the fuel cycle research and development by 10.8%. and yet yesterday when you were in georgia, you announced that there was going to be a new $10 million advanced nuclear innovative cross cutting for research and development for advanced nuclear reactor and fuel cycle technologies. those seem to be a little inconsistent. one end you're asking for the -- you're asking for a $10.8 million decrease. yet yesterday you said there was going to be new funding. what is this new funding? i didn't quite -- that came out kind of gray. >> okay. so in the -- first, i have been very supportive of nuclear since i walked in -- >> i understand that. and i believe that. but i also understand you're carrying the administration's water. >> so in terms of the fuel

cycle, we believe that -- first, as it was pointed out, the technologies for fuel recycling today we don't think are economically viable and not proliferation resistant. there are other examples of -- so this is the eurex, purex methods the u.s. developed, actually. but as we have seen from both -- especially in the japanese experience, that's well over budget. they believe it was a $6 billion investment. it's north of $22 billion today. still not operational. this is the rikashi plant. there are other technologies like pyro processing which we think have promise. they had good laboratory experiences and then we went up and did the next step and it didn't quite work as well as we thought it would. in order to be -- it is more

proliferation. it's not proliferation proof, but it's more proliferation resistant. had that worked well, we would have been encouraged. it's not to say that we're going to abandon that. in fact, i'm personally getting very interested in why it's not working. so in my little spare time i'm trying to figure out if i can help them. but nevermind that. >> you may resolve that in your garage. >> it's going to be up here. it's not going to be in a garage. i don't think the nrc would like for me to experiment in my garage. i will say this doesn't -- it doesn't open up -- it still doesn't mean we shouldn't be looking for other good ideas, because we are very interested in if nuclear is going to be part of this century's mix, we would like to not use 1% of the fuel, energy content of the fuel to generate a certain amount of electricity if we can use 20%.

20 times more so you have a similar waste product, but you've got 20 times more electricity. so this is hanging out there. we would like very much -- >> and we're all in agreement on that. >> right. so we do feel that it does make sense to invest in new technologies. we're going to have to come back a little bit and try to figure out why some of these earlier problems and things, that the lab scale doesn't go into the mini pilot scale. >> the one question i had why was this announcement made in georgia, because the inl in idaho, one of its strong missions, the actual work you described? >> well, i happened to be in georgia. yes, i can be only two places at once. that would happen to be georgia and oak ridge. >> so i can take the message back to the idaho people that this $10 million is coming? >> oh, we announced competitive bids and idaho is free to

compete with that money. >> mr. secretary, my time is up, but you and i had a discussion at your confirmation hearing about the contract for clean-up at the idaho national laboratory. you weren't familiar with that, but promised you'd get up to speed on that. i've got some questions about that from the budget which is really not very clear as to where we're headed with that. if you'll take those questions for the record, i'd appreciate it. >> sure. thank you. >> thank you mr. senator udall? >> good morning, mr. secretary. i can speak for senator risch, i know he'd volunteer his garage if you need it. i know he represents iral and i represent inral. you know i'm very proud of their accomplishments there. i want to continue to work with you to seecontinues. and then your budget, and in my estimation you go a long way

toward supporting that lab's critical programs, which are focused on developing innovative renewable energy technologies that clearly have translated into lasting, well paying jobs, a more comprehensive energy p t portfolio and the national security that comes along with that. so kudos to you. i know this is a tough fiscal environment and i want you to know that we support what you and the president have put together. i mentioned how important inral is. financing is also really crucial to our 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 states are 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 that we have left? >> sure. yeah, very quickly, i think things like production tax credits are a way to stimulate moving forward to get deployment in the marketplace. and because europe has -- i would say even perhaps in even worse economic straits than we are, and you see some countries like spain decreasing a lot of their feeding tariffs, a lot of their subsidies for renewables, that there's a diminution of the market. but it's the local markets that actually help stimulate manufacturing in a particular country. and 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. so they ratcheted it up. because they recognize that they want to nurture their industries. they need a home market to make sure they're going to be -- they want to catch up in wind turbine technology. they are becoming dominant for us in solar technology. but they see both of those at risk. so as we saw europe's subsidies decrease, they said, okay, we want to develop our home market. and the world is expecting this year that china will be the biggest deployer of renewable energy in the world. let's go back to the united states. if we don't have a home market for these things, industries would not be motivated to develop manufacturing at home. they would not be -- they would be less motivated to develop those technologies.

the next generation of solar. for example, nrel was the developer, essentially inventor and developer. there's a number of solar companies making the technology. those technologies are continuing to improve. one doesn't know whether silicon or some other technology. they're certainly a player in that field and they're certainly in a competitive race. so i think to have a hull market for clean energy standard, a protection tax 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 home market as well. it's this mixture that they need. >> and you're employing if we

don't extend the ptc, that home market missi t bipartisan way that's crucial -- >> well, it's who goes through how do you get a market draw, how do you help bring slightly lower cost financing, all those things. you talk to any supplier of wind, they would rather set up a supply chain in the country where these things are being installed. this is heavy stuff. and so in the solar world, it's more like a commodity that can be shipped worldwide but it's going to be heavily influenced. as i noted before, wind technology is getting very, very close to price parity with new gas. let me be careful. new gas at $4 to $6 a million cubic feet. which is considered, you know, if you average over the next 10 or 20 years, this is what it's projecting. solar has dropped by more than 75%, the solar modules have dropped by more than 75% in the last three years.

everybody anticipates another 50% drop, at least, in the next five to eight years. and 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 said repeatedly, we're either going to be buying and selling and i'd rather be selling. >> we all would. i know my time's about to expire. but on the critical min rams hub, what are you doing at d.o.e. to ensure the d.o.e. labs, university partners and industry are working together on the hubs? can you give a brief answer and then -- >> sure. very brief answer, even the design of the hubs, if we select a hub, they have to come in with a design and what are they doing at the get-go to have industry and the national labs and uni

universities. i was just visiting a hub in a competition 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 premature ageing 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 processes that you see? and so from its very design, it was, we can use the powers of high performance computing, the intellectual powers of the people in universities, national labs to help industries solve these problems. and so the hubs are specifically designed for that. the other thing very quickly i should mention is that we have also been easing the way to have technology transferred from national laboratories and universities, but national laboratories since we helped control the technology transfer

policies. we 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 -- this is lightweight steels and alloys and composites. everything. because it's going to be dominated by new materials. 250 people came. a lot of companies, a lot of excitement. immediately the first week of payoff was, you know, venture capitalists are inviting people from the labs to come. the other labs are saying, this really works. we're going to do this, too. we have another one on advanced competition, how that can help an industry. just tie the -- so the people in national labs know what the industry problems are and that they can be excited about helping them solve those problems. so this again is something

that's -- it has been occurring over the last year. >> i take from you that this is really important. you're really focused on it. you're going to work with all these stake holders. >> right. >> thank you, mr. secretary. >> senator manchin? >> thank you very much. i know it's been mentioned before, the president in his state of the union address says that the country needs to -- an all-out, all of the above strategy and develops every available source of american energy. a strategy that we all agree is cleaner, cheaper, full of new jobs but also hopefully keeping the jobs that we already have. i want to show you a chart we put together. this information is from the eia, your own department, showing where we are as far as the first through 2010, 20% is in nuclear and oil and other liquids. when we get to 2025, 27% will be coming from natural gas. renewables 16%. coal and steel, 39% and the rest at 18%. with that being said, the

president's budget basically had $2.7 billion that you all submitted for the energy efficiency renewable energy. a 47% increase from current levels. if you hold this one up, tom, so you can see the comparison. stand up. this is where your money's going. this is what you're going to get out of the investment. this is by your own. then you have the office of nuclear energy. nuclear is right here. this is where you're going. this is where you are. you've cut 19 -- 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. what i would say is when you look at -- take all the above that the president's said, look at the energy strategy when you're cutting funding to resources, that'll 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're doing, as you know during the recovery act, there was very large investments in clean coal partnerships and helping test, deploy some clean coal technologies. but unfortunately a lot of the companies who had to 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 not only the normal pollutants, but also to capture the 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 and millions to billion dollar projects, or multibillion dollar projects, but we do see a path forward in having carbon capture utilization. >> i hate to interrupt, but our times are so limited here. you can keep those up. that's very important. there's no coordination as i can see from the environmental protection agency trying to work with you all to develop policies and be able to use the energy that we are depending upon. that's where the disconnect comes. what we're asking for is 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 that we're setting. but there's no one 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 colder liquids that blended biomass into the fuel and had carbon captured sequestration technology. then you said also colder liquids with carbon capture and sequestration actually makes very clean fuels and then once you start blending in biomass, it becomes a real plus. it becomes carbon neutral. in the tail pipe emissions. so for that reason department of energy is very eager to promote that type of research. last year, your budget had $5 million in funding for that 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 cold 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 does -- it goes with carbon capture, it actually goes negative. you're actually net sucking carbon out of the air. >> right. i think you testified last year. we have people wanting to do this type, and the roadblocks 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. i think this shows completely where you're making your investments without taking in consideration what brought you to the dance. and what you're expecting. if you look at natural gas and coal and what we have there, you're talking about 66% of the energy for the next two decades with very little money going into them. >> well, as i said, the research for carbon capture and storage technologies we can fund. where it gets to be very expensive gets to be on the

deployment side. this is a chart of electricity, which is a major part of our energy. but about 38% of our energy is from oil. and if you took -- as i tried to point out before, our budget doesn't reflect the percentage of energy we use, therefore those dollars go to that percentage. the oil industry is a very mature industry and we don't think even though it's 38% over total energy budget, we're not going to put 38% of our d.o.e. budget into that. we do think that carbon capture, getting coal clean is very important. >> or oil recovery. enhanced oil recovery. so many things we could use it for. >> i absolutely agree. >> sir, your budget doesn't reflect that. i know. we have a difference. thank you. >> senator shane.

shaheen. >> thank you, mr. chairman. thank you, 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, saved significant amount of money. we have a wind farm in a community of of limster in the western part of the state and one that they're working on that

have used the production tax credits. it's made a difference not just in the jobs that go into building those wind farms, but also in reviving the communities because of the economic activity that goes on around those projects. so i think they're very important and agree with your comments about the importance of continuing these investments in these markets. and have been concerned, as i know many of us in the senate are, about the fact that these are going to 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 taxes. so can you talk a little bit about, adding to what you 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, i'm sure -- i know you have. as you talk to industries out there, what industry wants more than anything else is they want to see stable government 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 roll-off of these investments.

and you see this in the financial newspapers, bloomberg, you find all those things. there's going to be real concern. is it just going to roll off and stop? and, again, i go back and 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 great things about the u.s. automobile industry is we had a very large home market. and that actually stimulated a lot of the development of automobiles. >> and is it fair to say that if that uncertainty exists because we let these tax credits expire that there's a good likelihood that we're going to see a number of jobs lost as part of that? >> yes. i think there are early returns on that already because, aga, if you read the financial pages, the various newspapers around the country and around the world where there are continuing

policies that allow investments, you see growth, and otherwise there is a pulling back. >> i was also very pleased to hear the president in his state of the union and to see that in action as well the commitment to energy efficiency, which is something that i believe is very important. senator poma bill, s-1000, 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 cogeneration 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 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. you know, in today's modern let's say gas turbine generation, you can get 55%, 60% efficiency in converting that energy into electricit best, 60 efficient. i guess some companies claim 61% or 62%, but i'm not going to quibble. in combined heat and power you go up to 80%. it can be -- now, we think that -- 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. some people -- here's the issue. sometimes you want the electricity. you don't want the processed heat. or maybe you want the heat. you don't want the electricity. i was visiting a project we supported in recovery act funds in houston, texas. it powers this collection of

medical centers that is about the 12th largest city in the united states, just the medical centers. everything's big in texas. and anyway, what they had is they had a very efficient gas generator, but single cycle. they had high temperature processed heat that could be used for heating or air conditioning. now, the beauty of what they did is they took that processed heat and they used it. you can actually use heat to cool. and so they used it to chill water. and they restore this cold water in this big tank right there. and they found that it took about -- less than 10% of the energy, even on 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. it's a battery of heat that they would use to air condition their complex. okay? so it was very cost-effective. so they were operating this plant at 80% efficiency,

recovering all of that. very fuel efficient. again, drives down the cost to their customers. the medical centers, the hospitals. and so that's an excellent example of how combined heat and power can be used in a way -- i mean, buildings, new buildings now, many of them, especially if you have real-time pricing of electricity, they use the electricity at night. chill some water. you can turn into ice. use the ice to cool the building during the daytime. so you're buying electricity where it's inexpensive. you decrease your electricity used -- getting a 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 going 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 of the committee on some important projects. i like some things in the budget. one is energy efficient as senator shaheen has just talked about. and with buildings using about 40% of the energy in this country, i think what you're talking about there is consistent with the legislation, which as you may know is introduced in the house, a companion bill yesterday. so we're hopeful that s-1000 can make its way to the floor. i appreciate the support of the ranking member on the chair on that as well. i'm concerned about some other aspects of the budget. but let me focus on something else positive, which is a small modular reactor licensing

technical support program. you've funded that at 65 million bucks. and these smrs i think are really an exciting innovation, and as you know, have safety advantages as well as economic advantages. i know that nuclear regulatory commission has just licensed a plant and another one coming with larger reactors. but it seems to me that this is a good investment and something that will be very beneficial to energy mix going forward. so i thank you for that. with regard to carbon capture technologies, i don't know if you've had this question from other colleagues. i apologize if i'm repeating something here. but the ccs programs i think are still 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 how