This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. RPTR ALLDRIDGE EDTR ROSEN MODERNIZATION: ADVANCING DOE'S MISSION FOR NATIONAL, ECONOMIC, AND ENERGY SECURITY OF THE UNITED STATES TUESDAY, JANUARY 9, 2018 House of Representatives, Subcommittee on Energy, Committee on Energy and Commerce, Washington, D.C. The subcommittee met, pursuant to call, at 10:02 in Room 2123, Rayburn House Office Building, Hon. Fred Upton [chairman of the subcommittee] presiding. Present: Representatives Upton, Olson, Barton, Shimkus, Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, Long, Bucshon, Flores, Mullin, Hudson, Cramer, Walberg, Duncan, Walden (ex officio), Rush, Peters, Doyle, Castor, Sarbanes, Welch, Tonko, Loebsack, Schrader, Kennedy, Butterfield, and Pallone (ex officio). Staff Present: Ray Baum, Staff Director; Mike Bloomquist, Deputy Staff Director; 1 This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. Samantha Bopp, Staff Assistant; Allie Bury, Legislative Clerk, Energy Environment; Karen Christian, General Counsel; Kelly Collins, Staff Assistant; Wyatt Ellertson, Professional Staff, Energy/Environment; Margaret Tucker Fogarty, Staff Assistant; Adam Fromm, Director of Outreach and Coalitions; Jordan Haverly, Policy Coordinator, Environment; A.T. Johnston, Senior Policy Advisor, Energy; Ben Lieberman, Senior Counsel, Energy; Mary Martin, Chief Counsel, Energy/Environment; Katie McKeogh, Press Assistant; Brandon Mooney, Deputy Chief Counsel, Energy; Mark Ratner, Policy Coordinator; Annelise Rickert, Counsel, Energy; Dan Schneider, Press Secretary; Peter Spencer, Professional Staff Member, Energy; Jason Stanek, Senior Counsel, Energy; Madeline Vey, Policy Coordinator, DCCP; Andy Zach, Senior Professional Staff Member, Environment; Priscilla Barbour, Minority Energy Fellow; Rick Kessler, Minority Senior Advisor and Staff Director, Energy and Environment; John Marshall, Minority Policy Coordinator; Jon Monger, Minority Counsel; Alexander Ratner, Minority Policy Analyst; Tim Robinson, Minority Chief Counsel; Andrew Souvall, Minority Director of Communications, Outreach and Member Services; Tuley Wright, Minority Energy and Environment Policy Advisor; and C.J. Young, Minority Press Secretary. 2 This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. Mr. Upton. Good morning. Good morning, everybody. Happy New Year. Today's hearing begins this subcommittee's work in this session to identify what steps we need to do to make sure that DOE can address the national economic and energy security challenges that are going to be confronting the Nation over the coming number of decades. Recent years, we have been updating certain agency programs and authorities to shift DOE's mission focus more fully away from the energy scarcity mind-set of its founding back in the 1970s. We have worked to position the agency more appropriately towards the tremendous energy resources now available to our country and the economic and geopolitical benefits of those resources. We have sought to modernize the Department's strategic petroleum reserve and its response capabilities, and we have upgraded DOE's emergency preparedness for energy supply distributions and its authorities to protect critical infrastructure from physical as well as cyber attacks. But we are reminded almost daily that more needs to be done. Growing nuclear weapons, threats, and tens of billions of dollars needed to maintain the nuclear deterrent underscores the urgency for creating efficient, effective, and durable governance and management of DOE's nuclear security missions. So increasingly complex interconnections of our modern energy systems propelled by the digital efficiencies of the cyber age present new and growing risks. Getting ahead of these risks require secretarial leadership and coordinated attention across the agency's many programs and operations. Modernizing the Department of Energy means ensuring it has the appropriate statutory authorities and sound management structures to meet not only the challenges that we know about today, but what may be coming over 3 This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. the horizon. It means ensuring agency leadership can align with the Department's operations and resources to meet those priorities, and it means ensuring the tremendous scientific and technological assets of this agency are effectively focused for the benefit of the long-term security and prosperity of all Americans. Our two panels today will help look at what is needed to meet current and emerging challenges. We are going to hear from the senior leadership of the Department on the first panel. And with that, who once served this committee very well as its staff director, is the deputy secretary for the Department. He is essentially DOE's CEO. So I look forward to hearing his plans for aligning the Department to meet the administration's priorities and to discuss those priorities. He is joined by three Department Under Secretaries responsible for the bulk of its missions. Under Secretary of Energy Mark Menezes, also a capable alumnus of this committee, can help us understand what is necessary to enhance the Department's work regarding all of our national energy policy interests, and what more may be needed to enhance DOE's emergency and cyber functions. General Frank Klotz, who heads the Department's nuclear security enterprise, and with several years under his belt at DOE, has important perspective on what is needed for efficient and effective execution of the Department's vital nuclear and nonproliferation programs and related work across the DOE's enterprise. And finally, Under Secretary of Science Paul Dabbar can help examine how best to deploy and maintain the scientific and technological capabilities at the national laboratory system and its facilities offer to support the Department's missions. He also has new responsibilities for the Office of Environmental Management which oversees complicated environmental cleanup projects that present a host of 4 This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. management challenges. The second panel offers broader perspectives to help us assess what more is needed to improve execution of the agency's mission and to prepare for future challenges. We will hear from distinguished leaders and scientists on what is necessary to unleash the full benefits of the national lab system. We will hear how to ensure appropriate oversight in management of projects and programs in the national and nuclear security space and across departmental activities. We will hear how better to focus DOE's support of innovation and what our era of the energy abundance means for DOE responsibilities, both here and abroad. Our testimony today will start a record to inform our modernization efforts and to assist us as we prioritize what program authorizations to tackle in this new session of the Congress. With that, I yield for an opening statement from my friend and colleague, the ranking member of the energy subcommittee, Mr. Rush, from the good State of Illinois. [The prepared statement of Mr. Upton follows:] ******** INSERT 1-1 ******** 5 This is a preliminary, unedited transcript. The statements within may be inaccurate, incomplete, or misattributed to the speaker. A link to the final, official transcript will be posted on the Committee’s website as soon as it is available. Mr. Rush. I want to thank you, Mr. Chairman, for holding this important hearing on modernizing the Department of Energy. I also want to welcome all of the witnesses to this hearing. Mr. Chairman, for constituents, such as those I represent, one of the most pressing issues regarding DOE involves a matter of ensuring that the agency is representative of all communities, and that the needs of all citizens are being addressed through its energy policy and initiatives including the loan and grant programs as well as through engagement at the national labs, and access to contracting and vendor opportunities. Many of my constituents are constantly seeking ways to break into what has essentially become an onerous, good ol' boys network. As you are aware of, Mr. Chairman, my office worked extensively with former Secretary Moniz to establish the minorities and energy initiative which was designed to help foster increased minority participation in all sections of the energy industry. And this initiative, Mr. Chairman, was successful in beginning the process of raising awareness and engagement between DOE, industry, and minority communities. However, Secretary Perry did not seem to even be aware of the program, and many of the activities that were established by