technologies it has developed. companies like ge, westinghouse. it would also benefit if we had a homegrown new technology for enriching uranium for, again, so that we can offer for sale to other countries, other developing countries, you know, france is a player in this, russia is a player in this. we think if the united states is a supplier of this uranium, that we could have a moderating effect, again, on nonproliferation issues. so it's for that reason as well. >> in essence, discouraging emerging economies from developing their own enrichment capabilities. >> right. >> saying the fuel they need for a peaceful nuclear power facility can come from the united states. it will be a stable, affordable supply through domestic -- >> that's correct. in fact, if you put yourself in the shoes of another country who might want to have nuclear technology, they wouldn't want to see several suppliers.

so they would not be be holden to one or two. and we also feel that the united states in its-lead by example of helping do what it -- we can do in order to decrease the risks of proliferation. so it's the whole nuclear supply issue. we will be a player no matter what, but it would certainly benefit from that respect as well. >> my time is up. thanks, mr. chairman for giving a little time there. i appreciate the follow-up. we'll be following up. >> senator sanders? >> thank you, mr. chairman. welcome, mr. secretary. and thank you all for all that you are doing. let me begin by saying that i agree with senator shaheen and many others. it is absolutely imperative that we pass the production tax credit in 1603. it is beyond comprehension to me why we are not moving forward aggressively, and i thank the administration for their support

on it. i also want to thank you for help in vermont's smart grid. i think we will probably be the first state in america that have almost universal smart meters within a few years. we think if we're serious about energy efficiency and using electricity as efficiently as we can, this will be a major step forward. and i hope vermont can learn, the nation can learn from what vermont will be doing. we want to share that with the rest of the country. mr. secretary, it seems to me that one of the sad moments in terms of what is happening in our country today is the degree to which as a nation, as a congress we are not dealing with the horrendous planetary crisis of global warming. and i say this not to be terribly partisan here. but it is very sad that we have a major political party where many of its leading members actually reject what virtually

the entire world scientific community is saying, a, about the reality of global warming, b, that it is significantly caused by man made activities, and c, that if we are aggressive, we can begin the process of leading the world in reversing greenhouse gas emissions. and without getting partisan, it's just sad to me that we have so many people rejecting what is very clear scientific evidence, not only in this country, but from scientists all over the world. in terms of cutting greenhouse gas emissions, i think that energy efficiency is a huge step forward. i don't think there is much disagreement on that. i think weatherization is a very important part of that. i come from a cold weather state. we are making some progress in retrofitting homes. and when we do it well, what we are seeing is often working families, lower income people saying you know, i've cut my fuel bill by 20 or 30%. i'm saving money as a consumer. we are emitting less greenhouse gas emissions.

and you know what? we're creating jobs because people are working on those mommies. if there is any win-win-win situation that i see in this country, being aggressive about weatherization is it. and yet within a pretty good budget, you guys have cut weatherization. why? >> well, actually, our -- if you look at our requests, i believe it's up from what was given to us '12. >> well, here is the story. the budget before us actually invests only half as much in weatherization for 2013 as we did in 2008. that was the last year of the bush administration. in 2012, congress approved huge cuts to weatherization, dropping funding to $68 million in 2012, down from $227 million in 2008. now you're right. you went up from last year, but we're significantly below where we were in 2008.

would you agree with me that investing in weatherization is a win-win-win situation? >> oh, i agree. and so we have asked for an increase. it's not quite double, but a big increase from what we were authorized. and i think we're also trying to promote programs that would not only the federal dollars, but also programs -- because i really think if done right, weatherization can actually save money. and the money one needs to borrow, whether you're a business or a homeowner, if paid back in moderate interest loans can actually decrease your bills. >> right. hope that you will work with us, because i don't know that there is any much partisan disagreement on that one. if i lowered your fuel bill by 30%, why not? right? >> right.

>> and if we create jobs as part of that process, that's a winner. let me ask you this question. i am working on a concept, again, which should not be partisan. it's called on bill financing. one of the problems we have in terms of weatherization, if ron wyden here wants to reduce his fuel bill in his and knows that retrofit willing do that, but he doesn't have the up-front money, if we can get him the $15,000 he needs to cut his fuel bill by 30% and pay it back by the reduced amount of money he is spending on fuel, we're just lending the money, he is paying it back, what ideas do you have about how we can get middle class working families that up-front money so they can weatherize, lower their fuel bill, and save money in the long run? >> well, a number of things. first, usually one is most motivated and has the capacity when they are buying a house.

and we have in the tool box, i think it's hud has energy mortgages, not widely appreciated, not widely known. one way to stimulate that is to encourage lenders. lenders, they ask for a person's income. they want to know how if they can pay the mortgage, of course. they ask for the property tax, because that's the cost of owning the house. they ask for a lot of things. they ask for a structural engineer because they don't want their asset, the bank's asset to fall down. it would not be too much to say why not get a structural and energy audit from the engineer, and to make a wiser homeowner that can know -- >> i agree. but it is not only people who are just purchasing a home. >> right. >> you have people who have older homes. will you work with us on this concept of financing, coming up with loans that will be paid as a result of a lower bill?

i think it's a win-win situation. you work with us on that? >> absolutely. just very briefly, i think utility companies can play a role in this as well. >> yes, they can. >> because they have access to moderately low cost capital. >> that's correct. thank you. >> senator hoeven has arrived, but he has asked for a few minutes to review his notes. i know some of us have additional questions. i had one additional question, mr. secretary, that i wanted to ask. and thenally see if others do as well. and then senator hoeven can ask his questions when he is ready. i wanted to ask about the department's plans at los alamos national lab now that the chemistry and metalurgy has been put on hold. for many years we've been total the replacement nuclear facility was necessary. now we are told there may be

alternatives that the department wants to pursue. could you describe what changes in operations and staffing you anticipate at los alamos now that the cmrr has been delayed? >> well, much of this staffing i don't think is directly -- so what we plan to do is go ahead and complete substantially the design of that building. so what we have been putting in previously was mostly engineering design. we're going to get to perhaps 90% of the engineering design part of it. that's very prudent for a number of reasons, because before you start construction, it's best that you have most of it designed. but you're correct. we are now putting that on hold while because of the budget constraints of the nnsa, we have to lack at all the other projects, and we could not

simply we felt we simply could not start mrr and the uranium processing facility at oakridge. and we felt there was more compelling reasons to begin that. the -- we're looking at ultimately the plans we can consolidate. the footprint is there. there could be other parts of this. we're looking at as we look towards new start and beyond new start whether, you know, and working with the defense department as to what are requirements to fulfill our duties to the defense department for the nuclear facility will be. so as that gets worked out, that will be folded into it. so we'll essentially begin to complete the engineering design and then try to figure out how we can reposition. again, because of the -- and what is different as you well

know is that we have severe budget constraints. and we do have a deficit. >> but you are not real clear as to what -- what additional actions the administration would expect to take to meet its needs, the needs it was expecting to meet through the construction of this cmrr. >> yes. we're looking at some of the things the cmrr building would have done. we are looking perhaps to off-load some of that to other, for example, i forget what the name is called. it used to be called the nevada test ground. they have a new name for that. also, some issues. so we are looking very closely at how we can best fulfill our obligations and needs for our

nuclear security. we believe that and our overall plutonium strategy. but there will be some cmr at los alamos, we feel. but again, we don't know whether there are other options. >> let me ask senator hoeven. are you ready for your questions before i ask others if they have a second round of questions? >> i am, mr. chairman. thank you very much. >> why don't you go ahead. >> appreciate it. >> mr. secretary, good to see you again. thank you for being here. i would like to ask you a little bit about gasoline prices. i'm sure you're well aware that the average price for gasoline in the country right now is over $3.50, according to aaa and the lundberg survey. that's up 90% since the current administration took office. and so my question relates to why aren't we advancing projects like the keystone xl pipeline to provide more supply and help bring gasoline prices down?

you were asked to review that project, or the department of energy was asked to review that project by the state department. and your expert, dr. carmine -- i'm going to probably miss on the last name. you might have to help me. defigglio. does that sound about right? >> sounds about right. >> all right. he was asked to review the keystone xl pipeline project and comment on it as to whether or not it would help reduce gas prices in the united states. and i'll quote from his report. gasoline prices in all markets served by pad 1, the east coast, and 3, the gulf coast refiners would decrease. gasoline prices in all markets served by pad 1 in the east coast and 3, the gulf coast, would decrease, including the midwest. and that was by your expert, dr.

defigio, department of energy, june 2nd, 2011. so my question to you, here we have rising gas prices putting a strain on our consumers, on businesses, on the economy, and yet the administration turns down a project that would help us reduce gasoline prices. why is that? >> first, let me say, i'm not aware of this report. so i can get back to you on that. but it is my understanding that as try to explain, that the gasoline prices in the united states are affected by refine capacities and by access of those refiners. the biggest bottleneck was the bottleneck from cushing, oklahoma to houston. and that there was a very large price differential of crude in houston and cushing versus crude in houston.

so that bottleneck is being taken care of by the pipeline, the people who invest in pipelines. and as that is being taken care of as we speak, there are numerous plans to enlarging that pipeline, and one pipeline is being reversed. so that refined products from houston and louisiana can then be deported to the midwest. another pipeline from chicago to cushing also is being built, as far as i know. so much of the pipelines in the united states that would bring oil from wyoming, north dakota, and to get the oil to the refineries that hahe to refine back up are being done in the private sector.

jobs, that is going to be helping in the end the gasoline prices we are very concerned about, and the administration has taken in addition to -- i mean this pipeline activity occurs because once you see big price differentials, the industry steps in and says hey, we can fix that. in addition to that, we are doing a lot. for example, twice we have changed the mileage standards of automobiles. this directly affects the american public. by 2025, the estimate is the fleet average would be saving on average in americans over the lifetime of the ownership of the car about $8,000 in gasoline bills. >> mr. secretary, so you're saying that while you've been part of this administration, gasoline prices have gone up 90%. we're looking at $4 gasoline by memorial day, maybe $5 gasoline this summer. you're saying you're willing to build all kinds of pipelines,

but you're unwilling to build a pipeline that will bring 830,000 barrels a day into this country from our closest friend and trading partner, canada, and will help alleviate a bottleneck in my state of north dakota where we now produce more than 500,000 barrels a day, but our oil is now discounted $27 a barrel, light sweet bakken crude off west texas intermediate, $27 a bare we're discounted because we don't have the pipeline capacity to bring it down to the refineries. and we will put more than 100,000 barrel days in that pipeline. instead we have to run trucks over the road. we have traffic fate tates. we have wear and tear on our roads. you just got done saying you're willing to build up the pipelines. why not the keystone? >> the pipelines from wyoming and north dakota can be built. the administration actually has no -- there is not a decision the administration need make on that. this is all on american territory.

the only part of the pipeline the state department was asked to weigh in on was the part that went from canada to the united states. so specifically, and the pipelines that i was talking about are actually helping bring the oil from your state down to those refineries. those things are things where -- >> that's not the case. i just explained to you the pipeline that would help us bring the oil from my state down to the refinery. >> well, my understanding is if you look at the pipelines that exist today, and you look at the major of the pipelines, those pipelines, and we're talking now specifically about the part of the pipeline that goes from canada into the united states, those -- that is not the -- my people tell me that for the next decade or so, with the anticipated increase in production of canadian oil, that that will not be the bottleneck.

where we have the bottleneck now is in this cushing to houston. there is another bottleneck from chicago. and there is also pipelines that go from your state to chicago. and that pipeline goes from chicago to cushing. so those things are being built. so those are taken care of as we speak. >> i see i have over my time, mr. chairman. i will defer for a second round if that's the wishes of the chair. >> all right. why don't we go ahead with the second round. senator murkowski, do you have questions? >> i do. thank you. and thank you for your patience, mr. secretary. several weeks ago we had a presentation, eia present kind of the global picture. and i had an opportunity to ask mr. gruenespec where alaska natural gas fit into the bigger picture as we talk about domestic natural gas. senator wyden has on many

occasions before this committee asked questions about the export of domestic product here. and you as a secretary have the authority to sign off on whether or not export is in the national interest. the question i hadether or not alaska was viewed simply from the rest of the lower 48 market. different type of gas, different processes, and clearly a different market. alaska is much closer to the asian market than we are, most of the lower 48. it was good to get his opinion on it. but you're the guy that ultimately signs off on export licenses. how do you view alaska's natural gas and whether or not this is

differently than the domestic -- the lower 48 natural gas domestic production? >> well, given the charge of and the decisions we would have to make on allowing the export of natural gas, it would, again, have to be folded into what would be in the best interests of the united states. >> certainly. >> and you correctly pointed out that alaska is in a different location. but we would have to fold all that in. i actually don't know what howard said. but it is very clear that before we license anybody, as we deal with these applications, we just have to be very conscious of the fact that we don't want to have a significant impact on the gas prices. again, considering the benefit of the united states in its totality. so i really can't comment on

what it's going to be, the economics. having said that, we are -- alaska does have natural gas. >> lots of it. >> yes. >> lots of it. >> right. >> and we're still trying to figure out how we access that. and that's our challenge in the state right now. but one of the things that we are looking at is the prospect of rather than sending it through canada, through an extraordinary transportation system, to move it through the state, liquefy it and move towards export. it's not a decision that has been made yet. we have a long way to go. but it is an issue where for us in the state, it is a very different market. it a very different gas. and i look forward to the opportunity to speak with you more about that. >> sure. >> just segueing here, we have also had a chance to talk about arctic methane hydrates, and the great potential we have.

i understand that methane hydrates are going to continue to be a part of the natural gas technologies r&d budget, which is good. we're not the only country, of course, that is working on this. we've got a good partnership going with japan. i guess the question to you on this is right now there is a -- they're scheduled to conduct a major test up in alaska in partnership with japan on hydrate flows and pressures. i know doe had hoped to follow up on this december. i'm wondering if you can tell me what the level of commitment is from doe to continue this public/private -- the progress that has been made to advance the research in area that i think we recognize holds great potential. it may be farther out in the

distance than some of the technologies that are in front of us. but exciting if we can get there. so can you give me any updates? >> sure. >> and specifically the commitment doe has to this. >> sure. we're going ahead with this tests. it's done in connection with conocophillips. japan is very interested because they have methane hydrate reserves off their coast. and as you noted, it can -- if one can figure out how to extract it without plugging gas lines and all those other things, it would be -- it could be as significant or even far more significant than the technology twa so we are -- we're looking forward to the test. but the test is one part of a program going forward. before -- quite candidly, before industry would want to begin investing in it on their own. so again, it's this balance. right now industry is not --

they view methane hydrates more as something that plugs up their lines. rather than a potential source. and just like with shale gas, if it looks like it can be developed and industry gets invested in it, as part of the strat then they can take it over. right now the program being done in alaska is actually being directed by a doe scientist. so it is a research project. but it's just one part of that research project. after this stage, we see it continuing. >> well, and i think that's important, because we recognize that apparently there is $12 million now proposed in this budget for all methane hydrate research next year. it's my understanding that this test is going to -- it's going to be more expensive. so the commitment then from doe to continue that i think is going to be important. again, we'll follow up on this -- this conversation. thank you, mr. chairman. >> senator wyden?

>> thank you, mr. chairman and secretary chu. you've been a patient soul. there are pretty diverse views with respect to energy. folks who care about wind and solar, folks who care about coal and nuclear. so there is a wide variety of opinion. and i want to ask you about an area that i think would be unifying and something that i think you in particular could champion. and that is energy storage when you look at energy storage, this is something that makes wind and solar, for example, more economic. but it also is hugely beneficial to base load technologies like coal and nuclear, because it can help them meet their peak electric demand. and it also helps the transmission system operate more efficiently. so you've got something that is crosscutting in terms of technology, literally benefits every corner of the country. in other words, i can't find a

corner of the country that wouldn't benefit from it. and yet we haven't been able to get in place a clear strategy to tap the potential of the energy storage. a couple of years ago, dr. kunan, i asked him about energy storage. he said well, we're going to wait and see what happens. and basically we have gone through a variety of debates. i'm concerned, for example, that in the office of electricity in this budget, it looks like energy storage is cut. but i want to set that aside. and ask you what would it take to get you and the department to lay out for us a significant strategy to tap the potential of energy storage? i mean it has the real potential for production and distribution. it's not consumption. it's almost the other side of the coin of energy efficiency. and it could be something that would be backed by democrats and

republicans. it would be crosscutting in terms of technology. and yet so little has been done to lay out opportunity for real strategy here. could we persuade you to do that? >> you don't have to persuade me. well are doing that. we -- this is one of the reasons why one of our hubs is an energy storage hub. not only for automobiles, but for utility. and we made it very specific. and it's not only batteries, it's compressed air. it's thermal storage. i just talked about how you can use nighttime energy to process heat. sometimes when the wind is blowing, there is nowhere to take that electricity. you can put that into lots of kinds of storage. either hydro storage is something i've been pushing very hard, the bpa to start doing, pump from one dam to another dam so it has essentially no

environmental impact, but it is a form of storage. and we have a target. we know that energy stores at the megawatt and the megawatt hour scale would have incredible applications in the electricity distribution system. it would make our electricity distribution system much more efficient, because all the little ripples. you have a few major generating stations. it goes to distribute out here. you purposely overfill today. and if you had little batteries of, you know, kind of that size scale popped here and there, it would have a profound difference. right now the energy storage is about $300, $350 a kilowatt hour. at $100, $150 a kilowatt hour, it goes viral. energy storage for renewals, for make mortgage efficient distribution system, energy storages for a sounder, more robust grid are all part of that. e