I've suggested a plan to change that credit to a credit for domestic producers to help them pay their environmental compliance costs. I would hope the Department looks at it carefully. I understand it is getting a lot of attention in the independent industry particularly now. It may be a way to jump start some good domestic activity that is clean, complies with environmental laws, and can do a real big job of backing off some foreign energy.

I'd just want to again call it to your attention and urge you to consider it in the process of putting these tax proposals before the Congress.

Secretary O'LEARY. Understood. I'd like to tell you we will be perhaps timely on this issue, but as I have said before, what I owe this committee and my administration is a plan for exploration generally.

Mr. TAUZIN. Yes.

Secretary O'LEARY. Again, the folks who work with me have got this charge and mandate. It will be given to Sue Tierney, who is about to go to a hearing as the nominee for Assistant Secretary for Policy. I owe the public, and I owe the community at large, some plan to address these issues. My view is we need a tax and we also need to stimulate exploration. I understand that.

Mr. TAUZIN. I thank you and I again offer the services of our office and staff to assist in these kinds of concepts.

The idea we've proffered met with a very nice reception with the President and Vice President and again we'd commend it to your attention. Thank you very much, Madam Secretary.

Mr. SHARP. The gentleman from Texas.

Mr. HALL. Once again, my question will not expect an answer. In deference to my friend, Mr. Hastert, from Illinois, I am not antiethanol. I am like the football coach who arrived home and his wife was crying and he said what's wrong? She said you like football better than you do me, and he said yes, but I like you better than I do basketball.

I am that way about ethanol.

Mr. SHARP. As usual, the gentleman from Texas has the best last word. Madam Secretary, we certainly appreciate your work and your attention to these issues this morning and we'll have further questions for you.

Secretary O'LEARY. Thank you.

Mr. SHARP. Thank you very much. We stand adjourned.

[Whereupon, at 11:06 a.m., the subcommittee was adjourned.] [Responses to subcommittee questions follow:]

RESPONSES TO SUBCOMMITTEE QUESTIONS BY HAZEL R. O'LEARY, SECRETARY, DEPARTMENT OF ENERGY

Question: What is DOE's role in, and what are the administration's plans for, the President's "Clean Car" technology initiative?

Answer: President Clinton's "Clean Car" initiative reflects his foresight and recognition of the importance of the transportation sector to the United States in terms of its dependence on foreign oil suppliers, impact on balance of trade, and the competitiveness of U.S. technology in the world marketplace. The "Clean Car" initiative was announced on February 12, 1993. DOE is represented on the Interagency Working Group which has been established to: (1) identify and prioritize the research needs of U.S. industry in developing advanced automotive technologies, (2) formulate goals and objectives, (3) develop a program plan, and (4) project Federal funding requirements. the U.S. automobile industry will be consulted at all major stages

along the way. This activity is underway and will continue until the mission of the Working Group is accomplished.

Question: What are the Department's current plans for technology development for alternative fuel vehicle, including trucks?

Answer: The DOE plan for alternative fuel vehicle (AFV) technology development covers a wide range of light-duty and heavy-duty engine and vehicle systems. Key areas include: absorbents to reduce working pressure of onboard compressed natural gas (CNG) storage tanks while increasing vehicle range; demonstration concept, light-duty vehicles to meet ultra-low emission vehicle emissions standards on ethanol, CNG, propane, and methanol; catalyst systems for CNG diesel engines; flexible fuel alcohol/diesel engines; direct-injection hydrogen diesel engines; and liquefied natural gas systems adaptation to CNG diesel engines.

Question: My understanding is that the Solar Technology Transfer line in the budget request contains roughly $15 million for so-called "joint ventures" authorized by section 1202 of the Energy Policy Act of 1992. If this is correct, what is the timetable for issuing the Request For Proposals for these joint ventures?

Answer: Of the $16.4 million contained in the Solar Technology Transfer line in the budget request, $11.2 million is intended for the Joint Venture Program. An additional $3.8 million is contained in the Energy Conservation appropriation for a total Joint Venture program budget of $15 million. We expect to issue the initial solicitation for the Joint Ventures program initiative by the summer of this year. We intend to be in a position to make the first award(s) in this program as quickly as possible upon receipt of appropriations.

Question: The DOE budget proposes a one-third cut in funding for filling the Strategic Petroleum Reserve (SPR) from remaining previously appropriated funds and anticipates no further appropriations for SPR fill in future DOE or DOD budgets. How many day of net imports would the SPR contain by the year 2000 and the year 2010 assuming these plans are carried out?

Answer: The fiscal year 1994 budget looks only through 1998; the long-term fill strategy will depend on availability of funds in future years. If we were to stop at 600 million barrels, the days of protection would be:

Year 2000-56 days

Year 2010-49 days

Source: Reference price projections of imports in the Annual Energy Outlook. Question: As the number of days of imports in storage declines, what is projected to happen to the amount and concentration of oil export capacity worldwide?

Answer: The Energy Information Administration projects a high and low range of world production capacity. Production from the Persian Gulf and OPEC countries in total is projected to rise in comparison to non-OPEC production.

Question: What effect on U.S. energy security would result from a decline in SPR size relative to imports, and tight world oil market with reserves and excess capacity concentrated in a few Persian Gulf countries?

Answer: Trend projections under past policies imply a growing vulnerability of the United States to oil supply interruptions.

We must redirect our energy policies to achieve greater efficiency and less dependence on insecure sources of foreign oil production, by diversifying supply sources. Stockpiling alone would not eliminate vulnerability.

The size of the Reserve is sufficient.

As additional supply from the Soviet Union comes onto the market, implications of Persian Gulf market concentration will lessen in importance.

Question: In the absence of appropriations for SPR oil purchases, what alternatives for filling might be feasible?

Answer: The Department intends to take advantage of private sector experience with financing and invite suggestions.

We have identified a broad range of possibilities and expect to consult with Congress, the oil industry, and the financial community in coming months.

Alternative financing options still would require substantial budget authority. At the end of fiscal year 1993 we will have about $400 million in unexpended appropriations. At the end of fiscal year 1994 there will be about $295 million in unexpended appropriations.

Question: I understand the Department is considering terminating site selection for SPR expansion despite the requirements of Sec. 159 (j) of the Energy Policy and Conservation Act (EPCA) to make such a selection.

If SPR expansion is ever to be undertaken, does the advantage of having two preselected sites with completed environmental impact statements on the shelf justify completion of the selection process now? Even if expansion seems unlikely, does it make sense to abandon the selection process after most of the work has been completed?

Answer: The Department is not abandoning the selection process.

The Department is continuing with the National Environmental Policy Act process and intends to pick sites and file an SPR Plan Amendment.

The Environmental Impact Statement has been delayed because of the late inclusion of the Richton Dome, Mississippi site.

Because of a modification of the Mississippi proposal for brine disposal, the Environmental Impact Statement needs to be modified. We expect to be ready to pick the preferred sites this fall.

The plan amendment would then be forwarded to Congress in the Spring of 1994. Question: Are there any provisions of the Energy Policy Act of 1992 that have their implementation delayed because of constraints on funding? If so, please indicate what these provisions are, the amount of the funding shortfall, and the effect on timing of the implementation.

Answer: There are over 700 specific requirements in the Energy Policy, and over 400 of those require specific Department of Energy action of some kind. While most activities are proceeding on schedule, there are a number of actions required in the first year of enactment that will be delayed due to insufficient fiscal year 1993 appropriations, new policy directions, and fiscal year 1994 budget constraints. On April 28, 1993, I will be forwarding a detailed status report on the Department's Energy Policy Act implementation activities. Today, I will highlight areas affected by fiscal year budget decisions and constraints.

Joint ventures for electric vehicles (section 611), renewable energy (section 1211), and advanced buildings and energy efficiency technology (sections 131, 152) have fiscal year 1994 funding shortfalls. In each of these areas the reasons for the delay

are:

(1) Each of these initiatives requires the establishment of program design and solicitation processes that cannot be completed within the schedule provided by the legislation; and,

(3) Funding priorities and levels could not be established for these programs in time for fiscal year 1994 decisions.

Other priority areas with insufficient budget support include expanded grants and loans programs to States beyond weatherization, such as buildings standards (section 141), industrial efficiency (section 132), and alternative fueled vehicle purchases (section 409). With these sets of activities the reasons for delay are:

(1) The State and Local Grants program is experiencing substantial growth. The delays are necessary to evaluate overall program impacts; and,

(2) There was not enough time to development the plans necessary to support the budget ramp-ups in fiscal year 1994.

The other major funding problem is the requirement for a National Advanced Materials Program (section 2201). We are currently preparing plans to implement this provision of the Act, however, the plans were not far enough along to submit a budget request in the fiscal year 1994 timeframe. This matter will undergo a priority review during the fiscal year 1995 process.

Question: What are your plans for implementing the innovative technology export provisions in the Energy Policy Act (section 1211, section 1332, and section 1608)? Answer: The Department is moving ahead with planning and implementation of the provisions in sections 1211, 1332, and 1608 in the Energy Policy Act.

DOE has coordinated efforts to negotiate an umbrella Memorandum of Understanding ("MOU") with the Agency for International Development (AID) to implement the international programs included in EPACT sections-1211 (Innovative Renewable Energy Technology Transfer Program), 1608 (Innovative Environmental Technology Transfer Program), 1332 (Innovative Clean Coal Technology Transfer

Program) and 1203 (Renewable Energy Export Technology Training). The MOU is currently going through the DOE's concurrence process.

In accordance with specific legislative requirements, DOE has consulted with the Committee on Renewable Energy Commerce and Trade ("CORECT") regarding section 1211 and with the Committee on Energy Efficiency Commerce and Trade ("COEECT") regarding section 1608. Additionally, the Department has consulted with Clean Coal Technology ("CCT") Subgroup regarding section 1332.

A working group has been formed, including representatives from various programs throughout the Department, to coordinate the negotiation of Inter-agency Agreements ("IAG") for each of the EPACT Sections. This group will develop IAG provisions to be negotiated with AID which are common to all EPACT sections and will coordinate the negotiations conducted by each office for their specific sections. The working group will explore additional MOU's and/or IAG's with EXIM Bank and the Trade Development Agency to facilitate the implementation of the various EPACT programs. Also, the Department is conducting meetings to develop milestones for the implementation of section 1608 and to develop negotiation strategies. As part of the fiscal year 1995 budget review process, the Department, in coordination with the Agency for International Development, will be evaluating options to implement these programs. In addition, we need to coordinate any clean coal export initiatives with the completion of the clean coal technology demonstration program. To date, only three of it's programs 41 projects have been completed.

Question: Given limited resources, do you expect to give greater priority to vehicle technology development or the purchase of alternative fueled vehicles for the Federal Government?

Answer: The Department will continue to pursue two parallel paths in this regard. In terms of fiscal year 1994 budget allocations, there is $100 million requested for vehicle technology development (i.e., alternative fuels engine optimization, heat engine development, electric vehicle batteries, fuel cells, and hybrid propulsion systems), $13 million for operating existing alternative fuel vehicle fleet test demonstrations and data analysis, and $18 million to defray incremental costs for new Federal vehicle purchases and/or conversions of existing vehicles to compressed natural gas or liquefied petroleum gas. Feedback to the technology development projects of field problems identified in fleet test demonstrations has proven effective in developing solutions well in advance of widespread alternative fuel vehicle use. Both paths will continued to be pursued with vigor.

Question: The Supplemental Appropriation for the Economic Stimulus Package contains significant increases for the Federal Energy Management Program. How do you propose to use these funds to improve the energy efficiency of Federal buildings? Question: The Federal Energy Management Program provides guidance and assistance to Federal agencies to achieve a goal of 20 percent reduction in energy use by the year 2000 over a 1985 baseline. This will require an investment of $2-$4 billion in cost-effective projects from utility rebates, private sector capital, other agency funding, and a Federal Energy Efficiency Fund. Essential to meeting that goal is project selection and procurement technical assistance. The Energy Policy Act of 1992 provides FEMP with new tools to help Federal agencies identify projects and finance them. With proper DOE assistance and Agency cooperation, the Federal Government can stimulate jobs, enhance the environment and avoid spending $1 billion in energy costs by 2000. By starting rapidly, we will begin saving energy costs early.

DOE is increasing FEMP's funding by $6.8 million from a base of $4.5 million to accomplish the ambitious goal of rebuilding the Federal infrastructure with energy efficiency. This multi year investment will leverage $2-$4 billion in utility, private sector, and other agency funding to achieve a 20 percent savings goal by 2000.

At the same time, Federal leadership will stimulate jobs and a new generation of energy efficiency and renewable energy products. The approaches taken will be transfer-red to State and local governments and schools to double the impact of the Federal Government acting alone. New technologies will be demonstrated and lead to widespread use that should increase the country's technology competitiveness and leadership in energy efficiency and renewable.

The highest priority activities to increase energy efficiency are a well-trained Federal facility work force; on-site audits to identify the most cost-effective projects; new financing mechanisms through energy saving performance contracts, the Federal Energy Efficiency Fund and increased utilization of utility demand-side management rebates; and the demonstration of new technologies. The new funding would allow the program to conduct 400 on-site audits, train 600 Federal energy managers and provide direct technical assistance to facility managers. New partnerships need to be built with States, utilities, energy service companies and the private sector providing energy equipment and services.

Question: The fiscal year 1994 Budget Request contains significant increases for the Federal Energy Management Program. How do you propose to use these funds to improve the energy efficiency of Federal buildings?

Answer: Federal energy management offers the opportunity for the Federal Government to demonstrate leadership while reducing its own energy consumption, strengthening competitiveness in energy technologies, and enhancing the environment. In 1991, Federal agencies spent $11.2 billion for their energy purchases including $3.8 billion on energy used in buildings. The Clinton administration intends to reduce needless waste in Federal buildings and to implement the Energy Policy Act of 1992, which provides new tools for the Federal Energy Management Program to use in the effort.

The Federal Government must take aggressive leadership to reduce its own wasteful energy practices and convert its procurement clout into new, high efficiency energy saving and renewable energy purchases. The Federal Energy Management Program will be equipped to provide agencies with the guidance and technical assistance needed to reduce energy use in buildings by 20 percent.

With increased funding in fiscal year 1994, the Federal Energy Management Program will be able to spur private sector funds for new technology demonstrations and increase investments from energy savings performance contracts and utility rebates. Over the next 6 years, over $2 billion of non-Federal money will be leveraged with Federal funds to achieve $1 billion in annual avoided spending on energy costs. In fiscal year 1994, the program will increase its on-site audits to 1,000 sites and provide training for 2,000 Federal energy managers. The Federal Energy Efficiency Fund will begin investing $8 million and energy savings performance contracts will increase private sector funding for cost-effective projects. Projects will be competitively selected based on energy savings, transferability, job creation, Agency funding, size of utility rebate and energy saving performance contracts. Energy awareness, cash incentives for outstanding Federal energy managers, project tracking, and improved analytical capabilities will be funded. The Department will have substantially increased capability to provide technical assistance to Federal facility managers and transfer that expertise to State and local governments and schools. Question: What are DOE's plans regarding a recent request from low-level waste compacts and unaffiliated States for rebates of surcharges currently held by the Department in escrow in accordance with the Low-Level Radioactive Waste Policy Amendments Act of 1985?

Answer: Officials representing several Compact regions and unaffiliated States that are developing disposal capacity for low-level radioactive waste (LLW) have requested payment of surcharge rebates that are held in an escrow account. Their request is based on the conclusion that the compact regions and States have complied with certain requirements in the Low-Level Radioactive Waste Policy Amendments Act of 1985 (the Act). Requests have also been received from generators of LLW alleging that States have not fully complied with the requirements of the Act which would require rebates to be returned to them.

September 30, 1992, the Department issued a Federal Register Notice (57 FR 45248) on eligibility criteria and procedures for States and compacts, or waste generators, to receive the rebates. The Department received numerous comments on the Notice, and is analyzing the comments. The eligibility issue is also being reviewed by the Department's General Counsel. Their review will be completed by May 1, 1993, which will allow for a final Departmental position to be published in the Federal Register by May 20, 1993.

The Act established incentives and milestones for the development of new LLW disposal facilities in States and compact regions that do not have operating disposal facilities. States or compact regions that meet the milestones receive a portion of surcharge payments made by generators within those States for disposal of LLW at the operating disposal facilities. These funds are held in an escrow account established by the Act which also named the Department of Energy as trustee. As trustee, the Department is responsible for evaluating the status and progress of the States and compact regions to determine the proper distribution of the funds following each milestone.

Under the Act, States are to receive rebate payments, "If a State (or, where applicable, a compact region) in which low-level radioactive waste is generated provides for the disposal of such waste at any time after January 1, 1993 and prior to January 1, 1996." If the State or compact region does not comply, the rebate is paid to the generators. The Beatty, Nevada, disposal facility (host State for the Rocky Mountain compact region) ceased operating, as provided in Nevada law, on December 31, 1992; and States within that compact region dispose of their waste, under contract, at the Richland, Washington, disposal facility. The Richland facility is a