represents irail i represent nrail you know i'm very proud of their accomplishments there, and i want to continue to work with you to see that their good work continues and in your budget and in my estimation you go a long way towards supporting that lab's critical programs, which are focused on developing innovative nuclear technologies that clearly translated into lasting well-paying jobs, a more comprehensive energy portfolio and the national security they comes with energy. so kudos to you. this is a tough fiscal environmental process but i support what the president and you have put together. now, i mentioned how important nrail is. financing is also really crucial to energy future. would you speak to the fact that we're at a really critical

juncture here in regards to the ptc? the production tax credit. it's been very instrumental in the expansion of wind deployment around our country. every state has a stake in this whether producing wind in any significant amounts because of the supply chain that's developed. this very important policy expires at the end of 2012. would you speak to the ramifications, if we don't extend the ptc in the time frame we have left? >> yeah. quickly, i think things like production tax credits are a way to stimulate moving forward to get deployment in the marketplace. and there -- because europe is in -- i would say even perhaps worse than we are and you see some countries like spain decreasing a lot of their feeding tariffs, subsidies for

renewables that there's a dim muniti dim munition of the market. but helping manufacturing in a particular country, so the -- and this is why when spain took away their subsidies and other countries are decreasing, china put in feeding tariffs for their market in wind and solar. he ratcheted up recognizing they want to nurture their industries. they need a whole market to make sure that they're going to -- they want to catch up in wind turban technology. they are becoming a dominant force in solar technology but see both of those at risk. so in -- as we saw europe's subsidies decreasing. okay. we want to develop our market and the world is expecting this year that china will be the biggest deemployer of renewable

energy in the world. back to the united states. if we don't have a whole market for these things, industries will not be motivated to develop manufacturing at home. they would not -- there would be less motivation to develop those technologies. the next generation of solar. for example, you know, nrail was the developer essentially inventor, developer of the telluride cells. a number of making that technology. those technologies are continuing to improve. one doesn't know whether silicon or some other technology, but they're certainly a player in that field and they're certainly in a competitive race. so i think to have a whole market for clean energy standard, production credit, those are mechanisms that can stimulate private sector investment that then stimulates manufacturing in the united states. and this is why, yes, china

wants to export, but they also realize that we have to create a whole market as well, and it's this mixture that they need. >> and you're implying if we don't extend the ptc that whole market mission we've all agreed in a bipartisan way is crucial? >> it's who go goes the way of how do you get a market draw? how do you help bring slightly lower costs, financing, all of those things. talk to any supplier of wind, they would rather set up a explain chain in the country where these things are being installed. this is heavy stuff. >> uh-huh. >> and so in the solar world, it's more like a commodity that can be shipped worldwide, but it's going to heavily be influenced. now, as wind technology, as i noted before, is getting very, very close to price parity with new gas, new gas, let me be

careful. new gas, at $4 to $6 per cubic feet. average over the next 10, 20 years this is what is projected. solar dropped by more than 75%, the solar modules dropped by more than 75% in the last three years. everybody anticipates another 50% drop at least in the next five to eight years. so solar is going to be competitive with any new form of energy, and so again we need to spur this market, because this could be -- this is clean energy without subsidy that the world will want, and as i've said repeatedly, where you're going to be buying or selling, i'd rather be selling. >> we all would. i know my time is about to expire but on the critical minerals hub, what are you doing at deo to ensure the d.o.e. labs are working together on the hubs? can you give a brief answer for

the record? >> the design of the hubs, if we select a hub they have to come in way design and what are they doing at the get-go to have industry and national labs and universities jie was just visiting a hub, a computation for nuclear reactor simulation, and it was wonderful, because they said at the very beginning, what are the problems that industry is interested in? let's say a premature aging of the fuel rods. how do you extract more energy from those fuel rods? how do you make those, the reactors safer? those are the things that industry actually sits with every day and can you simulate this? can you simulate erosion process and so from its very design it was, we can use the powers of high performance computing, the intellectual powers of the people in the universities and labs to help industries solve these problems, and so the hubs

are specifically designed for that. the other thing i very quickly should mention is that we have also been easing the way to have technology transferred from national laboratories and universities, national laboratories, since we help control the technology transfer policies, we've just had a very exciting meeting about 250 people attended, people from industry, on the materials you would need for solving a lot of the energy challenges. this is not a form of materials this is lightweight steel, composites everything, because it's going to be dominated by new materials. 250 people came, a lot of company, a lot of excitement. immediately the first week of payoff was, you know, venture capitalists inviting people from the labs to come. other labs saying this really works.

we're going to do this too. we have another one on advanced computation, how that can help in the industry. just to tie the -- so the people in the labs know what the industry problems are and that they can be excited about helping them solve those problems. and so this, again, is something that's, has been occurring over the last year. >> i take from you this is really important, you're really focused on it and going to work with all the stakeholders. thank you. >> senator? >> thank you very much, secretary. let me say i know it's been mentioned before. the president in his state of the union address said the country needs an all-out strategy that develops every available source of american energy. a strategy is cleaner and keeping jobs we already have. i want to show ayou a chart we put together, information taken from the eia, your own department, showing where we are as far as 2010. 24% of our energy coming from

natural gas. 10% renewables, 45% coal, 20% from nuclear and other liquids. from your agency. when we got to 2035, two more decades, this is where you are. 27% from natural gas. renewables 16%. coal still at 39% and the rest at 18%. with that being said, the president's budget basically had $2.7 billion you all submitted for the energy efficiency renewable energy, increase from current levels. hold this up to see the comparison. stand up. this is where your money's gone. this is what you're going to get out of the investment. this is about your own. and then you have the office of nuclear energy. nuclear's right here. where you've gone. this is where you are. you've cut -- the greatest cut has been right here. and you're still going to be dependent on it and we can do it

much cleaner. i can't figure the rationale. when you take all of the above the president said, look at energy strategy cutting funding to resources that will continue to provide the energy that we're dependent upon by your own estimation. doesn't make sense, sir. doesn't make any sense at all that we can't do it better, cleaner and work together, because you sure are -- putting this out there. we're going to be able to depend on it. we need it. so i don't know if you have a comment on this, in relation. it seemed like there's not a balance here at all. >> well, what we are doing, as you know, during the recovery act there was very large investments in clean coal partnerships and helping test, deploy clean coal technologies, but unfortunately, a lot of the companies who had supply matching funds, at least 50%, have pulled out, but there's some hope, and we're still

pushing this as much as we can, because we do believe that we have to develop technologies to use coal cleanly. which means none of the normal pollutants but also the caption carbon dioxide. we still remain committed to that. however, because of this changing landscape of companies not wanting to invest in large projects, sometimes hundreds of millions to billion dollar projects or multibillion dollar projects, but we do see a path forward in having carbon capture utilization. >> sir, i hate to interrupt you. our times are so limited. keep those up. that's very important. with what -- there's no coordination as i can see from the environmental protection agency trying to work with y'all to make policies answers use the energy we're depending upon. that's where the disconnect comes. we're asking for somebody's got

to be talking to somebody coordinating it so we can continue from what you're depending upon to be able to use it and use it cleaner within the environmental standards we're setting. no one is working together. i will say this. last year when you came before us, you said the department of energy was eager to promote research on liquids that blend biomass and sequestration quality. once you blend in biomass it become as real plus. 's it becoming carbon neutral in the tail pipe emissions. for that reason the department of energy is eager to promote that type of research. last year your budget had $5 million for research. this year, zero. have you changed your position? what is the administration's position now and why would you have such a reversal? >> i'm going to have to look at that. and get back to you on that.

i do think -- i do think that any coal to liquids with carbon capture and as you blend in biofuels, and this is also true of coal firing, biomatter with a coal plant, and if you capture the carbon dioxide after a certain percentage, it goes with the carbon capture, it actually goes negative. you're actually net sucking carbon out of the air. >> right. and i think you testified last year, we have -- >> right. >> -- people wanting to do this type and the road blocks are insurmountable, because it looks like the administration is saying one thing, but they're pushing and promoting because of your, where you're making your investments, and i think this shows completely where you're making your investments without taking into consideration what brought you to the dance and

what you're expecting. 66% of the energy for the next two decades with very little money going into them. >> as i said, the research for carbon capture technologies, when it gets to be expensive it gets to be on the deployment side. this is a chart of electricity which is a major part of energy, but about 38% of our energy is from oil. and if -- if you took -- as a tried to point out before, our budget doesn't reflect the percentage of energy we use, g that percentage. the oil industry is a very mature industry, and we don't think even though it's 30% over total energy budget, we're not going to put that percent of our daily budget in that. we do think that carbon capture, getting coal clean is very important. >> recovery? enhanced or recovery? so many things we can use it

for. >> i absolutely agree with you. >> sir, your budget doesn't reflect that, sorry. >> but if -- >> we just -- i know we have a difference. >> thank you. >> senator? >> thank, mr. secretary for being here. i for one would never say that you have deaf ears. i have found you to be very responsive. so i appreciate that. and i want to pick up on the line of questioning that senator udall was pursuing relative to the production tax credits and the 1603 program, the advanced manufacturing program, because i was pleased to see that the budget included continuing those programs and expanding them, and we have some real success stories in new hampshire under at least two of those programs. we have a company called revolution energy in my hometown

of dover where they've used the 1603 program to put solar installations in schools, and save a significant amount of money. we have a wind farm in ahe lems difference into not only building the wind farms but in the reviving the communities because of the economic activity that goes on around those projects. so i think they're very important, and i agree with your comments about the importance of continuing these investments and these markets. i've been concerned as many of us are are in the senate they expire at the end of this year. at this point, the extension of the payroll tax cut and unemployment have not included a

package of tax extenders that address these taxing. so can you talk a little bit about adding to what you've said to senator udall about what happens to the market when we see this kind of interruption in support for these new energy technologies? >> well, i think, as you talked, and i know you have, as you talk to industries out there, what industry want more than anything else is they want to see stable governing policies. they don't want to see on again/off again. they want to see something because a lot of these investments, just to plan them and get them permitted and licensed could go well beyond a two-year cycle. and so the production tax credit and the 1603 have by most people's accounts, not everybody's, been very

successful in stimulating investments in these new clean energies, and with the end of the recovery act, the administration is very concerned about a rolloff of these investments, and you see this in the financial newspapers, bloomberg, "new york times," all of these things, a real concern. is it just going to roll off and stop? and, again, i go back to reiterate that it's very important that america develop a home market for the development of the industries of manufacturing in america. you know, one of the g about the industry is we had a very large home market and that actually stimulated a lot of development of automobiles. >> is it fair if they let these

tax credit expire we'll see a number of jobs lost as part of that? >> yes. i think the early returns out on that already. again, as you read the financial pages of the various newspapers around the country, and around the world, where there are continuing policies, aloys investmei allowing investments otherwise you see pullback i. was pleased to hear the president in the state of the union and see that in action as well the commitment to energy efficiency, something i believe is very important. senator portman and i have a bill 1,000 that addresses energy efficiency in the industrial sector in government, and in buildings, but one of the best ways to encourage energy efficiency is by supporting the expansion of co-generation or combined heat and power. these are, the technologies used

are generally off the shelf. they exist right here in the united states. the jobs that are created. the jobs are are here in the u.s. so can you talk to what the position of the department is on combined heat and power and how you address that in this upcoming budget? >> we are very bullish in combined heat and power. in today's modern, let's say gas turban generation you can get 55, 60% efficiency in converting that energy into electricity, but it's at best 60% efficient. i guess some companies claim 61% or 62% but i'm not going to quibble. and heat and power, you go up to 80%. it can be -- now, we think that, and if there's any way to encourage people to do that, that would be great. there's also new ideas and new innovations being deployed now

that seem to work. here's the issue. sometimes you want the electricity, not the processed heat. or maybe the heat, not the electricity. i was visiting a project, we supported in the recovery act funds in houston, texas. it powers this collection of medical centers that, as about the 12th largest city in the unite, just medical centers, and everything's big in texas. and, anyway, what they had is, they had a very -- gas generator, single cycle. high temperature process heat used for heating or air conditioning. now beauty of what they did, they took the processed heat and used it. you can actually use heat to cool. they used it to chill water and restored this water -- stored the water in a big tank right there and found it took about less than 10% of the energy, even in a hot houston summer day, to keep that tank cold, and

so they would run it so that that would balance. it's like a big battery, but a battery of heat, that they would use to air condition their complex. okay? so -- and it was very cost effective. so they were operating this plant, 80% efficiency, recovering all of that. very fuel efficient, and again drives down the cost to their customers. the medical centers, the hospitals. and so there's an excellent example of how combined heat and power can be used in a way. i mean, new buildings now, many of them, especially if you have realtime pricing of electricity, they use the electricity at night, chill some water. eastern may turn into ice. use the ice to cool the building during the day time. so you're buying electricity where it's inexpensive. you decrease your electricity bill. the asset of generation are used, you know, getting better return on your investment, because you're using the asset in a more even way.

and so the good news is, so this all is about energy efficiency, essentially. and so combined heat and power in any city, any university, any hospital that has an integration of steam and chilled water tunnels, or a big complex, could use combined heat and power. and we'd love to see it go in that direction, because now you're going to 80% efficiency. >> thank you. >> senator portman? >> thank you, mr. chairman, and dr. chu, thank you for being before the committee again and for working with me and other members ev of the committee on important projects of things in the budget. one is energy efficiency as senator shaheen just talked about and with buildings using about 40% of the energy in this country, what you're talking about there is consistent with legislation which as you may now was introduced in the house, a companion bill yesterday.

we're hopeful s-1000 can make its way to the floor. i appreciate the support of the ranking member and claire on th -- chair on that as well. i'm concerned about other aspects of the budget but let me focus on something positive. the small modular, these are an exciting innovation, as you know, have safety advantages as well as economic advantages. i know that the regulatory commission has just licensed a plant and another one coming with larger reactors but seems to me this is a good investment, and something that would be very beneficial to energy mix going forward. i thank you for that. with regard to carbon capture technology, i don't know if you had this question from other colleagues and i apologize if i'm repeating something, but the ccs programs i think still are lacking direction in this budget. i don't think there's a pathway here as to how long and how much

it's going to cost to be able to develop carbon capture technologies. i would like to see the budget laid out, but in the absence of that, i would hope that the department would do so. i did introduce an amendment last year that would require the department to assess our successful the programs have been, how much time and how to get them to a commercial level. and sna senator shaheen was par that for large corbin capture and storage. my question would be, what is the pathway and what can the department give us in terms of information as to what your scientists believe is the way to move to commercially viable demonstration projects? >> sure. first, the carbon capture technologies that are being tested today, and i'll divide them into two categories. this is after combustion, you

capture the carbon. there are mea-type technology, chilled technologies. those are being tested and since they're by and large in the commercial sector, we feel that we would like to develop less expensive means, because if you make -- if you put in an estimate how much would increase the electricity bills we think this would not -- would not spur not only the united states but china and india to use these technologies. woe like to improve them. there are potential ways to improve them. one of those ways to put very large high surface areas. we're investing a lot of research to decrease the size of these capture stacks. totally different ways of doing it so instead of it being absorbed in certain material you could use small particular matter. the nan o nano scale.

investing in that. another way is to separate nitrogen from oxygen. >> dr. chu, what i would ask, a danger asking somebody who knows about science testify. >> i'll try to suppress it. >> if you're willing, i'll submit a question for the record. a lot of members in the your response both on the specific technological improvements you would recommend but also just what the department sees as the pathway forward here and i don't see it in the budget. again, it would be very valuable to the committee. >> and in short, a brief time, i'd say the path forward is to take advantage of industry's interests on the piloting side in the carbon capture utilization nc sequestration. >> we want it to be cost effective. seems there is an opportunity here and we're not taking at advantage of it. with regard to uranium enrichment, i appreciate the fact in the budget you do talk

about the need for us to have a domestic source and in fact provide in the dense nuclear account $150 million for domestic uranium enrichment development demonstration research. you and i talked about this a number of times before. it's interesting you included under nsa rather than the nuclear energy account, because i think it would be also appropriate understa that accou. is there a reason for that? >> no. that was signed by people more like you than by me. >> uh-oh. i see what you're saying. >> no. i'm just saying that you had to put it somewhere. appropriate to put it in an nsa budget and -- >> okay. we'd be interested in working with you on that and i think there are aproep trapriaters wa

to know where it came from and the more information the better. with regard to enriched uranium, if you could talk for a moment why you think it's so important. obviously we freed it for nuclear power plants. at one point we had a majority of enriched uranium in the world produced by the united states. i think we're down to about 25% of the world's supply of enriched uranium now, and maybe place to start is where do we get now that we aren't producing nearly as much as we used to? >> there are two parts to this. one is the military side of the security side, we have international treaties which we want to abide by. treaties which say that the uranium used in nuclear -- for nuclear security purposes actually h