Answer. The Congress has provided extensive rights and opportunities for citizens under the Surface Mining Control and Reclamation Act. I agree that citizen participation is one of the key principles in making the Act work, and I fully support these provisions of the Act. Question 14. What will be Mr. Uram's policy on pollution prevention? Answer. The Surface Mining Control and Reclamation Act is dedicated to the prevention of pollution from surface coal mining operations. I fully support the goals of the Act. Question 15. What actions will Mr. Uram undertake to update regulation of postSMCRA, high-extraction technologies? Answer. I am concerned about the deaths and environmental problems which have occurred recently that were related to cool mining. If regulatory gaps related to high-extraction technologies are causing these kinds of problems, they should be eliminated. Question 16. What actions will Mr. Uram undertake to protect prime farmlands from destruction by mining? Answer. Prime farmlands received special protection under the Act, and, if confirmed, I will work with the concerned interests to ensure that before permits are issued, mining operators have the capability of reclaiming these prime farm lands to full production capabilities and, after mining, that they will be properly reclaimed. Question 17. What will Mr. Uram do to speed up the process that is now nearly four months and counting past due in meeting Congress mandate? Answer. If confirmed, my goal will be to have the Office of Surface Mining make all of its decisions in a timely manner, including a timely decision on the pending subsidence rulemaking to implement the Energy Policy Act. Question 18. Will Mr. Uram take full advantage of this tool to advance the principle of pollution prevention? Answer. I recognize the adequacy of reclamation bonds is important to the success of the Surface Mining Act. If confirmed, I will work with the primacy states to assure that bonds are adequate as provided for in the Act. Question 19. What will Mr. Uram do to eliminate the interference with inspectors' lawful duty to cite violations? Answer. If confirmed, I will ensure that OSM inspectors who are fulfilling their obligations to issue notices of violations and taking other enforcement actions will be protected from intimidation and reprisal so they can do their jobs effectively. Question 20. What will Mr. Uram do to make it clear that the law MUST be enforced and that OSM, as the federal agency in charge, will always be assertive in requiring primacy states to enforce the law?" Answer. Secretary Babbitt has asked that the Office of Surface Mining improve its enforcement program. I share that goal. If confirmed, I will be committed to meeting the Secretary's request. My goal would be to build a strong and effective relationship with the primacy states to assure that the law is enforced, new environmental problems are prevented, and all mined lands are reclaimed in an environmentally sound way. Question 21. What will Mr. Uram do to restore citizens' faith in OSM as the ultimate guarantor that the law will be enforced as Congress intended it? Answer. If confirmed, I plan to provide the Office of Surface Mining with a clear sense of mission and leadership needed to meet the goal of ensuring that all coal mines will be reclaimed in an environmentally sound manner. If confirmed, I will work with the primary states to develop a strong, shared commitment to this goal. DEPARTMENT OF ENERGY, Washington, DC, February 1, 1994. Hon. J. BENNETT JOHNSTON, DEAR MR. CHAIRMAN: Thank you for the opportunity to appear before you and the distinguished members of your Committee today, for my confirmation hearing for the position of Under Secretary. Enclosed for the record are answers to questions submitted to me in writing. [Enclosure.] CHARLES B. CURTIS, Under Secretary Designate. RESPONSES TO QUESTIONS FROM SENATOR BUMPERS Question 1. Last year I introduced S. 544, the Multistate Utility Company Consumer Protection Act, and an amendment thereto. This legislation would (1) transfer regulatory authority over PUHCA from the Securities and Exchange Commission (SEC) to the Federal Energy Regulatory Commission (FERC) and (2) correct the so-called Ohio Power problem to ensure that FERC and the states have the authority to, for ratemaking purposes, examine the reasonableness of the costs associated with non-power transactions between affiliates of registered holding company systems. It is my understanding that the Department of Energy has yet to take a position on this legislation. You have had the rare experience of working at both FERC and the SEC and have also grappled with the issues involving the regulation of registered utility holding companies in private practice. What is your position on this legislation? Answer. As you know, the electric industry is expected to face increasing competition in bulk power supply and in the demand for transmission and other services. In the last few years we have seen a growing number of utility mergers, and a number of utilities have indicated their intention to rely increasingly or exclusively on third-party power supply. Pressures for diversification are mounting. All of this may lead to a significant restructuring of the industry. It most certainly will stress the current state-federal regulatory balance. I believe it is quite appropriate in these circumstances for the Congress to test the continued validity of the regulatory scheme set forth in the Holding Company Act and the Federal Power Act by the Congress of 1935. My experience in this field teaches me that, as significant in scope and effect as S. 544 may be, much more would be required to harmonize federal and state regulations of the electric utility industry. I think we should look at the issues and proposed solutions more comprehensively with a view of examining not only the regulatory scheme that applies to registered holding companies but also single state and multi-state operating companies and exempt holding companies. Included in that examination should also be consideration of merger and diversification policy. I would be happy to contribute my experience to the development of an Administration position on these issues and to explore those matters further with you and your staff. RESPONSES TO QUESTIONS FROM SENATOR Wallop Question 1. As Under Secretary, you will be responsible for two major portfolios within the Department of Energy: Science and Technology, and Nuclear Weapons and Waste Clean-up. What do you consider to be the priority concerns facing you as Under Secretary: a. First, with respect to your Science and Technology portfolio? Answer. In the area of Science and Technology, I see my major responsibility as being to help provide careful stewardship over one of the nation's most significant scientific and technical resources: the Department of Energy laboratories. Thẹ Department's 30 laboratories have a collective annual budget of over $7 billion and total employment of nearly 70,000 people. This includes some 29,000 scientists and engineers. The Department of Energy laboratories have an impressive heritage of contributing to meeting national missions in energy, defense, basic science, and environmental protection, in particular. With the end of the Cold War and increased national attention to economic competitiveness, the activities of the DOE laboratories are changing. One of the great challenges that the Department faces, and one of my highest priorities, will be to redirect resources of the DOE laboratories toward new missions such as economic competitiveness while preserving the vital scientific and technological base that will be critical to national defense, energy development and environmental quality. Another specific concern will be the impact that termination of the Superconducting Super Collider will have on the field of high-energy physics, and the opportunities that might exist for future international collaborations in this field, as well as areas such as fusion. Tough issues will need to be resolved if the United States wants to move toward a more internationalized program of scientific collaborations in general, and in the scientific areas under the purview of the Department of Energy in particular. b. Second, with respect to your Nuclear Weapons responsibilities? Answer. The primary concern of the Nuclear Weapons Program must be the maintenance of the nuclear weapons stockpile in a safe, secure and reliable manner through a science based program of Stockpile Stewardship. I am informed that the Stockpile Stewardship program will make extensive use of past nuclear test data in combination with future, nonnuclear test data and aggressive application of com putational modeling, experimental facilities and simulators to further a comprehensive understanding of the behavior of nuclear weapons and the effects of radiation on military systems. Other concerns of the weapons program include: reducing nuclear stockpiles under a measured nuclear weapons dismantlement program; enhancing the technology infrastructure and core competencies for execution of the national security mission while assisting industrial competitiveness; transforming the DOE national security infrastructure to meet all current and future requirements; continuing to make progress in environmental cleanup and waste management at the Department's sites; providing efficient and forward-looking management of the Department's inventory of tritium, plutonium, and highly enriched uranium for the enduring weapons stockpile; and addressing worker and community needs arising from the reduction in the defense workload. c. Third, with respect to your Waste Cleanup responsibilities? Answer. With respect to Waste Cleanup, the priority concerns have been well identified by Assistant Secretary Tom Grumbly. They are: (1) to manage and eliminate urgent risks and threats in the system; (2) to provide a safe workplace that is free from fatalities and serious accidents and that continuously reduces injuries and adverse health effects; (3) to change the system so that it is under control managerially and financially; (4) to become more outcome oriented; (5) to focus the technology development program on DOE's major environmental management issues while involving the best talent in DOE and the national (public and private) science and engineering communities; and; (6) to develop strong partnerships between the Department and its stakeholders. A strategic plan has been developed to attain these objectives. The Department's dominant goal must now be to make it work and achieve measurable results. Question 2. The scientific and technological capabilities of DOE's national laboratories were established in support of our national security. Now these capabilities are available to also support our economic security. As Under Secretary, you will be responsible for redirecting many of these scientific and technological capabilities to civilian purposes. In this regard, what do you consider to be the principal challenges facing the Department's national laboratories on your watch? Answer. This question was partially answered above, since I view this issue as one of the major concerns that I will be addressing in the entire science and technology portfolio of the Department. However, I would like to add some additional thoughts specifically in the area of challenges posed by increased collaborations between the DOE laboratories and industry. One of the principal challenges facing the Department's laboratories as they increase their collaborations with the private sector will be to ensure that these partnerships are guided by market-pull. This will require continued close collaboration between the Department, the laboratories, and potential private sector part ners. Another challenge will be to ensure that these collaborations are in areas where it is appropriate for the Department of Energy-and the federal government, for that matter to play a role. Specifically, the Department will need to exercise continued good judgment in seeking opportunities to leverage the technologies developed for public missions with the needs of the private sector. The goal should be to maximize dual-use benefits of the science developed at the DOE laboratories. Finally, it will be a challenge to ensure that the capabilities of the laboratories— which rest upon a foundation of basic science-are sustained without being pushed excessively toward projects with potential near-term benefits. The DOE laboratories have an important niche to fill in the technology development process, and that niche is in the area of high quality, multidisciplinary research with a longer time horizon and higher risks than are normal for industrial laboratories. Returning to a point raised in answering the question above, I believe that careful stewardship over the laboratories will be required to maximize their continuing benefits to the nation. I look forward to the opportunity to providing some of that stewardship. Question 3a. Last year, Secretary Hazel O'Leary testified that— "DOE is not adequately in control of its contractors and, as a result the contractors are not sufficiently accountable to the Department. Quite clearly, this means that we are not in a position to ensure effective and efficient expenditure of taxpayer dollars in the pursuit of our critical missions. Now is the time to reform our management practices." a. As Under Secretary, you will be responsible for the Office of Laboratory Management. Would you comment on your philosophy regarding contractor accountability and what you consider to be the contractor problem facing the Department? Answer. I believe the Department has to be able to ensure prudent expenditure of taxpayer dollars in pursuit of our principal missions. To do so we need a better system of contractor accountability than exists today. I share the Secretary's views that the Department needs to reform its management practices, empower its managers to effect these reforms and measure their success. A system must be created that focuses on efficient processes and quality results, rewards initiative and commitment, and provides meaningful disincentives where necessary. Properly structured and implemented, such as a system can improve both contractor performance and accountability. Question 3b. As Under Secretary, you will be responsible for DOE's multi-billion dollar contract problems in such areas as environmental health and safety. 1. What administrative or management experience do you have that is applicable to the conduct of a multi-billion dollar contract program? 2. How do you propose to supplement your management capabilities? Answer. The Department of Energy is the largest civilian contracting agency. Although I once directed the affairs of a federal agency that relied, in part, on contractor supplied services, neither that experience nor perhaps any experience in the public or private sector quite measures up to the DOE system. That is not just a matter of the scope or size of contractor labor force or the dollars involved. It is also because DOE has employed a unique contracting system. Consequently I cannot draw too readily from my own past experience to guide the conduct of the Department's contract administration responsibilities. I know the Department has devoted considerable effort and resources to improve the Department's capacities in this area. At this time, I cannot assess the adequacy of the systems that have been developed or the competencies of the program offices. "I recognize the need to strengthen my own capabilities and can assure you that if I am confirmed, I will take all reasonable and necessary steps to do so. Question 4. The 1992 Energy Policy Act requires that the energy programs of the Department be administered so as to assure the transition of new energy technologies from research through development and demonstration to commercial applications. Will you give priority to the formulation of commercial application guidelines for the Department's energy research and development programs? Answer. I am aware of your concerns with the formulation of commercial application guidelines, and I can assure you that, if confirmed, this issue will receive my focused attention. Question 5. Would you agree that an objective of the energy technology programs of the Department should be to transform promising energy technologies of today into commercial realities that have market acceptance, have competitive costs, and can operate in a reliable and environmentally sound manner? Answer. Yes. All of the Department's technology development programs should have a clear "road map" to a useful end, which I see as being defined by your criteria-market acceptance, competitive costs, reliability, and environmental soundness. This is why "partnering" with industry is now a mainstay of the Department's technology development programs. Industrial partners are particularly wellequipped to help guide the Department's programs so that the emerging technologies will meet these criteria. Partnerships provide an excellent means for melding the experience of industry in the marketplace with the capabilities of the Department and its national laboratories in science and research. Question 6. In a report just released by the Energy Information Administration, it is predicted that by the year 2010 the United States will rely on foreign sources for as much as 60 percent of the Nation's oil. In 1973, the year of the Arab oil embargo, the United States was one-third dependent on foreign sources. Wouldn't it make sense for us to take action now to begin to reduce our foreign dependence, rather than to wait until the next crises? Answer. I am quite aware of economic, trade, environmental, and security issues involved in the nation's growing dependence upon foreign sources of oil. Policy options are obviously constrained in a crisis. Moreover, history teaches that our democratic processes do not function well in a crisis environment that involves significant and rapid fluctuations in supply or the price of oil and its products. Therefore, I think the fair answer to your question is that we should now explore all prudent means to address the implications of the increasing dependence on imported oil forecasted by EIA. It is my understanding that the Administration is presently looking into these issues as an outgrowth of the Domestic Natural Gas and Oil Initiative. Question 7. The United States recently signed an agreement with Russia to purchase high enriched uranium from Russian warheads. The HEU will be blended down and delivered to the newly created United States Enrichment Corporation for sale to utilities. The contract price to be paid the Russians is $82 per separative work unit; however, the Corporation's marginal cost of production is roughly in the range of $55 to $60. That's at least a $22 premium being paid presumably in respect of foreign policy goals and non-proliferation concerns that shouldn't be strapped on the back of the Corporation. How will the Administration ensure that the Corporation does not end up paying that part of the contract price that is basically foreign "good-will"? Answer. As you know, pursuant to the Energy Policy Act of 1992, the Executive Agent for this contract is now the United States Enrichment Corporation. I am aware of the many years that you and others on the Committee have invested in the Enrichment Corporation and understand fully your concerns with the Corporation's economic viability. Of course, I cannot speak for the Administration or the Corporation on these matters but I know the appropriate parties have been informed of your concerns in this area. Question 8. Pending before the Committee is S. 544, sponsored by Senator Bumpers, which proposes to overturn the Ohio Power court decision. In Ohio Power the Court said that if the SEC approves a contract between the affiliates of a registered electric utility holding company, the FERC cannot second-guess that decision. Overturning Ohio Power, as is proposed by S. 544, would lead to so-called "trapped costs"—that is, costs that are properly incurred by a utility as a result of an SECapproved contract would not be allowed by the FERC to be passed through. S. 544 would also unfairly subject long-standing, SEC-approved contracts to a new regulatory review under a new standard. And S. 544 would give the FERC "secondguessing" jurisdiction on SEC matters on which it has no expertise, such as the issuance of securities. What is the Administration's position on S. 544? Answer. As you know, the electric industry is expected to face increasing competition in bulk power supply and in the demand for transmission and other services. In the last few years we have seen a growing number of utility mergers, and a number of utilities have indicated their intention to rely increasingly or exclusively on third-party power supply. Pressures for diversification are mounting. All of this may lead to a significant restructuring of the industry. It most certainly will stress the current state-federal regulatory balance. I believe it is quite appropriate in these circumstances for the Congress to test the continued validity of the regulatory scheme set forth in the Holding Company Act and the Federal Power Act by the Congress of 1935. My experience in this field teaches me that, as significant in scope and effect as S. 544 may be, much more would be required to harmonize federal and state regulations of the electric utility industry. I think we should look at the issues and proposed solutions more comprehensively with a view of examining not only the regulatory scheme that applies to registered holding companies but also single state and multi-state operating companies and exempt holding companies. Included in that examination should also be consideration of merger and diversification policy. I have been told that the Administration has not developed a position on S. 544 at this time. However, I would be happy to contribute my experience to the development of an Administration position on these issues and to explore those matters further with you and your staff. RESPONSES TO QUESTIONS FROM SENATOR MURKOWSKI PROJECT CHARIOT Question 1. The old Atomic Energy Commission had a project known as Project Chariot one of the old "Atoms for Peace" programs that envisioned the use of nuclear bombs to build harbors, dig channels, and perform other civil engineering tasks. Project Chariot envisioned the use of six hydrogen bombs to blast a harbor in Northwest Alaska between the Native villages of Point Hope and Kivalina. The detonations did not occur, but there were some radioactive soils brought to Alaska to study how radioactivity would move through an Arctic environment. The radioactive soils were left behind, and you can imagine how the local communities reacted when they made that discovery some 30 years after the fact. The soils had been buried in an area where the people hunted and gathered food. Fortunately the Department of Energy cleaned up the site this past summer. And the Department, Assistant Secretary Crumbly, and many others at DOE are to be commended for the cleanup. But we have some unresolved issues: Reimbursement for expenses incurred by the local governments in dealing with the discovery and cleanup of the site. The North Slope Borough, the Northwest Arctic Borough, and the community of Point Hope and Kivalina spent thousands of dollars on community outreach education and participation. |