Chu defends US DOE budget request against Republican questioning

603 words/4 February 2010/Platts Commodity News/PLATT//Copyright 2010. Platts. All Rights Reserved./Washington (Platts)--4Feb2010/259 pm EST/1959 GMT

US Energy Secretary Steven Chu faced a barrage of questions Thursday from Republicans over the Obama administration's proposed withdrawal of the Yucca Mountain license application, reduction of funding for fossil fuel programs and slow pace of issuing nuclear loan guarantees.

In a hearing of the Senate Energy and Natural Resources Committee on the US Department of Energy's $28.4 billion fiscal 2011 budget request, Republicans also criticized the administration for seeking an almost $2 billion increase for DOE over last year's budget, when it has already received nearly $37 billion in stimulus funds and could get even more in a pending "jobs" bill.

Senator Lisa Murkowski of Alaska, ranking Republican on the committee, noted that DOE has spent just $2.1 billion of its stimulus funds so far.

"DOE had authority to spend a total of $63 billion last year, but did not come close to that level," she said.

Chu acknowledged that he is "disappointed" in the amount of money that DOE has spent so far, but he said many of the funds have been obligated to states and local governments--for weatherization programs, for instance--and those administrations do not always have the expertise to move funds quickly."We are sending people out to the states to help them," Chu said.

Senator Richard Burr, Republican-North Carolina, pressed Chu on the shutdown of the Yucca Mountain waste repository. Interrupting Chu many times, Burr questioned the need for President Barack Obama to appoint a blue-ribbon commission on nuclear waste strategies, when so much money has already been invested in the Yucca Mountain site in Nevada.

DOE's fiscal 2011 budget proposal gives Yucca Mountain no funding, and DOE has said it is withdrawing its license application for the site.

"New nuclear plants are a lot of money," Burr said. "Do you think we're going to maximize the build-out of nuclear until we have resolved the issue of what we're going to do with the waste?"

Chu responded that current research indicates nuclear waste can be stored on site for decades, giving the blue-ribbon commission adequate time to develop a long-term solution for waste. Those solutions include more efficient use of nuclear fuel, development of more geologically stable sites for a repository and advancements in spent fuel recycling, he said.
"Scientifically, we will have a solution," Chu said. "We have decades."

Liberal Senator Bernie Sanders, independent-Vermont, fired back at Republican supporters of expanded nuclear power and also chastised Chu for expanding the nuclear loan guarantee program. The proposed DOE fiscal 2011 budget would add $36 billion in loan guarantee authority for nuclear projects on top of the existing $18.5 billion.

Sanders called nuclear the "most expensive way to generate electricity."

He did praise DOE for proposing boosts in funding for renewable energy, particularly solar, and energy efficiency.

Murkowski said in her opening statement that she is disappointed that the administration is cutting funding for fossil fuel research programs and rescinding several tax breaks on oil and gas producers.

"Not only does the budget request propose to cancel a $71 million project that would add needed capacity to the Strategic Petroleum Reserve, it contains substantial tax and fee increases for domestic oil and gas producers," Murkowski said.
Committee Chairman Jeff Bingaman, Democrat-New Mexico, also was troubled by the cuts in oil and gas research, "especially in light of the recent natural gas discoveries here in the US."
Herman Wang, herman_wang@platts.com Document PLATT00020100204e624001bb