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Summary of Energy Hearings: March 2002



House Science Committee
H.R. 3929:  Energy Pipeline Research, Development, and Demonstration Act
March 13, 2002

Bottom Line
Two million miles of pipeline transport the 23 trillion cubic feet of natural gas the United States consumes annually.  In addition to natural gas, pipelines transport 2/3 of all crude oil in the United States.  As a result, pipelines play a vital role in the implementation of a national energy policy and future national security.  On March 13, 2002, the House Science Subcommittee on Energy introduced H.R. 3929, the Energy Pipeline Research, Development, and Demonstration Act.  H.R. 3929, co-sponsored by Reps. Ralph M. Hall (D-TX) and Lamar Smith (R-TX), aims to advance pipeline infrastructure research and development (R&D) and streamline the repair and recovery process after a potential pipeline failure.  Currently, the Department of Energy (DOE) manages pipeline inspections and the Department of Transportation (DOT) manages oil and natural gas pipeline R&D.  DOE is interested in eliminating pipeline inspection from the agency essentially consolidating all pipeline safety programs to DOT.

Hearing Summary
Rep. Smith described H.R. 3929 by saying that "this bill addresses the research requirements to both maintain our existing pipeline infrastructure, which carries essential and volatile energy sources, and to look to the pipeline needs of the future."  Subcommittee Chairman Roscoe Bartlett (R-MD) opened by reviewing the weaknesses of pipeline R&D along with pipeline safety and security.  The subcommittee heard testimony from the natural gas industry, utility companies and natural gas industry societies -- including Tim Felt, President of Explorer Pipeline Corporation; Terry Boss, Interstate Natural Gas Association of America (INGAA); Dr. Nirmal Chatterjee, Environmental, Health and Safety and Corporate Engineering Air Products and Chemicals, Inc.; and Stan Wise,  National Gas Association of Regulatory Utility Commissioners (NARUC). Bartlett asked the witnesses whether tax credit or direct funding opportunities would be more useful for pipeline R&D.  Tim Felt stated that tax credit would be the most useful although a need for federal involvement does exist in order to coordinate various research projects.

Ranking Democrat Lynn Woolsey (D-CA) focused questioning on the hydrogen pipeline transport.  Woolsey questioned if H.R. 3929 would apply to the transport of hydrogen fuel.   Dr. Nirmal Chatterjee stated that H.R. 3929 legislation could apply to hydrogen fuel transport.   He also discussed the differences between hydrogen and natural gas transportation needs.  In many ways, hydrogen fuel transport has similar troubles as petroleum or natural gas transport in regards to internal and external corrosion, unintended digging near pipeline or terror threats.  Dr. Chatterjee said that a hydrogen pipeline leak is easier to contain, but additonal pipeline R&D is needed.  He assured the subcommittee that current pipeline technology is adequate for a 3-12 inch pipe carrying up to 100,000 psi of hydrogen gas.

Industry funds only 10-15 percent of all basic research.  Dr. Chatterjee added that government can be more involved in long-term basic pipeline R&D funding where industry falls short. Terry Boss, speaking on behalf of INGAA, stated that natural gas pipeline R&D funding will certainly come from a combination of industry, government, suppliers and service providers. He pointed out that the American public will pay indirectly for natural gas R&D through direct investment by pipeline operators, pipeline user fees, or by increased investment by suppliers and service providers.  Both Boss and Chatterjee voiced support for shared pipeline R&D funding between DOE and DOT, which is outlined in H.R. 3929.  Felt stated in written testimony that "the oil pipeline industry will work with whatever agency Congress chooses to operate the program."  He added, "the legislation (H.R. 3929) carefully avoids choosing among the three agencies not by making any one more prominent than any other.  This is, in our view, very risky ... Someone has to be in charge."  In addition, Stan Wise, the NARUC representative, stressed the importance of H.R. 3929 due to current pipeline R&D funding being phased out by 2004.

Finally, Rep. Bartlett (R-MD) questioned the witnesses about pipeline security in light of recent terrorism events.  Boss said that "the need for better detection, inspection and integrity management techniques and technologies cannot be overstated."  In his written testimony, Boss discussed the increasing demand for smart pigs -- an in-line internal pipeline inspection device -- with only 35 percent of all natural gas pipeline able to handle smart pig devices.  Tom Felt added that more R&D funding is need in the technological development of smart pigs, particularly in "unpiggable" or smaller diameter and sharp curved pipelines.

-HRG


Hearing on Senate Appropriations Subcommittee on Interior and Related Agencies held a hearing
on the Department of Energy's (DOE) budget estimates for FY 2003

March 7, 2002

Bottom Line
On March 7, 2002, the Senate Appropriations Subcommittee on Interior and Related Agencies held a hearing on the Department of Energy's (DOE) budget estimates for FY 2003.  Chairman Robert Byrd (D-WV) opened the hearing by stating his concern about the DOE's budget and the fact that it does not reflect the rhetoric of the Bush Administration's National Energy Policy.  Byrd continued by remarking on the large cuts in energy conservation, fossil energy, oil technologies, clean coal research and natural gas programs.  The DOE Office of  Fossil Energy (FE) budget would be cut by 5 percent to $816 million.  The FE Research and Development proposed budget would be cut to $494 million, a drop from $587 million from FY 2002 enacted budget.  The oil technology's budget would be decreased by 37 percent to $35.4 million.  The natural gas technology programs request $22.6 million, down from $45 million in the FY 2002 enacted budget.  The budget for the Clean Coal initiative would receive $325.6 million, down from FY 2002 budget request of $2 billion.   Byrd stated, "Rather than respond to the challenges we face by increasing our research and development activities as a way of securing our nation's energy independence, this Administration has instead chosen to retreat.  Now is not the time to walk away from the type of research that will secure our nation's energy independence."

Hearing Summary
Department of Energy Secretary Spencer Abraham opened by addressing the importance of the nation's energy diversification, specifically referring to new clean coal technologies.  Abraham was enthusiastic about the advances in hydrogen fuel cell technology and the Freedom Car.  Abraham noted a substantial increase in weatherization funding, which is an energy policy focus for the administration.  Abraham introduced his newly appointed Assistant Secretary for the Office of Fossil Energy, Michael Smith, and reaffirmed the agency's commitment to review of the programs within this office.

Sen. Conrad Burns (R-MT) questioned Secretary Abraham about the elimination of funding for oil and gas research and development.  Burns stated that this funding supports partnerships between oil production research and federal agencies.  Oil and gas research funding also provides a means to influence the industry for the government.   Specifically, Burns expressed his interest in research on the oil recovery potential of small oil wells as well as coal bed methane technology.

Sen. Pete Dominici (R-NM) brought up the issue of the clean coal research initiative.  He also added his enthusiasm over new technologies of cleaning the coal during the mining process by separating the coal horizons that contain more pollutants.  Dominici stressed the importance of advancing the exploration process of coal and ultimately decreasing environmental effects.

-HRG


Hearing on House Appropriations Subcommittee on Energy and Water Development
held a hearing to question the DOE's Fiscal Year 2003 budget request

March 6, 2002

Bottom Line
On  March 6, 2002, the House Appropriations Subcommittee on Energy and Water Development held a hearing to question Department of Energy (DOE) Secretary Spencer Abraham about the DOE's FY 2003 budget request.  The major sections of the administration's budget request discussed included National Security Programs ($8 billion), other Defense Activities ($472 million), Energy Programs ($863 million), Science Programs ($3.3 billion), and Environmental Quality Programs ($7.4 billion).

Hearing Summary
Abraham opened his testimony by providing an overview of the problems the agency faced last year "with energy supply shortages; natural gas and gasoline price spikes in the Midwest and California; and terrorist attacks within our borders."  He then addressed the funding proposals for the Office of Fossil Energy and the Office of Science and how they would alleviate those stated problems.  He stated that the DOE's missions post-September 11, 2001, would be three-fold: promoting measurable performance objectives and accountability, national security, and promoting DOE employee safety. He then addressed the budget for weapons activities, defense nuclear nonproliferation, and naval reactors.  Abraham spoke about increased funding for the Environmental Management (EM) program, which would shorten the timetable for locality cleanup from 70 years to 30-45 years.  Abraham expressed his enthusiasm over the new Freedom Car initiative and the hydrogen fuel cell technologies.  He also added his commitment to expanding nuclear energy coupled with the assurance of long-term safety.

Chairman Callahan (R-AL) brought up a question regarding the acceleration of the Environmental Management program, costing $800 million.  He was unsure that the increases in funding would be beneficial overall, and suggested that the program's support in the past had not been utilized to its maximum capacity.  He also requested a partial breakdown of sites where the cleanup programs existed, and asked where the waste would be taken.  Abraham responded by saying that $400 of the $800 million went toward the Hanford site in Washington state.  The overhead for the Hanford site in previous years cost two-thirds of the program appropriations, while only one third was spent on remediation of the problem.  Thus, more funding for the project in 2003 would translate into millions of dollars saved in future years.  The $800 million would not only contribute to accelerated cleanup of plutonium at the site, but also clean up the Columbia River, and enhance the capabilities of the local wastewater treatment facility.  White House Chief of Staff Andrew Card contributed to this discussion by stating that part of the plutonium waste would be taken to a MOX facility, and method and location of disposal of the remaining plutonium was still being discussed.  Abraham also addressed the question regarding cleanup efficiency by saying that the rates of clean-up for low- and high- risk sites are the same, but high-risk sites ought to be cleaned up faster, which requires more funding in the short term.

Chairman Callahan expressed concerned about the amount of coal that is used to produce energy in America, which he said consisted of approximately 50% of energy production in America.  Coal burning from a power plant is the primary contribution to pollution in his district.  He expressed interest in Thermal Integrated Power Systems to alleviate the problem.  Abraham did not respond to this comment.

Rep. Wamp (R-TN) expressed his support for Environmental Management acceleration, and also wanted the $800 million to be earmarked by the local staff working on the cleanup rather than administration in Washington, D.C.  He addressed the question of when these cleanup sites are acceptable and whether the site can be reused for development.  He supported a multi-agency agreement (between DOE, EPA, and the like) to determine this level.  Wamp was enthusiastic about the new Freedom Car program proposed for DOE, which would decrease reliance on petroleum through the development of the hydrogen-fueled car.  He believed that the auto industry in Tennessee would be appreciative of these efforts, and believed that it is a misconception that the Partnership for a New Generation of Vehicles (PNGV) program is unpopular in the auto industry.

Yucca Mountain was briefly discussed, and Rep. Pastor (D-AZ) asked whether waste at existing nuclear plants could be recycled in some fashion.  Abraham replied that some transmutation would be possible, but after nuclear reactors are engaged in that process, there would still be waste that would need to be stored.

Pastor addressed the decrease in concentration on Solar Power in the budget, but was misinformed on the amount of budget decrease ($1 million).  Abraham still responded to the concern, saying that additional funding for photovoltaic technologies would not be the best use of DOE's money because solar energy is ready to emerge into the public sector; however, there is a need for more gridding to accept solar energy, and the majority of funds would be placed towards grid development.

-MB and HRG

Please send any comments or requests for information to the AGI Government Affairs Program.

Contributed by Spring 2002 AAPG/AGI Intern Heather Golding.

Posted August 9, 2002


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