NATIONAL SECURITY IMPLICATIONS Now with that premise it seems to me that we have to begin to look at the energy problem more in the context of our national security. You indicated this administration has been escalating this weapons part of the budget because of its commitment to national security. Now my question is this, Mr. Secretary: When you sit in the councils of the White House as the Secretary of Energy and when you are in conferences with the Secretary of Defense, the Secretary of State, and others who are charged directly with the programs of national security, do you raise the point that energy is as fundamental to our national security as nerve gas or the 155mm nuclear warhead or whatever other weapons of war this administration seems so intent on trying to acquire and put in the arsenal? At the same time, these trend lines in terms of our dependency on imported energy are unsettled, programs that would help us ensure energy independence have been on a downward slope and all the military weapons have been on an upward slope. Now ob- . viously this administration has not understood that the energy independence is fundamental to our national security. What I am asking is, are you carrying that thesis in the councils of the Reagan administration? Secretary HODEL. Mr. Chairman, I have been heard to do so. I have to qualify that by saying I don't raise it every time the issue comes up, but I have supported strongly the extension of energy tax credits for renewables and conservation. That is not an easy peace to make when we have deficits the size we have. But I think we have made some progress. I have no problem with this administration recognizing the importance of energy from the President to all of his advisors, to the key members of the Cabinet you have mentioned. There is a clear recognition of the urgency of energy. In any activity we undertake there is a genuine disagreement, obviously, on how best to spend the dollars we are able to on energy projects ranging from breeder reactors to coal gasification projects to synthetic fuels. If this Nation has a problem, it has been so blessed with resources that the proponents of one resource say, "Forget all those others; you can use this one to the exclusion of all the others." We believe that we have not turned our back, particularly with the increased funding that we are proposing, and we have not turned our back on responsible directions toward solar, wind, geothermal activities which may make a contribution in due course. They are not economically competitive today. One of the arguments suggests that if we would just turn some of that money over to people who are drilling for oil, we would be better off. My argument is we do recognize oil to be a depleting resource. There is an incentive to go from oil to gas. ENERGY TAX CREDITS We do need to push some of these other processes, including energy tax credits, in my estimation from an energy standpoint. I don't have the overall budget responsibility as you know and I can't say in the end that is the best spending of that money; but, yes, I have carried it and I think there is a recognition. I think we are on a responsible course. This Department, in a prior budget proposal, requested $7 or $8 million on a demonstration for solar. That was done and it was such a good project that the utility district liked it, the contractor liked it, the Congressmen liked it, and we put in the second one from which we learned nothing and didn't expand the technology in the society, at least in our view. There are arguments on that but it seems to me that we have got to try. I see this as kind of a wall of resistance in each of these areasproblems, technology, economic, resource base. We need to try to push that wall in where the private sector will move. The most encouraging thing was when Sears decided to put in a solar hot water heating system into its stores to sell it. When the commercial giants reach the point they believe they can sell renewable resources to consumers that will do a thousand times what any Government program can do. By the time we pay the bureaucracy to distribute the money, much of it does not reach its end purpose, or so we believe, so I am encouraged by that. I think that is where we can make our greatest contributiondo research, reduce costs, and get the private sector and the individuals to start buying it. That is why I do say we must keep the pressure on, the momentum on the conservation renewals. Chairman HATFIELD. I couldn't agree with you more in some of your theses. The only problem that I have is that I think like many other things where this administration has attempted to shift the emphasis to the private sector-and I agree the private sector is demonstrably more effective and more efficient, more economic-I think though the administration has failed to recognize that there is a transition that has to occur. This idea of chopping off one program that is primarily sponsored by Government and then expecting the private sector to pick it up immediately is unrealistic. I think the way this administration has approached some of those efforts, to shift the emphasis to the private sector, has been devastating-abrupt change rather than moving through a transition period and letting the tax credits or other incentives that have been created to take hold, let it pick up the slack, and then phase out the cover or phasedown or whatever the case may be. I really feel that if it had not been for the congressional pressure we would probably have seen a lot of these programs excised. It was like the approach to education; you solved the problem of education by abolishing the Department of Education. Well, I am not sure that it is a reasonable solution and Congress said, "Well, that is not so, therefore, we are not going to abolish the Department of Education." Now, they wanted to abolish the Department of Energy as well. Like a few years. ago we were going to solve the problem of bums on welfare by just totally abolishing welfare. I am not sure that that is a very practical approach to some of these important issues. I think that we have to move in a very pragmatic, practical way on these things, and I want to commend you again for reversing this trend or, as I said, putting the tourniquet on the hemorrhaging of these programs and probably to the total abolition of some of these programs this is probably in the thinking of those who were administering this meat ax approach to the problem before you took on this responsibility. I sleep better at night and I started sleeping better immediately after you took over this agency, Mr. Hodel, because I know you would be a reasonable man and a man with a long-time commitment to conservation to get ourselves off this dependency of Middle Eastern oil through developing the renewable resources. So be it. HANFORD WASTE DISPOSAL SITE EVALUATION Let me shift gears now. I think I made another point. The Hanford Reservation in Washington State has been considered as a potential site for radioactive waste materials. The DOE site evaluation report, I believe, was very upbeat about its suitability, but the U.S. Geological Survey and the NRC were precisely the opposite, they were very critical about the report's findings. In fact, the USGS used words like "overstated," "misleading," or simply "incorrect" in describing the findings of the report. Can you give me an update on this issue as it relates to Hanford? Secretary HODEL. Yes, sir, Mr. Chairman. We must be in an extended public process before we can make a selection and that is precisely why we are in that kind of process. If I have an upbeat report which may not include all the facts that the other included, we have a chance to see all of those before we even narrow down to the three sites which are recommended to the President and which then will be subjected to intense public and scientific scrutiny. My understanding is that we are pursuing all nine sites at the present time in six States. We are attempting to keep them on essentially a fairly equal knowledge base. WASTE DEPOSITORY SITES The target date in the statute for the first waste depository is 1998. There is some concern that because of the requirement for the extended environmental review it will take longer than that to get the job done and, in any event, at this point I should say we have not foreclosed any of those sites. We have not foreclosed the Hanford site. The conclusions will be covered with the same stringency by the Department of Energy. In the end I suspect we will find a great concern about each site and that we will have the good thinking statements about each site which will ultimately have to be weighed with what the statute says and by the President. Chairman HATFIELD. Thank you very much. I yield to the Senator from North Dakota and I will turn the gavel over to the Senator from Louisiana and go to the floor on the matter of exporting oil to Japan from Alaska. Secretary HODEL. I am glad you didn't ask me about that, Mr. Chair man. Chairman HATFIELD. I was being gentle today. [Laughter.] NORTH DAKOTA ENERGY RESEARCH CENTER Senator BURDICK. I just have one question, Mr. Secretary. Last April, the Department of Energy and the University of North Dakota signed a cooperative agreement to manage the Energy Research Center at the University of North Dakota. I understand, however, that DOE continues to carry on research activities at the center relating to low-ranked coals. Can you explain what these activities are and what is the budgetary impact? Secretary HODEL. Senator, I am sorry, I don't know the details of that program. I would be happy to supply that for you and for the record. I am aware of the transfer that we continue to provide support for various programs, but I don't know the details. Senator BURDICK. If you would supply the information, we would appreciate it. Secretary HODEL. Thank you. [The information follows:] LOW-RANK COAL RESEARCH PROGRAM-GRAND FORKS PROJECT OFFICE The Grand Forks project office was established in 1983 to administer the cooperative agreement between the Department of Energy's Office of Fossil Energy and the University of North Dakota Energy Research Center. The fiscal year 1984 cooperative agreement funding is $7,785,000 and additional supporting procurement funding is $1,335,000. While the fiscal year 1985 cooperative agreement funding is set at $7,411,000, the level of procurement funding for those efforts, in addition to the cooperative agreement, is currently under negotiation. The research areas that have been historically supported, and which will continue to be supported by the Department through the Grand Forks project office and the University of North Dakota Energy Research Center, include surface gasification, combustion, liquefaction, advanced research and technology development, and control technology and coal preparation. Examples of particular research activities are: development of new flue gas and hot gas cleaning concepts; development of new concepts for technical innovation in waste management; performance of background studies of coal combustion reaction mechanisms and rates; development of catalysts and improved distillate yields in coal liquefaction; and development of gasification process improvements. Senator BURDICK. I understand, however, that DOE continues to fund certain research activities related to lower ranked coal as I said. In addition, I understand that the center is also working with the Great Plains coal gasification project. I am pleased that these two DOE-related projects, both located in North Dakota, are working together. Can you explain to the subcommittee how the federally funded research at the center relates to coal gasification projects? Secretary HODEL. I can give a generic description which is that the Synfuel Corporation does not do research on synthetic fuels; the Department of Energy does that kind of research. We have a number of programs in synthetic fuels. I am assuming from the question that the work funded by us there relates to the gasification of coal and would be supportive of Great Plains. Again, the details I will have to supply to you for the record. Chairman HATFIELD. Very fine. Thank you. [The information follows:] LOW-RANK COAL PROGRAM-STUDIES IN SUPPORT OF SURFACE COAL GASIFICATION Low-rank coals represent a major and largely untapped resource in the United States. These low-rank coals have significantly different chemical and physical properties from those associated with higher rank coals and, therefore, present advantages and disadvantages when considered as feedstocks for gasification processes. The actual impact of these unique properties on the performance (economic and technical) of a coal gasifier and gasification process cannot be predicted with sufficient accuracy to verify the application of existing design or performance capabilities for gasification facilities that would use low-rank coal as a feedstock. The characteristics of the particular low-rank coal must be evaluated under the process conditions of the intended application to determine key design parameters, to select appropriate cleanup technologies, and to minimize any associated environmental impact resulting from the use as a feedstock for coal gasification facilities. The major driving forces for the experimental gasification program on low-rank coal include environmental concerns about liquid effluents and solid wastes, operability of the gasifier system, gasification efficiency, and correlation of operational data obtained from the Great Plains gasification facility with the experimental data base generated from earlier PDU and pilot plant operations. The program directed at developing environmental data on the characteristics of effluents is needed to minimize the environmental impact of these processes. Specifically, efforts will be directed toward validating the adequacy of various combinations of physical, chemical, and biological wastewater treatment methods; characterizing slag and waste treatment sludges and their leachates to ensure safe disposal under RCRA guidelines; and to assess occupational health issues. In addition to the work being performed on environmental considerations, studies on ash and slag characterization are underway. Specifically, the thermophysical properties of slag including viscosity, surface tension, thermal conductivity, et cetera, under reducing conditions are being determined; reactions occurring during slag attack on refrac tories will be characterized; and an attempt to develop a fundamental understanding of the changes occurring during the ashing of low-rank coals will be made. During fiscal year 1985, these studies will be continued and particular attention will be directed toward the shakedown and operation of a skid-mounted PDU liquid effluent cleanup system. Efforts will be directed at correlating the data from these studies and using it to evaluate, support, and/or resolve problems associated with operation of the Great Plains gasification plant. MAGNETIC FUSION PROGRAM Chairman HATFIELD. Mr. Johnston. Senator JOHNSTON [presiding]. Thank you very much. Secretary HODEL. Thank you. Senator JOHNSTON. Mr. Secretary, I am becoming increasingly concerned as the budgets get tighter about some of our energy programs which I have more or less totally and unquestionably supported in the past. One of those programs is magnetic fusion. The request is $483 million, up from $458 million in 1983 and $471 million in 1984. When you really look at our fusion programs, both magnetic and inertial confinement, I think anyone has got to come to the conclusion that the hope of getting unlimited energy at no cost and forever in all those things is really a vain hope. What we basically have in the fusion program, in |