President's Proposed FY 2027 Budget Request for Department of Energy

Good morning. The committee will come to order. We'll hear from Secretary Chris Wright today as we discuss fiscal year twenty twenty-seven budget for the US Department of Energy. So welcome, Mister Secretary. There are few policy areas where reality asserts itself faster than it does in the field of energy. You can dress it up with slogans, you can paper over it with subsidies. But sooner or later, when demand rises, the system will ask whether supply can answer the call of demand. During the Biden administration, the energy policy shifted away from reliability and toward favored sources, toward favored outcomes and long, brittle supply chains that begin overseas. They assumed that the system would hold together anyway. And it didn't. In the final months of the Biden administration, nearly ninety billion dollars in loans, that's billion with a B, were pushed out the door in just a matter of a few weeks, along with a significant volume of grant funding. In one of its final actions, the department earmarked billions of dollars in green energy loans to utility companies based in then Secretary of Energy Jennifer Granholm's home state of Michigan, uh, despite warnings from the department's very own Inspector General, who had called for the program to be paused over conflict of interest concerns. That, uh, Mister Secretary, was the status of the department that you inherited, and I applaud your decision to review those projects. Under your leadership, the U. S. Department of Energy has made significant progress in getting our country back in the right direction when it comes to energy, tightening oversight, refocusing on research and development, prioritizing energy sources that can deliver energy reliably, predictably, immediately when demand is high, and not just when conditions are most favorable. That shift is welcome, and it was very necessary. The recent winter storm gave us a reminder of what's at stake. Because when demand spikes, there's no margin for error. Either the system performs, and it provides the energy at the moment it's needed, to the degree that it's needed, or it does not. I'm looking forward to hearing from you today on what has worked on, on, uh, and on what doesn't work. Um, and also on what changes are necessary before the next big test arrives, because we never know when that next big test might occur. But there will be a next test and another one after that, and an endless succession of other tests following that. The coming dem- demand, uh, that people often speak of, has in fact arrived, and it won't wait for us to get comfortable. Data centers, advanced manufacturing, and the push for electrification are all factors that are driving demand even higher. If we're serious about competing in the global AI arms race and other energy-intensive endeavors, we're gonna need a lot more dependable power, not intermittently, not when conditions are ideal or when they happen to cooperate, but when it's actually needed, at the moment it's needed. That brings me to the Energy Dominance Financing Authority, authorized in the Working Family Tax Cuts Act Republicans passed last year. The program enables the Department of Energy to finance projects that restart idled infrastructure, increase output at existing facilities, and build new sources of base load dispatchable power. It can support upgrading plants so that they produce more power, replacing retired infrastructure with new capacity, strengthening transmission so electricity can actually move from where it's generated to where it's needed in the moment. I want to learn more about your vision for this program and about how you intend to keep it focused on projects that strengthen the grid rather than repeating uh, the same old, tired, uh, rushed, last-minute decisions that have undermined confidence in the past and have led to grid unreliability. Secretary Wright, the - the task before us is demanding, to put it mildly. The United States needs an energy grid and an entire system that can meet rising demand uh, without dependence on others to fill in the gaps. I have utmost confidence in you and your ability to get the job done, and I look forward to your testimony. So again, um, uh, thank you again for, uh, being here, Mister Secretary, and I'd like to recognize my, uh, um, uh, friend and colleague, the, uh, ranking Democrat on the committee, Senator Heinrich, for his opening statement.

Thank you, Chairman Lee. Uh, welcome, Secretary Wright. Over the past year, I have grown increasingly disappointed with the Department of Energy's actions under your leadership. When you came before this committee almost a year ago, I asked you if it was the case that political appointees were on review boards for the cancellation of three point seven billion dollars in awards. You responded, " Well, it's absolutely the case." Those are your words. Since then, it has become abundantly clear that politics are indeed calling the shots in your department of energy. Last October, DOE unlawfully canceled eight billion dollars in federal investments, in two hundred and twenty-three energy projects, almost entirely in states with democratic leadership. DOE then confirmed in federal court that the cancellations were based on whether a project was in a blue state. Satisfying a president's desire for political revenge or intimidation is not a lawful basis for terminating projects that were on track to help reduce soaring electricity prices. And a federal judge has already said as much, ruling that these cancellations were unlawful and that they violated the Fifth Amendment. These cancellations on a political basis are a blatant betrayal of the communities the workers and the businesses who are counting on those investments to lower their energy costs. And now it is those communities, workers and businesses who will pay the price regardless of their particular politics. Unfortunately, this budget reflects the same lack of concern for the real costs, facing hard-working families trying to keep the lights on and their vehicles on the road. For example, this budget eliminates the weatherization assistance program. which saves households on average three hundred and seventy-two dollars every year. It also rescinds fifteen point two billion dollars of infrastructure bill funding, congressionally directed funds that are ready to go out the door to support grid reliability and help reduce electricity prices. It cuts the Office of Science by fifteen percent and it cuts ARPA-E by forty-three percent, undermining the very innovation pipeline. that makes the United States of America so competitive. And it eliminates the wind and solar offices entirely while cutting the critical minerals and energy innovation office by sixty-four percent. As elec- electricity demand grows, we will not be able to meet the energy needs of new data centers and keep household bills stable if you restrict the growth of the sources of energy that are the cheapest and the fastest to build. This administration is also hurting families by holding back billions of congressionally appropriated funds that would help people save on their electricity bills. Congress appropriated eight point eight billion dollars for home energy rebates to help families lower their utility bills through more efficient appliances, and home upgrades. While twelve states have launched programs and are delivering real savings to their residents, The Department of Energy has stalled implementation for the remaining states, including those with approved applications, for over a year and a half. That's obstruction. And while these cost-saving programs are being obstructed, the department is taking actions that actively raise prices. Under your leadership, DOE has abused emergency authority under section two O two C of the Federal Power Act, to keep uneconomic fossil fuel plants on-line past their retirement dates. Half of these are not even generating electricity. And according to a recent report, keeping these plants open has cost Americans two hundred and seventy-five million dollars and counting. That is not reliability. That is waste. And your department's insistence on propping up coal plants doesn't end there. You also willful are willfully defying congressional direction by redirecting funds for carbon capture towards subsidizing coal plants raising serious concerns that the department may be violating the law. Secretary Wright, if you want to change the law, run for Congress. Until then, you have no right to ignore the direction of Congress. It is your responsibility to execute the law, and right now you are not faithfully executing the law. My concerns come at a moment when DOE's mission is more critical than ever, not just here at home but abroad. From global energy markets affected by the war in Iran to inst- instability in Venezuela, the department's decisions have real consequences for energy prices and national security, which makes the pattern we've seen over the past year all the more troubling, because instead of lowering costs, strengthening our workforce, and investing in energy infrastructure, Too many of these decisions favor garnering cheap political points. Now, you and I may disagree on the path forward. I'm sure we will. But we ought to agree on this. Americans deserve lower energy costs. Americans deserve a department of energy that follows the law and executes the will of Congress. This budget and the actions that we've seen over the past year fall short of that standard.

Thank you, Senator Heinrich. Um, Secretary Wright, uh, will now turn to you for your opening statement. The written statement that you've submitted to the committee will also be made part of the record. You may proceed.

Chairman Lee, Ranking Member Heinrich, and members of the committee, thank you for the opportunity to testify today on the President's fiscal year twenty twenty-seven budget for the Department of Energy. Under President Trump's leadership, we have put the department back on mission, delivering reliable, affordable, and secure energy for the American people. Let me highlight what that looks like. We have taken st- decisive steps to restore grid reliability. Using emergency authorities under section two O two C of the Federal Power Act, we kept critical base load generation online after DOE analysis warned outage risk could increase up to one hundred fold by twenty-thirty, due to supply shortfalls. This action, and the market response to our action, preserved seventeen gigawatts of critical dispatchable generation for the American people. Hundreds of American lives were saved by these actions during winter storm Fern. Historic cold drove record heating and electricity demand. Dispatchable energy, natural gas, coal, hydro and nuclear were the MVPs of the grid. In New England, at peak demand, hydrocarbons, hydro, and nuclear provided ninety-five percent of power. Wind, solar, and batteries combined provided two percent, less than burning wood and trash. The lesson? When reliability is on the line, dispatchable energy shows up. We have worked to establish American energy leadership globally. Since President Trump ended the previous administration's reckless LNG export approval ban, the department has approved more than nineteen BCF a day of new export authorizations which is more than America's entire capacity on inauguration day last January. The United States is the global leader in LNG exports and will become even more dominant under President Trump's leadership. This is a win for America, a win for our allies, a win for global energy security, and a blow to our adversaries. We are advancing national security at home and abroad. From day one, President Trump has focused on delivering prosperity at home and peace abroad. Occasionally, power must be projected to create long-term peace. American national security is anchored by our nuclear deterrent. DOE's National Nuclear Security Administration is honored by this mission to ensure a safe, secure and effective deterrent against new and evolving threats. Today, NNSA is delivering more new weapons, seven warhead modernization programs, and plutonium pits than any time since the Cold War. We are driving a nuclear power renaissance. Our efforts span next-generation reactor pilot programs, re-establishing American nuclear enrichment capacity, and domestic nuclear fuel fabrication, reprocessing, and a pathway to spent fuel permanent storage. I am proud to share that we will have multiple advanced reactor prototypes critical by America's two hundred and fiftieth birthday. We are driving hard to meet President Trump's goal of quadrupling nuclear capacity to four hundred gigawatts by twenty fifty. This ensures nuclear energy will play a central role in powering America's re-industrialization and leadership in AI. Our budget request reaffirms our commitment to cleaning up nuclear waste and communities that carried the weight of America's earliest nuclear programs. We are bringing professional management and innovation to enhance clean-up efforts while seeking to redevelop cleaned-up sites like Portsmouth Paducah Hanford and others. We launched the Genesis mission to bring AI's immense promise to scientific and technological innovation. In our nation's history, we have we have seen two great scientific mobilizations. the World War Two Manhattan Project and the Apollo space program. The Genesis mission is the third. Genesis' mission is focused on the most difficult scientific challenges of our time, quantum computing, fusion energy, advanced materials development, and human health. We are partnering where industry alone cannot go, tackling long-term challenges that require national commitment. Bringing together our national laboratories, universities, and private industry, to accelerate scientific discovery. We are winning the AI race and lowering energy costs. By leveraging department-owned land and assets, we are enabling rapid deployment of large-scale compute capacity through public-private partnerships. We are working closely with industry and communities to ensure these projects adhere to the President's important ratepayers' protection pledge to rapidly expand our nation's electricity grid and end the Biden administration's ruinous rise in electricity prices. We are securing critical minerals. We have strategically reorganized the department, consolidating five offices into a single office of critical minerals and energy innovation. This creates one hub across DOE, the national labs and external partners to manage the full supply chain from mining and processing to magnets and batteries. We have committed one billion in existing funding to strengthen domestic supply chains, reduce reliance on foreign adversaries, and re-shore American manufacturing. We are restoring fiscal discipline. We inherited a department that prioritized political objectives over energy security. The restructured Office of Energy Dominance Finance Energy Dominance Financing is correcting that. We reviewed every loan commitment of taxpayer dollars, restructuring or eliminating over eighty billion in loans. more than eighty percent of the Biden era loan portfolio and are redirecting that capital toward projects that strengthen reliability and American energy production including an historic twenty six billion dollar loan to the southern company that will lower costs and expand grid capacity in multiple states finally we are preparing for the future America is open for business again and trillions of dollars are being invested in American infrastructure for manufacturing and AI data centers Meeting this moment requires abundant, reliable and secure energy, and that is exactly what this budget delivers. As Secretary of Energy, I'm honored to lead this effort for President Trump and to work with this committee to strengthen America's energy future.

Thank you, Mr. Secretary. We'll now proceed to five minute rounds of questions. Um, I will start, followed by Senator Heinrich, and then we'll go back and forth between Republicans and Democrats in order of seniority subject to the early bird rule. Uh, the Department of Energy's Office of Inspector General investigated the Biden administration's loan programs office, um, and some of the decisions that it made, particularly in that, in that, um, uh, last period between the November twenty twenty four election and, uh, uh, January twentieth, uh, two thousand twenty five. Um, and wha- while no formal ex- ethics charges were filed, the IG report that resulted from that inquiry uh does seem to substantiate that the prior director of the loan program office um violated standards of ethical conduct by giving preferential treatment to a friendly c- company um while also misusing his position in order to create the appearance of government sanction uh of uh or endorsement of a of a clean energy group. Allegations are especially concerning, uh, as especially when you consider this this point that we've mentioned before, that the Biden Department of Energy issued nearly ninety billion dollars in loan guarantees just between election day in twenty twenty four and inauguration day in twenty twenty five. So wha- what steps in the energy, uh, i- i- within your department is the, uh, the the Energy Dominance Financing Office taking in order to solicit loan guarantee applications without breaching these standards.

So frankly, that track record you just laid out and digging into the details of those was quite alarming, very alarming, to obligate ninety billion dollars in sort of a rushed, haphazard way. Let me, let me point out one other thing, too. We have an excellent team at the Energy Dyna- Dominance Financing office right now, true professionals that have that have spent their careers lending money in a thoughtful, sober way so they can return money, uh, get the money returned and have advi- businesses advance. In all of the loans done in the four years of the Biden administration, we have yet to find one reference in loan documents, loan justifications about the cost of energy.

Hmm.

None, none of the money was lent to reduce the price of energy for American consumers, which pretty shocking for us as the United States Department of Energy. Um, we have of course flipped that.

It's part of your mission, isn't it?

It's part of our mission. It, to me it's, it's part of the central mission of energy infrastructure, is to make people's lives better by giving them affordable, reliable energy so they can afford to pay their bills. And so businesses can locate in your state, in your country, and bring jobs and opportunities to the citizens there. So all of our loans are focused number one on will this deployment of capital lower the cost of energy and increase the available energy, eh, energy available for American citizens and businesses. So, it's quite a different shop today.

Thank you. Um, let's talk about, uh, section two O two C, emergency orders. Um, the, y- your department has issued a number of them in this, this past winter, keeping critical gas and coal generation on-line at moments when demand is peaking. Can you talk to us a little bit about this authority and about, um, how important it is for maintaining reliability, um, uh, uh, especially when reliable coal, gas, and nuclear units have been forced off-line due to environmental regulations, and a number of other policies that are favoring intermittent, um, uh, electric power generation rather than base load firm power.

Yeah, the previous administration, and we and we've talked about it, spent enormous amount of resources for energy s- electricity sources that work some of the time but you're not sure when. But what we heard less about was they spent massive efforts to force the closure of reliable dispatchable energy sources. Both legs of that stool is why electricity prices rose almost thirty percent under the Biden administration with no increase in electric production capacity. So one of the first things we did was study the electric grid and say, what's going to happen if we continue this trajectory going forward? There was a plan for another hundred gigawatts of of of dispatchable, meaning it's there when you need it capacity to be closed in the subsequent five years, and a plan to build only twenty-two billion twenty-two gigawatts of replacement, so a net reduction of seventy-eight gigawatts, as artificial intelligence is arriving and reshoring the manufacturing. This this analysis we did showed blackouts would be one hundred times more likely five years from now, five, well, five years from last year, four years from now than they were at that time. We've already seen after a hundred years of the American electricity grid getting cheaper on a on an inflation-adjusted basis and more reliable, we've seen a reversal of these critical trends. Uh, the, not just us, the National Energy Reliability Council described the American electric gr- grid when we took off office as a five alarm fire. We have

Not so not just one hundred percent more likely, but one hundred times, meaning one thousand percent more likely.

One hundred times. Meaning ten thousand times more likely.

Yeah. Yeah. Thank you. Senator Heinrich.

Um, Secretary Wright, on uh television earlier this week, you said that gas prices may not fall below three dollars a gallon until twenty twenty seven. Uh, do you stand by that today?

I don't know the future of energy prices. Uh, s- often I will speculate or or look at those things. I would say gasoline prices peaked looks like they peaked about a week or so ago, a dollar a gallon cheaper than they peaked during the Biden administration, yet we're in the midst of ending a forty-seven year conflict in the Middle East, a major energy-producing region.

It is over four dollars a gallon. Is that uh a reasonable, do you think that's a a good price for people to pay at the pump?

Well, in contrast to the last administration, our goal is as low of possible of energy prices. And yes, we were proud to have gasoline prices below two dollars a gallon, uh, earlier this year,

What are they?

and we look forward to getting them back there.

What are they right now?

But just over four dollars.

And, uh, what is diesel?

Diesel's, uh, over five dollars.

Yeah, it's, it's closer to six in, in my state. Um.

It's over eight in California.

You've used emergency authority to keep thermal coal plants on-line. And in cases like Washington, Indiana, Colorado, um, those thermal coal, um, plants are sitting idle. However, those utilities have already purchased replacement generation. So, when they're ordered to stay on-line, effectively, customers are charged for the cost of maintaining those thermal coal facilities, plus they're charged for the price of replacement generation because those utilities had to come up with replacement generation before they decided to retire those facilities um is it appropriate to pass those costs on to consumers shouldn't the department of energy be uh uh responsible for those costs forty two million dollars in the case of the michigan plant

it's hard to overstate the cost to to health and businesses and consumers of blackouts. You mentioned the Michigan plant, the first one we issued a

The the state of Michigan and the utility in that case completely disagree with your conclusion that they were at risk.

Days later, days later, after we kept the Campbell coal p- power plant running, it was running at maximum capacity and they were at the edge of a blackout. Northern Miso is one of the most at-risk regions there is. That plant has run over that entire summer above average for all assets on the grid.

What about the Colorado plant?

It was critical to their grid.

How often has the Colorado plant run?

The Colorado plant is in western Colorado, and it's in a region that suffers with with transmission bottlenecks. If that plant is not there, if a peak demand event comes to that region, they're at high risk of blackout.

It's it it's f-

We want the lights to stay on and heats to work.

I I want the lights. Reliability is not negotiable. However, um, i've had uh co-ops come and complain about those costs being passed on to them when you know when the replacement generation has already been purchased so my concern is if you're going to uh declare an emergency should you be able to pass those costs on to the customer

we the benefits go on to the customers as well let let me explain one other point We've used two O two Cs for a certain number of gigawatts of coal. A much larger increment of coal slated coal closures were not closed because the utilities and everyone got the message, oh, you're gonna have our back. Because state and other politicians were forcing us to close assets we don't wanna close. You're gonna cover us. We're not gonna close them then.

Well, I I don't think it was politicians that decided to close the plant in Colorado. I think it was the the utility. Um, the Department of Energy appears to have also repurposed funds that Congress appropriated specifically for carbon capture, uh, also to subsidized coal-fired power plants. Um, what statutory authority allows you to move those dollars? I couldn't find anything in the statute that allowed those to be reallocated. What do you, what's the authority you're using to reallocate those funds?

So, we, we have continued to look at proposals.

But there But if you, if you wanna spend those funds on keeping those plants open, you need funds that are authorized to keep those plants open, which does not exist. So you're you're changing the authority

Mm. They're funds that are dedicated to enhancing the operations of coal plants, and we're deploying them to enhance the operation of coal plants.

I think you're on very thin legal ice. Senator Hoven.

Thank you, Mr. Chair. Secretary, thanks for being here and appreciate your service very much. Uh, the uh, the shale play has helped take this country from uh domestic production of oil from about five million barrels a day to about almost fourteen millil- million barrels a day. We all know how important that is. Uh, when I started as governor in two thousand, uh, we started a real push to crack the code on the Bakken shale play, to produce oil from the Bakken shale. You, of course, were one of the pioneers there, and you and others made it happen. And, uh, you know, we see that result. And so again, uh, energy security is national security, and we wanna continue to produce more energy here at home, from all sources, oil, gas, coal, uh, renewables, everything, right? Nuclear, it's just in the interest of our country, both from a security standpoint and, uh, from an economic standpoint. Um, now we find ourselves in a situation where we need to do it again. Uh, what we're seeing is that without enhanced oil recovery in the shale plays, we're starting to decline. We dri- for example, in North Dakota, we drove our production up from less than a hundred thousand barrel a day, up to one point five million barrels a day. I mean, that rivals some of the OPEC countries, OK? Just North Dakota. But now we're sliding back. We're down to about one point one million barrels a day. And we need to use enhanced oil recovery, cuz we're only getting about ten percent out of that shale rock, only about ten percent of all that's in place, billions of barrels there. And we can do it with enhanced oil recovery. So we're embarked on that, and one of the key ways we can do it helps with the very issue that you and the ranking member just got done talking about, dispatchable coal-fired electricity. We take the CO two off the coal plants, extending the life of those coal plants, we put it down whole for EOR, and we double our production. North Dakota, we've produced about six billion barrels. We can easily produce another six billion and more. That would still only be less than twenty-five percent of the oil out of the rock. So we've gotta crack the code two point O. That is the major initiative in our state right now. That is the major initiative that I am determined to drive in our state. If it works in North Dakota, it's gonna work on the Eagle Ford and the Permian, places like Tex- uh, Texas, oh, and New Mexico, and in places like the Marcellus Shale, Pennsylvania, and Ohio. We need to do that. We have a huge demonstration project showing we can do this at scale. So we've got these small projects we've shown we can do it. But we've got a large demonstration project now in North Dakota. got about five co- uh, companies participating. We have the state of North Dakota participating, and we have you at DOE participating. And we're gonna show we can do it at scale. We're using rich gas, migrating to CO two, and uh, again, then using the forty-five Q tax cut, now there's wanna be doing this with our coal-fired electric plants and our oil and gas companies. And this can take us to the whole next level. And you are a key player right in the middle of it. You've been out there to our Energy Environmental Research Center. You've seen it. You're helping us drive this. We've worked through the project, um, as of - I'm also on the energy - uh, the, uh, Energy and Water Appropriations Committee as well as this authorizing committee. Uh, notified by OMB, they've signed off, and it's been sent over - sent up to Congress now for the thirty day congressional notification. Uh, that happened on April second. So we're looking as of May two, we should be able to jump on this thing and go forward and make it happen. I want you to talk about that. for a minute or two. Uh, I think this is a huge, huge thing, not just for our state but for the country, and you are a key player in making it happen.

Senator, I agree very much with your comment. You put it as as you do with heart and passion in the context centered in North Dakota. But you're right, it's not only gigantic for North Dakota, it's gigantic for the United States of America. The shale revolution transformed the energy situation of our country in both oil and natural gas. and natural gas liquids. Um, we need that next generation shale revolution to increase recovery. As you call it, Bakken two point O. I love the name. I think it's spot on. I started my career working in oil and gas production in California, in the eighties, in fields that started producing in the nineteen tens. And they were continually reinvented with different technologies. Yes, California used to be our largest oil producer. Forty percent of American oil at one point came from California. Today it's only two percent. They've gone the wrong direction. Uh, North Dakota and New Mexico have gone the right direction with new, new energy technology, shale production changing the game. But you're right, we need a shale two point O. We need to figure out enhanced recovery to increase that recovery out of shales and tight rocks. Uh, we're starting that in the Bakken shale right there. And you make another great point to close the discussion I had briefly with Senator Heinrich. If we can figure out CO two as a major player in enhanced oil recovery, we we add an it closes the loop economically on carbon capture from coal plants, that now they become viable so the p- the plant can continue to run in the long run, both generating a reduced amount of electricity because of the energy to capture the CO two, but that captured CO two adds lots of economic value and everybody wins.

Right on, and and I'm I'm the kind of person that likes to, that never says, whoa, in a horse race. And New Mexico is edged a little bit ahead of North Dakota in daily uh barrels of oil production and and we've gotta reclaim that lead I know Texas is out pretty far ahead probably not gonna catch them but we are hot behind New Mexico. So if you know anybody from New Mexico let them know that we're looking to overtake them again. Thank you, Mister Secretary, for your uh very important efforts.

Thank you, Senator.

Senator Wyden.

Thank you, Mr. Chairman. Mr. Wright, last year, when you asked in the same chair, when I asked you about how you would deal with energy demand, you said repeatedly, it's about people and math. Now a few months later, you and the president threw most of the clean energy tax credits in the garbage can and took a wrecking ball to solar and wind energy projects. So here's my question. When energy demand is up,

Right.

supply is tight, Told you we're going down. manufacturing is down, We're going down. We're going down. and utility costs are going through the roof, why would you continue this ideological crusade against clean energy that clearly is not working?

So, Senator, thanks for reminding me of my words last year that energy is about humans and math. And that that's exactly why the admini- the the Republicans in this administration has followed those policies. Because if you look at the twenty-eight states across the country that have renewable portfolio standards, which means mandates for a certain amount of wind and solar, and mandates to close reliable capacity, those states on average have fifty percent higher electricity prices than the other twenty-two states that haven't followed those policies. There is a role for wind and solar. There is a role. But when it's mandated, forced, and subsidized, you c-

Well, what - what - what would - what would you do to have a role for wind and solar today? I mean, you're saying there's a role. Why not? We had a role with clean energy tax credits, and the private sector loved the fact that they were technologically neutral. They were voluntary. There were no mandates. And you all pulled that up by the roots over the opposition of people in natural gas of all industries who said, look, we love gas but we also need renewable clean energy, and you pulled it up. So why don't you do something now?

The subsidies, the production tax credit, for example, for wind power pays from the federal government four cents per kilowatt hour of production that comes from a wind turbine. What happens when the wind blows right now? the the wind picks up, there's more wind power, we turn down natural gas plants, which are the the firming agent in the grid almost everywhere else, and we save two cents in reduced natural gas price. We pay a four cent subsidy and save two cents. And then we have uh the the utility pays its compensation to the wind power.

I'm I'm gonna move,

Those subsidies have distorted our electricity market.

I'm gonna move on, but but what you are describing is fiction. The natural g- the natural gas industry

It's fact.

said publicly in big speeches they wanted clean energy because of demand and AI, and you turned them down. My second question is this. It deals with wildfire and grin grid resilience. My home state is looking right now at one of the toughest white fire seasons in modern history. It's documented that outdated power infrastructure is a major factor in these wildfires. I think we would agree with that.

Yes.

I wrote the disaster safe power grid law in twenty twenty one to maintain and improve existing power lines and lower wildfire risk it passed into law with the bipartisan infrastructure bill but over the last year and this is where i'm just baffled by what you're doing you all held up on funding for many of those projects you kept it locked in a government bank account instead of distributing it to communities that are working hard to deal with this record what looks like a record fire season Will you let those uh go and uh and actually let us help our communities?

Yeah, absolutely. We've worked hard to evaluate all of the projects that are in the in grid resilience, grid improvement, grid expansion, we've gone forward with lots of them, we've modified other ones, we're we we share your passion and your interest to make our grid more resilient.

Well, when when can when can I have a list of the projects you will let go in the next few weeks because this is urgent business can you give me a list within two weeks

I believe we released a list, uh, ten days ago or whatever, of all those projects, but we will get you all of the ones specific to the Northwest delivered to your office in the very near term.

Two, next two weeks.

Yeah, absolutely.

All right. Thank you, Mr. Chairman.

Thank you, Senator.

Senator Barrasso.

Uh, thanks so much, Mr. Chairman. Great to see you again. Mr. Secretary, I'm so grateful you visited Wyoming. You're always welcome there. We love when you come. Uh, you know about our abundant energy resources, our skilled workers. We are America's energy breadbasket. Uh, our energy resources are essential to unlocking American energy security, ingenuity, affordability, and I did want to ask about the Department of Energy's efforts to unleash American coal production. Can you talk a little bit about about that and what

Yes, you you bet. Like, coal, mo- most of my life people love to hate coal, and as a person who, as Senator Wyden just pointed out, who believes that energy is about people and math, I look at where the world gets energy, how that changes, Coal has been the largest source of global electricity since the data began. We have pretty good data starting in the year nineteen hundred. Coal is a hundred and twenty five and zero in how many years they have led the world in electricity production. I'm pretty confident coal will lead the world in global electricity production when I die so coal is critically important to the world in the United States, for most all of America. history, it was the largest source of electricity generation in the United States. Um, it has been attacked by politics, by government, by regulations. Some of them towards clean air, I can support those, most of them were really just trying to strangle an industry coal. I will point out in this cold storm fern that we had in the east, the two things that kept the lights on and kept people alive were natural gas and coal. Nuclear played a central role. It was Unimpacted by the weather where wind and solar went on vacation, nuclear was rock steady, but coal electric production rose twenty-five percent during that storm versus the same week a year ago. And natural gas rose also. That's why we kept people alive. If we had closed those coal plants later to close, people would have died. We pushed the grid to the edge. Coal kept things alive and around. So of course we're looking at uh projects where there's existing coal infrastructure that wanna make some upgrades. We're getting co-funding with the partners where they're funding the larger chunk of the money and we're matching their money to extend the life of these coal plants. If we don't extend the life of these coal plants, we will continue to have ruinous rises in our electricity prices. We will not be able to meet the challenge of re-shore manufacturing and AI. Coal is central, central to global energy and critical to American energy.

Could I ask you also then about what we're doing to expand rare earth mining in the United States?

Yes, it was one of the reasons I was in your great state of Wyoming, that that among these coal seams are significant deposits of rare earth elements. Um, and of course you have to have both the elements in place and you have to have a state where you have an an environment where you can permit things and move forward. And of course Wyoming checks those boxes as a great state to do business in where you can deploy funds and energy. We have through our critical minerals and energy innovation office, a number of partnership progress. The Department of War has a lot of projects. In fact, we have a whole of g- administration effort trying to figure out how we can quickly stand up a supply chain in our country of mining a number of which will be done in your state of Wyoming processing of those manufacturing of magnets. China has just had a stranglehold over the United States in this, in this area. Everything with a button on it. every device with a button on it has rare earth elements inside it. We get almost all of those from China. Even the little bit we mine in California, we were sending to China to process. We need to reverse and we need to change that, and we are hard at work at that task.

Uh, you you mentioned the word " permitting" and this committee has been working on that. We had previously, we have a uh a chairman and ranking member committed uh to that. I think it would be a big win for everyone. A key goal for me is eliminating administrative barriers unleashing our energy production, I I think it has to provide certainty for people that apply for permits in order to really spur the domestic energy development we need. How do you view as a, what do you view as a top priority in permitting reform?

We've gotta make it easier to build things in America, build big things in America. And my choice is businesses should choose what they want to build. I don't believe that's the government's choice, but we need to make it easier for businesses to get permits to build big things in America. Certainly one of the things that's hurt our energy system the most recently has been the inability to build interstate natural gas pipelines. These are four O one water permits. The six states of New England pay wildly higher heating and electricity prices than they should, because one state, the state of New York, decided not to give this water permit to two critical pipelines eight years ago. I believe we will get those two pipelines under construction and hopefully completed in this administration. You need permitting a short, a a reasonable window of what time to get a permit, and then you need certainty when you get permits. We need bipartisan, we need Republicans and Democrats to come together to make it happen.

Thank you.

It's critical for our country.

Appreciate it, Mr. Secretary. Thanks, Mr. Chairman. Thank you, Senator Barrasso. Senator King.

Thank you, Mr. Chairman, uh, to follow up on the on, uh, Senator Barrasso's questions, um, uh, you feel that certainty is important in permitting and, uh, That's a that's an important quality, we need to be able to move permitting faster, that's correct, isn't it?

Yes.

How do you feel about uh offshore wind projects being cancelled that were fully permitted, fully financed and under construction? What does that say about certainty for investment?

So there's, I'll come back to that, there's some complexities to that issue, Senator, both with national uh sure con surety security concerns, drones that we learned more recently on the wars.

Isn't that a risk of the developer?

It's it's a risk I think we need to manage with the developer, just to just to make sure we're not introducing a critical vulnerability of our East Coast population but to your to your broader point, y- yes, Senator, I believe that we need the parties to come together, we need a robust dialogue about that, and we need to deliver more certainty.

And if and and if you as a former developer the idea of getting all your permits going process getting your financing being under construction and then suddenly having the government say you can't do this you wouldn't like that very much if you were in that position is that correct that's correct ok um you've spent a lot of time this morning disparaging wind and solar and interruptible power the market doesn't seem to agree with you uh this year according to the energy information administration uh we're talking about increases in capacity, electrical capacity predictions, fifty one percent wind, twenty eight percent battery storage, uh, I'm sorry, fifty one percent solar, twenty eight, uh, percent battery storage, eleven, uh, eleven percent wind, natural gas, six. In other words, the market is saying solar, wind, and storage are where the action is. And I would commend to you an article in Forbes on February twenty sixth, talking about Texas, no subsidies pure economics and uh they've gone from uh let's see solar two percent in twenty twenty to fourteen percent in twenty twenty five storage has doubled in the last year and a half that's the market telling us these technologies work and our our economic uh there are no we are not talking about uh texas as being a a blue state and lots of uh climate concerns this is pure economics