Attached is the financial disclosure on all federal funding Dean Holder received since 1997. If you need further information, please don't hesitate to get in touch with me.

Sincerely,

Lin Jars

Linda N. Iams

Administrative Assistant

to Dean Holder

PANEL DISCUSSION

Chairman CALVERT. Thank you, Doctor.

USE OF METHANE IN FUEL CELLS

The first question I have before we get into climate change issues the testimony indicated that there is a 20 to 30 percent difference between traditional carbon sources and methane hydrates. If methane is used as a fuel source in a fuel cell, would that cut back carbon emissions even more since methane converts to hydrogen easier?

Mr. KRIPOWICZ. Yes, sir. Fuel cells are inherently-it depends on what you're using the methane for, but if you're using it for power generation, for example, then fuel cells are more efficient than existing power generation technology, typically, although you must realize that fuel cells aren't fully developed at this point.

IMPACT ON CO2 EMISSIONS

Chairman CALVERT. I guess the question would be-and anyone can get into this-if we used methane as a fuel source instead of, say, gasoline in a fuel cell, convert that to hydrogen, the conversion process to hydrogen, would we even lower the CO2 emissions using methane versus some other type of gas? Dr. Dillon

Mr. KRIPOWICZ. As far as I know, it's more efficient to convert methane to hydrogen than it is to convert gasoline to hydrogen, so you would end up with less CO2 emissions, yes.

Dr. HOLDER. I think that's correct. Fuel cells tend to the advantage of fuel cells is they use less fuel to produce the same energy. So, there is lower emissions because of their use.

Chairman CALVERT. Would it be even lower than the 20 and 30 percent that was indicated?

Dr. HOLDER. Yes, yes. If you're thinking about using an alternative fossil fuel for the fuel cells, then you would produce a certain amount of CO2, which would still be less than conventional usage of that same fossil fuel. So, if you then substitute from methane from hydrates, you would get another reduction of 20 percent. So, those effects would be multiplied.

Chairman CALVERT. So, it would almost be in half.

Dr. HOLDER. I would guess that would be approximately correct. Chairman CALVERT. Dr. Dillon, would you like to add to that? Dr. DILLON. Not really; I'm not an expert on fuel cells. But one point that might be made is that if we do move to a future hydrogen economy, methane is by far the most effective material to extract the hydrogen from. It's much more energy efficient to remove hydrogen from methane than from water, for example.

DOES DOE NEED LEGISLATIVE AUTHORITY TO CONDUCT METHANE

HYDRATES R&D?

Chairman CALVERT. Thank you. Mr. Kripowicz, the DOE Methane Hydrates Program plan that we've let me go back to another question you described a 10-year program in methane hydrate research conducted by DOE from 1982 to 1992. The program was conducted by your office without benefit of an authorization, a bill

such as the one that's before us today. What authority would you be given under this bill that you don't already have now?

Mr. KRIPOWICZ. I think we had this conversation before, Mr. Chairman. I think we have the generic authority to carry out research and development programs under the Organizational Act and the Federal Nonnuclear Energy R&D Act. This would have, as I understand it, specific authorizations which are not included in any of the generic legislation and are expected by the Congress in order to have appropriations on this, and we know that that doesn't always occur. So, it has that authority which we don't have right now. Plus, it shows Congressional support for the program which we think is very important.

Chairman CALVERT. I think I can talk for everybody up here that we tend to like authorizations.

Mr. KRIPOWICZ. Well, we certainly like this one, Mr. Chairman. [Laughter.]

PEER REVIEW OF METHANE HYDRATES PROGRAM GRANTS

Chairman CALVERT. Okay. The DOE Methane Hydrates Program announced in April, 1998 as a provision for a peer review by the National Research Council Board on Energy and Environmental Systems. Does this mean that all program grants will be peer reviewed before they're issued?

Mr. KRIPOWICZ. The peer review, Mr. Chairman, by the National Research Council is a biannual review of the overall program and its implementation, and it's not meant to be a review of the individual contracts. Our program will set up, though, that we will have a merit review of all projects on which we go out on a multiple basis, for example, to universities or to the national laboratories or to other industrial organizations. We will have a merit review which is equivalent to a peer review on those items but not by the National Research Council.

PROGRAM MANAGEMENT

Chairman CALVERT. Thank you. Mr. Costello.

Mr. COSTELLO. Mr. Kripowicz, I understand from the plan that has been developed for this project that various Federal agencies as well as other organizations will-industry groups will come together on this project, and I'm wondering from a management standpoint how DOE intends to manage all of the federal agencies that will be involved, and all of the industry groups that will be providing the technical assistance.

Mr. KRIPOWICZ. Mr. Costello, we intend to set up a management steering committee made up of the headed by the Department of Fossil Energy organization, which will include our science organization as well as representation from the Geological Survey, the Minerals Management Service, the Naval Research Lab, the National Science Foundation, the Ocean Drilling Program, and outside groups, such as the Gas Research Institute, the American Petroleum Institute, and the National Gas Supply Association. And they will determine generically the categories of research that should be done based on multi-year program plans which are currently being developed by the Department of Energy in consultation with this group.

Mr. COSTELLO. And the project manager will have the authority to run the project with advice from

Mr. KRIPOWICZ. That's the correct, and the Department of Energy-Fossil Energy will act the overall project manager for the program.

FOREIGN HYDRATES RESEARCH

Mr. COSTELLO. Very good. Dr. Holder, are you aware of academic and industrial research that is being done on this subject in other countries, and, if so, can you tell us how their investment in research has paid off in comparison to what we are beginning to do in this country and the investment that we are about to make with the authorization of this legislation?

Dr. HOLDER. There has been investment, and Japan has made the biggest investment, and their technology is just coming online now; it's not-I would not say that the Japanese are ahead of what's going on in the United States, because most of the hydrate research that has been done in the last 25 years has been done in the United States. But the Japanese are the first to actually lay out a federal plan for recovery of methane from hydrates under the ocean, and they've begun that plan, and it was a 5-year plan, and I know that they were actually involved with some of the researchers here in the United States to help them develop that program. I know that Brazil is the-I was a consultant for Petrobras, and I know that they've been very concerned with hydrates and have been interested in the possible recovery of methane from hydrates in their organization for a period of time, but it has not been a highly developed program either. So, I would say that we're on par with what's going on in other countries.

The only example we know of gas from hydrates that has been produced was a situation which was almost accidentally produced in the Soviet Union. Some of the scientists there have reported on numerous occasions the production of large quantities of gas from gas hydrates from Siberian gas fields, and that's the only example that we know, but that technology I don't think has been fully developed nor do they have the ability to take advantage of what they know right now, I think, in the Soviet Union.

RESULTS FROM $10 MILLION AUTHORIZATION

Mr. COSTELLO. You stated in your testimony that you have been a long advocate of the Federal Government spending $100 million

Dr. HOLDER. Or more.

Mr. COSTELLO [continuing]. Or more on this research. As you know, with this authorization, in the outyears, we are talking about authorizing $10 million. Can you comment on-you know, do you believe that the $10 million authorization-what will that get us?

Dr. HOLDER. Well, the reason I have put a higher number on this is largely because I think some of the research that needs to be done is quite expensive. If you want to take a well and produce gas in a well, you have to-what is the cost of putting up a single well, and it's exploratory, so you're going to have to use it as a learning curve, and so that's why I put the higher number on it.