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Welcome for this summary of our budget submission.
So the first thing I wanted to just emphasize is a reminder – I think everyone in this room is probably familiar with our various missions: Our nuclear security mission, which you can see in there is at nearly $13 billion for the request, from the nuclear deterrent to controlling nuclear materials to supporting the nuclear Navy.
Then, of course, our major missions in science and energy. This year the request will be nearly $11 billion. Obviously, supporting the President’s Climate Action Plan, moving to a low-carbon future is a very important part of that. I’ll be saying more about these, of course. But also there’s a really heightened focus on the issues of energy infrastructure and resilience against a variety of threats.
And we continue to, I think, hopefully execute successfully our responsibility in terms of being a major supporter of basic research, and most especially being kind of a backbone for the country’s physical science research infrastructure. Environmental management, another – our third – our third major mission area, to clean up the Cold War legacy, as you can see, nearly $6 billion there. And I’d say in these – each of these three areas is under the leadership of a different undersecretary in the – in the reorganization that we made about a year-and-a-half ago.
I will just add one thing to this slide in terms of kind of a mission focus, and that is an evolving mission focus around emergency response. Of course, we’ve had that for a long time in the nuclear arena – nuclear incidents, radiological events, should they occur – but now, increasingly, a focus on energy infrastructure under FEMA, having responsibilities there. And while those numbers are in the Ms, not the Bs, but we will, for example, be seeking an increase, for example, in the Office of Electricity’s response function from 6 (million dollars) to $14 million.
And the pie chart is here. As you can see, the numbers that we just said plus the other, which is a variety of smaller programs adding up to about $700 million, I would just note that although it’s not quite the same thing as those slices of the pie, the defense budget – is $18.9 billion out of the 29.9 (billion dollars). So 63 percent of the budget is in the national defense category.
Let me turn now to some of the specific areas. I won’t go through these slides word for word or not necessarily even in the same order. But just to say that, OK, if we start out by looking at the science effort, the – one of the themes, for example, is that budgets have been perhaps a little bit tight, but we continue to and will continue to be building and advancing our cutting-edge research facilities that are used by over 30,000 users.
So you can see here that, for example, we have completed – on schedule, within budget – the National Synchrotron Light Source at Brookhaven. The 12 GeV Upgrade at Thomas Jefferson Lab, the National Spherical Torus Experiment are in commissioning phases. And as we go forward in FY ’16, as you see, we will also be doing a major upgrade of the Coherent Light Source at SLAC. We will be building the Radioactive Ion facility at Michigan State University. There’s more, but that’s – the theme is that we will continue to provide and to – and to keep pushing the envelope in terms of cutting-edge facilities for the national research community and, of course, some international users as well.
In terms of science, while mentioning the Light Source and SLAC, for example, we just put up there one about mapping the structure of a protein in a living cell. I’ll just make – as an aside, with our four Light Sources, well over a third now of their usage is in life and medical science applications. Anyway, I also put here just one example of polymer-based flexible electronics just to note that, of course, we also, besides the labs, have a strong university research program.
And one of the things that we have in the FY ’15 budget, and so we will be starting to implement under the leadership of the Office of Science, are a set of traineeships – kind of models basically around the NIH model – these will be competitively awarded. As you can see, these first three in computing, advanced manufacturing and some environmental management issues, and then expanding in FY ’16, we hope, to add radiochemistry. These are areas of specific DOE mission need, and we will be developing both the talent and the curriculum to advance those.
Again, looking at the highlights going ahead – I’ve talked about a few of them. Another is exascale computing, continuing our tradition of leading in high-performance computing. I put it here. It’s actually a joint Office of Science-NNSA initiative. So we’ll be looking to one to 10 PFLOPS and, very importantly, what you need to manage the big data that we will be having in this kind of decadal time period. Advancing our Energy Frontier Research Centers, which we feel have been extremely successful.
And I wanted to also point out the development of the Long-Baseline Neutrino facility at Fermilab with international partners. And I want to emphasize that, because that’s a case where the particle physics community came forward with a good long-range plan in the middle of last year. And we are trying to – well, we’ve at least turned around the budget heading towards an important direction. Finally and very importantly, going back to the theme of user facilities, it’s essentially a full operating funding budget being proposed for FY ’16.
So this – you see there the budget in the various programs. I think that we’ve already discussed this. I will just add, in terms of the advanced scientific computing research, you see there a total of $621 million. I would just add to that that NNSA has almost exactly the same amount in its advanced computing line – so 1.2-plus billion (dollars). It’s a pretty big commitment that we have in advanced computing.
Turning to energy, the first thing I’ll focus on is developing/enabling the low-carbon economy. This obviously is key in the President’s Climate Action Plan, essentially addressing the mitigation focus. And as you can see if you just scan over this list, it really is an all-of-the-above approach, as the President has termed it – from coal, where we are – this year we will hit 10 million tons of CO2 sequestered; to biofuels, where, especially through loan guarantees supplemented by grants, we have moved to get the first essentially commercial cellulosic ethanol facilities moved forward; efficiency, a record year for efficiency standards; storage – we could go through – solar, where costs are coming down; geothermal, a new direction with FORGE which will look at the underpinnings of engineered geothermal systems; nuclear, from the recently renewed innovation hub looking at modeling, CASL, to continued activity on small modular reactors, et cetera.
And finally, just to emphasize, that in the last year – technically three, but sort of four – we have really moved forward with solicitations for our Loan Program across the board – $40 billion of remaining authority. And over these next two years we intend to pursue this aggressively.
Looking forward, some – a few of the items in the budget: One will be a continuation of the very strong focus on manufacturing. Proposing two new manufacturing institutes – you all saw that the President just a few weeks ago announced a new one on composite materials. And we will be pushing forward with that. Energy efficiency – a major increase in building technologies, but also going back and trying to increase, again, our weatherization support for low-income housing.
On the transportation side, this, again, will be an area of very, very strong focus. You can see from the budget table, each of these three major areas – renewables, transportation and efficiency – getting very, very major boosts in our – in our request. And on transportation, a variety of things, including a new round of SuperTrucks where we wanted to go to 100 percent efficiency improvement in these heavy vehicles.
Biofuels – a real focus now shifting towards drop-in fuels. This, of course, is very important also to the military and, in fact, this is a project with DOD and the USDA. And finally, going on – not finally, finally on this slide – going on with our renewable energy programs. For example, the SunShot initiative is really well along towards its 2020 goals, and we’ll be certainly continuing to push that.
Continuing in fossil energy, I would say overall the major focus remains that of carbon capture and sequestration, with FY ’16 proposing to initiate a thrust in natural gas plant CCS while, going back to the loan program, moving forward towards the issuance of up to $8 billion in terms of fossil energy projects while lowering – while lowering CO2.
A new proposal – it’s not in the DOE budget; it comes from the Treasury but very much aligned with this – is a new investment tax credit of $2 billion for CCS projects. You know, there are various terms for that, which we can – which we can describe, and that is complemented by also an expanded sequestration credit for commercial CCUS projects. So this is part of a coordinated approach, from technology to tax incentives, to get – to get carbon capture and sequestration moving along.
Nuclear energy – I already mentioned small modular reactors. This will essentially support the NuScale project, moving towards its license applications, a very strong focus on fuels – this is centered at the Idaho Laboratory, our lead lab for nuclear – and an increased focus on the technologies and the beginning of consent-based processes for nuclear waste management.
ARPA-E – we are proposing a $45 million increase, to $325 million. ARPA-E was established, as many of you remember, in 2009 with ARRA funding, approaching 400 projects. And we could say a lot more but, for example, 24 of those projects leading to companies, four of those companies being just acquired by large strategic investors. So now, at the five-, six-year mark, really beginning to show the impact out there.
And the loans I already mentioned in terms of the 40 billion (dollars), but another program I want to highlight is we are proposing a loan program for clean-energy projects on tribal lands – $11 million, 9 million (dollars) of which would be credit subsidy – a program that would be run through our established Loan Programs Office, but specifically focusing on tribal lands.
Now, we also have a strong focus on infrastructure. And a couple of the things was with the work we did with New Jersey on a – on a large – (chuckles) – seems like an oxymoron – a large microgrid is moving forward to reality in terms of resilience. But also the Quadrennial Energy Review I think most of you are familiar with. It’s focused on energy infrastructure. We anticipate, all of the analysis has been completed, putting together the document in the interagency and expecting to release that later on this month. And it will be a major exposure of the situation with regard to energy infrastructure, identification of the needs and recommendations for going forward. So as we go forward in FY ’16, certainly including actually in FY ’15, this year, we will be hopefully executing many of the recommendations in that document.
A few things to highlight: Certainly the electric grid remains a very important focus of modernizing our energy infrastructure. We have a major crosscut in this budget to build on the start we’ve already made in FY ’15. There will be a focus on methane emissions in the transmission, storage and distribution infrastructure. Another feature – and we have requested a total of about I think $63 million for state grants for energy assurance and for reliability, so that working with the states is something that we think is extremely important and, of course, continuing on to the second and third year of the Quadrennial Energy Review.
Another area I will just mention – it’s not as large in terms of the budgetary requirements, but very important – is obviously around the world there is a much-heightened focus on energy security issues, perhaps starting in Europe and with the Ukrainian situation. So one of the things that we have done is in the G-7-EU context to really map out an energy infrastructure approach, reflecting today’s market structures. Internally, last year we did a 5-million-barrel test sale for the – for the Petroleum Reserve. We learned a lot. And then, in fact, if you go down the page, this budget has a $257 million proposal to, in fact, address some of those infrastructure challenges that we saw in the test sale and through our analysis for the QER.
The last thing I’ll just mention is another thing that we accomplished in December was an MOU with Canada and Mexico to initiate improved North American energy data coordination. Our EIA, of course, is the lead in that for us. And that is one of the several drivers that we have for continuing to increase our EIA budget. The EIA plays an absolutely central role for us in our policy development, but also for the industry, frankly, in terms of its continuously improved resolution on a whole bunch of energy issues. So, again, you’ve seen the table there, and I think we’ve talked about the essential – the essential points. So, going on.
Another point to make is that we continue to build and, frankly, rebuild our strategic partnership with our laboratories. In many ways, they are so core, of course, to all of our science and technology based missions. And just here would note that, for example, that entails using the labs in perhaps new ways, such as having a team led by Oak Ridge National Laboratory look at the redesign of the Iranian facility for NNSA we’ll be to NNSA in a moment – using our Savannah River Laboratory to look at the technical issues of what happened at WIPP, for example – so really bringing them together to address these kinds of problems, but also bringing them together on the front end through, for example, an ideas summit that’s noted there, to help us design our new major programs going forward. And this – for example, 10 labs on the crosscutting grid modernization effort, it was – they were – they were very, very important in their – in their input.
The one place I’ll mention with some budgetary implications, our Laboratory Operations Board that I formed in 2013 came up with really a first-ever systematic inventory of our general-purpose infrastructure needs at the laboratories. And so in this budget we’ve responded with about $100 million of new investments for starting the long process of what is a multibillion-dollar issue in terms of building the general infrastructure. And that’s about half NNSA and half in the energy and science laboratories.
So that’s an important direction, complemented by another decision that we took, which is that – you know, it’s the theory of holes, of maintenance. You know, the theory of holes – you find yourself in one, you stop digging. So we have insisted that, from now going forward, we will not keep increasing the maintenance log each year. We must at least maintain it constant as we hopefully begin to shrink it.
And finally, before turning to nuclear security, these are six of the so-called crosscuts that I mentioned. I’ve already referred to some of them, like exascale and grid modernization, cybersecurity. Supercritical CO2 is a very promising thermodynamic cycle for high efficiency, subsurface engineering. These are crosscuts we started in 2015. The energy-water nexus is a new one. I mean, there was some work going on, but in terms of getting now this enterprise-wide approach, a new one going forward, and one that I might say has got tremendous interest from our international partners.
So if we can now switch from science and energy to nuclear security, we will start with the deterrent part of the – of the program. In terms of accomplishments, we should always remember to start with another year of a certified safe and reliable deterrent without nuclear testing. And that’s now more than two decades. And I always want to remind people to not forget how remarkable this is, with a new science-based program invented literally 20 years ago for this – for this purpose.
Now, we’ve continued and will continue – if you look at accomplishments and highlights for FY’16 – with our life extension programs. For example, the 76 for our friends in the Navy, are about halfway there towards completion in fiscal year ’19. We are on track, maybe even a little ahead of the track, on the B61 life extension program. I won’t go through all of it, but this year saw the – saw the W80 selected as the warhead for the Air Force’s next-generation standoff cruise missile. And in fact, in the FY ’16 highlights, as you’ll see, we have moved that two years to the left to meet the emerging military requirements. So a lot – a lot going on, and really a lot of of I think success in terms of meeting our responsibilities for a reliable deterrent, even as it is shrinking.
Now, of course, we all know that there is a major challenge of modernizing the production complex there. And here in FY ’16, we will be carrying through our disciplined, modular approach to meeting our uranium and plutonium responsibilities, and doing so with a lot more control, frankly, over budget and schedule than had been the case. And that’s something, and we’ll come back to that perhaps. But General Klotz at NNSA, for example, establishing new program managers to really make sure that these are focused on and get done in time.
Turning to nonproliferation and the issue of controlling and eliminating nuclear materials: In terms of accomplishments, last year almost 200 kilograms of vulnerable nuclear material taken care of. And I want to emphasize both bilaterally, that is us with Italy, for example, but also trilaterally with Russia – we know we have, obviously, a difficult relationship to work out at the moment with Russia – but this collaboration continued with removal of materials from Poland, Hungary and Kazakhstan in this last year – over 100 kilograms of weapons material just from Hungary and Poland together, for example. So that’s maybe a bright spot in the relationship in terms of our mutual interest in moving forward there.
Another issue is that the program has reorganized into four business lines that we think provides more clarity in terms of the major – the major missions in the program: Global Material Security, Materials Management Minimization, Nonproliferation and Arms Control, and Nonproliferation Research and Development. In addition, the Counterterrorism and Emergency Response functions, we think will benefit also by consolidation within this program.
The MOX project has a little bit of interest. So I’ll just say that there, in the budget what we are doing is we are taking the congressionally mandated program for FY ’15 of $345 million for building the MOX facility and continuing to construct, so we have kind of a constant level of effort maintained while we complete what we think will be largely the validation, frankly, of studies that we have taken out about the cost of various options and then, with the Congress, work out what is a viable path forward.
Navy nuclear propulsion, Admiral Richardson will insist that we talk about the 2 million miles steamed safely. But very importantly, advancing towards the Ohio-Class replacement, and as you see, in FY ’16, substantial investment in that replacement reactor. Moving forward on the spent fuel issues that the Navy is dealing with, but also – back to the accomplishments – delivering the first unit for the next generation Gerald Ford-Class aircraft carrier reactor. I think the hope remains for that carrier to be deployed in 2016. Maybe it’s going to be a little bit of a delay, but pushing hard on that. But anyway, but our job with the Nuclear Propulsion Office to have the power plant ready has really moved forward. And again, you see the budget that’s been up there on that screen.
Turning to environmental management, a lot of challenges, as there always are in terms of this program. But, you know, I do like to always start again here with the context that when this program was established we had 107 sites, 3,100 square miles, and it’s now down to 16 sites and less than 300 square miles. Now, that’s a 90 percent footprint reduction. Obviously, the ones that are left are not the easiest. So those are challenges. But I think we do not want to lose sight of the fact that there’s been a lot of – a lot of progress.
And just in this last year, one can see completing demolition of K-25 – the largest demolition project that the program has faced – continued progress with the Defense Waste Processing Facility at Savannah River, closure of six tanks. For the WTP at Hanford, arguably the most challenging of our projects, really moving forward with a new phased strategy that will allow us to start, say, within five or six years, of making glass at Hanford while addressing the supernatant in the tanks, even as we solve some additional technical problems. At Hanford, cleaning up 479 out of the 586 square miles and having again established river access to the river – to much of the river going through the Hanford site.
So going forward to ’16, very importantly, we will be implementing still the WIPP recovery plan. And we intend, in the first quarter of calendar year 2016, to start resuming waste emplacement. It’ll be at least to 2018 before one is at, let’s call it, full operations, but we’re on track for the beginning of 2016. And you can see here a variety of projects going on at our major sites like Idaho, like Hanford, like the Salt Waste Processing Facility. One that, again, we are projecting in FY ’16 as a major accomplishment is bringing the Plutonium Finishing Plant – as it says, “once the highest risk nuclear facility” in Hanford, to slab-on-grade by the end of 2016. So, again, it’s slow work. This is going to be decades, still, to complete all the cleanups. But I think continuing to make solid progress.
These are some of the site budgets. And clearly, River Protection, which is where the WTP is, we need to get a big push in that construction. Within this overall top line there are some decreases at sites. But without going through each of them, many of those reflect the completion of a certain set of activities. But there’s no question it is tight, even as we make this progress.
Finally, I do want to emphasize that we will continue to have a focus on management and performance. Again, from day one I’ve certainly emphasized that we’re not going to be able to address our missions if we do not keep improving management and performance.
Among the initiatives of this year and some of the accomplishments, we think a very important one – it’ll have to prove its mettle over the next couple years – but a very important one was the change we made in project management enterprise-wide, establishing some clear principles to be implemented by each of the Under Secretaries, elevating the Systems Acquisition Board from an ad hoc process to one that’s institutionalized, establishing a focus on risk management under that ESAB. And that’s something that we think is very, very important.
A number of other issues, as you can see: successfully resolving the hiring issues at Bonneville and restoring their hiring authority, recruiting ambassadors for our Minorities in Energy program and various specifics. But the message is we will continue this focus on management and performance, including, as you see, in FY ’16 a new human resources delivery model that will streamline the system; a new Jobs Council that we’re putting together now to really be able to amplify our impact in translating all of our activities into jobs; and of course continuing to focus on cybersecurity as a critical issue for us with our own data – be it personal data, financial data, nuclear-security data – and working with the private sector in terms of energy infrastructure cyberprotection. And so, again, a number of the other programs under our management and performance organization, but again, the main message is the continued focus on those issues.
And finally, just to summarize, to go back again kind of to the vision, as reflected in our departmental plan, you can see we will – again, we’re going to keep focus on the Climate Action Plan. We will continue our all-of-the-above energy strategy as, for example, our loan program, among other things, reflects. Continue to take our leadership in physical sciences in enabling activity very, very seriously. Focused on the stockpile, the deterrent, reduce the nuclear danger. Address the legal and moral imperative of cleaning up legacy waste. Continuing to work on strengthening our programs through enterprise-wide management by bringing complementary skills and needs to the table as we execute those. And finally, as I said, continuing our focus on management and performance, and in particular getting our new project management system exercised.
So, with that, that’s hopefully a good overview of our budget. And I think we’re open for some Q&A. And I will call on many of my colleagues here to answer some of those questions.