Hearings and Business Meetings

SD-366 Energy Committee Hearing Room 02:30 PM

Mr. Douglas Faulkner

Acting Assistant Secretary , Department of Energy

Statement of Douglas L. Faulkner
Acting Assistant Secretary for Energy Efficiency and Renewable Energy
U.S. Department of Energy
Committee on Energy and Natural Resources
United States Senate

October 20, 2005

Mr. Chairman and Members of the Committee, I appreciate the opportunity to testify
today on S. 1016, requiring the Secretary of Energy to make incentive payments to the
owners of qualified desalination facilities to partially offset the cost of electrical energy
required to operate facilities, and S. 1860, which would amend the Energy Policy Act of
2005 to improve energy production and reduce energy demand through improved use of
reclaimed waters and other purposes.

Although supplying and distributing water is largely a local responsibility, we believe
there is a Federal role in providing appropriate scientific and technological support for
these efforts. S. 1016, however, poses a narrower question: Should the Department of
Energy subsidize electricity costs at desalination facilities? We believe the answer is no.
While well intended, S. 1016 is not a comprehensive approach to the challenge we face.
It would subsidize a narrow group of electricity users engaged in water desalination
efforts, and could divert limited Federal funding from efforts to engage in a more
comprehensive approach.

It is our view that incentive payments are not the best means to remove the energy cost
barriers to desalinating water. Instead, we feel continued targeted Federal support for
desalination research and development consistent with the Administration’s Research and
Development Investment Criteria, as well as our ongoing efforts to reduce energy
demand and increase supply through the adoption of comprehensive energy legislation,
will have a larger impact in the long-run on reducing desalination costs than will making
incentive payments to the owners or operators of individual facilities.

 

The Department of Energy finds S. 1860 to be well intentioned as it shares our view that
we must develop innovative new approaches to dealing with the regional, national, and
global challenges related to water availability and quality. However, we have several
concerns regarding the specific language of this bill.

First, the bill appears to shift substantial statutory authority from the Secretary to the
designated National Labs and places the lead National Labs in inappropriate roles for
assessing Federal funding and activities across agencies. We are also concerned that the
bill appears to leave out the private sector and its key role in RD&D and
commercialization.

The bill places as much as two-thirds of the funding at the lead National Labs, largely
outside of any merit-based competitive process and it does so with little flexibility, not
recognizing that the allocation of funding will vary with the status of technology RD&D
and commercialization, and private sector roles. We believe that the funding levels, roles
and responsibilities for the Labs, Universities, and private sector should be determined by
the Secretary in order to meet the national needs identified by the legislation.

We share the view that we must develop innovative new approaches to dealing with the
regional, national, and global challenges related to water availability and quality, and this
is an issue that is commanding significant attention at the highest levels of the
Administration.

For example, in August 2004 the White House Office of Science and Technology Policy
(OSTP) and Office of Management and Budget (OMB) identified water as a top
Administration research and development priority and called upon the National Science
and Technology Council (NSTC) to “develop a coordinated, multi- year plan to improve
research to understand the processes that control water availability and quality, and to
collect and make available the data needed to ensure an adequate water supply for the
Nation’s future.” The NSTC Committee on Environment and Natural Resources has
formed a Subcommittee on Water Availability and Quality (SWAQ) comprised of more
than 15 Federal Departments and Agencies who are now in the process of developing a
comprehensive research plan. Their first report, “Science and Technology to Support
Fresh Water Availability in the United States,” was released in November, 2004. Among
the points highlighted by this report are the following:


· We do not have an adequate understanding of water availability at national,
regional, or local levels.


· Water, once considered a ubiquitous resource, is now scarce in some parts of the
country—and not jus t in the West as one might assume.


· The amounts of water needed to maintain our natural environmental resources are
not well known.


· We need to evaluate alternatives to use water more efficiently, including technologies for conservation and supply enhancement such as water reuse and recycling as a way to make more water available.


· We need improved tools to predict the future of our water resources to enable us
to better plan for the more efficient operation of our water infrastructure.


The Water Desalination Act of 1996 (Public Law 104-298) gave lead responsibility to the
Department of the Interior to conduct, encourage, and assist in the financing of research
to develop cost-effective and efficient means for converting saline water into potable
water suitable for beneficial uses. We are looking at ways to better coordinate our efforts
with those of the Department of the Interior and other agencies through the process
underway in the NTSC’s Subcommittee on Water Availability and Quality.

At the Department of Energy, we have been in serious discussions with some of our labs
on what we call the “energy-water nexus.” The relationship between energy and water is
not well understood by the public, and it is surprising to many, for instance, that the
amount of fresh water withdrawn nationally for electricity production is more than twice
as much as the water used for residential, commercial, and industrial purposes, and is
comparable to the amount of water used for agricultural irrigation. Meanwhile, pumping,
storing, and treating water consumes huge amounts of electricity—an estimated 7 percent
of California’s electricity consumption is used just to pump water.

We understand that our energy and water supplies are interconnected. In fact, as much
energy is used for water and wastewater purposes as for other major industrial sectors of
the U.S. economy such as paper and pulp and petroleum refining.

 

Although the hearing today focuses on producing drinkable water through a technological
process, the equally important aspect of the larger issue is finding ways to reduce water
consumption and remove some of the demand pressure from regional water supplies.
Price and regulatory signals can create market incentives to reduce water use. One area
for consideration is the water intensive process of thermoelectric generation from fossil
fuels such as coal. For these systems, an average of 25 gallons of water is withdrawn to
produce a kilowatt hour (kWh) of electricity of which nearly one-half gallon is consumed
by evaporation. Overall, fossil- fuel- fired power plants require withdrawals of more than
97 billion gallons of fresh water each day.

The Department’s Office of Fossil Energy is supporting several research projects aimed
at reducing the amount of fresh water needed by power plants and to minimize potential
impacts of plant operations on water quality. One project at West Virginia University is
assessing the feasibility of using underground coal mine water as a source of cooling
water for power plants. A North Dakota project is attempting to reduce the water
consumption of power plants by recovering a large fraction of the water present in the
plant flue gas. A project in New Mexico is exploring whether produced waters, the byproduct of natural gas and oil extraction which often present a disposal issue, can be used
to meet up to 25 percent of the cooling water needed at the San Juan Generating Station,
as well as investigating an advanced wet-dry hybrid cooling system. In addition, the
Department currently has a competitive solicitation on the street seeking additional
innovative technologies and concepts for reducing the amount of fresh water needed to
operate fossil-based thermoelectric power stations, including advanced cooling and water
recovery technologies. The Department is also investigating whether a suite of specially
selected, salt-tolerant agricultural crops or other plants can be used to remove sodium and
other salts from coalbed methane produced water so that it can be safely discharged or
used in agriculture.

One promising new approach to electricity generation, Integrated Gasification Combined
Cycle (IGCC) technology that converts coal and other hydrocarbons into synthetic gas,
offers significant environmental and water benefits compared to traditional pulverized
coal power plants. Because the steam cycle of IGCC plants typically produces less than 50 percent of the power output, IGCC plants require 30 to 60 percent less water than
conventional coal- fired power plants. The Department is supporting research, development, and demonstration on a number of advancements that will significantly
drive down the costs of IGCC plants.

The Fossil Energy office is also supporting work at the University of Florida
investigating an innovative diffusion-driven desalination process that would allow a
power plant that uses saline water for cooling to become a net producer of fresh water.
Hot water from the condenser provides the thermal energy to drive the desalination
process. Using a diffusion tower, saline water cools and condenses the low pressure
steam and fresh water is then stripped from the humidified air exiting the tower. This
process is more advantageous than conventional desalination technology in that it may be
driven by waste heat with very low thermodynamic availability. In addition, cool air, a
by-product of this process, can be used to cool nearby buildings.

The Department’s Office of Energy Efficiency and Renewable Energy (EERE) is
supporting R&D for innovative wind and solar electricity supply technologies that have
attributes that may prove to be very beneficial to the desalination industry.

For example, wind power is now becoming a competitive, clean, bulk electric power
supply option in many areas of the Nation, and places no further demand on water
supplies for its operation. In addition, excellent offshore wind resources are available
near many coastal areas facing water supply challenges. The role that wind could play in
powering desalination could take a range of forms, from stand-alone systems exclusively
powered by wind, to desalination plants that receive the majority of their energy
requirements from wind power delivered via electricity grid systems. In either case, the
relative ease and low cost of storing desalinated water, in comparison with storing
electricity, will allow operating flexibilities that will facilitate using inherently variable
wind power as a primary energy source for desalination.

We are currently funding a concept design study which will set up engineering and
economic models to examine viability of wind-powered reverse osmosis systems, looking
at applications for coastal seawater, inland brackish water, and water produced during oil
or gas recovery. A second project will model solar and wind resources for a desalination
unit to determine the effects of variable loads on desalination, and perform pilot-scale
testing to determine how renewable energy could reduce desalination costs.

We are also undertaking a mapping project to overlay data such as fresh and brackish
water resources, wind resources, water consumption, estimated growth, and electricity
supply. Two maps will be developed, one of the United States, and one for the four-state
region of Colorado, Utah, Arizona, and New Mexico, identifying locations that have the
best economic and technical potential for using wind to power desalination. Even as we proceed with these activities, we are mindful that the energy intensive technique of reverse osmosis we use for desalination today may not be the membrane technology of tomorrow. But whether that breakthrough comes from a lab working specifically on desalination, or through an area of broader scientific research remains to be seen. The Department’s Office of Science, for example, is studying microbes and smart membranes that may ultimately have relevance to desalination in the future.

Having said that, it seems certain that desalination will play an important role in
maintaining and expanding our Nation’s, and indeed, the world’s water supply. Where
fresh water aquifers are under pressure in many regions, over-drafted and subject to saltwater intrusion, brackish aquifers can be found throughout the country and the world, a
ready source of new water. More than 120 countries are now using desalination
technologies to provide potable water, most commonly in the Persian Gulf where energy
costs are low. The desalination plants of the future must come in a range of sizes so that
they can be installed where demand exists—smaller footprint facilities which can make
use of smaller deposits of impaired water, at a price the community can afford. For
American companies, the growing need for desalination will open new global markets.
Mr. Chairman, this completes my prepared statement, and I am happy to answer any
questions the Committee may have.