for usec within the nonproliferation budget request. i hope to hear from you and others in the department why when couples with a transfer authority request for fiscal year 2012 the department believes providing you with 300 million dollars in taxpayer money is a good investment and not a bailout. mr. secretary, i do look forward to hearing from you today about the fiscal year 2013 budget request that will help address energy and national security challenges. none of us will always agree. but certainly as we remember this subcommittee on long standing know that we can work through our differences in a cooperative and bipartisan fashion. and, again, mr. chairman, i appreciate you yielding the time. >> thank you very much. chairman of the full committee is recognized. mr. rogers? >> thank you, mr. chairman. thank you and your ranking

member for doing great work over here. you're doing good. mr. secretary, happy birthday. happy anniversary. welcome. this week the national average price for a gallon of gas is $3.60. it's up 20 cents over last month. 40 cents more than this time last year. the increasingly unstable middle east, belligerent iran threatens to shut down the strait and limit exports. china's rapidly growing economy is driving up oil prices through increases demand. while a state owned enterprises are securing commodity contracts around the world. monopolizing new foreign sources. once again, energy security key to economic prosperity and national defense is the focus of public debate. the congress has said a very

strong message that we must have balance in the expansion of conventional fuels. coal, natural gas, oil, nuclear to provide energy today with investment and to renewable energy to power our future. and while the president has repeatedly mentioned his support for a similar all of the above energy policy, this budget proposal and the recent denial of the keystone xl pipeline seemed to insinuate that this administration is not serious about responsibility and responsibly diverse fig our energy portfolio. instead, this budget request for doe coupled with the budgets of interior and the epa seem merely a continuance of this administration's political posturing. and diversion of scarce federal dollars to favored sectors at the expense of the others.

in particular, coal, so important to my region of southern and eastern kentucky and our country's most abundant energy resource has remained squarely in the administration's cross hairs. although your budget tries to hide it, your proposal significantly rolls back investment and carbon captured, carbon storage and the advanced energy systems programs that would allow our country to more efficiently use the fossil fuels already at our disposal. instead, these funds have been shuffled around to support the president's pet projects including a proposed $500 million increase for the energy efficiency and renewable energy program. which is already funded at $1.8 billion. as the epa rolls out the regulations and flushes out a

proposed green house gas rule, these fossil rnd funds are vital to developing the new technologies necessary to comply with the administration's own control standards. essentially, the administration has created a catch 22. demanding that industry invest heavily into new technology in order to meet stricter standards while cutting off the funding for those investments. it's a systematic dismissal of coal, the outcome of which will be thousands of lost jobs and more expensive electricity for american citizens while their tax money is thrown at unviable solutions like solyndra's solar panels. combined with underfilling the strategic reserve after last year's sale and in order to create the appearance of savings, i fear your budget reduces our energy security in real terms.

obviously, my colleagues and i have serious concerns about the administration's policies as they relate to our energy security. however, i would like to commend your department for its efforts through nnsa to maintain a strategic arsenal. i would welcome you to expand upon how your request which includes significant reductions ensures our nuclear capabilities are secure, thoroughly modeiz a sufficient deterrent to our enemies. thank you, mr. chairman. >> thank you, mr. chairman. mr. dicks, ranking member of the full committee. >> i also want to welcome secretary chu to the energy and opportunity to discuss the fy-13 department of energy budget request. and for fy -- i bet you could have thought of better things to do on your birthday and on your anniversary. but we'll be brief. for fy-13 the president's budget

request for the energy department is a sensible proposal that carries on our investments and important national programs and defense, science, and energy efficiency. this proposal represents a further investment for many programs that are the building blocks for a more efficient and independent energy future. this fy-13 budget request contains a small increase for naval reactors but healthier increases for nuclear weapons activities such as modernization as well as nonproliferation programs. while the increase for weapon activities is less than what was outlined in the budget document of a few yaeears ago, the fundi seems adequate to maintain our capability. however, i understand the administration's working on a plan to establish a requirement beyond this proposed budget. i applaud the budget request for the healthy increase and important domestic programs such as energy efficiency. the energy efficiency and renewable energy program would

be increased by more than $520 million over the fy-12 enacted level. this initiative funded under this program are important to establish and maintaining our lead in both the manufacturing and deployment of new energy technologies as well as making existing technologies more efficient. the budget request also continues adequate support, adequate spending for the cleanup in the hanford nuclear weapons site in washington state which is funded through the environmental management program. i want to work with the subcommittee and energy department to make sure that hanford cleanup succeeds at a reasonable cost to the taxpayer. however, i must express my disappointment that this budget continues to reflect the administration's decision to shut down the yucca mountain project. it is my opinion that the decision congress made back in the 1980s to use yucca as our national nuclear waste repos torre is still the law of the

land. again, want to welcome secretary chu to the committee. we look forward to your statement. thank you. >> thank you, mr. dicks. mr. secretary, thank you for being with us. we welcome your remarks and your entire statement will be included in the record. >> is that better? >> yes. >> perfect. thank you. chairman and ranking member and members of the committee, thank you for the opportunity to discuss department of energy's fy-13 budget request. to promote economic growth and strengthen our security, president obama called for an oil strat zwla develops every source of american energy. the president wants to fuel our economy with domestic energy resources while increasing our

ability to compete in the clean energy race. the department's fy-13 budget request of $27.2 billion is guide by the president's vision, our 2011 strategic plan and our technology review. it supports leadership in clean energy technologies, science and innovation and nuclear security and environmental cleanup. decades ago the energy department supported energy department support helped to develop the technology that's aloutd us to tap into america's abundant shale gas resources. today, our investments can help advance technology that's will unlock the promise of renewable energy and energy efficiency. the budget request invests $4 billion in our energy programs. it advances progress in areas from solar to off shore wind to carbon capture utilization and storage to smart grid technologies. it helps reduce our dependence on imported oil by developing next generation biofuels,

advance batteries and fuel efficient technologies. it requests 770 dls million in the nuclear energy program to help develop the next generation of nuclear powered technologies including small modular reactors. it also includes funding for the continued nuclear waste r & d which aligns with the recommendations of the blue ribbon commission on america's nuclear future. as we move to a sustainable energy future, america's fossil energy resources will continue to play an important role in our energy mix. the budget request includes $12 million as part of a larger r & d initiative by the departments of energy, interior and epa to understand and minimize the potential environmental health and safety impacts of natural gas development through hydraulic frac. the budget also promotes energy efficiency to help americans save money by saving energy. and it sponsors r & d and industrial materials and processes to help u.s. manufacturers cut costs. to maximize our energy

technology efforts in areas including batteries, biofuels, electric grid technologies, coordinating research and development and research programs. to encourage the manufacturing and employment of clean energy technologies, the president called for extending proven tax incentives including the production of tax credit, the 1603 program, and the advance energy manufacturing tax credit. as industry, congress and the american people make critical energy decisions, it's also important that we adequately fund the energy information administration. competing in all the new energy -- repeating in the new energy economy requires us to harness our resources. the budget includes $5 billion for the office of science to support basic research that can lead to new discoveries and help solve energy challenges. these funds support progress and material science, basic energy science and advanced computing and more.

the budget request continues to support energy frontier research centers which aim to solve specific scientific problems to unlock new clean energy development. it also supports the five existing energy innovation hubs and proposes a new hub in electricity assistance. through the hubs, we're bringing together our nation's top scientists and engineers to achieve game changing results. additionally, the budget request includes $350 million to support research projects that can transformed the way we use and produce energy. they invest in high risk, high reward projects that if successful could create the foundation for entirely new industries. in addition to strengthening our economy, the budget request strengthens our security by providing $11.5 billion to the national nuclear security administration. as they begin the nuclear arms reduction required about it new start treaty, the science, technology and engineering capabilities within the nuclear

security enterprise will be more important to sustaining the u.s. nuclear deterent. that's why they include $7.6 billion for weapons activities and also $1.1 billion for the naval reactor's program. additionally, it supports nnsa's work to prevent nuclear terrorism which is one of president obama's top priorities. includes $2.5 billion to implement key nuclear security, nonproliferation and arms control activities. finally, the budget request includes $5.7 billion to continue progress in cleanup the nation's cold war nuclear sites. the budget request makes strategic investments to promote security. at the same time, we recognize our country's fiscal challenges and our coming back where we can. we're also committed to performing our work efficiently and infeeffectively. countries recognize the energy opportunity and are moving aggressively to lead. this is a race we can win but we must act with fierce urgency.

thank you and now i'll be pleased to answer your questions. >> thank you, mr. chairman. we have votes in the 4:00 time frame. we'll try to stick to the five-minute rule and that's for the members to be aware of. mr. secretary, our committee long supported and this has been very bipartisan the department's efforts to keep the world's best science and engineering workforce here at home and to keep our position as the world's top innovator. we also need to think one step further by making sure we don't just in vent the newest technologies but that we then manufacture them in the united states. after all, devoting federal funding to support a research team of ten people at home so a company can support 1,000 manufacturing jobs overseas truly misses the mark. mr. secretary, beyond the advama proposes, how are

you working -- this is very much in line with the ranking member's comments -- to insure that federally funded research and development conducted at america american universities, our laboratories and companies then leads to manufacturing in jobs in these united states? >> well, mr. chairman, first, i couldn't agree with you more. i think that if we invest in research in american universities or national labs or in companies that we would like to see not only that research lead to discoveries but that research leads to manufacturing in the united states. because that is where we will see our future prosperity. the department of energy is it working in a number of ways. first, when there are issues strog do with ip generated by the department of energy, we're looking at what means we have to say if you support a company or

research that you can -- what are the means we have at our disposal to make sure it doesn't go to the highest bidder? what are those means? we support search done by a company of improferring the manufacturing of sil solar and e it down. they decided given what is happening in china that they weren't going to get out of this business. and we were taking steps to make sure that that ip generated by american taxpayers would be -- would have controls that, again, it doesn't migrate. >> what's the reference to china? we know china is it aggressive in this area. but if we made and you gave this example yourself, if we made this substantial investment, what did we do to protect that?

we look at the legal means. so i've been told by my people that if this is -- if this property is sold to somewhere else, the united states will look at what means we have. but -- >> respectfully, the department of energy has been in business for quite a long time. we have excellence represents by a lot of incredible talented and national laboratories. and they've been coming up with some pretty ingenious ideas. they are going to be sucked out of the labs and find ourselves

confronting challenges based on the cheap labor and manufacturing base and in places like india or china. we can't take the industrial side of what we do for granted. also an appreciation of how important it is that we remain technology leader and especially high-tech manufacturing that rests on the intellectual property that we generated here in the united states. >> you headed up one of those laboratories? correct? >> so -- and god bless you for doing that. and the investments we made in the variety of innovators and people under your, you know, area of responsibility, what was to take -- you know, what

prevented them from that information from migrating abroad? >> well, first -- >> what steps do we legally take if indeed it's possible and a global economy? >> well -- >> whether we support the development of an idea, we can in principle look at steps and doing this increasingly. when we look at -- we have the ideas first. we are greasing the interaction between the united states and what comes out of laboratories. in addition to that, you know, if you're supporting research, we're in discussions. if you support the research with the u.s. taxpayer money, how do you begin to say all right. we don't want to see this then go -- again as i say go, to the highest bidder. these are complex things that we're looking at. >> well, we shouldn't be looking at them. how about -- how are you acting on it? are the horses already out the barn here? i mean have we come up with a lot of ingenious ideas and

innovations and patents and you know, they're being marketed by our global competitors? >> well, the u.s. government doesn't have complete control over certain things. and so when a company, let's say a start-up company picks up a property and develops it, depending on what that -- >> we don't just want them setting up shop outside beijing. i mean especially if we as the taxpayers have made this -- these types of investments. >> right. no. it's a -- it's a set of reasons to encourage american companies to set up manufacturing in the united states. those set of reasons include provisions on whether they can use research supported by the department of energy. but they also, quite frankly, include issues having to do with

the climate in the united states that leads to fiscal policies. >> we know the climate here. and it's not to our benefit at the moment. so let me yield to the ranking member who through his opening statement and shares very much my concern here. he can speak from an industrial base that has been stripped of a lot of its assets. >> thank you, mr. chairman. secretary, i have a couple questions. we have five minutes at least on this first round. i would associate myself with the chairman and i'm very concerned that there is a provision for the stimulus bill in 2009. but it applied only to infrastructure investment. and when credits were used for energy programs, much of those facilities and products were imported. i'm told we lost production facility and possibilities for solar. i produce more steel.

i don't, my workers do in my district and any state in the country and every time i see a 215 ton wind mill imported because we don't make it here, i get furious. and i appreciate that the last time we had a discussion you initiated a conversation and i appreciate it. there is a focus now at the department about making sure that the intellectual firepower that you have is going to be used with a goal of making sure goods and products are manufactured. i do appreciate that. the question i have on manufacturing is there is a proposal for manufacturing demonstration facility within the 2013 budget. and, again, on first blush, i think it's a swell idea. the concern i have is over about the last three to five years the department has established the bioenergy research center, energy innovative hubs, the energy frontier research centers and industrial assessment centers, clean energy regional

application centers, manufacturing energy centers. and the obvious question is do we need that? do we have too many centers? are we dissipating our companies? >> no, i don't think we're dissipating our efforts. you named a lot of centers. >> i'm just saying why do we need the manufacturing done -- >> fair question. let me focus on that. >> i have three minutes left here. >> right. those centers specifically are centers in which you work with american companies and they're almost like incubated companies. i toured one. its with a carbon composite. it was done in conjunction with oakridge where you have companies and you test new manufacturing methods. they say well we don't know whether this is going to work or not. and so you have a facility that helps them develop new manufacturing methods that can enable them to produce carbon

composite materials which firstly the whole world thinks will be material in the future but in order to produce it cost effectively cheaper so you can actually buy them in american products. these are american companies that use this facility and say, look, we're going to do experiments. maybe they can't afford some of this stuff. but here's the facility. it's like an incubator house. come in and we'll help you get started. i think that's -- those are examples of the manufacturing facilities which i think are directly applicable to help keep manufacturing in the united states. >> okay. two last questions. the second one deals with the issue of management and a wood note that in the 2011 report by the gao, they did indicate that the department has made progress towards many of the recommendations relative to the watch list. but also suggested that doe

needs to commit sufficient people and resources to resolve its contract management problems. you still have obviously nnsa as well as environmental cleanup about 60% of your budget on the list. further, very recently the national academy of sciences issued a report that talked about serious management issues or hampering the will work at nnsa weapons laboratory noting persistent levels of mistrust calling the relationship dysfunctional. what additional actions are you taking relative to the national academy's report in that just persistent year in and year out appearances of these agencies on that watch list? >> with regard to the watch list, as you noted, its office of science is now off the watch list. if you look at their recent record, it's 100% on time and on budget. and that's an existence movement that the department of energy that one can develop very complex multibillion dollar

budgets. and carry them through in projects. and so when i knew that one wh i walked in the door. concerted effort to export those best practices in the office of science to nnsa and to environmental cleanup. one of the things, let me very, very briefly say that a strong common denominator, especially fli complex projects like nsa are doing is you don't start construction until a large faction of the engineering drawings are done. if you start putting shovels in the ground when you have 10% of the design done, you'll find out this is not a government project. this is true in the private sector as well. you invariably find out that, oops, you should have done more design before you actually start construction. and so one of the things we've been -- that -- so a lot of the things that you see are things put in progress years ago. and there is now concerted effort to make sure that you

progress further along and first budget estimates but never -- but also be very reluctant to put shovels in the ground until you know what you're going to be building. >> all right. in light of that national academy report -- >> i'd love to tell you about that. but for another day. >> thank you. >> thank you. mr. rogers? >> thank you, chairman. >> coal provides 50% of the nation's energy electricity today. if we went completely at 100 miles an hour developing other sources, you're still going to need coal and for the foreseeable future. it is an abundant resource that we that we recall the saudi arabia of coal, it's inexpensive

relatively speaking. and on the world market for energy. and, yet, it seems this administration is intent on completely shutting off the use of coal and the mining of coal for the purpose of generating electricity. epa is issuing regulations almost every day. there is no technology capable of meeting those standards. and so consequently, there can be no new coal plants because of that rule among others. at the same time, epa is demanding new technologies for compliance with their regulations. you are cutting the research that would develop those

technologies. that seems to me to be incomprehensible. we have two agencies of the government at cross purposes. the fossil energy research and development program and your department has played an important role in improving existing technologies and inventing entirely new ones. your request for funding is cut for fossil energy r & d is cut by 21%. $113 million cut. advance energy systems by 45 million that, is almost half. and it cuts cost cutting research by $19 billion which is