TYPE: COMMITTEE HEARING

LENGTH: 30003 words

COMMITTEE: SENATE ENERGY AND NATURAL RESOURCES COMMITTEE

HEADLINE: U.S. SENATOR JEFF BINGAMAN (D-NM) HOLDS CONFIRMATION HEARING FOR ENERGY SECRETARY-DESIGNATE SPENCER ABRAHAM

SPEAKER:
U.S. SENATOR JEFF BINGAMAN (D-NM)

LOCATION: WASHINGTON, D.C.

WITNESSES:

FORMER SENATOR SPENCER ABRAHAM, ENERGY SECRETARY-DESIGNATE

BODY:
U.S. SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES

HOLDS CONFIRMATION HEARING FOR ENERGY SECRETARY-DESIGNATE

SPENCER ABRAHAM


JANUARY 18, 2001


SPEAKERS:

U.S. SENATOR JEFF BINGAMAN (D-NM), CHAIRMAN

U.S. SENATOR DANIEL K. AKAKA (D-HI)

U.S. SENATOR BYRON L. DORGAN (D-ND)

U.S. SENATOR BOB GRAHAM (D-FL)

U.S. SENATOR RON WYDEN (D-OR)

U.S. SENATOR TIM JOHNSON (D-SD)

U.S. SENATOR MARY LANDRIEU (D-LA)

U.S. SENATOR EVAN BAYH (D-IN)

U.S. SENATOR BLANCHE LINCOLN (D-AR)

U.S. SENATOR FRANK H. MURKOWSKI (R-AK), RANKING MEMBER

U.S. SENATOR PETE V. DOMENICI (R-NM)

U.S. SENATOR DON NICKLES (R-OK)

U.S. SENATOR LARRY E. CRAIG (R-ID)

U.S. SENATOR BEN NIGHTHORSE CAMPBELL (R-CO)

U.S. SENATOR CRAIG THOMAS (R-WY)

U.S. SENATOR GORDON SMITH (R-OR)

U.S. SENATOR JIM BUNNING (R-KY)

U.S. SENATOR PETER FITZGERALD (R-IL)

U.S. SENATOR CONRAD BURNS (R-MT)

*

BINGAMAN: The committee will come to order. Under the Rules of the Senate the standing committees continue from one Congress to the next and have the power to act until their successors are appointed. Although the Senate has yet to appoint new Members, we expect, subject to the approval of a Democratic Conference and the full Senate, that Senators Feinstein and Schumer and Cantwell will be appointed as Democratic members of this committee and, if they are able to attend this morning, we will certainly permit them to ask questions of the nominee and participate.
Obviously, we extend the same courtesy to any new Republican Members, but I understand that the Republican Conference has not yet decided on who those members will be. Is that correct?


Senator Murkowski: That is my general understanding, Mr. Chairman.


Chairman Bingaman: The committee will consider the nomination of Spencer Abraham to be the Secretary of Energy this morning, then we will break for lunch and reconvene at 2:30 this afternoon to consider the nomination of Gale Norton to be the Secretary of Interior. I have decided to exercise the prerogatives that I have as chairman for another day-and- a-half, Mr. Chairman, to model these hearings after those that we conducted in this room for Donald Rumsfeld instead of those that are being conducted for John Ashcroft. By that I mean that I would intend to give a brief statement myself, call upon Senator Murkowski, the Ranking Republican Member, to give a statement, then call on the two Senators from Michigan to introduce the witness and then call on Senator Abraham to make his statement, the nominee, and then we would go after that to questions by the committee.


In the first round of questions we would have 8 minutes per questioner instead of five, so the people could make statements or ask questions as they saw fit.


The purpose of this hearing, as I said, is to consider the nomination of our former colleague, Spencer Abraham, as the Secretary of Energy. Several years ago, Senator Abraham, of course, urged that we abolish the Department of Energy. He has since seen the light. He has come to understand the importance of that Department, and the importance of it for our energy security, our national security, our economy, and our scientific and technological prowess.


I am sure he is also learning the difficult problems facing the Secretary and how difficult it will be for the Secretary to solve those problems. Like his predecessors, he will be held accountable for energy supply and price fluctuations over which he has very little control. He will be held responsible for the performance of National Nuclear Security Administration, over which he has no direct management authority. He will be called to account for environmental messes that he had no part in making, and he will be held liable for not having opened the nuclear waste repository 3 years ago.


Republicans harshly criticized President Clinton's nominees for this and other posts in the Department of Energy for not being sufficiently steeped in the intricacies of the energy area for which they were nominated, and for needing, as it was referred to, on-the- job training. It would be easy for Democrats to respond in kind, now that our roles are reversed, and it would be easy but it would not be constructive or fair to this nominee.


It is time for both parties to put aside their rancor, to work cooperatively with the new Secretary to try to solve some of these very serious problems facing the Department. I, for one, have assured this nominee of my support, and I look forward to working with him. At this point let me call upon our two colleagues from Michigan to make their -- oh, excuse me. Let me, before we do that, call upon Senator Murkowski to make any opening statement he would like to make.


Senator Murkowski: Thank you very much, Mr. Chairman, and let me join you in welcoming your new members to the committee, and I certainly commend President-elect George W. Bush for nominating Senator Spence Abraham to serve as Secretary of Energy. I must admit, Mr. Chairman, this is a little detraction from my ego to have to hold my breath for a day-and-a-half, but nevertheless it is good character- building to be readjusted, but the good news is, it is temporary. But in any event, you and I have got a close working relationship, and I think it is fair to say the bipartisan nature of this committee has been evidenced by the number of bills that we have gotten out in working with the professional staff in a manner that I think is traditional with the Committee on Energy & Natural Resources.


Let me remind the nominee that this is not necessarily a glamorous position. As Senator Bingaman indicated, your challenges are many, and in many cases they are unique. I think it is fair to say that we all agree that we have an energy crisis that is upon us. We can point fingers, but that does not do the job.


I do not know if you have looked at your gas bill, but I looked at mine yesterday and it roughly doubled, and Nancy and I have been gone most of the month, but nevertheless, outside of an appeal to the gas company, which we would lose on, I think it is a reality that natural gas is up about four times what it was a year ago, and 56 million or 50 percent of the homes in this country depend on natural gas. 98 percent of our new electric generation is going to be fired from gas, so the demand is going to be there.


We have seen crude oil prices bouncing around up to $37. We noted that OPEC has cut production. Obviously they have discipline within their system, and intend to keep oil prices relatively high. We have become increasingly dependent on foreign oil imports. Some of us remember the gas lines around the block in 1973 and 1974. Others a bit younger do not know what we are talking about, but at that time we were 37 percent dependent on imported oil. Today we are 56 percent dependent. The Department of Energy has indicated that in about 2004 we will be somewhere around 62 percent. The question is, how much is enough? When do you adjust for the national security interests of the country when we have that kind of dependence?


Supply is not keeping pace with demand. We have seen the California price spikes, power shortages. They finally had the blackouts. The consumers now are affected. Their bills have been affected yet, but I think some of us think that California may really have forgotten where energy comes from. Somebody has to produce it, and it has to come from some resource.


The problems faced by consumers in California are not the only energy problems American consumers face. As we look at the new administration coming in, I think it is fair to say that from the lessons of the last administration we need a coordinated effort by the Secretary of Energy involving the head of the Environmental Protection Agency, the Department of Interior, to work for solutions and try and generate a balance and the legitimate concern over the environment has to be modified to some extent by the reality that the energy has to come from some source, and what we have going for us is better and newer technology, and we can make a smaller footprint.


We brought an oilfield into Alaska about 15 years ago. It came in as Endicott, the tenth largest producing field in the country. The footprint was 56 acres. Now, 15 years later, we have technology that could reduce that in the ANWR area to roughly 2,000 acres out of million acres. Now, that is the kind of consideration that we have to understand and appreciate and recognize the tradeoff and the balance. As you look at your new applications, the nuclear issue, where 20 percent of our energy comes from, it is efficient, clean, but nevertheless the waste problem is a reality that members of this committee and Members of Congress are going to have to face up to.


Hydro consists of about 8 percent of our electric generation. We have problems, of course, trying to balance the needs of the areas with the fish resources, but we are going to have to make decisions, and the decisions are going to have to be made on sound science. We simply cannot put off the decision-making process.


Wind, solar, biomass, there is tremendous potential there. We spent $6 to $7 billion in the last 5 years mostly in subsidies, grants. It has been worthwhile, but it still contributes less than 4 percent of our energy source.


Now, these are a few of the problems you will face as Secretary of Energy in the coming years, and I might add, I have not added the issues you will face with regard to environmental cleanup, the weapons complex. You have got to go out to Hanford. Believe me, it is a tough set of facts, and it is challenging to the science as well, the laboratories down in New Mexico and the contribution they make, but I have great confidence in your ability to meet the challenges placed before you as Secretary of Energy and I welcome both you and your family and feel that you have the qualifications, because in the time that you have been in the Senator representing your State of Michigan you have demonstrated a keen understanding of energy and environmental issues, from technological advances in automobile technology to the needs of Michigan consumers for natural gas and heating oil in the winter.


Your vocal support for the funding for the T&GV at the Department of Energy's Office of Science demonstrate your commitment to the mission of the Department of Energy to break through research to yield the next generation of energy technologies and the public-private partnership needed to get these technologies to the market.


You have also been one of the Senate's foremost authorities on high tech issues and the Department of Energy's high tech research will benefit from your leadership. I encourage you to try and bring the environmental community to recognize that with true technology we can make advancements and we can make footprints smaller, and the opportunity before you, particularly in the Department of Energy, with the capabilities in the laboratories and various other aspects, puts you in the forefront of that effort, so we have high expectations that you will be able to come forward with some answers and, indeed, a recognition of the necessity of trying to balance where energy comes from.


So, Senator Abraham, you are clearly an outstanding nominee. I fully support your nomination with the chairman. I look forward to hearing about your vision for the Department of Energy, and I look forward to working with you as you help to solve our Nation's energy crisis and provide a secure, affordable, and clean energy future.


Mr. Chairman, I just have one more comment. I commend you on being able to do something I have never been able to do, and that is limit the opening statements of you and I.


Chairman Bingaman: With that, we will go ahead and hear from our two colleagues from Michigan. First, Senator Levin. We are glad to have you here before the committee.


Senator Levin: Senator Bingaman, first let me congratulate you on the way this committee has thrived under your chairmanship. To be able to do what Senator Murkowski just did indicates a tremendous initiative, leadership on your part.


You know, it is one of the wonders of the political world that within a few months after Senator Abraham lost an election to Senator Stabenow, an election in which I supported Senator Stabenow, that today we are here, Senator Stabenow and I, to introduce to this committee Senator Abraham to recommend his confirmation by the United States Senate. This is really American democracy at its ironic best.


One of the most demanding jobs in this Government is the Secretary of Energy, for the reasons which Senators Bingaman and Murkowski have just enumerated. Energy is the key to our security, to our economy, and to our comfort. The importance of it is highlighted by some of the recent problems that we have had, from high gas prices around the country to shortages in California of electricity, to the demands for heating, fuel, fuel oil, to the way in which OPEC manipulates the world market in oil.


This is a tremendously demanding and tasking job to which Senator Abraham has been nominated. It needs someone who is extraordinarily hard-working, and someone who is a quick learner. Senator Abraham is both. He is known for being both a quick study and somebody who is extremely hard-working. I just want to spend a moment on one issue which has not yet been touched upon to which Senator Abraham brings a special expertise. That is his knowledge of alternative fuel vehicles, the importance to those vehicles to our energy security and our energy future, the auto industry in this country is moving towards alternative fuel vehicles, which includes now hybrids and fuel cells.


Over the next few years, and over the next few decades, these vehicles will be the secret to greater energy independence, to fuel efficiency, and to greener automobiles, or environmentally sound automobiles. These AFV's, as we call them, these alternative fuel vehicles are really going to be a centerpiece, and, if any of you are able to get to any of the auto shows around the country recently, a centerpiece of our automotive future that is going to be a major contribution to both energy use reduction as well as to environmental protection.


To achieve these vehicles, we are going to need partnerships between the industry and Government. We are going to need incentive to consumers, and we are going to need a full use of markets, free markets, in order to achieve their fuller utilization. Spence Abraham has been involved in all of these, from his involvement in tax incentives for the use of vehicles, alternative fuel vehicles, to his involvement in the partnership for a new generation of vehicles, the PNGV. He has knowledge on the industry and the direction in which it is moving, and that is going to be very, very useful in our struggle for both energy and environmental security.


Spence really needs no introduction to any of us. He is a friend of all of ours. He has made friends on both sides of the aisle, which is surely the goal of this body, of every Member of this body. His wonderful wife, Jane, needs no introduction to any of us. She is well-known. So I guess that then reduces me to introducing his three children. I think I will leave that treat to him, because I know how important they are in his life and how supportive they and Jane are to him and to his career.


But again, I am delighted to be here to introduce Spence Abraham and to recommend his confirmation to this committee.


Chairman Bingaman: Thank you very much, Senator Levin.


Senator Stabenow, we are glad to have you before the committee.


Senator Stabenow: Good morning. It is wonderful to be here, Mr. Chairman, Mr. Ranking Member, soon to be chairman, both of you. It is a pleasure for me to have one of my first duties in the United States Senate to be here today to present a major Michiganian to this committee for confirmation as our next Secretary of Energy.


As you would imagine, we have certainly gotten to know each other over the last few years. Our previous meetings have been behind podiums facing each other, and today I am very pleased and honored to be sitting at the same table representing Michigan.


Mr. Chairman, Senator Abraham is a devoted family man, as Senator Levin indicated, and his wonderful wife and children are here today. He has a long record of service in Government and politics. Our Secretary-designee is no stranger to the Senate, as we all know, or to Washington, D.C. He has an impressive work and educational background. He received his bachelor's degree at my alma mater, Michigan State University, and we both cheered together the basketball team as they hopefully go on to their second NCAA men's championship this year.


After that, he went on to obtain his law degree from a small university in the East called Harvard. Prior to his Senate service, Senator Abraham served as Deputy Chief of Staff to Vice President Dan Quayle, and from 1983 to 1990 he served as the Republican Party chairman for the State of Michigan.


Mr. Chairman, when Senator Abraham takes his next oath of office, he will be confronting major energy problems, as we all know. These are critical issues facing our Nation and Michigan residents. As Senator Levin has indicated, he brings great knowledge of the auto industry and the technologies we can bring to many of these problems and solutions.


One major problem is the volatile price of energy. For example, Michigan residents still remember the high price spikes in gasoline during last summer's driving season. I know that Senator Abraham has witnessed this price shock first-hand. That is why I am pleased that a son of Michigan will be a member of the new President Bush Cabinet. I wish him the best as he addresses complicated, difficult energy issues that will affect our families in Michigan and across the country and, Mr. Chairman, I am pleased to be here to support the nomination of Spencer Abraham and hope the committee and the full Senate will confirm him expeditiously.


Thank you.


Chairman Bingaman: Thank you very much, Senator Stabenow. We also want to acknowledge and recognize the presence of the Governor of Michigan, John Engler. Thank you very much for being here today.


Senator Abraham, before I administer this oath to you, which we require of all witnesses, let me just ask if you would like to introduce your family members who might be here today.


Senator Abraham: I would be glad to, Mr. Chairman. I am joined today by my wife, Jane, and our children, our daughters Betsy and Julie, and our son, Spencer. We are also joined by Jane's parents, Bob and Betty Jane Hershey, and by a number of other friends and family members who have traveled here to Washington to be with us today. I am very happy they are all with us, if I could ask them maybe just to stand up.


Chairman Bingaman: Very good. We welcome them.


(APPLAUSE)


Chairman Bingaman: Thank you very much.


The rules of the committee, which apply to all nominees, require that they be sworn in connection with their testimony. Would you please rise and raise your right hand, please? Do you solemnly swear that the testimony you are about to give to the Senate Committee on Energy & Natural Resources shall be the truth, the whole truth, and nothing but the truth?


Senator Abraham: I do.


Chairman Bingaman: Before you begin your statement -- go ahead and be seated. Before you begin your statement, I need to ask three questions that we address to each nominee before this committee.


First, will you be available to appear before this committee and other congressional committees to represent departmental positions and respond to issues of concern to the Congress?


Senator Abraham: I will.


Chairman Bingaman: Are you aware of any personal holdings, investments, or interests that could constitute a conflict, or create the appearance of such a conflict should you be confirmed and assume the office to which you have been nominated by the President?


Senator Abraham: Mr. Chairman, my investments, personal holdings, and other interests have been reviewed by myself and the appropriate ethics counselors within the Federal Government. I have also taken appropriate action to avoid any conflicts of interest. There are no conflicts of interest or appearances thereof, to my knowledge.


Chairman Bingaman: Senator Abraham, are you involved, or do you have any assets held in blind trusts?


Senator Abraham: No, I do not.


Chairman Bingaman: With that, we very much welcome you to the committee, and go right ahead with your statement.


Senator Abraham: Mr. Chairman, thank you very much. I wanted to thank you and Senator Murkowski, as well as the members of the committee. It is a privilege to appear before you today as President- elect Bush's nominee to be Secretary of the Department of Energy, although I have to say, as I listen to both the chairman and Senator Murkowski describe the challenges facing the next Secretary, and their suggestions as to the difficulties of this job, I took it even more seriously than before.


I am extremely honored that the President-elect has asked me to serve in this capacity, especially considering the tremendous importance of the energy and national security issues facing this country. I want to thank you, Mr. Chairman, for moving forward so expeditiously with this nomination.


Although they have left, I also want to publicly express my gratitude to my former colleague, Senator Levin, to Senator Debby Stabenow for her gracious introductions here today, and I look forward to working here with them as well as with the other members of this committee and my former colleagues in the Senate.


As I look around the room, I do see an awful lot of friends, people with whom I have worked, the members of this committee, with genuine expertise on the important and diverse programs at the Department of Energy. I have enjoyed working with a number of you on various projects in the last few years, and I can assure you that, if I am confirmed by the Senate as the next Secretary of Energy, that I will continue to work closely with each of you and to draw on your expertise to address the challenges that lie before this Department and the country.


Mr. Chairman, I have already introduced my family and, when I finish my comments, our children will, if they are still awake, at least, be leaving the hearing room. They heard about the Ashcroft hearings, I think, so they wanted to go over and see some real fireworks here today.


But I just also really do want to publicly thank a number of friends who have come down from Michigan to be with us, and family members as well. As each of you knows, the missions of the Department of Energy are vital to this country. The Department splits a national interest in a variety of contexts but for particular areas. National security, energy policy, science and technology, and environmental management. What I would like to do today is to just briefly discuss the Department's role in each of these areas and my perspectives on that.


First, national security. Paramount among the four missions of the Department is supporting our national security. As all of you know, more than two-thirds of the Department's funding comes from defense accounts. One of the most sobering and important responsibilities that is vested in the Secretary of Energy is the duty to annually certify to the President that the U.S. nuclear arsenal is safe, secure, and reliable.


I can assure the members of this committee that nothing that I will do will be higher on my priority list than the management of our nuclear stockpile. The Department also plays a critical role in the challenge of nuclear nonproliferation. This Nation has an acute interest in accounting for and preventing the spread of nuclear weapons materials and expertise. The Department has had many past successes in this arena, and working with you the Bush administration will continue those efforts with regard to security at the Department's national laboratories. I will only say that this, too, will be a very high priority of mine.


I met with Under Secretary Gordon earlier this week, and I look forward to working with him to make our national laboratories secure and to make sure that the Department and the NMSA functions are effectively performed, which means that we must also make ensure that the highly skilled employees at our facilities are treated with the dignity and the respect that they deserve.


The second area where the Department supports the national interest is, of course, in the area of energy policy. Let me begin today by saying that I am very concerned with recent developments in California. We appreciate the urgency of the situation and have been monitoring it. I have had the opportunity to discus the situation briefly with Secretary Richardson yesterday, as well as with many members of this committee over the last few days. While I believe it would be premature to speculate today as to actions the Bush administration might or might not take, I want to assure all of you that we will work with California, with the members of this Congress, and with other concerned parties, particularly those in the region, to address this urgent situation.


Certainly the situation at the Northeast heating oil supplier evidence the importance of the Department's responsibility to develop a national energy policy. President-elect Bush and I are deeply committed to developing an energy policy that includes domestic production of energy in an environmentally responsible manner, increasing our use of renewable energy, decreasing our reliance on imported oil, and developing new technologies that can conserve fossil fuels and reduce energy-related pollution.


It will take a concerted, cooperative effort from both sides of the aisle, each end of Pennsylvania Avenue, and from individuals both inside and outside of Government to accomplish these objectives. The American people deserve our best efforts. That much is clear from the experience of the past year, a year in which Americans worried about the price and supply of gasoline, heating oil, electricity, and natural gas. It was also a year in which oil imports reached an all- time high, 56 or 57 percent, as was mentioned in Senator Murkowski's opening statement, compared to just 36 percent in 1973-1974, when our economy was disrupted by the OPEC oil embargo.


Every day, our economy grows more dependent on energy. Just look at the Internet, which accounts for nearly 10 percent of U.S. electricity demand. As the Internet doubles in size every 100 days, and e-commerce expands every day, the associated electricity consumption has and will continue to rise sharply. Clearly, our continued economic prosperity is directly linked to ensuring adequate supplies of reasonably priced energy.


Just let me take an additional moment to put this in perspective. Over the last decade, oil consumption has increased by more than 14 percent, while domestic oil production has declined by more than 18 percent. These trends have increased our dependence on imported oil, as I have said, to the 56 or 57 percentile, which is our highest level ever. We now import more than 11 million barrels of oil each day, and the Department of Energy estimates that imports will increase to perhaps as high as 15 million per day by the year 2010.


Natural gas prices have more than doubled over the last year in many areas of the country, and in some places are much higher. All this will drive up the price of goods through increased production and transportation costs. The Department of Energy is the principal Federal agency charged with responsibility for development of a national energy policy. However, development of such a national policy requires coordination with other Federal agencies and departments, and working with Congress, and I look forward to doing both in the days ahead.


The third area where the Department supports the national interest is through research in science and technology. For the past 6 years, I have worked with a number of you and others of our colleagues on a variety of science and technology programs that I believe can improve our economic competitiveness. I cannot stress enough my desire to continue to move this Nation forward in this area. The science and technology programs at the Department have been widely praised, and justly so.


The laboratories have improved the ability of the Department to perform its national security, its environmental management, as well as its energy policy missions. The laboratories are also, of course, supporting the activities and missions of other Federal agencies, but they are much more than that. I think we would all agree they are national treasures. I believe the national laboratories can serve the country in many other capacities, and I look forward to exploring the full potential for partnerships with industry and with the academic community.


The final area where the Department supports the national interests is in the area of environmental stewardship. As you all know, the Department has the unenviable responsibility for implementing the world's largest cleanup program. In this respect, the Department has an exceptionally difficult challenge in terms of both cleaning up as well as managing the waste generated during more than 50 years of nuclear weapons production.


These problems were not created overnight, and certainly we are not going to dispense with them quickly or easily, but I think we can do a better job of accelerating cleanup and closure of those sites that are surplus to DOE's needs. I pledge to work with Congress and the States to find ways to move the DOE's cleanup program forward.


With respect to the nuclear waste program, I share President- elect Bush's commitment to ensuring that sound science governs the program. I share the frustration of the members of this committee with the lack of progress in this area. My commitment is to make progress on the nuclear waste program while ensuring that sound science governs decisions on-site recommendation.


Before I close, I would just like to move to a topic that was alluded to by the chairman in his remarks, and is, I am sure, on the minds of a few folks in this room. As you all know, I think, as a Member of the Senate I supported legislation that would have shifted the various and important and vital functions of this Department to other departments and agencies or to the private sector. Widely held concerns about the Department's management structure and operational success, combined with the relatively stable nature of our energy markets, led me to support this legislation in the past. A number of developments have occurred that either significantly address these concerns or have put them in a new light.


Just to mention a few, I think quite clearly the changing energy situation, as well as the enactment of a National Nuclear Security Administration Act last year which restructured the Department to improve agency management have significantly altered the equation, and I can assure the committee that I no longer support this legislation and its various components, such as the privatization of the Federal Power Marketing Administrations.


Mr. Chairman, in closing, let me just say again how extremely honored I am that President-elect Bush has chosen me for this position. The missions of the Department are vital to our national interest. If confirmed, I will work with the members of this committee and others in Congress to carry out these missions to the very best of my abilities, and in the best interest of the American people.


Thank you very much.


Chairman Bingaman: Thank you very much. I will go ahead with my first round of questions and then call upon Senator Murkowski for his.


Thank you for addressing the issue about the importance of maintaining the Department of Energy, and I will not ask you again about that since you have already addressed it.


On the issue of science and technology support at the Department of Energy, the science and technology programs at the Department of Energy, in my view at least, have not been funded at a level that is commensurate with their importance in the Department. Particularly, I refer to the science budget that we approve and that are proposed to us by the administration, previous administrations in other science- focused agencies such as the National Science Foundation, the National Institutes of Health.


They, in my view, have had a much better record of maintaining commitments and resources for science and technology than the Department of Energy has, so the obvious question from that is whether you will support robust budgets for science and technology at the Department of Energy that would be comparable to the treatment that we give to these other science agencies.


Senator Abraham: Senator, one of the roles which I took a part in during my tenure in the Senate was to work on some of these science research priorities. I am kind of very proud -- I actually just played an active role in trying to focus more resources on some of the areas that you have mentioned, NIH in particular.


I think one of the challenges for us is to make an adequate investment in basic research as a Nation. I intend to be a strong proponent of that, recognizing two things, that I will need to be effective for support here in the Congress, but also I think an appreciation that all the roles of this Department, particularly as it relates to environmental management and nuclear security as well as the science and technology function are very important priorities, and so my commitment is to continue the work I did in the Senate of trying to be an advocate for increased investment in science and technology, but I am probably also going to be an advocate for doing the things we need to do to address some of the other challenges.


We can say that others are of lower priority, but they certainly remain important to this Nation's interests. I was able during my time in the Senate to work with a number of colleagues on this committee to try to increase those investments with Senator Domenici in my role on the Budget Committee and others in other contexts, and I look forward to continuing that function as an advocate for the Department.


Chairman Bingaman: Thank you. A major issue that you are probably already aware of, but you will certainly become very aware of at our national defense labs now is the imposition of management requirements that has occurred in the last year or so. Particularly I am thinking about the polygraph examination requirements that have been imposed. There is a perception in the laboratories by many of the scientists and engineers there that much of that requirement for polygraph examinations is not based on any scientific grounding, and I worked with Secretary Richardson to set up a review by the National Academy of Sciences of the science underlying the Department of Energy's current use of polygraphs.


If the National Academy of Sciences finds deficiencies in the Department of Energy's program of using polygraphs, would you work to correct those deficiencies so that those polygraphs would only be used where their use could be justified scientifically?


Senator Abraham: Well, before I address that directly, I would just say that one of the things I was informed of shortly after my designation was that, should I be confirmed, one of the things that will happen is that I will be subjected to a polygraph, and that puts this in maybe clearer focus for me as I look at the issue that you have raised here today, because I think this proposal, which affects a lot of people in this Department, is one that I will be hearing a lot about and experiencing on a personal level.


Clearly, we will look at any results that come about as a result of the study that is being undertaken. I think what we want also to do is to look at a broader set of considerations which I suspect we might talk a little bit more about before we are done here today. Clearly, the American people expect us to conduct business in the national security arena with the highest degree of protection of our secrets, of our security.


I am deeply committed to making sure that that is fulfilled, recognizing, however, that there is a need to make sure that we retain and attract the body of people at the laboratories who can perform all the various functions of those laboratories in the most effective way possible. I have talked briefly about this issue already with General Gordon, and we intend to continue to focus on it as well in the context of his role as he addresses the broad issues that the NMSA will be overseeing, but certainly we will look at the results of that study when it is available.

Chairman Bingaman: One issue that you alluded to and that is going to be very much on your agenda for consideration and action when you take office will be the problem with electric utility restructuring in California and what that has led to. Secretary Richardson has taken several actions to try to assist the situation in California, to try to head off the shortage that is obviously there. What additional actions, if any, could you advise us of today that you would take? If you were in a position to give us any additional information, that would be very useful.


Senator Abraham: Mr. Chairman, as I said in my statement, I think it would be premature today for me to speculate about actions that might be taken once this administration takes office. I say that for two reasons, first, because we have not injected ourselves -- I haven't, and I don't believe others have -- in the negotiations and the discussions that have gone on with various parties involved from the government of the State of California to the various providers.


I believe those kinds of discussions certainly would commence after the administration is in office, and also because I do believe that, with the ongoing discussions and actions that are taking place in California right now in the legislature as well as on various private channels, that any speculation, if misinterpreted or in some other way perceived by parties to those discussions as either advantaging or disadvantaging them, could disrupt what I think is a very important set of meetings and deliberations going on.


I am not trying to put this off for long, but I do think that it is very critical that the legislative actions that are in the process of being conducted, and the negotiations that are part of that, move ahead unimpeded by speculation on litigation today, but I do want to assure this committee, and I know a number of Members are from either -- including Senator Feinstein, who is on the committee, either from California or from the region, who are very concerned about it, and this administration is very concerned as well, and we view this as a matter of urgent priority and will treat it as such.


Chairman Bingaman: I firmly believe that ensuring the reliability of our interstate transmission grid needs to be a top priority. Last year, the Senate passed the reliability bill that came out of this committee. Unfortunately, it died in the House of Representatives. Late last year, the Department of Energy issued a notice of inquiry on initiating a rulemaking to impose mandatory reliability standards. Do you have some views you could express today about whether you would proceed with that rulemaking on mandatory reliability standards if Congress does not act in this area?


Senator Abraham: Well, in the broadly defined area of electricity, I think that the administration, and I know that during the campaign President-elect Bush indicated a desire to address these issues. We have not put together yet, nor do I think it would be possible in the short period of time that we have had since the election results were determined, to begin to develop that program, but I know that one of the issues that would certainly be part of that, of any restructuring effort that we would propose, would be issues that relate to reliability, ones that we addressed in the last Congress.


I think what I would want to do is both work with members of the Congress as well as examine where the agency, where the Department is at this point in terms of putting forward some type of rulemaking before I would reach a conclusion as to which course of action made the most sense, but certainly that would be a priority that we will focus on.


Chairman Bingaman: My final question relates to these power marketing administrations. I believe that you referred to that in your opening statement. The Western Area Power Administration provides Federal electric power to a number of rural utilities in my State. This low-cost power is critical to keeping rates down in the rural parts of the country. Do you foresee the need to make any changes in the operations or terms of sale of the Federal PMA's?


Senator Abraham: I am well aware of the composition of this committee and the interest on this set of issues. In fact, I believe Senator Smith may have called me before any other person with my designation was made public to make sure I was fully apprised of these issues, and other Senators, Senator Wyden and others, were soon to follow.


I do not have, nor is the plan of the administration to make any changes in the issue of rate structure or with respect to the continuing responsibilities of the Department of Energy to house those administrations within the Department in terms of any kind of privatization discussions, as I mentioned in my statement.


Chairman Bingaman: Thank you very much. Senator Murkowski.


Senator Murkowski: Thank you very much, Senator Bingaman.


I thought your answer on California was appropriate relative to the fact that you have not been confirmed, the administration has not taken over, and clearly there are a lot of discussions going on in California. There have been for sometime. But after the 20th, there are going to be great expectations that somehow you are going to solve this dilemma. I think it is unfair to characterize the California effort as true deregulation. Any time you structure an effort in a free market and then put in price controls you have disrupted that, and as a consequence the process was flawed from the beginning.


We are under a great deal of pressure on this committee to address the issue of deregulation, and the merits associated with it relative to lower cost to consumers, but I personally think that the experiment in California is not representative of true deregulation, and it has to some extent muddied the water, and clearly compromised the credibility of the effort. Other States are doing quite well, Pennsylvania as an example, and others that I could mention, but in any event, my concern and questions to you relative to this are, you had better have some answers after the 20th, because there is expectations that it is going to be the partial responsibility of Government.


Now, we have seen Government bail out companies before. Chrysler, the Mexican debt, testabonos. As a consequence, the parallel of what we are going to do to the largest utilities in the country, BG&E and Southern California Edison, that have missed their payments because they have been put in an impossible situation, where they have a cap on retail -- or, excuse me, a cap on retail and no cap on wholesale and as a consequence they can't stay in business and do anything about that.


Now, FERC has a responsibility as a Federal agency. They could potentially put a cap on wholesale, but that would be contrary to stimulating competition, but I would encourage you to recognize that before there is going to be meaningful corrections the California consumer has to feel the hit, and that has not occurred yet. They have felt an inconvenience associated with the recent brown-outs, but the immediate burden has to fall on California. It has to fall on the Governor, the California State legislature, and the California utility commissions to basically restructure the process and fix the problem.


Now, I do not expect an answer to that, but I think it is fair to say that everybody is going to be pointing fingers at everybody else. This was not a problem caused by the previous administration. This was a problem that was quite predictable, was ignored. The reality of where energy comes from, and to think that a State like California with, I think it has the sixth largest economy, if you will, in the world, could continue to prosper and continue to use energy and not be concerned with where it is going to come from, as long as it did not come from within the State of California, and as they begin to purchase outside they seemed to think it would never end and, of course, prosperity hit other States and we have seen the results.


So as a consequence I would encourage you to keep the pressure on those that are responsible for it and not necessarily encourage Uncle Sam to step forward and bail out a situation that is going to take some internal correcting within the individual State.


A question, though, and that is what this is all about, that moves us over to Yucca Mountain, where this committee has spent an extraordinary amount of time and effort relative to the obligation that we feel we have in addressing the disposition of high-level waste associated with our commercial reactors, and the realization that the nuclear industry contributes about 20 percent of the power generated in this country.


In 1998 was the due date for the Federal Government to take the waste in kind. Ratepayers have paid in excess of $11 million. Now, it did not go into escrow. It went into the general fund. I do not know what Pete Domenici did with that.


Senator Domenici: Just dumped it in the Treasury.


Senator Murkowski: Well, anyway, somebody would have to appropriate it if we are going to meet our obligations. Coming up are a couple of dates that are going to be significant. One is a site determination sometime this summer or early this spring. I am not just sure when it is, but one of, I guess, the concerns I have is, this has to be one of your highest priorities to deal with the spent nuclear fuel waste. I assume you will consult with this committee.

Senator Abraham: Of course.


Senator Murkowski: And I assume you are aware of the reality that nobody wants this waste. We have seen the members of this committee laying down their political lives to ensure that it did not come, as an example, to the State of Nevada. It is a highly politicized issue. If you throw it up in the air, it is going to come down somewhere.


Nobody wants it, but the realization is that the estimated current litigation costs associated with the nuclear industry's countersuits against the Federal Government is somewhere in the area of $40 to $60 billion, and that is as a consequence of the Government failure to honor the terms of the contract that it entered into to take that waste in 1998. Some people seem to dismiss the significance to the taxpayer of this liability.


I wonder if you have any comments relative to this dilemma that everybody else has simply put off for reasons of expediency, preferring not to accept the responsibility on their watch, and little heed the obligation of what it means to the taxpayer of this country.


Senator Abraham: I would first note that when I was a Member of the Senate I did support legislation that was produced by this committee, because in my State we have nuclear power generators who have waste issues that are very acute issues to the State of Michigan, and I take seriously the responsibility of this Department to fulfill the commitments that were made to the various companies, and to ratepayers across America.


There was a process. I hope and expect to see that process move forward in a timely way, but it has to move forward. The President- elect I think made it very clear during the campaign that he was committed to making sound science decisions, i.e., the underlying basis for any site's determination.


As the committee knows, there are a number of additional steps that go beyond a site determination. There is obviously opportunities for public comment. There is a role for the State which the site's determination produces to have an opportunity to veto, if they wish, that decision. There is an opportunity for Congress to override that veto. There is a role for the Nuclear Regulatory Commission to play in a very public sense.


I think the key is that the process be followed, that it be based on sound science, and that it be followed in a timely manner.


Senator Murkowski: Thank you. I just have time for one more question. You certainly responded adequately. This is coordinating administration energy policy, because the Department of Energy doesn't control Federal lands which contain energy resources. DOE does not control air quality standards that often impact energy supply and price. The Department of Energy does not have the responsibility for fiscal policies that are going to be necessary to stimulate various resource development, technological development.

How do you propose to coordinate the reality that you are going to have to have cooperation from the Environmental Protection Agency, the Department of Interior, various other organizations, to obtain an objective of relief for the crisis that we are in?


Senator Abraham: Senator, you are absolutely correct that the challenge facing us with regard to developing and implementing effective energy policies is an interdepartmental interagency problem that is not solely the responsibility of the Department of Energy or any other single unit of Government.


I have spoken already with the President-elect about this. In fact, it was one of the issues we discussed at the time we met to discuss my possible selection, and I know that he is committed to trying to bring together the various departments and agencies of the Government, and you mentioned a number of them, but arguably others even would be included beyond the list that you put forward to try to come back to you and to work with you, with the Congress and beyond, to try to identify the kinds of components and action steps that need to be taken.


As we move forward on an executive branch level I certainly would anticipate seeking the counsel and participation in some form or other of the Congress, but also of others beyond Washington, and beyond the Government of the United States. There are a lot of people who have some expertise to participate here, but at the end of the day it clearly will require a set of policy options that span a variety of agencies and we will try to bring that together in some kind of policy development format.


Senator Domenici: Thank you, Mr. Chairman.


Chairman Bingaman: Senator Dorgan.


Senator Dorgan: Mr. Chairman, thank you very much. I would like to just make a couple of comments, since we did not make opening statements, and then ask a couple of questions. First of all, Senator Abraham, it is my intention to support your nomination. You are going to inherit some of the most difficult policy problems we now face in this country. Yesterday's announcement of rolling blackouts in our Nation's largest State, dramatic price spikes in natural gas prices, they are just some of the symptoms of a very serious energy problem.


You indicated in your statement that we too dependent on foreign- source energy. That is certainly correct. The solution is, in my judgment, a balanced, coordinated, thoughtful set of policies that blend the need to find and produce more energy here with the need for more and more conservation. When I say more energy, I also mean more renewable energy.


Now, you and I have visited in my office about a range of policies. We are going to agree and disagree from time to time, but my sense is that these creaky institutions of democracy are largely lubricated by the goodwill of men and women who aspire to public service and want to do the right thing, and I count you among that group, and that is why I support your nomination.

I do want to ask you about a number of issues. First, you indicate that you no longer support privatization of the Federal Power Marketing Administration. Let me agree with my colleague from New Mexico of the importance of these PMA's, the power marketing administrations. In addition to no longer supporting it could we hope, or could we expect that you no longer oppose those few discordant voices who from time to time suggest that they be sold?


Senator Abraham: Yes, you can.


Senator Dorgan: Let me ask about restructuring briefly, and thank you for that answer. Restructuring, I would not agree with my colleague from Alaska on a couple of points but agree with him on the large point with respect to California. It seems to me that if you go to the road of complete restructuring and taking the caps off wholesale and also the caps off resale, what is going to happen at the retail level with no caps is, you are going to find ultimately very little support for any kind of restructuring once you get some problems in the retail market, so that is why they kept the caps on retail.


But it is clear to me that this is going to substantially diminish the appetite of some to want to rush headlong into deregulation restructuring. Do you feel that we ought to move forward aggressively, do you feel we ought to move forward cautiously? Give me again, if you could rephrase your answer on restructuring, how do you generally feel?


Senator Abraham: Well, as I said, Senator Dorgan, and I want to thank you for your comments relative to my nomination, I think during the campaign the President-elect made it clear that he believes that some electricity restructuring needed to be addressed, and we are not prepared today, and I can't give you a time line as to when this administration either would come forward with its own legislation or work with legislation that might be offered, and I know there are a number of members of this committee who at times have offered various forms of restructuring legislation.


Part of certainly any effort we will undertake is to examine what is obviously a set of laboratories that are in place in the various States today. Senator Murkowski mentioned the experiences in Pennsylvania which seem to be, at least to this point, quite different than experiences in California.


I mean, I think there's fairly widespread agreement that the California approach is a failure, not working as currently structured, and I think we would want to take into account any and all of that information as we might develop something, so I don't expect that we would have a restructuring recommendation or piece of legislation quickly to present to the committee or to the Congress, because I think we need to go through that investigation on the executive branch side and to hear from Members of Congress.


I have -- I would say that as I talk to members of this committee it's definitely an issue that a number of people have very different views on, and we will want to try to sample opinion from all.

Senator Dorgan: So you are not a missionary on this issue?


Senator Abraham: Well, you know, I think that as part of a comprehensive energy policy we have to consider how we make affordable and adequate supplies of electricity available, but there's a lot of issues that are part of that debate, in addition to restructuring.


Senator Dorgan: Some of feel very strongly about renewable energy sources. Some say, well, gosh, it contributes almost nothing, less than 5 percent. Some of feel very strongly that the potential in wind energy and biomass and others is very important. Will you be an advocate for those kinds of issues at the Department of Energy, and will you be supportive of, for example, production tax credit extensions for wind energy?


Senator Abraham: I will continue to support the Department's commitment in that area. I think I supported legislation in the last Congress, if I remember, that would have extended the -- those tax credits, and I think we ought to look at other kinds of incentives that might be made available in one or more of the various areas of renewable energy, the biomass, and solar, and geothermal areas as well, to see what other kinds of ingredients might -- I mean, I think the challenge we have is to overcome what is perceived by many and has been mentioned by many here today as our inability thus far to really move in this direction in terms of supplying a significant portion of the energy that this country uses, but I think we've got to really have a balanced approach, and I think renewable energy is an important part of that kind of balanced approach.


Senator Dorgan: And do you feel the same way about clean coal technology?


Senator Abraham: Absolutely, and I would mention that the President-elect during the campaign has made strong statements of support for a substantial increase in clean coal technology research.


Senator Dorgan: I would ask you about two other areas. Senator Abraham. One deals with fuel efficiency, but first let me ask about global warming. Some say clearly the evidence exists that there is some global warming. Others say, this is not settled science, and still others say, that's nuts, we don't have any idea what is happening to our Earth, or our world at this point.


What's your impression? Some say no matter how you feel you ought to take a series of no-regrets policies in anticipation if there is settled science at some point there is global warming you ought to have done something.


Senator Abraham: I think regardless of the differing opinions of scientists and experts and so on on the broad issue, that we have a challenge as a Nation and an opportunity in the sense that the new technologies that are, you know, in so many ways affecting our lives, some of which I've had a minor role, in my previous career in the Senate, in helping to expand to try to make sure among the kinds of priorities we set for the research we're doing and the technology development that's going on is to try to address the issue that relate to CO2 production and ways to try to address that, as well as to see how we can conserve in a fashion that reduces rather than expands these kinds of emissions.


And I hope we can do that without getting -- in other words, let's look for new solutions. I think during the campaign the President-elect stressed that as one of his priorities, to find ways to use technologies to find new solutions so that we're not locked in to simply, you know, a single-minded debate about what the scientists think on the one hand or, on the other hand, a situation in which our debate is almost exclusively whether or not we can work with the less- developed countries to come up with a more balanced approach to dealing with this problem.


Senator Dorgan: I would like to follow up on that, but because of the time I will send you a question to answer on that.


One final very short question. You come from Michigan. It is a great State, produces a lot of America's automobiles. We have had aggressive debates here in Congress about the issue of fuel efficiency and standards. Improving fuel efficiency by 3 miles per gallon in this country would save 1 million barrels of oil per day. In m y State we are all concerned about pickup trucks and various things. I understand all of those issues.


Having said that, the question, I guess, for an Energy Secretary is, will fuel efficiency play a role in energy conservation and in trying to address our energy needs? Should it play a role, and how will it play a role in your administration?


Senator Abraham: I suspect that if you were had asked either Senators Levin or Stabenow their views on this they would have been remarkably similar to mine as a Senator from Michigan. As a Secretary of Energy, certainly we are going to look at all these issues.


What I would say is, I thought we made some very positive progress last year when the Senate deliberated this issue and came up with what I thought was a very good proposal to examine, to have, I believe it was the National Academy of Sciences examine and really study the issue of what was an appropriate fuel efficiency CAFE standard, but to take into account, in addition to simply the question of miles per gallon, some of the other issues that have bothered Americans coast-to-coast on this issue, the safety of vehicles that are, in fact, brought into line with lower standards, the impact on the economy.


The other thing I would note in closing on that topic is just, as Senator Levin mentioned, we're seeing the auto companies actually moving faster than I suspect any kind of Department of Transportation regulations would move with the projected date of perhaps as early as the year 2003 of having the first of these hybrid models that Senator Levin alluded to in his statement, so I think we're seeing the market drive this probably faster than Government ever possibly will.


Senator Dorgan: Mr. Chairman, thank you, and let me wish Senator Abraham well.


Senator Bingaman: Senator Domenici.


Senator Domenici: Thank you very much, Mr. Chairman. It is a pleasure to be with you, Spence, and I am harkening back in my mind to some pleasant days when we were privileged to go off to Europe ahead of the euro market to learn about what was going on over there as they decided to have their own currency.


I do not think you are going to have time for that for a little while, because I think you have taken on a job, and I am sure voluntarily, that is probably as onerous as any in American history. Anyone that is not telling you that the greatest Nation on Earth has a severe energy crisis is not telling you the truth.


We have been playing around the edges of this crisis, doing little or nothing about it, no aspirations on any one, we just have not done much about it, and now it finally comes to a head in the sixth largest economy in the world, which happens to be California, and I would suggest, not for you, but I hope Californians will, in terms of how people up here feel about California, I think it is an immediate crisis, and I think you are going to be confronted with addressing some of those soon.


But I also believe California has to decide what they want to do about energy. I believe they have been part of the decisionmakers of that State have been part of getting them into this problem, and I do not mean just deregulation. I think they have had a we-don't-want- any-power-plants-in-our- State attitude for far too long and frankly there is an attitude that we do not need any more electricity, maybe we can fix this up some other way.


I want to suggest to you, without an answer required, that yes, we have got to help them, but yes, they ought to decide what they are going to do also. No comment required.


Senator, let me suggest something to you now and ask you what you think about it. The United States has so much coal that we are considered to be the Saudi Arabia of coal. We have had the highest technology base in terms of nuclear power and new nuclear technology that the world has ever seen. We have 21 to 22 percent of our energy in nuclear power now, and very new technology moves us in directions of totally different kinds of power plants, but we have a fringe in America that is scared to death to even mention it.


We have natural gas in the Department of Interior, where the lands are tied up, that we have now been told contain 200 trillion acre feet of natural gas. For your perusal, we use 20 a year. They are on Federal land which we cannot drill for natural gas. Part of it is in my State. We have ten times the current annual use of natural gas locked up, and yet what happens in America? Every new power plant built, Mr. Secretary, of recent origin, five or six have been built to use natural gas. No coal, no nuclear, just this beautiful fuel called natural gas.


We do not have enough natural gas for that, and we do not have enough infrastructure to deliver it, so we have become a natural gas- dependent country. Now, I ask you, Mr. Secretary, in light of all the diversity possible, does that frighten you, as the Secretary of Energy, as you look at America's future?


Senator Abraham: As I mentioned, I believe in my response to Senator Murkowski, I think that we cannot allow ourselves to become -- to move any further away from a balanced approach with respect to the sources of energy that we use. That's, I think, the strongest argument among many for the kind of interagency program of developing a comprehensive strategy that includes a focus on all the various possible sources on the one side, conservation issues and investments in research toward development of renewable energy sources, to the provision of more fossil fuel-generated energy sources as well.


If we allow ourselves to essentially put off-limits one after another of the sources -- and I think we can all see, you know, how some of this has come about. I mean, we have had what seemed to be an abundant supply of energy in recent years, and so it perhaps moved us away from a focus on the future. I think that any comprehensive policy we develop can't just look at America today, or even America in a couple of years. I mean, we really have to put together a set of proposals that has a far longer focus to it, and I think we've got to include in that each of the sources you mention.


Senator Domenici: Mr. Secretary, since my time is going to go out, let me give you a couple more observations. First, yesterday I sent a letter to the President-elect. I would like to give it to you today so you can read it.


I believe it is time for the President to suggest that we cannot put the whole burden on you because you do not have the power to make the decisions, but the other Departments of Government should all be tasked, be it the Department that we call Environmental Protection, Interior, and others. They should be tasked with reviewing each of their policies and each of their decisions in terms of, how does that affect the energy supply of this Nation, not necessarily making energy decisions, but look at them in that light. Would you suggest some approach for trying to make sure we are not making contrary decisions with reference to our energy supply?


Senator Abraham: Right. Well, I would, and I think I have made that point. I will look forward to seeing your letter, and I would support that kind of interagency participation. This is by no means something that only one Department has the ability to affect exclusively.


Senator Domenici: I want to suggest that -- Senator Bingaman raised an issue. In confirming a Secretary of Energy he raised an issue of lie detector tests at the national laboratory, and it is very interesting that in your opening remarks you addressed the morale of those great scientists and those who support them at the national laboratories, and I think there are 10 that are energy labs, three of which are nuclear deterrent laboratories, but it is interesting that we are talking about that in an Energy Secretary, because you have jurisdiction over that.


I want to put on the record that I believe you should start immediately trying to find out why we should be doing between 10 and 20,000, which I think is what the statute which came out of the House and the conference report requires. I think it is borderline ludicrous to have that many lie detector tests in these three laboratories.


I think we have got to find out how they work and put them to work, but by saying we are doing 80 times more than we did 6 years ago we are secure I believe is rather ludicrous, and I would hope that you would attend to that as quickly as you can.


Senator Abraham: As you said, I have talked already with General Gordon about this issue, and asked him to bring me up to speed as quickly as possible on the status of his analysis, and your point, and the one that I made also about the morale and the need for us to have the kind of environment that attracts the talented people and retains the people, that allow us to have the skilled force of workers there that we need, is paramount.


Obviously, we all want to make sure at the same time that we do not in any way back away from a standard that protects the secrets that those very scientists have been responsible for creating.


Senator Domenici: Now, Mr. Secretary, my last question has to do with the creation by the Congress of the NNSA, the National Nuclear Security Administration., which is now headed by retired General John Gordon. If you have not, I am sure you and your staff will have an opportunity to read that statute.


It was heavily debated in conference and was significantly manicured, but it does create a semiautonomous agency within your Department, you are still ultimately in control, but it creates that Department to manage and see that the nuclear weapons part of your jurisdiction is no longer dysfunctional and managed from so many sources it cannot get its work done, as recently outlined by the General Accounting Office when they reviewed it.


Is it fair to say from your opening statement that you will attempt to abide by that law and to work with General Gordon or his successor to create that kind of an entity contemplated by that statute I referred to?


Senator Abraham: I voted for the legislation, as you know, and therefore obviously approved of the thrust of it and, indeed, have talked to Senator Rudman and others who have done extensive analysis from the President's Foreign Intelligence Advisory Board's perspective and others on this subject.


General Gordon and I -- I look forward to working with him to make sure, to do the part that the Secretary must perform to make sure that the job he's performing is done well, but I also, as you mentioned, recognize that the ultimately responsibility still rests in this agency with the Secretary, and my goal is to make it possible for the work of the NNSA to be done as well as possible. I look forward to working with him to achieve that objective.


Senator Domenici: I thank yo, Mr. Chairman.


Senator Bingaman: Thank you. Senator Graham.

Senator Graham: Thank you, Mr. Chairman. I would like to start with the same statement that my colleague, Senator Dorgan did. I look forward to voting in support of Spencer Abraham to be Secretary of the Department of Energy. I have known him to be a man of intellect, high values, ability to absorb complex information rapidly. I believe that he will provide wise leadership in an area where we need all the wisdom that we can get at this present time.


As we discussed in the office, I believe that it would be very beneficial if the Department were to try to establish some national energy goals and to put as many numbers behind those goals as possible. For instance, the last number I had is that we were using somewhere in the range of 17 to 18 million barrels of petroleum per day.


Those numbers may be somewhat out of date by now, but what should be our national policy in terms of the total amount of petroleum that we used, and then what should be our national goal over time in terms of the allocation between domestic production and foreign imports. That will then get to a set of subsidiary questions such as how much of a reserve and resource should we maintain in our domestic production?


Should we try to maintain a 50-year reserve of petroleum in the United States, which will tend to restrict our current ability to draw down our domestic resources, or are we prepared to live with a smaller cushion of safety? What would be your receptivity to the idea of setting some national goals with the numbers behind them which then drive the resolution of the difficult tradeoffs that are going to be involved?


Senator Abraham: Well, first of all, Senator Graham, I just want to thank you for your kind remarks and support. As you know from our conversation just the other day, and I might add a number of other Members raised similar interests, I guess a similar level of interest in trying to get a kind of current status of the challenges before us, and have raised, and I alluded to it a minute ago, the interest in not having just a comprehensive energy policy for 2001, or 2001 through 2005, but a much longer term kind of approach, and I think it makes every bit of sense.


To the extent that we can quantify some of these projections, I think everybody ought to begin with that framework, because we try to talk about policy changes, whether it's on the conservation side or the production side or any other aspect of this we really do need to know either what the current demand level is going to be, or -- and what the projected supply levels are going to be, category by category, so I would say that some type of an initial analysis is particularly important before we talk about policies that might reach that level of fulfillment.


Senator Graham: There are some issues which would be affected by that analysis that are coming fairly quickly before Congress. On the issue of energy conservation, one of the principal sets of incentives to achieve conservation has been the tax code. Various tax credits, deductions and other specialized provisions that were designed to encourage everything from biomass to solar energy to more conservation- oriented appliances have ended up in the tax code.


Yesterday before the Finance Committee the nominee for the Secretary of the Treasury, Mr. O'Neil, indicated that within the next 60 days he anticipated the administration would present to the Congress a large, in the range of $1-1/2 trillion, proposed tax cut. At that scale, that is probably going to be the major tax recommendation for the foreseeable future. Have you, or would you review that in terms of what that tax cut would provide in terms of incentives for energy conservation which in turn might be part of your overall energy strategy?


Senator Abraham: We will, and I think I mentioned in an earlier answer that I believe in the last Congress I supported proposals that would at least extend the current code's special treatment of certain types of investments.


I think that without elaborating too much, as we look ahead towards the development of a comprehensive policy, certainly we know that there are in a variety of the areas of possible sources of production or conservation, or renewable development, situations in which adjustments in the tax code could make an impact. Whether, and to the extent to which those will be part of this initial proposal of the administration I can't say today, but I think it will be certainly on the table for this Department to work to include.


Senator Graham: My point is, I think there should be a certain sense of urgency on that, because if we are going to have an energy policy that will be balanced as between increasing supply and reducing demand, one of the key levers in the reduction of demand is going to be through the tax code, and it looks like many of the decisions as to what will be offered for reductions in tax measures will be made early rather than later, so I would suggest that might be an earlier rather than later assignment for the Department to be prepared to influence what's in the program and then explain it once it is proposed.


Senator Abraham: The point is well-taken. I agree.


Senator Graham: On the supply side, an issue that I know Senator Domenici and many other members of this committee have been interested in, as have I, has been the use of nuclear in meeting our electrical generation needs. My State is fairly typical of the Nation. Not too long ago we had about 20 percent of our total electric generation from nuclear. Today, that is dropping down close to 15 percent and appears to be headed further south.


This is a complex issue, which involves matters of disposal of waste, but it also involves regulatory policy. How do you reinvigorate the industry to seriously look at nuclear? How do you get the financial institutions to be willing to undertake the investment? What do you see as the role of the Department of Energy? Should there be a role? Is it an appropriate policy to try to reinvigorate our nuclear power option and, if so, what are some of the things you might consider doing?


Senator Abraham: Well, I think that any kind of balanced comprehensive policy has to take into account the possible role and the broadening or focused role of nuclear power as a source of generation. My own view is that again, and there are a number of agencies that have various responsibilities here, and I think that we, as I keep saying, have to do this on a multidepartmental level.


What I would say is that there -- you know, I think we all know that there has not been a, I don't think a new nuclear power facility has been started in this country in a very long period of time. I think maybe it's back to the 1970's. But we also have existing facilities that may be headed towards a point where they may not be allowed to continue. They may need to be reauthorized.


I know one of the challenges, for instance, is the purchasing by entities who often have greater expertise in the safe and effective and efficient operation of nuclear facilities from current owners who do not, and it seems to me we have to look at that part of the puzzle. How could we keep facilities already in place, functioning well into the future? I think all of those are issues the Department ought to be examining as we conduct this analysis in terms of the development of a long-range plan, or strategy.


Senator Bingaman: Thank you very much. We will have one other set of questions here from Senator Campbell, and then we will take a 10-minute break. Senator Campbell.


Senator Campbell: Thank you, Mr. Chairman. One of the benefits, I guess, of sitting this far away from the center of power, where the chairman sits, is that most of the questions have already been asked, or in your statement you have already talked a good deal about the things I was interested in, but I appreciate the comments of my colleagues, particularly Senator Dorgan and Senator Bingaman.


There is no question you are stepping into a quagmire of problems, and I just have to tell you, Spence, I really admire you for taking on that job. I think that California, which tends to lead the rest of the Nation in a lot of things good and a lot of things bad as it washes across the country, is just the tip of the iceberg of what we are going to be facing, and I know it is easy just to sort of point fingers, you know, that deregulation was the problem, or it is those greedy power producers, they are the problem, or whatever, but I think we all recognize that Nation-wide we have got a growing population and diminishing power production, maybe not diminishing, but it certainly is not keeping up with the amount of power we need.


One of my colleagues mentioned the Internet takes 10 percent of our power uses now, and who knows what things have not even been invented yet that will need power in the next 10 years, but clearly the present administration, by locking up a lot of our resources, or preventing us from developing them, has been part of the problem.


I noticed with interest this morning that seven more large tracts of land were locked up under the Antiquities Act that will be off the screen now for any kind of future development, and I know, too, that there is a national defense component.


I read with interest a couple of days ago that Iraq is already rearming, and doing it with the money that we are paying them, since we are now importing m ore oil from Iraq than we did before the war. I mean, there is something wrong with that picture. Americans lose their lives over there in the sand of the Middle East, and just a decade later we are dependent on them, instead of them dependent on us. There is something wrong with our policy that needs a major fix, and I know that you are just going to be up to your ears in it, so I just want to tell you how much I admire you for doing that.


But one of my colleagues did mention interagency cooperation, and coming from public lands States, many of us have a little different view on perhaps the sale of the PMA's where rural electrification is so important, or the use of public lands for drilling and coal-mining, things of that nature, but clearly a lot of the things that you will have to deal with in looking for energy sources so that we can get less dependent is going to have to be done in cooperation with the Interior Department and perhaps a number of others, too, and I just want to commend you.


I do not have a lot of questions to ask you, but I know, as you do, that we haven't built a refinery in this country, a new refinery for oil, in 30 years. I do not know how many years ago it has been since we built any kind of a nuclear facility, a good number of them, I guess, and I know that this last administration that is now leaving advocated tearing down some of our dams, which are suppliers of much of our electrical power.


I do not know how anybody in their right mind could not look at all those and recognize that we are in deep trouble, and we are going to get more and more dependent on foreign power all the time, but Senator Dorgan mentioned, too, something about conservation. I think that is important, and alternative fuels are important, too.


Living out West, coal bed methane, natural gas, oil shale, things of that nature are just sort of coming on line. The price has not been right, but as we get more and more expensive oil, I am sure they will be, but certainly automobile manufacturers and those manufacturers of apparatuses that use energy can do better, too. We now have Caterpillar and Cummins in Detroit and a number of our manufacturers that basically got their start in your State who have engines developed now that develop 600 horsepower and pull 80,000 pounds and still get 6 miles to the gallon. I do not get that much in my pickup.


I will not mention the name of my pickup, because I do not want to hurt their sales, but I am getting rid of that thing. One of the reasons is, I know there are more efficient engines out there, and I know that we can do a lot more on efficient engines that still use hydrocarbon power. We are not ever going to get to the position where we can use solar, or wind, or something like that to drive our ship fleet or our bombers or heavy trucks. It is just not going to happen, and we need the kind of power that comes from hydrocarbons, which has basically been cut off from our use.


But I just wanted to make just one comment to you. It will not be really in your purview, but you probably know that something like one-third of our whole trade deficit now is related to oil. It is really a downward spiral, and it is going to continue as long as we are related more and more to foreign oil.


But there is one form of land in this country that has huge resources of coal, of coal bed methane, of natural gas, of oil, too, and that is Indian lands, and they have not had the opportunity to develop that, to provide jobs for their own people, but it seemed to me that if you do some work with the Department of Interior you are going to find an opportunity in which a lot of the resources in America that have not been locked up will be able to be developed for the good of the Nation, and certainly the good of the people that live on those lands, by providing jobs and an income to those tribes, so I would hope you would keep that in your mind as you take your position.


I also just want to wish you good luck in your tenure.


Thank you, Mr. Chairman.


Senator Bingaman: Thank you very much. We will take a 10-minute break and then continue with the questions.


(RECESS)


Senator Bingaman: Let us go ahead and reconvene. I wanted to advise all Members that it would be the intention of the chair to have a vote on the Abraham nomination when we come back into session at 2:30 this afternoon before we proceed to the hearing on Gale Norton's nomination, so we will advise all officers of that so that if there is objection we can consider that, but otherwise if there is no objection we will do that.


Senator Wyden, you are next.


Senator Wyden: Thank you, Mr. Chairman. Mr. Chairman and colleagues, I have worked closely with Senator Abraham on a wide variety of technology issues in particular, including the Internet tax freedom bill and the Digital Signatures Act. I think all of us understand that Senator Abraham is smart, he is fair, and he is a good listener.


I have been kidding him that I was pleased that his proven legislative expertise did not extend to his bill to sell off Bonneville Power. As he knows that would just clobber our agency, and in conversations Senator Abraham has assured Senator Smith and I that he will not support selling off Bonneville. He will not support these precipitous schemes to go to marketplace rates, and he will continue to support the preference clause that is so important to Bonneville customers and small businesses.


The one area, Senator Abraham, that we did not discuss that is of importance to our region are these emergency orders that the Department keeps issuing to require our region to sell power to California. Now, California energy officials publicly thanked the Northwest back in December for those sales that they said prevented rolling blackouts in their region, so Oregon and the Northwest is clearly being a good neighbor.


My question to you is, will you take another look at these emergency orders and, in doing so, I hope you will agree with me that you will not continue to renew them when they put Northwest ratepayers at risk, or they lack guarantees that Oregon and the Northwest will be repaid.


Senator Abraham: Senator, as I said in my statement, you know, we -- I think it's certainly premature today to speculate about policy actions which will be taken, although certainly soon, but what I have indicated to you, to Senator Feinstein when we met, and to others who have had concerns about this, is that the administration will look at all of these issues in a broad regional context, as well as in the context of the immediate and urgent problems in California, and obviously the concerns which you and others from the Northwest have expressed to us about where energy supplies to your States and the region will be at a later point this year, perhaps, are part of a broader set of considerations that have to be taken into account as all of this plays out, but it is certainly something we're concerned about, and something that we regard as a matter of great urgency.


Senator Wyden: Understand that these emergency orders continue to be renewed, and the people of my State have been more than good neighbors, but I hope you will also look to the proposition that we should not be forced to ship power by emergency order when we do not have any. That is the concern that Oregonians have today.


The second area I wanted to explore with you deals with environmental protection. As you know, there have been a number of environmental groups that have been concerned about various votes in the Senate. Someone said to me, you should not vote for your friend Spence Abraham because of his environmental record. What is your orientation with respect to assuring that the country produces more energy without compromising the environmental protection and the treasures that we all appreciate?


Senator Abraham: Well, obviously, Senator, as you know, we look ahead to a real challenge in terms of the demand for energy that not only exists today, that produces some of the challenges we confront even immediately before us, but to the increase in demand that I think we all, at least to date, can project for the future, so as we move forward we have to analyze not only what we can do on the production side, but what we can do on the conservation side, what we can do on the renewable energy side of the equation, all of which, obviously, contribute I think towards environmental sensitivity.


I think this administration, and I know the President- elect during the campaign made it very clear that whatever policies he would be advocating with respect to increases in production would be advocated in a way that was environmentally sensitive.


What I think we also, though, have to recognize is that there are a lot of other agencies that are part of this, of this decision-making process. Some of the issues that certainly would be related to environmental protection are not going to be within the scope of the work that the Department of Energy does, and I suspect that other hearings with Governor Whitman and probably later with Gale Norton here will also be part of that decisionmaking process, too, but certainly this Secretary's focus will be on trying to properly balance the sensitivity to environmental safety on the one hand, as well as the need to address the production and supply needs.


And to just take it one step further, a major part of the responsibility of this Department, as you are well aware, is environmental management, is the cleanup of sites that have been over the last 50 years or so, as part of our weapons process and so on, have posed very serious threats, and I have talked to a number of members of this committee about how important it is to me, and I know to them, that we move forward and try to begin to gain some ground on the cleanup of those sites. That is a very important commitment as well.


Senator Wyden: I understand your reluctance to go into specifics today, but I hope that early on in your tenure you will send a powerful message that it is possible to produce more energy in this country without compromising environmental policy. The American people are looking for that message, and I think it is important that you send it early on, and it is one that I feel very strongly about.


The third area that I want to examine is a regional one, that is, the question of Hanford. There are not the funds right now for the cleanup of Hanford, which, of course, adjoins our lifeblood, the Columbia River, and the Upper Pacific Northwest. There are a lot of folks in our region who believe the area is being turned into a sacrifice zone.


Now, the current administration considered the proposed restart of the fast flux test facility for a variety of different missions, took 5 years, spent $100 million of taxpayers' money, looked at every conceivable use of this facility, and said that the expected missions could be handled by other Department of Energy facilities.


I hope that you will not resume this scavenger hunt for some kind of mission to restart this facility. Do you have any thoughts on that this morning?


Senator Abraham: My understanding is that Secretary Richardson may have already have completed the process of the signing of the RFP, I believe, on that issue. I have no -- I recognize there are other focuses here of other, perhaps, perspectives, but I really think, in the absence of any demonstration of inappropriateness in the reaching of the conclusions that have been reached, that that would be the extent of that effort.


Senator Wyden: Do I have time for one additional question? Is my time up?


Senator Bingaman: You have got 10 seconds.


Senator Wyden: This one really starts a brawl in the committee, because the chairman and I have a difference of opinion on it.


The Oregonian, our State-wide newspaper, found evidence that BP Amoco has manipulated the West Coast gas market through export sales to Asia. As you know, there had been a lifting of the export ban of the sales of Alaskan oil. I would ask only that you take a look at this issue that you consult with Northwest members, the chairman, of course, and others, because we have the dubious honor of paying the highest gasoline prices in the country, and the paper in our State put e-mail and other documents from BP Amoco on the front page of the paper saying that this is part of a plan to manipulate West Coast markets.


I do not want to cause a brawl in this committee, but I would ask that you look at that evidence.


Senator Abraham: I would be happy to do so.


Senator Wyden: Thank you, Mr. Chairman.


Senator Bingaman: Senator Thomas.


The Chairman: I will address that in the next round of questions.


Senator Bingaman: Senator Thomas.


Senator Thomas: Thank you, Mr. Chairman. First, let me welcome Spence Abraham. I am certainly delighted that you are going to take this job, and I know you will do very well. As has already been said, by the time we get here, almost everything has been said, but that never deters us from saying it again, so I guess basically I just have some things I would like to emphasize with respect to what I think are important.


One is the coordination among agencies. We have talked about that. I think Interior, Energy, EPA, even the White House, Environmental Quality Council, those kinds of things, all have a very important impact on this thing. I would like to suggest to you that there ought to be organized soon some kind of an almost summit meeting where the heads of those agencies are brought together to visit a little bit with producers as well as consumers, and I think we are faced with two things, it seems to me, both of which you have talked about.


One is a longer-term policy which, frankly, we have not had. It is very important, but it isn't a short-term answer. And then we have to do some things more on the short term, and I think we need to do that.


Nuclear waste has also been mentioned. Certainly we are not going to move forward with nuclear power as a supplemental or alternative until we do something about the waste, or else begin to use it as they do in Europe, in some sort of recycling, but we have spent billions of dollars on waste facilities that are not now being used very fully, and we need to do that.


Hydro energy, we have talked about that. The idea of removing dams certainly is not consistent with the problems we have now.


Obviously, access to public land, particularly those of us in the West, where 50 percent of Wyoming belongs to the Federal Government, and even more in most of the western States. then I am not suggesting we open up all the wilderness or the parks and so on, but we do have a lot of multiple use lands that ought to be made more readily available, it seems to me.


Interesting, I think this week you have had the Secretary, the current Secretary overseas dealing with OPEC, which is an appropriate thing to do, but it does not seem to me that the Department of Energy has a lot of leverage, and I mentioned this to General Powell yesterday. It would seem to me in those countries where we have done a great deal for them, when we are dealing with them about the production of OPEC, that energy ought to be joined by the State Department, it ought to be joined by DOD and some others, so that we have a little leverage in terms of what we are doing there.


I am also interested, of course, in your nuclear weapons activities. We have, I think very important offensive missiles -- offense, not offensive, that are very important as well as the missile defense, and I hope you do that.


So you mentioned, I apparently missed it, I think, doing some research on clean coal. I would like to suggest that you expand that a little bit to also enrichment. You buy a ton of coal in Wyoming for $4-1/2, and by the time it gets to Dallas it costs $25. We can change that by increasing the enrichment, get more Btu's than that. You could do some of that. What is your reaction to experimentation with that?


Senator Abraham: I would say that I am not that familiar with the process. I know that with regard to the basic clean coal technology programs that we had, the work that is done in the labs in Pittsburgh and Morgantown and so on, that the President-elect has expressed a strong commitment to increase over $2 billion over the next 10 years those kinds of programs, what the mixture would be in terms of the kind of research we really are not yet prepared to make recommendations about, but would take into consideration that as perhaps part of the type of research that would be done. I would be interested in getting more information from the Senate on that.


Senator Thomas: I think that would be great. Actually, there has been research going on for some time, and it has not been as effective, I think, as it might be. We have a specific issue with my friend from Idaho where we have had the treatment project in INEL, which is a waste disposal pilot plant in which incineration was the original idea, and of course those of us that are downwind, whether it is Yellowstone Park or Wyoming, have been concerned about that.


The Secretary has set up a study group. They have come up with some recommendations, and I want to urge you to continue to pursue the alternatives to incineration in that plant. I think it is very important to us.


Again, congratulations. We look forward to working with you, and I think we can make some progress by working together.


Thank you, Mr. Chairman.


The Chairman: Thank you. Since we have no other already approved members of the committee on the Democratic side, I will go to Senator Craig.

Senator Feinstein: Jeff.


The Chairman: Yes. Let me call on Senator Feinstein. Did you have a question about the procedure?


Senator Feinstein: No. I am sorry, I thought you said there were no other members.


The Chairman: No, no. You and Senator Cantwell and Senator Schumar I am going to call on after the members who have already been approved since you have not yet been approved by our conference.


Senator Feinstein: I see. Thank you.


The Chairman: Go ahead, Senator Craig.


Senator Craig: Well, Mr. Chairman, I am not sure that I want to be in the situation with the two new additions to our committee and both of them being ladies. But I have worked with Senator Feinstein in the past. And I know that if I do not get the first word in, I will never get the last. She is most effective. And I welcome both of you to the committee.


Senator Feinstein: Thank you.


Senator Craig: The great thing about having you before the committee is I can say, Spence, welcome. It is not often that we have the opportunity to be able to know those who will become key players in a new administration on a personal and a friendship basis prior to them assuming that responsibility. But most of us on this committee have had that opportunity with you, Spence. And I say that I am excited and looking forward to you becoming our new Secretary of Energy.


I am sure al of the members this morning have laid out the daunting task before you. I just came from the Ag Committee where we were visiting with Ann Veneman, soon to be your colleague on the Cabinet as Secretary of Agriculture. And even there, as we talked about agriculture and its problems and the need for leadership, energy emerged.


The cost of the production of fertilizer has tripled in the last six months. Natural gas, as you know, is a large component in the production of fertilizer. And many of the fertilizer plants simply do not believe they can produce fertilizer for the coming year at a cost of level that the American farmer can afford.


I do not think any average consumer even has begun to understand the ripple effect of high energy costs in this nation. Many of us on this committee knew that. We watched for the last eight years as average increase in production in this country went up less than one and a half percent. And average production or consumption went up over 2.5 percent. And we knew that at some time in the future those lines would cost and we would be in crises.


Those lines crossed about eight to ten months ago. We are now in crises. And if we do not articulate and implement a new energy policy for this country in the near future, then California will be commonplace nationwide.


I say this not for the benefit of my colleague from California, but the political correctness that has been going on in California for the last decade over energy production produced the blackouts of yesterday. They are not a producing state. They are a consuming state. But tragically enough, we have become a consuming nation, not a producing nation. You know that. That is going to be a huge responsibility for you and an obligation.


While just in another building, John Ashcroft is getting all the attention this morning, as he did yesterday and the day before, my guess is that in the long-term, yours is by far the greater task. Because what you will do in the next year with our new president to articulate an energy policy and to begin to implement it in cooperation with Congress is going to have immediate, short-term and long-term impact on every citizen in this country. Whether it is the cost of that which the consume or their lifestyle itself needing to be altered simply because there is no longer the abundance of energy available of the kind that we have known that has driven the great economy of this country all of our lifetime and certainly beyond.


We look forward to working with you in that task. We know that it is got to be done. And we do not conserve our way out of this one. We produce our way out of this one.


At the same time, conservation is important. And I would hope that the budget that you present to Congress will not have any less money in it for technology and the kind of new technology that you are so well aware of and that you introduced me to when I was in your state in the last year looking at that marvelous new fuel cell concept that is being produced there in the laboratories of some of our auto manufacturers. That technology has to go forward.


At the same time, it is downstream. And we know what we have got to produce in the short-term to get our country back on track.


My guess is, and I have said this to the President- elect, while I am very willing to say that the current situation is the Clinton energy crisis, and I believe that. Because I know that they have not been a producing administration. They have been a conserving administration. Or one that would want to wait for new technologies to come. If we do not articulate a policy, if you do not help develop that and lead us in that, then this crisis will be short-term for Mr. Clinton and long-term for Mr. Bush. And I say that as a dedicated conservative Republican. At the same time, I recognize the importance of it getting done and for all of us working very closely together.


You gave me the courtesy of coming to visit yesterday and we talked about the needs of my state and the marvelous laboratory that I have in my state. And the resource that it is to the nation. The kind of experimental and research and engineering development work that goes on there. We are also the lead for environment, environmental clean up and all of those kinds of things for the Department of Energy that are a major responsibility for it. I am very excited that you are becoming our new Secretary of Energy. I am excited about the opportunity to watch your leadership and to work with you in the development of these new policies for our country now and for the future.


So, welcome to the committee and let me recognize you as soon to be our new Secretary of Energy. Thank you, Spence.


Senator Abraham: Thank you, Senator.


The Chairman: Senator Bayh.


Senator Bayh: Thank you, Mr. Chairman. It is good to be with you again today. And Senator Abraham, I would just like to say that it is good to know that there is life after the United States Senate. You are looking very well here today.


I would also like to complement you on your stamina. You were good enough to call me on the phone shortly after your nomination. You then came to see me. And now you are good enough to endure our comments here today. It reminds me in some ways of the mediaeval justice system where they had the trial by ordeal. So this is a testimony to your dedication to public service. And I know I speak for all of us when I say that I also apologize for having to step out. I enjoyed seeing your beautiful family. How old are your twins again, Spence?


Senator Abraham: Seven.


Senator Bayh: Seven. Well, as you know, I have got twin boys who are five years and two months old. And I kind of wondered how long your girls were going to last there in the front row. If I had brought my boys to something like this, they would have been at the witness stand there in no time flat.


Senator Abraham: Well, we had sort of arranged in the event that the questioning turned particular hostile to send our 4 son loose on the committee. And so he had been practicing his various techniques last night for disruptive behavior. But we decided at the last minute that might not go down too well.


Senator Bayh: Well, you never know. Having experienced that times two -


Senator Abraham: The threat still exists. He remains on the floor. So he is somewhere in the building.


Senator Bayh: All right. We will bear that in mind as the proceedings continue on. And finally, I know your friend and colleague, the Governor of Michigan, has been recognized previously. John, it is good to see you again. I enjoyed our service together. And I could not help but remark, as I think you and I were commenting on yesterday, you have twins. And I have twins. And the Englers have triplets. There must be something in the midwestern water that produces these results.


Senator Abraham: The Department of Energy will study that issue as well.


Senator Bayh: I will look forward to the results. Just briefly, we have talked about these issues previously. As you know, as I think Senator Craig was just mentioning, and several of our colleagues have talked about the importance of energy independence for our country.


And I have had a chance to share my thoughts with you about the great reserves of coal that we have, not only in the Ohio River Valley Basin, but elsewhere across our country, and the importance of continuing to invest in technology and research so that we can utilize those resources that we have in abundance in a way that is environmentally safe and sound. And I would encourage the efforts that you have pled to undertake in the department.


I know you expressed your support for this. I know the President-elect has also indicated his support for clean coal technology. I think it has to be one of the fundamental pillars of a long-term strategy for energy independence in our country. It should be a win/win strategy, a domestic energy source that is reliable and affordable. With the new technology coming on line, we should also be able to find ways to make it safe for the environment. So I just take an opportunity here on the public record to reiterate my support for that initiative.


Secondly, as we have previously discussed - I know Senator Feinstein will probably have some additional comments about this. Perhaps some of my colleagues have as well. I shared with you my own conviction that in the long run we need to harness market forces in the electricity market in ways that will provide a safe and secure affordable source of electricity without relying on the traditional monopolies that have dominated that part of our energy system.


One of the beauties, as our mutual friend Governor Engler would tell you, one of the beauties of the federal system is we allow different states to experiment with different solutions to the problems that face our citizens. And then those of us at the national level can use the benefit of that experience to see what works, what does not work.


Unfortunately, there appear to be some things that have gone seriously awry in California. But I hope that does not mean that we give up on the prospect of having a more open market for energy and that we can look for ways that, as I said, harness market forces, while still absolutely assuring people of a reliable and affordable supply of energy.


That is a balance that needs to be struck and I am sure that we will be analyzing the results from the West Coast and elsewhere as we try and seek ultimately the right answer. But I would encourage at least to analyze that situation and glean the answers that can be taken from it to inform our future policymaking.


Just a couple of other quick points. I know that we all share - particularly you and I, several of the rest of us from automotive producing states - your two colleagues who introduced you to the committee emphasized this - a strong commitment to the next generation of automobiles to ensure that they get the better fuel mileage and also they have lower emissions. And I would encourage our dedication in that regard.


It is an important domestic industry as you know. We employ a lot of people. And we need to try to invest in this technology to ensure that we get the economic benefits of this industry while still doing right by the environment and the long-term energy concerns of the country.


So I know I am preaching to the choir here when I mentioned this, but again I just want to reiterate that for the public record.


Finally, Spence, I did have one question for you. I do not want to bring this out of the blue. It was submitted by or recommended to me by a member of your Congressional delegation. And he asked that I get the benefits of your thoughts. It must be an issue you have had to address before because it comes from Michigan. About any thoughts that you might have about the advisability or appropriateness of drilling for oil and gas in the Great Lakes Basin. Apparently, this is something that is on the mind of some folks up there. And if you have any thoughts along those lines. Obviously, the Great Lakes are a vitally important natural resource. I personally was not aware that there was a great interest in drilling, but apparently at least one member of Congress believes there is.


Senator Abraham: Yes, I am not aware that there is either, Senator. I certainly have the support of that and do not bring that perspective to this job. And as I said to several of the members during the comments, our goal here is to try to work together to identify the new sources of energy or ways to enhance the current sources we have in an environmentally sensitive and balanced way.


And obviously, the fresh water supply the Great Lakes provides for our nation is so vital, I do not think that we would ever lose sight of that set of factors as we would consider - or factors like them in other areas of production and sources. Clearly, we have to weigh all these considerations.


At the same time, as I mentioned, we need a balanced approach. And as you and I talked this week, trying to make sure that we do have balance is pivotal to the success. The dependence somebody mentioned earlier, the increasing dependence on natural gas cannot be allowed to continue because that will not work for long. And we really need to look at this in a more balanced way, but also an environmentally sensitive one as well.


Senator Bayh: Thank you, Spence. Apparently, there was a gas leak in one town out there that raised this concern, and with the possibility of some slant drilling and things of that nature apparently is an issue on some people's minds.


You know as well as I do the Great Lakes are vitally important to part of our ecosystem and a great national treasure. So I think you are right. Any activity of this kind there needs to be done in an appropriate and sensitive way to ensure both the continued greatness of the Great Lakes and ensuring that people do not have any undue health concerns.


Having said all that, I look forward to supporting you. And I look forward to working with you. And I appreciated the hand in friendship you extended the other day. And on behalf of all of this on this side of the aisle, let me just say we want to work with you when we can to try and get policy right in our country. I wish you the very best of success.


Senator Abraham: Thank you. And I look forward to working with you as well.


The Chairman: Senator Smith.


Senator Smith: Thank you, Mr. Chairman. Spence, I also take delight in calling you by your first name and so appreciate the opportunity and the great challenge that you have.


I have heard my colleagues state the dilemma facing you in different ways. And to state it differently, I have reconstructed a couplet that I heard as a boy for this occasion.


Just because - I am speaking of Oregonians now. Just because we love our fish, our birds and our trees should not mean that we must sit in the dark and freeze.


So that is your challenge, Spence. We want a good, clean environment. But we want our lights on at night and the heat on in the winter. And I must say I am very concerned for my state. I have been - I have felt I have been something of a voice in the wilderness for a long time now saying that food does not come from Safeway. We do not create energy by hitting a light switch. Gasoline does not come from a filling station.


All these natural resource industries have been under assault for eight years. Now, the challenge you have is to meet the new environmental ethic of our country. But somehow reconnect the reality dots for the American people as to what we must do to help them to continue to prosper as a people.


Now, why am I concerned about Oregon? We are California's neighbor. We care about our neighbors and we want them to be well and to be healthy. And we want them to be warm in the winter, especially cool in the summer. But frankly, I think my state is being setup - and I include Washington State - to be an energy farm for California.


Now, why do I say that? Recently, the California Public Utilities Commission voted to increase rates temporarily from 9 to 15 percent. However, yesterday after we met, I received three calls from different industries in Oregon complaining to me that they are just being put on notice that their rates will go up between 30 and 40 percent because of what is happening in California.


I have to tell you whatever hope they might have had for a profit this year is gone with those rates. Now, that effects directly the value of those businesses, their ability to pay taxes, the ability to keep schools open for their children, the ability to have a family wage job.


I wonder, Spence, if you agree with me that Governor Bush was incredibly prescient when he said in the northwest that it is the height of irresponsibility to tear out hydroelectric power in the middle of a looming energy crisis. Do you agree with that?


Senator Abraham: I support the Governor's position. And I think he has made that very clear on a number of occasions.


Senator Smith: Yes, he did. And I appreciate his courage in saying that. A lot of people did not realize how far sighted he was when he said that.


But right now my state is in the cross hairs. And for those who love the environment - and I count myself as one of those - the policy of our government has been to store up water to produce some power in the winter - and we ship a lot of it to California, but we do it in a way that protects salmon.


Our reservoirs are at historic lows right now. And so our ability to help is frankly much impaired. But we need to run these assets. These are assets that were established by Franklin Roosevelt in the '30s when only 30 percent of my state even had electricity. And we are being beguiled into believing that we can have it all, but we do not need to produce it. We can just import it. I say to every American, we have never been in greater jeopardy to foreign sources of oil that are hostile to the interests of this country.


Somehow, Spence, you have got to keep our lights on and you have got to produce. And you have got to protect the birds, the trees, and our fish as well.


It is a tall, tall order. But I hope that reality can be returned soon.


Spence, I also want to invite you to Oregon. I think we need to talk about how to run our hydroelectric system, how to create more power and frankly I would like to distance myself from the comments of my governor who said recently that the problem is not that California is not doing enough. People outside the region do not appreciate what California is doing. I think they are doing something now.


But you know what? This problem has been in creation for a decade now. And I can cite you chapter and verse in utilities that have been shutdown, dams removed, proposals for energy production said we do not need them. And here is a headline from the Daily Astorian on an article. It says "Cash Starved California Utilities See No Help in Governor's Plan".


And I just am asking, Spence, to be fair to this neighbor of California. Because my citizens cannot afford this. It is going to take a neighborly approach. But it must be fair. And what is going on right now is not fair. It is not fair to every other western state.


And so I plead for fairness. And I plead for a more balanced approach. And somehow, I hope you and the Governor, President-elect Bush, will use your bully pulpit to reconnect the reality dots for the American people as to how we make it all run. I think I had a question, Mr. Chairman, but it got lost in my statement.


The Chairman: All right. Well, we will let you submit it for the record. Senator Burns.


Senator Burns: Thank you very much, Mr. Chairman. I would ask unanimous consent that my statement be made part of the record.


The Chairman: It will be made part of the record.


Senator Burns: Spence, I want to associate myself with my colleagues on this committee about your dedication to community service and national service and your family values. That is all you have got written down here. Do you want me to say anything else?


(LAUGHTER)


Senator Abraham: I have to say that the second page was even more impressive than the first.


(LAUGHTER)


Senator Burns: We have some people nodding off out there and I kind of wanted to wake them up. I think Senator Smith hit upon a point that the situation that we find ourselves in today just did not start at the first of this year. I have two of my largest employers shutting down because of energy in Montana. I am sort of like the movie Apollo 13, "Houston, we've got a problem." That Houston is you.


And also, we are looking at a situation where - I tell you when you get to a certain age, New Year's Even is not what it used to be when you were younger. My wife has grown to the stage where we rented a movie and stayed at home and watched a movie. And we watched a movie called "The Perfect Storm". And there is a lot of lessons to be learned there, but we are in the middle of what one could call a perfect storm.


I represent a constituency that is oil producing people. That should be good for us because oil prices are high. We also produce a lot of natural gas. Gas prices have increased some four times from just a year ago. I am in a state that produces coal which effects energy prices in Minnesota and Michigan and a lot of states we ship our compliant low sulfur coal.


But at every turn in the last ten years because we are also a public lands state and the policy for public lands is that they have been withdrawn from any kind of exploration or management.


We say that impacts us and it does. But basically, we see now that it is impacting all of America. But some of these policies that were supported, now when they hit the switch to turn the lights on, the lights are not going on. Bad policy.


In the mix of things, there has to be conservation. In 1976, when we had the shortage of oil and we had the lines and we were asked to conserve, we Americans did react. And we did conserve. And we can. And it should be part of the mix. But also, on our power mix are fuel cells, alternative fuels, ethanol, coal bed methane, to make those fuel cells, has to be in the mix.


It would take a person much smarter than I am to see how they complement and work with each other, but we must have somebody or someone or something that could figure out exactly how that is. And then to dream a little bit and to tell America or at least give us a vision where do we want to be energy-wise in ten years, 20 years and 30 years down the road instead of just taking a band-aid and fixing it tomorrow.


My farmers cannot afford the fuel prices that diesel is going to cost this summer, not on $2.50 wheat. They also cannot afford their fertilizer with natural gas as high as it is four times higher.


So it is going to effect our food prices. Is food going to cost more at the grocery store? I doubt it. But the raw product will cost more and that impacts the income in my state.


Somebody is going to have to make some hard choices. We have been willing to make some of those hard choices in the last ten years, but nobody else has. And I am like Senator Smith. We have been sort of a voice in the wilderness saying there has to be a different kind of an approach.


So with PMAs and when you represent a state now I realize that Senator Smith has got Portland in his district. I do not have any really large city. I have got a lot of dirt between light bulbs. And all of those folks out there are just like any other American. They have a right to the same sources of energy to power their economy as the rest of America does. And I am going to make sure that it is there as best I can.


Well, I appreciate your coming in. We went over the questions. We locked it up today. Also, I would suggest to this administration to setup an interagency, someplace where you can bring all agencies together and say if we do this, how does it effect agriculture? If we do this, how does it effect agriculture? If we do this in agriculture, how does this effect transportation?


And, you know, we are going to ride horses in the parade on Saturday. And when we mentioned horses, I will never forget this. The man who is in charge of the parade, he said, well, cannot you cowboys walk? We do not especially want horses in this parade. And I said, you do not know cowboys. That is the reason they make pick ups and horses. We do not walk anywhere.


Well, I will tell you what. We may spend more time on that horseback than we are in them pickups. But I would hope not because those pickups are very important to the State of Michigan. And I would not want to put the Governor here in any embarrassing position.


But I look forward to working with you. And also on clean coal technology. And I serve on the Interior Appropriations. And we are going to make sure that you have got research dollars so that that can move forward. And I think the great future with your automobiles in the next generation is fuel cell development. And we just happen to have the resources it is going to take to build those fuel cells. And we want to talk to you about that also.


So, thank you for coming today. And thank you, Mr. Chairman, for your kindness. And I would submit the rest of it for the record.


The Chairman: Thank you. Senator Nickles.


Senator Nickles: Mr. Chairman, thank you very much. And welcome to my friend and colleague. Senator Abraham, I am delighted that you are here. I am delighted that President Bush selected you for this position. It is a pleasure to see a friend, Governor Engler, as well before you and supporting you. But you are taking on an enormous task. And you are taking on a task that is close to crisis. And you are up to that task. But it is going to take a lot of work. And it is going to take Democrats and Republicans working together to work with you and this administration to get some positive accomplishments to help meet these challenges confronting you.


You mentioned in your statement that we are now importing 57 percent of our oil. We are very vulnerable to foreign supplies. In 1973 and 1979 when we had curtailments and brown outs and shortages that Senator Feinstein is experiencing today in California, that was the last time we had significant curtailments is in 1973 and 1979. That means that factories were shut down, schools were closed, homes did not get power in those years, 1973 and 1979.


What we do about it is important. Congress at that time did a lot of things. In 1979 and 1980, they passed a lot of legislation. Most of it did not do any good. As a matter of fact, most of it was harmful. Most of it was counter productive. But Congress wanted to do something. And I feel maybe a sense that we are in the process now. We want to do something. I want to do something. But let us make sure it is positive.


If you look back in history, if you look at the five major energy acts that were passed as a result of the shortage, the crisis in 1979, Congress passed the synthetic fuels corporation. We abolished it later. It wasted a lot of money. We passed the Natural Gas Policy Act. It had some good things and some good things and some bad things, but it continued and extended price controls on natural gas. We finally decontrolled natural gas and it has worked. And it resulted in lower prices I might mention for consumers.


Congress also passed the Fuel Use Act and said you cannot burn natural gas in power plants and industrial facilities. We finally repealed the substance part of that. Congress passed the windfall profits tax. We finally repealed that. We taxed basically domestic production, did not tax imports. So we gave imports an advantage over domestic production. We finally repealed that. Also, there was an Energy Allocation Act which allowed politicians to distribute energy which was really absurd and we repealed that.


So the major energy acts that were passed in the Carter Administration basically to respond to the energy crisis in the '70s were serious mistakes. We need to make sure that we move forward and do not make serious mistakes, but do things to help alleviate the problem.


If you are importing 57 percent today, Mr. Secretary and Mr. Secretary to be in a couple of days, that figure is quite likely to be 66 percent in ten years. That means we are very vulnerable. And that means if hostilities become more hostile in the Middle East, we could really have a problem. And if California thinks they are alone, our entire country could experience shortfalls, brown outs, curtailments.


And so we need to be very leery of that, aware of it, and try and take some efforts to alleviate it. And that includes energy from a lot of sources. That means increasing supply and not just in Anwar. It means nuclear power. It means producing, increasing production. It means conservation. It means a balanced approach. And as you said, a balanced approach and environmentally sensitive and sound management.


So, you have an enormous challenge. I look forward to working with you. You have proven yourself to be a very outstanding legislator I think in the Senate and I think you will be an outstanding Secretary of Energy. And we look forward to working with you in the next several years. My complement to you for taking on this enormous task.


The Chairman: Senator Cantwell. Senator Cantwell is gone. Senator Feinstein.


Senator Feinstein: Thanks very much, Mr. Chairman. I am very pleased to be a member of this committee. I asked for it largely because of two things. One was obviously what has happening in California right now with respect to energy. And the other is my concern over the nuclear labs. And I am very pleased I have had an opportunity to share both of these concerns with Mr. Abraham. I do intend to support your nomination.


I do not have a lot of questions to ask you today. I understand you come into this new. You are right in the middle of the thicket. And it is going to be a very hard time. And I want you to know anything I can do to make it easier, I would be happy to do that.


I do want to spend my time this morning saying what I think is happening, particularly in California. And I know it is very easy for some to say, oh. California is hoisted on their own petard. They enacted a bill in 1996 that was deeply flawed. Let them sit and work it out. That is a very dangerous philosophy.


Let me tell you what I think has happened. The bill was very flawed. The reason it was very flawed, the main reason, is because it required California to buy 95 percent of its power on the day ahead or spot market.


Now, that would have been fine if there was an abundance of power. The point is there was a shortage of power. And whereas, California has 25 new sites cited, it is estimated that it will take the next year and a half to get the first three of those new sites operational.


Additionally, a good deal of the power is actually contracted out of the state. Five to ten thousand megawatts, for example, normally would be going up to the Pacific northwest. That changes when you go into a stage two and a stage three.


This morning, California starts the day with a deficit of 62 percent of its power need if you can believe that. The blackouts that are going to go on today will effect all non-essential services. Now, that is deceptive. Non- essential services are hospitals under 250 beds. There are retirement centers. There are schools. There are street lights. There are ATMs. There are businesses. For 62 percent of the state, that is an enormous impact.


Additionally, California's two blue chip utilities, PG&E and Southern California Edison, are very close to bankruptcy. Now, why? Because on this spot market, they had to buy power. They could not pass through the cost of that power in excess of $64 a megawatt hour. And spot power was selling anywhere from 4800 to $1,400 to even $3,000. You have to buy power at $3,000 a megawatt hour. And you can only pass it through at $64. That put the utilities in the position that we are in today of occurring for the past six months tens of millions of dollars of debt each day. That debt has run up to a net of $8 billion. Their bonds are today junk status. They are very close to going to Chapter VII, not XI, but VII bankruptcy. Which means they then go out of that business.


Now, there are those in California that would say, oh, let that happen. I am not one of them. The worst possible thing in my view is to have these two blue chip utilities - first of all, we have got hundreds of thousands of retirees that depend on those stock dividends. Secondly, subcontractors that depend. And tens of thousands of employees that depend.


These utilities go into bankruptcy. That will have a strong ripple effect through the remainder of the California economy, the western economy, the national economy, and, yes, the international economy. It is that big.


Now, the state is kind of in a way - the market is so broken, not only do you not have the supply, but the rates are also fixed. So unlike, for example, where Arizona where consumer rates flow free, California has restricted rates. So you cannot pass those costs on. And you have a robust consumer market whose consumers say we cannot pay any more. We do not want to pay any more. Very badly broken market.


Now, the bilateral contracts offer a solution. If you can negotiate them long-term at rates that are practical, these negotiations have been going on now for a month and a half under an Administrative Law Judge. The generators will not budge. And the state has not budged.


Consequently, you have got a gridlock. My appeal today is on both sides. Please, you have got to work out a practical long-term contract. There are not other alternatives.

Secondly, the state has to move in my view to securitize the debt of the utilities. In other words, give them an opportunity to gain back the credit. They cannot do that unless they can show a way that they can make their forward purchases and pay for them. And also, the banks will not loan to them unless they can show a way that they can make up this $8 billion of back debt.


The state could securitize this. Any rate increase that is necessary could be spread long-term, say for 15 years, on the individual rate payers. But you have got to bite the bullet to do this. And there has been I think a broad reluctance to bite that bullet.


Now, last night the governor issued this statement at 10:15. I had a long conference call with the four principle generators in California, the CEOs of those companies, Duke, Southern, Reliant and Dynergy, with the four legislative leaders in a bipartisan effort.


Those generators were prepared to pull down the utilities into bankruptcy tomorrow - that is today - at 12:01 p.m. They have agreed, if legislation passes tomorrow, they will not do that. They will provide us the power necessary to keep the lights on.


I very much hope that is happening today. Because we are going to lose life and lose business. And this is the tip of the iceberg. Now, I am one that believes that the state has to move. The state legislators have to move. They have got to amend that flawed bill. They have got to do it. They have got to allow the utilities to generate their own power, not divest of the power. I believe they are willing to do this. They have to permit full cost based contracts bilaterally, negotiate it. That will enable this situation to be stabilized.


It is also my belief that FERC has not acted. FERC has found the rates, the rates I spoke of, $800, $1,400, $3,000, on the spot market, to be both unjust and unreasonable. But FERC has not carried out the second part of its responsibility which is then to set those rates.


I sincerely believe that there is a federal responsibility here through FERC. If FERC is going to sit by and allow this entire western states to self-destruct, because that will happen, rather than carry out their mandate and set power rates, when rates they find are unjust and unreasonable, it is a disastrous situation for this nation.


This is why I will introduce legislation that will give this Secretary - he may not want it - the right to set these rates. If they are found to be unjust and unreasonable. And they will be cost based. So that there can be a pass through, a margin for profit, a margin to recover costs, and will permit any governor of these 12 states to opt out. If the governor does not believe there is a need for this, that governor will be able to opt out.


Now, what will this do? To be temporary, it should only be until the state is able to bring some additional power sources online. There is no quick fix. We are going to live with this for the next year and a half or two years. And it is extraordinarily complicated.

So what my appeal to day to this new Secretary is please look at all of these elements. Please understand no one thing is going to solve it. We must put additional generating facilities online on a fast track and do everything we can.


I just got the note. I did not mean to get going here. My time has expired. But I do want to say that I am prepared to do whatever I can to help you, Spencer. This is a very difficult situation. Anybody who thinks this is just going to stay with California, as Senator Nickles said, is dead wrong.


So what I want to say to Oregon and Washington and the other states is I want to work with you. I want to see us get ourselves out of this solution in a way that is fair to every state in the Union. Because it is going to eventually effect a number of them. Thank you very much, Mr. Chairman.


The Chairman: Senator Cantwell.


Senator Cantwell: Thank you, Mr. Chairman. And, Senator Abraham, congratulations on your nomination to this post. It is a great honor for me to serve on this committee as a new member. I think that out of the last 50 years, probably at least 45 of them there has been a member from Washington State. Because these energy issues are so important to the Pacific Northwest, not only the Bonneville Power Administration - and I appreciate your comments earlier about the Power Market Administration and your support of them - as well as Hanford and nuclear waste issues.


If I could on a few issues, some of my colleagues have already covered, and that is the particular concern of Secretary Richardson's order requiring suppliers to sell to California. And I hear my colleagues comments about working together as a region and we want to do that. But I want to reiterate Congressman Wyden's statements about the great concern that we have about the financial security and the consequences that it places on the northwest when those kind of emergency orders are put in place.


And so I want to reiterate my strong concern for those types of solutions that put our industries and consumers at-risk within the northwest.


And I do not know if you have any further comments on that.


Senator Abraham: I think as I said at the outset of my opening statement, Senator, that as we assume office as an administration and should I be confirmed, when we are looking at these issues, we will be looking at them both with the goal of - I mean, we understand the urgency - and I stress that - as well as the concern of the incoming administration. And it is not a minimal concern. It is a very strong one.


And our goal is to not just se us solve these problems in the short-run, albeit the short-run is very pivotal, but also on a long- run basis. And any kind of short or long-term solutions, as I said in my statement, need by necessity to include a regional, not just a state-by-state kind of analysis. We certainly will want to have the counsel of members throughout the region recognizing the interdependence here of energy sources.


Senator Cantwell: Given that, what would your thoughts be on a west-wide price cap as a short-term?


Senator Abraham: As I said already, I think it is premature for us today to - for me at least today to speculate about what we might offer in terms of policy options, recognizing we will act - be in a position to act in a few days.


But there are two reasons for that. Number one, a number of discussions have been going on between the current administration and the various parties as well as legislators and so on. We have not engaged in those discussions. I have not heard from those various participants and feel that is an important requisite to making any kind of judgment as to the kinds of policies we might follow.


And I do not want to - if I say, well, maybe we are open to that idea or maybe we are not, it will send signals that I think are premature to send. We just have not looked at this at all from the standpoint of having those discussions. And I want to have that opportunity.


I also want to make sure that - and Senator Feinstein touched on even today very important decisions may be made in the legislature in California that effect not just California, but the whole region. And I think it would be premature to start talking about the next set of policies when we really do need action as soon as possible. And I share the point that Senator Feinstein made about the need for action to be taken today if possible by those who can.


Senator Cantwell: I appreciated your comments in your statement about the connection between the new economy businesses and their access to a reliable and stable source of energy. The northwest has a long built in economy based on those stable and reliable sources. And, yes, now it is leading the way in a new economy that is very much interdependent on those issues as well.


We have long had the Pacific Northwest Preference Access to Federal Power from the Bonneville Power Administration. And obviously, we have suffered some of the adverse environmental impacts of that.


Can you tell me of your commitment to retain the benefits of BPA, particularly the exclusivity for Pacific Northwest?


Senator Abraham: I do support that continuation. I would just add, your point about the new economy is a really - I think - important one for us as we move forward in the development of policy to take into account. I think a lot of the premises on which existing energy policy has been developed was in the context of an economy that we no longer are in. And as we move forward with the development of a comprehensive set of recommendations and policy, we really do have to re-analyze the kinds of energy needs we will have in light of the transition that is going on across this country.

I mentioned in my statement the direct connection between Internet usage and electricity consumption. And that is just one example of many. We obviously have heard and seen the comments made by leaders in the high tech industries about the needs they have for certain types of energy sources if they are going to be able to be producing the kinds of products that they make in terms of the component parts to new technology products.


And so I think as we move ahead with this. We have certainly been looking to members of this committee - particularly ones who come from that industry to talk about and share with us some of that insight. Because I thin, it really is a pretty central part of the at least initial analysis we have to conduct.


Senator Cantwell: Turning to another subject, Hanford cleanup. And obviously, hoping to get a commitment today about the priority within the Department of that as a major priority. As well as we have had a tri-party agreement to set milestones that need to be met. And I guess I am looking for a commitment there to work with our state and to live up to the obligations of that agreement and the milestones that are set.


Senator Abraham: We recognize - I do at least - the need to meet commitment that have been made. I think we all need to work togther. And we have several members of the Budget Committee who are part of this committee to make sure that we have the resources to do so.


The environmental management budget of the Department of Energy is right now pegged at something in the vicinity I think of about $6.75 billion a year which is around 34 percent of the total departmental budget. The projections that I have seen for long-range cleanup commitment to address all of our sites are in the vicinity of two to three hundred billion dollars over a number of decades.


But I think we have to within that long range projection identify urgent challenges of which I would put Hanford on the list as well as areas where we can move fairly quickly hopefully to bring closure to sites that are in the position of being cleaned up. Rocky Flats being an example there.


So we want to work with you to address that. As I think many observers are aware, the Hanford site has something in the vicinity of 177 underground tanks of which some 65 to 70 are leaking. That is an unacceptable situation that will take a long time to address, but which needs to be addressed as a priority. And I am looking forward to working with you to make sure that we fund it at a level that allows that to happen.


One of the problems I know that the Department has had is that the budget that is in place today while addressing a lot of the sort of maintenance of now allowing situations to worse has not allowed us to make as much progress as we need to, to actually clean up sites. Because the overhead and the security issues by themselves have consumed too much of that budget. We need to get beyond not just that level, but to actual site closures.

Senator Cantwell: I appreciate that. I know that my time is up. I just think that the deal that they are looking for in 2001, the total cleanup was about $1.2 billion. And then additional resources obviously for the cleanup efforts of the Hanford Columbia River short. Plus, the vitrification, the waste classification that is coming online. That facility is looking for a separate item as well. So obviously, a huge budget item within your budget. So I look forward to working with you.


Senator Abraham: Thank you.


The Chairman: Senator Schumer.


Senator Schumer: Well, thank you very much, Mr. Chairman. And I am delighted to be here for the first time as a member of this committee. I want to thank you for your hospitality as well as the ranking member.


The Chairman: Before any of you three arrived - I think Maria was here, but I did indicate that we welcome all three new members on the Democratic side. And if we have new members on the Republican side, we will equally, heartfelt welcome them. So go right ahead.


Senator Schumer: Well, thank you, Mr. Chairman. And I just apologize to the membership and to Senator Abraham for not being able to be here the whole time. As you know, we have whole lots of hearings, including the one in Judiciary. So I apologize for that.


I am also excited to be the first New Yorker on this committee since the late 1970s when Daniel Patrick Moynihan was on this committee. And I guess the only north easterner on this committee since Senator Jeffords left a few years back.


And I want to welcome Senator Abraham to this confirmation hearing. We have known each other quite well. We worked together on the Judiciary Committee. Spencer, you are a man of integrity. You have dealt with both sides very, very fairly. You went out of your way to be helpful to me in a number of instances on the immigration subcommittee when you were the chair. And you are an extremely intelligent dedicated kind of person, the kind of person the founding fathers would have wanted to go into government. So I am glad that you are not leaving government, but rather moving on - I guess I cannot say to greater heights, but to lateral heights with us here.


Senator Abraham: I only would hope that all the members will remember how well they thought of me today as we move ahead.


Senator Schumer: I have a feeling, Spence, that will be the case.


Senator Abraham: I hope.


Senator Schumer: And I think that you will be an excellent Secretary. And I have every intention of supporting your nomination.


Let me say a couple of things and just ask for your judgment. One of the reasons I sought to be on this committee is I do believe we have an impending energy crisis. I have seen it in my State of New York. Last summer for the first time in a long while, we struggled with brown outs. They were small and controllable, but they are a real problem.


And the situation is very, very simple. And I am sure it has been touched on by many of the people who spoke before me this morning, many of my colleagues. That supply is basically flat and demand will go up.


And one of the things I worry about is if our economy sort of cools down a little bit, we will forget about this. The long-range prognosis is that the world economy will grow. I read somewhere that China alone is expected to have 170 million new cars, cars that nobody drives right now, as their economy grows over the next 15 years.


That is just something to think about. As the rest of the world and as I think our economy continues to grow, we are going to have this problem. And one of the problems we faced is we had it so good for so long that there was not a national focus on energy policy and we are going to need it.


And I guess my second observation is it seems there is something of a deadlock in Washington where mainly - this is not exclusive on either side, but one side of the aisle focuses on supply. One side of the aisle focuses on demand. And we do not get much done.


And I look forward to working with you. There is not a better place for a 50/50 Senate than the Energy Committee. Because it means that both sides have to be put together. And it seems to me that that is a policy that makes sense to. That when demand increases and supply is flat, we have to do things to both to try to limit the demand increase without limiting economic growth and increase supply.


And I for one am willing to work with you on both sides of that equation, not just on one. And I think you are the perfect guy to help put it all together because you have had such good relationships with Senators on both sides of the aisle.


So I do not want to ask a whole lot of questions having not been here. The questions I will ask probably have been asked already by my colleagues.


But I would just like your comments on that general proposition. Then I will yield back my time, Mr. Chairman.


Senator Abraham: Senator, I agree whole heartedly, as I indicated in my opening statement, the need for us to develop a comprehensive energy strategy that is balanced, that focuses on both the supply and demand side.


But I think we - you know, one of the thoughts that went through my mind as you were commenting, as I was looking at you and Senator Cantwell, is that in the area of technology and the new economy, one of the challenges we are going to have I think is going to be to address the demand side in light of new technologies that are being developed that are extraordinarily attractive to the people of our country. And I think, again, I mentioned and used as a statistic in my earlier opening statement that the ten percent of the electricity used in this country now appears to be linked to just the use of the Internet.


How we address the demand on that particular and singular challenge seems to me to be a pretty difficult, to say the least, problem. Because I look at just my own friendship circle, my family, and all people that all of us certainly know whose use of Internet will be very difficult to curb or to reduce.


So it will be tough and it will call upon all of us to be optimists I think probably is the best word as we move ahead. I think there are two ways we can look at this situation, as a challenge to America. We can look at it in a very pessimistic way in a sense that we cannot address these challenges they are so onerous. I do not believe that to be the case at all. I am very optimistic we can make some progress. I look forward to working with you as we have talked.


Senator Schumer: Well, thank you. And I would just make the comment technology works both ways.


Senator Abraham: Right.


Senator Schumer: One in terms of the demand, the new use of the Internet and everyone has a computer and a fax machine. But it also has tremendous potential. You know, New York State where General Electric has had its labs, we have a lot of sort of electricity oriented new companies, particularly in the Albany area, because of the GE labs in Mistyuna.


And two companies that are very interesting and have potential, one is really on the verge of being able to create economical fuel cells which produce electricity by your home.


You know, it is a very simple little chemical equation. They take the oxygen. You have a little pot of water or container of water. I am sure I am not doing justice to this in its full scientific flourish, but they take apart the oxygen and hydrogen atoms, put them back together, take them apart, put them back together, and generate energy as a result of that and use a small amount of natural gas to do it. And you do not need all the transmission and everything else.


And it costs about $20 a month for the supply of natural gas to do it. Much cheaper to the consumer. Of course, the machine itself is so expensive right now that it does not quite work. But every year the cost goes down and it is something that we might want to look at and encourage.


Then they have another company over there in Latham, a suburb of Albany, where they are developing the ability using super conductivity to send eight times the amount of power through existing transmission lines that they can do right now. And that presents tremendous potential for areas like New York, particularly down state New York City and Long Island, where one of our problems is even if you build a new power plant upstate, they do not have the transmission capacity to get it downstate.


So there are a whole lot of things, exciting things, optimistic things as I think you accurately put it, that we can look at and work towards together. If we have a little bit of will and a little bit of compromise, I think we can lick this crisis before it occurs. Thank you, Mr. Chairman. And thank you, Mr. Secretary.


The Chairman: Thank you, very much. Let me just advise all members that if you wish to submit additional questions for the record, they can be filed with the committee staff anytime before 5:00 o'clock tomorrow Friday. We will now have another round of questions here and these will be limited to five minutes per member.


Let me start with a couple of questions and then go to Senator Murkowski. One issue that is very much in your jurisdiction relates to the non-proliferation programs in the Department of Energy. Former Senator Baker, our Majority Leader here for many years and Lloyd Cutler headed up a task force or chaired a task force that has looked into this issue and made some recommendations.


I do not know if you have had a chance to look at their report. A major recommendation is to the new Congress and the new President, it says the President in consultation with Congress and in cooperation with the Russian federation should quickly formulate a strategic plan to secure and/or neutralize in the next eight to ten years all nuclear weapons useable material located in Russia and to prevent the outflow from Russia of scientific expertise that could be used for nuclear or other weapons of mass destruction.


I would ask if you have seen that recommendation, if you have any position on the recommendation, if you intend to follow it.


Senator Abraham: Senator, I have not read the entire report, but I am certainly familiar with it and with the basic recommendations it makes. And they are obviously consistent with some of the work that has been done and continues to be done at the Department of Energy.


As you know, in the context of non-proliferation, we have worked on a number of fronts, primarily with respect to Russia. We have the programs that are designed to provide support for the actual security of existing or past facilities to protect the material that is there.


We have programs that are designed to address the issues of the technicians and scientists, also alluded to in the comments you made that are part of the report to try to - to the degree we can - prevent the talent from somehow becoming available to those who would use weapons of mass destruction inappropriately, the rogue nations and other questionable acquirers of such talent.


I know that there have been concerns expressed about the effectiveness of that particular program. It is one of my priorities to become more familiar with.


We have the ongoing program designed to purchase highly enriched uranium from the Russian sources with a pretty substantial commitment in terms of the magnitude of what we might purchase. I think we have already purchased 110 or so tons of highly enriched uranium which has in effect made that industry in America more or less recede.


And we, of course, are in and have been in negotiations and have negotiated with Russia with respect to weapons grade plutonium conversion. We have not gotten to the point where although we have kind of agreed upon numbers and I know we have moved forward with respect to the design of facilities that might be used for such conversion and resources for that to be done on the Russian side do not exist at this point. And I know that we are looking to others to perhaps help in that process.


So that is a kind of long about way of saying that this is a high priority. Each of these categories and will be. Whether every component of the report is one that I would recommend to the President or to the inclusion in our budget, I would have to defer until I have analyzed every part of the report.


I have talked or actually did not have a chance to meet with, but I know that Senator Baker wanted to have a discussion at some point. As soon I am confirmed, I will talk with he and Lloyd Cutler and to examine these. And, of course, General Gordon's role in this is very important as well. And he and I have briefly discussed this as an extraordinarily important part of the national security issues we face.


The Chairman: We passed a law in the 103rd Congress prohibiting research and development of low yield nuclear weapons. Can you assure the Committee that under your leadership the Department of Energy will abide by that provision of law?


Senator Abraham: That was prior to my arrival here. So I will not try to comment beyond indicating it would be my intention to fulfill the commitments that are statutorily required of the department and if that is a statutory commitment, then certainly it would be my duty to fulfill it.


The Chairman: Thank you, very much. Senator Murkowski.


Senator Murkowski: I will try and be brief Senator Wyden brought up an interesting point that I think deserves examination by your department. And that covers the issue of the alleged West Coast price adjustments on oil from my state of Alaska that would be exported. And I would like the record to reflect that there has been no oil exported from Alaska since roughly April of this year. Excuse me, of last year.


As a consequence, there seems to be a little necessity to bring some background into the Alaska oil historical picture. Alaska when it came online produced about two billion barrels a day. That production is down to roughly one million barrels. At that particular time, the West Coast refineries could not accommodate the excess oil. There was surplus oil.


From a business point of view, all Alaskan oil has to move in U.S. flag vessels. It cannot move in a foreign carrier. So the cost of transportation is higher than it would be if you moved it in a foreign carrier. The Jones Act requires a carriage of U.S. products and passengers in U.S. flag vessels. There is no exception to that.


So as a consequence, a significant maritime fleet was built up. Most of that fleet was raised for shipyard use in the Portland shipyard that was built by public funds from Portland as I think a pretty good investment.


But since my time is limited, I do want to advise you that the production has dropped to a million barrels a day. The surplus that was formerly excess to the West Coast, moved for a while through the Panama Canal. Then a pipeline was built across the isthmus of Panama and the excess oil was moved into the Atlantic and then in the Gulf Coast refineries.


But as the markets for production increased from Venezuela, from Mexico and so forth, they were able to supply the refineries in the Gulf Coast.


But the point is the Alaska oil production declined as Prudhoe Bay production declined. It is currently about a million barrels a day.


Now, as a consequence, we formally had a law that prohibited the export of Alaskan oil. It was Alaska specific, did not require California or any other state, but just Alaska. Congress in 1995, passed, and the President signed, legislation lifting the ban on exports of Alaska and the north slope crude oil.


As a result of that legislation, we brought in GAO as a watchdog. And they reviewed the impacts and found the following. And these are quotes. One, "lifting the ban raised the relative price of ANS and comparable California oils between 98 cents and $1.30". That was crude oil only. That is not gasoline.


Secondly, "West Coast consumers appear to have been unaffected by lifting the ban because the price of important petroleum products they use has not increased".


Finally, third, "Future oil production should be higher because higher crude oil prices have given producers an incentive to produce more oil".


Now, that is what they found. Additionally, in the statute, it provided the President with the authority to revoke or modify ANS exports based on recommendation from the Secretary of Commerce and Energy - which of course would be you - if the President determines they are responsible for supply shortages or oil price increases.


So as a consequence, I assume you will uphold the law regarding the ANS export issue. Unless the law has changed.


Senator Abraham: I will.


Senator Murkowski: Now, the FTC, currently with my support and Senator Wyden's, is investigating gasoline prices on the West Coast. And I think that is an appropriate thing to do.

I would remind my colleagues - and this is their business within their own states - that Oregon has no refineries. That is a rather dangerous situation. In my own mind, it is somewhat similar to California who has decided that they do not want to produce power. They would rather get it from outside. But that is the business of the State of Oregon.


All products shipped come from some other area outside the State of Oregon. And Oregon's gasoline taxes are some of the highest in the nation, about 42.4 cents a gallon.


Now, as we look at this issue, again I would advise you that there is currently no oil exported Alaska oil. Nor in my opinion is there a likelihood of it. Because we do not have a surplus anymore. And we are consuming and using more.


I want to use the balance of my time, however, to request that you folks take a look at the role of public power vis-a- vis investor owned power. Because you are going to get into it. And this committee has been into it for a long time.


And I am not degrading the role of the PMAs, but we should remind ourselves that power marketing, which Bonneville is one, was paid for by all the taxpayers of this country, designed to serve a region. And it certainly served the Pacific Northwest. It has given them an aluminum industry. It has given them very bountiful agriculture and various other things which are meritorious. And as a consequence, when we try in Alaska to tie our 1,000 miles of coastline with some kind of an inter-tie, we need federal help, taxpayers from all the states.


So I do not begrudge that. But I think you are going to have to look at various aspects that have developed. Because there has been times when Bonneville had surplus power. As a consequence, they have negotiated contracts, take or pay contracts. As a consequence, we have seen some of the aluminum industry quit producing aluminum and sell electricity. It is a good business. They can make money at it.


We have seen a situation with new energy ventures in Los Angeles where you should look into the circumstances because it appears that there was a negotiated deal made for surplus power to be wielded from Bonneville down to Los Angeles and resold. Who is entitled to that profit? Is it Bonneville? Or is it individuals in an office somewhere simply making a buck? I do not begrudge them that, but we need to have some clarification on these side deals if we have no access to what the prices were, what the terms of the contract were. And this is a quasi-government activity. The activities associated with a PMA.


We have situations where we know the Seattle power, the municipal power and light company, does a great job in Seattle. Buys power from Bonneville because they can get it cheaper than they produce it. And they wield it down to Southern California and sell it to the Nordstrom stores under contract. Nothing wrong with that, but it displaces investor owned.

As we look at the situation in the northwest where the shortage is becoming more apparent, even in Washington and Oregon, let alone California, we ought to take a look at the appropriate role of these PMAs. And I am sure my friend from Oregon, both of them, would support this. Because there are some inconsistencies. And I happen to believe that charity begins at home, whether it be Oregon, Washington, Alaska, California or New Mexico. But there are just too many unanswered questions out there at a time when our friend says the reservoirs are at an all time low. And when summer comes, look out. Because you are not going to be able to meet your own current demand.


So I just leave you with that rather profound elongated and muddy statement relative to realities associated with your new responsibility. Thank you, Chairman Bingaman.


The Chairman: Thank you, very much. Senator Wyden.


Senator Wyden: Thank you, Mr. Chairman. As I said to the nominee, this question of Alaskan oil exports has never been a subject for the faint hearted. And that you have gotten a sense of that.


Look, the Chairman is absolutely right in saying there are no exports taking place today. The problem is we wanted to put in place a permanent ban to ensure that in effect the federal government's position with BP Amoco was not just we will trust them. And so that is why we are asking for a re-examination.


The Chairman: I assume you are talking about all exports of oil outside the United States.


Senator Wyden: I was just getting to that point, Mr. Chairman. Because I think that one area where there may be some common ground - and we ought to explore it. And the Chairman and I were just visiting about it - is the question of perhaps given this dependence that our country has on foreign oil, 60 percent or thereabouts, there ought to be a complete ban on the export of domestically produced oil given the national security ramifications.


Mr. Secretary, what would be your reaction to something like that? And understand, the Chairman and I have just visited about this informally. This is going to take a considerable amount of research and analysis. But what would you think about that conceptually?


Senator Abraham: It will take a considerable amount of research and analysis I think is my reaction. I think that as we develop - as we try to accomplish what virtually every member of this committee, either today or in the private meetings I had leading up today, has said to me we need both a balanced, but a comprehensive policy that analyzes very source, determines how we get there.


And I think that as we examine sources, we have to be examining sources, not just from the standpoint of how to produce more in terms of permit processes or of tax laws, but also in terms of how market forces would apply. And I mean no disrespect to the position of either the Senator from Oregon or the people, the Oregonians' position or anybody else. I would want to analyze the market impact. Because it certainly sounds like at least the study that Senator Murkowski alluded to had found perhaps that there were some effects that were not necessarily anticipated when you think of this in a kind of abstract sense. But at least my first blush reaction is that I would need to certainly find out a lot more about the issue before I would hazard a judgment in terms of whether or not it is -


Senator Wyden: I understand that. Know that this GAO report that was cited was done before the Oregonian put the e-mail on the front page of the paper attesting to BP Amoco's desire to deliberately stick it to the West Coast consumer by discounting sales to Asia knowing they could more than make up for it with higher prices on the West Coast.


I would like us to work on some approaches that find common ground. And I think one of the areas we ought to take a look at and examine is the question of saying that when you produce oil in this country, it stays in this country. I hope that we can look at it.


One other issue that I would like to raise with you and that is this question of transporting gasoline products from the Gulf of Mexico to the West Coast. Our understanding is that it costs between seven and eight cents per gallon. As you can understand, a big part of the concern in the west that we are paying the highest prices in the country, seven to eight cents, while not the entire driving force behind these increases is certainly significant.


Would you look into the question of whether there are legal, logistical or other kinds of constraints to figuring out a way to get the gas by tanker or pipeline to the west and provide some relief to our region?


Senator Abraham: I would. This is an area of some interest to me because we confronted gasoline prices back in the midwest last summer that I am sure many of you not only observed, but probably recall me preaching about on the Senate floor at the time. In fact, suggesting we should temporary suspend gas taxes to abate the problem to some extent temporarily.


And what we discovered, at least what I discovered, in that period, was that there were a number of factors that we really had not even recognized that compounded this problem that were logistical in nature to a certain extent, that were regulatory in nature to a certain extent.


Probably the biggest problem was actually a rupture in a pipeline that was supplying the southern part of Michigan. And so that on top of other factors, including OPEC's decision to reduce production that took place shortly before the prices spiked were the big parts of it that kind of got my interest in this area peaked. And so it would be something that I would like to see us examine, not exclusively with respect to the West Coast challenge.


Senator Wyden: Mr. Chairman, my time is up, but I look forward to supporting Spence Abraham this afternoon. I think there will be strong bipartisan support in the committee and it is very much deserved. And I thank you.

The Chairman: Thank you, very much. I know Senator Domenici indicated right now that he would be right back and does have another question or two. While he is on his way, did you have an additional question? I can ask you one just so we are not cooling our heels. You are familiar with the nuclear cities initiative that the Department of Energy has engaged in with Russia to accomplish work there.


Much of the success of that is a result of the efforts of the Department of Energy employees working with officials in these secret cities, former secret cities, on non-weapons research and commercialization activities.


There have been some difficulties, however, in arranging for Department of Energy employees to meet with those officials, not problems with the Russians, but problems with our own Department of State. I do not know if you are familiar with any of that, but I have discussed it with others in the administration and the incoming administration as well.


I would just ask that once you are in the position of Secretary of Energy if you would look at that issue and see if you could not come to a better agreement with the Department of State. So that they would be more cooperative in allowing Department of Energy officials to go to Russia and do this work.


Senator Abraham: I know that you have particular knowledge about and expertise in this area. And I would be more than receptive to getting your guidance as to whatever impediments we have on our side and then to carry forth with the new Secretary and the appropriate officials at State to try to address it.


Obviously, the nuclear cities issue as I mentioned a few minutes ago in my comment about non-proliferation challenges is one that has suffered a certain amount of criticism and concern. And if we can find ways to address some of those concerns, if they are impediments that we are creating ourselves, then it makes sense to me to me that we would want to try to do that as soon as possible.


The Chairman: Senator Domenici, go ahead.


Senator Domenici: Thank you, Mr. Chairman. And thanks for waiting for me. I apologize. I have three questions I am going to submit for you in writing. At your leisure, you could answer them.


I would just want to make two closing observations. You have heard a lot today about the challenges and how tough a job you have undertaken. I think you know tough jobs make heroes. Tough jobs are what make people do great things. And frankly, I think you have one of the most difficult situations right now in terms of our future growth and prosperity that we have had in a long, long time. And I hope you succeed. Because if you do, the country will be much better off.


I want to tell you in the process you will experience some very exciting and fun things. Because you will attend that the national laboratories, all ten of them, I am very familiar with all of them but most familiar with the nuclear ones which do much civilian work. You will experience some of the most exciting science that you could imagine coming into your life.


At some of the labs, the next generation of computer chips are now a working product between a national laboratory that you will be running and all of the computer chip companies of the world. And what they say they will soon have for the world is incredible in terms of computer chip capacity. And you will be able to mark part of that as having been done by the stars in science at the Department of Energy. In fact, that one I am talking about is international. So everybody is going to put money into get the next computer chip and it is incredibly more powerful than what we have got and will be ready for the world.


In addition, you have heard a lot about genome. You remember when I used to talk a lot about it. Believe it or not, in short order the computer capacity of one of the major laboratories will be melded with the genome research that is going on to determine much more quickly the relationship of chromosomes, which are very complicated, to illness. And that will be a great big venture that will be announced shortly between one of the national labs and one of the companies that does that. That is exciting. If you were Energy Secretary, you could be present at that. And instead of worrying about all of this, you could be very excited about doing it.


And my last remarks have to do with something that also is subject to your control, but Secretaries of Energy have not had to do a thing about it. And that is the nuclear navy of the United States. And I want to just tell you something about it because I think it will help you as you think of nuclear power.


And although a small group of people who tremble when you talk it and who worry so much about low level radiation they have stymied everything, anything that has to do with nuclear, since 1954 when the Nautilus put the first atomic engine in it was put into the oceans of the world, we have continued to put them in. We have over 120 right now sailing the seas of the world with one or more - believe it or not - nuclear reactors onboard running the boat with the waste that comes from it on the boat until they dispose of it.


And guess what? They go to every seaport in the world loaded with these nuclear reactors and nobody worries about them except one place in Australia which has a non-nuclear policy, non-nuclear power policy.


So it serves notice that if we are looking for the next generation of power for Americans, we really ought to look to the next generation of nuclear power also. You will be told much about this. And, of course, you will probably be told do not touch it because of politics.


I say touch it. Let us get a waste disposal policy to start getting rid of the nuclear waste. France is doing it with immunity and has 78 percent of their energy is nuclear. Why could not the country that invented it, that put all the technology into it, whose Energy Department or its predecessor actually made them, and whose U.S. Navy sails the seas and everybody lets them in all the ports because there is nothing dangerous about them?


I am just hopeful that you will begin to get some positive reactions to this. Because our Energy Department without a sign up there that says we are also looking at nuclear energy is not an energy department of the United States. At least it is not gifted enough to be called an American energy facility or department.


I am sorry to give you speeches today, but I guess you know I feel pretty strongly about this. Because I think we are making a mistake. Good luck.


Senator Abraham: Thank you.


Senator Domenici: I look forward to voting for you and working with you. Thank you.


Senator Abraham: Thank you, Senator.


The Chairman: Thank you, very much. Before we conclude, I wanted to particularly thank some of the people who helped prepare for the hearing today. Andrew Lundquist, of course, from this committee, Paul Longworth with the Armed Services Committee, Clay Sell from the Appropriations Committee in particular. Senator Abraham, subject to your assurance that you will respond to any additional questions we have in writing some time in the next week, we would go ahead at 2:30 with a vote here in committee on reporting your nomination.


Senator Abraham: Thank you. I will be happy to respond. And I might also if I could just have the opportunity to submit for the record the names of some other individuals who participated in the efforts on behalf of the preparation team here to make today's hearing on our side more effective.


The Chairman: We would be glad to receive that. And the committee will stand in recess now until 2:30.


Senator Abraham: Thank you, Mr. Chairman.


END


NOTES:
???? - Indicates Speaker Unkown
      - Could not make out what was being said. 
off mike - Indicates Could not make out what was being said.

PERSON:  JEFF BINGAMAN (94%); SPENCER ABRAHAM (80%); FRANK H MURKOWSKI (65%); DANIEL K AKAKA (57%); TIM JOHNSON (56%); RON WYDEN (56%); BOB GRAHAM (56%); EVAN BAYH (55%); MARY LANDRIEU (55%); DON NICKLES (54%); PETE V DOMENICI (54%); BEN NIGHTHORSE CAMPBELL (53%); CRAIG THOMAS (52%); GORDON SMITH (52%); JIM BUNNING (52%); PETER FITZGERALD (51%); CONRAD BURNS (51%); 

LOAD-DATE: January 22, 2001