W000800 | 8204 | H | D | COMMMEMBER | VT | 115 | 1879 |
| Latta, Robert E. | L000566 | 8095 | H | R | COMMMEMBER | OH | 115 | 1885 |
| Scalise, Steve | S001176 | 7959 | H | R | COMMMEMBER | LA | 115 | 1892 |
| Guthrie, Brett | G000558 | 7954 | H | R | COMMMEMBER | KY | 115 | 1922 |
| Harper, Gregg | H001045 | 8021 | H | R | COMMMEMBER | MS | 115 | 1933 |
| Lance, Leonard | L000567 | 8049 | H | R | COMMMEMBER | NJ | 115 | 1936 |
| Lujan, Ben Ray | L000570 | 8058 | H | D | COMMMEMBER | NM | 115 | 1939 |
| Tonko, Paul | T000469 | 8082 | H | D | COMMMEMBER | NY | 115 | 1942 |
| Schrader, Kurt | S001180 | 8118 | H | D | COMMMEMBER | OR | 115 | 1950 |
| Olson, Pete | O000168 | 8178 | H | R | COMMMEMBER | TX | 115 | 1955 |
| Kinzinger, Adam | K000378 | 7931 | H | R | COMMMEMBER | IL | 115 | 2014 |
| Bucshon, Larry | B001275 | 7947 | H | R | COMMMEMBER | IN | 115 | 2018 |
| Long, Billy | L000576 | 8015 | H | R | COMMMEMBER | MO | 115 | 2033 |
| Johnson, Bill | J000292 | 8096 | H | R | COMMMEMBER | OH | 115 | 2046 |
| Duncan, Jeff | D000615 | 8143 | H | R | COMMMEMBER | SC | 115 | 2057 |
| Flores, Bill | F000461 | 8173 | H | R | COMMMEMBER | TX | 115 | 2065 |
| McKinley, David B. | M001180 | 8222 | H | R | COMMMEMBER | WV | 115 | 2074 |
| Cardenas, Tony | C001097 | H | D | COMMMEMBER | CA | 115 | 2107 | |
| Ruiz, Raul | R000599 | H | D | COMMMEMBER | CA | 115 | 2109 | |
| Peters, Scott H. | P000608 | H | D | COMMMEMBER | CA | 115 | 2113 | |
| Brooks, Susan W. | B001284 | H | R | COMMMEMBER | IN | 115 | 2129 | |
| Hudson, Richard | H001067 | H | R | COMMMEMBER | NC | 115 | 2140 | |
| Cramer, Kevin | C001096 | H | R | COMMMEMBER | ND | 115 | 2144 | |
| Collins, Chris | C001092 | H | R | COMMMEMBER | NY | 115 | 2151 | |
| Mullin, Markwayne | M001190 | H | R | COMMMEMBER | OK | 115 | 2156 | |
| Walters, Mimi | W000820 | H | R | COMMMEMBER | CA | 115 | 2232 | |
| Dingell, Debbie | D000624 | H | D | COMMMEMBER | MI | 115 | 2251 | |
| Costello, Ryan A. | C001106 | H | R | COMMMEMBER | PA | 115 | 2266 | |
| Doyle, Michael F. | D000482 | 8132 | H | D | COMMMEMBER | PA | 115 | 316 |
| Engel, Eliot L. | E000179 | 8078 | H | D | COMMMEMBER | NY | 115 | 344 |
| Eshoo, Anna G. | E000215 | 7819 | H | D | COMMMEMBER | CA | 115 | 355 |
| Green, Gene | G000410 | 8185 | H | D | COMMMEMBER | TX | 115 | 462 |
| Barton, Joe | B000213 | 8162 | H | R | COMMMEMBER | TX | 115 | 62 |
| Pallone, Frank, Jr. | P000034 | 8048 | H | D | COMMMEMBER | NJ | 115 | 887 |
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