[Senate Hearing 108-658]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-658

                             NUCLEAR POWER

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   TO

   RECEIVE TESTIMONY REGARDING THE ROLE OF NUCLEAR POWER IN NATIONAL 
                             ENERGY POLICY

                               __________

                             JULY 13, 2004


                       Printed for the use of the
               Committee on Energy and Natural Resources



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma                JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho                DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee           RON WYDEN, Oregon
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri            MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana                EVAN BAYH, Indiana
GORDON SMITH, Oregon                 DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                CHARLES E. SCHUMER, New York
JON KYL, Arizona                     MARIA CANTWELL, Washington

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                 Pete Lyons, Professional Staff Member
                  Jonathan Epstein, Legislative Fellow


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Alexander, Hon. Lamar, U.S. Senator from Tennessee...............    14
Bayh, Hon. Evan, U.S. Senator from Indiana.......................    15
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     2
Bunning, Hon. Jim, U.S. Senator from Kentucky....................    15
Craig, Hon. Larry E., U.S. Senator from Idaho....................     3
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1
McSlarrow, Kyle E., Deputy Secretary, Department of Energy.......     5

                                APPENDIX

Responses to additional questions................................    35

 
                             NUCLEAR POWER

                              ----------                              


                         TUESDAY, JULY 13, 2004

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Pete V. 
Domenici, chairman, presiding.

            OPENING STATEMENT OF PETE V. DOMENICI, 
                  U.S. SENATOR FROM NEW MEXICO

    The Chairman. This hearing of the Energy and Natural 
Resources Committee on the role of nuclear power in our 
national energy policy is now in session. The purpose of the 
hearing is to evaluate the progress of various nuclear energy 
programs at the Department of Energy, to better understand the 
administration's commitment to nuclear energy. Today I want to 
discuss all of the Department's nuclear energy programs in the 
context of what I hope is an integrated administration strategy 
for a renaissance of nuclear energy.
    With Friday's court decision on Yucca Mountain, the 
Department's preliminary views on that decision will be of 
great interest to the committee. Currently 103 nuclear power 
plants are operating in the United States. These reactors 
provide 20 percent of the electric power needed for our Nation, 
thereby injecting important diversity into our energy supplies. 
Nuclear plants provide the Nation's lowest cost electricity 
other than hydropower, emit no atmospheric pollutants, excel at 
providing steady baseload power essential for anchoring grid 
stability, have demonstrated outstanding reliability, and have 
a superb safety record.
    However, the last completed nuclear plant in the United 
States was ordered in 1973. Combinations of issues, including 
high up-front capital costs back in those years, unproven 
regulatory framework for new plants, progress on spent fuel 
management, and a deregulated and highly competitive electric 
market, all have contributed to perceived financial risks that 
to date have precluded new orders.
    In contrast, nuclear plants with characteristics well 
advanced over any in the United States are operating today in 
Japan, are being built around the world. Four of these plants 
are under construction in Japan, two in Taiwan, two in Korea, 
one in Romania, and one in Finland.
    In 1997 I said we needed a renaissance of nuclear power in 
America and today we are on the verge of it, except we do not 
know what the circuit court opinion does to that. More voices 
have joined us in calling for expansion of nuclear energy. Alan 
Greenspan has testified on the importance of new nuclear 
plants, and just recently I was presented with a preeminent 
international spokesman for environmental causes, Gene 
Lovelock, stated: ``We have no time to experiment with 
visionary energy sources. Civilization is in imminent danger 
and has to use nuclear power, the one safe, available energy 
resource, now or suffer the pain to be inflicted on our 
outraged planet.'' He is a very out-front environmentalist who 
has made this statement. ``Opposition to nuclear energy,'' he 
said, ``is based on irrational fear fed by Hollywood-style 
fiction and green lobbyists and the media. These fears are 
unjustified and nuclear energy has proved to be the safest of 
all nuclear powers,'' he concluded in his statement. That is 
Gene Lovelock.
    I was enthusiastic earlier this year when I learned that 
three consortia had submitted proposals to begin the process to 
build the first new power plants in our country in a very long 
time. This opens the door for a new plan of construction that 
is critical for our country. It is a process that we will all 
watch with strong interest.
    This has been a roller-coaster year for Yucca Mountain 
program. The proposal of OMB to move the nuclear wastes off 
budget, while a good goal, is not well thought out. As noble as 
this goal was, their execution was lacking. In a year of belt-
tightening, they have almost forced Congress to fund the 
project at a lower than necessary level.
    As one possibility, I propose to make up the funding 
shortfall with a one-time transition cost increase on nuclear 
utilities. Of course, the whole program is now assessing last 
Friday's court decision about the 10,000-year radiation 
standard for the repository. I will continue to work with 
others--the Department, the administration, and industry--to 
solve these challenges.
    Testifying today, Senators, is Deputy Secretary of Energy 
Kyle McSlarrow. Kyle, we always appreciate your views and you 
will testify shortly.
    Senator Bingaman.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much for having the 
hearing, Mr. Chairman. Obviously it is very timely. The future 
of nuclear power in this country is a very important issue and 
one that I know has been a major focus of your efforts in 
particular. I have certainly tried to be supportive as well, as 
most members of this committee have.
    I do think the two key issues that obviously I would be 
anxious to learn more about today relate to Yucca Mountain. 
One, as you referred to it, is the administration's request to 
take Yucca Mountain project funding off budget and the almost 
inevitable reduction in funding for Yucca Mountain that seems 
to be resulting from that.
    Second, this decision last Friday by the court of appeals 
to vacate the EPA and the NRC rules that use the 10,000-year 
period, vacate them as being inconsistent with congressional 
intent that they follow the recommendations of the National 
Academy of Sciences. Obviously, the National Academy determined 
that the peak risk was considerably farther out in geologic 
time and that 10,000 years was not appropriate. I would be 
anxious to find out what course the administration sees to keep 
the Yucca Mountain project on track and to move ahead with it 
in light of all these developments.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Bingaman. I also want to 
acknowledge the authenticity of your statement, that you have 
been very helpful. You have also been very helpful in terms of 
your insight in terms of how we get things done. That is really 
the issue. We all can keep talking about how good it is, but if 
we cannot get things done it is like whistling in the dark.
    I did not say in my statement, but I think I ought to and 
then yield to Larry, I think everybody knows that the 
Environmental Protection Agency and the Department of Energy 
was finding it difficult to model 10,000 years out in the 
future. That is almost as far out in the future as civilization 
in terms of its existence. There may have been a few little 
villages that sprung up 12 and 13,000 years ago, but 
essentially there was nothing in the world 10,000 years ago 
that had to do with mankind.
    Yet this report says that the National Academy of Science, 
which they were supposed to look to, has found that the highest 
peak of radiation is 300,000 years from now, the implication 
being if you want to use existing standards and existing 
statutes your new model is going to have to be 300,000 years.
    We can call any scientists or engineers in the world and 
all of them, nobody will tell you that you can do that. It is 
impossible. So we have to set out trying to see where we are 
going.
    Let me acknowledge Senator Craig's enthusiastic support, 
not only for nuclear, but his genuine help in trying to get 
things done. Thank you, Senator.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Thank you very much, Mr. Chairman, and let 
me thank you for the continued leadership you have demonstrated 
on the issue of nuclear energy and a path forward for it.
    I guess my reaction is, whoever said it would be easy? What 
we are trying to do here is break out of a mind set that this 
country has been locked into for 2 decades. The good news is 
that those who helped establish the mind set are now beginning 
to see the error of their ways as it relates to abundant clean 
sources of energy that this country so desperately needs if it 
wants to retain its position as a world economic leader, and 
those 103 reactors that are now relicensed and functioning are 
setting tremendous records as it relates to productivity at low 
costs, and that is fundamentally important. And by the way, we 
dare not fail to say they are producing extremely clean sources 
of energy.
    The only problem, and we do face the problem, is that those 
reactors function substantially based on a path forward as it 
relates to the management of waste, and that is what we have 
got to be about.
    What we have also got to be about and what I want to 
recognize Kyle McSlarrow for this morning is the kind of 
leadership that he and the Secretary have demonstrated in 
looking out into the future, along with Bill Magwood and others 
who are here this morning, to see where we can get and where we 
must get as it relates to Gen IV and new reactors and new 
reactor designs. While the court decision of last Friday is 
going to cause us to be focused for a moment, I hope it is not 
but a moment, and I hope that you and I and the other Senator 
from New Mexico, Senator Bingaman, can show the kind of 
leadership with the Senate and the Congress to recognize that, 
while the EPA and others looking at the 300,000 years did not 
think they could get there and it was not necessary to get 
there and 10,000 years was more realistic, but if you carry it 
a step further it was also that the peak dosage was 300,000 
years and you ought to really look out a million years.
    There are many of us who would like to think we are 
visionary as it relates to the shaping of public policy. But 
the best of our scientists and the best of the engineers the 
world over are not there, cannot get there, and will not get 
there. And maybe we have to rethink our policy a little bit, 
that we were designing a policy in an era of nuclear 
schizophrenia and that is changing today and there is a much 
more realistic attitude growing across America.
    That attitude is already in France and in Europe, where 
they were facing energy crises long before our abundance denied 
us and now we face crisis.
    So I hope we can get there. I think we can get there and we 
should get there. While we are getting there, I think it is 
important that we look at the 20 percent nuclear base we 
currently have, wishing it were 30 or 40 as it relates to clean 
energy, and that we have a plan to do so, certainly in working 
with the Department and with our national laboratory in Idaho 
to develop a premier nuclear laboratory and the kind of new 
design and development that we hope can get there.
    My questions this morning are going to be directed at that 
and the future, not a bump in the road that I would hope and 
that I would wish that the Congress would view the circuit 
court decision, will change the language so the judges can look 
at it a bit differently. They too I think need to be realistic, 
and certainly our country is headed in that direction.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Mr. Secretary, before you testify, I just want to put on 
the record: Senator Craig said that all of the nuclear reactors 
have been relicensed. But that is not so. I did not want to 
stop him.
    Senator Craig. No, not all 103, that is correct.
    The Chairman. In fact I was going to ask you, how many? 
Twenty or thirty or something like that out of the 103 
operating?
    Mr. McSlarrow. Twenty-six to date, although we do expect 
that all of them ultimately will be relicensed.
    The Chairman. Thank you.
    Please proceed.

STATEMENT OF KYLE E. McSLARROW, DEPUTY SECRETARY, DEPARTMENT OF 
                             ENERGY

    Mr. McSlarrow. Thank you, Mr. Chairman. Mr. Chairman, 
first, obviously I will summarize this testimony and submit it 
for the record.
    I would like to thank you and Senator Craig and Senator 
Bingaman for your leadership. You have been working on these 
issues a long time, as you noted, often during a period when 
some analysts were predicting the end of nuclear energy in the 
United States. It is important to recall that during the last 
decade things looked very bleak for nuclear power in the United 
States. The door seemed to close on the future of nuclear power 
early in the decade as the Shoreham nuclear power plant on Long 
Island was finally closed in 1992. That event showed that even 
a completed plant in which $5.5 billion had been invested, 
which had been licensed to operate by the NRC, which had a 
virtual twin that had been operating in Connecticut for 2 
decades, even this plant could fail to reach commercial 
operation.
    The following year saw the termination of nearly all of the 
Department of Energy's nuclear energy research and development 
activities. The bottom came in fiscal year 1998. In that year 
the Department's civilian nuclear energy research funding fell 
to zero. At the time I am sure that many saw this as an 
embarrassing collapse in what had once been a world-leading 
research program. But many members of this committee and you, 
Mr. Chairman, have provided support to get us back on our feet 
again.
    At the same time, during that decade what might not have 
been obvious was many positive trends. The industry was making 
tremendous progress in operating U.S. nuclear power plants more 
efficiently. After trailing behind nuclear programs in other 
countries, U.S. operators responded vigorously to the challenge 
of deregulation with better management and a new focus on the 
efficient and reliable operation of U.S. plants.
    The key event in the revival came when the President 
unveiled the National Energy Policy, in which we issued a clear 
policy statement of encouraging the expansion of nuclear power. 
With the recommendations of the NEP guiding our program and 
policy decisions, we were able to focus the Department's 
nuclear energy program and enhance its core mission of nuclear 
energy research.
    I would like to briefly summarize these programs. First, we 
believe that state-of-the-art nuclear power plants developed by 
U.S. and overseas suppliers can and should play an important 
role in meeting U.S. energy requirements in the next decade. 
Under the auspices of the Nuclear Power 2010 program, we are 
working with industry to pave the way for an order to be placed 
for a new U.S. nuclear power plant in the next few years.
    We have seen important successes in this program already, 
with three U.S. utilities partnering with the Department to 
test the Nuclear Regulatory Commission's early site permitting 
process.
    Last November, the Department challenged the utility 
industry to organize itself to evolve from the study and 
evaluate stage to consider specific projects that could result 
in the construction of new nuclear power plants. We asked those 
utilities to form teams that could create solid plans to 
demonstrate the major components of the NRC's licensing regime 
that remains untested, the one-step licensing process, which is 
formally known as the combined construction-operating license 
process. We have received three proposals from industry thus 
far.
    I should note, Mr. Chairman, that I realize we are going to 
get into Yucca Mountain today. Our view is that continued 
progress toward establishing a high-level waste repository at 
the Yucca Mountain site is absolutely essential. We are still 
on track toward submitting a license application in December 
and opening a repository and beginning waste acceptance in 
2010, and it is extremely important to put in place a long-term 
funding solution if 2010 is to be a reality. We look forward to 
working with you and the other members on this.
    Mr. Chairman, we also have to plan for the longer term, as 
Senator Craig pointed out. We have two complementary programs 
designed to achieve this. First is the Advanced Fuel Cycle 
Initiative, which is designed to develop a better, more 
efficient, and more proliferation-resistant nuclear fuel cycle 
that can support an expanding role for nuclear power in the 
United States.
    The second technology program is Generation IV. Technology 
needs to provide a nuclear plant of the future that is a 
superior business choice, essentially to natural gas or other 
options in direct head-on competition, with the kinds of 
attributes that I just described as part of the AFCI program. 
That is exactly the thinking that led to the formation of the 
Generation IV International Forum, or GIF. That forum is 
looking at six technology concepts. We have selected one of 
those concepts that I know we will be discussing, the NGNP, 
which will be able to make both electricity and hydrogen at 
very high levels of efficiency.
    The Department of Energy is obviously well equipped to 
pursue this kind of research, development, and demonstration of 
complex and advanced systems. Most of the labs have excellent 
capabilities and expertise in various aspects of nuclear 
technology. We have established a program management structure 
that brings all of that talent together in an integrated 
fashion. In managing the Generation IV, AFCI, and nuclear-
hydrogen activities, we have developed an integrated structure 
that designates key laboratory personnel at different labs as 
national technical directors. Obviously, the Idaho National 
Laboratory is intended to play a central role.
    I know we are going to discuss the RFP's here in a moment, 
so I will not go into detail right now. But the basic thrust 
is, as Secretary Abraham has said, to establish a command 
center of a revived nuclear technology, education, and research 
enterprise in this country.
    Mr. Chairman, we are at a critical moment in deciding our 
energy future. As Secretary Abraham and you have said, we need 
to get our energy house in order. We believe that task requires 
a strong contribution by nuclear energy well into this century. 
Ensuring this occurs is a formidable challenge, but we need to 
start now.
    The past 3 years has seen a dramatic change in terms of 
actions taken, increased industry interest, and a broader 
recognition of the benefits of nuclear energy. We look forward 
to working with you and this committee in resolving those 
challenges and meeting these goals.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. McSlarrow follows:]

      Prepared Statement of Kyle E. McSlarrow, Deputy Secretary, 
                          Department of Energy

    Good morning, Mr. Chairman and members of the Committee. It is a 
pleasure to be here today to discuss the progress we are making toward 
restoring nuclear power as a vibrant and realistic option to meet this 
Nation's future energy needs. Building on industry's success with the 
efficient and safe operation of current nuclear power plants, the Bush 
Administration is looking to both pave the way for deployment of new 
plants in the next few years and point the way toward a new generation 
of nuclear energy for the future.
    First, Mr. Chairman, I would like to thank you for this Committee's 
leadership. Even before President Bush took office in 2001, you, 
Senator Craig, Senator Bingaman and others were working on the issues 
facing nuclear energy in this country--often during a period when some 
analysts were predicting the end of nuclear energy in the United 
States. This committee's efforts provided a solid programmatic and 
policy foundation that has made the progress we are seeing today 
possible. While, as we all know, there is still much to be done, I 
believe that it is important to recognize the success that we have seen 
in the nuclear field over the last few years.
    It is important to recall that during the last decade, things 
looked very bleak for nuclear power in the United States. The door 
seemed to close on the future of nuclear power early in the decade as 
the Shoreham nuclear power plant on Long Island, New York was finally 
closed in February 1992 after a long, contentious fight. That event 
showed that even a completed plant in which $5.5 billion had been 
invested, which had been licensed to operate by the Nuclear Regulatory 
Commission, which had a virtual twin that had been operating in 
Connecticut for two decades--even this plant could fail to reach 
commercial operation.
    The closure of Shoreham seemed to herald a stream of bad news for 
nuclear power. The following year saw the termination of nearly all the 
Department of Energy's nuclear energy research and development 
activities. Work on programs such as the Integral Fast Reactor, the 
Gas-Turbine Modular Helium Reactor, and the SP-100 space reactor were 
all brought to a rapid end. The number of students taking up nuclear 
engineering in the United States was in free-fall--dropping from about 
1,500 before Shoreham to less than a third that level by 1997.
    Deregulation of the electric utility industry and the advent of the 
competitive electricity market led many analysts--and more than a few 
members of Congress--to predict that nuclear power plants would become 
``stranded costs'' that would force their owners to close them 
prematurely and replace them with smaller plants fueled by demonstrably 
cheap and apparently infinite supplies of natural gas.
    The Yucca Mountain project was stuck in neutral. While taking in 
hundreds of millions of dollars of ratepayer money each year, the 
program, delayed by litigation and funding shortfalls, was making 
little progress towards its goal of accepting commercial and defense 
high-level nuclear waste by 2010.
    In this environment, the nadir came in fiscal year 1998. In that 
year, the Department's civilian nuclear energy research funding fell to 
zero.
    At the time, I'm sure that many saw this as an embarrassing and 
harmful collapse in what had once been a world-leading research 
program. But many of the members of this Committee provided support and 
encouragement that made it possible to begin the long process of 
rebuilding the Federal nuclear energy program.
    At the same time, industry made tremendous progress in operating 
U.S. nuclear power plants more efficiently. After trailing behind 
nuclear programs in other countries for many years in terms of 
efficient operation, U.S. operators responded vigorously to the 
challenge of deregulation with better management and a new focus on the 
efficient and reliable operation of U.S. plants. U.S. capacity factors 
were less than 70% when the 1990s began and topped 90% only ten years 
later, leading the world in the safe and efficient operation of nuclear 
power plants. Moreover, the Nuclear Regulatory Commission has acted 
quickly and effectively to enable utilities to ``uprate'' their plants 
and extend operating licenses for an additional 20 years. One result--
which is very different from the picture that some analysts painted 
only a few years ago--is that essentially all nuclear power plants in 
the country are expected to apply for license renewals.
    The key event in the revival came when the President unveiled the 
National Energy Policy (NEP). For the first time since the Department 
of Energy was formed in 1977, the Government issued a clear policy 
statement encouraging the expansion of nuclear power to meet our future 
energy needs. With the recommendations of the NEP guiding our program 
and policy decisions, we were able to focus the Department's nuclear 
energy program and enhance its core mission of nuclear energy research. 
We started important new initiatives and Secretary Abraham authorized 
the formal creation of the Generation IV International Forum, the model 
for many of the international efforts the Department is pursuing today. 
Most recently, we set off to establish a premier laboratory for nuclear 
energy research and development, the Idaho National Laboratory.
    In parallel with this progress, Secretary Abraham, citing the sound 
scientific work conducted by the program since its inception, 
recommended and the President accepted the Yucca Mountain site as the 
best place to build the Nation's high-level waste repository. This step 
cleared a major roadblock in enabling a vibrant U.S. nuclear power 
program to move forward. With Congress's strong votes in support of the 
site selection; and the Department's demonstrated progress toward 
meeting our goal to establish a geologic repository by 2010, industry 
saw clearly that the nuclear power option was truly back on the table.
    This brings us to today. We have much work ahead of us and I would 
like to discuss with you today the programs, strategies, and policies 
that are advancing our goal to assure a strong, long-term role for 
nuclear energy in helping this country to meet its energy and 
environmental goals.

                      ENCOURAGING GENERATION III+

    We believe that state-of-the art nuclear power plants developed by 
U.S. and overseas suppliers can and should play an important role in 
meeting U.S. energy requirements in the next decade. It is clear that 
U.S. demand for electricity will continue to increase. Despite the fact 
that the U.S. economy has become increasingly efficient in its use of 
energy, growth in energy use and growth in economic activity remain 
linked. The Energy Information Administration projects that assuming 
modest economic growth of three percent annually through 2025, U.S. 
energy use will grow by about 1.5 percent each year. While this does 
not sound like a big number, this means the U.S. will need to build 
over 335,000 megawatts of new capacity during that period to meet the 
demand and this does not include the plants we will need to build to 
replace older, retiring plants.
    Industry has generally anticipated that most of these new plants 
would be efficient gas-fired units similar to those that comprise the 
vast majority of the power plants built over the last decade. Use of 
natural gas for electric power generation increased by 85% from 1990 to 
2002. It is projected to nearly double by 2025--from 685 BkWh today to 
1,300 BkWh. This dependency on a single fuel type for new generation 
represents a potential vulnerability in our energy security.
    Nuclear power should be a key part of the U.S. electric generating 
portfolio. Advanced, Generation III+ light water reactor-based plants 
are on the market today and more will be available from U.S. and 
foreign suppliers in the coming years. Advanced Boiling Water Reactors 
(ABWRs) based on U.S. technology are being built and operated today in 
Japan and other countries with impressive results. Finland will build a 
large French-supplied European Pressurized Reactor (EPR) plant to meet 
the needs of its growing industries. China is planning to build 30 new 
plants by 2020 to meet its rapidly growing energy requirements.
    Under the auspices of the Department's Nuclear Power 2010 program, 
we are working with industry to pave the way for an order to be placed 
for a new U.S. nuclear power plant in the next few years. The Nuclear 
Power 2010 program is designed to work with industry to identify sites 
for new nuclear power plants, develop and bring to market advanced 
nuclear plant technologies, evaluate the business case for building new 
nuclear power plants, and demonstrate untested regulatory processes.
    We have seen important success in this program already, with three 
U.S. utilities partnering with the Department to test the Nuclear 
Regulatory Commission's Early Site Permit process. Under this process, 
utilities can work with the NRC to evaluate potential sites for new 
plants and, if the sites pass regulatory scrutiny, the utilities can 
obtain permits from the Commission that would ease the licensing of a 
plant at an approved site in the future.
    Clearly, there is great value to such a process. However, like many 
of the advanced NRC licensing activities that came into force after the 
Energy Policy Act of 1992, this procedure has never been tested. Under 
our Nuclear Power 2010, the Department is working with three of the 
Nation's major utilities--Dominion Resources, Entergy, and Exelon--to 
evaluate sites in Virginia, Mississippi, and Illinois. This effort has 
already resulted in applications by these utilities to the Nuclear 
Regulatory Commission. We anticipate that the first Early Site Permits 
ever issued will emerge from this work in 2006.
    The Department has also funded several important studies under the 
Nuclear Power 2010 program. For example, we have launched a cost-shared 
study with the petrochemical industry to explore the benefits to 
industrial users of natural gas of building a new nuclear power plant 
in the Southwest. Most important, in 2002 we completed an independent 
business case analysis that was based on comprehensive interviews and 
workshops with industry leaders and Wall Street experts. The resulting 
report, Business Case for New Nuclear Power Plants in the United 
States, provided an authoritative account of the business and financial 
issues facing utilities that are considering the construction of new 
plants.
    The Business Case study found that there are two primary obstacles 
to building new plants in the United States:
    1. The difficulty in obtaining up-front financing for a large 
project that requires five or more years to complete; and
    2. The uncertainty in the untested licensing process.
    The first issue reflects the changes in the market since the last 
plants were built. In the 1970s, a utility deciding to build a nuclear 
plant simply placed the order and paid for all the necessary design and 
engineering work required for the project. Costs were generally passed 
on to ratepayers as part of the cost needed to assure a long-term 
electricity supply. Today, the situation is very different. Because 
utilities are unable simply to pass costs to ratepayers in the 
competitive markets in which many now operate, they are unwilling to 
absorb the very expensive up-front design and engineering work required 
for new plant technologies to be brought to market. Further, because of 
the scrutiny utilities face from investors and credit rating 
organizations, they are very reluctant to make large capital 
investments of any kind--especially if these investments have a multi-
year long impact on earnings.
    The second issue reflects the negative experiences utilities had in 
the late 1970s and early 1980s. Few utilities are interested in making 
investments in billions of dollars in a new power plant if they can't 
be certain that they can operate the plant on a predictable schedule--
or, in a worst case, if there is a prospect that they won't be able to 
operate at all. The legacy of Shoreham looms large in this thinking.
    It is in this context that we designed the next step in the Nuclear 
Power 2010 program. On November 20, 2003, the Department challenged the 
utility industry to organize itself to evolve from the ``study and 
evaluate'' stage to consider specific projects that could result in the 
construction of new nuclear power plants. We asked the electric 
utilities to form teams that could create solid plans to demonstrate 
the major component of NRC's licensing regime that remains untested: 
the ``one-step'' licensing process, which is formally known as the 
combined construction/operating license (COL) process.
    By receiving the authorization to construct and the authorization 
to operate at essentially the same time, a utility could build a new 
plant with a very high degree of confidence that a well-executed 
project will allow a new plant to go on-line on schedule.
    We have received three proposals from industry thus far. We have 
awarded costshared funding to one consortium led by the Tennessee 
Valley Authority to verify vendors' cost and schedule estimates to 
build an ABWR at the utility's Bellefonte site near Hollywood, Alabama. 
The results of this work will be available in April 2005 and will be 
used to allow the TVA Board to make an informed decision about the 
future of this concept.
    Two other consortia have also made proposals. One, led by Dominion 
Resources, would demonstrate the COL process using technology from 
Atomic Energy of Canada, Limited (AECL); the other is led by a large 
consortium of 9 utilities that plans to consider two technologies--the 
Westinghouse AP-1000 and the General Electric Enhanced Simplified 
Boiling Water Reactor (ESBWR). Since this procurement action is still 
open, I am not at liberty to discuss the details of the industry 
proposals.

                YUCCA MOUNTAIN: CONTINUING THE PROGRESS

    If we are to see our Nuclear Power 2010 efforts develop into actual 
nuclear power plant projects, continued progress toward establishing 
the Nation's high-level waste repository at the Yucca Mountain, Nevada 
site is absolutely essential.
    This Administration has made a strong commitment to resolving the 
nuclear waste challenge and making the construction of a repository 
achievable. We have followed through on that twenty-year commitment 
with important actions, such as the 2002 recommendation of the Yucca 
Mountain site and support for the enactment of the Congressional joint 
resolution that enabled the Department to move toward licensing the 
repository. This decision allows the Nuclear Regulatory Commission--an 
independent regulatory body implementing an extensive set of 
regulations--to review the science during a rigorous three-to-four-year 
licensing process, which will involve many other parties and will be 
open to public scrutiny.
    We are moving ahead with developing a high-quality license 
application for submittal to the Nuclear Regulatory Commission at the 
end of this year. The application is built on over 20 years of sound 
science, making Yucca Mountain the most exhaustively studied project of 
its kind in the world. Since the Nuclear Waste Policy Act of 1982 was 
enacted, five Presidents have overseen work on a geologic repository 
for spent nuclear fuel and high-level waste. This Administration's 
policy has been to complete the science, to fulfill all the technical 
and institutional requirements laid out in the Nuclear Waste Policy 
Act, and begin construction if authorized by the NRC.
    At the end of June, the Department fulfilled a prerequisite for 
submittal of the license application, certifying the availability of 
approximately 1.2 million documents, totaling some 5.6 million pages, 
submitted by the Department for the Nuclear Regulatory Commission's 
Licensing Support Network. The Licensing Support Network is an 
electronic, Internet-based discovery system that will allow the Nuclear 
Regulatory Commission, the public, and parties to the licensing 
proceeding electronic access to the results of scientific studies and 
other information used to develop the license application.
    This system is the first of its kind, and its development is 
providing lessons learned for many of the parties involved. We are 
working out technical issues and ensuring that we do not disclose 
individuals' privacy information. It is important to note that the 
Licensing Support Network is not the License Application--the document 
collection supports the License Application, which will provide context 
and present the substantive conclusions drawn from these documents.
    We are still on track toward submitting a license application in 
December of this year, and opening a repository and beginning waste 
acceptance in 2010. The President's Fiscal Year 2005 budget reflected 
the funding needed to maintain these longstanding goals, and, in 
parallel; the Department offered a legislative proposal to resolve a 
funding problem that has burdened the Program for many years. It is 
extremely important to put in place a long-term funding solution if 
2010 is to be a reality, and we look forward to working with the 
Congress further to achieve this objective.

            TECHNOLOGY OPTIONS FOR THE LONG-TERM FUEL CYCLE

    Our Advanced Fuel Cycle Initiative (AFCI) is designed to develop a 
better, more efficient, and more proliferation-resistant nuclear fuel 
cycle that could support an expanding role for nuclear power in the 
United States. AFCI technologies could provide important benefits such 
as enhancing national security by lowering proliferation risk through 
the reduction of inventories of commercially-generated plutonium 
contained in spent fuel. AFCI will also enhance national energy 
security by recovering the significant energy value contained in spent 
nuclear fuel--the 44,000 metric tones of spent nuclear fuel currently 
stored at nuclear power plant sites across the country that contain the 
energy equivalent of over 6 billion barrels of oil, or about two full 
years of U.S. oil imports.
    One possible key to realizing these benefits is the development of 
advanced separation technologies. These are technologies that can 
remove the useful components of spent nuclear fuel from the materials 
that must be disposed as waste. This is not a new field of study. The 
United States developed PUREX technology during the Manhattan Project 
to provide plutonium for use in atomic weapons. PUREX technology is 
used today in Europe to reprocess spent fuel.
    However, while commercial reprocessors have done much to improve 
existing separation technology, it remains too expensive, generates too 
much high-level waste, and separates plutonium that presents a long-
term proliferation risk. We believe it is the wrong technology for the 
future and the National Energy Policy reflects this. We have, instead, 
focused on two technologies that show great promise.
    Through the AFCI program; our scientists have invented a technology 
known as Uranium Extraction Plus (UREX+), an advanced aqueous process 
that can be used to remove the uranium and a combination of plutonium 
and selected minor actinides from spent nuclear fuel. It is our hope 
that this technology will prove proliferation-resistant enough to 
provide the benefits of recycling spent fuel without increasing 
proliferation risks.
    Another technology, pyroprocessing, was investigated during the 
Integral Fast Reactor program of the 1980s. In its current form, it is 
proving to be a highly efficient, proliferation-resistant, non-aqueous 
approach to separate the actinides in spent fuel from fission products. 
The AFCI pyroprocessing activities support the ultimate reduction of 
the radiotoxicity of nuclear waste through the transmutation of minor 
actinides in future Generation IV fast spectrum reactors or in 
dedicated transmuter devices. In addition, these activities provide the 
means for closure of the fuel cycle for Generation IV fast reactors.
    The AFCI program is preparing for its next steps--larger-scale 
demonstration of key technologies and development and testing of 
advanced transmutation fuels. If successful, this research will reduce 
the toxicity of nuclear waste to the point that it will decay to the 
same toxicity as natural uranium ore in less than 1,000 years--instead 
of the 300,000 years required without AFCI technology.

                MOVING FORWARD WITH GENERATION IV: NGNP

    Current, state-of-the-art Generation III+ technologies such as 
AECL's ACR-700, the Westinghouse AP-1000, and the GE ESBWR could serve 
the future market for nuclear energy well. Our Nuclear Power 2010 
program is designed to help utilities decide among these technologies 
and to place new plant orders. While utilities are positively engaged 
in this effort, we cannot ignore the fact that ordering a new nuclear 
plant remains a tough decision for any utility operating in a 
competitive market. As we look to the longer-term future, it is clear 
that nuclear power must find a way to deal with the structural issues 
that potentially limit its expansion.
    Again, we believe advances in technology can provide a path-
forward. To allow nuclear to compete more effectively with other energy 
options, it will be necessary for the utility decision to build a 
nuclear unit to be a matter of fuel mix rather than an issue of cost 
and risk. In other words, technology needs to provide a nuclear plant 
that is a superior business choice to natural gas units or other 
options in a direct, head-on competition. Such a plant must be capable 
of coming on-line in a time frame similar to a gas plant, with no more 
financial risk. Such a plant must be licensed and regulated under a 
regime that recognizes its safety advantages. Such a plant must be 
highly flexible and able to serve the needs of the market as they 
evolve.
    This is exactly the thinking that led to the formation of the 
Generation IV International Forum, or GIF. That group, in coordination 
with the Nuclear Energy Research Advisory Committee (NERAC), led the 
evaluation of over 100 different nuclear energy concepts by over 100 
expert scientists and engineers from over a dozen countries. After a 
complex, carefully managed two year process, the GIF concluded that six 
technology concepts held the most promise for the future and the GIF 
member countries agreed to establish an international framework to 
allow all countries to work on the technologies of greatest interest to 
them in direct partnership with other member countries.
    Today, GIF is comprised of ten countries and EURATOM, working 
together to advance next-generation nuclear energy technologies. 
Working with brilliant engineers and scientists from all over the 
world, the GIF has selected six advanced nuclear energy technologies 
that it will pursue for the future use by nations all over the world. 
Under U.S. chairmanship, the GIF is at this time completing a 
multilateral agreement that will allow all GIF nations to share in this 
important work.
    For our part, as we indicated in our report to Congress last year 
on the U.S. Generation IV program, the Department of Energy has 
selected one of the six technologies as its lead technology. This 
technology is now known as the Next Generation Nuclear Plant, or NGNP. 
The NGNP would be able to make both electricity and hydrogen at very 
high levels of efficiency; would be deployable in modules that will 
better fit the highly competitive, deregulated market environment in 
the United States; and would be extraordinarily safe, proliferation-
resistant, and waste-minimizing.
    The base concept of the NGNP is that of a very-high temperature 
gas-cooled reactor system. coupled with an advanced, high-efficiency 
turbine generator and an even more advanced thermochemical hydrogen 
production system. We have very high expectations for this technology. 
As we indicated in our recent request for Expressions of Interest 
(EOI), we are interested in the eventual deployment of commercial 
plants that can generate electric power at a cost of less than 1.5 
cents/kilowatt hour; produce hydrogen at a cost of less than $1.50/
gallon-gasoline equivalent; and cost less than $1,000/kilowatt to 
construct with a goal of $500/kilowatt.
    These characteristics are obviously challenging. But, because of 
the work we have completed thus far in our work on Generation IV 
nuclear power systems, we believe these characteristics are achievable. 
It is very possible that this type of nuclear plant could be brought to 
market by the 2020s and serve the world's long-term needs for many 
decades thereafter.
    The Department is working with its international partners to define 
the research and development activities necessary to advance this 
concept. We have received comments from the U.S. private sector on our 
NGNP strategy and have also received indications from several companies 
regarding their interest in serving as the Project Integrator. To be 
successful, such a technology must be flexible, safe, reliable, and 
consistent with the economic realities of the market.
    Our EOI also noted that a management and funding option the 
Department is considering is to implement a cooperative agreement with 
a Project Integrator to pursue this technology. This entity would 
create the mechanisms needed to assure strong private sector and 
international participation in the project and also assure a solid 
private sector management approach to the selection of technologies and 
the construction project. This entity, with its eventual consortium 
partners, will be able to apply this technology to commercial projects 
in the U.S. and abroad. We also expect the Project Integrator to build 
any fuel fabrication or other facilities that will be needed to support 
commercial use of NGNP technology (though we may, as some potential 
applicants have already inquired, certain proposals to build such 
facilities at the Idaho National Laboratory). The Consortium will also 
be responsible for obtaining an NRC license for the NGNP.
    We believe that a strong role for the private sector in this 
program is essential to its success. Without private sector leadership, 
the NGNP will lack credibility with industry and it will be very 
difficult to bring this technology to commercial deployment. We have 
considerable confidence in the U.S. private sector to assemble the 
right technologies, the right players, and the right strategy to make 
NGNP technology a reality.
    If we are successful in creating such a technology, we will 
transform the energy and environment future of the United States. We 
will not only assure a vibrant, long-term future for nuclear energy 
that will allow the Nation to benefit from nuclear energy's enviable 
environmental qualities, but we will expand its advantages from 
electricity production to fueling the Nation's vast transportation 
system. In doing so, we will enable the President's vision, as 
articulated in the National Hydrogen Fuel Initiative, to be realized 
far earlier than many thought possible.

                  MANAGING DOE'S NUCLEAR ENERGY AGENDA

    The Department of Energy is well-equipped to pursue the research, 
development and demonstration of complex, advanced systems such as the 
NGNP because it has access to some of the best scientific and 
engineering talent in the world--at the DOE laboratories. Because of 
its roots in the Atomic Energy Commission, most of the Department's 
labs have excellent capabilities and expertise in various aspects of 
nuclear technology. The Department has established a program management 
structure that brings the best technical talent to bear on DOE's 
nuclear energy R&D programs, no matter where that talent may reside. In 
managing the Generation IV, AFCI, and Nuclear Hydrogen Initiative 
activities, for example, DOE has developed an integrated structure that 
designates key Laboratory personnel as ``National Technical Directors'' 
of specific technology areas. These individuals have the responsibility 
to coordinate work at the national labs with universities, industry, 
and the international community in areas that they have particular 
expertise.
    We believe that there is a role for many of the labs in advancing 
our nuclear energy program objectives. I have met personally with the 
``Seven Lab'' group to discuss their ideas on promoting a broad-based 
nuclear energy research program. And, as I told the senior lab staff at 
this morning's ``Decision-Marker's Forum.'' We expect to rely on 
Argonne National Laboratory (with its unique expertise in reactor 
analysis, reactor safety, physics and computer codes); Oak Ridge 
National Laboratory (which has great expertise in materials and 
chemical processes); Pacific Northwest National Laboratory (with its 
international nuclear safety expertise); Lawrence Livermore National 
Laboratory (which leads in the consideration of the national security 
considerations of nuclear technology); Los Alamos National Laboratory 
(which has some the Department's finest advanced nuclear fuel 
technology capabilities); and Sandia National Laboratories (which has 
outstanding energy conversion, systems engineering, and 
nonproliferation expertise).
    Obviously, however, the Idaho National Laboratory will play a 
central role. As you know, we have issued a request for proposals which 
will establish a new Management and Operations Contractor at the lab 
who will have the task of merging the lab operations of Argonne 
National Laboratory-West and Idaho National Engineering and 
Environmental Laboratory to create a new, multi-program national 
laboratory. The new lab will serve as what Secretary Abraham called the 
``command center'' of a revived nuclear technology, education, and 
research enterprise in this country. We expect that the INL will form 
close and productive relationships with other national laboratories--
particularly those where important, irreplaceable expertise and 
capabilities exist today.
    The development of this new laboratory is a key objective of our 
Next Generation Nuclear Plant program. It is fair to note that the 
Department has two coequal purposes in pursuing the NGNP; one is to 
work with industry to develop and deploy a technology that would help 
us meet the Nation's long-term energy and environmental goals. The 
other is to initiate the ten-year effort to build the Idaho National 
Laboratory into the world's premier nuclear energy research laboratory.
    Pursuant to the latter objective, the Department has developed a 
strategy that assures both a strong management role for the private 
sector and a major, well-defined role for the INL. In particular, we 
envision that the INL would have the following key responsibilities in 
the NGNP project:

   The INL would serve as the Department's lead laboratory and 
        technology agent for the entire project. All of DOE's funding 
        for the considerable research required for the NGNP project 
        will go to the INL. I would expect that INL would coordinate 
        tasks utilizing some of our other outstanding labs which play a 
        significant role in nuclear research and development today.
   DOE's current approach is to maintain the National Hydrogen 
        Fuel Initiative as a distinct program. The INL will conduct the 
        hydrogen technology program and coordinate with the Integrator 
        to eventually marry the NGNP with the hydrogen plant.
   The INL will provide the Integrator and the Consortium with 
        technology support required for the project.
   The Department expects that the INL will also play a major 
        role in the construction of the NGNP; it is our experience that 
        first-of-a-kind components are fabricated at national 
        laboratories.
   The INL will coordinate all educational activities connected 
        with the project, most likely through the proposed Center for 
        Advanced Energy Studies to be collocated with the INL.
   INL will serve as the primary point-of-contact on the 
        relevant Generation IV International Forum ``system steering 
        committee'' related to NGNP technology and coordinate any 
        international government-to-government research and development 
        work.

    Beyond nuclear energy research, we envision the INL continuing to 
serve as a multi-program laboratory, with a broad and varied portfolio 
of work. We believe that a diverse scope of work activities would 
provide a sound intellectual basis for the lab and help attract the 
wide range of expert researchers and technologists from many 
disciplines that will be needed to allow us to reach our ambitious 
nuclear energy goals. In addition to its nuclear energy role, the 
request for proposals indicates that the new INL M&O contractor will:

   Consolidate at the INL the ability to fabricate, test and 
        assemble plutonium-238 power systems needed for both national 
        security and space exploration;
   Establish a world-class Center for Advanced Energy Studies 
        in Idaho Falls, Idaho, in which the INL, Idaho universities and 
        other regional and national universities cooperate to conduct 
        on-site research, classroom instruction, technical conferences 
        and other events;
   Be a lead science and technology provider in nuclear 
        nonproliferation and counter proliferation activities, and play 
        an increased role in developing science-based, technical 
        solutions for protecting the country's critical infrastructure; 
        and
   Research, develop, demonstrate and deploy technologies that 
        improve the efficiency, cost effectiveness and environmental 
        impacts of systems that generate, transmit, distribute and 
        store electricity and fuels.

    For the nuclear energy and other missions, we have asked the 
Nuclear Energy Research Advisory Committee to evaluate the assets in 
Idaho and to recommend to us improvements it believes we should make 
not just in facilities and equipment, but also in less tangible areas, 
such as personnel development and incentives and laboratory culture. We 
look forward to receiving their recommendations later this year.

                 ENHANCING NUCLEAR TECHNOLOGY EDUCATION

    Finally, Mr. Chairman, I think it is important that I highlight the 
progress we have made in reversing the decline in nuclear engineering 
in the United States. With significant support and encouragement from 
this body and your colleagues in the House of Representatives, we are 
now reversing the decline in undergraduate enrollments in this area of 
study that began in 1993 and continued through 1998. In 1998, the U.S. 
saw only around 500 students enrolled as nuclear engineers--down from 
almost 1,500 in 1992. After several years of focused effort, the United 
States now has over 1,300 students studying nuclear engineering. That 
number is set to increase further, as strong programs--such as at 
Purdue and Texas A&M, not to mention Idaho State University and the 
University of New Mexico--continue to grow and we see new programs 
start at schools such as South Carolina State University, the 
University of South Carolina, and the University of Nevada-Las Vegas.
    The growth of nuclear energy in the United States is dependent on 
the preservation of the education and training infrastructure at 
universities. The research conducted using these reactors is critical 
to many national priorities. Currently, there are 27 operating 
university research reactors at 26 campuses in 20 states. These 
reactors are providing support for research in such diverse areas as 
medical isotopes, human health, life sciences, environmental 
protection, advanced materials, lasers, energy conversion and food 
irradiation.
    The most exciting development in University Reactor Infrastructure 
and Education Assistance is the Innovations in Nuclear Infrastructure 
and Education (INIE) Program established in FY 2002. In FY 2003, two 
additional university consortia were awarded, bringing the total to six 
INIE grants, providing support to 24 universities in 19 states across 
the Nation. These consortia have demonstrated remarkable collaborative 
efforts and strong formation of strategic partnerships between 
universities, national laboratories, and industry. These partnerships 
have resulted in increased use of the university nuclear reactor 
research and training facilities, upgrading of facilities, increased 
support for students, and additional research opportunities for 
students, faculty and other interested researchers.
    We plan to do even more to support nuclear technology education in 
the future. With the advent of the Idaho National Laboratory's proposed 
Center for Advanced Energy Studies, we expect that the lab will become 
a center point for strengthening nuclear education nationwide. We look 
forward to the opportunities this new Center will create for our 
efforts to maintain and enhance the Nation's nuclear education 
infrastructure.

                               CONCLUSION

    Mr. Chairman, we are at a critical moment in deciding our energy 
future. As Secretary Abraham and you have said, ``we need to get our 
energy house in order.'' We believe that task requires a strong 
contribution by nuclear energy well into this century. Ensuring this 
occurs is a formidable challenge. But we need to start now; the past 
three years has seen a dramatic change in terms of actions taken, 
increased industry interest, and a broader recognition of the benefits 
of nuclear energy. We look forward to working with you and this 
committee in resolving outstanding challenges and meeting these goals.

    The Chairman. Thank you very much, Mr. Secretary.
    I want to ask Senators that came late if they would like to 
make a brief opening remark. Senator Alexander and Senator 
Bayh, and then we will ask Senator Bunning. Would you like to 
make a remark?

        STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR 
                         FROM TENNESSEE

    Senator Alexander. Yes, Mr. Chairman, and I will make it 
brief. Thank you. Thank you, Mr. Secretary, for----
    The Chairman. It does not have to be brief; whatever you 
would like.
    Senator Alexander. Thank you.
    These are the points that I would like to make. I very much 
support nuclear energy as an option for us in the United 
States. It ought to be a major component of our National Energy 
Policy. I am from a part of the country, Tennessee, which has a 
big clean air problem and one of the surest ways to clean our 
air is to produce more of our electricity from nuclear power. 
We get 20 percent of that from TVA right now and I support 
TVA's effort to continue to expand nuclear power in the area. 
So I support the administration on that.
    I am concerned about a couple of things. One is I want to 
make sure that we have sufficient resources in the budget, Mr. 
McSlarrow, to reach the 2010 goal. We have consortia, as you 
have mentioned, who have stepped up and said that they want to 
work through this very expensive process of making sure that 
the regulations permit licensing. I look forward in the 
question and answer period to talking more about whether we 
have enough money there to send a clear signal to the industry 
that this is a real prospect, the opening of new plants.
    The second area I would like to ask you about and I hope 
you will comment when the time comes has to do with the Idaho 
National Laboratory. I am all for its being the lead lab for 
nuclear research, but I wonder whether it is wise to take the 
plutonium 238 processing capabilities which we now have at Oak 
Ridge and the plutonium 238 encapsulating capacity which we now 
have at Los Alamos and move it to Idaho. I do not think that 
would be necessary in order for Idaho to fulfill its mission 
and I would be interested in the cost of that. It would seem to 
me that if it is likely to cost hundreds of millions of dollars 
to take that established capacity which is at Oak Ridge and Los 
Alamos and move it to Idaho, I would rather spend the money in 
Idaho to try to get a new, lower cost nuclear power plant going 
than to take existing capabilities that have existed over the 
last 30 years and replicate them there.
    So those are the areas I would like to hear more about. I 
thank you for coming.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Bayh.

           STATEMENT OF HON. EVAN BAYH, U.S. SENATOR 
                          FROM INDIANA

    Senator Bayh. Just very briefly, Mr. Chairman. I thank you 
for holding this hearing.
    I arrived at this subject as something of an agnostic, but 
am interested in the role that nuclear power can play in 
addressing two of the big issues of our time. The first is 
increased energy independence for our country. This is a 
significant national security issue, the significance of which 
we are reminded of every day with most of the world's energy 
supplies residing in fairly unstable places.
    The second is the issue of global warming and the possible 
contribution that an appropriate use of nuclear power as a part 
of our Nation's energy mix can make in contributing toward 
that.
    The final factor would be affordability. With natural gas 
and other energy sources increasing in cost, I am interested in 
the role that nuclear power can play in perhaps lending some 
stability to affordable energy sources for our country.
    So I am here to listen and learn, not to speak, but I thank 
you for affording us all this opportunity.
    The Chairman. Thank you very much.
    Senator Bunning.

          STATEMENT OF HON. JIM BUNNING, U.S. SENATOR 
                         FROM KENTUCKY

    Senator Bunning. Thank you, Mr. Chairman. I am pleased that 
we are having this hearing today on the role of nuclear power 
in our National Energy Policy. It is important that we remain 
focused on the need to increase our domestic energy production 
and lessen our dependency on foreign national, such as the 
Middle East, foreign nations.
    The need to increase our own production of energy has never 
been more important than now. This hearing is especially 
important because of the high price of oil and natural gas that 
we are experiencing. This Nation needs to diversify its energy 
resources, including using energy from coal, oil, gas, and 
nuclear energy.
    I look forward to hearing from our witnesses today about 
the use of nuclear power and a means to diversify and increase 
our domestic energy sources. I thank the witnesses for 
appearing and I will question our No. 1 witness, a little later 
on, on why it has been since 1973 that we have not had a new 
nuclear power plant started.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    We are going to now proceed to some questions and I am very 
hopeful everybody will have some. I do think it is very 
important for our committee that we get an opinion as soon as 
we can, as valid as we can make it, as to what the impact of 
the circuit court decision is on nuclear power. I am not sure 
everybody knows that last week there was a very, very 
significant ruling by the circuit court up here regarding how 
many years out in the future we must provide this facility at 
Yucca Mountain, how many years out in the future do we have to 
provide for safety.
    We were doing 10,000 years because that is about all we 
could model. They leave the impression that it might have to be 
300,000 years, which seems impossible.
    But let me ask a couple of questions so we get the record 
straight. What percentage of the electric power does France get 
from nuclear power generation?
    Mr. McSlarrow. It is about 75 percent.
    The Chairman. 75 percent of France's power comes from that. 
They have interim storage of their nuclear waste, is that 
correct?
    Mr. McSlarrow. Correct.
    The Chairman. Have you ever seen that?
    Mr. McSlarrow. I have not personally seen it, no.
    The Chairman. I would like to just say on the record that I 
have seen it, and you would not know that you were there. You 
get into a building that looks much like a junior high school 
in America, a big one, a big junior high, and you walk in and 
the floor is kind of glassy. And you ask, where is the waste, 
and they say: Look down. And you look down and you are standing 
on it.
    It is encapsulated in glass tubes and then glass-filled, 
and then glass on the top, and you can walk all over it. There 
is no radiation emitted. And that will last 75 years and they 
figure they will be looking for other ways, and they proceeded 
to have 75 percent, while we here in America decided that our 
way to store it was to put it in the ground permanently and 
that is the law, that we are going to get there some day.
    Rather difficult so far. That opinion is going to require 
that Congress act in certain ways, I am sure.
    Senator Bayh raised the issue of is there enough money in 
the budget to keep this going, or who asked that? Senator 
Alexander. So let me ask you right now, Mr. Secretary. In spite 
of the decision, it is your opinion, is it not, that if we fund 
this the funding can be used and the project can continue in 
spite of this decision; is that correct?
    Mr. McSlarrow. Absolutely, Mr. Chairman.
    The Chairman. That is because you are proceeding to develop 
it, but you are not yet licensing it; is that correct?
    Mr. McSlarrow. We are at the stage right now where we are 
preparing a license application by the end of the year, and we 
will meet that deadline. There is a lot of useful work to be 
done and that is what the funding requirements in the next 
couple of years would be devoted to.
    The Chairman. Well, Mr. Secretary, I am in the enviable or 
unenviable position, whichever it may be, of chairing this 
committee, which has some authorizing power with reference to 
paying for Yucca, which I was not aware of, but it is there and 
I will discuss that in a paper with all of you as to what that 
is.
    But second, I chair the subcommittee that pays for this, 
the Energy and Water. So I want to ask you, based on all of the 
problems we have shared with you, is there sufficient money in 
the budget to pay for the next stage of the evolution of this 
project?
    Mr. McSlarrow. There is, if the President's request is met. 
If it is below that, I cannot say. It is a year for year slip, 
but it will obviously have some impacts. The request of $880 
million, that is the $131 million from the defense account plus 
the $749 million included in the administration's 
reclassification proposal, keeps us on track to take waste 
beginning in 2010.
    The Chairman. I want to make it clear, and then I will 
yield to Senator Bingaman. I have some additional questions, 
but I may just submit them to you. I want to make it clear that 
I blame no one, but the way the budget was prepared took $500 
million off budget to pay for Yucca. Our budget process do not 
permit us to do that, does not permit us to do that. So what we 
have to do is take the regular budget for Energy and Water and 
take that money out of it to pay for a huge portion of Yucca.
    That is almost impossible from the adding up of the numbers 
as to how it can be done. So we are looking everywhere we can 
to find some way to do that.
    But his answer begs the question. The budget has the money 
in, but does it have it in there in a way that we can spend it? 
The answer is probably no.
    Senator Bingaman.
    Senator Bingaman. Thank you very much.
    Mr. Secretary, as I understand what the court of appeals 
ruled this last Friday, they basically said that under the law 
EPA is required to establish a standard that is, quote, ``based 
upon and consistent with the National Academy report.'' The EPA 
had established what they thought was a standard that was based 
upon and consistent with the report, and the court said, no, it 
is not, because the academy report does not permit you to 
establish a standard that contemplates 10,000 years.
    Is it your view that it is possible for EPA now to go back 
and develop a workable standard that is consistent with that 
National Academy report?
    Mr. McSlarrow. First let me say, we are obviously 
evaluating a lot of options. That would be one of them. We have 
had essentially 1 full business day to review this opinion, but 
let me just give you sort of the initial cut at this. I told 
Senator Domenici yesterday, I am a congenital optimist about 
Yucca Mountain and I guess I have to be in this job. But 
everybody said we could not get to the point we are at right 
now in terms of the Congress having approved the siting 
solution.
    This court case--and it is often lost sight, and I realize 
opponents are going to try to make hay of what they got. This 
court case was an enormous victory. Everything regarding site 
selection and everything regarding the standards that the EPA 
and the NRC did was upheld, except for one thing. And other 
than that one thing, the 10,000-year period that you have 
identified, it is clear to me that the 10,000-year period with 
the 15 millirem standard, which is what the EPA and the NRC 
established, has been upheld. So all the work that is devoted 
to that in the license application is still very useful and we 
will proceed, as I said before, to file a license application.
    What you do after the 10,000-year period is the question 
mark that is presented by the court case. Just to give you an 
example of what we are dealing with, in the final environmental 
impact statement produced on the Yucca Mountain project by the 
Department, we estimated a mean peak dose just to show 
magnitude, occurring in 480,000 years, of 150 millirem. Just to 
put that in context, 150 millirem is roughly half of the 
average background radiation in the United States.
    So based on what I know right now, I see no technical 
reason why EPA or anybody else cannot do something that allows 
us to proceed and deals with the post-10,000 year period. But 
obviously those are decisions that will be the product of 
consultation among our agencies and with the Congress.
    Senator Bingaman. So you are saying that it may be possible 
for EPA to revise its standard to comply with whatever the 
court has said and there will be no need to change the law?
    Mr. McSlarrow. That is possible. I do not know that. I know 
that is certainly a possibility.
    Senator Bingaman. And your intent is to go ahead and 
develop your application for a license on the assumption that 
if a new standard comes forth from EPA you would then change 
the application to reflect that, even if that occurred once the 
initial application had been filed?
    Mr. McSlarrow. Right. I think it is unlikely, not 
impossible perhaps, but unlikely that anything that might occur 
on a post-10,000 year standard would cause us to revisit the 
first 10,000 years. So I would view it as possible that even as 
we work through an application and a license we might have to 
supplement it with new performance data according to whatever 
new standards might be brought to bear.
    Senator Bingaman. You referred in your testimony to the 
Nuclear Power 2010 program and the value of that. As I read the 
fiscal year 2005 budget request, it proposes cuts to that 
program by almost 50 percent and states on page 398 of the 
budget volume, quote: ``The Department has requested only 
minimal funding for fiscal year 2005 to enable the continuation 
of ongoing licensing demonstration and related analysis 
projects.''
    Could you explain why, if this Nuclear Power 2010 program 
is a priority, you are proposing to cut that program by 50 
percent?
    Mr. McSlarrow. Sure. Of course, I remember that asterisk 
very well. It is a fair point, and I think what in 
bureaucratese was being said there is this. We started the 
NP2010 program because we thought it was vital that we move to 
new starts. We had to test the early site permitting process. 
We want to test the combined construction and operating 
license. We want to do the predesign certification.
    All of these are the product of the new NRC rules, Part 52. 
We are well into the early site permitting process. It was not 
until last November that we issued a solicitation inviting the 
industry to come forward and tell us what they would be 
interested in doing in terms of testing out new designs and 
most importantly perhaps, testing the combined operating, 
construction and operating license.
    So at the time we produced the budget we did not know what 
the answer was. Now we have some sense of the answer. We have 
three consortia that have come in the door. One of them we have 
actually agreed to fund. It was a much smaller amount. It was 
TVA, looking at a study of the ABWR down at Bellefonte. The 
other two are very substantial. I cannot go into details 
because of the procurement sensitivity, but these are real 
serious proposals. We are in the midst of evaluating them right 
now.
    I would expect that now we have, all of us, new data and 
the industry has stepped forward to say what it is they are 
interested in doing, that this will have an effect certainly on 
next year's budget. But at the time we did not have that data.
    Senator Bingaman. Thank you, Mr. Chairman.
    The Chairman. Senator Bingaman, I might say, although it is 
preliminary, we do intend to address the issue that you raised 
in the appropriation bill. So whether they put it in or not, we 
are looking at it as a must.
    Before I yield to Senator Craig, I have one follow-up 
question to something you have been saying. Can you tell us how 
the research that you are doing on the Advanced Fuel Cycle 
Program is progressing and how it could address issues 
associated with licensing of a high-level waste repository?
    Mr. McSlarrow. Well, Mr. Chairman, I am not a nuclear 
engineer, although I have stayed at a Holiday Inn Express. I 
will give it my best shot.
    The Chairman. Go ahead.
    Mr. McSlarrow. As I understand it, when you are dealing 
with disposal long-term of waste in a repository you really 
have three issues: the issue of volume, the issue of heat, and 
the issue of radiotoxicity. These are all the challenges that 
the Yucca Mountain project is currently grappling with. The 
Advanced Fuel Cycle Initiative has in terms of the research 
that we are doing an ability to address all three of those.
    You can pursue a UREX, uranium extraction, process to pull 
useful uranium out of spent fuel--a lot of people do not 
realize that in a spent fuel rod about 96 percent is uranium--
and either re-use it or dispose of it as class C waste. You can 
use other technologies to separate out the plutonium or the 
long-term actinides, which are one of the causes of the heat 
and certainly one of the drivers for the radiotoxicity. And you 
can burn it as fuel in a light water reactor or, more 
importantly, if you use a fast spectrum reactor, you can 
actually burn it and transmute it, so that you take what is 
essentially, we have used the term, a 300,000-year problem 
today, take what is a 300,000-year problem and turn it into 
something that is only several thousand years, which is a much 
more manageable deal from an engineering point of view.
    We feel very positive about AFCI and what we have already 
learned to date. For example, we have already proved on the 
laboratory scale--we have not scaled up yet, but in the 
laboratory--that we can extract the uranium in a way that is 
proliferation-resistant. This is the opposite of what we did 
for the weapons program. So we are very excited about the 
opportunities.
    The Chairman. This is called transmutation, right?
    Mr. McSlarrow. Part of it, yes, sir.
    The Chairman. Part of it is.
    Did he explain it right, Dr. Chu? You are the expert. You 
are the engineer. Please assist him. Was it pretty good?
    Dr. Chu. Yes.
    The Chairman. You taught him well?
    Dr. Chu. Yes.
    The Chairman. Senator Craig.
    Mr. McSlarrow. You will get that raise I promised you 
earlier, Margaret.
    [Laughter.]
    Senator Craig. Then apparently between the checking in and 
the checking out of the Express Holiday Inn you did learn a 
bit. Obviously by that last answer you did.
    Kyle, how will DOE both rebuild the Idaho lab 
infrastructure to meet the goals as you now plan it and perform 
actual nuclear research with what we call a flat budget through 
2009? How do you get there? You began some of that explanation 
with Senator Bingaman. Expand on that if you would.
    Mr. McSlarrow. I think one of the things about Idaho is we 
are trying to do many things at once. Obviously we are trying 
to--we are trying to separate out the mission so that the 
cleanup program, which is the RFE that we are currently 
developing right now, is focused just on cleanup. One of the 
reasons we transferred this to nuclear energy as the program 
office was we wanted the site to know what its mission was, not 
that the cleanup is not important. So that is the first step.
    The second step was to do, as we proposed in the RFP, to 
combine INL, currently INEEL and Argonne West, and from the 
efficiencies of the combination, not just infrastructure and 
logistical efficiencies but efficiencies we believe that are 
intellectual, to build a powerhouse capability in terms of that 
kind of work. Then you have got programs, Generation IV, the 
nuclear-hydrogen program, the NGNP, which has been the subject 
of the expressions of interest that we just sent out, that are 
not going to be exclusively funded at Idaho, because obviously 
we are going to call on the other labs who have expertise to be 
participants in this, but there is going to be a funding stream 
that relates to that.
    I think the biggest problem we have had in 2005--this is 
reflected in the budget--was to ensure that we dealt with the 
transition costs and we dealt with some of the early 
infrastructure costs--because they have not, frankly, been 
attended to in the past--in the 2005 budget, which kept the 
nuclear R&D side from being as high probably as we want it to 
be. But we felt it was important to make sure that we lay the 
foundation for the future of this lab there.
    I think with the nature of Generation IV, the hydrogen 
program, and most particularly the NGNP, there is a lot of 
uncertainty there. I mean, we have flat budgets for just about 
everything in the Federal budget documents. It does not 
actually reflect what happens the following year.
    Part of this too is going to be informed by what we 
discover this year. Obviously, you are going to have an 
important role in terms of what money is actually appropriated. 
But I believe that we have laid the foundation and are in the 
middle of establishing something that will ensure not just a 
thriving, but an exciting, future for the Idaho National 
Laboratory.
    Senator Craig. Beyond the restructuring and the RFP's, one 
of the things that is essential in developing the NGNP, as you 
have just mentioned, is material development. The Idaho 
Advanced Test Reactor has been in operation since 1968 and most 
believe it will be essential to material development in the 
NGNP. Yet the fuel for the ATR is in danger of no longer being 
manufactured.
    The question is is DOE budgeting for fuel purchases and 
major system maintenance that will be needed to sustain the 
test reactor toward this new materials development that will be 
necessary?
    Mr. McSlarrow. Well, Dr. Magwood just whispered in my ear 
that that is something we are conscious of, that we are looking 
at in terms of the 2006 budget.
    Senator Craig. It will be essential.
    According to the Nuclear Regulatory Commission's 
regulations, for any reactor design that differs significantly 
from current light water reactors the NRC will require testing 
of an appropriately sited full-sized prototype for the design 
over a significant range of normal operating conditions, 
transient conditions, and specific accident sequences. Now I am 
going to test how much you learned between the checking in and 
the checking out.
    In order to ever deploy advanced reactors in this country, 
we would really have to undertake a project like, I think, the 
Idaho Advanced Reactor Demonstration would be. Or would we not? 
That is the question.
    Mr. McSlarrow. I think we do. But over and above what the 
NRC regulations are, I think we do simply as a practical 
matter. The rest of the designs that we have been talking about 
that we would be testing against the design certification are 
so-called Generation III Plus. Now we are talking about 
something that is Generation IV. It is really new. And the 
NGNP, which is a very high temperature reactor, is sort of the 
one we have selected to really pursue.
    Our goal, at least in terms of the Department, what we have 
recommended to Congress, has been to produce a prototype, a 
demonstration plant, that can be commercialized. Obviously it 
will have important benefits in terms of the research that is 
done there and certainly all the research on technology that 
leads up to it. But ultimately it is to actually produce 
something that can receive a license, that can demonstrate the 
qualities that we want it to have and be commercialized so we 
move to the next generation.
    I mean, that is why we call it the Next Generation Nuclear 
Plant. So I think as a practical matter it would be very odd, I 
think, if we ended up with a design certification of a 
Generation IV design and then we just expected the industry to 
step forward and start building them without one having been 
built. And I think that of necessity it requires government and 
industry partnering.
    Senator Craig. And also to have it licensed by the Nuclear 
Regulatory Commission.
    Mr. McSlarrow. Correct.
    Senator Craig. Because I think we are also concerned about, 
you mentioned in your opening statement, uniformity of 
licensing and licensing process. And based on current licensing 
procedure, ultimately there has to be that model in place 
functioning.
    Mr. McSlarrow. Correct.
    Senator Craig. Thank you.
    The Chairman. Senator Alexander.
    Senator Alexander. Thank you Mr. Chairman.
    First I wanted to say this committee also has a lot to do 
with the Forest Service and the National Park Service, and on 
this past weekend I took a 13-mile bicycle ride between Idaho 
and Montana on a trail that Senator Craig helped to create. And 
I just want to congratulate him for that. It is a rails-to-
trails.
    Senator Craig. Well, Lamar, that is a beautiful example of 
an old rail right-of-way that the Forest Service wanted to 
condemn and walk away from. It has how many tunnels that you 
trafficked through?
    Senator Alexander. We went through about seven tunnels and 
over some of the most fantastic trestles in the country. It is 
where the old Sky-Top used to go from Chicago to Tacoma and I 
am glad you saved it.
    Senator Craig. And we saved it and it has now become one of 
the premier mountain biking paths in the western world. That is 
my commercial for the day.
    Senator Alexander. I am grateful for it.
    Senator Craig. Thank you very much, Lamar.
    Senator Alexander. Now I want to talk about Idaho some more 
in just a minute, on the lab. But first I want to reemphasize 
what I said earlier. I do not see any alternative to, in the 
next 10 to 15 years especially, to nuclear power if we want to 
be energy independent and if we want clean air and we want 
reasonable cost.
    I very much hope that we can find a way to sequester carbon 
from burning coal and have coal gasification. I hope that 
happens, and I applaud your efforts to push us in that 
direction. I would like to find some new natural gas sources on 
non-protected Federal lands. But 20 percent of our energy today 
comes from nuclear power. As Senator Domenici said, France is 
taking our technology, Japan is taking our technology, and they 
are using it and they are cleaning their air and they are 
producing power, and we should do the same.
    I am glad you have your 2010 project. I am glad you have 
already funded the TVA consortium. I hope that we have enough 
money to push that ahead. I appreciate Senator Bingaman's 
questions on that.
    Let me go to one set of questions I have to try to 
understand what the Department's proposals are for the 
plutonium 238. I do not want to be misunderstood. We have the 
Idaho laboratory and its mission as I understand it is to help 
us find a way to create new commercial nuclear power plants so 
we can duplicate them and replicate them in a McDonald's 
fashion. It will be cheaper and easier to do that. And we need 
to focus that somewhere and Idaho is our place to do that. That 
is where we want to do it, and we need to put as much money 
into that and the 2010 project, is to help us get through the 
regulatory part of the process so people can actually get a 
license to build such plants.
    Now comes the proposal to consolidate the plutonium 238 
program at Oak Ridge and at Los Alamos, where they have got a 
long history of processing plutonium 238 from irradiated 
targets at Oak Ridge and then shipping it to Los Alamos, where 
they then encapsulate it. Why does that need to be moved to 
Idaho? Will not that cost several hundred millions of dollars? 
And if so, would it not be better to spend that several hundred 
millions of dollars to help push ahead with the Idaho mission 
of creating this new commercial nuclear power plant?
    Mr. McSlarrow. The quick answer--and we will get you 
something more specific--is I think it will cost a couple 
hundred million dollars total life cycle to stand up the 
complete ability to produce the Pu-238.
    This is not a search for a mission for Idaho National Lab. 
I just want to be clear about that up front. It made sense to 
us for the following reasons. First, we actually do not have 
the capability of producing plutonium 238 today. We are just 
drawing on inventory as it stands right now. We have not yet 
done the production facility at Oak Ridge. That is the plan 
currently that we propose to change.
    At Los Alamos, as you mentioned, you have got the 
processing, and then the last part is assembling the elements 
of this into useful national security or space systems. That 
has already been moved to Idaho.
    So those are the three functions. But when you produce 
plutonium 238 what we had in mind was essentially bouncing back 
and forth with irradiated targets from Oak Ridge to Idaho 
anyway. When you look at all of the shipments suddenly we were 
talking about, which of course have to be secure transport, at 
a certain point we realized, given that we have already moved 
the assembly operations to Idaho, given that we would like to 
free up space at TA-55 in Los Alamos, and given the constraints 
that we need the transportation units to do a variety of 
different things, not just this program, it made sense to us to 
consolidate it in one place.
    So it is partly driven by the transportation costs, it is 
partly driven by security concerns. It is partly driven by what 
we believe ultimately would be efficiencies in that operation.
    Senator Alexander. I appreciate that and would like to 
learn more about that. It is not necessary--I am trying not 
just to be parochial about this. In the Oak Ridge case, for 
example, with the designation of Oak Ridge as the lead agency 
in helping to recapture high-speed computing, it was not 
necessary to move all of the computing operations there. 
Argonne and other laboratories will be in partnership. Many 
universities will be in partnership with that effort.
    So I guess my caution would be that just because an 
operation is relevant to the mission of the Idaho laboratory 
does not mean it all needs to be moved there if it is not cost 
efficient to do that. I would just like to wave a yellow flag 
and ask for more information on that process. And if it is true 
that it does not have to be there and we could take the same 
amount of money and accelerate the mission in Idaho, then I 
think that ought to be considered. That is my point.
    Mr. McSlarrow. We will be happy to provide that for you.
    [The information follows:]

    The Department has the responsibility to maintain the 
infrastructure required to provide plutonium-238-fueled radioisotope 
power systems to various Federal government agencies in support of 
important national science and security missions. Unfortunately, our 
infrastructure to produce this material was dismantled in the 1980s 
after the reactors at the Savannah River Site were shut down over 
safety concerns. Since that time, we have relied on a dwindling 
inventory of this material to support important national security 
missions.
    To address the need to produce new Pu-238 for this inventory, we 
established a plan to put in place a new capability at Oak Ridge 
National Laboratory to fabricate and process reactor targets needed to 
make this material. We also planned to conduct irradiation of these 
targets in the Advanced Test Reactor in Idaho; continue the existing 
program of encapsulating Pu-238 into pellets at the Los Alamos National 
Laboratory; and conduct final testing and assembly of the power systems 
at the Mound Plant in Ohio.
    After the events of September 11, 2001, two changes occurred that 
altered the status of our Pu-238 activities. First, the demand for our 
power systems by national security elements of the United States 
government increased significantly. As a result, our inventory will be 
depleted by the end of the decade. Second, the effort to assure the 
security of this material has become more intensive. The safety of the 
public and, therefore, the security of the material, is the highest 
priority of the Department's Pu-238 activities. Pursuant to this, the 
Department relocated the power system testing and assembly effort from 
the Mound Plant to a more secure location in Idaho.
    Similarly, our original plan to move target material to the Oak 
Ridge campus has had to change. We are now proposing to relocate the 
material to a secure site in Idaho, where it can be more effectively 
protected. We must also revisit the location of the Pu-238 processing 
effort.
    The consolidation of plutonium-238 operations would significantly 
increase security of the material and would enhance program 
flexibility, while reducing future secure transportation requirements 
and risks associated with regularly transporting this nuclear material 
across the United States. Relocating the processing and encapsulation 
function currently performed at the Los Alamos National Laboratory 
would also free up facility space for future national security missions 
by the National Nuclear Security Administration. Including the 
production function as part of a consolidation effort at Idaho would 
also not impact current employment at Oak Ridge since the capability 
does not currently exist at that site and would have to be put in 
place.
    Nevertheless, we intend to conduct an open, public process in 
deciding where the processing mission will be located. We will 
determine whether it should be consolidated with other Pu-238 missions 
in Idaho or remain in Oak Ridge. Our preliminary assessment of the 
costs, reliability, and security issues points to consolidation in 
Idaho, but we intend to conduct a complete National Environmental 
Policy Act review before making a final decision.

    Senator Alexander. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    I want to get back to the administration's fiscal year 2005 
budget. In your budget for nuclear energy research and 
development there is $96 million, $96 million.
    Mr. McSlarrow. Correct.
    Senator Bunning. That is $34 million less than provided in 
fiscal year allotment last year.
    Mr. McSlarrow. Right.
    Senator Bunning. Why did the Department of Energy decide to 
cut nuclear energy research and development?
    Mr. McSlarrow. The answer is much the same as my first 
budget hearing that we had here in February, which was this was 
a tight budget across the board. I think you all have heard 
this a million times by now, but the President recommended a 
budget to you that focused increases on defense and homeland 
security. Everything else was tight. It is not just nuclear 
energy. Everything at the Department was very tight.
    The budget actually for the Office of Nuclear Energy went 
up, slightly, but it went up. There were other programs that 
went down. It did go down because it was a tight budget year. 
There is no question about it. It is not centered on nuclear 
energy per se. It is not sending a message about that, because, 
as I say, we have had these conversations about science and 
fossil and everything else.
    What is important I think in terms of the commitment that 
we and this committee and members of this committee have shown 
is--I mentioned in my testimony that in fiscal year 1998 the 
budget for nuclear energy, the research and development portion 
was zero. If you average out all of the budgets requested by 
the previous administration prior to this President's National 
Energy Policy, it is a little below $40 million. If you average 
our budgets that we submitted after the President's energy 
plan, it is slightly below $100 million. It has more than 
doubled. So it is very robust. And like everything else, we 
might want more money, but we have the budget realities that we 
are dealing with.
    But again, it is not centered on nuclear energy per se.
    Senator Bunning. Mr. Secretary, that is very well-meaning 
and nice-sounding and everything, but it does not get to the 
problem. If we do not expend more dollars in research and 
development of nuclear power, we are never, never going to open 
another nuclear power plant, because, as you know and I talked 
about it before, the last completed nuclear power plant in the 
United States of America was in 1973. That is longer than I 
care to remember and it should be longer than the Department of 
Energy ever cares to remember.
    If we are going to get a new nuclear power plant built, the 
Federal Government is going to have to subsidize that nuclear 
power plant. We had it in our energy bill. Unfortunately, it 
was filibustered and it did not go forward. We never got 
cloture.
    But I am telling you, and you know it, if we do not 
subsidize the development of nuclear power and a fourth 
generation--I have a son who works in a nuclear power plant in 
Clinton, Illinois, and they are constantly upgrading that plant 
so that the Nuclear Regulatory Commission does not come in and 
shut them down, and it lasts about 2 years.
    So I am begging you as part of the Department of Energy to 
do something about that. The only way we can do something about 
that is to put more dollars into research and development to 
make sure that investors, investor-owned utilities, private 
enterprise, and the Federal Government partner in the 
development of stage four or whatever we want to call it, phase 
four, nuclear energy production.
    And please, do not tell me about how many dollars we have 
got going in. It is not enough.
    Mr. McSlarrow. OK.
    The Chairman. Senator, I might tell you I do not know where 
we will go this year with appropriations, but the Subcommittee 
on Energy and Water has taken your point and we do fund what 
you ask for, even though it is not in the President's budget.
    Senator Bunning. That is very good, Senator, chairman, and 
I hope to gosh that the Senate has the wisdom to pass that when 
it comes to the floor.
    The Chairman. I want to also say for the record, the 
Senator talks about subsidy. I want to explain what the energy 
bill had in it. The energy bill followed the recommendations of 
the best experts around, and what we put in was production tax 
credits, production tax credits. They are the same 
proportionately as we gave to wind energy, as we gave to solar 
energy, as we gave to geothermal energy. So they all fit in 
with the same production tax credits that would have been part 
of the bill.
    I am not critical of anyone. Most everybody would have been 
for those, even though the bill got caught up in an MTBE issue. 
So I just wanted to make sure that you knew that.
    Senator Craig, do you have anything further?
    Senator Craig. Thank you very much, Mr. Chairman.
    Kyle, last year DOE tasked an independent technology review 
group to evaluate design features and technology risks for the 
NGNP. This was followed on--this was follow-on work to the 
development of functional requirements for the NGNP. All of 
this work was part of the evolution of DOE's Generation IV 
program, as you have already explained.
    This review group was made up of an international cross-
section of major industry and utility executives. Their task 
was to identify an appropriate level of technology risk for the 
project.
    The question is, does DOE think the independent review, 
technology review group report, could be used as technical 
guidance for the development of a new reactor and what is the 
status of that report?
    Mr. McSlarrow. There is no question that it would be 
available for use and I think our expectation is that we would 
certainly make it available as guidance to the project 
integrator, which is the subject of the EOI that went out 
recently. The status is it is still in draft and it is 
completed soon, in weeks, is the status.
    Senator Craig. How long is ``soon''?
    Mr. McSlarrow. Weeks. Does next month work any better?
    Senator Craig. I do not know. We will not be here next 
month, so you will probably have until September 1.
    Mr. McSlarrow. September you will have it.
    Senator Craig. All right. But that report will be valuable, 
I think, for overall understanding.
    Some of the industry comments on the expressions of 
interest have been shared with me for information. One company 
that has an extremely long history with nuclear power in this 
country commented as follows: ``DOE's conceptual strategy, 
which relies heavily on a single project integrator, will 
result in higher than necessary costs, a longer than necessary 
schedule, and is unlikely to lead to a plant being built.''
    The reason I selected that quote, because I thought it was 
very blunt and direct, but more importantly it came from an 
industry source that has phenomenal credibility in the 
construction of nuclear plants.
    The question is, how did DOE justify the use of a project 
integrator? What has this approach been used--where has this 
approach been used in DOE in similar projects in the past?
    Mr. McSlarrow. As an aside--I do not think we need to get 
into this because I will take it on its own merits. But I have 
obviously heard comments that are diametrically the opposite.
    The important thing about the expression of interest, where 
we lay out essentially the idea that a project integrator, a 
private company, would essentially form a consortium that would 
go from the early stages through obtaining a license and 
construction of an NGNP, is a product of several things. First, 
you and Senator Domenici wrote the Department a letter in 
November of last year where you said: We do not view the entity 
responsible for the NGNP as something that should come within 
the work scope of Idaho National Laboratory, No. 1. No. 2, we 
do not think it should be sole sourced. No. 3, we believe that 
when you get into the technology you should ensure that there 
is competition between at least two technologies and then a 
down-select to an ultimate one.
    Obviously, we attach great weight to what you have to say. 
As we thought our way through that, we tried to design 
something that would, even if it is housed and obviously lashed 
up extremely tightly with the M&O contractor at Idaho National 
Lab, that would allow us to think through before we leap into 
the process of how the private sector, if we are going to 
commercialize a plant like this, how the private sector viewed 
this from the very get-go.
    You asked a question about if we have done this in the 
past. My guess is no. In my role as Deputy Secretary and the 
acquisition executive for the Department, I sort of deal with 
legacy issues when it comes to contracts all the time, and they 
are not pretty. My sense of it is that we very often cannot 
distinguish between when we are doing acquisition and when we 
are partnering with industry, when industry should take the 
lead.
    So the idea of the project integrator was to have somebody 
in industry who has got those kinds of capabilities who could 
put it all together. Now, they do not have free rein. 
Obviously, what we have described is something where every step 
of the way they have to work with the Department. And there are 
going to be offramps.
    But that is the concept. Now, that said, we have not locked 
this in by any means. There is no pride of authorship here at 
all. This is a concept we have thrown out for comment. We are 
getting comments, obviously blunt ones like that, but we are 
getting lots of comments. I expect that, based on what I 
already know about what people are saying, we are going to end 
up tailoring this somewhat.
    It was not--again, I wanted to be as careful as possible to 
think through this. I want to get this right. So we welcome 
that kind of input.
    Senator Craig. Could I do a follow-on to that question?
    The Chairman. Please.
    Senator Craig. While, because Idaho is tied to this, the 
questions may sound parochial, they are not. I think all of us 
on this committee want to make sure that we do it right in our 
relationship with industry. This is something that is 
developing a great deal of attention, not only nationally but 
internationally.
    The capabilities of the project integrator are listed in 
the EOI as management, integrate research, manage projects 
within the cost and schedule, evaluate competing technologies, 
organize an international team. My question would be, will not 
the new management and operating contractor that the DOE is 
hiring to run the Idaho National Lab have these capabilities? 
Should they not have these capabilities, no matter where this 
facility might be constructed?
    I say that because I do not have the letter in front of me, 
but your comments in last November when talking about the INL 
lab contractor should not build in GMP, but that their role is 
in no way slighted. In other words, they had to have these 
capabilities and talents. So when I am sitting here looking at 
this, I look at this as almost a duplication of bureaucracy or 
management bureaucracy, management team. Maybe ``bureaucracy'' 
is too negative to use. And where do we get by doing this kind 
of double layering, if you will, when we ought to be hiring 
somebody with these kinds of talents from the beginning through 
the end?
    Mr. McSlarrow. Well, I will go back and look at the letter, 
too. I mean, my recollection is that what you all had said was 
separate it from the Idaho contract so that you would 
essentially have two things, but maybe we misunderstood.
    But there is some duplication. I do not think we thought 
that was a bad idea in this instance because the M&O contractor 
is going to have a lot on its plate. It is going to be 
responsible for leading and integrating with all the other labs 
and the important work that they are doing to support all of 
these programs.
    Obviously, we have not said this today, but there are lots 
of things outside of nuclear energy that are happening at Idaho 
on the national security and homeland security front too that 
the M&O has to focus on. The nuclear-hydrogen program is going 
to be a big part and a big program at the Idaho National Lab.
    On the NGNP, obviously we are at the very beginning stages. 
No one, including Congress, has made a decision we are actually 
going to construct it, but we are going to start driving in 
that direction. But the NGNP potentially is so huge that I 
think, just my own opinion is, I do think it merits a separate 
program structure with direct supervision right out of Bill 
Magwood's office. I think it is that important.
    It is what we are doing with Future Gen on the coal side. 
it is a big deal. It is a Presidential initiative, and so it is 
being managed--obviously, in the case of Future Gen, it is 
lashed up very closely with NETL--in Idaho's case, because you 
are actually potentially talking about siting the facility 
there and all the research is there.
    I think to the outside observer it is possible that you 
would not even know the difference between INL, NGNP. It would 
all seem like the same. But I think in terms of building, 
producing and managing a project, I think that has got to be 
seamless. I do not think anybody should be confused about what 
the mission is on that. I think the visibility suggests, 
although I am open to other arguments, suggests that that ought 
to be managed right out of the headquarters department.
    Senator Craig. Further questions? I have got some more, but 
go ahead.
    The Chairman. Thank you. Let me say, Senator Bingaman 
wanted to ask some and then I have a couple. Senator Bingaman.
    Senator Bingaman. Thank you very much.
    Let me ask about two issues. One is this Nuclear Energy 
Research Initiative. That has generally been a successful 
program to permit far-ranging R&D in the nuclear science. The 
proposal in the fiscal year 2005 budget, is to zero that out, 
subsume it under the advanced fuel cycle initiative, whose 
purpose is to reprocess and recycle fuel at the national 
laboratories. Can you just explain briefly what steps are being 
taken to ensure that universities can continue to play an 
important role in nuclear energy research in light of this 
proposal?
    Mr. McSlarrow. Sure. First, there is good news here. The 
amount of money that is going to go to universities is under 
our budget substantially going to increase. It is true that the 
NERI line was zero funded. But we are proposing--and I have 
talked to Dr. Magwood and his folks and I know they have the 
plans. We are proposing as part of those plans that we are 
going to spend $7 million in 2005 going directly to 
universities.
    What we did was take it out of the NERI line item, and we 
have now--we want these activities at the universities to 
support our work, whether it is Gen IV or the nuclear-hydrogen 
program or AFCI. The big R&D program lines are what we want to 
support. So we wanted to wrap it in. And it in no way 
diminishes the importance of universities. As I said, it 
enhances it.
    In addition, of course, you have got the universities 
research and assistance line item that will continue, both the 
assistance for research reactors and the grants and the 
fellowships that have been the case in the past, at basically 
the same funding we got in 2004.
    Senator Bingaman. Thank you.
    One other issue, which I know you would be disappointed if 
I did not ask about. Both Senator Domenici and I think some 
others have asked you nearly a year ago, in September of last 
year, about the plans with regard to polygraph exams in the 
Department. You stated there--this is in response to a written 
question. You said: ``Before I leave the mandatory screening 
program, let me mention that if a revised rule is proposed and 
promulgated I believe it is important we proceed with full 
implementation of that rule expeditiously so that the Secretary 
is in a position to make the certification required in the 
fiscal year 2002 defense authorization bill regarding the 
implementation of the new program.''
    Could you tell us the status of the polygraph rule and the 
revisions that you proposed to the committee?
    Mr. McSlarrow. Yes. This is one reason why, after 3\1/2\ 
years, I really hate government. I testified before you and I 
told you what the plan was going to be, and then when I 
testified here in February you asked me where it was. I said we 
were just about to get it to OMB for inter-agency clearance. 
Inter-agency clearance has just completed. It is now back with 
us.
    I expect very soon, now that it is back within my control 
that we will get it out. And I am as frustrated by the length 
of time as you are on this.
    Senator Bingaman. Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Bingaman.
    Senator Craig, I am going to get to you and let you ask as 
many questions as you would like, if you do not mind my leaving 
while you do that. I have to be in another place.
    Let me just close by saying we sit here today with all 
these accolades aimed at the need for and the propriety of 
nuclear energy in our future. We know what others have done and 
we know what we have done. We know what we ought to be doing 
and we know what we were doing. But as we sit here today a 
little statute that was inserted in the Energy Policy Act--
Senator Bennett Johnston was presiding then--and it said that 
in doing this work the Environmental Protection Agency should 
be guided by the National Academy of Science.
    Now, the National Academy of Science talked about when the 
maximum exposure would occur, and nobody but nobody expected 
that to--270,000 years is one interpretation. Even a million 
years is another interpretation. Nobody thought that anybody in 
the world would have to meet that kind of standard up front in 
starting the repository process.
    The court has nonetheless said that the EPA failed to 
consider the National Academy's report. I want to suggest that 
this is an ominous situation. It is terrifically important that 
we in some way find a solution to this. The entire nuclear 
energy production in the United States could stand or fall on 
this interpretation, because if we cannot proceed with Yucca, 
soon across this land the States will find that there is no way 
to take care of the wastes that are in every State in America 
and that they are going to have to keep them. And nobody wants 
to do that, and there might be some statute compliance required 
that says they cannot continue to produce nuclear power until 
they have solved this.
    So I want to make sure that as we leave this meeting today, 
we could have an array of people telling us the consequences 
and we could have a few people saying rah, rah, rah, it means 
the end of nuclear power. But I believe concertedly, working 
with everyone, we have to find a way to be more realistic.
    For those who do not want it, this is not a way to have a 
victory. They think so, but this is not a victory; this is the 
destruction of an industry and a source of energy that is now 
20 percent of America's needs. We even have, and I read into 
the record, one of the most significant environmentalists based 
upon global warming saying it is imperative that we move to 
nuclear energy quickly and many, many nuclear power plants, 
because the time is too short, says he, to use the other energy 
sources we have all been talking about. They cannot get the job 
done.
    Now, that is probably right whether you are worried about 
global warming or whether you are worried about diversification 
of energy for the United States, less reliance upon foreigners. 
And here we sit.
    So I want the Department to know that this chairman is 
interested in trying to find a solution, and I think we have a 
compelling number of Senators on this committee who would like 
to find a solution. I am not sure we can because we may not 
have the authority. But we have not looked at all the authority 
we have on this committee either. We will be doing that.
    So Mr. Secretary, I thank you. I did want to say, with 
reference to the laboratory in Idaho, that I do not believe 
2020 is right. I think it is too far in the future. We have to 
expedite that. We have to get that done quicker. I am not 
saying that because Larry Craig is here. It is just too long 
for what we are trying to do and how important it is in terms 
of where we are going.
    So I want to leave you and your people with my firm belief 
that we have got to find different ways to get there faster. I 
am sure that is good news to Larry Craig, but I did not say it 
for Idaho. I said it because I really believe doing that 
reactor is terribly, terribly important.
    I also want to say another thing that I forgot to say. 
There are so many people saying we ought to have new cars, cars 
that run on hydrogen. And there is this great big hoopla that 
that might be really good. Well, I want to tell you, most 
experts say you cannot produce enough of that to run the cars 
in America without a nuclear power plant or more to generate 
the hydrogen that you need.
    Now, if you want to keep saying we are going to have 
hydrogen cars and have a little experimental hydrogen around, 
that is fine. You might produce 10,000 or so and show them off. 
But you do not have a permanent supply without a nuclear power 
plant.
    So everywhere you look it is imperative. I hate to make it 
so ominous, but I think it is. I really am worried that 
something very wrong has been done here and we must fix it.
    Senator Craig.
    Senator Craig. Mr. Chairman, before you leave, I appreciate 
your drawing attention to the importance of proceeding with 
Yucca Mountain as it relates to the industry and clean 
electricity. I have been a fairly regular attendee at climate 
change conferences around the world, and at the last one that 
we attended in Milan, Italy, last spring I found something most 
significant. Two of the countries I visited with that have 
already adopted the Kyoto Protocol and were supposedly driving 
their economies toward compliance by the reduction of the 
emission of greenhouse gases had to openly admit that they were 
not going to meet those standards and probably could not ever 
meet those standards.
    Japan was within, I believe, 7 percent of meeting those 
standards. Now their economy is coming back on line and they 
bumped themselves another 3 to 5 percent ahead of where they 
wanted to be. Italy is the same way.
    Clearly, there is no question that providing abundance of 
energy is directly tied to the economy of countries and the 
ability of those countries to grow. And those two countries had 
to admit in conversation with me that as their economies came 
back on line their margin of getting to compliance had rapidly 
grown again and that they just did not know how they were going 
to get there, in all fairness, based on current technology, 
current energy production technology.
    That is why future technologies and clean technologies are 
so critically important in those general concepts of climate 
change.
    The Chairman. Also, Senator, that is why France can say to 
America, why do you not sign the treaty----
    Senator Craig. Sure.
    The Chairman [continued]. Because they can comply easily 
when 75 percent of their electricity comes from nuclear. They 
start off with none of the pollution or a very insignificant 
portion coming from the electric power generation, which is a 
pretty easy start. What if we did not have any. We would move 
in the direction of the numbers set by Kyoto, and we would say 
to other countries, why do you not join us. But we do not have 
it like France.
    Senator Craig [presiding]. Mr. Chairman, I do have a couple 
of more questions. I will be short. Kyle, we appreciate your 
time here. I have others that I will ask that you respond to 
the record with.
    In relation to Yucca Mountain--and you have talked about 
continuing to move there--I know that DOE must give advanced 
notice to potential layoffs and faces a deadline of later this 
month in relation to budget and all of that. Does DOE plan to 
request administrative flexibility from OMB regarding this 
layoff notice while Congress continues to work on finding a 
solution?
    Mr. McSlarrow. I do not think that is a bridge we have to 
cross yet. The Secretary identified this as a potential 
challenge I think a month or so ago in a letter to the Hill.
    Senator Craig. It is not at the end of the fiscal year?
    Mr. McSlarrow. Well, it has changed since then because of 
the--as you point out, July 31 would be the 60 days that you 
would be required under the Warren Act.
    Senator Craig. That is true.
    Mr. McSlarrow. What has changed since we notified people 
about this concern is I think we are much more comfortable, 
based on discussions with you and the leadership on the Senate 
side as well as on the House side, that we are going to get 
this resolved, even though if you look at the committee marks 
it may not reflect this. I think we are much more comfortable 
that ultimately we will have the kind of funding that takes us 
way beyond any need to think about RIF's.
    So right now, for the time being we are just going to work 
with Congress. We are not going to have to go through that 
process. We are just going to work with Congress to ensure that 
we get the funding stream that we have asked for.
    Senator Craig. Well, that is our hope, too.
    In the expression of interests list, some in my view--I 
should put it this way. In the expression of interest there are 
some very ambitious cost projections for the Advanced Reactor 
Demonstration. Were these cost goals based on comparable 
cutting edge energy research as they--well, first of all, what 
were they based on? I guess that is the first question I would 
want to ask.
    Mr. McSlarrow. There are several different ones.
    Senator Craig. Let me put it this way. Are they based on a 
first of a kind research project? Can we do that in relation to 
what we are talking about is really the first of a kind, 
because we are out on the edge of technology again to some 
degree?
    Mr. McSlarrow. Yes and no. Yes in the sense, if you just 
take one of the goals it is to actually construct for $1,000 a 
kilowatt, with a goal to get down to $500 a kilowatt. So it is 
yes in the sense of $1,000 is completely doable for a first of 
a kind. It is a stretch goal. That is what we want to do, is 
challenge them, but ultimately to make it commercialized and 
successful there the $500 per kilowatt would be the stretch 
goal in terms of commercialization.
    The other goals are essentially the production of hydrogen 
at a gasoline-equivalent cost of $1.50 a gallon, I think, and 
then the production of electricity, which is the other part 
obviously of the plant, at 1.5 cents a kilowatt-hour. Those are 
all aggressive. But in order for this to succeed in the 
commercial sector we think those are the goals that anybody who 
is doing this project has to at least achieve.
    Senator Craig. Well, Mr. Secretary, thank you very much for 
being here this morning. I think for the value of our record it 
was extremely important that you be here, and we appreciate 
your testimony, and the full committee will stand adjourned.
    [Whereupon, at 11:28 a.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

                     Nuclear Regulatory Commission,
                           Office of Congressional Affairs,
                                Washington, DC, September 14, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: I am responding to questions regarding changes 
in force-on-force exercises at power reactor facilities licensed by the 
Nuclear Regulatory Commission (NRC). Given the nature of these 
questions, they were referred to the NRC from a list of questions 
submitted for the record to the Department of Energy's Deputy 
Secretary, Kyle McSlarrow, following his appearance before the Senate 
Committee on Energy and Natural Resources on July 13, 2004.
    The NRC's responses to the four post-hearing questions from Senator 
Byron Dorgan are enclosed. If additional information is needed, please 
do not hesitate to let me know.
            Sincerely,
                                        Dennis K. Rathburn,
                                                          Director.
[Enclosure.]
                     Questions From Senator Dorgan
    Question 1. I understand that the NRC is now refocusing its efforts 
on force-on-force security exercises at nuclear power facilities. Under 
this program, the NRC is now allowing third party security forces to 
perform these training exercises. What are the reasons for this change 
in practice?
    Answer. Since the inception of the force-on-force (FOF) security 
exercise program in the early 1980's, there has been essentially no 
change in the practice of using security officers from the facility 
being evaluated, other nuclear power facilities, or local law 
enforcement officers to serve as mock attackers during FOF exercises. 
During pilot program FOF exercises aimed at strengthening the program 
in 2003, the NRC identified a need to improve the offensive abilities, 
consistency, and effectiveness of the exercise adversary force. The 
Commission addressed this need by directing the staff to develop a 
training standard for a Composite Adversary Force (CAF) which will 
travel from site to site to serve as the mock adversary. The CAF for a 
given NRC-evaluated FOF exercise will include security officers from 
various nuclear power facilities (excluding the licensee being 
evaluated) and will have been trained in offensive, rather than 
defensive, skills to perform the adversary function. We believe this 
will lead to a more effective exercise.
    Question 2. Do you agree that by allowing third party contractors 
to essentially evaluate their own readiness, there may be a perception 
that these evaluations pose a conflict of interest?
    Answer. CAF members do not perform an evaluative function. The NRC 
and its subject matter expert (SME) contractors evaluate the 
performance of each licensee during FOF exercises, and the NRC will 
continue to evaluate the abilities, consistency, and effectiveness of 
the exercise adversary force.
    The industry has selected Wackenhut to manage the CAF. Wackenhut 
also provides protective services to a substantial number of operating 
power reactors. The NRC recognizes that some may perceive a conflict of 
interest with respect to the same contractor providing both the 
protective services to some individual sites and staffing some members 
of the adversary force used for exercises. The Commission has directed 
the staff to ensure that there is a clear separation of functions, 
including appropriate management and administrative controls, in place 
within the Wackenhut organization to provide adequate independence 
between the Composite Adversary Force and the nuclear reactor guard 
force. In addition, the NRC will continue to assess the performance of 
the adversary force and require improvements if appropriate, including 
developing an NRC-contracted adversary force. One of the benefits of an 
industry adversary force is the feedback of a mock adversary's 
perspective into enhancement of site protective strategies and security 
officer training at his or her normally assigned facility, as well as 
improving the quality of FOF exercises conducted by the licensees 
annually for training.
    Question 3. I do not feel security forces, especially in the area 
of nuclear security, should be allowed to evaluate themselves. If this 
is happening, what procedures have the NRC put in place to ensure that 
members of the same company evaluating their own security teams will be 
isolated from each other?
    Answer. The evaluation is done by the NRC. The NRC independently 
evaluates licensee performance in FOF exercises at each site on at 
least a triennial basis, using the CAF to provide a consistent, 
capable, and effective adversary. The CAF will not perform an 
evaluative role in the exercises. CAF members will arrive on site at 
about the same time that the NRC evaluation team arrives and will be 
coordinating closely with the NRC evaluation team and the NBC's SME 
contractors before and during the exercises.
    In addition, each facility licensee will conduct its own FOF 
training exercises each year during the remaining 2 years of the 
triennial evaluation cycle. The industry has included provisions for 
conducting FOF training exercises in the training and qualification 
section of each site's unique security plan. The NRC is currently 
reviewing and approving these security plans. The NRC includes 
verification of the proper conduct of industry-conducted FOF exercises 
in its procedures for periodic inspections of the licensee's security 
training programs. The NRC will also maintain its capabilities to 
conduct independent verification of licensee performance, on a for-
cause basis, as needed.
    Question 4. It would seem that the best way to avoid a potential 
conflict of interest would be to have the government conduct these 
exercises like they did before 2001. What level of funding or other 
tools are needed for the NRC to be able to conduct force-on-force 
exercises like they did before September 11, 2001?
    Answer. Prior to September 11, 2001, the exercise adversary force 
was also provided by the licensee being evaluated, usually from another 
site's security force. Then, as now, the NRC was the sole evaluator of 
licensees' performance during the exercises. The NRC expects the CAF to 
be a significant improvement in ability, consistency, and effectiveness 
over the status quo before September 11, 2001.
    Since September 11, 2001, the NRC has made additional enhancements 
to the FOF exercise program, including an increase in the frequency of 
NRC-evaluated FOF exercises from once every 8 years to once every 3 
years, the use of the Multiple Integrated Laser Engagement System 
(MILES) equipment for effective and objective evaluations, and a 
significant reduction in the licensee's notification time associated 
with exercise logistics and the use of Trusted Agent Agreements to 
minimize opportunities for compromising exercise integrity. The NRC 
believes that these changes, taken together in an integrated program, 
have substantially improved the effectiveness and quality of the FOF 
program.
    The NRC routinely reassesses the effectiveness and efficiency of 
its FOF evaluation program and has mechanisms in place to revise or 
improve its FOF processes and procedures as needed. Should industry be 
unable to maintain an adequate and objective CAF that meets the 
standards mandated by the NRC, the NRC has a contingency plan that 
would expand its support agreement with DOE/NNSA to fulfill the CAF 
function. The cost of this contingency is estimated at $4.3 million 
annually.
                                 ______
                                 
                              Department of Energy,
               Congressional and Intergovernmental Affairs,
                                Washington, DC, September 29, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: On July 13, 2004, Kyle E. McSlarrow, Deputy 
Secretary, testified regarding the role of nuclear power in national 
energy policy.
    Enclosed are the answers to 20 questions that were submitted by 
Senators Craig, Alexander, Landrieu, and you for the hearing record. 
The four remaining answers are being prepared and will be forwarded to 
you as soon as possible.
    If we can be of further assistance, please have your staff contact 
our Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031.
            Sincerely,
                                          Rick A. Dearborn,
                                               Assistant Secretary.
[Enclosures.]
                    Questions From Senator Domenici
    Question 1. Earlier this year three consortia responded to a 
solicitation from DOE asking energy companies for proposals to test the 
NRC's new licensing process. That's an absolutely critical step toward 
new plant construction and one that we should strongly encourage. But 
to date, the Administration has only provided nominal financial support 
to one consortium. What's the status of support for the other two 
consortia?
    Answer. The Department has completed the technical merit and 
programmatic review of the New Nuclear Plant Licensing Demonstration 
Project proposals from teams led by NuStart Energy, LLC and Dominion 
Resources. Several important issues were identified during these 
reviews and, during the week of July 26, 2004, the Department met with 
representatives of both teams to obtain clarifications. One team, 
NuStart Energy, also provided a revised proposal. The Department is 
evaluating the new information obtained from each team.
    Question 2. How soon will the Administration provide significant 
encouragement to these other consortia to get them moving too?
    Answer. The Department is evaluating new information provided by 
the NuStart LLC and Dominion Energy, Inc. teams. As soon as this 
process is complete, we will be in a position to make a final decision.
    Question 3. In developing the comprehensive energy bill, I believed 
that the first priority for nuclear power was to see a few new plants 
built in this country. That required extension of Price Anderson and 
some government assistance to reduce the financial risks of new plant 
construction. Any construction in the near future would involve 
advanced models of our current reactors.
    Just below those top priorities, I supported construction of a 
Generation IV reactor, study of advanced fuel cycles, and improved 
university programs. But no Gen IV reactor is going to be ready for 
commercial use for a long time, at least 20 years. We can't wait that 
long to start our nuclear renaissance.
    Yet some argue that we should just push immediately for the 
advanced reactors and forget about building the advanced models of 
current reactors.
    What's your view on this key issue? Do you think it is realistic 
build Generation IV reactors and use advanced fuel cycles without new 
starts of advanced plants of our current generation?
    Answer. The Department believes that for nuclear energy to make a 
real contribution in the near and the long term, both new orders for 
advanced light water reactors, and Generation IV systems are needed. 
Without new orders for current-technology advanced light water 
reactors, the country will lose vital intellectual, technical, and 
industrial infrastructure that will be extremely difficult and 
expensive to reestablish. On the other hand, without advanced 
Generation IV reactors and fuel cycles, nuclear energy will not become 
truly sustainable in the long term. In the even longer time-frame, 
Generation IV fast reactors will manage the burden of ever-increasing 
quantities of spent nuclear fuel and, eventually, provide the needed 
fuel when uranium becomes scarce.
    Question 4. What plans does DOE have to work with the industry to 
develop and commission a Generation IV reactor in a manner that will 
effect an easy transition to a commercial Generation IV design? How 
would such a project be financed, if the industry is committed in the 
near term to Generation III licensing and construction?
    Answer. The Department has not made a decision on whether to 
proceed with Generation IV reactor; however, on May 26, 2004, the 
Department published a Request for Information and Expressions of 
Interest in its conceptual strategy for developing and demonstrating a 
Generation IV reactor capable of both hydrogen production and 
electricity generation. In our conceptual strategy, the Department 
proposes to partner with private industry in the form of a ``Project 
Integrator'' to lead the development of the NGNP. The Project 
Integrator would hold a design competition to select the most 
commercially promising NGNP technology capable of meeting the 
Department's goals and then would organize an international consortium 
that would on a cost shared basis with the Department, design, develop, 
construct and operate the NGNP.
    The Department would anticipate a 50-50 cost share over the life of 
the project. We believe that this cost share expectation is realistic 
given the huge market potential of a successful NGNP. We expect 
electric utilities will continue to focus on near-term, Generation III+ 
technology for the foreseeable future. However, we anticipate 
considerable interest in the NGNP effort from both domestic and 
international vendors.
    Question 5. For over half a century the U.S. has provided 
responsible technical nuclear leadership in commercial nuclear 
technology. Foreign nations have taken U.S. technology and developed 
their own programs for the benefit of their own countries.
    How does DOE intend to regain U.S. technical leadership in 
commercial nuclear technology other than participation in both the 
Generation IV International Forum and the Paris-based OECD Steering 
Committee on Nuclear Energy? Do you agree such leadership is important?
    Answer. U.S. leadership in commercial nuclear technology is very 
important and the fact that the U.S. chairs both the Generation IV 
International Forum and the OECD Steering Committee on Nuclear Energy 
clearly represents that revived leadership. Such leadership enables the 
United States to influence international nonproliferation institutions, 
and monitoring and inspection arrangements, as well as the deployment 
of nuclear energy around the world. United States leadership will be 
enhanced by deploying new nuclear energy capacity and commissioning a 
geologic repository. Additionally, this will strengthen our position in 
the international market and in the development of Generation IV 
nuclear systems in cooperation with other countries.
    Question 6. The DOE estimates that by 2020, 15% of our natural gas 
will have to be imported from non-North American sources, even with 
completion of the Alaskan pipeline.
    Each new large nuclear plant will displace about 112 billion cubic 
feet of natural gas per year. Ten large new nuclear plants could 
substitute for 5 percent of the nation's total natural gas needs--that 
would be an immense cut in our need for LNG imports. And with gas at $5 
per thousand cubic feet, just that 5 percent translates to about $6 
billion that we wouldn't be sending overseas to pay for imports.
    With gas prices where they are now and are likely to be, isn't it 
sound national economic policy to increase our use of nuclear power?
    Answer. As reflected in the National Energy Policy, we believe that 
increased use of nuclear energy should be a major component of our 
national energy policy. This is supported by the economic advantages 
that accrue as the price of alternate fuels increases, the excellent 
safety record, the security of energy supply, the small footprint and 
light environmental burden of nuclear systems, the absence of 
greenhouse gas emissions, and the positive influence on the U.S. trade 
balance.
    Question 7. Over the next 20 years, what role do you see for 
nuclear power in reducing our dependency on foreign energy suppliers?
    Answer. I see increased deployment of new nuclear power plants to 
reduce U.S. dependency on foreign energy suppliers. New advanced light 
water reactors, currently being developed in cooperation with industry, 
will, when deployed, reduce the importation of natural and liquefied 
gas for electrical generation. Further, in the longer term, the 
development of the Next Generation Nuclear Plant, coupled to advanced 
electricity and hydrogen generation capabilities, and its commercial 
follow-on plants will not only offset gas imports, but produce hydrogen 
for our transportation infrastructure that will offset the use and 
therefore the importation of oil from foreign sources.
    Question 8. I am a strong supporter of the new reactor at Idaho. I 
worked to insert $15 million into the budget for this year to start the 
competition for that new reactor. I was pleased that the Secretary 
assured Senator Craig and me in January that competition for the new 
reactor would begin this fiscal year.
    I'm pretty disappointed that it took 8 months of the fiscal year to 
even issue a 4 page Expression of Interest for the new reactor. Several 
areas in those four pages are of concern to me, including the 
suggestion that an operational 2020 date is acceptable. That's just far 
too long. Furthermore, it's hard to see how any effective design 
competition is going to start this year after so much delay.
    Does the Administration support construction of the new Idaho 
Reactor?
    Answer. We are very excited by the possibilities presented by the 
NGNP. Because the INL is our preferred location for such a project, it 
was essential that we complete our Request for Proposals for the 
management and operating contract for that lab before issuing our 
Expression of Interest (EOI) document. While only a few pages long, the 
EOI lays out a new and exciting approach to the NGNP that has generated 
great interest. We have held detailed discussions with 12 large U.S. 
companies that are interested in serving as the project integrator for 
the NGNP. The input we have received and the interest we have seen in 
this initiative will be weighed as we make a final decision regarding 
this project.
    Question 9. Do you concur that it is critical to get this reactor 
operating quickly enough to help the nation's nuclear program recover 
some of its design leadership? And do you believe that a 2020 reactor 
start-up date accomplishes that goal?
    Answer. The Department believes that the Next Generation Nuclear 
Plant is a critical component of our overall strategy to reinvigorate 
the domestic nuclear industry and ensure a domestic energy supply free 
from dependence on foreign energy providers. We feel that the NGNP 
works in concert with the NP 2010 program to strengthen our national 
nuclear infrastructure and enhance U.S. leadership in the international 
nuclear arena.
    A specific timetable for development of the NGNP depends upon a 
number of factors and remains to be determined. We believe, however, 
our strategy of involving the private sector could result in a plan 
that meets our technology goals at an earlier date.

                      Questions From Senator Craig

                     NEXT GENERATION NUCLEAR PLANT

    Question 1. DOE specifies that the project integrator must be a 
``U.S. owned'' organization. This will narrow the field of nuclear 
experienced competitors considerably.
    Energy in general, and nuclear specifically, is an increasingly 
global business. Countries like France and Japan have been investing in 
nuclear energy research during all the years that we were not. They 
have built reactors--recently. We will need other countries in order to 
make this demonstration a success.
    DOE wants to build the NGNP as part of an international 
consortium--and DOE is also requiring these other countries to cost 
share in the reactor--probably substantially. In addition, these 
international participants will be exposing their intellectual property 
to the larger consortium.
    Why did DOE require a ``U.S. owned'' entity, instead of a ``company 
incorporated in the U.S.''?
    Answer. The request for expressions of interest puts forth a 
proposal and does not reflect a final decision on this issue; however, 
the Department believes that with the large amount of government 
funding expected for this project, paid for by the U.S. taxpayer, it is 
appropriate to consider requiring that a U.S. owned company serve as 
the integrator for the development of the Next Generation Nuclear 
Plant. This would not ``narrow the field'' of nuclear-experienced 
companies that can contribute to the project. Our strategy, in fact, 
relies significantly on the participation of international 
organizations on the NGNP consortium that would ultimately develop, 
design, and build a pilot facility.
    Question 2. Why should international participants be willing to put 
their intellectual property into this project--when the ``U.S. owned'' 
integrator will, at the end of the demonstration, ``lead the commercial 
deployment of the design''?
    Answer. The primary role of the integrator is to identify a 
private-sector-led consortium to carry forward this technology. It will 
be the consortium that will ``lead the commercial deployment of the 
design,'' not the integrator. The technology rights of each member of 
the consortium would be negotiated on an open, commercial basis.
    Question 3. DOE has specified an outlet temperature of 1000 degrees 
C for its ``base concept'' for NGNP. Some believe this will not be 
possible with currently used and qualified materials.
    Do you agree that although the NGNP must stretch the envelope in 
technology development, this goal must be tempered with the need to 
develop the foundation for deploying a reactor that is economically 
competitive and that harbors a minimum of inherent economic risks, if 
any?
    Answer. Yes, the Department agrees that the overriding concern in 
the development of the NGNP is that it be commercially attractive. To 
that end, as reflected in the EOI, the Department is not imposing 
design specifications for outlet temperature of the NGNP. Rather, the 
Department intends to specify economic performance goals that will 
ensure that the NGNP will generate electricity and hydrogen 
economically and therefore will find receptive customers and contribute 
in a meaningful way to our national energy economy.
    Question 4. DOE will pursue NRC licensing for the NGNP--which I 
believe is absolutely critical to the success of the project.
    Since the project will be externally regulated by NRC, is DOE 
limiting the redundant involvement of DOE's own safety and health 
office and of the Defense Nuclear Facilities Safety Board? If not, will 
DOE have achieved a demonstration whose results can be translated to 
the commercial sector?
    Answer. The Department believes that redundant or overlapping 
oversight leads to confusion and conflict, and must be avoided. In the 
case of the Next Generation Nuclear Plant, Nuclear Regulatory 
Commission (NRC) oversight is a key element to make the selected 
technology commercially deployable. While no final decision regarding 
the licensing and safety oversight of the NGNP has been made, it is our 
view that this project should be overseen by the NRC as would any other 
commercial nuclear power project. That said, with the demonstration of 
this technology at the preferred site of the Idaho National Laboratory, 
an interface between NRC and the Department's oversight organizations 
would be required, but must be clear and constructive to maintain 
safety and protect the environment while achieving our objectives. 
Because the NGNP is a civilian technology at a non-defense site, we do 
not envision a role for the Defense Nuclear Facilities Safety Board.
    Question 5. How is DOE providing resources to the NRC to be 
involved with the demonstration at its earliest stages?
    Answer. Over the past year, the Department and NRC senior 
management have met several times to discuss various strategies for 
licensing the NGNP. The Department continues to work with the NRC on 
various technology components that may be incorporated into the NGNP. 
Some examples include the Advanced Gas Reactor fuel development program 
that has been coordinated with the NRC to ensure that NRC gets the data 
it needs to make its own evaluation as to the behavior of this fuel 
under accident conditions. The Department is also preparing to jointly 
fund, with the NRC, low-flux vessel-steel irradiation studies so that 
both development and regulatory data needs are met. Further, we are 
funding studies at the Idaho National Engineering and Environmental 
Laboratory that will assist the NRC in developing a risk-informed, 
technology-neutral licensing framework for advanced reactors and in 
evaluating the license-by-test concept.

                     PRICE ANDERSON REAUTHORIZATION

    Question 6. The provisions of the Price-Anderson Act that provide 
insurance for commercial nuclear power plants licensed by NRC expired 
last year. While existing NRC licensed facilities are grandfathered, 
any new nuclear reactors would not have Price-Anderson coverage until 
the law is reauthorized. I understand from utility executives that no 
one is prepared to invest in new commercial nuclear power until they 
are assured that Price-Anderson insurance will be available to protect 
the public.
    Does the Administration still support the expeditious 
reauthorization of the expired portions of Price-Anderson dealing with 
commercial reactors so that there can be new nuclear development in 
this country?
    Answer. The Administration strongly supports the expeditious 
reauthorization of the Price-Anderson Act (the Act). Although all 
current reactors would continue to receive coverage without 
reauthorization of the Act, industry would not be in a position to 
consider the construction of new nuclear power plants.
    The indemnification provisions under the Act provide both the 
economic protections needed to allow for the construction of new 
nuclear plants in the United States and protects the interests of 
property owners in the improbable event of a nuclear power plant 
accident. The Act establishes the ideal design for an insurance program 
where the probability for occurrence of an event is extremely remote, 
but the potential damages could be very high. The retrospective premium 
aspects under the Act minimize the cost of this indemnification to 
electric ratepayers, but still provide over $10 billion in coverage. 
Further, claimants benefit from the fact that industry would assume 
full responsibility for a nuclear accident rather than engaging in 
lengthy legal processes.

                    Questions From Senator Alexander

    Question 1a. In January 2001, Secretary Richardson issued a record 
of decision regarding the production and processing of Plutonium-238. 
In this decision, the Department acknowledged that the Radiological 
Engineering Development Center (REDC) at Oak Ridge National Laboratory 
was the preferred facility for processing irradiated targets. The REDO 
facility has over 30 years of target fabrication and processing 
experience. However, despite this proven record and the Department's 
recent decision, the Department has proposed consolidating the 
plutonium-238 program at the Idaho National Laboratory.
    Why would the Department reverse this decision through a contract 
proposal for the operation of Idaho National Laboratory?
    Answer. The Department is revisiting its decision on where the 
production of plutonium-238 should be reestablished since the original 
decision was made prior to the events of September 11, 2001. Because 
plutonium-238 requires significant precautions to protect this 
material, there are significant security benefits that could be 
achieved by consolidating all plutonium-238 operations at a single, 
well-protected site that is remote from the public. The Department is, 
therefore, exploring this option. Reestablishing the production of 
plutonium-238 operations that would be included in consolidation of 
these operations. As a result, the Department asked that bidders 
interested in operating the new Idaho National Laboratory address, as 
part of their proposals, the potential consolidation of all plutonium-
238 operations at this laboratory. Such consolidation would include the 
plutonium-238 processing and encapsulation efforts currently being done 
at Los Alamos National Laboratory as well as the plutonium-238 
production efforts previously proposed to be established at Oak Ridge 
National Laboratory but not yet established. Consolidation would 
eliminate the need to ship irradiated targets and plutonium-238 between 
the various sites, thereby enhancing overall security, and would 
increase program efficiency and flexibility by doing all of the 
operations at a single site. With the required target irradiation 
planned to occur primarily at the Advanced Test Reactor in Idaho and 
with the assembly and testing of heat sources and generators already 
being moved to Idaho from the Mound Site in Ohio, the logical site for 
potential consolidation is the Idaho National Laboratory. It is in this 
context that the Request for Proposals included the potential 
consolidation of all plutonium-238 operations as an option to be 
considered in the contractor proposals. Since the previous decision on 
the facilities to be used for reestablishing plutonium-238 production 
was issued in the January 2001 Record of Decision, any change in this 
decision would be only be made after completing an appropriate 
environmental review and decision process.
    Question 1b. Is the Department going to conduct a full National 
Environmental Policy Act (NEPA) review of the proposed operations at 
the Idaho National Laboratory for processing and--encapsulating 
plutonium-238? If so, when will this review be conducted and when will 
public comment be accepted on the proposed plutonium-238 activities?
    Answer. Yes, the Department will conduct a full National 
Environmental Policy Act review for the proposed Plutonium-238 
Consolidation Project before a final decision is made to pursue the 
project. The review, in the form of an environmental impact statement, 
will be initiated in the near future and is expected to last between 12 
and 18 months. There will be several opportunities for the public to 
comment on the proposed action during the preparation of the 
environmental impact statement. The specific dates for the public 
comment period have not yet been established, but will be made public 
as soon as possible.
    Question 1c. Does the Idaho National Laboratory have sufficient 
expertise and facilities to process irradiated targets in the most 
timely and economical manner?
    Answer. The irradiation and processing of irradiated targets has 
been accomplished at the Idaho National Laboratory site for many years. 
Key programs involved in this effort include the past operation of the 
Idaho Chemical Processing Plant, one of DOE's three former large-scale 
reprocessing facilities; the ongoing operation of the Fuel Conditioning 
Facility and other experimental work in support of the Advanced Fuel 
Cycle Initiative; isotope production and separation at the Test Reactor 
Area; and numerous experiments at several analytical laboratories 
across the site. Therefore, adequate technical expertise exists at the 
site. Equipment and facilities needed to process the irradiated targets 
would have to be procured and constructed, but this type of activity 
would be required to place this mission. at any potential site, 
including the Oak Ridge National Laboratory. In addition, consolidation 
of all plutonium-238 activities at Idaho National Laboratory would 
significantly increase programmatic reliability and reduce operational 
costs--in part by eliminating the need to transport radioactive 
materials across the country.
    Question 1d. How many staff currently work at the Idaho National 
Laboratory that have expertise in processing irradiated materials?
    Answer. There are several hundred staff members at the Idaho site 
that have relevant experience with the irradiation and processing of 
irradiated target materials. This experience has been gained through 
programs such as the past operation of the Idaho Chemical Processing 
Plant, the ongoing operation of the Fuel Conditioning Facility and the 
production and separation of isotopes for the isotope production 
program.
    Question 1e. Has the Department done a detailed analysis of the 
cost of consolidating this program at Idaho including construction of 
new facilities and additional security requirements for such 
facilities? If so, what are the detailed costs including the cost of 
constructing a new category I nuclear facility for processing the 
plutonium-238 oxide and the cost of constructing the hot cells for 
processing the irradiated targets?
    Answer. The Department has completed a preliminary cost estimate 
for the proposed plutonium-238 Consolidation Project. This project 
would be conducted in an already secure area and, therefore, should not 
involve any significant increase in security costs. The cost estimate 
for the proposed Plutonium-238 Consolidation Project includes the 
construction of a hazard category 2 nuclear facility. This facility 
would support both the production of new plutonium-238 and the 
processing and encapsulation of the plutonium-238 that is currently 
accomplished at Los Alamos National Laboratory. The cost estimate for 
the facility to include both of these functions is $205 million to $230 
million over five years. The cost estimate for installing the target 
processing mission at INL is about the same as the cost for installing 
the mission at ORNL, but operating costs are projected to be lower if 
the consolidation of plutonium-238 activities in Idaho is completed.
    Question 1f. Does the Department have a detailed plan for 
consolidating this program at Idaho National Laboratory that include 
facility designs and project milestones? If so, please elaborate upon 
these plans.
    Answer. No, the Department does not have a detailed plan for the 
potential consolidation of the plutonium-238 operations at the Idaho 
National Laboratory. The project is not yet approved by the Department 
and project specific funding is not included in the fiscal year 2005 
budget request before Congress. The Department has developed 
preliminary high-level milestones and plans for the project. However, 
the Department plans to complete a National Environmental Policy Act 
review and initiating conceptual facility designs over the next 12-18 
months. Final facility designs and firm project level milestones would 
be established after the National Environmental Policy Act review is 
completed and a Record of Decision issued.
    Question 1g. Does the Department have a cost estimate for shutting 
down these operations at Oak Ridge National Laboratory?
    Answer. The capability to produce plutonium-238 does not currently 
exist and, therefore, there would be no cost associated with shutting 
down these operations. A small amount of funding, on the order of $1 
million per year, has been directed towards the planning for plutonium-
238 production and no major investments have been made in facilities or 
hardware. If the Department should decide to pursue the Plutonium-238 
Consolidation Project, it would not affect other ongoing operations at 
the Oak Ridge National Laboratory. Therefore, the impact on the Oak 
Ridge National Laboratory is expected to be negligible.
    Question 1h. Has the Department performed an environmental impact 
analysis of consolidating this program at Idaho?
    Answer. No, the Department has not yet performed an environmental 
impact analysis for consolidating the plutonium-238 operations in 
Idaho. However, in support of the Plutonium-238 Consolidation Project, 
the Department plans to initiate a National Environmental Policy Act 
review during FY 2005.
    Question 2. Is the budget for the Office of Nuclear Energy, 
Science, and Technology sufficient to research, design, develop, and 
deploy a next generation nuclear reactor? Please elaborate upon your 
response.
    Answer. The budget requests for the NGNP to date have been 
submitted as part of the overall Generation IV Nuclear Energy Systems 
Initiative. Thus far, these budget requests have been consistent with 
the early planning stages for the NGNP program. The Department places a 
very high priority on the Next Generation Nuclear Plant program. If a 
decision is made to proceed with development of the NGNP, as the 
program moves forward into design and build phases, the Department 
would reflect the need for additional funding in its future budget 
requests.
    Question 3. What cost arrangements does the Department foresee with 
its industrial partners in the design, construction, and deployment of 
the next generation nuclear plant?
    Answer. The Department anticipates a 50-50 cost share arrangement 
over the life of the NGNP program, with the Department assuming more of 
the burden, in the first few years to establish the baseline technology 
and supporting research and development and our partners in the program 
doing so in the later stages of the program.
    Question 4. Is the Department's budget sufficient to support the 
activities of the three consortia that have responded to the 
Department's solicitation for participation in the Nuclear Power 2010 
program?
    Answer. The Department's FY 2005 request was formulated before we 
received proposals from the three consortia. As a result, we did not 
have the information required to estimate the cost of these projects. 
Further, it was unclear, until we received these proposals in the 
spring of this year, that industry was interested in proceeding with 
projects to demonstrate the licensing process for new nuclear power 
plants. The information we have now received will be taken into account 
as we develop our funding requirements for FY 2006 and beyond.

                    Questions from Senator Landrieu

    Question 3. Given the importance of the Nuclear Power 2010 program 
in terms of testing the combined construction and operation process is 
DOE going to increase its funding level from $10 million back to 
recommended level of $20 million?
    Answer. The Department's FY 2005 request was formulated before we 
received proposals from the three consortia. As a result, we did not 
have the information required to estimate the cost of these projects. 
Further, it was unclear, until we received these proposals in the 
spring of this year, that industry was interested in proceeding with 
projects to demonstrate the licensing process for new nuclear power 
plants. The information we have now received will be taken into account 
as we develop our funding requirements for FY 2006 and beyond.
                                 ______
                                 
                              Department of Energy,
               Congressional and Intergovernmental Affairs,
                                   Washington, DC, October 4, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: On July 13, 2004, Kyle E. McSlarrow, Deputy 
Secretary, testified regarding the role of nuclear power in national 
energy policy. On September 29, 2004, we sent you the answers to 20 
questions for this hearing.
    Enclosed are answers to the four remaining questions that were 
submitted by Senators Landrieu and Feinstein to complete the hearing 
record.
    If we can be of further assistance, please have your staff contact 
our Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031.
            Sincerely,
                                          Rick A. Dearborn,
                                               Assistant Secretary.
[Enclosures.]

                    Questions From Senator Landrieu

                                FUNDING

    Question 1. Has the Department begun to re-prioritize its internal 
programmatic funding to account for the $749 million shortfall for 
Yucca Mountain in Fiscal-Year 2005?
    Answer. The Office of Civilian Radioactive Waste Management is 
currently reviewing its budget request for FY 05 in light of the amount 
that would be appropriated in the House passed Energy and Water 
Development Appropriations bill. That said, it is vital that the 
program receive its budget request, and that the Congress enact the 
legislation to reclassify fees paid into the Nuclear Waste Fund as 
offsetting collections.

                           CONTINGENCY PLANS

    Question 2. DOE must have been aware from the direction of the oral 
arguments made in the United States Court of Appeals for the District 
of Columbia that the current EPA standard for 10,000 years could be 
thrown out--What contingency plans has DOE made in terms of moving 
forward with Yucca Mountain?
    Answer. I do not believe that the 10,000 year standard was thrown 
out. As I stated at the hearing, I believe the issue is what you do 
after the 10,000 year period. We still intend to submit an appropriate 
license application with the Nuclear Regulatory Commission in light of 
the court decision. If the safety standard is revised at some point, we 
will address this issue.

                    Questions From Senator Feinstein

                          FUNDING CONTINUATION

    Question 1. On Friday, a federal appeals court ruled that that the 
EPA must take into account findings by the National Academy of 
Sciences, which called for a storage system that would protect against 
radiation releases beyond the next 10,000 years.
    A former DOE official, Lake H. Barrett, wrote in 1999 that devising 
a radiation standard beyond the next 10,000 years ``would be 
unprecedented, unworkable, and probably unimplementable.''
    Should we continue to spend billions of dollars to develop the 
single repository when we could harden the existing storage sites?
    Answer. The national policy since 1982 has been to pursue geologic 
disposal. This policy, which was made law in the Nuclear Waste Policy 
Act, was recommended by the National.Academy of Sciences, has been 
consistently endorsed over the years by four presidents and the 
Congress, and is overwhelmingly the choice of the international 
community.

                            BUDGET SHORTFALL

    Question 2. The President's Budget included $880 million for the 
DOE civilian nuclear waste disposal program, a 50% boost over FY2004. 
The Administration also is proposing that $749 million of the FY2005 
request be offset by the existing nuclear waste fee, so that the net 
appropriation would be $131 million. The House Appropriations 
Committee, noting that Congress has not enacted the Administration's 
waste-fee offset proposal, voted to provide only the $131 million net 
appropriation request.
    Without at least $600 million (according to lobbyists for the 
nuclear power industry), Yucca cannot continue-the House Energy and 
Water Appropriations Committee report noted DOE'S prediction that the 
funding reduction could force layoffs of 70% of the program's work 
force, place submittal of the repository license application ``at 
risk,'' and cause ``an indefinite delay in opening the repository.''
    How is the Administration going to try to make up the budgetary 
shortfall?
    Answer. We are currently working with the leadership in the Senate 
and the House, as well as the Office of Management and Budget, to 
secure adequate funding for the program.

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