[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                      OPPORTUNITIES AND CHALLENGES
                           FOR NUCLEAR POWER

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

                                HEARING

                               BEFORE THE

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 23, 2008

                               __________

                           Serial No. 110-94

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                 ______



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                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                 HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
MARK UDALL, Colorado                 LAMAR S. SMITH, Texas
DAVID WU, Oregon                     DANA ROHRABACHER, California
BRIAN BAIRD, Washington              ROSCOE G. BARTLETT, Maryland
BRAD MILLER, North Carolina          VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois            FRANK D. LUCAS, Oklahoma
NICK LAMPSON, Texas                  JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           TOM FEENEY, Florida
LAURA RICHARDSON, California         RANDY NEUGEBAUER, Texas
PAUL KANJORSKI, Pennsylvania         BOB INGLIS, South Carolina
DARLENE HOOLEY, Oregon               DAVID G. REICHERT, Washington
STEVEN R. ROTHMAN, New Jersey        MICHAEL T. MCCAUL, Texas
JIM MATHESON, Utah                   MARIO DIAZ-BALART, Florida
MIKE ROSS, Arkansas                  PHIL GINGREY, Georgia
BEN CHANDLER, Kentucky               BRIAN P. BILBRAY, California
RUSS CARNAHAN, Missouri              ADRIAN SMITH, Nebraska
CHARLIE MELANCON, Louisiana          PAUL C. BROUN, Georgia
BARON P. HILL, Indiana               VACANCY
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
                            C O N T E N T S

                             April 23, 2008

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Bart Gordon, Chairman, Committee on 
  Science and Technology, U.S. House of Representatives..........     6
    Written Statement............................................     7

Prepared Statement by Representative Ralph M. Hall, Minority 
  Ranking Member, Committee on Science and Technology, U.S. House 
  of Representatives.............................................     9

Prepared Statement by Representative Jerry F. Costello, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................    10

Prepared Statement by Representative Eddie Bernice Johnson, 
  Member, Committee on Science and Technology, U.S. House of 
  Representatives................................................    10

Prepared Statement by Representative Laura Richardson, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................    11

Prepared Statement by Representative Russ Carnahan, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................    11

Prepared Statement by Representative Harry E. Mitchell, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................    11

Statement by Representative Brian P. Bilbray, Member, Committee 
  on Science and Technology, U.S. House of Representatives.......     7
    Written Statement............................................     8

Prepared Statement by Representative Adrian Smith, Member, 
  Committee on Science and Technology, U.S. House of 
  Representatives................................................    12

                               Witnesses:

Ms. Marilyn C. Kray, Vice President, Exelon Nuclear; President, 
  NuStart Energy Development
    Oral Statement...............................................    13
    Written Statement............................................    15
    Biography....................................................    19

Mr. Robert Van Namen, Senior Vice President, Uranium Enrichment, 
  United States Enrichment Corporation Inc.
    Oral Statement...............................................    20
    Written Statement............................................    22
    Biography....................................................    24

Mr. James K. Asselstine, Managing Director (Retired), Lehman 
  Brothers; Former Commissioner, Nuclear Regulatory Commission
    Oral Statement...............................................    25
    Written Statement............................................    27
    Biography....................................................    30

Dr. Thomas B. Cochran, Senior Scientist, Nuclear Program, 
  National Resources Defense Council, Inc.
    Oral Statement...............................................    30
    Written Statement............................................    32
    Biography....................................................    41

Mr. Robert W. Fri, Visiting Scholar, Resources for the Future; 
  Chair, Committee on Review of DOE's Nuclear Energy Research and 
  Development Program, Board on Energy and Environmental Systems, 
  National Research Council
    Oral Statement...............................................    42
    Written Statement............................................    43
    Biography....................................................    48

Vice Admiral John J. Grossenbacher, Director, Idaho National 
  Laboratory, U.S. Department of Energy
    Oral Statement...............................................    48
    Written Statement............................................    50
    Biography....................................................    54

Discussion
  The Global/Nuclear Energy Partnership (GNEP)...................    54
  Environmental Challenges.......................................    57
  Economics of Nuclear Power.....................................    59
  Nuclear Waste, Safety and Training.............................    61
  Low Public Confidence in Nuclear Energy........................    62
  Reprocessing Spent Nuclear Fuel................................    64
  The Role of Federal Subsidies..................................    66
  Yucca Mountain and Waste Storage...............................    68
  Making Nuclear Cost-Competitive................................    70
  Domestic Uranium Supplies......................................    71
  On-site Waste Storage..........................................    71
  High Temperature Gas-Cooled Reactors...........................    73
  The Future of Nuclear Technology...............................    76
  Regulation and Investment......................................    78
  More on High Temperature Gas-Cooled Reactors...................    79

              Appendix: Answers to Post-Hearing Questions

Ms. Marilyn C. Kray, Vice President, Exelon Nuclear; President, 
  NuStart Energy Development.....................................    84

Mr. Robert Van Namen, Senior Vice President, Uranium Enrichment, 
  United States Enrichment Corporation Inc.......................    86

Mr. James K. Asselstine, Managing Director (Retired), Lehman 
  Brothers; Former Commissioner, Nuclear Regulatory Commission...    90

Dr. Thomas B. Cochran, Senior Scientist, Nuclear Program, 
  National Resources Defense Council, Inc........................    93

Mr. Robert W. Fri, Visiting Scholar, Resources for the Future; 
  Chair, Committee on Review of DOE's Nuclear Energy Research and 
  Development Program, Board on Energy and Environmental Systems, 
  National Research Council......................................    96

Vice Admiral John J. Grossenbacher, Director, Idaho National 
  Laboratory, U.S. Department of Energy..........................   104


             OPPORTUNITIES AND CHALLENGES FOR NUCLEAR POWER

                              ----------                              


                       WEDNESDAY, APRIL 23, 2008

                  House of Representatives,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 10:05 a.m., in Room 
2318, Rayburn House Office Building, Hon. Bart Gordon [Chairman 
of the Committee] presiding.


                            hearing charter

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                     U.S. HOUSE OF REPRESENTATIVES

                      Opportunities and Challenges

                           for Nuclear Power

                       wednesday, april 23, 2008
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

Purpose

    On Wednesday, April 23, 2008 the House Committee on Science & 
Technology will hold a hearing entitled ``Opportunities and Challenges 
for Nuclear Power.''
    The Committee's hearing will explore the potential for nuclear 
power to provide an increased proportion of electric generating 
capacity in the U.S. Nuclear power generation offers the opportunity 
for increasing electricity generation without associated increases in 
greenhouse gas emissions, however, challenges to this expansion remain 
including high costs, waste disposal, and concerns about nuclear 
proliferation issues. The hearing will also examine the Department of 
Energy's programs to support and advance nuclear technologies and their 
potential to address the challenges associated with expansion of 
nuclear power generation.

Witnesses

          Mr. Robert Fri is a Visiting Scholar at Resources for 
        the Future, and the Chair of a recent study conducted by the 
        National Academies on the Department of Energy's nuclear 
        research and development program. Mr. Fri will testify on the 
        findings of this report.

          Mr. Jim Asselstine is a recently retired Managing 
        Director at Lehman Brothers, and a former Commissioner of the 
        Nuclear Regulatory Commission. Mr. Asselstine will testify on 
        the current overall state of financing for new nuclear power 
        plants.

          Dr. Thomas Cochran is a Senior Scientist in the 
        Nuclear Program at the National Resources Defense Council 
        (NRDC). Dr. Cochran will explain NRDC's position on whether 
        nuclear power merits additional federal support in comparison 
        to other sources of energy.

          Mr. Robert Van Namen is the Senior Vice President of 
        Uranium Enrichment at USEC. Mr. Van Namen will describe the 
        current status of the domestic uranium enrichment industry, and 
        provide background on advancement of uranium enrichment 
        technologies.

          Ms. Marilyn Kray is the President of NuStart Energy, 
        and also the Vice President of Project Development at Exelon 
        Nuclear. Ms. Kray will provide the perspective of utilities on 
        the ability for nuclear power to significantly increase its 
        share of electric generating capacity in the U.S.

          Vice Admiral John Grossenbacher is the Director of 
        Idaho National Laboratory. Mr. Grossenbacher will testify on 
        DOE's programs to support and advance nuclear energy.

Background

    Nuclear power is derived from energy that is released when 
relatively large atoms are split in a series of controlled nuclear 
reactions. The resulting heat is used to boil water which drives a 
steam turbine to generate electricity. The process of splitting an atom 
is known as nuclear fission. Nuclear power represents approximately 20 
percent of the total electric generating capacity in the U.S. with 104 
nuclear plants currently operating. Because they are a low-carbon 
emitting source of energy in comparison to fossil fuels, increased use 
of nuclear power is being proposed by the Administration and several 
electric utilities as a way to mitigate climate change while meeting 
the Nation's growing energy needs.

Nuclear Waste Storage
    There are, however, several drawbacks to the expanded use of 
nuclear power. Disposal of radioactive waste produced in nuclear power 
plants has been a significant issue for decades. While on-site storage 
has become a default interim solution, the Nuclear Waste Policy Act of 
1982 (NWPA) called for disposal of spent nuclear fuel in a deep, 
underground geologic repository. In 1987, amendments to the NWPA 
restricted DOE's repository site studies to Yucca Mountain in Nevada. 
Technical and legal challenges have since delayed its use until at 
least 2017. All operating nuclear power reactors are storing spent fuel 
in Nuclear Regulatory Commission (NRC)-licensed on-site spent fuel 
pools. Most reactors were not designed to store the full amount of the 
spent fuel generated during their operational life. Currently, there is 
over 50,000 metric tons of spent fuel stored in the United States. 
Earlier this year, the Administration proposed draft nuclear waste 
legislation repealing the 70,000 metric ton limit on the amount of 
waste that can be stored at the repository at Yucca Mountain. It is 
expected that the 70,000 metric ton limit would be exceeded by the 
waste generated from the nuclear plants currently operating in the U.S.

Waste Reprocessing
    Reprocessing spent fuel could also eventually be necessary to meet 
nuclear fuel demands if worldwide growth meets projected targets. The 
Administration has proposed a multi-billion dollar federal program 
called the Global Nuclear Energy Partnership (GNEP) to foster the 
expansion of nuclear power internationally by having a select set of 
nations reprocess nuclear fuel for the rest of the world. GNEP expands 
upon the Department of Energy's Advanced Fuel Cycle Initiative, which 
has conducted a program of research and development in spent fuel 
reprocessing since 2002. A second objective of the GNEP program is to 
reduce the amount of radioactive waste requiring disposal in a geologic 
repository.
    Technologies required to achieve the goals of the GNEP program are 
not yet fully developed and tested. Therefore further research is 
required before the facilities necessary to accomplish the intended 
goals of the program can be constructed and operated. GNEP includes the 
design and construction of advanced facilities for fuel treatment, 
fabrication, and an advanced reactor which raises concerns about the 
financial risks associated with the program. In addition, reprocessing 
spent fuel raises concerns about the potential for proliferation of 
weapons-grade nuclear materials because existing reprocessing 
technologies separate plutonium from the spent fuel. While the 
plutonium can be recycled into a new fuel for use in nuclear reactors, 
as is done in France, it can also be used to make nuclear weapons. DOE 
has yet to identify a proliferation-resistant method to achieve this 
goal.

Nuclear Fuel Supply
    The nuclear fuel cycle begins with mining uranium ore, but 
naturally occurring uranium does not have enough fissionable uranium to 
make nuclear fuel for commercial light-water reactors. Therefore, the 
uranium is first converted to uranium hexafluoride before it is put 
through an enrichment process to increase the concentration of the 
fissionable uranium. Finally, the enriched uranium is fabricated into 
fuel appropriate for use in commercial light-water reactors.
    The United States' primary uranium reserves are located in Arizona, 
Colorado, Nebraska, New Mexico, Texas, Utah, Washington and Wyoming. 
According to the Energy Information Administration, five underground 
mines and five in-situ mines were operating in the U.S. in 2006. Much 
of the world's uranium supply comes from Canada and Australia. While 
the security of uranium supplies is a policy concern, over-production 
in the industry's early years and the United States' maintenance of 
military and civilian stockpiles of uranium have helped to provide 
confidence that uranium resources can meet projected demand for 
multiple decades.
    There is one conversion facility operating in the United States in 
Metropolis, IL. The expansion of the facility is expected to be 
completed this year.
    The United States Enrichment Corporation (USEC) operates the only 
uranium enrichment facility in the United States. Commercial enrichment 
services are also available in Europe, Russia, and Japan. Recently, 
four companies announced plans to develop enrichment capabilities in 
the U.S. According to March 5, 2008 testimony in the Senate Energy and 
Natural Resources Committee by the President of the Louisiana Energy 
Services, it is more than a year into construction of an advanced 
uranium enrichment plant in New Mexico. In addition, USEC is 
undertaking the development of advanced enrichment technology through 
the American Centrifuge Plant, which is U.S. technology originally 
developed by the Department of Energy.
    There is an ongoing debate about the ability of the United States 
to ensure we maintain a reliable, domestic source of nuclear fuel. A 
major element of that debate is whether or not an agreement between 
Russia and the U.S., which limits Russian fuel imports, will be 
enforceable. If not, there is concern that Russian fuel would be 
imported without limit, potentially jeopardizing the domestic 
enrichment industry.

Federal Programs to Support Nuclear Energy
    Another important issue with nuclear power is cost. The 2003 MIT 
report The Future of Nuclear Power discusses nuclear power as an energy 
source which is not economically competitive because nuclear power 
requires significant government involvement to ensure that safety, 
proliferation, and waste management challenges meet policy objectives 
and regulatory requirements. In addition, the success of nuclear power 
depends on its ability to compete with other energy production 
technologies. However, the MIT report points out: ``Nuclear does become 
more competitive by comparison if the social cost of carbon emissions 
is internalized, for example through a carbon tax or equivalent `cap 
and trade' system.''
    While high oil and gas prices are helping to revive interest in 
nuclear power and improve its economic viability, another factor adding 
to the interest in nuclear power is the improved performance of 
existing reactors. However, there is little doubt that the federal 
incentives included in the Energy Policy Act of 2005 for the nuclear 
power industry make the economics more attractive.
    The last order for a new nuclear plant came in 1973, and many in 
the industry have expressed that strong federal incentives are 
necessary to build new plants. Such incentives authorized within the 
last three years include: $18.5 billion in loan guarantee authority for 
new nuclear plants and $2 billion for uranium enrichment plants; cost-
overrun support of up to $2 billion total for the first six new plants; 
a production tax credit of up to $125 million total per year, estimated 
at 1.8 cents/kWh during the first eight years of operation for the 
first six GW of generating capacity; and Nuclear Power 2010, a joint 
government-industry cost-shared program to help utilities prepare for a 
new licensing process.
    It is expected that currently authorized loan guarantees will only 
cover the first four to six new plants, depending on their size, and 
utilities will advocate for more federal loan guarantee authority 
before building additional plants. In all, nearly 30 applications for 
new plants are expected to be submitted to the Nuclear Regulatory 
Commission by the end of 2009 in order to meet the eligibility criteria 
for the production tax credit in addition to the other incentives.
    The Federal Government provides other indirect financial support 
for the nuclear industry as well. While costs to develop the Yucca 
Mountain site are primarily covered by a fee on nuclear-generated 
electricity paid into the Nuclear Waste Fund, the government takes full 
responsibility for waste storage. Because the project is decades behind 
schedule, DOE estimates that the U.S. Government has incurred a 
liability of approximately $7 billion for the department's failure to 
begin accepting spent nuclear fuel from existing commercial plants. The 
nuclear industry is also given Price-Anderson liability protection for 
any accident involving operating reactors. This establishes a no fault 
insurance-type system in which the first $10 billion is industry-
funded, and any claims above that level would be covered by the Federal 
Government. Furthermore, any accelerated development of reprocessing 
technology, such as GNEP, may cost the government tens of billions of 
dollars.

Nuclear Workforce
    As advanced technologies transform the energy industry there will 
be an increased demand for an appropriately skilled workforce to meet 
its needs. As the energy sector of our economy changes and grows, the 
nuclear industry faces increasing competition for engineering talent. 
In addition to greater demand, the Nuclear Energy Institute's 2007 
nuclear workforce survey estimates that 39 percent of nuclear utility 
maintenance workers, 34 percent of radiation protection workers and 27 
percent of operations staff may reach retirement eligibility within 
five years. There is a general concern that a revival in the nuclear 
power industry could be hampered by the availability of the necessary 
skilled, technical workforce. November 2007 testimony by the Assistant 
Secretary of Labor underscores the need for creative workforce 
solutions because energy industry workers are difficult to replace as 
training programs were reduced during the downturn of the industry in 
the late 1980s and early 1990s. She goes on to state that training 
programs have not expanded at the same rate at which the industry is 
rebounding. The MIT report The Future of Nuclear Power punctuates 
concerns about workforce development acknowledging that the nuclear 
workforce has been aging for more than a decade ``due to lack of new 
plant orders and decline of industrial activity.''
    Chairman Gordon. This hearing will come to order. Good 
morning everyone and welcome to today's hearing on the 
opportunities and challenges related to the expansion of our 
nuclear power industry.
    As usual, we have a lot going on this morning, so we will 
have Members coming in from their other meetings. Also, you 
know, this is being televised, so we have staff and other 
interested people watching, so your words will go out broadly, 
and we are glad you are here for this very good discussion.
    And I would like to welcome our expert panelists, who will 
share with us their views about the role of the Federal 
Government to advance electricity production from nuclear power 
and its ability to help address the pressing problems of 
climate change. There is no doubt we are witnessing a renewed 
interest in nuclear power production overseas and here in the 
U.S.
    Controls of greenhouse gas emissions, federal incentives 
authorized in the Energy Policy Act of 2005, and higher fossil 
fuel prices are all motivating this renewed interest. The 
Nuclear Regulatory Commission is anticipating over 30 U.S. 
applications for new reactors through 2009, and another 150 are 
planned or proposed globally. Existing nuclear power plants 
provide approximately 20 percent of our nation's electricity, 
and they do so as a carbon, or a low carbon emitter.
    Improvements in performance at our nuclear facilities over 
the years have made them a reliable source of baseload 
electricity. However, expanded use of nuclear power won't come 
without some major costs. Construction of new nuclear power 
plants is expensive. In addition to other issues that need to 
be considered are the risks of nuclear weapons proliferation, 
management of radioactive waste generated by the nuclear power, 
and the cost to taxpayers of possible additional federal 
subsidies to the industry.
    The technical challenges of expanded nuclear power 
production should be met with an aggressive research and 
development program. The Administration has been a strong 
advocate of expanded financial support for the industry. In my 
view, support for research and development to address the 
challenges associated with expanded nuclear power production is 
equally important.
    I believe that we must maintain a diverse and robust energy 
production portfolio in the United States. We need reliable and 
affordable electricity generation to maintain our quality of 
life, and ensure we remain globally competitive. We must have a 
strategy that maintains our economic viability, without turning 
a blind eye to the tremendous challenge of climate change. The 
details of a national climate change program are not very 
clear, but I believe it is critical that we have a 
comprehensive and meaningful technology strategy to ensure we 
can meet targeted reductions of greenhouse gas emissions in a 
rapid timeframe.
    I look forward to a lively discussion this morning about 
the potential for nuclear power to provide more of our 
electricity in the United States and abroad, and at this time, 
I would like to yield to my friend, the distinguished colleague 
from California, and our, today's Ranking Member, for his 
opening statement.
    [The prepared statement of Chairman Gordon follows:]
               Prepared Statement of Chairman Bart Gordon
    Good morning and welcome to today's hearing on the opportunities 
and challenges related to expansion of our nuclear power industry.
    I would like to welcome our expert panelists who will share with us 
their views about the role of the Federal Government to advance 
electricity production from nuclear power and its ability to help 
address the pressing problem of climate change.
    There is no doubt we are witnessing a renewed interest in nuclear 
power production overseas and here in the U.S. Controls on greenhouse 
gas emissions, federal incentives authorized in the Energy Policy Act 
of 2005, and higher fossil fuel prices all are motivating this renewed 
interest.
    The Nuclear Regulatory Commission is anticipating over 30 U.S. 
applications for new reactors through 2009 and another 150 are planned 
or proposed globally.
    Existing nuclear power plants provide approximately 20 percent of 
our nation's electricity, and they do so as a low-carbon emitter. 
Improvements in performance at our nuclear facilities over the years 
have made them a reliable source of baseload electricity.
    However, expanded use of nuclear power wouldn't come without some 
major costs. Construction of new nuclear power plants is expensive. In 
addition, other issues that need to be considered are the risk of 
nuclear weapons proliferation, management of radioactive waste 
generated by nuclear power, and the cost to taxpayers of possible 
additional federal subsidies for the industry.
    The technical challenges of expanded nuclear power production 
should be met with an aggressive research and development program. The 
Administration has been a strong advocate of expanded financial support 
for the industry. In my view, support for research and development to 
address the challenges associated with expanded nuclear power 
production is equally important.
    I believe that we must maintain a diverse and robust energy 
production portfolio in the United States. We need reliable and 
affordable electricity generation to maintain our quality of life and 
ensure we remain globally competitive. We must have a strategy that 
maintains our economic viability without turning a blind eye to the 
tremendous challenge of climate change.
    The details of a national climate change program are not yet clear, 
but I believe it is critical that we have a comprehensive and 
meaningful technology strategy to ensure we can meet targeted 
reductions of greenhouse gas emissions in a rapid timeframe.
    Nuclear power may very well play an important part of the climate 
change solution.
    I look forward to a lively discussion this morning about the 
potential for nuclear power to provide more of our electricity in the 
United States and abroad.
    Thank you.

    Mr. Bilbray. Thank you, Mr. Chairman. I appreciate this 
hearing today, and I think that this issue is one that has been 
waiting for a long time to have a frank and open discussion 
about.
    Mr. Chairman, nearly a billion people around the world 
celebrated Earth Day yesterday, or earlier this week, and 
frankly, you heard a lot of communication and talk about 
countless alternatives for energy. We talked about alternative 
energy sources such as wind and the use of hydroelectric, and 
you can go down the whole thing. But what is interesting is if 
you listen to all of the talk, there was nothing mentioned 
about nuclear power, as if it was a black hole that was not 
allowed to be discussed.
    And I think that when we confront the issue that, over the 
next 25 years, we are going to be confronted with a 30 percent 
increase in electricity demand, at a time that is going to 
potentially increase CO emissions by 16 percent, when we need 
to be reducing those numbers by a dramatic number within the 
next 30 years.
    The fact is, is that if we go down and talk about solar, we 
talk about different items on this, the politically correct 
concept that we are not allowed to say the N word has to be 
thrown away. This is not a dogma. If we want to be truly 
protective of the environment and the economy, we have to 
approach this from a scientific base. This is not a theology. 
Our global strategy for climate change control has been backed 
by numerous world leaders and scientific experts. The Executive 
Secretary of the United Nations Framework Convention on Climate 
Change noted, and he said they have never seen a credible 
scenario for reducing greenhouse gas emissions that did not 
include nuclear power.
    Now, we can go back and say that the Intergovernmental 
Panel on Climate Change (IPCC), which won the 2007 Nobel Peace 
Prize, along with Vice President Gore, noted in their report 
the need for nuclear energy. And the IPCC's Report on Climate 
Change, the Fourth Assessment Report of Intergovernmental Panel 
on Climate Change, the Panel identified nuclear energy as being 
a key technology in addressing global change, and in fact, the 
IPCC reported that the robust mix of energy sources, including 
nuclear, are almost certainly to be required if we are going to 
reach our demands.
    So, I just think we need to start off with this right out 
front, that let us be willing to say what needs to be said. I 
just had a meeting with a colleague that you may remember, Mary 
Nichols, who used to be at the EPA, and as a former member of 
the Air Resources Board, she is now the Chair of the Air 
Resources Board for California. California is confronted with 
the reality that their blanket abolition against nuclear power 
has to be revisited, and if they truly want to address the 
climate issue, they have got to be brave enough to step up and 
address this issue up front. So, I appreciate the fact that you 
have been able to have this hearing today.
    The United States has not built a new nuclear power plant 
in 20 years, and this has really been harmful. With all of the 
concerns about nuclear, the alternatives are not acceptable, 
and so, I appreciate the fact that we are able to have this 
discussion, and hopefully, Mr. Chairman, this will be the 
beginning of a bipartisan approach. Let us say not how do we 
abandon a technology that is essential for our future, but how 
do we work together to make it work, so that we can save the 
climate and leave our children and grandchildren a prosperous 
future.
    And I yield back, Mr. Chairman.
    [The prepared statement of Mr. Bilbray follows:]
         Prepared Statement of Representative Brian P. Bilbray
    Chairman Gordon and Ranking Member Hall, thank you very much for 
holding this timely and important hearing on the Opportunities and 
Challenges for Nuclear Power. As our nation grapples with an increasing 
energy demand and the need to combat global warming, nuclear power must 
be an option to address these issues.
    Mr. Chairman, yesterday nearly a billion people around the world 
celebrated Earth Day. All across the television, the Internet, radio 
and other means of communications we were told of the countless 
opportunities that alternative energy sources would have to combating 
global climate change. There were stories on solar, wind, hydroelectric 
and even vegetable oil. But nothing on nuclear power's promises. Why?
    Last month, the Energy Information Agency (EIA) released its 
outlook for 2008. EIA indicated that U.S. electricity demand would grow 
30 percent between 2006 and 2030. Likewise CO2 emissions are 
predicted to increase 16 percent from 2006 levels at a time when it 
will be essential to decrease them.
    While the pain here at home is bad, the worldwide problems 
associated with increased population growth and energy consumption in 
developing nations will be catastrophic. EIA notes that ``total 
electricity demand in the non-OECD nations is expected to grow from 
2004 to 2030 at an annual rate that is nearly triple the rate of growth 
for electricity demand in the OECD.'' This increased energy demand will 
most likely result in increased greenhouse gas emissions and widespread 
global warming damage.
    If we are to combat this looming crisis we will need a mixed bag of 
solutions. These will need to include command and control techniques 
including the use of renewable fuels such as wind and solar power, 
sequestration of fossil fuels, and most importantly the use of nuclear 
technology.
    Nuclear energy has all the properties and benefits our world needs 
to successfully combat global climate change and meet our energy needs. 
Nuclear energy is one of the cleanest energy sources known to mankind. 
Nuclear energy accounts for 73 percent of the Nation's clean air 
generation. In 2005, U.S. nuclear power plants reduced emissions of 
nitrogen oxides and sulfur dioxide-pollutants controlled under the 
Clean Air Act--by 1.1 million short tons and 3.3 million short tons 
respectively. The amount of nitrogen oxide emissions that nuclear 
plants prevent annually is the equivalent of taking nearly 55 million 
passenger cars off the road. Even more striking is in that same year, 
U.S. nuclear power plants prevented the discharge of 682 million metric 
tons of carbon dioxide into the atmosphere. This is nearly as much 
carbon dioxide as is released from all U.S. passenger cars.
    A global strategy of climate change control has been backed by 
numerous world leaders and scientific experts. Yvo de Boer, Executive 
Secretary of the United Nation's framework Convention on Climate Change 
noted that he had never seen a credible scenario for reducing 
greenhouse gas emissions that did not include nuclear power. Likewise, 
the United Nation's Intergovernmental Panel on Climate Change (IPCC), 
which won a 2007 Nobel Prize along with Vice President Al Gore, noted 
in their report the need for nuclear energy. In the IPCC's Fourth 
Assessment Report, the panel identifies nuclear energy as a key 
technology in addressing global climate change. The report states that 
a ``robust mix'' of energy sources, including nuclear energy, ``will 
almost certainly be required to meet the growing demand for energy 
services, particularly in developing countries.''
    The United States has not built a new nuclear power plant in nearly 
20 years. If we are to truly harness this great technology and solve 
our environmental problems, we must make a commitment to nuclear 
research and development as well as the production of new nuclear 
facilities.

    Chairman Gordon. Thank you, Mr. Bilbray. I hope, as this 
hearing goes forward, you will let us know how you really feel 
about nuclear power.
    I ask unanimous consent that all additional opening 
statements submitted by Committee Members be included in the 
record. Without objection.
    [The prepared statement of Mr. Hall follows:]
           Prepared Statement of Representative Ralph M. Hall
    Mr. Chairman, I thank you for holding this hearing today on the 
very important issue of nuclear energy. I have always been a supporter 
of nuclear energy and I am buoyed by the activity from the utility 
companies who have submitted applications to the Nuclear Regulatory 
Commission to build 33 nuclear plants. I hope that this truly is the 
start of the nuclear renaissance in our country.
    We are faced as a nation and as citizens of the world with the 
responsibility of reducing our carbon dioxide emissions while at the 
same time providing affordable, reliable electricity to support our 
growing cities. There are very few options available to our electricity 
providers when it comes to emissions-free, reliable base load power, 
and in my opinion, nuclear power is at the top of that list if not the 
only energy source on that list until coal plants begin using carbon 
capture and sequestration technology.
    I don't want my words to be misinterpreted to mean that I'm not a 
supporter of renewable energy because I am. I believe they definitely 
have a place in our energy mix, but I do not believe that they can 
produce the same amount of energy as reliably and as efficiently as 
nuclear energy. As an example, it would take 3,000 one-megawatt wind 
turbines on 150,000 acres of land to provide the same amount of 
electricity from one nuclear plant--and that's if the wind is blowing. 
The bottom line is that I think there's a place for all forms of energy 
in our current mix and that nuclear holds a secure place in that line-
up.

    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Mr. Chairman, I am pleased that the Committee is pursuing this 
issue, as the issue of energy sustainability is one of the most 
pressing public policy issues on our agenda.
    I believe we need to consider all of the energy resources and 
technologies available in constructing a comprehensive energy policy 
that satisfies our energy needs, reduces our dependence on foreign oil 
and protects our economy. The debate surrounding nuclear power 
remains--is it a safe and reliable source of domestic fuel?
    The Federal Government's lack of investment in nuclear technology 
over the past decades has changed recently with the Bush 
Administration's Global Nuclear Energy Partnership (GNEP) program. I am 
pleased that the Committee has chosen to further examine this issue and 
hear testimony on the merits of federal support in comparison to other 
sources of energy.
    As we have recently recognized Earth Day, thank you, Mr. Chairman 
for the timeliness of this hearing. I appreciate the Committee's 
efforts to explore the merits of the array of resources and 
technologies that can comprise our nation's energy policy. I believe 
the best solution will come from utilizing our domestic resources and 
investing in technology that will ensure a clean, efficient and diverse 
energy policy for our future.

    [The prepared statement of Ms. Johnson follows:]
       Prepared Statement of Representative Eddie Bernice Johnson
    Thank you, Mr. Chairman. As our nation grapples with major 
questions regarding our energy supply, the Science Committee is tasked 
with major responsibilities.
    This committee has the authority to drive federal investments in 
research and development.
    Although it is good to let market forces determine the best 
practices, when it comes to energy, federal investments are often 
needed to spur beginning-stage technologies to market.
    According to the Energy Information Administration, in 2004, Texas 
energy came primarily from coal.
    Forty-eight percent of Texas energy came from natural gas; 39 
percent came from coal; 11 percent came from nuclear; and three percent 
came from other sources.
    In Texas, there are two nuclear facilities: Comanche Peak and South 
Texas nuclear plants.
    My sense is that it is good to approach the energy problem from 
multiple angles. Wind, solar and other renewable energy sources are not 
viable for storage of energy the way fossil fuel sources are.
    However, since Texas has the greatest potential for wind energy, I 
would like to see greater investment in that arena.
    Nuclear energy is becoming a more economically viable, as the price 
of oil rises. Reprocessing research, infrastructure and spent fuel 
storage issues will be costly to address.
    Most nuclear reactors were not designed to store the full amount of 
the spent fuel generated during their operational life. Currently, 
there is over 50,000 metric tons of spent fuel stored in this nation.
    Another international issue is that reprocessing spent fuel raises 
concerns about the potential for proliferation of weapons-grade nuclear 
materials because existing reprocessing technologies separate plutonium 
from the spent fuel.
    The high cost of reprocessing technology may cost the government 
tens of billions of dollars.
    While the plutonium can be recycled into new fuel for use in 
nuclear reactors, it can also be used to make nuclear weapons.
    The Department of Energy has yet to identify a proliferation-
resistant method to achieve this goal.
    On top of all of these factors, I still have safety concerns. Our 
technical workforce will need to be trained appropriately.
    In summary, I believe that nuclear is a viable option to explore. 
In France, 100 percent of their energy is derived from nuclear plants.
    Let us learn from others' experiences and invest appropriately to 
move toward cleaner and less expensive energy.
    Thank you, Mr. Chairman. I yield back.

    [The prepared statement of Ms. Richardson follows:]
         Prepared Statement of Representative Laura Richardson
    Thank you Chairman Gordon for holding this important hearing today, 
and our witnesses for your attendance.
    There is no doubt in my mind that nuclear energy provides a 
critical opportunity for the United States to lessen its dependence on 
foreign oil. In any city in this country it is evident, the rising cost 
of gas is harming the livelihood of everyday Americans who have to 
commute to work, and shuttle their children to and from school. The 
high price of gasoline is something that we have been dealing with in 
my home State of California for some time now. In 2001 the average 
price of regular gasoline in California was $1.44 per gallon. Today the 
average price of gasoline in my home State of California is $3.82 per 
gallon. That is an increase of 165 percent.
    Unfortunately while the price of gas, and the profit margins of big 
oil companies have increased the income of average Americans has not. 
For reasons that are not clear to me, this 110th Congress and the 
current Administration has not been able to rein in the price of gas. 
Some argue that it is simply a matter of increased demand from 
developing nations like India and China. Whatever the reasons may be, 
it is obvious to me that the time to explore alternate sources of 
energy is now.
    Therefore I welcome this discussion about the opportunities and 
challenges for nuclear power. The American people do not want another 
Three Mile Island type of incident to occur and expect industry 
preeminence. Despite the fact that there were no immediate deaths or 
injuries to plant workers or members of the nearby community which can 
be attributed to the accident, the public reaction probably killed the 
prospects for nuclear energy for decades to come.
    Likewise in a post 9/11 world we must be concerned with the 
proliferation of enriched uranium, a major component in the step 
towards developing nuclear weapons. We certainly can not allow our 
sworn enemies to acquire this technology. With the likelihood that more 
facilities will be built, there has to be some assurance that not only 
is the facility safe, but the personnel working in these facilities are 
closely monitored to prevent the transfer of technologies.
    Finally any discussion about nuclear energy/power must address this 
issue of what to do with the waste.
    I look forward to the testimony of our witnesses, and I hope we can 
build on this discussion in order to develop a bipartisan policy 
approach to nuclear energy.
    Mr. Chairman I yield back my time.

    [The prepared statement of Mr. Carnahan follows:]
           Prepared Statement of Representative Russ Carnahan
    Mr. Chairman, thank you for hosting this important hearing on the 
potential for nuclear power as a viable energy source. As our country 
continues to see the consequences of high energy prices, investigating 
alternative sources may provide a solution.
    As consumers continue to face escalating gas prices at the pump, 
growing heating and air conditioning bills, and increasing food costs, 
it is our responsibility as Members of Congress to seek ways in which 
we can ease these financial burdens. After personally visiting nuclear 
power plants in France and witnessing the possibilities this 
alternative presents, I believe nuclear power is worth investigating 
further. The long-term effects of storing radio-active waste and other 
possible negative consequences demand that research include attention 
to these environmental and safety concerns. I look forward to hearing 
more on the benefits and possible problems with nuclear power.
    Mr. Asselstine and Dr. Cochran, I am interested to hear about the 
Federal Government's role in financing new nuclear power plants and 
whether or not, in your opinion, this is sufficient. Additionally, I 
look forward to hearing Mr. Grossenbacher's testimony on the Department 
of Energy's programs to support and advance nuclear energy.
    I would like to thank today's witnesses, Mr. Fri, Mr. Asselstine, 
Dr. Cochran, Mr. Van Namen, Ms. Kray, and Mr. Grossenbacher, for taking 
the time to appear before us. I look forward to hearing your 
testimonies.

    [The prepared statement of Mr. Mitchell follows:]
         Prepared Statement of Representative Harry E. Mitchell
    Thank you, Mr. Chairman.
    Yesterday, as we celebrated Earth Day, we were reminded of the 
importance of protecting our planet from harmful greenhouse gas 
emissions.
    I strongly believe that we must refocus our energy priorities to 
the production of alternative sources of energy, like solar power, that 
will not be harmful to our environment.
    Nuclear power generation also has the potential of generating 
electricity without increasing greenhouse gas emissions.
    However, there are still many obstacles to the expansion of nuclear 
power generation including high costs, waste disposal, and concerns 
about nuclear proliferation.
    I look forward to hearing from our witnesses on how the Department 
of Energy's nuclear technology programs could address these challenges.
    I yield back.

    [The prepared statement of Mr. Smith follows:]
           Prepared Statement of Representative Adrian Smith
    Thank you, Mr. Chairman. The people of Nebraska are ready for 
expanded energy options, which includes nuclear power. Nuclear power 
has been an important energy generation tool for decades and it is a 
key component of our future portfolio for energy independence.
    I was excited to learn from the written testimony submitted by Mr. 
Grossenbacher about one of the next generation nuclear technologies, 
the High Temperature Gas Reactor (HTGR) system. The heat generated by 
HTGR can be coupled with processes to hydrolyze water to produce 
hydrogen and oxygen, used in fertilizer, chemical, and coal 
gasification plants. These clean technologies will decrease our 
dependence on foreign oil and will definitely be beneficial to 
Nebraska's rural and agricultural economies.
    I am encouraged to learn from the written testimony of several of 
our witnesses that recent legislation has reduced regulatory barriers 
and streamlined the process for new nuclear plants. There is still room 
for improvement. Investors must be assured their financial investments 
will not be destroyed by long delays beyond their control, such as 
litigation or regulatory concerns.
    I am concerned that several of you mentioned the aging workforce in 
nuclear power and the lack of qualified replacements trained in nuclear 
technologies. We need to encourage young people to pursue education and 
careers not just in nuclear power technologies, but in science, 
technology, engineering, and mathematics fields in general. We need 
more visionary scientists, engineers, entrepreneurs, and investors in a 
variety of energy generation, storage, and transmission technologies.
    I look forward to hearing the testimony of our witnesses.
    Thank you, Mr. Chairman, and I look forward to working with you as 
we look to the bright future of energy technologies in the United 
States.

    Chairman Gordon. It is now my pleasure to introduce our 
witnesses this morning. First, Ms. Marilyn Kray is the 
President of NuStart Energy, and also, the Vice President of 
Project Development at Exelon Nuclear. Welcome.
    Dr. Robert Van Namen is Senior Vice President of Uranium 
Enrichment at the United States Enrichment Corporation. Welcome 
to you.
    Dr. Jim Asselstine is the recently retired Managing 
Director at Lehman Brothers, and a former Commissioner of the 
Nuclear Regulatory Commission. We welcome you.
    And Dr. Thomas B. Cochran is the Senior Scientist in the 
Nuclear Program at the Natural Resources Defense Council. 
Welcome.
    And Dr. Robert Fri is a Visiting Scholar at Resources for 
the Future, and a Chair of a recent study conducted by the 
National Academies on the Department of Energy Nuclear Research 
and Development Program.
    And finally, Dr. Admiral--or Vice Admiral John 
Grossenbacher is the Director of the Idaho National Laboratory. 
I want to compliment our Minority and Majority staff for 
pulling together an outstanding panel to, I think with diverse 
views, that will help us start this process of better 
understanding the role of nuclear power, as we move forward.
    And I would say to the witnesses, you each will have five 
minutes of your spoken testimony. We want to try to be crisp 
with that, but we are not going to cut you off if you have more 
good things to say. Your written testimony will be included in 
the record for the hearing, and when you complete your 
testimony, we will begin the questions. Each Member will have 
five minutes to question the panel.
    So, Ms. Kray, you may begin.

   STATEMENT OF MS. MARILYN C. KRAY, VICE PRESIDENT, EXELON 
         NUCLEAR; PRESIDENT, NUSTART ENERGY DEVELOPMENT

    Ms. Kray. Good morning, Chairman Gordon, Congressman 
Bilbray, and Members of the Committee. As mentioned, I am the 
Vice President with Exelon Nuclear. Exelon is the largest 
operator of nuclear plants in the United States.
    I am here today in my role, also, as President of NuStart 
Energy Development. The NuStart consortium is comprised of 10 
power companies and two reactor vendors. The consortium was 
formed in 2004, based on a shared vision, as well as a shared 
sense of responsibility.
    The shared vision was that the nuclear industry would be 
called upon at some point in the future to provide additional 
baseload capacity, and the shared responsibility is that it was 
our job to take actions in order to make us ready for that.
    The need for nuclear plants arises from a platform of 
change that has brought about by both the electricity demand, 
as well as mentioned, the environmental awareness. You may know 
the EIA projects electricity demand to increase by 30 percent 
by the year 2030. With respect to environmental awareness, 
nuclear power accounts for 73 percent of the carbon free 
generation. To put it in perspective also, the volume of 
greenhouse gas avoided by the production with nuclear power is 
approximately equal to 96 percent of the passenger cars that 
are on the road today.
    Mr. Chairman, I stress that the consideration of additional 
nuclear is not to the exclusion of any other baseload 
generation, in particular, renewable, but rather, it is our 
attempt to uphold the current 20 percent contribution that 
nuclear is making, given the expected growth in demand. As the 
title of this hearing suggests, the opportunities for nuclear 
plants must be considered along with the challenges.
    My testimony outlines a number of challenges, but in 
response to your invitation letter, I would like to address a 
few of those, including licensing, cost, and also, workforce 
development. Demonstrating the licensing process is one of the 
objectives of the NuStart consortium. To date, there have been 
nine combined construction and operating license applications 
submitted to the NRC. Six of these nine were submitted by 
NuStart members. NuStart members plan to submit an additional 
four applications by the end of the calendar year.
    My observations to date of the licensing process is that it 
is going well. However, I caution that we are only a few months 
into a multi-year review. There are two aspects of the process, 
however, that I believe have yielded the success to date, but 
more importantly, will continue in the ongoing success of the 
process. They are, first, the commitment to design 
standardization for the new fleet of plants, and also, the 
communication between the NRC staff and the industry.
    You may know one of the components of an application is the 
Final Safety Analysis Report. For the two selected technologies 
by NuStart, those are the Westinghouse Advanced Passive 100 
reactor, and the GE/Hitachi Economic Simplified Boiling Water 
Reactor, the FSAR is approximately 75 to 80 percent identical 
for all applicants of that technology. And although the premise 
of plant standardization is operational safety and efficiency, 
it will greatly facilitate the NRC's design-centered review 
approach, and that is where the NRC needs to review an issue 
only one time. That yields, of course, the regulatory 
efficiency, and NuStart remains the optimum forum for this 
industry coordination.
    The other cornerstone of the licensing process is the 
communication, as I mentioned. Over a year and a half ago, the 
NRC began to conduct public workshops, wherein they conveyed 
their expectations with respect to content of applications. 
Also during this pre-submittal phase, there were numerous 
public visits by the NRC staff to the various sites, and also 
public meetings, again, wherein we could get ongoing feedback 
regarding the development of our application. This continued 
throughout the sufficiency review, and we expect that it will 
continue through the intense safety environmental reviews.
    On the next challenge of cost, I offer you my utility 
perspective, and that is that any investment in a new plant 
will only be made if it is in the best interest to both our 
shareholders, as well as our customers. We are not predisposed 
to nuclear generation. Whether it is a Board of Directors 
decision, or that of a state Public Utilities Commission, a 
nuclear investment must be proven to be superior to the other 
energy alternatives. We are concerned not only with the initial 
cost of the plant, but the long-term stability of electricity 
rates over the life of the plant. Contrary to what you may hear 
from my fellow panelists, I believe government incentives are 
needed to address our energy investment crisis, and these 
incentives must be, must equitably treat each component of the 
diverse portfolio.
    The third area of workforce development, while it is a 
challenge to new nuclear plants, it is a tremendous opportunity 
for students, workers, and businesses. The nuclear industry 
needs a wealth of engineering expertise and skilled labor to 
design, construct, and operate the next fleet of plants. The 
industry is taking aggressive action to develop its future 
workforce. Some of these actions include outreach efforts with 
professional societies, developing training programs and 
partnerships through high schools, unions, apprenticeship 
programs, community colleges, and universities. Success in 
these areas is needed to not only staff the existing fleet, but 
also, the fleets of the future.
    Lastly, I want to leave you with my outlook for the 
expansion of nuclear power, and again, speaking from my utility 
perspective, I would characterize it at this point as 
cautiously optimistic. A few years ago, the nuclear strategy 
was to keep the option open, but now, based on conservative and 
phased decision-making, we have seen the optimism grow, as 
evidenced by the number of utilities that have either submitted 
or declared their intent to submit a license application, the 
placement of orders for long lead equipment, and most recently, 
the actual signing of an engineering procurement and 
construction agreement.
    We thank Congress for its vision, through the Energy Policy 
Act, in establishing the framework through which we 
accomplished many of these milestones, and I thank the 
Committee for the interest in the expansion of nuclear power, 
and the opportunity to appear before you today.
    Thank you.
    [The prepared statement of Ms. Kray follows:]
                 Prepared Statement of Marilyn C. Kray

Chairman Gordon, Congressman Hall, Members of the Committee:

    Thank you for the opportunity to appear before you today to discuss 
opportunities and challenges for nuclear power and to highlight NuStart 
Energy Development's activities to spur new reactor development in the 
United States. I am Marilyn Kray, Vice President of Project Development 
for Exelon Nuclear and President of NuStart Energy Development.
    Exelon Nuclear is the largest owner and operator of commercial 
nuclear power plants in the United States. We have 17 reactors at 10 
sites in Illinois, Pennsylvania and New Jersey, and we are developing a 
Combined Construction and Operating License (COL) application for two 
reactors in Victoria County, Texas.
    NuStart is a consortium of 10 power companies and two reactor 
vendors\1\ that was formed in 2004 with two purposes: first, to 
demonstrate the Nuclear Regulatory Commission's never-before-used 
licensing process to obtain a Combined Construction and Operating 
License (COL) for an advanced nuclear power plant; and second, to 
complete the design engineering for two advanced reactor technologies, 
General Electric's Economic Simplified Boiling Water Reactor (ESBWR) 
and Westinghouse's Advanced Passive AP-1000. NuStart activities are 
being funded by the Department of Energy on a 50/50 cost sharing 
arrangement under the Nuclear Power 2010 Program.
---------------------------------------------------------------------------
    \1\ Power companies include: DTE Energy, Duke Energy, EDF 
International North America, Entergy Nuclear, Exelon Generation, 
Florida Power and Light, Progress Energy , SCANA, Southern Company and 
Tennessee Valley Authority. Reactor vendors include General Electric-
Hitachi and Westinghouse.
---------------------------------------------------------------------------
    America's 104 nuclear power plants generate about 20 percent of our 
electricity. In 2007, the nuclear industry generated more electricity 
than ever before, and we did it more safely than ever before as 
evidenced by data on unplanned reactor shutdowns and the industrial 
safety rate. Bureau of Labor Statistics data show that it is safer to 
work in a nuclear plant than to work in the real estate or financial 
sectors.
    Demonstrating the NRC licensing process and completing the 
engineering for new reactor designs are critical first steps toward the 
construction of a new generation of reactors in the United States. To 
date, individual NuStart member companies have submitted six COL 
applications to the NRC for their review and another four are planned 
for submittal by the end of 2008. We anticipate that the Commission 
will complete its review of certain applications as early as 2011, 
allowing a company or consortium of companies to begin construction of 
a new reactor with the hope of having a plant begin operation by 2017.

Opportunities

    As power producers strike to maintain a reliable supply of clean, 
safe and economic electricity to sustain our economy, there are three 
primary trends that create opportunities for nuclear power to play an 
increasing role in meeting our nation's energy needs: first, increasing 
demand for baseload electric generation; second, increasing fuel costs 
for conventional sources of electricity; and third, the likelihood of 
limits on greenhouse gas emissions from power plants.

Increased Demand for Electricity

    Even with aggressive efforts to increase energy efficiency and 
conservation, demand for baseload electricity both in the United States 
and around the world is expected to increase significantly over the 
next two decades.
    The Energy Information Administration's Annual Energy Outlook for 
2008 projects that electricity demand will increase by 30 percent by 
2030. EIA's International Energy Outlook for 2007 predicts even higher 
growth worldwide. Much of the increased demand in the U.S. will be for 
base load power and will occur in regions of the country currently 
served by companies with nuclear experience.
    To help meet this anticipated demand, nine companies, including the 
six NuStart members mentioned earlier, have submitted applications for 
combined operating licenses with the Nuclear Regulatory Commission for 
15 units. As many as 10 additional applications for 16 or more new 
units are possible at the NRC this year.

Increasing Fuel Prices

    Increased worldwide demand has led to steep rises in fuel costs for 
power plants since 2000, with coal prices increasing over 250 percent; 
natural gas prices rising over 300 percent; oil prices growing over 400 
percent; and uranium prices up nearly 1,000 percent from their all-time 
low. Although nuclear fuel prices have risen more than other fuels, the 
price of uranium remains relatively low, and nuclear fuel accounts for 
a small portion of operating and maintenance costs compared to fossil-
fired plants. As a result, these fuel price increased have made nuclear 
more attractive.
    The volatility of fuel prices also makes nuclear energy more 
attractive than fossil-fired plants. In approving FPL's recent proposal 
for two nuclear reactors at the Turkey Point site, the Florida Public 
Service Commission found that building nuclear plants instead of 
natural gas plants would save Florida utility customers over $94 
billion in fuel costs alone over the life of the plants.

Limits on Greenhouse Gas Emissions

    While some may disagree about the science of climate change, we at 
Exelon are convinced that there is a need to take action now to slow, 
stop and then reduce human-caused greenhouse gas emissions to address 
climate change. If policy-makers take action to reduce greenhouse gas 
emissions, nuclear power will play a critical role in helping meet that 
policy objective.
    Nuclear power has played a vital role in reducing greenhouse gas 
emissions. Nationally, nuclear power plants account for 73 percent of 
all carbon-free generation. In 2006, the volume of greenhouse gas 
emissions prevented by nuclear plants was the equivalent of taking 96 
percent of all passenger cars off the road. During the last year alone, 
Exelon Nuclear prevented 121 million metric tons of carbon dioxide by 
eliminating the need for an equivalent amount of coal-based generation.
    While nuclear power will not serve as a ``silver bullet'' solution 
to the climate issue, policy-makers are increasingly recognizing that 
it will be exceedingly difficult--if not impossible--to reduce 
emissions without nuclear power. New York Mayor Michael Bloomberg's 
PlaNYC, the Regional Greenhouse Gas Initiative, and most recently the 
State of New Jersey's Energy Master Plan have all recognized that 
nuclear plants must continue to operate if their environmental 
objectives are to be met.

Challenges

    In addition to a demonstrated need for new base load power, the 
nuclear industry has identified six preconditions to the construction 
of new nuclear plants:

          a demonstrated regulatory process

          completion of reactor designs for passive 
        technologies

          confidence in a long-term solution for used fuel 
        disposal

          public confidence in nuclear power

          a sound nuclear power infrastructure

          acceptable financial returns

    I would like to touch briefly on each of these issues.

Demonstration of Regulatory Process

    As noted above, one of NuStart's primary objectives is to 
demonstrate the Nuclear Regulatory Commission's never-before-used 
licensing process to obtain a Combined Construction and Operating 
License (COL) for an advanced nuclear power plant.
    Obtaining a COL is a critical step in a potential renaissance of 
the nuclear power industry in the United States. By achieving this, 
NuStart hopes to demonstrate that the COL can be obtained on schedule 
and within budget, and that advanced plant designs can be approved.
    Further, NuStart's efforts will provide a realistic time and cost 
estimate for building and operating a new nuclear plant in today's 
environment.
    During the 1980s, nuclear plants were plagued with significant cost 
overruns due in large part to the regulatory uncertainty inherent in 
the NRC licensing process. Many major issues were argued and litigated 
only after plants had been constructed, in some cases delaying plant 
operations for years.
    Congress took an important step to reform the licensing process as 
part of the Energy Policy Act of 1992 with the codification of the 
NRC's combined Construction and Operating License regulations under 10 
CFR Part 52. The COL process is designed to provide all parties with an 
opportunity to raise issues related to siting and plant design before a 
license is granted. Once a plant is built, the only question before the 
Commission is whether the licensee has constructed the plant in 
conformance with its license. On paper the process appears to be sound; 
however, investor confidence will not be established until the process 
is demonstrated, as proposed under the NuStart project.
    The new licensing process also gives potential licensees an 
opportunity to have sites pre-approved by the Commission. The Early 
Site Permit (ESP) process allows a potential licensee to apply to the 
Commission for approval of a site for a new nuclear plant. Companies 
provide the NRC with extensive data on the proposed site, as well as 
information about the reactor design that could be built on the site. 
If a site is approved, a company can ``bank'' the site for as long as 
20 years.
    Also under the Department of Energy's Nuclear Power 2010 program, 
three companies received matching funds to develop and submit Early 
Site Permit applications to the NRC: Dominion's North Anna site in 
Virginia, Entergy's Grand Gulf site in Mississippi, and Exelon's 
Clinton Power Station in Illinois.
    NuStart's experience with the licensing process has been positive 
to date. Much of the success to date is attributable to the 
communication between the NRC staff and the industry. The communication 
examples include the numerous workshops conducted by the staff to 
convey their expectations regarding COLA content, the frequent pre-
application visits and meetings and the frequent interaction during the 
sufficiency reviews of the applications. Also of note is the 
implementation of the design-centered working group concept whereby 
each applicant consistently presents the standard design for a 
particular technology in their respective COLA allowing for efficiency 
in the NRC review process. The NuStart consortium serves as an optimum 
forum for such industry coordination, both before and during the NRC 
review process.

Completion of Reactor Designs for Passive Technologies

    Another aspect of the revised NRC licensing regulations allows 
reactor vendors to submit designs to the NRC for Design Certification. 
This process allows the NRC to evaluate potential designs and allows 
for public participation in the certification process. Once a design is 
certified by the Commission, it can be paired with an Early Site Permit 
and used in the submission of a Construction and Operating License.
    NuStart plans to complete the design engineering for two advanced 
reactor technologies, General Electric's ESBWR and Westinghouse's AP-
1000. NuStart selected these technologies because they represent the 
optimization of operational confidence and innovation. They are natural 
evolutions of the designs currently in operation, yet both of these 
technologies adopt simplified design features and technology 
improvements that rely on inherent, passive safety systems. In this 
context, ``passive'' refers to design principles wherein laws of nature 
such as gravity feed, convective heat transfer and natural circulation 
are used in place of complex systems comprised of numerous pumps, 
valves and actuation devices. The result is an enhancement to safety 
because there is less reliance on equipment performance and operator 
action, and a reduction in cost because there is less equipment to 
construct and maintain.
    NuStart's work with the reactor vendors to complete the one-time 
generic engineering work necessary for the standardized plant designs 
will position these technologies for deployment when needed, thereby 
significantly reducing the time to market for a new nuclear plant.

A Long-Term Solution for Used Fuel Disposal

    While nuclear energy has a proven track record in the United States 
as a clean, economic and reliable source of energy, used fuel from 
nuclear plants must be managed to permanently isolate it from the 
environment.
    Before new plants can be built, energy companies, investors and the 
public must be confident that there is a long-term solution for the 
disposal of used nuclear fuel. While individual companies may have 
different views on what constitutes an acceptable solution, it is 
essential that the Federal Government continue to make progress on 
meeting its statutory and contractual obligation to begin removing used 
fuel from reactor sites.
    In 1982, the Federal Government codified its obligation to assure 
for the permanent disposal of high-level radioactive waste and used 
nuclear fuel. In 2002, Congress upheld President George W. Bush's 
designation of Yucca Mountain, Nevada, as the site for the Nation's 
permanent, deep geologic repository. While the Yucca Mountain project 
faces a number of challenges, the industry, policy-makers and 
regulators have recognized that used fuel can be safely stored on-site 
for 100 years or more.
    Given the uncertainties surrounding the Yucca Mountain program and 
the fact that used fuel can be safely stored at reactors sites for 
several decades, policy-makers are examining the possibility of 
recycling the fuel to harvest the vast quantities of usable material 
that remain in the fuel and to minimize the volume of the waste product 
that must be permanently isolated from the environment.

Public Confidence in Nuclear Power

    New nuclear power plants cannot be built without a high degree of 
public confidence in the safety of the technology, the competence and 
commitment of reactor operators, and the dedication of regulators. The 
industry recognizes that public confidence is based on the performance 
of our current fleet of plants. We must remain ever vigilant to the 
safety responsibility entrusted to us.
    Public awareness of nuclear energy's positive contribution to 
energy independence, clean air, and a reliable, low-cost energy supply, 
has led to greater support in recent years. The nuclear industry's 
commitment to safe operations and its proven track record over the last 
25 years have also reinforced public support for nuclear technology.
    The nuclear industry's continued strong operating record has led to 
increased public confidence. In 2007, the industry's median unit 
capability factor was 91.5 percent, the eighth consecutive year that 
capability factors have exceeded 90 percent. A related metric, capacity 
factor, a measure of total power generated as a percentage of design 
production, was a record high 91.8 percent in 2007. The Nuclear Energy 
Institute reported that this record capacity factor, along with other 
sector-leading nuclear industry indicators, led to U.S. nuclear power 
plants producing a record-high 806 billion kilowatt-hours (kwh) of 
electricity in 2007.
    A nationwide poll conducted earlier this month for the Nuclear 
Energy Institute found 63 percent of those surveyed favor nuclear 
energy. While 59 percent agreed that the country should definitely 
build new plants, 71 percent believe that plants are safe and secure.

Nuclear Power Infrastructure

    A critical challenge for the nuclear industry is the continued 
presence of a strong nuclear power infrastructure. This infrastructure 
includes the engineering expertise and skilled labor to design, 
construct, and operate plants; the existence of a strong educational 
network at the Nation's colleges and universities; and the presence of 
knowledgeable and dedicated personnel to staff the Nuclear Regulatory 
Commission.
    The lull in the construction of new nuclear power plants in the 
1990s led to a decrease in the number of nuclear engineering students 
in American universities. As with many other businesses, the nuclear 
industry faces an aging workforce. If the commercial nuclear power 
industry in the United States is to expand, it is imperative that the 
Nation has a skilled workforce that is ready to construct, operate, and 
support new plants.
    The limited availability of a skilled workforce is not unique to 
the nuclear industry. It affects the entire energy sector as well as 
the manufacturing sector. The commercial nuclear industry is taking 
aggressive action to develop its future work force. The industry has 
been pursuing a variety of initiatives to increase career awareness 
through direct outreach efforts with professional societies and through 
the Internet and other media.
    The industry has also developed training programs and partnerships 
through high schools, union apprenticeship programs, skills centers, 
community colleges and universities, and we provide financial support 
and scholarships to students and is actively developing and engaging 
regional and state-based work force development partnerships.
    To help American workers prepare for careers in the nuclear 
industry, we are taking steps to raise awareness of the impending 
skilled craft labor shortage and its impact on the energy sector; 
elevate the image, status and prestige of skilled craft careers; 
attract, recruit and train workers, particularly from untapped and 
under-represented labor pools; align investments and work force 
development initiatives to ensure collaboration and coordination of 
government, industry and labor efforts in the develop the energy 
skilled trades work force; build partnerships between industry, 
government, organized labor and the education community that promote 
talent and economic development; and implement performance-based 
education and training programs for skilled craft workers through 
vocational and technical education programs in secondary and post-
secondary educational environments (including high schools, pre-
apprentice, apprenticeship, and community college programs).

Acceptable Financial Returns

    As a final prerequisite for new plant construction, companies will 
have to be confident that they can provide their shareholders with an 
acceptable financial return on their investment and that they can 
provide to their customers affordable and reliable electricity. Any 
investment in nuclear power must look attractive not only on an 
absolute basis, but superior to other fuel alternatives.
    While the industry is optimistic that nuclear generation can be 
competitive to the other alternatives, it does expect that the ``first 
mover'' investors will face significant hurdles unique to a nuclear 
investment. Accordingly, financial incentives such as those provided 
for in the Energy Policy Act of 2005 are both necessary and 
appreciated.
    The Energy Policy Act established three incentives for new nuclear 
plant deployment: a production tax credit for up to 6,000 MW of new 
plant capacity, standby insurance in the event of regulatory delay for 
the first six units, and the Title XVII loan guarantee that allows 
support for any advanced energy technology that ``avoid, reduce, or 
sequester'' greenhouse gas emissions.
    These incentives are necessary for the first series of plants built 
employing advanced technologies under a never-before used licensing 
process. The new regulatory process must be proven before investors 
will have the confidence necessary to invest in these new technologies. 
Such a cooperative industry/government financing program for the first 
plants is a necessary and appropriate investment in U.S. energy 
security.

Conclusion

    Trends in worldwide energy use, increases in fossil fuel costs, and 
the need to limit greenhouse gas emissions present the nuclear industry 
with the opportunity to play an increasing role in meeting our 
increasing need for electricity. While there are a number of challenges 
to realizing the full potential of nuclear power, I am confident that 
those challenges can be successfully managed.
    Thank you for the opportunity to appear before you today.

                     Biography for Marilyn C. Kray
    Marilyn C. Kray is the Vice President, Project Development for 
Exelon Nuclear. In this capacity, she is responsible for generic 
licensing and engineering activities related to advanced nuclear 
reactors. She also serves as President of NuStart Energy Development, 
LLC an industry consortium formed to pursue a Combined Operating 
License for a new nuclear plant in the U.S.
    Prior to this assignment, Mrs. Kray was the Vice President of 
Nuclear Acquisition Support and Integration. In this role, she 
pioneered the internal processes for due diligence and plant 
transitions by successfully completing the purchases of three nuclear 
plants: Three Mile Island, Clinton and Oyster Creek. Mrs. Kray served a 
two-year rotational assignment in the Customer Service organization 
where she was the department's lead for the development of the 
deregulation pilot program to implement customer choice. She began her 
career with Exelon in the licensing organization for Peach Bottom 
Atomic Power Station. Prior to that, she was a Reactor Engineer and a 
Project Manager for the U.S. Nuclear Regulatory Commission (USNRC).
    Mrs. Kray is a graduate of Carnegie-Mellon University, with a 
Bachelor of Science degree in Chemical Engineering. Through completion 
of extensive simulator and training courses, she was certified by the 
USNRC to perform power operations inspections at nuclear reactor 
facilities. She has served in leadership roles as the Company 
representative to various industry groups including the Nuclear Energy 
Institute and the Electric Power Research Institute. She is the 2005 
recipient of the World Nuclear Association award for ``Distinguished 
Contribution to the Peaceful Use of Nuclear Technology,'' and in 2007 
received the American Nuclear Society's Utility Leadership Award. She 
is an active volunteer in community organizations, including serving as 
President of the Home and School association and referee for the 
Phoenixville YMCA basketball program.

    Chairman Gordon. Thank you. And Mr. Van Namen.

   STATEMENT OF MR. ROBERT VAN NAMEN, SENIOR VICE PRESIDENT, 
 URANIUM ENRICHMENT, UNITED STATES ENRICHMENT CORPORATION INC.

    Mr. Van Namen. Good morning. My name is Robert Van Namen, 
and I am the Senior Vice President, Uranium Enrichment, for 
USEC Inc., a leading supplier of nuclear fuel for commercial 
nuclear power plants. Thank you, Chairman Gordon, Congressman 
Bilbray, and Members of the Committee, for inviting me to 
testify.
    Today's nuclear fuel supply is in transition. While in 
better shape than a decade ago, much remains to be done to 
support the expansion of nuclear power. Domestic companies 
constructing new facilities face stiff competition in a market 
dominated by foreign, vertically integrated firms.
    As we increase our capacity, U.S. companies need the 
assurance that their investment of resources will receive the 
support necessary to revive the industry to a self-sustaining 
position. Unless we take steps now, we will lose our ability to 
affect nuclear's future expansion and use.
    Let us start with mining and milling of natural uranium. 
Since 1994, domestic sources have provided about 18 percent of 
the uranium purchased by U.S. reactors. Since 2003, the price 
of uranium has risen from $10 a pound to more than $95 a pound 
for long-term contracts. At this price, domestic miners have 
begun to expand or restart existing mines. While it is unlikely 
we would ever be able to supply all of our needs with domestic 
production, the countries with the greatest uranium reserves 
are close allies. The Department of Energy also maintains a 
large inventory of uranium in various forms.
    The second step of the fuel cycle is conversion of natural 
uranium to uranium hexafluoride. The lone U.S. supplier of 
conversion, the Converdyn plant in Illinois, has recently 
expanded, and can now meet about 80 percent of U.S. demand.
    After conversion, the uranium must be enriched to raise the 
concentration of the fissionable isotope, Uranium-235. The 
United States has one operating uranium enrichment plant, the 
Paducah Gaseous Diffusion Plant in Kentucky, which USEC 
operates under lease from DOE.
    Domestic supplies come from three major sources, the 
Paducah plant, about 12 percent, the Megatons to Megawatts 
program, where USEC supplies about 43 percent of the market 
from LEU, blended down from Russian nuclear warhead material, 
and European producers make up the rest of the market needs 
from their overseas production.
    The enrichment industry is transitioning to production 
based almost solely on gas centrifuge. One advantage of gas 
centrifuge is modularity. As contracts are signed, a plant 
could be expanded in increments. As we see new reactors 
constructed, we have the ability to expand in order to meet the 
demand. In the United States, USEC and another company are each 
building a gas centrifuge plant. Others are contemplating 
building here. If all are constructed, it could supply the U.S. 
needs, and be expanded as needed to meet growth in the market. 
If required, the Paducah Gaseous Diffusion Plant could also run 
past its planned shutdown in 2012.
    I would like to speak for a moment about the American 
Centrifuge Plant. The ACP is the only plant to use U.S. 
centrifuge technology. Owned and operated by a U.S. company, it 
is the only technology that can be used to meet national 
security needs, but at the same time, does not benefit from 
foreign government ownership and support, as does its 
competitors. USEC's development and manufacturing work is based 
in Oak Ridge, Tennessee. Manufacturing of machine components 
will also take place in several other states. We are at a 
critical juncture as we enter in the process of deploying the 
plant, and are looking to have it at capacity by 2012 to meet 
market demand.
    The final portion of the fuel cycle, fuel fabrication, is 
served by several plants in the United States. Currently, the 
market has much more supply than demand. If new reactors are 
built, existing fabrication facilities should have enough 
capacity to meet demand.
    Several threats to nuclear expansion exist. One is timely 
and adequate financing for construction in light of current 
credit market conditions and uncertainty regarding the timing 
of any loan guarantees from the Department of Energy. The 
companies building here also need to be able to compete on a 
level playing field. The potential for Russia to dump low 
enriched uranium on the U.S. market is indeed a threat.
    I would like to close by discussing the role that the U.S. 
Government can play in solidifying the U.S. based fuel supply. 
Despite actions by Congress to encourage the expansion of 
nuclear power, the implementation of legislative directives at 
the agency level has lagged behind market needs. Delays in 
implementing the loan guarantee program is one example.
    Domestic producers need legislative support to ensure that 
the U.S. Government can effectively enforce the Russian 
Suspension Agreement. Additionally, support for the Paducah 
plant with a contract to enrich the Department of Energy's high 
assay tails would help meet market needs for both uranium and 
enrichment. DOE needs to complete its plan for managing and 
selling its uranium inventory to provide market clarity on how 
DOE's inventories will affect supply.
    Our mutual goals should be the expansion of nuclear power. 
The domestic fuel industry is working to ensure that the fuel 
for nuclear reactors will be available when they come online. 
At USEC, we firmly believe that increasing our use of nuclear 
power will help our nation tackle the challenges we face, from 
international energy security, to the adverse effects of 
burning fossil fuels.
    Thank you for your time, and I look forward to the 
questions.
    [The prepared statement of Mr. Van Namen follows:]
                 Prepared Statement of Robert Van Namen
    Good morning. My name is Robert Van Namen, and I am Senior Vice 
President, Uranium Enrichment at USEC Inc., a leading supplier of low 
enriched uranium for commercial nuclear power plants. Thank you 
Chairman Gordon, Ranking Member Hall and Members of the Committee for 
inviting me to testify on the current status of America's supply of 
uranium and nuclear fuel and the industry's ability to meet additional 
demand for fuel as the country prepares to increase its use of nuclear 
power.
    Today's U.S. nuclear fuel supply industry is in transition. While 
it is in better shape than it was a decade ago, much work remains to be 
done and substantial investments need to be made before it can fully 
support the expansion of nuclear power in our country. Domestic fuel 
companies constructing new facilities face stiff competition in a 
market dominated by foreign, vertically integrated firms, many of which 
benefit from the financial and political support of their governments. 
As we work to increase our domestic fuel supply capacity, U.S. 
companies supplying the nuclear fuel cycle need the assurance that 
their investment of resources will receive the support necessary to 
revive the industry to a long-term, self-sustaining position. We must 
rebuild and expand our domestic fuel cycle infrastructure to put us in 
a position of self reliance for the future.
    While America still leads the world in the amount of electricity 
produced by nuclear power, we long ago gave up our industry leading 
position on nuclear technology. Unless we take steps now to reclaim a 
leadership position, we will lose our ability to affect nuclear's 
future expansion and use worldwide or even in our own country. Now is 
the time for the U.S. Government to encourage the efforts of our 
domestic companies to rejuvenate the U.S. nuclear fuel cycle so it can 
meet the demand of an expanded nuclear power generating capacity in the 
decades to come.

U.S. Uranium Supply

    Let me start with the beginning of the fuel cycle, the mining and 
milling of natural uranium. Since 1994, domestic sources have provided 
an average of about 18 percent of the natural uranium purchased by U.S. 
reactor operators. Our production of uranium began to decline in the 
mid-1990s as a flood of government inventories and material from 
countries in the former Soviet Union depressed prices to levels that 
made it uneconomical to produce the material domestically. The dimming 
prospects for future nuclear reactors being constructed also dampened 
prices and the prospects for future demand growth.
    But today the situation has changed somewhat for the better. Since 
2003, the price of uranium has risen from about $10 a pound up to more 
than $95 for long-term contracts. At this price, domestic miners have 
begun the process to expand or restart existing mines. NRC expects 
applications for 20 new mines to be filed by 2011. Concurrently, 
production has increased to about five million pounds a year at 
existing mines.
    However, even if domestic production of uranium expands immensely, 
it is unlikely that we would ever be able to supply all our needs with 
domestic production. Fortunately, the countries with the greatest 
uranium reserves, Canada and Australia, are close allies of the United 
States, reducing chances of supply disruptions. Additionally, the U.S. 
Department of Energy maintains an enormous inventory of uranium in 
various commercial and non-commercial forms. This inventory can supply 
limited regular demand as well as serving as a strategic reserve in 
case of supply disruptions. The department is working on the details of 
a long-term policy for handling its inventory, which would bring much 
needed clarity to the role of these sales in the market.

U.S. Conversion Supply

    The second step in the fuel cycle is the conversion of natural 
uranium to uranium hexafluoride. Unlike uranium mining, the lone U.S. 
supplier of conversion services can meet the majority of U.S. demand. 
The Converdyn plant in Illinois has recently expanded and can now meet 
about 80 percent of annual U.S. demand. Historically, conversion plants 
have been able to expand in step with increased demand, and the world 
has an overcapacity of conversion services available at facilities in 
Canada, the United Kingdom, France and Russia. Additionally, companies 
have expressed some interest in building more plants or adding onto 
their existing capacity at conversion facilities in these countries. A 
secondary source of conversion lies in the large quantity of uranium in 
inventories such as DOE's that have already been converted to uranium 
hexafluoride.

U.S. Low Enriched Uranium Supply

    After conversion, uranium must be enriched to raise the 
concentration of the fissionable isotope U235 from its 
natural state of less than one percent to the four to five percent 
required for commercial nuclear reactors. The United States has one 
operating uranium enrichment plant, the Paducah Gaseous Diffusion Plant 
in Paducah, Kentucky, which USEC operates under lease from DOE. In 
2008, we expect to produce approximately six million SWU at the plant. 
A SWU, or separative work unit, is the industry unit of enrichment. The 
annual fuel requirements of a typical reactor require about 100,000 SWU 
and 900,000 pounds of uranium. Annual U.S. demand ranges between 12 to 
14 million SWU a year. USEC shut down Paducah's sister plant in 
Piketon, Ohio, in 2001 in the face of dumping of foreign commercial LEU 
and to accommodate increased supply of LEU from down-blended Russian 
nuclear warheads through the Megatons to Megawatts program.
    U.S. reactors currently depend upon foreign sources for the 
majority of their LEU. The supply comes from three major sources: LEU 
from the Paducah plant, about 12 percent, the Megatons program, about 
43 percent, and from European producers, about 43 percent. But that is 
about to change.
    Worldwide, the enrichment industry is transitioning from production 
based on a mix of gaseous diffusion and gas centrifuge technologies to 
one based almost solely on gas centrifuge over the next ten years. In 
the United States, USEC and a subsidiary of Urenco, a European 
enrichment company, are each building gas centrifuge plants as I speak. 
Combined, these plants will have an initial capacity of just under 
seven million SWU.
    Other companies, such as GE-Hitachi and the French conglomerate 
Areva, are also contemplating building plants here, although neither 
has applied for a license, selected a site, or made any other 
definitive commitment to build yet. If all four plants are constructed, 
it would provide enough LEU capacity for current and potential 
increases in U.S. demand. Additionally, based on current SWU prices, 
the Paducah GDP can run past its planned shutdown in 2012 to fill any 
supply gaps should the market require the additional supply.
    I would like to speak for a moment about our American Centrifuge 
Plant. The ACP is the only plant to use U.S. centrifuge technology. 
USEC's centrifuge machine, the AC100, is based on a design by DOE from 
the 1980s, but with vast improvements in performance, materials and 
manufacturing processes. Because the ACP will be owned and operated by 
a U.S. company, it does not face the restrictions imposed on the 
foreign centrifuge and laser enrichment technologies that will be used 
in the other plants. USEC's development and manufacturing work is based 
in Oak Ridge, Tennessee, where we have been working since 2001 to 
resurrect the U.S. technology. Manufacturing of machine components will 
also take place in West Virginia, Indiana, Ohio and other states. 
Constructing the plant increases domestic capacity while also 
rebuilding an American industrial base for manufacturing a highly 
advanced nuclear technology.
    One major advantage of gas centrifuge over gaseous diffusion is its 
modularity. As new contracts for LEU are signed with utilities, a plant 
can be expanded to meet demand in increments. So while our initial 
planned capacity for the American Centrifuge Plant is 3.8 million SWU, 
our Environmental Impact Statement approved as part of our NRC license 
covers the potential expansion of the plant to approximately double 
this size. If nuclear power grows as some predict, we could eventually 
expand the plant to four times its original size based on the available 
land at the site. So if we see a number of new reactors licensed and 
constructed, we believe we will have the ability to expand the plant in 
order to meet the emerging demand.
    However, several threats to the expansion of the U.S. LEU capacity 
exist. One major issue is the availability of timely and adequate 
financing for construction in light of current credit market conditions 
and uncertainty regarding the timing of any loan guarantees from DOE. 
In particular, USEC would like to utilize DOE's loan guarantee program 
to assist with debt financing for the American Centrifuge Plant. DOE 
needs to move quickly to award guarantees once applications are 
received. Given the current credit crisis, such guarantees may be 
necessary to receive financing that makes the plant economical for 
investors.
    The companies building here also need to be able to compete on a 
level playing field, shielded from uncontrolled dumping of foreign 
imports of uranium and LEU. The potential for Russia to dump LEU on the 
U.S. market is particularly on the minds of those of us investing here, 
as witnessed by the Senate hearing on the matter last month.
    Other threats include the increasing costs for material and labor, 
the costs for recreating a manufacturing base in the U.S. to make 
centrifuge machines and plant components, and the need to develop a 
skilled labor pool to build and operate the facilities. Utilities 
considering building new reactors face many of these same challenges.
    So if conditions permit, we may see a large and diverse domestic 
enrichment industry within five to ten years, one that could support 
the expansion of our nuclear fleet.

U.S. Fuel Fabrication

    The final portion of the fuel cycle, fuel fabrication, is served by 
several plants in the United States, only one of which is owned by a 
U.S. company, and currently the market has much more supply than 
demand. While each reactor vendor used to be the sole source for fuel 
assemblies for the reactors they built for customers, today each 
vendor's plant can make fuel assemblies for reactors designed by 
competitors, leading to the current glut. If new reactors are built 
here, the existing fabrication facilities should have enough capacity 
to meet any new demand.

The Role of the U.S. Government in Expanding the Use of Nuclear Power

    I would like to close by discussing the role that the U.S. 
Government can and should play in expanding the use of nuclear power 
domestically, specifically in assisting the expansion of our domestic 
fuel supply.
    First, a few of the positives that have gotten us to this point are 
worth mentioning. Congress has enacted legislation, such as the Energy 
Policy Act of 2005, that has spurred utilities to consider building the 
first new plants in 30 years. In addition, the regulatory uncertainty 
of the NRC licensing process has been simplified and tested. For 
instance, USEC and Urenco's subsidiary LES have both successfully 
applied for and received construction and operating licenses for new 
enrichment facilities. These are the first new nuclear facility 
licenses issued by NRC in several decades. NRC has also worked 
vigorously to increase its staff in order to handle the tens of 
applications for new nuclear plants, fuel cycle facilities and uranium 
mines that is has received and expects to receive during the next 
decade.
    Those are some of the positives, but the need for government action 
remains. Despite legislation passed by Congress to encourage the 
expansion of nuclear power, the implementation of legislative 
directives at the agency level has often been out of step with real-
world timeframes. The delay in implementing the Loan Guarantee program, 
for instance, may prevent new nuclear facilities from coming online as 
soon as possible because companies may have to delay or cancel their 
projects. The NRC also faces a funding shortfall from its budget 
request that may force it to defer or delay the review of applications 
for new projects.
    Specifically in nuclear fuel, domestic producers need legislative 
support to backup the Russian Suspension Agreement Amendment to ensure 
that the U.S. Government can enforce recently agreed terms that allow 
measured Russian access to the U.S. market while permitting our 
domestic industry time to secure contracts needed to secure financing 
for new mines and production facilities. Additionally, near- and 
medium-term support for the Paducah plant with a contract to enrich 
DOE's high-assay tails would ensure that it remains available to meet 
the needs of domestic utilities past 2012, a period when the new 
centrifuge facilities will be starting up operations. As mentioned 
before, DOE needs to complete its plan for managing and selling its 
uranium inventories to provide the market, and specifically miners and 
enrichers, clarity on how DOE's inventory will affect supply and demand 
during the next decade. Finally, any assistance with education, job 
development, and infrastructure improvements in the next few years will 
go a long way to assisting us with creating a stable, long-term nuclear 
fuel industry in the United States.
    Our mutual goal in all of these activities should be to see the 
renewed expansion of nuclear power, America's primary source of clean, 
reliable emissions-free electricity. The domestic fuel industry has 
spent the past several years working to ensure that the fuel for new 
reactors will be available when they come online so that our nuclear 
plants can continue to provide us energy security and diversity. At 
USEC, we firmly believe that increasing our use of nuclear power will 
help our nation tackle the severe challenges we face from international 
energy security to the adverse effects of electricity generated by 
burning fossil fuels. Thank you for your time and I look forward to 
your questions.

                     Biography for Robert Van Namen
    Robert (Bob) Van Namen is Senior Vice President of Uranium 
Enrichment at USEC Inc. He heads the Company's marketing and sales 
department as well as operations at the Paducah and Portsmouth sites. 
He is also the lead USEC officer responsible for overseeing NAC 
International, USEC's wholly-owned subsidiary based in Norcross, GA. He 
previously served five years as USEC's Vice President of Marketing and 
Sales.
    Prior to joining USEC in January 1999, Mr. Van Namen was head of 
nuclear fuel management for Duke Energy. His career at Duke also 
included seven years in nuclear design and safety analysis.
    Mr. Van Namen is a nuclear engineer with 22 years of experience in 
nuclear power. He has served in a variety of leadership roles in 
industry and professional organizations including the Nuclear Energy 
Institute. He currently serves on the board of management of the World 
Nuclear Association.
    Mr. Van Namen earned his Bachelor of Science and Master of Science 
degrees at the University of Virginia. He is a registered professional 
engineer in the State of North Carolina.
    USEC Inc. (NYSE: USU), a global energy company, is a leading 
supplier of enriched uranium fuel for commercial nuclear power plants.

    Chairman Gordon. Thank you. And Mr. Asselstine, you are 
recognized.

    STATEMENT OF MR. JAMES K. ASSELSTINE, MANAGING DIRECTOR 
   (RETIRED), LEHMAN BROTHERS; FORMER COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Asselstine. Mr. Chairman, Congressman Bilbray, Members 
of the Committee, thank you for the opportunity to appear 
before you today.
    My testimony will provide a financial community perspective 
on the major issues of financial institutions regarding 
investment in new nuclear plants. In addition, I will discuss 
the role of the federal financial support in private sector 
decisions to invest in nuclear power.
    As the companies and their investors evaluate a potential 
new nuclear plant project, I believe that they will need to 
consider several factors. First, the companies and investors 
are mindful of the experience with construction delays, cost 
increases, and licensing and litigation delays for many of the 
existing plants that entered commercial operation in the 1980s 
and 1990s. They will want to be satisfied that the causes for 
these past problems have been addressed for any new project.
    Second, given the construction complexity and large capital 
investment for a new nuclear project, the companies and 
investors will want to be confident that a new project can be 
completed on budget and on schedule. Third, the companies and 
investors will want assurance that technology risk for the 
project is relatively low, because all of the new plant 
projects being contemplated use technology that is similar to 
the light water reactor designs of the existing plants, and 
because those plants have established a consistent track record 
of safe and reliable operation, I don't believe that technology 
risk is a significant factor.
    Fourth, the companies and their investors will want 
assurance that the risk of cost increases due to new regulatory 
requirements, and licensing and litigation delays, is 
acceptably low. The existing light water reactor technology in 
use today is much more mature than it was when many of the 
existing plants were licensed, and we now have an extensive 
base of successful operating experience with the existing 
plants. In addition, a number of issues, such as the post-Three 
Mile Island changes, fire protection, equipment reliability, 
material condition, and metallurgy, and maintenance issues, 
have been addressed satisfactorily by the industry and the NRC.
    Further, over the past decade, we have had a period of 
regulatory stability with the NRC that has contributed to the 
successful operation of the existing plants. Thus, although 
there is the potential for additional regulatory requirements 
to address issues such as plant security and material 
condition, as the existing plants grow older, the risk of 
costly and disruptive new regulatory requirements for new 
plants appears to be relatively low. Similarly, the adoption of 
a new licensing process by the NRC for future nuclear plants, 
that is intended to address the causes of delays and cost 
increases in the past, is encouraging, but until licensing 
decisions have been completed for a group of initial new 
plants, that new licensing process remains untested, and some 
uncertainty remains as to whether the process will function as 
it is intended.
    Fifth, the companies and investors will require assurance 
that the price of power to be generated by a new nuclear plant 
will be competitive with other alternatives, including coal and 
gas-fired generation, and renewable energy resources. This may 
pose a special challenge for the initial group of new nuclear 
plants, because it is likely that the industry will incur $300 
to $500 million in first of a kind engineering costs for each 
new nuclear plant design, in order to develop the detailed 
engineering design information required to satisfy the NRC's 
design certification process. Depending upon how these costs 
are allocated, this could significantly increase the cost of 
the initial new plants.
    And finally, as is the case with any new proposed 
generating project, the companies and investors will need 
confidence that the power from the new plant is needed, and 
that the company will be able to recover its capital investment 
in the plant and earn a fair return on that investment.
    Mr. Chairman, I believe that a number of these factors can 
be addressed by the industry through the contractual 
arrangements for construction and risk-sharing among the 
parties involved in designing, building, owning, and operating 
a new nuclear plant, but some factors, such as the magnitude, 
complexity, and large initial capital investment, including the 
engineering design costs that I mentioned, of a new nuclear 
project, and residual uncertainties associated with the new, 
but as yet untested NRC licensing process, will likely require 
federal financial support, to allow the companies and investors 
to move forward with new nuclear plant commitments.
    Mr. Chairman, I believe the financial support provisions in 
the Energy Policy Act of 2005, if properly implemented, can 
provide a sufficient basis to support the development and 
financing of new nuclear plants in this country. As you 
mentioned in your opening statement, there is clear evidence, 
from the level of activity within the industry since the Energy 
Policy Act was enacted, that these provisions in the Act are 
having their intended effect of facilitating and encouraging 
new nuclear plant development.
    Continued successful implementation of all three of the key 
financial support components in the Energy Policy Act of 2005 
will be essential if this industry activity is to be converted 
into firm orders for new plants.
    Final implementing regulations are now in effect by the 
Department of Energy for the standby delay risk insurance 
provision, and the federal loan guarantee program. In addition, 
final regulations are now in effect by the Internal Revenue 
Service for the production tax credit provision. In general, I 
believe that these regulations provide a workable framework for 
implementing the three financial support provisions in the 
Energy Policy Act.
    In particular, though, considerable work remains to be done 
regarding the federal loan guarantee program, and that is the 
area that I believe will require some additional ongoing 
Congressional oversight and involvement. Again, thank you for 
the opportunity to testify today, and that completes my 
testimony.
    [The prepared statement of Mr. Asselstine follows:]
               Prepared Statement of James K. Asselstine
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to appear before you today.
    My name is Jim Asselstine. Before my retirement last year, I served 
as a Managing Director at Lehman Brothers, where I was the senior fixed 
income research analyst responsible for covering the electric utility 
and power sector. In that capacity, I provided fixed income research 
coverage for more than 100 U.S. electric utility companies, power 
generators, and power projects. I also worked closely with the large 
institutional investors who have traditionally been a principal source 
of debt financing for the power industry. In addition, I served as a 
member of the U.S. Nuclear Regulatory Commission from 1982 to 1987, a 
period during which many of our existing nuclear units received their 
operating licenses.
    Mr. Chairman, I appreciate your invitation to testify at today's 
hearing to explore the potential for nuclear power to provide an 
increased proportion of electric generating capacity in the United 
States. My testimony will provide a financial community perspective on 
the major considerations of financial institutions regarding investment 
in new nuclear power plants. In addition, I will discuss the role of 
federal financial support in private sector decisions to invest in 
nuclear power.
    The process of planning, developing, licensing, building, and 
financing a new nuclear plant is likely to be one of the most complex 
endeavors facing an electric utility or power generation company today. 
As currently envisioned, this process will require a preliminary 
planning period of about two years, a period of three to four years to 
complete the process to obtain a combined construction and operating 
license (COL) from the U.S. Nuclear Regulatory Commission (NRC), and a 
construction period of from four to five years. Thus, more than a 
decade will be required to plan, license, build, and bring a new 
nuclear unit into commercial operation. A new nuclear unit will also be 
a large, very complex, and capital intensive construction project. In 
terms of its cost and construction complexity, building a new nuclear 
unit is likely to be similar to building a large new coal-fired 
generation unit. This cost and construction complexity will also be 
much greater than that for the gas-fired generating capacity that has 
represented the bulk of new power generation built in this country over 
the past two decades. Because the cost of a new nuclear unit can 
represent a substantial portion of the market value of a utility or 
power generation company, the decision to proceed with a new nuclear 
project is likely to be one of the more significant decisions facing 
the company's management and investors.
    Further, unlike any other power generation alternative, a new 
nuclear unit is subject to the NRC's licensing process and regulatory 
oversight. This exposes a new nuclear plant project to the potential 
for changing regulatory requirements, and for licensing and litigation 
delays. Changing regulatory requirements, and licensing or litigation 
delays could increase the cost of a new nuclear unit, delay the 
recovery of the company's financial investment, and in extreme cases, 
prevent a completed plant from entering commercial operation. A number 
of our existing nuclear units experienced cost increases as a result of 
changing regulatory requirements, and licensing and litigation delays 
in the 1980s and 1990s, and one completed plant ultimately failed to 
enter commercial operation as a result of these factors. Since that 
time, the Congress and the NRC have established a new licensing process 
for nuclear plant applications that is intended to achieve final 
licensing decisions as early as possible in the process in order to 
minimize the risk of delay or disruption after the company has made a 
substantial capital investment in the plant. This new licensing 
process, including the use of a combined license (COL) that would 
authorize both construction and operation of the plant, holds great 
promise, but has yet to be tested to verify that it will work as 
intended.
    As the companies and their investors evaluate a potential new 
nuclear plant project, I believe that they will need to consider 
several factors. First, the companies and investors are mindful of the 
experience with construction delays, cost increases, and licensing and 
litigation delays for many of the existing plants that entered 
commercial operation in the 1980s and 1990s. They will want to be 
satisfied that the causes for these past problems have been addressed 
for any new project. Second, given the construction complexity and 
large capital investment for a new nuclear project, the companies and 
investors will want to be confident that a new project can be completed 
on budget and on schedule. Third, the companies and investors will want 
assurance that technology risk for the project is relatively low. 
Because all of the new plant projects being contemplated use technology 
that is similar to the light water reactor designs of the existing 
plants, and because those plants have established a consistent track 
record of safe and reliable operation, I do not believe that technology 
risk is a significant factor.
    Fourth, the companies and their investors will want assurance that 
the risk of cost increases due to new regulatory requirements, and 
licensing and litigation delays is acceptably low. The existing light 
water reactor technology in use today is much more mature than it was 
when many of the existing plants were licensed, and we now have an 
extensive base of successful operating experience with the existing 
plants. In addition, a number of issues such as the post-Three Mile 
Island issues, fire protection, equipment reliability, material 
condition issues and metallurgy, and maintenance issues have been 
addressed satisfactorily by the industry and the NRC. Further, over the 
past decade, we have had a period of regulatory stability with the NRC 
that has contributed to the successful operation of the existing 
plants. Thus, although there is the potential for additional regulatory 
requirements to address issues such as plant security and material 
condition as the existing plants grow older, the risk of costly and 
disruptive new regulatory requirements for new plants appears to be 
relatively low. Similarly, as I discussed previously in my testimony, 
the adoption of a new licensing process by the NRC for future nuclear 
plants that is intended to address the causes of delays and cost 
increases in the past is encouraging. But, until licensing decisions 
have been completed for a group of initial new plants, that new 
licensing process remains untested, and some uncertainty remains as to 
whether the process will function as it is intended.
    Fifth, the companies and investors will require assurance that the 
price of power to be generated by a new nuclear plant will be 
competitive with other alternatives, including coal and gas-fired 
generation, and renewable energy resources. This may pose a special 
challenge for the initial group of new nuclear plants because it is 
likely that the industry will incur $300-$500 million in first-of-a-
kind engineering costs for each new nuclear plant design in order to 
develop the detailed engineering design information required to satisfy 
the NRC's design certification process. Depending upon how these 
engineering design costs are allocated, this could significantly 
increase the cost of the initial new plants. Finally, as is the case 
with any new proposed generating project, the companies and investors 
will need confidence that the power from the new plant is needed, and 
that the company will be able to recover its capital investment in the 
plant and earn a fair return on that investment. In the case of a 
regulated electric utility, this confidence will depend upon the state 
rate-setting arrangements that are in place for the new plant. In the 
case of an unregulated, or merchant, generation company, this 
confidence will depend upon any contractual arrangements to sell the 
output of the plant, and upon studies of power market conditions in the 
region in which the plant will be located.
    Mr. Chairman, I believe that a number of these factors can be 
addressed by the industry through the contractual arrangements for 
construction and risk-sharing among the parties involved in designing, 
building, owning, and operating a new nuclear plant. But some factors 
such as the magnitude, complexity, and large initial capital 
investment, including engineering design costs, of a new nuclear 
project, and residual uncertainties associated with the new, but as yet 
untested NRC licensing process, will likely require federal financial 
support to allow the companies and investors to move forward with new 
nuclear plant commitments.
    The Energy Policy Act of 2005 contained four provisions that were 
intended to facilitate and encourage industry commitments to build and 
operate new nuclear plants. First, the Act included a 20-year extension 
of the Price-Anderson Act, which provides insurance protection to the 
public in the event of a nuclear reactor accident. With the previous 
expiration of the Price-Anderson Act, insurance coverage for the public 
remained in place for the existing 104 operating nuclear units, but 
that coverage would not have been available for new plants. The 20-year 
extension of the Price-Anderson Act corrected this problem.
    Second, the Act provided a production tax credit of 1.8 cents per 
kilowatt-hour for up to 6,000 megawatts of generating capacity from new 
nuclear power plants for the first eight years of commercial operation. 
This production tax credit is subject to an annual cap of $125 million 
for each 1,000 megawatts of generating capacity. A similar production 
tax credit was provided, and has historically been available, for 
certain renewable energy resources.
    Third, the Act provided standby support or risk insurance for a new 
nuclear project's sponsors and investors against the financial impacts, 
including financing costs, of delays beyond the industry's control that 
may be caused by delays in the NRC's licensing process or by 
litigation. This standby risk insurance for regulatory and litigation 
delays provides protection for the first six new nuclear units built. 
Up to $500 million in protection is provided for the first two new 
units, and 50 percent of the cost of delays up to $250 million, with a 
six-month deductible, is provided for units three through six.
    Finally, the Act provided for federal loans and loan guarantees for 
up to 80 percent of the project's cost. These federal loan guarantees 
were not limited to new nuclear plants, but instead were made available 
to support the development of innovative energy technologies, including 
advanced nuclear power plants, that avoid or reduce certain air 
pollutants and greenhouse gas emissions.
    Mr. Chairman, I believe that these financial support provisions in 
the Energy Policy Act of 2005, if properly implemented, can provide a 
sufficient basis to support the development and financing of new 
nuclear plants in this country. Although no company has yet placed a 
firm order for a new nuclear unit, there is clear evidence from the 
level of activity within the industry since the Energy Policy Act was 
enacted that these provisions in the Act are having their intended 
effect of facilitating and encouraging new plant development. To date, 
the NRC has certified two new reactor designs for use, and reviews of 
two additional designs are currently underway. Thus, it appears likely 
that the industry will be able to select from at least four new NRC-
certified plant designs. Further, according to the Nuclear Energy 
Institute, as of April 8, 2008, at least 23 companies or consortia have 
stated their intention to file applications with the NRC for a combined 
license for at least 27 new nuclear units in this country. Of these, 
applications for COLs for 15 units have now been filed with the NRC, 
and that number could grow to about 20 units by the end of this year. 
In addition, a number of companies are pursuing Early Site Permit 
applications with the NRC in order to resolve site environmental issues 
in advance of the COL proceeding.
    Mr. Chairman, I believe that continued successful implementation of 
all three of the financial support components in the Energy Policy Act 
of 2005 will be essential if this industry activity is to be converted 
into firm orders for new plants. These financial support provisions are 
complementary; collectively, they have the potential to reduce the 
residual uncertainties, risks, and costs associated with a new nuclear 
plant to levels that are likely to be comparable to other base load 
generating alternatives. The standby risk insurance provides valuable 
protection against licensing and litigation delay costs for the initial 
six units to be built, although there would be no protection for what 
may be a number of additional units working their way through the NRC 
licensing process at about the same time. The production tax credit 
provides a valuable financial benefit for new plants over their initial 
eight years of operation. This benefit can offset the somewhat higher 
cost of the initial plants; however, this benefit only becomes 
available when the unit begins operation, and the exact amount of the 
available production tax credit for each plant will not be known for 
some time. The available tax credit benefit will be spread among all of 
the eligible plants, and initial eligibility will be determined by the 
number and size of the plants for which COL applications are filed with 
the NRC by the end of this year. The federal loan guarantee can help to 
facilitate the availability of debt financing for up to 80 percent of 
the total cost of the plant. Given the magnitude of a new nuclear plant 
investment, this can be a substantial benefit for all the companies, 
including the regulated utilities that are considering a new nuclear 
project. But the loan guarantee may be essential to facilitate debt 
financing for the unregulated, merchant generation companies that may 
have somewhat less financial flexibility than the regulated utility 
companies. This is especially the case if the company seeks to use a 
non-recourse project finance structure similar to the financing 
structures used for many gas-fired power plant projects in the 1990s.
    Final implementing regulations are now in effect by the Department 
of Energy for the standby delay risk insurance provision and the 
federal loan guarantee program. In addition, final regulations are now 
in effect by the Internal Revenue Service for the production tax credit 
provision. In general, I believe that these regulations provide a 
workable framework for implementing the three financial support 
provisions in the Energy Policy Act. In particular, though, 
considerable work remains to be done regarding the federal loan 
guarantee program. The Department of Energy has done an effective job 
in staffing its Loan Guarantee Program Office, and in my view, now has 
the in-house technical expertise to evaluate loan guarantee 
applications. Once the Administration and Appropriations Committee 
review process for the Department's loan guarantee implementation 
program is completed, the Department will solicit loan guarantee 
applications and begin an extensive due diligence process and the 
negotiation of financial term sheets. It appears this process will 
continue well into 2009. Further, the calculation of credit subsidies, 
which will determine the cost of the loan guarantee to the individual 
company, has yet to be finalized. Thus, the terms and cost of the loan 
guarantee may not be defined for some time. Finally, the currently 
approved funding of $18.5 billion for loan guarantees for new nuclear 
projects may not be sufficient to cover all those who apply. Continued 
Congressional oversight of the Department's loan guarantee program and 
the available funding for that program may be needed to ensure that the 
loan guarantee financial support component is successful.
    Mr. Chairman, again, thank you for the opportunity to testify 
today, and this completes my testimony.

                   Biography for James K. Asselstine
    Mr. Asselstine recently retired from his position as a Managing 
Director with Lehman Brothers, Inc. During his more than 18 years with 
Lehman Brothers, Mr. Asselstine was a senior fixed income research 
analyst covering the electric power industry. Mr. Asselstine was also a 
member of the firm's Investment Banking Division Commitment and Bridge 
Loan Committees, and was the global head of high grade credit research 
for six years. As one of five senior members on the firm's Commitment 
and Bridge Loan Committees, Mr. Asselstine was responsible for 
reviewing, approving, and monitoring all of the firm's equity, fixed 
income, and structured products capital commitments and bridge loan 
commitments. As head of high grade credit research, Mr. Asselstine 
directed a team of 55 research analysts covering investment grade-rated 
industrial, financial, and utility issuers of fixed income securities 
in the United States, Europe, and Asia.
    Mr. Asselstine served as a Commissioner on the U.S. Nuclear 
Regulatory Commission from 1982 to 1987. From 1978 to 1982, he served 
as Associate Counsel for the U.S. Senate Committee on Environment and 
Public Works. While on the staff of the committee, Mr. Asselstine also 
served as a Co-Director of the Committee's investigation of the Three 
Mile Island nuclear power plant accident.
    From 1977 to 1978 and from 1973 to 1975, Mr. Asselstine served as a 
Staff Attorney with the U.S. Nuclear Regulatory Commission, and from 
1975 to 1977, he served as Assistant Counsel for the Joint Committee on 
Atomic Energy of the U.S. Congress.
    Mr. Asselstine holds a B.A. degree in Political Science from 
Virginia Polytechnic Institute, and a J.D. degree from the University 
of Virginia.

    Chairman Gordon. Thank you. And Dr. Cochran, you are 
recognized for five minutes.

 STATEMENT OF DR. THOMAS B. COCHRAN, SENIOR SCIENTIST, NUCLEAR 
       PROGRAM, NATIONAL RESOURCES DEFENSE COUNCIL, INC.

    Dr. Cochran. Mr. Chairman, thank you for providing the 
Natural Resources Defense Council with the opportunity to 
testify today.
    I have provided, in my testimony, a summary of 
recommendations for the Congress. The highest priority, I 
believe, is to pass a climate bill that puts stringent limits 
on CO2 emissions and other greenhouse gas emissions. 
This is not only the best and most economically efficient way 
to mitigate climate change, but it is the single policy that 
would provide the greatest benefit for the domestic nuclear 
power industry.
    Secondly, the Congress should stop subsidizing the 
construction of new nuclear power plants, and reject further 
subsidies for new nuclear plants in climate mitigation 
legislation. The economically inefficient way to mitigate 
climate change is to continue to subsidize new nuclear plants. 
This will penalize and slow investments in improved energy 
efficiency and energy supply technologies that can mitigate 
climate change in less time with less cost and risk.
    Third, you should terminate the Department of Energy's 
misguided 100-plus year effort to close the nuclear fuel cycle 
and introduce fast burner reactors into the United States, and 
terminate funding for research on advanced nuclear fuel 
reprocessing. You should establish an unbiased outside 
commission to report on ways to improve the Nuclear Regulatory 
Commission's safety culture. The biggest barrier to significant 
improvement of U.S. nuclear plant safety is the poor safety 
culture of the Nuclear Regulatory Commission.
    Finally, you should initiate a search, or have the 
Department of Energy initiate a search, for a second geologic 
repository for the disposal of spent fuel.
    Nuclear power has both benefits and costs. On the benefits 
side, it is a low carbon emitter. It is a reliable generator of 
electricity. It provides low cost electricity from existing 
plants. It has a reliable and plentiful supply of fuel, and low 
health impacts from routine plant emissions.
    On the other side of the ledger, it increases the risk of 
nuclear weapons proliferation. You run the risk of another 
catastrophic nuclear accident. It has significant, unresolved 
waste disposal problems. It has significant, unresolved health 
and environmental problems associated with uranium mining. And 
new nuclear plants will not be economical in the United States 
until competing fossil generation is required to pay 
significant financial penalty for its carbon emissions. 
Polluters should pay, and the efficient way to deal with that 
issue is to cap carbon emissions.
    I have provided an analysis of the projections of nuclear 
power globally based on the World Nuclear Association's 
databases, and it is a snapshot of all the reactors in 
operation, under construction, planned, and proposed. And if 
you look at this future set of reactors, this snapshot, and ask 
what is the climate mitigation offset--the carbon emission 
avoided--you see it is about--over and above what it would be 
today if you maintained the current global level of nuclear 
power--six percent of what is needed to address this climate 
change problem.
    Now, that number is very uncertain. It could certainly be 
twice that, because that number does not include nuclear plants 
from the 2030 to 2050 period, because that is beyond the 
horizon for companies to propose new plants. Nuclear has made a 
contribution to climate mitigation. It will continue to make a 
contribution to climate mitigation.
    The issue for the Congress and for us is not whether you 
are for or against nuclear power. The climate issue, in terms 
of domestic policy, is whether Congress, the Federal 
Government, should continue to subsidize new nuclear plant 
construction. And in our view, the Congress should not. I 
stated earlier why I think that would actually slow the process 
down, by curtailing investments in technologies that can get us 
there sooner and at less risk.
    I believe, additional subsidies are not needed. Hearing 
Marilyn Kray, who is the President of NuStart. The NuStart 
participants, the 10 utilities, own or operate two thirds of 
the nuclear power plants in this country. They have combined 
assets of--I don't know the precise figure--but I would say on 
the order of $400 billion. The General Electric company, which 
is also a participant, the second largest corporation in the 
world, has assets of $400 billion alone. You do not need to 
subsidize these people. They can provide the risk insurance for 
their own investments by collaborating, as they have done, in 
NuStart.
    Chairman Gordon. Dr. Cochran, if you could, we are trying 
to be generous with the time, but if you might bring it to a 
close, then we can explore the suggestions and the questions.
    Dr. Cochran. Well, let me just say the greatest concern I 
have about the global expansion of nuclear power is the 
proliferation risk. The international safeguards regime, the 
Non-Proliferation Treaty, the IAEA safeguards, and other 
elements, not adequate today to safeguard many of the fuel 
cycle facilities that are used by the nuclear power industry 
globally, and we see that being played out in Iran and North 
Korea.
    And it is unfortunate, but all of the big problems with 
nuclear are being foisted over onto the Federal Government for 
various reasons. Proliferation--that is a government problem. 
Safety of catastrophic accidents--the government assumes the 
risk of catastrophic accidents. The waste is so toxic, and it 
contains plutonium that can be used for weapons--that is a 
government problem. The government is not solving these 
problems. These problems are endemic, and they remain.
    And you have got to address these fundamental problems 
before we expand nuclear power significantly on a global basis.
    [The prepared statement of Dr. Cochran follows:]
                Prepared Statement of Thomas B. Cochran

Introduction

    Mr. Chairman and Members of the Committee, thank you for providing 
the Natural Resources Defense Council (NRDC) the opportunity to present 
its views on the ``Opportunities and Challenges for Nuclear Power'' and 
its role in mitigating climate change. NRDC is a national, non-profit 
organization of scientists, lawyers, and environmental specialists, 
dedicated to protecting public health and the environment. Founded in 
1970, NRDC serves more than 1.2 million members and supporters with 
offices in New York, Washington, Los Angeles, San Francisco, Chicago 
and Beijing.

Summary of recommendations

    Congress should:

          Pass a climate bill that puts stringent limits on 
        CO2 and other greenhouse gas emissions--``cap 
        carbon.'' This is not only the best and most economically 
        efficient way to mitigate climate change, but it is the single 
        policy that would provide the greatest benefit to the domestic 
        nuclear power industry.

          Stop subsidizing the construction of new nuclear 
        power plants, and reject further subsidies for new nuclear 
        plants in climate mitigation legislation. The economically 
        inefficient way to mitigate climate change is to continue to 
        subsidize new nuclear power plants. This will penalize and slow 
        investment in improved energy efficiency and energy supply 
        technologies that can mitigate climate change in less time, 
        with less cost and risk.

          Terminate DOE's misguided 100+ year effort to close 
        the nuclear fuel cycle and introduce fast burner reactors in 
        the United States, and stop funding research on advanced 
        nuclear fuel reprocessing.

          Establish an unbiased outside commission to report on 
        ways to improve the NRC's safety culture. The biggest barrier 
        to significant improvement of U.S. nuclear plant safety is the 
        poor safety culture of the NRC.

          Initiate a search for a second geologic repository 
        for disposal of spent fuel.

Nuclear power has both benefits and costs

    On the benefit side, nuclear power:

          is a low-carbon emitter,

          is a reliable generator of electricity,

          provides low cost electricity from existing power 
        plants,

          has a reliable and plentiful supply of fuel, and

          has low health impacts from routine power plant 
        emissions.

    On the other side of the ledger, nuclear power:

          increases the risk of nuclear weapons proliferation,

          runs the risk of another catastrophic nuclear reactor 
        accident,

          has significant unresolved waste disposal problems,

          has significant unresolved health and environmental 
        problems associated with uranium mining, and

          new nuclear plants will not be economical in the 
        United States until competing fossil generation is required to 
        pay a significant financial penalty for its carbon emissions, 
        on the order of $40 to $60 per ton of CO2.

    Commercial nuclear power has unique risks and the liability for 
these risks has been transferred to the government:

          Nuclear is the only existing energy technology that 
        requires special international safeguards and export control 
        regimes to prevent countries from making nuclear weapons from 
        fuel cycle facilities and materials.

          In the United States and some other countries nuclear 
        is the only energy technology where the government has to 
        assume the liability for catastrophic accidents.

          Nuclear power is the only energy technology whose 
        waste is so dangerous that the government has to assume 
        responsibility for its disposal.

The Contribution of Nuclear Power To Climate Change Mitigation

    Nuclear power plants worldwide will continue to make a modest 
contribution to climate change mitigation. Based on data in the World 
Nuclear Association data (www.world-nuclear.org/info/reactors.html), in 
Figure 1 we show a potential for worldwide growth in nuclear capacity 
out to about 2030.



    This is a snapshot based on current plans--not a highly accurate 
projection of the future. While it is adequate for the purposes of this 
hearing, the Subcommittee should understand that there are 
uncertainties in the projected data in Figure 1. Most of the operating 
reactors are assumed to have 60 year lifetimes. Actual lifetimes could 
be longer or shorter. Commercial operation dates for some reactors in 
the ``under construction'' and ``planned'' categories will surely slip. 
The plants in the ``proposed'' category do not have associated dates 
for the start of commercial operations, so we have assumed these plants 
may come on line between the years 2016 and 2032. Assuredly, some of 
these reactors will never be built, and others, not yet proposed, will 
be built in the future. And while we have extended the projection for 
50 years, it is important to note that industry planning horizons do 
not stretch beyond about 20-25 years, so the shape of the ``proposed' 
plant category cannot reasonably be calculated beyond about 2030. 
Nevertheless, this snapshot is probably more realistic that projections 
based on country specific and regional economic models.
    In Figure 2, NRDC estimates the projected carbon emissions avoided 
by these same projected nuclear power plants displayed in Figure 1.



    These projections are summarized in the following table:
    
    

    The percentage of needed carbon emission is based on an assumption 
that approximately 175 GtC of reductions over a fifty year period would 
be necessary to stabilize global atmospheric CO2 
concentrations, where stabilization is defined as a reduction of 
atmospheric concentrations of carbon dioxide to two times the pre-
industrial level. (Pacala and Socolow, ``Stabilization Wedges: Solving 
the Climate Problem for the Next 50 Years with Current Technologies,'' 
Science, 13 August 2004, Vol. 305, No. 5686, pp. 968-972.)
    What conclusions does NRDC draw from these projections? First, 
statements such as, ``nuclear must be part of the mix,'' ``I don't see 
how we can mitigate climate change without nuclear,'' ``I support [or 
do not support] nuclear power,'' are largely irrelevant. Nuclear is 
part of the current mix of power generation, and it will continue to be 
part of the mix for the foreseeable future. Existing nuclear power 
plants are contributing to climate change mitigation and will continue 
to do so.
    The real issue for the Congress is not whether one is for or 
against nuclear power per se. The crucial question for Congress is 
whether to continue, curtail, or increase federal taxpayer subsidies to 
a mature, polluting industry in order to spur building new U.S. nuclear 
plants. As NRDC demonstrates below, the answer to this question is a 
resounding ``no.''

Why Congress should cease subsidizing the construction of new nuclear 
                    power plants.

1. New-build nuclear power plants are not economical in the absence of 
strong carbon controls, and even with such controls they may not 
compete effectively against electricity supplied by renewable sources 
and energy efficiency programs.

    Existing nuclear plants that have been largely or fully 
depreciated, or that acquired a new cost basis via a change in 
ownership at a deep discount to their original cost, are now economical 
to operate. The forward cost (fuel and operating and maintenance costs) 
average less than two cents per kilowatt-hour (c/kWh), and thus these 
plants produce some of the lowest cost electricity.
    In strong contrast to existing plants, new plants are uneconomical 
due to their high cost of construction. In late-2003, the MIT study, 
``The Future of Nuclear Power'' estimated that the cost of electricity 
generated by a new merchant nuclear plant would be some 60 percent 
higher than the cost of energy generated by a fossil-fueled plant. See 
MIT, ``The Future of Nuclear Power,'' 2003, Table 5.1, p. 42. Since 
that report was published in 2003, the cost of fossil fuels and the 
capital cost of electricity generating plants have both increased 
significantly. In June 2007, the joint industry and non-profit Keystone 
Center report found that the levelized cost of electricity from new 
nuclear power plants was estimated to be in the range 8.3-11.1 c/kwh, 
up from the 6.7 to 7.0 c/kwh estimate in the 2003 MIT study. See the 
Keystone Report, ``Nuclear Power Joint Fact-Finding,'' at 11.
    Based on more recent data supplied by utilities and energy 
generating companies pursuing new nuclear plants, the low end of the 
Keystone estimate is no longer valid. Current cost estimates for 
several new reactors are in the range of 14 to 18 c/kwh (in 2007 
dollars).
    Electricity from new nuclear power plants in this cost range is not 
competitive with fossil-fueled baseload generation in today's 
marketplace, nor even with electricity supplied by waste heat co-
generation, wind turbines, or freed-up by continuing pursuit of end-use 
efficiency programs. By the time the earliest of these new nuclear 
plants begin delivering power to the grid, several forms of solar power 
are also likely to be cheaper on a retail delivered-cost basis, and 
concentrating solar thermal plants will likely be competitive in the 
wholesale power market as well.
    Implementation of a carbon cap that internalizes the true cost of 
burning fossil fuels is the single policy that would most benefit the 
nuclear industry, not because new-build nuclear power will necessarily 
be cheaper than other sources, but rather because it will make 
polluting fossil-fueled power more expensive. EPA has modeled the 
effect of the current version of the Lieberman-Warner climate bill to 
predict CO2 prices using two different models. One model 
forecasts prices starting at $22/ton CO2 in 2015, rising to 
$28 in 2020 and $46 in 2030 and continuing up from there; the other 
model's prices start at $35/ton in 2015 and hit $45 and $73/ton in 2020 
and 2030 respectively. See http://www.epa.gov/climatechange/economics/
economicanalyses.html. In short, enacting a carbon cap could increase 
the value of generating electricity from nuclear plants by 2.2-3.4 c/
kwh in the near-term and more in later years.
    Subsidizing new nuclear plants through direct federal cost sharing, 
a production tax credit, and tens of billions in federally subsidized 
and guaranteed debt will not remove new-build nuclear's cost 
disadvantage vis-a-vis other energy sources. Rather it will tend to 
disguise and even prolong these cost disadvantages, thereby penalizing 
and slowing investments in less costly demand--side energy management 
programs energy efficiency, and an array of electricity supply options 
that can provide carbon offsets more quickly, cheaply and safely than 
nuclear power. Unlike the wind and solar industries, after fifty years 
of operations, the nuclear reactor industry displays no consistent 
trend toward lower unit costs in manufacturing and construction, so it 
seems unlikely that further subsidies at this late date will serve to 
catalyze major cost reductions.
    Given their high capital costs, and all the other non-carbon 
environmental liabilities and risks that attend reliance on the nuclear 
fuel cycle, new nuclear plants are obviously not the first, second, or 
even third option this body should turn to stem the buildup of carbon 
dioxide in the atmosphere. Put bluntly, anyone or any organization 
pushing for more taxpayer-funded largess for nuclear power plants in a 
climate bill is either seeking inappropriate windfalls for their 
clients, or is pursuing a poison pill strategy to protect carbon 
polluters by trying to kill the bill.

2. International safeguards are inadequate.

    As evidenced by events in Iran and North Korea, the current 
international safeguards regime has major vulnerabilities. Under the 
Treaty on the Non-Proliferation of Nuclear Weapons (NPT), International 
Atomic Energy Agency (IAEA) safeguards agreements, and other elements, 
a non-weapon state can develop sensitive dual-purpose technologies, 
such as gas centrifuge enrichment plants, bring them within days or 
weeks of producing nuclear weapons.
    Moreover, ``[T]he objective of safeguards is the timely detection 
of diversion of significant quantities of nuclear material from 
peaceful activities to the manufacture of nuclear weapons or of other 
explosive devices or for purposes unknown, and deterrence of such 
diversion by the risk of early detection.'' (IAEA), INFCIRC/153; 
emphasis added).
    In non-nuclear weapon states today, this objective cannot be met at 
several types of facilities used by the nuclear power industry, 
including commercial gas centrifuge plants, nuclear fuel reprocessing 
plants, mixed-oxide fuel fabrication plants, and storage facilities for 
separated plutonium and highly-enriched uranium. The ``timely warning 
criteria''--detecting a diversion in time to bring diplomatic pressure 
to reverse the course of action--simply cannot be met if these plants 
are located in non-weapon states such as Iran or North Korea.
    There are a number of reasons for this, including for example, IAEA 
``Significant Quantities'' for direct use nuclear materials are 
technically erroneous, and in the case of plutonium are too large by 
roughly a factor of eight. Also, at large commercial-size bulk handling 
facilities--e.g., uranium enrichment plants, reprocessing plants and 
plutonium fuel fabrication plants (MOX plants)--inventory differences 
exceed the amount of material required for a nuclear explosive device.
    Countries that have recently announced their intent to build large 
nuclear power reactors include:



    Israel already has nuclear weapons, but is not a signatory of the 
Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Presumably, 
most of the remaining countries, should they build nuclear plants, will 
do so without harboring an explicit contemporaneous objective of 
obtaining a nuclear weapon capability. Nevertheless, there is a 
significant risk that one or more of these countries will represent a 
future proliferation threat as Iran does today.

3. The Administration's current program for a ``Global Nuclear Energy 
Partnership'' (GNEP), built around the reprocessing and the 
international recycling of spent nuclear fuel, would be a disaster for 
international security and a multinational economic boondoggle of 
staggering proportions.

    Even if by some miracle in thirty years GNEP's development managed 
to succeed on a technical level--an outcome that we do not believe is 
at all likely--it would still drain vital capital away from more timely 
and practical clean energy investments that are desperately needed now 
to avert pollution and foster human development around the world.
    The Administration originally proposed GNEP to allegedly reduce the 
proliferation risk posed by the future spread of conventional methods 
of reprocessing, and to reduce the amount of waste required for 
disposal by closing the nuclear fuel cycle. The center piece of the 
GNEP vision is an elaborate scheme involving as yet unproven techniques 
for spent fuel reprocessing and fabricating new types of transuranic 
fuels, and the ``transmutation'' of the long-lived transuranic isotopes 
in this fuel using a new class of costly fast reactors.
    Of course, a simpler and cheaper way to avert the proliferation 
risks posed by reprocessing is not to engage in it, and strongly 
discourage others from doing so.
    GNEP is a far more elaborate scheme than the approach currently 
used by France , which involves reprocessing using the conventional 
PUREX process and burning the recovered plutonium only once in existing 
thermal reactors. The French approach is already a bad idea. 
Implementing the grandiose GNEP vision would require a century long 
multinational state enterprise that would cost US and foreign taxpayers 
hundreds of billions of dollars, and result in the importation of 
thousands of tons of foreign nuclear waste into the United States. By 
mid-century, when the best available science says we must have 
stabilized global CO2 levels at no more than twice their 
pre-industrial levels--we would just be wrapping up the GNEP pilot 
projects, having already misallocated precious tens of billions of 
dollars merely to get GNEP to the starting line.
    In reality, the whole concept is flawed technically, economically, 
and politically: the proposed mixture of transuranic isotopes in the 
transmutation fuel would still be usable in nuclear weapons; the 
resulting fuel cycle would not be remotely cost-competitive with 
conventional nuclear power, much less other modes of electric power 
generation; and the rest of the world is highly unlikely to sanction 
another shared nuclear monopoly over the civil nuclear fuel cycle to 
match the one currently controlled by the select group of nuclear 
weapon-states under the Nuclear Nonproliferation Treaty.
    Both the current French and proposed GNEP approaches to closing the 
fuel cycle increase nuclear proliferation risks relative to--and 
neither is preferable to--the ``once-through'' fuel cycle currently 
used in the United States.
    Compared to the once-through fuel cycle, the French fuel cycle 
costs more, has greater associated nuclear proliferation risks when 
replicated in non-weapon states, results in larger inventories of 
separated weapon-usable plutonium, is less safe, results in greater 
releases of routine radioactive emissions, produces greater quantities 
of radioactive waste when low-level and intermediate-level waste is 
included, provides no significant benefits in interim spent fuel and 
HLW storage requirements, and does not reduce the geologic repository 
requirements.
    As noted in the recent Keystone Center report:

         No commercial reprocessing of nuclear fuel is currently 
        undertaken in the U.S. The NJFF [Nuclear Joint Fact Finding] 
        group agrees that while reprocessing of commercial spent fuel 
        has been pursued for several decades in Europe, overall fuel 
        cycle economics have not supported a change in the U.S. from a 
        ``once through'' fuel cycle. Furthermore, the long-term 
        availability of uranium at reasonable cost suggests 
        reprocessing of spent fuel will not be cost-effective in the 
        foreseeable future. A closed fuel cycle with any type of 
        separations program will still require a geologic repository 
        for long-term management of waste streams. (The Keystone 
        Center, ``Nuclear Power Joint Fact-Finding,'' June 2007, 
        emphasis added.)

    GNEP represents the marriage of two failed technologies--
reprocessing and fast reactors. Reprocessing and closed fuel cycles 
have resulted in the accumulation of about 250 tons of separated 
plutonium in civil nuclear programs in Europe, Japan, Russia and India. 
In theory the GNEP vision reduces geologic repository requirements by 
substituting costly reprocessing plants and costly MOX fabrication 
plants for costly geologic repositories.
    For the GNEP vision to work an estimated 40 to 75 gigawatts (GW) of 
fast reactor capacity would be required for every 100 GW of thermal 
reactor capacity. But we already know from decades of experience with 
fast reactors and failed efforts to develop commercial fast breeder 
reactors that fast reactors are uneconomical and unreliable--far more 
costly and far less reliable than existing thermal reactors. No energy 
company is going to order a fast reactor when it can purchase a less-
costly, more-reliable light water reactor. GNEP is a recipe for further 
federalizing and increasing the cost of the nuclear fuel cycle.
    Despite decades of research costing many tens of billions of 
dollars, the effort to develop fast breeder reactors has been a failure 
in the United States, France, United Kingdom, Germany, Italy, Japan and 
the Soviet Union. The flagship fast reactors in each these countries 
have been failures. The effort to develop fast reactors for naval 
propulsion was a failure in the United States and the Soviet Union, the 
only two navies that tried to introduce fast reactors into their 
respective submarine fleets. After investing tens of billions and 
decades of effort in fast breeder R&D, the Congress should ask itself 
why there is only one commercial-size fast reactor operating in the 
world today--one out of approximately 440 reactors. NRDC knows why. 
Fast reactors are uneconomical and unreliable.
    The history of fast reactors was best summed up by the ``father'' 
of the Nation's Nuclear Navy, Admiral Hyman Rickover, when he decided 
in 1956 to abandon the sodium-cooled fast reactor and replace it by a 
pressurized water reactor in the USS Seawolf (SSN 575). ``In Rickover's 
words they were `expensive to build, complex to operate, susceptible to 
prolonged shutdown as a result of even minor malfunctions, and 
difficult and time-consuming to repair.' '' (Richard G. Hewlett and 
Francis Duncan, Nuclear Navy: 1946-1962, (Chicago and London: The 
University of Chicago Press, 1974), pp. 272-273.) A 1995 sodium coolant 
leak and fire in Japan's Monju prototype fast breeder reactor has kept 
the facility shut-down for the last twelve years.
    To our dismay and despite the decades of evidence to the contrary, 
the DOE is actively signing up countries to the GNEP vision and 
promoting GNEP research and development worldwide. But as the Keystone 
Center report noted, ``The GNEP program could encourage the development 
of hot cells and reprocessing R&D centers in non-weapon states, as well 
as the training of cadres of experts in plutonium chemistry and 
metallurgy, all of which pose a grave proliferation risk.'' (The 
Keystone Center, ``Nuclear Power Joint Fact-Finding,'' June 2007, p. 
91.) ``Could encourage'' can now be changed to ``is encouraging'' as we 
are already witnessing the promotion under GNEP of closed fuel cycle 
R&D in South Korea.
    Professor Frank von Hippel, in the most recent issue of Scientific 
American, has summarized the reasons ``it makes no sense to rush into 
[this] expensive and potentially catastrophic undertaking.'' (Frank N. 
von Hippel, ``Rethinking Nuclear Fuel Recycling,'' Scientific American, 
May 2008, pp. 88-93.)
    In sum, Congress should pull the plug on DOE's effort to close the 
close the fuel cycle and stop funding research on advanced nuclear fuel 
reprocessing.

4. Reactor safety is a significant concern and, to a degree not matched 
by any other power source, continued nuclear power generation is 
hostage to its worst practitioners.

    The most important factor affecting the safety of nuclear power 
plants is the safety culture at the plant. In the United States and 
some OECD countries the safety culture at operating plants has improved 
over the past two decades. While new reactor designs have improved 
safety and security features, over the next two to three decades, the 
safety and security of nuclear plants in the United States and the rest 
of the world will largely be determined by the safety and security of 
existing reactors. Several countries that already have nuclear plants, 
e.g., Russia, Ukraine, China, India, and Bulgaria, have notably weaker 
safety cultures than the nuclear enterprise merits. This is not a 
situation that the United States Government as a whole or this Congress 
can control or resolve.
    Compounding the problem, expansion of nuclear power is projected to 
occur primarily in countries that currently have significant weaknesses 
in legal structure (rule of law), construction practice, operating 
safety and security cultures, and regulatory oversight, e.g., China and 
India. Securing commercial sales and ``nuclear renaissance'' exuberance 
have taken precedence over nuclear safety and non-proliferation 
concerns. This is evidenced by the fact that since his election in May 
2007, President Nicolas Sarkozy has offered French reactors to such 
authoritarian, unaccountable, nontransparent, and corrupt governments 
as Georgia, Libya, the UAE, Saudi Arabia, Egypt, Morocco, and Algeria 
(Nucleonics Week, Vol.49. No. 7, Feb. 14, 2008). Consequently, if 
another catastrophic nuclear reactor accident occurs during the next 
couple of decades, it is more likely to occur in Russia, Ukraine, 
China, India, or another country with a poor safety culture, than in 
the United States. Several countries recently expressing an interest in 
acquiring nuclear reactors also have very high indices of industrial 
accidents and official corruption.
    We concur with the findings and recommendations in the excellent 
report by the Union of Concerned Scientists (UCS), ``Nuclear Power in a 
Warming World'' (December 2007). As noted by UCS, ``The United States 
has strong nuclear power safety standards, but serious safety problems 
continue to arise at U.S. nuclear power plants because the Nuclear 
Regulatory Commission (NRC) is not adequately enforcing the existing 
standards.'' (p. 3) Since the United States will continue to rely on 
nuclear power for substantial base load electricity generation into the 
foreseeable future, it is essential that the safety of U.S. nuclear 
plants be improved.
    The biggest barrier to significant improvement of U.S. nuclear 
plant safety is the poor safety culture of the NRC. The Congress should 
establish an unbiased outside commission, similar to the Kemeny 
Commission, to report on ways to improve the NRC's safety culture. This 
commission should investigate failures to enforce regulations, staff 
deferral of safety inspections and upgrades so as not to impinge upon 
reactor operating schedules, pro-nuclear bias in the selection of 
Commissioners, senior NRC staff management and advisory committee 
members, the revolving door practice of NRC staff being hired from the 
industry it regulates and industry hiring of NRC staff, the curtailment 
of public's ability to engage in discovery and cross-examination during 
reactor licensing hearings, and other issues identified in the UCS 
report.

5. After more than fifty years of nuclear power use there is no 
operational spent fuel or high-level waste disposal facility anywhere 
in the world.

    The proposed Yucca Mountain geologic repository site selection 
process has been severely damaged by its premature politicized 
designation as the sole site for detailed investigation. This error has 
been compounded by unsupportable manipulation of the licensing criteria 
for the site, and the credibility of the technical site investigation 
has been seriously undermined by charges of fraudulent data. In light 
of this record, the project either should be terminated, or the amount 
of wastes destined to the facility should be severely restricted, for 
example, by limiting its use to the disposal of defense high-level 
waste and R&D on spent fuel disposal. In either case, Congress should 
initiate a search for a second repository.
    For fifty years, since the National Academy of Sciences first 
addressed this issue, the scientific consensus has been that high-level 
nuclear waste, and by implication spent fuel, should be permanently 
sequestered in deep underground geologic repositories, and by 
implication the primary barrier to prevent the release of the 
radioactivity into the biosphere should be the geology of the site. In 
this regard, some amount of spent fuel can be disposed of safely in 
Yucca Mountain. At this time we do not know whether this is greater or 
smaller than the statutory limit of 70,000 tonnes of spent fuel and 
high-level nuclear waste, and for reasons highlighted below, we may 
never know because the site selection process and the criteria for 
judging its long-term safety have been thoroughly corrupted.
    In a separate paper I have reviewed how the Federal Government has 
thoroughly corrupted the geologic repository site selection and site 
licensing processes (See http://docs.nrdc.org/nuclear/
nuc-08010701A.pdf). Here I will focus on a few points.
    The Environmental Protection Agency (EPA) has the statutory 
responsibility to establish criteria for judging the adequacy of the 
proposed Yucca Mountain repository. The objective of these criteria of 
course is to protect future generations from potential releases of 
radioactive materials. The criteria are based on three key 
considerations: 1) what is the highest radiation exposure dose that 
will be permitted to the maximally exposed individual; 2) where will 
this dose limit be imposed, i.e., where will the maximally exposed 
individual be assumed to reside; and 3) over what period of time is the 
dose limit imposed. The licensing criteria being established EPA (in 
collusion with the NRC and the DOE through secret White House reviews 
overseen by the Office of Management and Budget) are far from being 
adequately protective of future generations. In developing the 
licensing criteria for Yucca Mountain it appears that the highest 
priority has been to ensure the licensability of the Yucca Mountain 
site.
    First, EPA ``gerrymandered'' the control boundary, extending it 
from five to 18 kilometers in the direction that the radioactive 
materials is projected to leak from the repository. EPA also cut off 
the time period for compliance at 10,000 years. When a Federal Court 
ruled that the 10,000 year cut-off was unlawful because it was 
inconsistent with the recommendations of the National Academy of 
Sciences as required by law, EPA proposed to eviscerate the Court 
ruling by proposing a two-tiered dose limit--retaining the pre-10,000 
year mean dose limit of 25 mrem and proposing a post-10,000 year median 
dose limit of 350 mrem. The mean dose is projected to be approximately 
three times higher than the median dose. Thus, EPA has proposed to 
allow the estimated mean exposure to the maximally exposed individual 
during the peak exposure period to be on the order of one rem per year. 
According to cancer risk estimates in the National Research Council's 
BEIR VII report, a lifetime exposure at this dose rate today would 
result in one in 12 such exposed persons getting cancer from this 
exposure with half of the cancers being fatal.
    Some would argue that 10,000 year is a sufficient compliance 
period. It should be noted, however, that extending the compliance 
period beyond the projected life of the engineered spent fuel canisters 
is one way to ensure that the geology of the site will be the primary 
barrier preventing the release of the radioactivity into the biosphere.
    DOE is required to submit its Yucca Mountain license application to 
the NRC. In its attempt to demonstrate that the repository will meet 
the EPA criteria, DOE plans to run a series of calculations to predict 
the release and transport of radioactivity from the site. The computer 
code that DOE plans to use for this purpose is so large that NRC will 
not be able to independently run it, and neither will any potential 
intervenor in the licensing process. Consequently, the NRC will be 
unable to confirm the validity of the DOE calculations. Instead, NRC 
plans to run its own transport code, but only for the purpose of 
developing a set of questions to be answered by DOE.
    The Yucca Mountain project has repeatedly failed to meet its 
schedule and there is a possibility that the project will be terminated 
by Congress. If this occurs it would represent the third failed attempt 
by the Federal Government to solve the high-level waste/spent fuel 
disposal problem--the first failure being the salt vault project at 
Lyons, Kansas followed by the failed Retrievable Surface Storage 
Facility (RSSF).
    So where does all this leave us. We have a proposed geologic 
repository for spent fuel and high-level waste that was selected 
through a corrupted site selection process, that cannot meet the 
original site selection criteria, that will be judged against 
thoroughly corrupted licensing criteria developed in collusion with 
DOE, the licensee, and judged with the aid of a computer simulation 
model that cannot be independently checked or run by the regulators or 
outside experts.
    The Congress should require that DOE resume a search for a second 
repository site. Aged spent fuel can be stored safely in dry casks 
until a safe geologic disposal site is identified and licensed for use. 
However, it has been a policy of the Federal Government that we should 
not rely on administrative controls for more than 100 years for the 
management and disposal of nuclear wastes.
    The Congress also should approve consolidation of spent fuel from 
shut down reactors, but should not support consolidation of spent fuel 
from operational reactors since these sites will require the on-site 
management of spent fuel in any case.

                    Biography for Thomas B. Cochran
    Dr. Thomas B. Cochran is a senior scientist in the nuclear program 
and holds the Wade Greene Chair for Nuclear Policy at NRDC. He served 
as director of the nuclear program until 2007. He initiated NRDC's 
Nuclear Weapons Databook project. He also initiated a series of joint 
nuclear weapons verification projects with the Soviet Academy of 
Sciences. These include the Nuclear Test Ban Verification Project, 
which demonstrated the feasibility of utilizing seismic monitoring to 
verify a low-threshold test ban, and the Black Sea Experiment, which 
examined the utility of passive radiation detectors for verifying 
limits on sea-launched cruise missiles. He has served as a consultant 
to numerous government and non-government agencies on energy, nuclear 
nonproliferation and nuclear reactor matters. He is a member of the 
Department of Energy's Nuclear Energy Research Advisory Committee. 
Previously he served as a member of DOE's Environmental Management 
Advisory Board, Fusion Energy Sciences Advisory Board, and Energy 
Research Advisory Board; the Nuclear Regulatory Commission's Advisory 
Committee on the Cleanup of Three Mile Island; and the TMI Public 
Health Advisory Board.
    Dr. Cochran is the author of The Liquid Metal Fast Breeder Reactor: 
An Environmental and Economic Critique (Washington, D.C.: Resources for 
the Future, 1974) and co-editor/author of the Nuclear Weapons Databook, 
Volume I: U.S. Nuclear Forces and Capabilities (Cambridge, 
Massachusetts: Ballinger Press, 1984); Volume II: U.S. Nuclear Warhead 
Production (1987); Volume III: U.S. Nuclear Warhead Facility Profiles 
(1987); Volume IV: Soviet Nuclear Weapons (1989); and Making the 
Russian Bomb: From Stalin to Yeltsin (Boulder, Colorado: Westview 
Press, 1995). In addition, he has published numerous articles and 
working papers, including those in SIPRI Yearbook chapters, Arms 
Control Today, and the Bulletin of the Atomic Scientists. He has co-
authored (with Dr. Robert S. Norris) the article ``Nuclear Weapons'' in 
the 1990 printing of The New Encyclopedia Britannica (15th edition).
    Dr. Cochran received his Ph.D. in physics from Vanderbilt 
University in 1967. He was Assistant Professor of Physics at the Naval 
Postgraduate School, Monterey, California, from 1967 to 1969; modeling 
and simulation group supervisor of the Litton Mellonics Division, 
Scientific Support Laboratory, Fort Ord, California, from 1969 to 1971; 
and, from 1971 to 1973, a senior research associate at Resources for 
the Future. Dr. Cochran has been with NRDC since 1973. He is the 
recipient of the American Physical Society's Szilard Award and the 
Federation of American Scientists' Public Service Award, both in 1987. 
As a consequence of his work, NRDC received the 1989 Scientific Freedom 
and Responsibility Award by the American Association for the 
Advancement of Science (AAAS). Dr. Cochran is a Fellow of the American 
Physical Society and the AAAS.

    Chairman Gordon. Thank you, Dr. Cochran. And Mr. Fri, you 
are recognized.

STATEMENT OF MR. ROBERT W. FRI, VISITING SCHOLAR, RESOURCES FOR 
THE FUTURE; CHAIR, COMMITTEE ON REVIEW OF DOE'S NUCLEAR ENERGY 
     RESEARCH AND DEVELOPMENT PROGRAM, BOARD ON ENERGY AND 
        ENVIRONMENTAL SYSTEMS, NATIONAL RESEARCH COUNCIL

    Mr. Fri. Thank you, Mr. Chairman, and Mr. Bilbray, and 
Members of the Committee. I am here today representing the 
National Research Council, where I served as Chair of a 
committee to review DOE's nuclear energy R&D program. We 
submitted our report last October, and I would like to just 
touch on some of the highlights from it.
    We examined four major R&D programs, the funding for which 
is on the order of $300 to $400 million per year, that are 
managed by the Office of Nuclear Energy in the Department of 
Energy. Now, they were what is called Nuclear Power (NP) 2010, 
which is a program cost-shared with industry to assist in the 
licensing of the first nuclear plants in the U.S. in over 30 
years, and three real research programs, one, the Generation IV 
class of nuclear reactors, secondly, the Nuclear Hydrogen 
Initiative, and finally, the Advanced Fuel Cycle Initiative, 
which is a program aimed to develop technologies to close the 
back end of the nuclear fuel cycle.
    The committee recommended that the Department give the 
highest priority to NP 2010. If nuclear power is to play a 
major role in the Nation's energy picture, it is simply 
essential to license, build, and operate the first of the next 
generation of reactors, and given the long lead times and 
construction periods involved, it is important to do it now. 
The committee also noted that the human and intellectual 
infrastructure needed to support this effort has been aging, 
and therefore, we specifically recommended first, continued 
support of university programs in nuclear science and 
engineering, and secondly, consideration of the appropriate 
research support for the nuclear industry, for example, through 
the provision of national user facilities, such as the Advanced 
Test Reactor at the Idaho National Laboratory.
    Now, the same sense of urgency, however, did not attend the 
other programs we examined. There are acceptable methods of 
storing spent nuclear fuel safely for decades without 
reprocessing and fuel recycling. There doesn't seem to be a 
serious shortage of uranium for reactor fuel, and certainly not 
one that is going to emerge for many years. And moreover, we 
concluded that it will take considerable time for the 
information to be developed to change these judgments.
    Now, this is not to say that research in new reactor design 
or hydrogen production or closing the fuel cycle should not go 
on. Indeed, our committee recommended that it should. However, 
the research program should be designed to lay the basis for 
deployment of these technologies some time in the future, when 
circumstances warrant. To this end, funding at a sustainable 
level over time is more important, it would seem to us, than 
speed, and we strongly urge the development of an independent 
oversight function that would help ensure that the advanced 
research programs stay on track over an extended period of 
time, and continue to be responsive to the changing external 
environment.
    We also concluded that the development of large scale 
facilities for closing the nuclear fuel cycle would be 
inconsistent with our assessment of priorities. For this 
reason, and because of the very large technical risks involved 
in an overly aggressive construction program, we recommended 
against the funding of such facilities in the near-term.
    Thank you, Mr. Chairman, and I look forward to your 
questions.
    [The prepared statement of Mr. Fri follows:]
                  Prepared Statement of Robert W. Fri

Abstract

    There has been a substantial resurgence of interest in nuclear 
power in the United States over the past few years. One consequence has 
been a rapid growth in the research budget of DOE's Office of Nuclear 
Energy (NE). In light of this growth, the Office of Management and 
Budget included within the FY 2006 budget request a study by the 
National Academy of Sciences to review the NE research programs and 
recommend priorities among those programs. The programs to be evaluated 
were: Nuclear Power 2010 (NP 2010), Generation IV (GEN IV), the Nuclear 
Hydrogen Initiative (NHI), the Global Nuclear Energy Partnership 
(GNEP)/Advanced Fuel Cycle Initiative (AFCI), and the Idaho National 
Laboratory (INL) facilities. This testimony summarizes the conclusions 
and recommendations of the National Academies review and its report, 
Review of DOE's Nuclear Energy Research and Development Program.

Mr. Chairman and Members of the Committee:

    My name is Robert Fri. I am a Visiting Scholar at Resources for the 
Future, an organization dedicated to improving environmental and 
natural resource policy-making through objective social science 
research of the highest caliber. Today, however, I am representing the 
National Research Council as Chair of its Committee on Review of DOE's 
Nuclear Energy Research and Development Program, which produced the 
report, Review of DOE's Nuclear Energy Research and Development 
Program.
    The FY 2006 President's Budget Request asked for funds to be set 
aside for the National Academy of Sciences to review the Office of 
Nuclear Energy (NE) research programs and budget and to recommend 
priorities for those programs given the likelihood of constrained 
budget levels in the future. The programs to be evaluated were Nuclear 
Power 2010, the Generation IV reactor development program, the Nuclear 
Hydrogen Initiative, the Global Nuclear Energy Partnership (GNEP)/
Advanced Fuel Cycle Initiative (AFCI) and the Idaho National Laboratory 
facilities program. Our Committee began its work in August, 2006, and 
completed its report in October, 2007.
    In the balance of this statement, I summarize the results of our 
work. To avoid covering too many topics, I have not included our 
recommendations on the Idaho National Laboratory. However, that 
laboratory is intended to be the Department's center for nuclear energy 
research and as such plays an essential supporting role in many DOE 
programs.

BACKGROUND

    Growing energy demands, emerging concerns about the emissions of 
carbon dioxide from fossil fuel combustion, the increasing and volatile 
price for natural gas, and a sustained period of successful operation 
of the existing fleet of nuclear power plants have resulted in a 
renewal of interest in nuclear power in the United States. One 
consequence of the renewed interest in nuclear power for the DOE 
mission has been rapid growth in the DOE research budget: it grew by 
nearly 70 percent from the $193 million appropriated in FY 2003 to $320 
million in FY 2006.
    Despite these changes in program and budget experienced by the NE 
research program, there are some constant features that set the context 
for the committee's evaluation approach. In this regard, two 
observations have influenced the committee's approach to this project.
    Stable Major Goals: One is that while the details of the NE program 
have shifted considerably, its high-level goals have changed little if 
at all. While stated in somewhat different words in various reports, 
the committee believes that a reasonable summary of the goals for 
technology development in support of the NE mission is:

          Assist the nuclear industry in providing for the 
        safe, secure, and effective operation of nuclear power plants 
        already in service, the anticipated growth in the next 
        generation of light water reactors, and associated fuel cycle 
        facilities.

          Provide for nuclear power at a cost that is 
        competitive with other energy sources over time.

          Support a safe and publicly acceptable domestic waste 
        management system, including options for long-term disposal and 
        the related waste forms.

          Provide for effective proliferation resistance and 
        physical protection of nuclear energy systems, both 
        domestically and in support of international non-proliferation 
        and nuclear security regimes.

          Create economical and environmentally acceptable 
        nuclear power options for assuring long-term non-nuclear energy 
        supplies while displacing insecure and polluting energy 
        sources; such options include electricity production, hydrogen 
        production, process heat, and water desalinization.

    Uncertain Future Development: A second observation is that 
predicting the course of nuclear technology development over the next 
several decades entails substantial uncertainties. Indeed, the 
committee heard presentations from several respected analysts about how 
this development might take place. Their views of the technological 
future differed in important ways. A major reason for this divergence 
is that the development of new nuclear technology requires a planning 
horizon measured in decades, in no small part because of the capital 
intensity of the commercial nuclear energy sector. Over such a time 
period, the committee believes that the success of various candidate 
technologies will depend on policy and other forces outside the control 
of any NE technology development program. For example:

          Waste management options and associated regulatory 
        regimes and their likely acceptance by the public range from 
        long-term storage at reactor sites or centralized interim 
        storage, to direct disposal of all spent fuel in geologic 
        repositories and the reduced waste forms envisioned by GNEP.

          Environmental policy, especially regarding climate 
        change, not yet formulated could have decisive impacts on the 
        attractiveness of nuclear power.

          Opinion on the cost and availability of natural 
        uranium and associated enrichment capacity varies widely.

          Non-proliferation and physical protection regimes are 
        in flux, especially as international agreements continue to 
        evolve.

          The rate of near-term expansion of nuclear power 
        plants matters, both domestically and internationally, since 
        this rate drives the timing and need for advanced reactors and 
        fuel cycle technology.

NP 2010

    The Nuclear Power 2010 (NP 2010) program was established by DOE in 
2002 to support the near-term deployment of new nuclear plants. NP 2010 
is a joint government/industry 50/50 cost-shared effort with the 
following objectives:

          Identify sites for new near-term nuclear power plants 
        and obtain early site permits.

          Complete detailed, first-of-a-kind design engineering 
        on two advanced light water reactor (ALWR) plants and confirm 
        the safety of the designs by obtaining design certifications.

          Obtain combined construction and operating licenses 
        in keeping with the Standardization Policy of the U.S. Nuclear 
        Regulatory Commission.

          Develop an effective inspection, testing, analyses, 
        and acceptance criteria (ITAAC) process to assure licensing 
        compliance during construction.

          Implement the Energy Policy Act of 2005 standby 
        support provisions for the construction of new nuclear plants.

          Estimate the capital costs and operation and 
        maintenance costs, construction time, and levelized cost of 
        electricity for the two plants.

          Evaluate the business case for building new nuclear 
        power plants and pave the way for an industry decision to build 
        new ALWR nuclear plants in the United States. Construction 
        would begin early in the next decade.

    NP 2010 and selected commercial research projects should be fully 
funded as a matter of highest priority. Unless the commercial fleet of 
light water reactors (LWRs) grows, nuclear power will be a diminishing 
energy resource for the United States and there will be little need for 
all of DOE's longer-term research programs. Although increases in the 
NP 2010 budget are likely, they do not account for a large fraction of 
the total NE funding. The NP 2010 requirements should be fully 
supported.
    In addition, DOE should augment this program to ensure timely and 
cost-effective deployment of the first new reactor plants. Of 
particular importance is the need to address industrial and human 
resource infrastructure issues. Specifically, DOE should support:

          Research in support of the commercial fleet. The 
        committee does not recommend a large federal research program, 
        because most of this research should be industry-supported. 
        However, some specific projects have sufficient public benefit 
        to warrant federal funding, for which DOE should share about 20 
        percent of the costs and support user facilities at incremental 
        cost. These elements of the program should be fully funded when 
        the NP 2010 licensing and design completion efforts come to an 
        end.

          University infrastructure. A sizable buildup in 
        nuclear energy production, research, and development 
        necessitates strengthening university capabilities to educate a 
        growing number of young professionals and scientists in the 
        relevant areas. DOE should include this program in its budget 
        at the levels authorized by the Energy Policy Act of 2005.

ADVANCED FUEL CYCLE INITIATIVE/GLOBAL NUCLEAR ENERGY PARTNERSHIP

    Since 2002, the United States has been conducting a program for 
reprocessing spent fuel under the Advanced Fuel Cycle Initiative 
(AFCI). Then, in February 2006, it announced a change in its nuclear 
energy programs. Recycling would be developed under a new effort, GNEP, 
which would incorporate AFCI as one of its activities. If the recycling 
R&D program is successful and leads to deployment, GNEP would 
eventually require the United States to be an active participant in the 
community of nations that recycle fuel, because one aspect of the 
partnership is that some nations recycle nuclear fuel for other user 
nations.
    At the time of our report, GNEP has two key stated technical 
objectives:

          Develop, demonstrate, and deploy advanced 
        technologies for recycling spent nuclear fuel that do not 
        separate plutonium, with the goal over time of ceasing 
        separation of plutonium and eventually eliminating excess 
        stocks of civilian plutonium and drawing down existing stocks 
        of civilian spent fuel. Such advanced fuel cycle technologies 
        would substantially reduce nuclear waste, simplify its 
        disposition, and help to ensure the need for only one geologic 
        repository in the United States through the end of this 
        century.

          Develop, demonstrate, and deploy advanced reactors 
        that consume transuranic elements from recycled spent fuel.

    Three facilities were key components of the GNEP program as then 
planned: (1) a nuclear fuel recycling center, or centralized fuel 
treatment center (2) an advanced sodium-cooled burner reactor--a fast-
neutron reactor; and (3) an advanced fuel cycle facility. At the time 
of the writing of this report, the latest information the committee had 
was that the baseline separation process was UREX+1a, although some 
other comparable separation technology, most notably pyroprocessing, 
may be adopted at a later stage.
    The GNEP program is premised on an accelerated deployment strategy 
that will create significant technical and financial risks by 
prematurely narrowing technical options. Specifically:

          The domestic need for waste management, security, and 
        fuel supply is not great enough to justify early deployment of 
        commercial-scale reprocessing and fast reactor facilities. In 
        particular, the near-term need for deployment of advanced fuel 
        cycle infrastructure to avoid a second repository for spent 
        fuel is far from clear. Even if a second repository were to be 
        required in the near-term, the committee does not believe that 
        GNEP would provide short-term answers.

          The state of knowledge surrounding the technologies 
        required for achieving the goals of GNEP is still at an early 
        stage, at best a stage where one can justify beginning to work 
        at an engineering scale. However, it seems to the committee 
        that DOE has given more weight to schedule than to conservative 
        economics and technology. The committee concludes that the case 
        presented by the promoters of GNEP for an accelerated schedule 
        for commercial construction is unwise. In general, it believes 
        that the schedule should be guided by technical progress in the 
        R&D program.

          The cost of the GNEP program is acknowledged by DOE 
        not to be commercially competitive under present circumstances. 
        There is no economic justification for going forward with this 
        program at anything approaching a commercial scale. DOE claims 
        that the GNEP is being implemented to save the United States 
        nearly a decade in time and a substantial amount of money. In 
        view of the technical challenges involved, the committee 
        believes that just the opposite is likely to be true.

          Several fuel cycles could meet the eventual goal of 
        creating a justifiable recycling system. However none of the 
        cycles proposed, including UREX+ and the sodium fast reactor, 
        is at a stage of reliability and understanding that would 
        justify commercial-scale construction at this time. Significant 
        technical problems remain to be solved.

          The qualification of multiply-recycled transuranic 
        fuel is far from reaching a stage of demonstrated reliability. 
        Because of the time required to test the fuel through repeated 
        refabrication cycles, achieving a qualified fuel will take many 
        years.

    The committee believes that a research program similar to the 
original AFCI is worth pursuing.\1\ Such a program should be paced by 
national needs, taking into account economics, technological readiness, 
national security, energy security, and other considerations. However, 
considerable uncertainty surrounds the technology and policy options 
that will ultimately satisfy these needs. For this reason, the 
committee believes that the program described below should be 
sufficiently robust to provide useful technology options for a wide 
range of possible outcomes. On the other hand, the program should not 
commit to the construction of a major demonstration or facility unless 
there is a clear economic, national security, or environmental policy 
reason for doing so. Because of these complexities, the committee 
recommends DOE obtain much more external input than it so far has--in 
particular, an independent, thorough peer review of the program.
---------------------------------------------------------------------------
    \1\ A majority of the committee favors fuel cycle and fast reactor 
research, as was being conducted under AFCI; however, two committee 
members recommend against such research.

GENERATION IV REACTORS

    DOE has engaged other governments in a wide-ranging effort to 
develop advanced next-generation nuclear energy systems, known as 
Generation IV, with the goal of widening the applications and enhancing 
the economics, safety, and physical protection of the reactors and 
improving fuel cycle waste management and proliferation resistance in 
the coming decades. Six nuclear reactor technology concepts were 
identified in the DOE-initiated, international Generation IV Technology 
Roadmap completed in 2002. Each of the six technologies, as well as 
several areas of crosscutting research, is now being pursued by a 
consortium of countries as part of the Generation IV International 
Forum. Three concepts are thermal neutron spectrum systems--very-high-
temperature reactors, molten salt reactors, and supercritical-water-
cooled reactors--with coolants and temperatures that enable hydrogen or 
electricity production with high efficiency. In addition, three are 
fast neutron spectrum systems--gas-cooled fast reactors, lead-cooled 
fast reactors, and sodium-cooled fast reactors (SFRs)--that will enable 
better fuel use and more effective management of actinides by recycling 
most components in the discharged fuel.
    From 2002 to 2005, the primary goal of the U.S. Generation IV 
program was to develop the Next Generation Nuclear Plant (NGNP), 
focusing on high-temperature process heat (850+C-
1000+C) and innovative approaches to making energy products, 
such as hydrogen, that might benefit the transportation industry or the 
chemical industry. At the end of 2005, DOE shifted the fundamental 
emphasis of the overall Generation IV program, making spent fuel 
management using a closed fuel cycle the main goal of the program. This 
new GNEP priority led to reduced funding for the NGNP programs; phasing 
out of the other programs, and refocusing of the SFR concept to near-
term demonstration. With these changes, NGNP's very high temperature 
gas reactor (VHTR) remains the only major reactor concept that is not 
integrated into the GNEP program.
    Economic benefits of early commercialization of high-temperature 
reactors (HTRs) and VHTRs based on NGNP technology could be realized in 
four market segments where HTRs could make products at a lower cost 
than competing technologies: baseload electricity, combined heat and 
power, high-temperature process heat, and hydrogen. A long-term goal 
for the NGNP is to demonstrate hydrogen production as an energy carrier 
for a hydrogen economy. However, in each of those four segments, there 
are specific applications where HTRs will have near-term advantages. By 
directing NGNP and the Nuclear Hydrogen Initiative (NHI) R&D toward 
those specific applications, stronger near-term industry interest and 
investment is more likely, which in turn will support continued R&D 
investments for subsequent expansion of HTR technology into additional 
market segments and, in the longer-term, support the transition to a 
hydrogen economy.
    The NGNP program has well-established goals, decision points, and 
technical alternatives. A key decision point is the nuclear licensing 
approach. However, little planning has been done on how the fuel for 
the NGNP would be supplied. There is a particle fuel R&D program, but 
it will take up to two decades to complete the development and testing 
of this new fuel. To keep to the apparently preferred schedule, which 
has a FY 2017 plant start-up date, some of the technical decisions must 
be made quickly, so that detailed design, component and system testing, 
and licensing can be initiated. However, it is unlikely that the plant 
can begin operation by 2017 owing to the significant funding gaps that 
developed in FY 2006 and FY 2007 and affected the scope and schedule 
for testing fuel and structural materials as well as the heat transport 
equipment. A schedule that coordinates the elements required for 
public-private partnership, design evolution, defined regulatory 
approach, and R&D results should be articulated to enhance the 
potential for program success.
    The main risk associated with NGNP is that the current business 
plan calls for the private sector to match the government (DOE) 
funding. So far, however, not a single program has been articulated 
that coordinates all the elements required to successfully commission 
the NGNP. The current disconnect between the base NGNP program plan and 
the complementary public/private partnership initiative must be 
resolved. DOE should decide whether to pursue a different demonstration 
with a smaller contribution from industry or, alternatively, a more 
basic technology approach for the VHTR.
    NE should sustain a balanced R&D portfolio in advanced reactor 
development. The program requires predictable and steady funding, but 
its goals can be more modest and its timetables stretched. A revised 
program can be conducted within levels recently appropriated for 
Generation IV and for SFR-related R&D under GNEP.

NUCLEAR HYDROGEN INITIATIVE

    NHI is DOE's research program for developing technologies to 
produce hydrogen and oxygen from water feedstock using nuclear energy. 
The program includes a small effort supporting advanced low-temperature 
electrolysis, but its primary focus is three methods that use high-
temperature process heat to achieve greater efficiency. The high-
temperature methods could realize 60-80 percent greater efficiency than 
conventional electrolysis. These methods involve challenging high-
temperature materials problems, which are being addressed with 
laboratory-scale research at this time. Key technology down selections 
to allow testing at the pilot and engineering scales are scheduled for 
2011 and 2015. The NHI program is tightly tied to the NGNP program to 
develop a reactor capable of producing high-temperature process heat. 
NHI activities are coordinated with the larger DOE hydrogen program, 
led by the Office of Energy Efficiency and Renewable Energy, as well as 
with NGNP.
    NHI is well formulated to identify and develop workable 
technologies, but the schedules and budgets need to be adjusted to 
assure appropriate coupling to the larger NGNP program. DOE should 
expand NHI program interactions with industrial and international 
research organizations experienced in chemical processes and operating 
temperatures similar to those in thermochemical water splitting. NE 
should also broaden the hydrogen production system performance metrics 
beyond economics--for example, it could use the Generation IV 
performance metric of economics, safety, and sustainability.

BALANCE AND OVERSIGHT

    The AFCI, GEN IV, and NHI programs require steady progress and 
should evolve over a reasonable time. Given this need, and as a 
counterbalance to the short-term nature of the federal budget process, 
NE should adopt an oversight process for evaluating the adequacy of 
program plans, evaluating progress against these plans and adjusting 
resource allocations as planned decision points are reached.
    The senior advisory body for NE has been the Nuclear Energy 
Research Advisory Committee (NERAC). A modified NERAC seems the obvious 
starting point for reestablishing oversight of the NE programs. In the 
committee's opinion, the key will be to ensure its independence, 
transparency, and focus on the most important strategic issues. The 
committee has not attempted to design a specific oversight capability, 
but the following characteristics would be appropriate for the body it 
has in mind:

          Encourage objectivity by recognizing that 
        knowledgeable persons have different points of view and that 
        balance is therefore best achieved by diversifying the 
        membership of the oversight body.

          Avoid conflicts of interest by requiring public 
        disclosure of members' connections with study sponsors or 
        organizations likely to be affected by study results. Persons 
        directly funded by sponsors are rarely appointed to such 
        bodies.

          Ensure transparency by requiring that both the 
        statement of task and the final report for each project are 
        routinely made public in a timely fashion.

                      Biography for Robert W. Fri
    Robert W. Fri is a visiting scholar and senior fellow emeritus at 
Resources for the Future, where he served as President from 1986 to 
1995. From 1996 to 2001 he served as Director of the National Museum of 
Natural History at the Smithsonian Institution. Before joining the 
Smithsonian, Mr. Fri served in both the public and private sectors, 
specializing in energy and environmental issues. In 1971 he became the 
first Deputy Administrator of the U.S. Environmental Protection Agency 
(EPA). In 1975, President Ford appointed him as the Deputy 
Administrator of the Energy Research and Development Administration. He 
served as Acting Administrator of both agencies for extended periods. 
From 1978 to 1986, Fri headed his own company, Energy Transition 
Corporation. He began his career with McKinsey & Company, where he was 
elected a principal. Mr. Fri is a senior advisor to private, public, 
and nonprofit organizations. He is a Director of the American Electric 
Power Company and a trustee of Science Service, Inc. (publisher of 
Science News and organizer of the Intel Science Talent Search and 
International Science and Engineering Fair). He is a member of the 
National Petroleum Council, the Advisory Council of the Electric Power 
Research Institute, the Advisory Council of the Marian E. Koshland 
Science Museum, and the steering committee of the Energy Future 
Coalition. In past years, he has been a member of the President's 
Commission on Environmental Quality, the Secretary of Energy Advisory 
Board, and the University of Chicago board of governors for Argonne 
National Laboratory. He has chaired advisory committees of the National 
Research Council (NRC), including the recent Committee on Review of 
DOE's Nuclear Energy Research and Development Program, the Carnegie 
Commission on Science, Technology and Government, EPRI, and the Office 
of Technology Assessment (OTA). From 1978 to 1995 he was a Director of 
Transco Energy Company, where he served as Chair of the Audit, 
Compensation, and Chief Executive Search Committees. He is a member of 
Phi Beta Kappa and Sigma Xi and a national associate of the National 
Academy of Sciences. He received a B.A. in Physics from Rice University 
and an M.B.A. (with distinction) from Harvard University.

    Chairman Gordon. Oh, it was good timing, then. Very good 
timing. Okay. Dr., or rather, Admiral Grossenbacher.

  STATEMENT OF VICE ADMIRAL JOHN J. GROSSENBACHER, DIRECTOR, 
      IDAHO NATIONAL LABORATORY, U.S. DEPARTMENT OF ENERGY

    Vice Admiral Grossenbacher. Mr. Chairman, Congressman 
Bilbray, and Members of the Committee, good morning, and thank 
you for providing me the opportunity to speak with you on a 
subject of great importance to our country, nuclear power and 
the opportunities and challenges associated with it.
    It is a privilege for me to represent the 3,800 scientists, 
engineers, skilled technicians, and support staff of the Idaho 
National Laboratory. At the dawn of the Nuclear Age, the Idaho 
National Laboratory was our nation's reactor laboratory, 
developing and demonstrating a range of technologies, from 
boiling water reactors to breeder reactors, gas cooled 
reactors, reactors cooled by organic coolants, over 52 
different reactors.
    As we consider the role of nuclear energy in our nation's 
and the world's energy portfolio, people of the Idaho National 
Laboratory are eager to collaborate with university colleagues, 
nationally and internationally experienced industry technical 
leaders, and the system of laboratories and their unique 
capabilities within the Department of Energy. We are eager to 
collaborate to answer the difficult questions that should guide 
our nation's and the world's choice of our future energy 
portfolio.
    Technology provides the means to an end. We humans have 
chosen an energy dense existence as an end, with attendant 
benefits, enormous benefits, costs, and risks associated with 
the means. Our choices, as we modify that end and adjust those 
means, should be informed by discipline, technically sound 
research, development, and demonstration that illuminates our 
choices. DOE's Nuclear Energy Program attempts to do just that. 
Nuclear Power 2010, Light Water Reactor R&D, the Advanced Fuel 
Cycle Initiative, Generation IV nuclear energy systems 
development, and investments in our human capital, very 
importantly at our universities, are the elements of DOE's 
Nuclear Energy Program.
    As has been mentioned, Nuclear Power 2010 is a public/
private initiative that reduces technical, institutional, and 
regulatory barriers to new plant development. Light Water 
Reactor R&D intends to bring the enormous technical 
capabilities of the Department of Energy's laboratories to bear 
on current and future light water reactor performance issues, 
in partnership with industry, and engaging the creativity of 
our universities.
    The Advanced Fuel Cycle Initiative is the domestic 
technology development and deployment component of GNEP, the 
Global Nuclear Energy Partnership, a significant policy 
initiative intended to develop and demonstrate advanced fuel 
cycle technologies that will increase the efficiency with which 
we use nuclear fuel, and decrease the waste burden of the 
nuclear fuel cycle. GNEP is intended to also provide a nuclear 
materials management system that addresses proliferation risks, 
and all in an environment that is relevant in a world where the 
use of nuclear energy is expanding and expanding rapidly.
    Generation IV nuclear energy systems development is 
intended to enhance the economics, safety, physical protection, 
improved waste management, and reduced proliferation risk of 
reactors and fuel cycles beyond the Light Water Reactor 
technologies we use today.
    The NGNP, the Next Generation Nuclear Plant, is a 
significant element of this program, intended to develop and 
demonstrate a reactor after next technology, that can expand 
the use of nuclear energy beyond electricity generation, to the 
provision of industrial process heat.
    DOE's Nuclear Energy Program engages the next generation of 
nuclear scientists, engineers, and technicians through its 
university and intern programs. It is also looking to the 
future, in addressing how we sustain our nuclear science and 
technology infrastructures, both inside and outside the 
Department of Energy.
    In conclusion, Mr. Chairman, the Department of Energy's 
Nuclear Energy Program is intended to provide us with informed 
choice and opportunities for the use of nuclear energy in our 
current and future energy portfolio. We at the Idaho National 
Laboratory are proud, as the Nation's nuclear energy 
laboratory, to have a leadership role in this very important 
work.
    Thank you very much.
    [The prepared statement of Vice Admiral Grossenbacher 
follows:]
        Prepared Statement of Vice Admiral John J. Grossenbacher
    Mr. Chairman and distinguished Members of the Committee, good 
morning and thank you for providing me the opportunity to speak with 
you on a subject of such great importance to our nation--nuclear power, 
and the opportunities and challenges associated with it.
    As Director of Idaho National Laboratory--the Nation's nuclear 
energy laboratory--and as former commander of the U.S. Naval Submarine 
Forces, I've committed most of my adult life to the safe application of 
advanced nuclear energy systems. Needless to say, I feel personally 
responsible for helping chart a prudent course toward a secure and 
sustainable energy future for this nation--a future enabled by a richly 
diverse energy portfolio that can maintain and even expands nuclear 
power's significant contributions.
    I'll highlight the Department of Energy's major nuclear energy 
programs--from my vantage as INL Director--with an eye toward how they 
address the challenges of cost, waste management and proliferation as 
cited in your letter of invitation. I'll also discuss the role of the 
national laboratories in supporting nuclear energy research and 
development, what is being done to support education and work force 
development for the nuclear power industry, and challenges that 
national laboratories face in sustaining our nuclear science and 
technology infrastructure.
    Mr. Chairman, before I get to the core of my remarks today, I'd 
like to ask you to consider how they conform to the spirit and intent 
of what you said in your news release of two weeks ago. In 
acknowledging the 50th anniversary of the Defense Advanced Research 
Projects Agency--DARPA--you stated, ``Given the geopolitical 
instabilities that threaten global energy supplies, the skyrocketing 
costs of energy to consumers, the looming threat of global climate 
change, and the resulting costs from the likely regulation of carbon 
dioxide emissions, there is a critical need for ground-breaking 
science-based energy solutions that can be deployed in the 
marketplace.'' The Department of Energy and its network of national 
labs could not agree with you more. That's precisely why we have the 
following programs.

NUCLEAR POWER 2010

    The U.S. Energy Information Administration projects that U.S. 
electricity consumption will increase 30 percent by 2030. This means 
our nation will need hundreds of new plants to provide electricity. 
Rising demand for energy and electricity, pressure to reduce carbon 
emissions along with fair consideration of the outstanding performance 
and economics associated with operating U.S. nuclear power plants have 
spurred a nuclear energy renaissance in the U.S.
    Recognizing that all sources of energy will be needed to meet 
energy demand, the Department of Energy launched the Nuclear Power 2010 
program in 2002 as a joint government-industry cost-shared program to 
identify sites for new nuclear power plants, develop and bring to 
market advanced nuclear plant technologies, and evaluate the business 
case for building new nuclear power plants by demonstrating untested 
regulatory processes. Together with incentives enacted through the 
Energy Policy Act of 2005--federal loan guarantees for low emission 
energy technologies, federal risk insurance and production tax 
credits--government and industry are working together to address the 
last barriers associated with building new plants: the financial and 
regulatory risks. These federal tools will allow first movers to 
address and manage the risks associated with building the first few new 
nuclear power plants. This year's budget request seeks to significantly 
increase the government's share in the NP 2010 program and to extend 
the period during which companies can seek loan guarantees by two 
years. Industry has stated that loan guarantees are essential to 
ensuring the first new nuclear plants are ordered and built.
    Industry has responded with 17 companies and consortia pursuing 
licenses for more than 30 nuclear power plants in states represented by 
20 members of this committee. Nuclear Regulatory Commission review of 
the first wave of applications has already begun and industry indicates 
it expects to submit 11 to 15 more applications this year. At the same 
time, orders are starting to be placed for long-lead items such as 
forgings. The signing earlier this month of a contract between Georgia 
Power and Westinghouse for two AP-1000 units is yet another signal that 
the nuclear energy renaissance has begun.

LIGHT WATER REACTOR RESEARCH AND DEVELOPMENT

    The combination of low operating and fuel costs which keep 
electricity prices down, an excellent record of performance, and clean 
energy benefits means that nuclear energy will remain an important 
source of energy for our nation's future. The design features of the 
Generation III and Generation III+ nuclear power plants, which include 
redundant systems, automatic shutdown systems and multiple layers of 
protection, combined with a strong safety culture and an excellent 
regulator means that nuclear power will continue to be a safe and 
reliable source of energy.
    The increased electricity from existing nuclear power plants since 
1990 is enough to power 29 cities the size of Atlanta or Boston each 
year. The outstanding performance of the existing fleet and the 
prospects that market pull will demand a ramping up in new nuclear 
plant build projects has prompted consideration of a new government-
industry cost-shared initiative in FY 2009 within the Generation IV 
program for light water reactor research and development. This research 
and development would be aimed at supporting efficient construction and 
operation of the dozens of new plant projects anticipated over the next 
decade and at maximizing the contribution of the existing fleet by 
further extending the licenses beyond 60 years.
    In February, the Electric Power Research Institute and Idaho 
National Laboratory issued a joint Nuclear Power Strategic Plan for 
Light Water Reactor Research and Development that sets forth 10 
objectives, six of which are considered to be of highest priority for 
this initiative. These high priority objectives include:

          Transitioning to state of the art digital 
        instrumentation and controls

          Making further advances in nuclear fuel reliability 
        and lifetime

          Implementing broad-spectrum workforce development

          Implementing broad-spectrum infrastructure 
        improvements for design and sustainability

          Addressing electricity infrastructure-wide problems

          Sustaining the high performance of nuclear plant 
        materials.

    This LWR strategic R&D plan presents a framework for how industry 
and government should work together on research and development and is 
the first step in identifying the specific research to be pursued. 
DOE's budget request includes $10M to support LWR R&D, representing the 
government's share in FY 2009. Both Nuclear Power 2010 and the LWR R&D 
initiative will enable the Nation to do much to meet near-term domestic 
power needs, while continuing to avoid generation of the massive 
amounts of greenhouse gases that would be produced if our nuclear fleet 
were to be replaced with fossil-fuel plants.

ADVANCED FUEL CYCLE INITIATIVE

    In much the same way that Congress has determined that it is in the 
best interest of our nation to boost the fuel economy of our cars, 
trucks, vans and SUVs--so, too, has DOE and the global nuclear industry 
determined that we need to raise the fuel efficiency of nuclear power, 
while reducing the toxicity and volume of waste that requires disposal. 
The Department and its system of national laboratories--working in 
partnership with industry and academia--are pursuing this essential 
goal through the Advanced Fuel Cycle Initiative.
    The once-through fuel cycle used by our nation's 104 nuclear power 
plants is only able to extract less than five percent of the available 
energy from their nuclear fuel rods before they have to be replaced. By 
eventually closing the fuel cycle as envisioned by AFCI, much more of 
the available energy in nuclear fuel would be extracted, and more 
easily managed high-level waste would result. Admittedly, significant 
technology development must occur before AFCI's complete vision is 
realized, and additional cost analyses should be done to further 
understand the economics. But waiting until someone determines the 
economics are right to begin investing in alternate and advanced 
technologies tends to produce the kind of crises the world faces today 
with oil prices at well over $100 a barrel.
    Over the near-term, the AFCI program is conducting research and 
demonstrating technologies that have a high probability of reducing the 
volume, heat generation and radiotoxicity of used nuclear fuel 
materials requiring repository disposal. The AFCI program is developing 
advanced separations processes for the treatment of used nuclear fuel 
from current light water reactor and advanced light water reactor 
systems. While plutonium burning and transmutation of some of the other 
transuranic elements that impact repository performance can be 
accomplished in thermal reactors, more complete transmutation of 
transuranic elements is achievable in fast reactors with a much larger 
reduction in decay heat and radiotoxicity per unit energy produced in a 
nuclear power plant. This translates into a reduction in the source 
term per unit energy produced and hence, more effective utilization of 
a geologic repository. The AFCI program is conducting R&D aimed at 
addressing the economics of fast reactor technology and developing the 
advanced fuels and associated reprocessing technologies for sodium-
cooled fast reactors to enable more of the energy value of used nuclear 
fuel to be recovered, while destroying, and extracting energy from the 
transuranics.
    AFCI is the first DOE Office of Nuclear Energy program to implement 
a Technical Integration Office model to effectively and efficiently 
coordinate the research and development across the DOE national 
laboratory complex, including with universities and international 
research partners. Research supporting AFCI has been organized into 
seven campaigns and two cross-cutting functions. The seven campaigns 
include advanced separations technologies, advanced fuel development, 
systems analysis, safeguard systems development, advanced reactor 
design, waste form development, and grid-appropriate reactor 
development. The two cross-cutting functions are modeling and 
simulation and nuclear safety and regulatory activities. World-
recognized experts at DOE's national laboratories have been assigned to 
lead each of the campaigns, with much of the research conducted at the 
Science labs.
    AFCI is the domestic R&D component of the Global Nuclear Energy 
Partnership. GNEP is an international initiative that seeks to enable 
global expansion of nuclear energy in a safe and secure manner, 
enabling countries to enjoy the benefits of nuclear power without 
having to invest in expensive and sensitive enrichment and reprocessing 
technologies. Although GNEP is a relatively new initiative, 21 nations 
have formally joined the partnership and four teams comprised of some 
of the most capable and respected nuclear industry firms have offered 
approaches to DOE on how best to implement a closed fuel cycle with 
advanced fuel cycle technologies. In addition, industry has told DOE 
that meaningful steps can be taken in the near-term to close the fuel 
cycle by 2020 to 2025, suggesting that government take a fresh look at 
nuclear waste management through an integrated approach including 
recycling and repositories.
    The bottom line is--GNEP comes at a crucial time in the global 
expansion of nuclear power, and is an important initiative for 
addressing challenges associated with nuclear waste management. It's a 
comprehensive proposal to close the nuclear fuel cycle in the U.S., and 
engage the global community to minimize proliferation risks--while 
providing the mechanism for international synergy in policy formation, 
technical support and technology and infrastructure development.

GENERATION IV NUCLEAR ENERGY SYSTEMS

    For the long-term future, the Department is working on the next 
generation of nuclear energy systems, technologies that represent 
enhancements in economics, sustainability, reduced waste intensity and 
proliferation-resistance over today's technologies through the 
Generation IV nuclear energy systems program. Additionally, the U.S. is 
part of the Generation IV International Forum or GIF, a multinational 
effort to work collaboratively on Generation IV technologies. GIF 
nations are exploring six advanced systems of interest. Overall, the 
investment of 10 nations in collaborative R&D on Generation IV 
technologies is over $100M per year on the first two systems.
    U.S. Generation IV research is focused on reactor systems that 
operate at higher temperatures than today's reactors to both improve 
efficiency and provide a process heat source for a wide range of 
energy-intensive co-located industrial processes. A mid-term version of 
the Generation IV Very High Temperature Reactor concept, the High 
Temperature Gas Reactor (HTGR) nuclear system is being pursued in the 
U.S. through the Next Generation Nuclear Plant (NGNP) demonstration, 
authorized by the Energy Policy Act of 2005. The HTGR is an advanced 
nuclear technology that can provide high-temperature heat for 
industrial processes at temperatures up to 950+C. Coupled 
with developmental high temperature electrolytic or thermo-chemical 
technologies, this advanced HTGR technology can also be used in the 
production of hydrogen and oxygen from water for existing markets such 
as refinery upgrading of petroleum crude, chemical and fertilizer 
plants, as well as in processes such as coal-to-synthetic fuels and 
hydrocarbon feedstocks. Using the HTGR nuclear heat source will reduce 
dependence for producing process heat using fossil fuels such as 
natural gas and oil, for which the long-term prices are increasing and 
the availability is uncertain. This is achieved without carbon 
emissions, thus reducing the carbon footprint of these industrial 
processes.
    As currently conceived, the commercialized HTGR will be inherently 
safe by design and more flexible in application than any commercial 
nuclear plant in history. The commercialized HTGR will secure a major 
role for nuclear energy for the long-term future and also provide the 
U.S. with a practical path toward replacing imported oil and gas with 
domestically produced clean and economic process heat, hydrogen and 
oxygen.
    As with Nuclear Power 2010, the Advanced Fuel Cycle Initiative and 
GNEP, the Generation IV program in general and the Next Generation 
Nuclear Plant project in particular are built on a public-private 
partnership foundation. DOE has recently issued a Request for 
Information and Request for Expression of Interest seeking input from 
interested parties on how best to achieve the goals and meet the 
requirements of the NGNP demonstration project at Idaho National 
Laboratory.
    Idaho National Laboratory, Oak Ridge National Laboratory and The 
Babcock and Wilcox Company are developing TRISO-coated fuel and 
conducting other HTGR research. The research to improve performance of 
the coated particle fuel recently met an important milestone by 
reaching a burn-up of nine percent without any fuel failure, 
demonstrating that the U.S. can produce high-quality gas reactor fuel. 
Already, significant success has been achieved with the Department's 
Nuclear Hydrogen Initiative with the development and testing of high-
temperature electrolysis cells that take advantage of NGNP's high 
process heat output to efficiently produce hydrogen and customizable 
carbon-neutral fuels.

NUCLEAR SCIENCE AND ENGINEERING EDUCATION AND FACILITY INFRASTRUCTURE

    While all of the programs I've highlighted for you individually and 
collectively do much to advance the state-of-the-art in nuclear science 
and technology, and enable the continued global expansion of nuclear 
power, there is a great area of challenge confronting nuclear energy's 
future. As with most other technologically intensive U.S. industries--
it has to do with human capital and sustaining critical science and 
technology infrastructure.
    My laboratory, its fellow labs and the commercial nuclear power 
sector all face a troubling reality--a significant portion of our work 
force is nearing retirement age and the pipeline of qualified potential 
replacements is not sufficiently full.
    Since I'm well aware of this committee's interests in science 
education, I'd like to update you on what the Department and its labs 
are doing to inspire our next generation of nuclear scientists, 
engineers and technicians. Fundamentally, the Office of Nuclear Energy 
has made the decision to invite direct university partnership in the 
shared execution of all its R&D programs and will set aside a 
significant amount of its funds for that purpose. Already, nuclear 
science and engineering programs at U.S. universities are involved in 
the Office of Nuclear Energy's R&D, but this move will enable and 
encourage even greater participation in DOE's nuclear R&D programs.
    In addition, all NE-supported labs annually bring hundreds of our 
nation's best and brightest undergraduate and graduate students on as 
interns or through other mechanisms to conduct real research. For 
example, at INL we offer internships, fellowships, joint faculty 
appointments and summer workshops that focus on specific research 
topics or issues that pertain to maintaining a qualified workforce. 
This year, we are offering a fuels and materials workshop for 
researchers and a 10-week training course for engineers interested in 
the field of reactor operations. Last year, DOE designated INL's 
Advanced Test Reactor as a national scientific user facility, enabling 
us to open the facility to greater use by universities and industry and 
to supporting more educational opportunities. ATR is a unique test 
reactor that offers the ability to test fuels and materials in nine 
different prototypic environments operated simultaneously. With this 
initiative, we join other national labs such as Argonne National 
Laboratory and Oak Ridge National Laboratory in offering nuclear 
science and engineering assets to universities, industry and the 
broader nuclear energy research community.
    Finally, national laboratories face their own set of challenges in 
sustaining nuclear science and technology infrastructure--the test 
reactors, hot cells, accelerators, laboratories and other research 
facilities that were developed largely in support of prior missions. To 
obtain a more complete understanding of the status of these assets, the 
Office of Nuclear Energy commissioned a review by Battelle to examine 
the nuclear science and technology infrastructure at the national 
laboratories and report back later this year on findings and 
recommendations on a strategy for future resource allocation that will 
enable a balanced, yet sufficient approach to future investment in 
infrastructure.

CONCLUSION

    All of the programs I've cited today--Nuclear Power-2010, the 
Advanced Fuel Cycle Initiative, GNEP, Generation IV, Nuclear Hydrogen 
Initiative--ultimately seek to make nuclear power better and safer. 
Realistically, we as a nation have no silver bullets that in the near- 
or mid-term can replace nuclear power as a reliable, 24/7 producer of 
massive amounts of cost-effective and carbon-emission-free baseload 
electric power and process heat for industrial processes to displace 
burning of natural gas and oil.
    The challenges frequently associated with nuclear power--high 
costs, waste disposal and proliferation risks--can all, from a 
technological perspective, be managed. The high cost concerns actually 
have little to do with the fuel used in a nuclear reactor--they're more 
related to the rising costs of concrete, steel, copper, and project 
capital on large, lengthy projects like a nuclear power plant. Many of 
these same cost concerns apply to virtually every means of generating 
electricity we have. Nuclear Power 2010 and the other incentives 
available to first movers of new nuclear plants can effectively address 
these financial and regulatory challenges.
    The waste stream from a nuclear reactor is hazardous and must be 
isolated - but we know how to handle it safely and we know the pathways 
we can take to reduce and manage it. The Nuclear Regulatory Commission 
has concluded that used fuel can be safely stored on-site for 100 
years. An integrated approach to used fuel management offers the 
possibility of recycling the usable components, greater utilization of 
our uranium resources, and reduced toxicity and/or volume of used fuel 
requiring geologic disposal.
    Finally, proliferation. The fact is that nuclear materials can be 
redirected for non-peaceful purposes. President Eisenhower acknowledged 
that a half century ago in his Atoms for Peace address. But the nuclear 
genie is out of the bottle. Over 430 nuclear reactors are already in 
operation around the world, and dozens more are under construction or 
in the planning process. Do we in this country wish to disengage from 
the global nuclear renaissance and hope for the best--or do we want to 
help guide the world toward the best nuclear fuel cycle possible?
    These programs maintain the viability of today's nuclear reactor 
fleet and prepare the way for the safe, sustainable future for this 
large and immediately available global power source. They address the 
challenges facing nuclear energy, and leverage the best minds in our 
national laboratories, universities and industry.
    As the Director of Idaho National Laboratory, I'm proud of the role 
my 3,800 Idaho colleagues play in carrying out these national priority 
programs and related efforts that contribute to our nation's energy 
security.
    Thank you.

                  Biography for John J. Grossenbacher
    Mr. Grossenbacher is the Director of the Idaho National Laboratory 
and President of Battelle Energy Alliance, LLC (BEA). His credentials 
and experience include leadership and management of large institutions 
with substantial efforts focused on technology research and 
development. Before joining Battelle, Mr. Grossenbacher had a 
distinguished career with the U.S. Navy, achieving the rank of Vice 
Admiral and Commander of the U.S. Naval Submarine Forces. He earned a 
Bachelor of Science degree in Chemistry from the U.S. Naval Academy, 
and he holds a Master of Arts degree in International Relations from 
the Johns Hopkins University. In addition, he completed the Harvard 
University Graduate School of Business Administration Program for 
Management Development. He is a leader with a refined sense of 
strategy, an in-depth technical knowledge and a focus on delivering 
results. He is one of only a handful of officers in U.S. Navy history 
to be awarded both the Stockdale and David Lloyd Awards for Leadership 
Excellence. As Commander of the U.S. Naval Submarine Forces, Vice 
Admiral Grossenbacher led the integration and consolidation of the U.S. 
Navy's Atlantic and Pacific submarine forces. He is noted for his 
ability to build and lead multi-disciplinary teams, to meet complex 
science and technology challenges, and to achieve success in developing 
and sustaining collaborative relationships with multiple stakeholders.

                               Discussion

              The Global/Nuclear Energy Partnership (GNEP)

    Chairman Gordon. All right. At this point, we will open our 
first round of questions, and the Chair recognizes himself for 
five minutes.
    I have heard a variety of concerns about the implementation 
of the GNEP program, so I want to better understand that, and I 
would like for, I have some questions for Admiral Grossenbacher 
and Mr. Fri.
    First, can either of you provide me with a cost estimate? 
Are we talking hundreds of millions, billions, or tens of 
billions of dollars?
    Mr. Fri. The report uses tens of billions, although, at the 
time we did the report, we didn't have a really definitive 
process.
    Vice Admiral Grossenbacher. I agree with that. For the 
long-term implementation of the technology, it is a significant 
investment over a long period of time.
    Chairman Gordon. Well, that is a very huge investment of 
taxpayer dollars, and with that understanding, I would like to 
clarify that the Department aims to deploy commercial scale 
facilities at some point to accomplish two main goals: waste 
reduction and nonproliferation of weapons-grade materials. Has 
a process for recycling spent fuel that meets those goals, or 
the goals I stated and identified, and if so, is it ready for 
commercial deployment?
    Mr. Fri. I think that the Committee's view, the short 
answer to that is not, certainly not ready for commercial 
deployment. There are several processes that could be examined, 
and what we recommended was that the Department systematically 
sort through those to determine the one that looks the most 
promising in light of what else is going on in the world--that 
commercial sphere.
    Chairman Gordon. Do you concur with that, Admiral?
    Vice Admiral Grossenbacher. Mr. Chairman, the only thing I 
want to add is that the waste reduction, that is true, and the 
other intention is resource utilization, remembering that the 
current once through fuel cycle only uses a very small 
percentage of the uranium.
    Chairman Gordon. But in terms of recycling the fuel, that 
process is not ready for commercialization. Is that correct? 
Would you concur with Mr. Fri's----
    Vice Admiral Grossenbacher. Not as envisioned in GNEP. 
Certainly, there are recycling technologies that are 
industrialized today, but not----
    Chairman Gordon. Well, that is what I was trying to get to 
GNEP for----
    Vice Admiral Grossenbacher. Yes.
    Chairman Gordon. Okay, Admiral, so spending billions of 
taxpayer dollars on commercial scale facilities before the 
necessary research and development has been conducted, it is a 
little hard for me to understand. It has been reported that the 
Department is moving away from that strategy. Can you confirm 
that for me?
    Vice Admiral Grossenbacher. The short answer is no, I 
can't--I don't know the precise details of the current 
discussion about GNEP. I feel--it is important to remind you 
that this is meant to be a development and demonstration 
program that is evolutionary, and that you have to start 
somewhere.
    Chairman Gordon. Well, don't you start with research, 
rather than with moving forward----
    Vice Admiral Grossenbacher. Well, sure you do the research, 
Chairman.
    Chairman Gordon.--on a full scale, tens of billions of 
dollar commercialization? And with all the needs here, I mean, 
is this--I guess what I am trying to, with the limited dollars.
    Vice Admiral Grossenbacher. Right.
    Chairman Gordon. Is, you know, is this the best way to 
spend those dollars, and is this a focused way, and you know, 
quite frankly, there has been concern in many areas that there 
wasn't a lot of collaboration, that this doesn't really, it was 
a sort of everything for everybody, and I am concerned, again, 
if we are going to make this investment, I want to make it in 
the best possible way.
    Vice Admiral Grossenbacher. Yes, sir. I think that is a 
valid point. The only thing I want to point out is, if you look 
at the goals of GNEP, which from a technology point of view, 
are ambitious, the key question is what is the timeframe, and 
when do you go to a full-scale industrial demonstration of that 
technology, what technology do you choose, and that has to be 
informed by both an R&D process, and the involvement of the 
industry. The laboratories, the scientists and engineers don't 
build and operate these large scale industrial facilities, so I 
think the issue is what is the timeframe that----
    Chairman Gordon. Well, part of that issue, also, is having 
a broad enough buy-in, that you can keep a flow of taxpayer 
dollars going to--so, just real quickly, Dr. Cochran, or Mr. 
Fri, do you want to comment on this issue?
    Mr. Fri. Well, only to say that our report, we said, while 
we don't see the virtue in spending a lot of money right now 
for the commercial facilities, it is a long-term program, the 
quid pro quo is, it is a long-term program, and therefore, 
sustained commitment and sustained funding is really important 
to the success of that program, and that kind of stability is 
not something that the nuclear R&D budget has experienced over 
the last several years, and it is something that I hope that 
the Congress will be able to do, at a reasonable level, over a 
long enough period of time, to incorporate outside advice, so 
that we can get the job done.
    Chairman Gordon. Quickly, what is the appropriate outside 
advice, and who would that be? Or not what is it, but who is 
the vehicle for that?
    Mr. Fri. We recommended that the Department set up an 
outside advisory committee, that is independent, objective, and 
has a strategic focus. What we have in mind, the technology 
that may be familiar to you, something like the Science 
Advisory Committees at the Department of Energy, which has a, 
which is composed of people of the community, but as you know, 
they are perfectly willing to tell the Department when they are 
wrong, and that is what----
    Chairman Gordon. I think that is important. I don't want to 
abuse my time, and I know Dr. Cochran is probably squirming in 
his seat, so why don't you have a closing statement on this 
topic.
    Dr. Cochran. Mr. Chairman, the GNEP program is doomed to 
failure. The vision requires that roughly, for every 100 
gigawatts of thermal reactor capacity, the type of reactors we 
have today, you would need roughly 40 to 75 gigawatts of fast 
reactor capacity, and fast reactors have been under development 
in this country and around the world since 1946.
    The programs to develop fast breeder reactors were failures 
in the United States, in France, in the United Kingdom, in 
Germany, in Italy, in Japan, and I would also argue, in Russia. 
The flagships of these programs were all failures. Monju had an 
accident, and was shut down in 1995, and hasn't restarted. 
Super-phoenix, in France, had a lifetime capacity factor of 
between six and seven percent. The Clinch River Reactor was 
canceled. We have left the FFTF sitting around in the State of 
Washington, and folded that program back into very small EBR-1 
reactor, EBR-2 reactor at Idaho. The German reactor, SN-300, 
was canceled before it was fueled, and it has been turned into 
a hotel and amusement park, and is probably the only fast 
reactor that has ever made money. The British fast reactor 
program was canceled. The Italian one never got off the ground. 
The Russians never put plutonium in their fast reactors.
    Chairman Gordon. Well, Dr. Cochran, I don't want to abuse 
my time. I think the short answer there is that, clearly, this 
needs to be rethought, to make sure that we are, with this past 
history, that we are spending those limited dollars wisely.
    Dr. Cochran. One more point.
    Chairman Gordon. Okay.
    Dr. Cochran. Because this program is doomed to failure, 
because these fast reactors are unreliable--I didn't mention, 
by the way, it was a failure in two Navies, the United States 
Navy, Admiral Rickover jerked it out of the Seawolf, and in the 
Soviet Navy. But what is going to happen is the R&D is going to 
go forward, and the Department of Energy is promoting this R&D 
not only in weapon states, but in non-weapon states, and what 
we are doing is training people in actinide chemistry and 
plutonium metallurgy, and the proliferation risks are going to 
increase from the R&D programs, and they will never decrease 
from the deployment of the program.
    Chairman Gordon. Thank you, and Mr. Bilbray is recognized 
for five minutes.

                        Environmental Challenges

    Mr. Bilbray. Thank you very much, Mr. Chairman. Dr. 
Cochran, I am looking at the concerns about the environmental 
challenges of nuclear. The Natural Resource Defense Council 
basically, does it support more emphasis on hydroelectric, 
wind, geothermal, and solar?
    Dr. Cochran. Our highest priority is to mitigate the 
climate effects of global warming, and that means that our 
highest priority is to get a climate bill through the Congress, 
and that means, since it is the single policy that will do the 
nuclear industry the most good, we are in a situation where the 
Natural Resources Defense Council is an advocate for the single 
policy that would do the U.S. nuclear industry the most good.
    Mr. Bilbray. Well, that is a great attitude to have. I 
appreciate that. I think we have talked about hydroelectric, 
and we realize the environmental problems of dam, and the 
construction and whatever, and I want to make sure that, you 
know, your group identifies the environmental challenges of all 
the options.
    Dr. Cochran. We do, and we have programs across the board 
to internalize the externalities associated with all of these 
energy technologies.
    Mr. Bilbray. When you do----
    Dr. Cochran. Coal, nuclear----
    Mr. Bilbray. Wind, solar, and geothermal seem to appear to 
be a small environmental footprint, wouldn't you agree, in at 
least first appearances?
    Dr. Cochran. Yes.
    Mr. Bilbray. And do you articulate at all the unseen 
environmental impacts of those three choices?
    Dr. Cochran. Well, I, you know, the primary problems 
associated with wind today are not environmental problems, I 
mean, other than aesthetics, some people think it looks good, 
some people think it is an eyesore. But the primary problems 
with wind relate to its cost, and the fact that the wind 
doesn't blow 100 percent of the time, so the average capacity 
factor of a wind farm would be like 25 to 30 percent, rather 
than the 90 percent of the capacity of a U.S. nuclear plants, 
and--today. Solar, I think solar can, the main problems have to 
do with cost, but the environmental problems are quite small. 
They are not zero. I think we need to internalize the 
environmental costs of all of the technologies.
    Mr. Bilbray. Doctor, I have to apologize to you, because I 
have sort of got an inside track here. As you know, California 
has tried to lead on a lot of this, and one of the things that 
has hit my district with these supposedly very environmentally 
friendly technologies, is the horrendous impact, that is 
unseen, by the fact that most of what is perceived as being 
non-polluting, environmentally friendly technology, is sited a 
long distance from the source of the power to the receiver, 
which means massive amounts of transmission capability, which 
has horrendous environmental impact.
    The greatest, probably the biggest environmental uproar 
right now in my county is the fact of bringing in geothermal 
and solar through a state park, through habitat areas, and 
everything else. And I only want to raise that, because when we 
talk about one technology, we sort of overlook the other 
technologies' major environmental footprint. And so, it is one 
of those things that I am looking at, that what would be the 
environmental impact of expanding facilities that already are 
on, in San Diego County, as opposed to so-called 
environmentally, the most environmentally friendly 
technologies, that have to be trucked in. In fact, I think you 
are looking at wind generation, and the whole center of the 
Nation being proposed, but the transmission lines are not being 
considered in the environmental footprint.
    Do you agree that is something that we haven't addressed 
enough of this thing?
    Dr. Cochran. You know, you mentioned, for example, 
transmission lines. That is also a problem for nuclear plants. 
It is a problem for importing electricity from the Palo 
Verdes----
    Mr. Bilbray. But you do agree that nuclear has the 
capability of being sited where plants are already sited, and 
using existing facilities, as opposed to wind, solar, and 
geothermal are really site-specific, and limited to certain 
locations, that have to be sited at those places, and thus, the 
transmission lines tend to be new, and easements being 
increased.
    Dr. Cochran. I more or less agree with you, certainly the 
reason new nuclear plants are going to be sited at existing 
sites is because it is cheaper to do it there.
    Mr. Bilbray. Well, and it is environmentally, usually, it 
reduces the environmental footprint.
    Dr. Cochran. Sure.
    Mr. Bilbray. Admiral, 20, you know, 1978, I was a 27 year 
old mayor down in, down along the border, and the whole issue 
of the U.S. nuclear industry shifted right out from under our 
feet. Could you explain what has happened with that industry in 
the last 30 years, and is it currently in a good shape?
    Vice Admiral Grossenbacher. Well, there are certainly 
people at the table that can address this more directly than I 
can, but I will tell you what I see from my vantage point, and 
I see a much more mature industry, that has learned from, 
learned how to deal with the complexities and challenges 
associated with its technology, a regulatory regime that has 
developed and matured, and so it operates, you know, very, very 
well. I think last year, and Marilyn Kray can correct me, but I 
think the capacity factor of the nuclear plants in the U.S. was 
91.7 percent. From the point of U.S. safety, any industrial 
technology has hazards and risks associated with it, 
tragically, and we killed more people this year in refining 
sugar in this country than we did in operating nuclear power 
plants for 40 years. So, all risks have to be discussed, I 
think, in context and in a relative manner, but my perspective 
on it is that the nuclear industry is a mature industry that 
operates very well. It needs to be a mature industry. It needs 
to be extremely diligent, given the nature of the technologies.
    And the only other point I will add, if I may, is in, just 
the previous discussion. The other thing to remember about 
comparisons of energy sources is the density. You know, nuclear 
energy provides baseload power, so it is a large, concentrated 
energy source, with hazards and risks associated with it. 
Distributed energy sources have other issues, including the 
complexity, including the scalability, and there is no free 
lunch. If we want large amounts of energy, there are going to 
be costs, risks, benefits associated with them, and we have to 
look at all of them, and do that type of comparison, I think, 
to make the best choices.
    Mr. Bilbray. Thank you, Mr. Chairman.
    Mr. Lipinski. [Presiding] Mr. Bilbray. The Chair now 
recognizes Representative McNerney.

                       Economics of Nuclear Power

    Mr. McNerney. Thank you, Mr. Chairman.
    One of my big concerns about nuclear power is the economics 
of the game. Now, it is very hard to get your hands around a 
good economic estimate for nuclear power, for a lot of reasons. 
One of the reasons, I understand, is that it is easy to build a 
cheap nuclear power plant that has low safety consideration, 
and then, the more safety you add on, the more expensive it 
gets, and so on. But I still don't understand why it is so 
difficult. I mean, there is going to be an initial capital 
cost, there is going to be a fuel cost. There is going to be 
maintenance costs, and there is going to be disposal costs.
    Mr. Asselstine, perhaps you could address that, what the 
difficulty is, and where I could find good information on that 
that is easy to understand.
    Mr. Asselstine. Sure, Congressman. Let me start with the 
existing plants first, and operating costs. I think there, we 
have got a very good handle on that, as one of the previous 
speakers just pointed out. If you look at the existing fleet of 
104 operating plants today in the United States, those plants 
are operating highly reliably, with capacity factors in excess 
of 90 percent, and if you think about the need for refueling 
outages, that means those plants are operating just about as 
efficiently as they possibly can.
    We also know that fuel, operating and maintenance costs, 
waste disposal fees, and taxes add up to about, say $0.025 per 
kilowatt-hour, in that range, which again, is very comparable 
to what we see for large, efficient, coal-fired power plants.
    Mr. McNerney. So, that is your operating costs.
    Mr. Asselstine. Those are operating costs. That is exactly 
right.
    So, then, the real question becomes, as you look at new 
nuclear plants, what is the capital cost of the plant going to 
be----
    Mr. McNerney. Right.
    Mr. Asselstine. How confident are we that the plant will 
actually be built for that cost, and will enter commercial 
operation when it is expected to, and the variables there are 
first, commodity prices? We are seeing significant increases in 
prices for things like steel. There are, in some instances, 
very limited international suppliers for some of the components 
that are necessary for nuclear power plants. A good example is 
very heavy steel forgings, which are necessary for the reactor 
pressure vessels, steam generators, there is only one supplier 
in the world for that, those components today. And they control 
the market, and prices have been moving up as well.
    Second, it has been 20 years since we have built a new 
nuclear power plant in this country. Many of the suppliers that 
supplied the existing plants are no longer available. If you 
went to most of the existing nuclear plants in this country, 
when those plants were built, virtually all of the equipment 
and components in those plants came from the United States. For 
the new nuclear plants that will be built around the world, 
including in the United States, if there are, if plants go 
forward, most of the components and equipment and supplies will 
come from international sources. So----
    Mr. McNerney. What I am basically hearing you saying is 
that the costs, the capital costs can be a determining factor, 
and it is going to be possibly high, and there is a lot of risk 
associated with this, so----
    Mr. Asselstine. Exactly.
    Mr. McNerney.--the lenders are going to want to take their 
part out of that risk.
    Mr. Asselstine. And the same thing is true, quite frankly, 
for large new coal plants, especially clean coal, using clean 
coal technology. You have the same risks and uncertainties. 
Marilyn can probably talk about how the industry and the 
companies are trying to get their arms around what those costs 
will be.
    When we get to the point where companies are signing firm 
orders to purchase a new nuclear power plant, which will be, in 
most instances, probably a few years from now, we will have a 
better fix on exactly what those capital costs will be. The 
financing costs also, then, need to be determined, and for the 
purpose of investors, investors will look at that investment, 
and they will say how safe or how risky is this investment, 
compared to building another type of generating plant within 
this industry, and what is the risk premium that needs to be 
built in for the capital costs.
    I believe that all of those costs can be dealt with, and 
you can end up with costs that are pretty comparable to what 
you would see for coal-fired generation, taking into account 
the financial support that the Congress provided in the Energy 
Policy Act, but we will know with greater definition exactly 
what those costs are, probably, in a couple of years.
    Mr. McNerney. I wanted to talk a little bit about disposal, 
too. I worked on disposal calculations as a graduate student, 
at the New Mexico Waste Isolation Pilot Project. Any idea where 
we are with regard to credibility of geologic disposal? Mr. 
Fri.
    Mr. Fri. The credibility, in terms, the technical 
credibility is, I think, pretty high. I mean, the National 
Academy of Sciences has said that that is ultimately to dispose 
of nuclear waste fuel.
    The actual mechanism by which that is going to happen, and 
the costs incident thereto are still pretty much up in the air. 
Yucca Mountain is an ongoing project, and the number of 
alternatives to storing the spent fuel, perhaps on-site, and I 
don't think good studies have been done of all of the array of 
options that are possible, or their costs.
    Mr. McNerney. All right. Thank you, Mr. Fri.
    Mr. Lipinski. Thank you, Dr. McNerney. Dr. Ehlers is 
recognized for five minutes.

                   Nuclear Waste, Safety and Training

    Mr. Ehlers. Thank you, Mr. Chairman. Thank you for holding 
the hearing on a very important topic. Something most people 
don't realize the crisis we are facing. Everyone is complaining 
about the increase in gasoline prices, but that is going to 
have a direct impact on electricity consumption and production, 
because more and more people will do as I have done, buy a 
hybrid, and very shortly, we will have plug-in hybrids. They 
will be all the rage, because it takes less gasoline, but they 
do take electricity. That is just one example that we are going 
to face increased demand for electricity.
    Well, back when all the fuss started about whether nuclear 
reactors were safe or not, I did my own study on the issue, 
comparing coal to nuclear, and frankly, and as you know, I am 
an environmentalist, I decided they were equally bad for the 
environment, but nuclear had a distinct advantage. The two 
biggest environmental problems, I felt, were the greenhouse gas 
production from the fossil fuel-fired plants, whether coal, 
oil, natural gas, and the biggest problem with the nuclear was 
the nuclear waste.
    To me, it was an easy decision as to which was best, 
because when you are discharging gases in the atmosphere, it is 
awfully hard to get them back, and collect them, and deal with 
the problem. Whereas, with the nuclear waste, it is a 
relatively small solid, liquid, and theoretically, should be 
easier to deal with, if you can get rid of the paranoia in 
society about nuclear waste. And I think there are ways of 
doing that.
    I have also, incidentally, I never talk about disposal of 
nuclear waste. We are kidding ourselves if we use that word. I 
served on a county commission, and we had, it was the Kent 
County Disposal System, which is a landfill, and I proposed 
officially that we should change it to the Kent County Waste 
Storage Facility, because all we are doing is storing it 
underground, and that is what we are talking about doing at 
Yucca Mountain, too. But if the Congress had written the bill, 
that this is going to be retrievable, monitored storage, I 
think we would have had far less difficulty selling it. People 
would still object, but it wouldn't be as bad as it is now.
    But putting the requirements on, say, we have to make it 
safe for 10,000 years is just totally unrealistic, what we can 
scientifically prove, then. So, thank you for letting me vent 
just a little bit, but it seems to me we have a huge amount of 
work ahead of us. You have just heard that from the testimony, 
what we have to do to get construction going again, obtaining 
parts, et cetera, but there is another important aspect, and I 
fought during my first years here, to prevent the killing of 
the program that funded training for nuclear engineers. I lost 
the battle, the funding was killed, and the universities 
dropped the programs, and that whole system has to be started 
up again. We have to develop a whole new fleet of nuclear 
engineers, and I think it is very, very important that we have 
properly trained personnel.
    Although I said that the problem with Three Mile Island was 
that, at that time, there was a surplus of physicists in the 
country. I said the problem was Three Mile Island was being run 
by taxicab drivers, and taxicabs were being driven by 
physicists, which is kind of a backward way to solve a problem.
    So, I think we have to set up good training programs, make 
sure we have an ample supply of nuclear engineers, who can 
design, build, and operate nuclear reactors safely. The safety 
record, I think, is phenomenal, for all but the Soviet Union. 
We have reasons why that happened there, governmental as well 
as training.
    I, Mr. Chairman, all I am saying here is we have to get 
going. We can't just depend on the industry to get started 
itself. The investments required are phenomenal. The security 
that will be provided if we don't step in and provide the 
assurance that things will work, there is not going to be 
enough security there for the industry, for the financiers, to 
put the money in to get it going. So, I think we ought to face 
up to our responsibility here, as well as making sure that 
industry assumes their fair share of the responsibility, and 
that is the only way it is going to happen, but it has to 
happen. We are literally running out of fossil fuels in the 
petroleum and natural gas area, got plenty of coal, but 
frankly, as I said earlier, I would much rather have nuclear 
power than coal-fired plants, in terms of the environment, not 
just the greenhouse gases, but the mercury, and all the other 
factors.
    Pardon? And the nuclear, that is right. So, at any rate, 
that is the end of my sermon, and I hope we can unite on some 
positive action here.
    Thank you.
    Mr. Lipinski. Thank you, Dr. Ehlers. I, we always are very 
much enlightened by your sermons here, so if we just all 
followed, then we would solve a lot of problems.
    But we will now, the Chair will now recognize Mr. Chandler 
for five minutes.

                Low Public Confidence in Nuclear Energy

    Mr. Chandler. Thank you, Mr. Chairman. It seems to me, in 
listening to all of this, and following what I have been 
following over the years, in regard to this issue, that we 
have, as much as anything, a public confidence problem, a 
significant public confidence problem which, of course, impacts 
the willingness of investors to be involved significantly.
    Do you all have any ideas about how the industry can assist 
in building public confidence. The storage issue, of course, 
disposal issue is, I am sure, one that has to be addressed in 
particular in that regard, but could you give me some ideas 
about what could be done to bring the public into a position 
where they feel more confident about moving forward with 
nuclear energy?
    Ms. Kray. Mr. Vice Chairman, I will volunteer a response to 
that. The industry admits that we do not do a good job, and we 
are not boastful, and that comes to our detriment when you look 
at public confidence. I think in the investor community, and 
Mr. Asselstine will correct me if I am wrong, those who explore 
it, I think yield a more positive view.
    Through the Nuclear Energy Institute, we do conduct 
surveys, and for those surveyed around the plants themselves, 
we have a very high support rate for nuclear power. What we do 
see, however, when we survey the more broader population, is 
that there is a misunderstanding, in particular, in the 
environmental area, and most people do not equate nuclear power 
with being carbon-free, with respect to greenhouse gas 
emissions. So, we have taken that on as one of the issues that 
we do need to do.
    Also, there are a number of other organizations. One of our 
more successful one is the Young Generation Nuclear Group, 
which is some of the new students coming out of the 
universities, working into the industry, to help communicate 
that. I would also say that, in addition to the industry, the 
NRC has integrated public interaction very much into the 
licensing process. And even before any of the applications were 
submitted, the NRC, by process, would conduct a number of town 
meetings, so as to educate people about that. So, that is an 
opportunity, at that point, also, for the industry to share the 
safety record, to share the process going forward.
    But--so I do acknowledge that the advertising and self 
promotion is probably something that, as an industry, we have 
not made a priority, but need to, going forward.
    Mr. Chandler. Maybe Mr. Asselstine and possibly, Dr. 
Cochran, too, on this, if you don't mind, if you have any 
ideas.
    Mr. Asselstine. First, I would say, from the perspective of 
somebody in the financial community, I think the industry has 
actually done a fairly effective job over the past couple of 
years, in beginning to lay the groundwork to build support for 
new plant commitments, and obviously, this process is going to 
be ongoing over the next several years. And I start with the 
performance of the existing plants. That has been consistently 
strong over the past decade, and that was a very important 
foundation, because without that, then the prospect of new 
commitments just wouldn't happen. So, continued strong 
performance in the existing plants, from a safety standpoint, 
from a regulatory standpoint, and economically, is a critical 
initial ingredient.
    But what the industry has done fairly effectively, I think, 
over the past couple of years, is begin to talk about the cost, 
potential cost of a new nuclear plant, the approach that they 
will use in making a decision whether to go forward or not, in 
order to really educate the financial community and investors, 
about how that process will unfold, well in advance of when 
they come to investors and say, now, we want to borrow several 
billions of dollars to build this. I think they need to 
continue to follow that approach going forward.
    Dr. Cochran. Well, in my view, the best way to get public 
support is to be truthful and transparent about all the risks 
and benefits of the technology. And looking at the industry's 
potential public relations problems going forward, a concern I 
would have is that if you look at the safety of plants, nuclear 
plants in the United States are safer today than they were two 
decades ago.
    But if you are going forward, most of the plants, new 
plants that are going to be introduced in the world, are going 
into countries that do not have good safety cultures, and when 
one of these plants runs into a problem, as it has in the past, 
the good plants will suffer along with the bad ones, and so, I 
think some attention needs to be given, by the United States 
Government, to the development of an improved safety culture in 
other countries that are getting into this business.
    It is the safety culture at the plant that is the most 
significant, most important factor that affects the overall 
safety. It is the culture at the plant, and we have improved 
the culture at U.S. plants, but we have not addressed that 
problem on a global basis going forward.
    Mr. Chandler. All right. Mr. Fri, do you have something 
quickly to add?
    Mr. Fri. One thing that might be worth looking into is the 
legislative and regulatory structure we have for spent fuel. 
Dr. Ehlers is exactly right, it seems to me--the structure we 
have requires you to prove that this stuff is going to be safe 
for a million years. I have chaired the committee for the 
National Academies that came up with that brilliant suggestion, 
and it is really hard to do, and it is very hard to convince 
the public that you can do it. And so, it might not be a bad 
idea to take another look at that structure.
    Mr. Lipinski. Thank you, Mr. Chandler. The Chair will now 
recognize, for five minutes, Ms. Biggert.

                    Reprocessing Spent Nuclear Fuel

    Ms. Biggert. Thank you, Mr. Chairman. I have to say that, 
maybe I am going to start venting, too. I hope not. But I, when 
I came to Congress almost 10 years ago, the first thing that 
happened, and I--Argonne National Laboratory is in my 
district--was that the President cut the EMT, the Electro-
Metallurgical Program, by $20 million, and I was hysterical. 
This was in the first month that I was here, and I needed to 
get that funding back, because I really do believe in, and have 
long been an advocate in the recycling and reprocessing of 
spent nuclear fuel. Well, I did get the money back, and the 
program continued to conclusion, and I know that there are 
different processes, the PUREX, the UREX, the UREX+, some have 
mixed actinides, and so the--to cut down on the proliferation, 
but I think the three issues, or the two really, that--pure 
plutonium and the, and what to do with the waste, are key 
issues.
    But to me, I think we should be moving much, much quicker 
than we are, and as--when I was the Chairman of this, of the 
Energy Subcommittee in the 108th and the 109th Congress, we 
really worked on GNEP, and trying to develop that. There was 
one sticking point, and that was that we asked the Department 
of Energy to do a comprehensive systems analysis, rather than 
move right to what we thought was commercialization. And there 
was a disconnect there, and I think that that really, it slowed 
down the process, but I think we would be a lot further along 
right now, if we really had turned to the systems analysis, 
rather than the construction of a commercial scale facility.
    And the problem was, then, that the funding was cut until 
that systems analysis, or trying to get that. Of which I was 
not an appropriator, so I was not involved in that, but the 
Appropriations Committee felt the same way.
    So, I would like to know from Admiral Grossman, where are 
we now, as far as moving ahead. You know, Congress, the GAO, 
and the National Academies, I think, would be more accepting of 
the, what you are trying to do to close the fuel cycle, and I 
think this is the most important issue that we are facing is, 
you know, finding alternative energies, and it has to be 
nuclear. I guess I come from a state that 50 percent of our 
electricity is nuclear, so we are used to it, and I really 
wanted to see what goes on, but I just think that we are 
spinning our wheels again. We are just sitting around waiting 
to say we will do it in the future. The costs only go up. The 
lack of nuclear energy is only going to hurt our country. We 
see all over the world all this building of nuclear plants, and 
we are sitting. And reprocessing plants, and--we have one in 
Illinois that was built and then shut down by Jimmy Carter. 
There is at least five others that were built at that time.
    Vice Admiral Grossenbacher. Well, Congresswoman, I take 
your points, and I think they are very good ones. The reasons 
to reprocess are, in my opinion, twofold. One is to get 
additional energy out of the uranium that you dug out of the 
ground. I mean, uranium and the other fissionable natural 
materials, thorium, are limited resources. So, if we look 
ahead, if we say nuclear energy is going to be an important 
element of our energy portfolio for the next 100, 200 years, 
then I think if you put it in that context, then, resource 
utilization, not just the current market price of uranium, is 
an important consideration.
    In addition to that, the technologies involved, in 
reprocessing at industrial scale, are difficult. You take 
highly radioactive material, and the first thing you do is 
dissolve it in hot nitric acid. That being said, resource 
utilization, the other is with increased resource utilization 
comes a waste disposal problem at the end of the cycle that is 
easier to manage. The waste is less toxic, less radioactive for 
a long period of time, so those are really the goals of 
reprocessing and then recycling. And GNEP, of course, has 
proposed a separation of used fuel into its components, and 
burning the particularly difficult ones, the long lasting, 
highly radioactive ones, in a fast reactor kind of technology.
    The systems analysis that you talk about to support that is 
ongoing. It is, I think, frankly, limited by the number of 
uncertainties in what does it look like at a commercial scale. 
What are the economics going to be, so to move forward, what we 
have to do is both the research and development, and involve 
the industry along the way.
    Ms. Biggert. If I might, though, if we are going to have to 
deal with the waste, if we put what, the waste that we have 
now, that has already accumulated, we would actually fill Yucca 
Mountain.
    If we were to, be able to do the reprocessing, and if we 
would be able to burn and re-burn that waste, we could have a 
facility that would last for over a century, and I think we 
just have to make that, you know, we can go ahead and build 
these plants, and have more waste, but at some point, we are 
going to have to decide when we can't use Yucca Mountain.
    Vice Admiral Grossenbacher. Yes, ma'am. Those are the 
gains, that we can reduce the need for a geological repository, 
reduce the waste burden, and the costs of the development of 
the industrial scale reprocessing technology, the resolution of 
the uncertainties. The principal uncertainty is you know, we 
know, at a laboratory scale, we can do the kinds of separations 
we want. We can parse the fuel. Can you do that at an 
industrial scale, because it really does change?
    And then, the other uncertainty is can you make fuel that 
you want to burn the particularly, what I will call the bad 
actors, can you make the fuel, and can you recycle it 
efficiently? And there are just a lot of, you know, technology 
unknowns in that, but the only way to resolve them is to do the 
research and development, involve the industrial components at 
the right pace, at the right level, because this is not just 
the business of laboratory scientists. It is the business of 
industrial operators.
    And then we will know. Then we will know whether or not we 
want to do it.
    Chairman Gordon. Thank you, Admiral, and thank you, Ms. 
Biggert. I am having to deal with an issue collateral to this. 
I am sorry to be coming and going. Mr. Baird is recognized both 
to question and to chair.

                     The Role of Federal Subsidies

    Mr. Baird. [Presiding] I thank the Chairman. I will move to 
the chair, and ask a couple of questions.
    I appreciate the testimony of the witnesses, and very much 
in line with some of the points made by Mr. Ehlers, and 
however, I should also say that I come from a state, the State 
of Washington. I am down-river from the Hanford Nuclear 
Reservation, which is not clean by a darn sight. Obviously, it 
was not a nuclear power issue initially, but nevertheless, 
there is a substantial nuclear waste issue today. And we are 
also from the state that had the WPPSS, the Washington Public 
Power Supply System debacle, the largest bond default, I think, 
in the history of the country up to that point.
    And it is not, just, seems to be, I have two questions. 
One, can somebody give us a handle of the total net federal 
subsidies, thus far, that have gone into nuclear energy, and 
that would include development, design, indemnification, et 
cetera, et cetera.
    And then, the second question is, what can we do if we 
spent it on not coal, not nuclear, but something else, and 
take, for example, more fuel efficient heat sources, et cetera, 
et cetera. What are the returns on investment, and the relative 
risks and costs of those, more efficient heat pumps, in-ground 
heat pumps, in line with Mr. Bilbray's question, don't require 
any new generation, or any new generation or transmission 
capacity.
    So, two questions. What about subsidies, and what about 
alternatives? And the final one would be, if any of you want to 
volunteer whether or not you have asked the Administration to 
increase funding to clean up Hanford. We would certainly 
welcome that, if you are asking for new money for new power 
plants, to clean up your mess beforehand would be great.
    So, anybody want to take any three of those? Dr. Cochran.
    Dr. Cochran. I think it is difficult getting a handle on 
the total federal subsidies to nuclear power in the United 
States. I have seen numbers on the order of $150 billion, which 
probably includes direct and indirect subsidies.
    Mr. Baird. A total over the lifespan of the industry?
    Dr. Cochran. Total, yes. I mean, you know, the industry was 
built on the back of the submarine program--the naval nuclear 
propulsion program. It had enormous subsidies in its early 
career. We spent tens of billions on the fast breeder reactor 
and other nuclear technologies that didn't come to fruition.
    It is a mature industry now. It is a 50-year-old industry 
in the United States, and the subsidies that are being provided 
today are not going to change the underlying economics between 
fossil fuels and nuclear baseload energy generation.
    Mr. Baird. And yet----
    Dr. Cochran. They are basically subsidies to build a few 
new nuclear plants, and the only way you can change the really 
underlying economic differential is to internalize the true 
cost to society of emitting carbon. Regarding federal 
subsidies, I would look to where the Wall Street money is 
going, in terms of these energy technologies, where is the high 
risk money going out in the Palo Alto area, and it is going 
towards solar, new solar technologies. And a number of other 
renewable energy areas.
    Mr. Baird. Mr. Asselstine.
    Mr. Asselstine. I would agree with Tom. I think it is very 
difficult to quantify past support.
    Mr. Baird. Some costs anyway----
    Mr. Asselstine. That is right. But it is much easier to 
look at the financial support that is now being provided for 
the next generation of plants, and if you look at the Energy 
Policy Act, you can work through the numbers fairly easily.
    There is a production tax credit of $0.018 per kilowatt-
hour for up to 6,000 megawatts of new generation, very similar 
to the production tax credit that is provided for renewable 
energy resources, as well. So, if you took that 6,000 megawatts 
over eight years, with the cap of $125 million per 1,000 
megawatts per year for nuclear, that is $6 billion over the 
eight-year time period.
    Mr. Baird. But is that not somewhat specious, because there 
is not waste disposal problems of the same magnitude? I mean, 
so you have got a production tax credit, which is a direct 
subsidy, but what about waste disposal issues, transportation--
--
    Mr. Asselstine. Well, waste disposal, the Nuclear Waste 
Policy Act did impose a mandatory charge for utilities for 
nuclear generation that has been in effect since the mid-1980s, 
where the utilities have paid one mill per kilowatt-hour for 
every kilowatt-hour of electricity generated by nuclear power 
plants in the country. That money has gone to the Treasury to 
fund the waste disposal program, and if anything, what we have 
seen over that time period is the Federal Government failed to 
meet its obligation to take the waste, and if anything, courts 
have now been returning some of that money, or compensating 
utilities for their ongoing storage costs.
    So, I would argue, on the waste side, the utilities were 
pay-as-you-go from the mid-1980s, and continue that way today, 
and the assumption is, if you have new nuclear power plants 
going forward, those plants will also be assessed for their 
waste disposal costs down the road.
    You can also look at the stand-by risk insurance, which 
provides protection against licensing and litigation delays for 
six units, if that risk insurance is actually needed and used, 
that would be about $2 billion, and the Congress has 
appropriated about $18.5 billion in funding for loan guarantees 
for the nuclear plants.
    Add all of those up, it is about $26 billion, and as the 
Chairman pointed out in his opening comments, we now have 
applications or statements from the utilities that they intend 
to apply for licenses for 25 to 30 new units. So, the tradeoff 
would be about $26 billion in federal support to help ensure 
that we might get 25 to 30 new nuclear power plants over, say, 
the next 20 years or so. Those 25 to 30 new plants would mean 
that nuclear, taking into account the Energy Information 
Agency's projection about growth in electricity demand, would 
keep nuclear at about 20 percent of our generating mix going 
forward.
    My own personal view is that is a reasonable, the Congress 
made a reasonable decision to provide that support to get about 
25 to 30 new plants, to keep nuclear at 20 percent of our 
generating mix. And why is that beneficial? It makes the 
challenges of dealing with carbon, with the coal-fired 
generation, easier to deal with. It makes dealing with price 
volatility for natural gas somewhat easier to deal with, and it 
keeps nuclear in the balance of its current contributions to 
our generating mix.
    My own view is that is a reasonable tradeoff, and 
reasonable value for the federal support going forward.
    Mr. Baird. Appreciate it. I would like to let others 
testify, or speak, but I have exceeded my own time, and I try 
not to abuse that as the Chair.
    No one offered that they want to increase funding for 
clean-up, and we have answered, but we would sure welcome that 
at some point.
    Dr. Gingrey is recognized.

                    Yucca Mountain and Waste Storage

    Mr. Gingrey. Mr. Chairman, thank you. Dr. Cochran, in your 
testimony, you recommended that Congress should require that 
the Department of Energy resume a search for a second site to 
complement Yucca Mountain as a nuclear waste repository.
    You went on and criticized the Department of Energy, and I 
think you said corrupting the site selection for Yucca 
Mountain. Since the idea of utilizing Yucca Mountain has seen 
delay after delay, due in, I think, in large part because of 
one Senate Majority Leader, it has hampered further usage of 
nuclear power because of the question of what do we do with the 
waste? So, therefore, until we finally open Yucca Mountain as 
the national repository for nuclear waste, I think it will 
inevitably prevent the Federal Government from adequately 
finding a secondary source.
    That being said, if you feel that the site selection of, on 
Yucca Mountain has been corrupted, what do you believe will 
occur if any secondary site is selected, and additionally, 
where do you recommend we look for a secondary location for a 
nuclear waste repository?
    Dr. Cochran. Very interesting questions.
    Mr. Gingrey. Well, you have had some very interesting 
comments.
    Dr. Cochran. I don't know that I have the answers, but let 
me make the following observations. Beginning in the Carter 
Administration, there was a genuine, bipartisan effort to solve 
the waste problem, and set up an interagency review to address 
this issue. And they came up with, and Congress passed, what 
looked like a very good proposal. One agency, the Department of 
Energy, was tasked with going out and systematically finding 
the best site. A second agency, the Environmental Protection 
Agency, was tasked with developing criteria for assessing 
whether that site should be licensed. And a third agency, the 
Nuclear Regulatory Commission, was tasked with making the 
judgment as to whether the site would meet those criteria.
    Now, in the decades since, that has gotten all botched. I 
mean, the site selection process was botched, and knowing how 
the Federal Government works, they would probably botch it 
again. The development of the criteria was totally corrupted. 
EPA is not an independent agency, making these decisions. 
Before decisions come out of EPA, they go into secret meetings 
at OMB, where EPA and NRC and OMB and Justice all get together 
and decide what the Administration's position is. So, EPA 
really isn't independent of DOE. And here we are, 20 years 
later, and we have no final EPA criteria to begin with.
    Mr. Gingrey. So, Dr. Cochran, excuse me for interrupting, 
because I have a shortage of time here, but some of us on this 
side feel that maybe the process was corrupted politically more 
than it was by the Administration or----
    Dr. Cochran. That also.
    Mr. Gingrey. I want to address a question to Mr. Fri. I 
don't disagree with Dr. Cochran's concerns about the nuclear 
proliferation potential of spent fuel, and obviously, when you 
talk to the Germans, you know, that is always their big 
concern, and you can't ignore it, but where are we in regard to 
mitigating those concerns, in regard to reprocessing and, 
indeed, getting some of this spent fuel that is, in these 
storage pools at the 101 current reactors in our country, into 
a final depository?
    If you could address that for the Committee, I think it 
would maybe allay some concerns that exist over this nuclear 
proliferation issue, because I firmly believe that the nuclear 
power, we need to go forward with it, but I don't--I am taking 
too much time. You go ahead and respond to that.
    Mr. Fri. Let me respond to it this way, Congressman. First 
of all, it--we are probably on the order of decades away from 
having a reprocessing and recycling operation on a commercial 
scale to begin to deal with the nuclear waste in the form that 
has been proposed, for example, by the energy, in which you 
separate plutonium, you burn up the actinides, and so forth, a 
lot of which can go into Yucca Mountain.
    But behind the question is, in the intervening time, a 
proliferation danger--to worry about. And basically, in terms 
of spent fuel, there are a lot of proliferation issues, but one 
in spent fuel, as I understand it, is not very high, because 
spent fuel, sitting at a reactor site, or in an interim storage 
facility, is not separated plutonium. It is very hot, and it is 
just not a really good source of material for a weapon.
    So, I don't think, and the Nuclear Regulatory Commission 
has been storing this stuff, first in a pool, and then, in a 
dry cask, over a period of decades, and it is perfectly safe. 
So, I don't think that there is the large proliferation risk in 
taking our time to get the job done right on recycling and 
reprocessing.
    Mr. Baird. Mr. Melancon was next, but he is absent right 
now. Ms. Richardson. Mr. Smith is next.

                    Making Nuclear Cost-Competitive

    Mr. Smith. Thank you, Mr. Chairman and witnesses.
    Dr. Cochran, I appreciate your testimony. Would you 
generally give a thumbs-up or thumbs-down to nuclear power?
    Dr. Cochran. Excuse me. Nuclear power is in the mix. It is 
a mature industry, and when it can compete with the other 
technologies on a level playing field, it ought to be, you 
know, we should permit it to compete. Setting aside the 
separate issue of whether you should reprocess the fuel. I 
think that is a terrible mistake.
    But the problem today is, new nuclear plants are not 
economical. These guys are coming up to the Hill to get 
subsidies for a few new nuclear plants. It won't change the 
underlying economic problem they have. You need to cap carbon 
if you want to change the underlying economics. It is also the 
right thing to do, and then, if nuclear can compete, let it 
compete, but it is going to have to compete with a lot of new 
technologies that are going to be coming down the line, and it 
is going to be a difficult road for them.
    Mr. Smith. So, you mention capping carbon. Is that through 
cap and trade policies?
    Dr. Cochran. Yes.
    Mr. Smith. And what do you think the impact would be to 
electricity rate payers, as an example, on cap and trade?
    Dr. Cochran. I think it would increase the cost of fossil 
fuels by, initially, a few cents (), and then, further out, 
more, but I think that could be offset by a higher investment 
in improved energy efficiency in the near-term, particularly, 
which has a benefit in lowering the cost of electricity.
    And so, the net effect, over the long-term, I don't think 
would effect the economy--I don't think it would, should be 
significant.
    Mr. Smith. Okay. Thank you.

                       Domestic Uranium Supplies

    Ms. Kray, if you wouldn't mind responding, how much of our 
current electricity use in the United States could be generated 
by nuclear power, using only domestic uranium?
    Ms. Kray. Only domestic uranium? I might have to actually 
defer that to my USEC friend here.
    Mr. Van Namen. Given the rise in the prices that we have 
seen over the last several years, I think you are seeing 
resurgence in siting uranium mines, and licensing new uranium 
mines. I don't think, again, you would ever have a substantial 
portion funded, or fueled by domestic mines. I think you would 
still look to partners such as Canada and Australia to supply 
much of the uranium, but our ability to do, maybe in 20, 15 to 
20 percent, is very reasonable.
    Mr. Smith. Okay. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Gordon. Thank you. Mr. Rohrabacher is recognized 
for five minutes.
    Mr. Rohrabacher. Thank you very much.
    Chairman Gordon. Excuse me, Mr. Rohrabacher. I didn't--is 
Mr. Matheson--if you are teed up, and Mr. Matheson----
    Mr. Matheson. I am teed up.
    Chairman Gordon.--is recognized for five minutes. And then, 
we will follow by Mr. Rohrabacher.

                         On-site Waste Storage

    Mr. Matheson. Thanks, Mr. Chairman. I had a few questions I 
wanted to ask the panel, relative to the waste issues. I think 
the waste issue really is one that we need to move to some 
point of resolution if nuclear power is going to have a better 
opportunity.
    During the debate in Congress over the last few years, on 
moving waste to Yucca Mountain, a number of Members of Congress 
would get up during the debate, and they would say, gee, I have 
got all these nuclear power plants right in my backyard, and I 
want to give this waste away. We have got millions of people 
living next door to this.
    Is it not true that as long as there is an operating power 
plant, there will be waste on-site, even if you had an off-site 
storage disposal site someplace else, and there would be a 
reasonable amount of waste there, that has to stay there for a 
few years before it can be moved?
    Is that a fair statement?
    Ms. Kray. I can answer that, Mr. Chairman.
    By design, once the reactor fuel is removed from the core 
itself, it is placed into wet storage, and that is to 
accommodate the heat load that is still present then. But 
ideally, the original design of the plants was that once that 
time had expired, that it would be moved to dry cask storage, 
not for on-site storage, but rather, to the ultimate 
repository. So, if the repository were available, there would 
be a very short period of time while the fuel is in wet 
storage.
    But I would also add that, while it was not the plan, 
having the dry cask storage on these facilities does not pose 
an undue risk. It is just outside of what the original mission 
was.
    Mr. Matheson. I am glad to hear that, because that leads to 
my next line of questioning. But I wanted to, first of all, 
address what I think a number of Members of Congress have 
inappropriately assumed: that they wouldn't have nuclear waste 
in their backyard with an operating power plant. They will. 
They will, whether Yucca Mountain happens or not. It may not be 
the same amount or volume, but it will be there.
    Secondly, you mentioned that the benefit of going to dry 
cask storage, back in 1982, I think, when Congress passed the 
Nuclear Waste Policy Act, I don't think dry cask storage was 
necessarily on the table at that point. That is where 
technology has taken us now.
    What do people think about the opportunity, in terms of 
trying to resolve this complicated issue, of looking at interim 
on-site storage, where we put the waste in dry cask storage, we 
leave it on-site, the government takes title to the waste. That 
may address some of the concerns of the power plant owners.
    And from a cost basis, and from an effort at trying to 
bring some medium-term resolution to this issue, it is not the 
million year resolution, but maybe it is a 100-year resolution. 
How does the panel react to that type of proposal, to try to 
move beyond the dynamic we are in now, in terms of waste 
storage? I would ask anyone on the panel.
    Ms. Kray. Yeah, and I would offer right now, the industry, 
as well as with the Department of Energy, is considering a 
number of alternatives. Included, I believe what you are 
suggesting, is interim storage, not necessarily at the site at 
which it was generated, but perhaps, multiple but more 
centralized dry cask storage facilities.
    Also, revisiting the idea of closing the fuel cycle, and I 
think, contrary to Dr. Cochran, what the intent of it is, is to 
develop the process by which you would not increase 
proliferation risks, so this interim storage would, therefore, 
avail the fuel for future reprocessing, just as was said 
earlier, to extract from it the energy that still remains in 
it.
    So, I think all of those, whether it be the interim on-site 
storage, the more centralized dry cask storage, the 
reprocessing, but ultimately, there will be a byproduct that is 
needed for Yucca Mountain, but in much lower volume, and also, 
a much, significantly lower heat load.
    Mr. Matheson. Well, this line of questioning is motivated, 
and I want to hear from some other folks on the panel, but this 
line of questioning is motivated, I have introduced legislation 
that calls for interim on-site storage, and the Federal 
Government taking title to the waste. And I think it represents 
at least some level of looking at a practical step forward on 
this issue, as opposed to where we have been with substantial 
amounts of money being spent on Yucca, questions about the 
scientific analysis. Time is dragging on. We haven't met 
deadlines. We have spent a lot of money, and I think that there 
may very well be both an economic argument and a practical 
argument, in terms of making progress on this issue, as a 
medium-term solution, that we look at interim, on-site storage, 
with the Federal Government taking title to the dry casks. What 
other people have reactions to that?
    Mr. Van Namen. Congressman, what you are doing is asking 
what I think is a very good question, and that is, let us ask 
ourselves what is the safest and smartest thing to do with this 
stuff for the next 100 years, while we figure out what the 
safest and smartest thing is in the very long-term.
    Mr. Asselstine. I would just add from my perspective within 
the financial community, I think from investors, particularly 
as I have talked to them about potential commitments for new 
nuclear power plants, the waste issue virtually always comes 
up.
    The NRC has always been able to determine that on-site 
storage or extended dry cask storage does not pose a safety 
hazard or a safety risk. There is a cost associated with it 
that would need to be dealt with, but I suspect that from an 
investor perspective, and probably from the perspective of the 
companies themselves within the industry, some movement or 
progress toward an extended storage solution will be necessary 
before you see large scale new plant commitments, because 
people will want to know what is going to be done with the 
waste. That is also probably true from the standpoint of state 
rate regulators, economic regulators, as well. They are 
probably just as upset about the delays and the problems in 
waste disposal as the utilities are, as well.
    So, if Yucca Mountain is not going to move forward, some 
alternative to provide an extended storage solution for the 
waste, probably is necessary, before we see substantial new 
plant commitment.
    Mr. Matheson. Thanks, Mr. Chairman. I would just offer 
again, I think it may be a more cost effective method, too, and 
if I can just add one point. A lot of people are still 
questioning the transportation risk of moving all this waste to 
Yucca Mountain. The Interim On-site Storage Bill would address 
that problem as well.
    Mr. Chairman, I will yield back.
    Chairman Gordon. Thank you, Mr. Matheson. I think that we 
could have a very interesting hearing just on this topic, and 
thanks for raising it. And the patient Mr. Rohrabacher is now 
recognized for five minutes.

                  High Temperature Gas-Cooled Reactors

    Mr. Rohrabacher. Thank you very much, Mr. Chairman. Let me 
just note, and this is a side issue, but just again, Mr. 
Cochran or Dr. Cochran, global warming is not the basis for 
making decisions like this. Even in your testimony, it has gone 
from climate change to global warming, and the fact that it has 
been--in fact it is getting colder for these last seven years 
has now taken the global warming people, so now, they are 
saying it is global climate change, and that is so, that is 
such a mishmash, I think that reasonable people have got to 
frankly look at other issues, rather than climate change for 
such incredible decisions as we are making today.
    However, with that said, I think you made some very good 
points about nuclear energy that need to be addressed, other 
than whether it is going to change the climate of the planet or 
not. I asked, I made sure my staff asked the panel beforehand, 
and gave them some indication that I would be asking them about 
the High Temperature Gas-Cooled Reactor. Have any of you been 
to Japan, and seen the High Temperature Gas-Cooled Reactor that 
they have in operation there? I went to Japan a month ago, and 
went to that reactor.
    This reactor, from what I understand, after questioning the 
scientists there, as well as questioned various scientists, is 
lower in construction costs, lower in operation costs, has no 
risk of melt-down, has no risk of radioactive discharge, has no 
proliferation danger, and the, and a major reduction in 
leftover nuclear waste. Now, what I want to know, with--first 
of all, that is what I understand. I am not a scientist, you 
know, there are protons, neutrons, electrons, and morons in 
this universe. And I would have to say that I am closer to the 
latter than the former.
    Maybe, am I wrong in seeing that there is a great potential 
in the High Temperature Gas-Cooled Reactor that is just being 
ignored? Go right ahead.
    Ms. Kray. I can offer a perspective on that. The High 
Temperature Gas-Cooled Reactor design, sometimes referred to as 
Generation IV, they offer a promising option in the future, 
primarily because of the potential to divert that high process 
heat, whether it be for enhanced oil recovery in tar sands, or 
even hydrogen production.
    However, I would differ from your perspective when you say, 
about the costs. There are a number of issues right now, as far 
as implementing them in the U.S., where they are significantly 
behind what is referred to as the Generation III plus, looking 
at what we want to implement next. It is, primarily, it is the 
licensing piece of it. They are not yet design certified by the 
NRC or the other----
    Mr. Rohrabacher. So, in other words, it is the bureaucratic 
costs, not the technology costs.
    Ms. Kray. Not yet. I would also add the size of them.
    Mr. Rohrabacher. Yes.
    Ms. Kray. And there is, in order for them to be 
commercially deployed, there is the licensing aspect of it, and 
along with that, some safety implications, the NRC has 
indicated the need for advanced fuel performance and 
characterization, as well as the selection of materials, again, 
because they operate at such a high temperature, which is to 
their benefit, but also, a challenge.
    So, with the cost, I would say any estimates of 
implementing them in the U.S. right now would be aspirational 
at best, and that is because of the lack of the maturity of 
them at this time. Intuitively, I would think that they will be 
more costly than the light water reactors, only because of 
their per-kilowatt output, or their size, and they don't have 
the economies of scale.
    Mr. Rohrabacher. Well, actually, you can, if you have got 
smaller reactors, you can actually place them in different 
places, maybe closer to the consumers, perhaps.
    Ms. Kray. We have looked at that, I know, with the Pebble 
Bed Modular Reactor, and in the U.S. grid system, it still 
suggests that from an economic perspective, you would actually 
want to bundle at least four or six of those together. However, 
in----
    Mr. Rohrabacher. Which you could do.
    Ms. Kray. You could do, but then, again, so that 
deployment, or that distributed generation, which that is, 
doesn't necessarily win so much over here. But again, there is 
a strong future and outlook for those.
    Mr. Rohrabacher. Why is it, I guess what you are telling 
me, of all over, what we have got now, this water-based 
reactors that we have now, this is 56-year-old technology. 
These were things somebody designed 60 years ago, that now, 
there have been incremental improvements on, but it is the 
fundamental concept of, frankly, people who were raised and 
educated before World War II, and what I don't understand is, 
that why there doesn't seem to be, I mean, listen, I went over 
and talked to those engineers. The Japanese engineers were not 
just Japanese engineers that had made their life on the High 
Temperature Gas-Cooled Reactor. These were engineers that had a 
long history, a long history of their involvement in the 
nuclear energy field, all of them suggested that just the 
technology of it had all of these great benefits that I just 
suggested, especially the fact that there is no plutonium left 
over, which as I say, Dr. Cochran's concern for that is very 
well--I disagree with him on global warming, but I totally 
agree with him on some of the points he raised that have to be 
concerns, like proliferation and the leftover waste material, 
as well as potential accidents.
    Were they lying to me when they said that there is no 
possibility of a melt-down or a radioactive discharge, as 
compared to light water reactors?
    Ms. Kray. There is definitely a benefit with the High 
Temperature Gas-Cooled Reactors, because the fuel type is 
ceramic in nature, it can withstand higher temperature, and 
there is less likely to melt. However, I would say as far as 
the technology looking to be deployed next, that is being 
designed as we speak, so it is not archaic technology, but 
rather, we see it from an operational perspective, as the 
optimum balance between the innovation, using the path of 
approach to technology, but at the same time, the wealth of 
experience that we do have on light water reactors. Because 
again, as we go through, while the financial issues have 
dominated a lot of the discussions, at the end of the day, for 
us investing and operating, it is the safety aspect of it.
    Mr. Rohrabacher. Well, the safety operation, you are trying 
to tell me that light water reactors are going to be, just a 
safety comparison to what this High Temperature Gas-Cooled 
Reactor offers, that there is a better safety potential for the 
water reactor, with all of the leftover plutonium?
    Ms. Kray. I think it is unknown at this point--well, I 
don't think that the plutonium issue is as much of a 
differentiator.
    Mr. Rohrabacher. Okay. Okay, what about the melt-down 
issue? What about the discharge of radioactivity issue? I mean, 
these Japanese scientists are, were very specific with me about 
this. They had all worked on the light water reactors before, 
and said there is just no comparison as to the actual safety of 
these two operations.
    Ms. Kray. I would, again, argue that there is a potential, 
and there are safety benefits associated with the High 
Temperature Gas Reactors, but at the same time, there are 
unknowns, again, in the area of fuel, and also, with the 
materials, which have implications, obviously, to the safety.
    But, so I think that the High Temperature Gas Reactors need 
to be on the horizon, but I think the bridging technology, to 
get from where we are to that is to implement the next 
evolution, not revolution, of technology, to sustain the 
infrastructure, to allow us to implement the Gen IV reactors.
    Mr. Rohrabacher. Well, it sounds like----
    Chairman Gordon. The gentleman's time has expired, but 
Admiral, it looks like you--are you trying to get into this? Do 
you want to say something quickly?
    Vice Admiral Grossenbacher. Yes, sir, I just wanted to add, 
and you know, we are, certainly my laboratory believes that, 
yes, High Temperature Gas Reactor technology has a lot of 
potential. I don't think the Japanese engineers lied to you. I 
think they implied a degree of maturity in the technology that 
is not there yet. It holds a lot of promise. The issue is, you 
got to finish developing the technology. You got to show that 
you can make this fuel, and make it reliably, and billions and 
billions of times. The other is the market for these machines, 
these reactors. They, big, light water reactors are very good 
at generating electricity, and they are very inexpensive in the 
U.S. context. These reactors, the High Temperature Gas 
Reactors, are really focused in a different market, which is 
the high temperature process heat applications, including how 
you make hydrogen.
    In point of fact, a market that doesn't exist yet. So, you 
know, we are committed, and the Department of Energy is 
committed to developing that technology, and resolving those 
issues, and this is what we call reactor after next technology. 
It is not as mature, I guess.
    Chairman Gordon. Thank you. We will have a second round. 
And Mr. Rohrabacher, for your information, Mr. Bilbray had 
asked unanimous consent that your self-commission be concurred, 
but I would not consent to that, so--but I will recognize him 
for a second round.

                    The Future of Nuclear Technology

    Mr. Bilbray. Always willing to support my fellow surfer 
down there, whatever his motion is.
    Admiral, you know, do you believe that there is going to be 
a resurgence of the nuclear use and technology in the world?
    Vice Admiral Grossenbacher. Yes, sir, I do, and if I can 
just make one point. When we discuss other choices for energy, 
you have to consider the density of the source, and if you are 
providing energy for a large, industrial activity over a large 
population center, certainly, we want to do everything we can 
with efficiency, because the cleanest megawatt is the one that 
is never used. We certainly want to do everything we can with 
renewables and distributed sources, but as I mentioned in my 
opening remarks, we have chosen a very energy dense path. 
Today, we satisfy the high concentration needs with hydro, with 
fossil fuel, and nuclear, and there are challenges associated 
with all those, all three, when I add up the pluses and 
minuses, I think there is an important future for nuclear 
energy.
    Mr. Bilbray. Do you agree that it is important, and in 
fact, it is almost echoing what Dr. Cochran said about the fact 
that other countries getting into nuke without the kind of 
oversight we have in this country, do you believe it is not 
only essential for us as Americans to be involved in this, but 
also, in the issue of being involved in what technology and how 
this technology is being used around the world?
    Vice Admiral Grossenbacher. Yes, I do. We need to be 
leaders in those processes.
    Dr. Cochran. I will speak to that. I agree with that 
conclusion. However, our leadership is misdirected towards 
closing the fuel cycle, and developing a technology that simply 
has been demonstrated to be unreliable, and far more costly 
than even the light water reactors.
    Mr. Bilbray. Well, I understand that, Dr. Cochran. Admiral, 
there was discussion about the Federal Government's involvement 
in this industry. In the last 20 years, who has been the major 
purchaser of reactors within the United States?
    Vice Admiral Grossenbacher. In the last 20 years? No one.
    Mr. Bilbray. Except the United States Navy, right?
    Vice Admiral Grossenbacher. Yes, sir.
    Mr. Bilbray. Okay. I just want to say that while we have 
sort of pointed fingers over at industry on one side, we have 
been the major consumer of reactors, as the United States 
Government, and then, we wonder why is the Federal Government 
getting involved in this issue, when we have been the biggest 
consumer, the consumer for domestic sources.
    That being said, is, when we--you know, and one of the 
things, I guess, that we need to point out, that I think there 
is sort of a, this concentration of energy being needed to be 
sited at a certain location, with the zero emission potential, 
is not just an issue for electricity. Hydrogen production, if 
we are ever going to go there, either has to depend on using 
natural gas, which is, in my opinion, it is going to be an 
essential transition fuel for global sources, or we are going 
to need to go to some way we can concentrate the energy for 
hydrogen and, for those of us in California, desalinization, 
which we are already seeing.
    I don't know what other technology not only provides that 
option, but I think the one bum rap that I keep hearing is that 
when you look at the life cycle, the true costs, not the 
regulatory or legal costs, but the true costs, hydro where you 
can do it, wind generation where God has put it, and then 
nuclear. Overall, you compare that to the other costs life 
cycle, they, I don't think this is one of those issues where we 
have got to choose between the economy and the environment.
    But my concern is this. We need to start shutting down 
major emitters of greenhouse gases now. We can't wait 20 years, 
30 years. How do we shut down coal plants across this country 
without going to some kind of technology that is able to 
concentrate it down the line? So, let me just say this. We were 
looking at the cost.
    Ms. Kray, what percent, you know, how much effect does 
government regulation and litigation and tort exposure have to 
do with the overall costs, and I would only, and then, I would 
turn around and say, Dr. Cochran, one of my concerns is my 
state has outlawed one of the options that has been pointed out 
by the UN Council on Climate Change, has outlawed that 
technology. At the same time in California, we are talking 
about taking a lead on.

                       Regulation and Investment

    So, let us talk about the regulatory, and I guess let me go 
back and say from the investment point of view, is it the 
regulatory and the tort issues that are the dark clouds on the 
horizon when you are talking to investors?
    Ms. Kray. And I, so the NuStart consortium was formed to 
address that. The, I mean, you can use the word--and recognize 
the failure of that investment process. So, that is what is on 
the minds of investors going forward.
    And part of the changes in the licensing process that the 
NRC invoked was to address that, and to essentially pull 
forward all of that litigation risk before the tremendous 
capital investments are made, and that was not the case when 
the current fleet was built, where, in effect, you were pouring 
in your capital investment at the same time you were at the 
mercy of the regulatory process. So, that huge uncertainty 
still is in the minds of investors, whether it is from the 
utilities side, or from the financial community itself.
    So, our belief is that with the revised Part 52 process, 
that that will improve that, but nevertheless, our objective is 
to demonstrate that by getting a license in hand, again, prior 
to making those huge investments, and to avoid the situation 
you are referring to.
    Mr. Asselstine. You are exactly right, Congressman. That 
concern is foremost in the minds of the investment community. 
We have a new process. I personally believe that process will 
work effectively. If you have essentially completed designs 
that the NRC has reviewed and signed off on at the outset, if 
you have an opportunity to go through, literally, all of the 
environmental and safety issues around the plant before you 
start construction, then the risk of a problem or a surprise 
down the road, particularly after the capital investment in the 
plant has been made, ought to be relatively low.
    The problem is that we have got the new process, and it 
hasn't been tested, and until we get several plants through 
that process, and it performs as everyone intends, the 
financial community will look at that, and say there is a risk 
and an uncertainty here. What sets nuclear apart from every 
other alternative form of generation, is the requirement to go 
through the NRC licensing process. And so, that is the 
difference, and until we have a track record of successful 
performance from the new system, that uncertainty will be 
there.
    Mr. Bilbray. Now, I served on two environmental regulatory 
agencies, some of the best in the world, I think we would 
agree, and I have been proud to serve on those groups, 
California Coastal Commission and the Air Resources Board for 
California.
    But getting back to the Admiral's statement about, we are 
talking about a concentration of energy generation, what we 
have seen here is also a concentration of capital and deep 
pockets that attracts the type of vultures who swoop down and 
are looking to take their pound of flesh, and becomes a huge 
target to be able to generate great revenue through regulatory 
obstructionism and legal proceedings. And we need to address 
that thing, Mr. Chairman. I guess what it really comes down to, 
is this attitude of just back off and let the system work, is 
the fact that we basically have, you know, tied this industry 
down, and then, based on the fact that they can't move, and 
then say why haven't they done more.
    And I think there is a real challenge, that we have got to 
be more proactive on this, and as I stated before, don't think 
the other industries right now, or the fair-haired groups, 
aren't going to have litigation, and come to San Diego County, 
and take a look at the litigation against the links that are 
going to solar, wind, and geothermal. It is a huge uproar in a 
community that is very environmentally sensitive, so all of 
these things, in the long run, you are going to have a lot of 
baggage, and we need to be proactive, rather than reactive on 
it.
    Thank you very much, Mr. Chairman.
    Chairman Gordon. Thank you, Mr. Bilbray, and Mr. 
Rohrabacher is recognized for our final question.

              More on High Temperature Gas-Cooled Reactors

    Mr. Rohrabacher. Well, thank you very much. You know, I 
have been listening very closely here, and I just, it seems to 
me that what we have got here in the United States is a 
corporate mentality that is only interested in trying to make 
more money off the current status quo, and only a very short-
term vision, and any vision that they have for the future is 
based, it is not being based on something new being in the 
picture. It is all based on status quo technology, and again, 
nuclear energy isn't all that new. We are talking about 
something, the fundamentals that were set down by what we are 
talking about, something that was designed by people who were 
educated before World War II. And it is basically 50-year-old 
technology that has been incrementally improved.
    I think the idea of having, focusing our research on 
reprocessing plants that can help solve part of the problem is 
a good idea, but I would like to know, if we can't rely on 
corporate America to come, for innovations, on the other hand, 
rely on government policy, how much money has been going into 
research and development, federal dollars, in terms of 
developing this High Temperature Gas-Cooled Reactor concept, as 
compared to just incrementally improving this, the light water 
reactor concept?
    Vice Admiral Grossenbacher. I can speak to, from the 
standpoint of the improvement of light water reactor 
technologies, there has been very little Federal Government 
investment in research and development. There is an ongoing 
effort for a cost-shared program with, between government and 
industry, so that the research tools of government can do what 
industry can't do, or doesn't have the capabilities to do to 
ensure the extension of that technology.
    In terms of the High Temperature Gas Reactor, in the United 
States, the project that needs to deliver that capability is 
the Next Generation Nuclear Plant. There is an ongoing program 
to develop and demonstrate that technology, at a scale that 
will, then, convince commercial interests that this is 
something that they want to buy.
    Mr. Rohrabacher. Well, why is it that the Japanese have one 
of these working, and we don't?
    Vice Admiral Grossenbacher. Well, they have a test reactor.
    Mr. Rohrabacher. That is correct.
    Vice Admiral Grossenbacher. It is not industrial scale.
    Mr. Rohrabacher. It is a big reactor. I went there, and I 
went through the reactor myself.
    Vice Admiral Grossenbacher. South Africa has an aggressive 
developmental program in this area, and again, we think, and I 
speak just from the standpoint of reactor technology, and our 
perspective at the Idaho National Lab, this is a very important 
future technology. It is also complicated. You have got to 
prove the fuel performance. You have got to prove that you can 
manufacture the fuel, and the fact that you can do it once in a 
test reactor, and not stress it, or demonstrate it at 
industrial scale, there is lots of uncertainties that have to 
be resolved. So, that refers to my comment, is perhaps the 
folks you talked to were a little bit aggressive in terms of 
their estimates of the maturity of the technology.
    Having said that, Congressman, I am with you. I think this 
is an important technology, but reactors are not simple things.
    Mr. Rohrabacher. I believe, first of all, that the, as I 
say, the criticisms of the current system is justified. We have 
plutonium left over, and we have got waste problems, and we 
have got risks associated with it. I am dismayed that we have a 
situation where we have a potential alternative nuclear option 
that is not being fully looked at, that the Japanese and the 
Russians, of all people, are engaged in actually moving forward 
on this technology at a much faster pace than we are, and that 
we will be left behind, because of corporations' inability to 
basically, to look forward and have long-term strategies, and 
our government, which seems to be unfortunately, too tied to 
the hip to major U.S. corporations, that we are being dragged 
back, and not being able to make these investments in future 
technologies.
    So, I think this is a great risk. I think we could wake up, 
look, I am the benefit, Mr. Chairman, we are the benefit of 
that World War II generation. My father helped develop the 
things that right now, and his generation, that are now solving 
the problems that we face today. But there are future problems, 
and unless we are the ones that are open to new ideas, rather 
than totally focused only on incremental improvements in the 
status quo, we will be left behind a generation from now, and 
our kids will not be the leaders of the future, as Americans 
have been for the last 30 and 40 years, based on the work of 
our parents.
    So, I would hope that we live up to the Great Generation's 
challenge to us, and remain the world's leader, and energy is 
so important, and I believe that the High Temperature Gas-
Cooled Reactor is an example of something that we should be 
putting maximum attention on, and instead, it is being pushed 
to the side and out of the picture. So, thank you----
    Ms. Kray. If I could comment on that.
    Mr. Rohrabacher. Sure.
    Ms. Kray. I would agree that the U.S. has fallen behind in 
its leadership of the nuclear industry.
    Mr. Rohrabacher. Right.
    Ms. Kray. But at the same time, I think we have a very 
similar view of the High Temperature Gas-Cooled Reactor, as 
does the Asian market, particularly Japan. I think we both see 
it as prototype, somewhat developmental in nature, through 
Admiral Grossenbacher's theory is we need to look at the fuel 
characterization and the materials issues, but if you look at 
what Japan is building and purchasing now, it is not High 
Temperature Gas Reactors. They are building the light water 
advanced reactors.
    Mr. Rohrabacher. Yeah, they have got the same problems with 
their corporations that we do.
    Ms. Kray. Well, and I think, and again, when we put out a 
request for proposal for additional baseload power, we are, we 
do not limit it to anything. We will get coal, any renewable 
and nuclear, and within the nuclear family, whoever responds, 
the answer is there was no response of the High Temperature 
Gas-Cooled Reactor, and that is because it is not yet ready for 
the commercial deployment. But we are hopeful that, as we 
sustain this infrastructure, there will be deployment of HTGRs, 
whether it is for electricity production, or some of the other 
benefits that it can provide.
    Mr. Rohrabacher. Well, I will be going to Russia to look at 
their operation, and some of the issues that you have brought 
up, and I think this really deserves the attention of the 
Committee, and I thank you very much for giving me this time.
    Chairman Gordon. The gentleman's time has expired. I know, 
Dr. Cochran, you would like to continue, but let me say this. 
You have been an excellent panel. We have not closed the 
record. This is not the extent of this dialogue. This is one 
that we want to continue. It needs to, we need to continue. 
There are not easy answers here. We are all going to have to 
talk about it in a collaborative way. And we will continue on 
this committee to do that.
    So, under the rules of the Committee, the record will be 
held open for two weeks for Members to submit additional 
statements and any additional questions they might have for the 
witnesses.
    And the hearing, but not the subject, is adjourned.
    [Whereupon, at 12:25 p.m., the Committee was adjourned.]
                               Appendix:

                              ----------                              


                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Responses by Marilyn C. Kray, Vice President, Exelon Nuclear; 
        President, NuStart Energy Development

Questions submitted by Representative Ralph M. Hall

Q1.  Ms. Kray, have NuStart's members seen any NIMBY opposition or 
environmental opposition to their proposed nuclear plants?

A1. While some opposition has emerged, it has not been significant. In 
fact, NuStart members have uniformly seen strong support from State and 
local stakeholders surrounding potential new plant sites.
    Positive relations with the community surrounding a nuclear plant 
is a primary goal of Exelon as well as of other NuStart member 
utilities. For Exelon, we strive to be a valued member of the community 
through our charitable contributions as well as through the 
contributions of our employees who serve on boards, coach sports teams 
and are active in other service areas.
    The nuclear industry routinely polls the public regarding its 
opinion on nuclear energy. The April 2008 survey conducted by Bisconti 
Research, Inc. reported that 63 percent of those polled favor the use 
of nuclear energy, while 33 percent oppose. This percentage is 
approximately the same as a survey conducted in October 2007 but down 
from a peak of 70 percent favorable in 2005.
    In selecting a site for a potential new plant, community support is 
one of many factors that are considered. When NuStart selected its 
sites for the DOE Nuclear Power 2010 Program, we received positive 
feedback from the communities of all six of the finalist sites. 
Similarly, Exelon has been welcomed by the local community of its 
selected site in Victoria County, TX. To date, resolutions in favor of 
a new plant have been passed by the City of Victoria, the Guadalupe-
Blanco River Authority, the Victoria Chamber of Commerce, the African 
American Chamber of Commerce of Victoria, the Victoria Economic 
Development Corporation and the Victoria County Commissioners' Court.
    Support for a new plant is clearly not unanimous. The ``not in my 
backyard'' (NIMBY) sentiment is expected in each of the planned 
licensing proceedings. The NRC licensing process, however, is keenly 
focused on soliciting public opinion and offering ample opportunities 
for public involvement. These opportunities include public meetings 
that are held at various stages of the licensing process, starting even 
before an actual application for a new plant has been submitted. The 
NRC licensing process also includes the opportunity for formal 
intervention in the hearing proceedings. To date, the two lead Combined 
Construction and Operating License Applications (COLAs), TVA's 
Bellefonte COLA and Dominion's North Anna COLA, have each received 
petitions to intervene.

Q2.  Ms. Kray, how long has the industry been engaged in programs to 
attract a skilled workforce? Has it been a success?

A2. Since the industry's inception, nuclear utilities have been 
conducting programs to attract and retain a skilled workforce. These 
efforts have been accelerated recently in anticipation of the potential 
addition of new nuclear plants to the U.S. fleet and have led to an 
increased focus on identifying, recruiting, and training workers to 
meet a variety of needs related to plant design, construction, 
engineering, and operations.
    The issue of workforce development is of particular interest to the 
nuclear utility industry given that the median worker age in the 
nuclear utility industry is over 48 years which is higher than that of 
the national average. Further, as much as 35 percent of the incumbent 
nuclear utility workforce may be eligible to retire within five years.
    Today, the typical nuclear plant employs 400 to 700 people, and 
jobs at these plants pay substantially more than average salaries in 
the local area. For example, the median salary for an electrical 
technician at a nuclear power plant is $67,517; for a mechanical 
technician, $66,581; and for a reactor operator, $77,782.
    Utilities have been working together through the Nuclear Energy 
Institute (NEI) and have sponsored individual initiatives and programs 
in their local areas of interest. Through NEI, the industry is working 
with organized labor, government, educational institutions and 
nonprofit organizations.
    On a company level, Exelon has taken a number of actions to address 
the workforce issue. These range from direct financial contributions to 
targeted engineering institutions to working with a local community 
college to develop a two-year program to prepare students for 
employment opportunities in power generating facilities. To address our 
potential need in Texas, the site of our proposed new plant, Exelon is 
involved in outreach efforts at the local high schools to encourage 
students to pursue careers in the nuclear power industry.
    While the challenge remains, preliminary results are positive. An 
industry survey conducted in 2007 found a 34 percent increase in the 
number of young engineers 18 to 27 years of age working in the utility 
workforce from 2005 to 2007. During the same period, operations 
personnel 18 to 27 year of age increased 33 percent.

Question submitted by Representative Adrian Smith

Q1.  Could you please address challenges associated with nuclear waste 
transport and any reform needed to streamline the process or improve 
its safety?

A1. Allow me to address the question of safety first. While accidents 
can and do happen, the safety record of transport of used nuclear fuel 
in the United States and throughout the world is excellent. Nearly 
3,000 shipments of used fuel have been transported in the United States 
since the early 1960s. Overseas, more than 650 shipments are made each 
year in Britain and France alone. Several minor vehicle accidents have 
occurred involving these shipments, but none has resulted in the 
release of radioactivity to the environment.
    The Nuclear Regulatory Commission (NRC) is responsible for 
licensing the shipping packages used in the United States and for the 
security of used fuel transport. The Department of Transportation (DOT) 
oversees package labeling, manifest and content. State and local 
authorities provide escort and inspection services as required. 
Coordination of these entities is generally performed at the state 
level with the involvement of state police troops and state 
governmental agencies.
    From a safety standpoint, Exelon believes satisfactory controls are 
in place at the federal, state and local levels to ensure that 
transport of used nuclear fuel can be accomplished safely. Continuing 
dialogue between the states--under the auspices of the Council of State 
Governments and the Department of Energy (DOE)--is helping to 
communicate the State and local responsibilities and to prepare 
emergency response organizations.
    Regarding streamlining the process, Exelon believes there are a 
number of issues presenting bottlenecks to used fuel transport. One 
simple logistics example is that individual states have the option of 
designating ``preferred routes'' and entrance/egress inspection 
requirements for the transport of used nuclear fuel. Unfortunately, 
``preferred routes'' may not be contiguous between bordering states, 
and State/local inspection requirements may unnecessarily delay 
transport and potentially create security risks. Reforms at the federal 
level may be able to reduce this bottleneck and potential security 
risk.
                   Answers to Post-Hearing Questions
Responses by Robert Van Namen, Senior Vice President, Uranium 
        Enrichment, United States Enrichment Corporation Inc.

Questions submitted by Representative Ralph M. Hall

Q1.  Mr. Van Namen, in Dr. Cochran's testimony he said that one of the 
negatives of nuclear power is that it ``has significant unresolved 
health and environmental problems associated with uranium mining.'' Do 
you have any thoughts on that statement?

A1. As with any conventional energy source, the feedstock for nuclear 
fuel must be obtained by extracting it from a country's natural 
resources. During the past several decades, U.S. uranium miners have 
progressed substantially in their responsible stewardship of the mines 
while decreasing the negative effects of their operations on local 
communities.
    Today's mines are highly regulated by the U.S. Environmental 
Protection Agency, the U.S. Nuclear Regulatory Commission (or the 
equivalent state agency in Agreement States), the U.S. Department of 
the Interior's Bureau of Land Management, and the U.S. Department of 
Labor's Mine Safety and Health Administration. Mining of uranium and 
other natural resources in the United States is also regulated at the 
State level.
    The benefits gained by extracting this powerful natural resource 
through conventional and leach mining techniques greatly outweigh the 
minimal health and environmental effects caused by today's uranium 
mining practices. In fact, most mines in operation today, or that will 
come online in the future, will be required to return the mine site as 
close as possible to its original condition and to remove or remediate 
any remaining byproduct material.
    What Dr. Cochran is probably referring to are the effects of the 
legacy wastes left over from U.S. Government mining operations during 
World War II and the Cold War at abandoned mines in the western part of 
the United States, when national security needs were a high priority. 
Today, the highest priority of our nation's commercial uranium industry 
is safety, as well as environmental and health protection that has 
reduced concerns in these areas.

Q2.  Mr. Van Namen, will you tell us about the supply of uranium and if 
there are any foreseen supply problems for the projected worldwide 
nuclear plants? Do you think reprocessing is necessary from a uranium 
supply standpoint?

A2. The increase in price for natural uranium has spurred the rapid 
prospecting for and development of new uranium mines around the world. 
Mining companies in the United States, Australia, Canada, Kazakhstan 
and several African nations have begun preparing for new production to 
meet an anticipated need for additional natural uranium. Most market 
participants expect that existing mines, new mines and legacy supplies, 
such as those held by the U.S. Department of Energy, will be able to 
meet any growth in demand for the foreseeable future.
    The majority of the new uranium production expected to come on line 
in the next several years will come from expansions to existing 
operations or re-opening mines that were put into standby mode during a 
period of low prices. The permitting and development process for a new 
mine can take as much as 10 years to bring a deposit into production.
    Uranium reprocessing is not necessary to meet the needs of the 
existing or planned nuclear plants over their lifetimes based on known 
available resources of uranium. However, given the potential long-term 
economic and environmental benefits of recycling nuclear fuel once it 
has gone through the reactor, reprocessing nuclear fuel is clearly a 
technology that should be pursued. Reprocessing allows for the 
recapture of approximately 90 percent of the original energy content in 
the nuclear fuel that has been used in a nuclear reactor. Clearly, the 
opportunity to capture that energy potential with a corresponding 
reduction in the quantity of spent fuel is attractive. The key is that 
we must invest now to develop the best possible reprocessing 
technologies that meet non-proliferation, environmental and economic 
objectives.

Q3.  Mr. Van Namen, how many mines are there in the U.S.? You mentioned 
in your testimony that domestic mines supply 18 percent of the natural 
uranium purchased by U.S. reactor operators. Are there more uranium 
supplies that could be mined? Are there any barriers towards mining in 
new locations? What is our country's uranium supply in terms of years 
of use?

A3. As the accompanying chart indicates, the Energy Information Agency 
of the Department of Energy reports that there are currently 12 sources 
of uranium currently in operation in the United States producing about 
4.5 million pounds of U308. Other sources of U.S. produced 
uranium include government stockpiles, industry inventories, and 
processing of uranium tails at the enrichment plants.
    There are many known sources of uranium in the U.S. that can be 
mined, and there has also been a sharp increase in exploration activity 
in search of new resources. Known domestic reserves of uranium, as 
reported by the EIA, are estimated at 890 million pounds 
U308, enough to supply the current reactor fleet for 18 
years. The OECD/IAEA ``red book'' reports prognosticated resources for 
the U.S. at about four times the estimated reserve level (note that 
reserves are estimated at $50/lb cost for U308, and would be 
higher at higher market prices).
    The primary barrier to uranium production is obtaining the numerous 
permits required to bring a discovery to production. There is at least 
one State, Virginia, which currently does not allow uranium mining. One 
of the largest high quality uranium deposits in the North America is 
located in South-Central Virginia, North of Danville. At present, 
development of this project is on hold pending efforts to change 
Virginia's statues to allow this project to proceed to the regulatory 
phase.



Q4.  Mr. Van Namen, what step of the fuel cycle needs the most help or 
the most protection from the U.S. Government?

A4. Two parts of the fuel cycle need U.S. Government assistance.
    First, a comprehensive solution for managing the long-term storage 
of existing and future used fuel from commercial reactors needs to be 
implemented. The U.S. Government, specifically Congress, needs to come 
to agreement and take action about the best way forward towards 
achieving a responsible, sustainable storage solution. The lack of a 
viable solution may eventually prevent the expansion of nuclear power 
in the country as utilities may be reluctant to increase their use of 
nuclear power until they know that the used fuel generated by their 
current and future plants will have a disposition path.
    Second, the domestic uranium enrichment industry needs protection 
from unfairly priced enriched uranium supplies that could be dumped 
onto the U.S. market by the government-backed Russian nuclear fuel 
conglomerate. In addition, the U.S. Government's Title XVII loan 
guarantee initiative for innovative technologies includes a provision 
for $2 billion in guarantees for U.S. fuel cycle facilities. Timely 
implementation of this initiative is a critical action to support 
deployment of advanced uranium enrichment technologies to meet the fuel 
needs of the current reactor fleet over their remaining lifetimes and 
the new reactors currently in development.

Questions submitted by Representative Daniel Lipinksi

Q1.  You mention in your testimony that the U.S. gave up our industry 
leading position on nuclear technology long ago. Can you elaborate on 
this and explain in what ways other countries have taken the lead? As 
leaders in the field, what advantages have these countries gained?

A1. While the United States brought the commercial use of nuclear 
energy to the world, our leadership role has slowly eroded since the 
1980s. This decline reflects a complicated interplay of several factors 
including economics, politics, activist positions of environmentalists 
and the industry's own lack of assertiveness in correcting many of the 
misconceptions that grew from the accident at Three Mile Island and the 
subsequent cancellation of orders for nuclear reactors in the following 
decade.
    With little domestic industry growth to support U.S. nuclear 
companies, many closed, shifted focus from development and construction 
to maintenance services, or were sold to foreign firms who utilized 
American expertise and technologies to capture a dominant role in the 
world market as other countries continued their expansion of the 
technology. This decline was accompanied by a loss of jobs spanning a 
range of skills.
    As America plans to build new reactors, U.S. utilities must turn to 
foreign vendors for a majority of the necessary components, 
manufacturing and project expertise because no American company has 
built a reactor in almost three decades. This reliance adds costs and 
risks to our attempt to increase our sole emissions-free baseload 
electricity source at a time when our economy is increasingly driven by 
information technology and service industries.
    Without the indigenous capacity to build a nuclear plant, we can no 
longer direct our own path to a reduced-carbon future. It is time for 
the United States to take back its leadership role by promoting the use 
of nuclear energy through the actual construction of new plants and 
fuel cycle facilities, by advancing the use of U.S. technologies around 
the world and by continuing to innovate and commercialize advanced 
nuclear technologies such as advanced reactor designs and reprocessing 
technologies.
    Our American Centrifuge uranium enrichment plant is a perfect 
example of this new path. Based on U.S. gas centrifuge technology that 
USEC has substantially improved during the past six years, the American 
Centrifuge machine will be almost five times more productive than the 
next best machine commercially deployed in the world today. The last 
U.S. enrichment plant was constructed more than 50 years ago and today 
we pay the price of relying on an outdated, energy-intensive process 
that most of the world abandoned decades ago. By utilizing U.S. 
technology, manufacturers, and the labor force, USEC's project has 
taken the first steps towards reasserting America's leadership role in 
the worldwide nuclear industry.
    Similar efforts should be championed at other American companies if 
we are to again be the world's leader in this vital sector that will 
power the low-carbon world of the future.

Q2.  You mention that the Converdyn plant in Illinois recently expanded 
to allow it to meet about 80 percent of annual U.S. demand. Where does 
the other 20 percent come from? And are any plans underway to meet this 
remaining demand domestically?

A2. U.S. demand for conversion is currently met by sources from around 
the world, primarily the Metropolis, Illinois plant whose product is 
marketed by Converdyn and by a plant in Canada operated by Cameco. 
While it would probably be feasible for the Illinois facility to be 
expanded again (it was recently expanded to its current capacity), it 
is unlikely that this will be the case until more demand develops in 
the United States.
    The President of Converdyn has indicated publicly in recent months 
that the company may instead consider building a new facility in Europe 
or Australia in order to balance conversion supply geographically with 
enrichment or in large uranium production centers such as Australia. 
However, any number of nuclear companies could also consider building a 
new conversion facility in the United States using similar technology 
if the demand, typically aligned with enrichment capacity, is present. 
Conversion capacity, as well as centrifuge based enrichment capacity, 
can be built in a shorter timeframe than the nuclear power plants that 
they would support which significantly reduces the risk of a supply 
shortfall resulting from expanding the nuclear fleet.
                   Answers to Post-Hearing Questions
Responses by James K. Asselstine, Managing Director (Retired), Lehman 
        Brothers; Former Commissioner, Nuclear Regulatory Commission

Questions submitted by Chairman Bart Gordon

Q1.  In your testimony, you describe current federal incentives for 
nuclear power as essential to enabling utilities to build new plants in 
the U.S. If you were still with Lehman Brothers today, would you 
recommend that the company use its resources to finance a new nuclear 
plant which takes advantage of the current incentives over a standard 
natural gas or coal plant? If similar applicable incentives were 
offered to comparable-scale renewable projects, such as large-scale 
wind farms in the Northeast or solar thermal plants in the Southwest, 
what recommendation would you make? If all incentives were removed and 
a strong carbon cap-and-trade system were implemented, would your 
recommendation change?

A1. I believe that the package of incentives for nuclear power 
contained in the Energy Policy Act of 2005, if properly implemented, 
effectively offsets the risks and uncertainties associated with 
building an initial group of new nuclear power plants in the United 
States. Taken together, these incentives, along with appropriate 
contractual arrangements between the plant's owners and the plant 
vendors, should help to make a new nuclear power plant competitive 
economically with other forms of generation, including coal and gas-
fired power plants and renewable energy resources. Accordingly, were I 
still with Lehman Brothers, I would recommend that the firm support the 
financing of a new nuclear plant. As a full service investment bank, 
Lehman Brothers works with its corporate clients to execute their 
equity and debt financing needs in the capital markets, advises its 
institutional investor clients as they consider alternatives for their 
equity and debt investments, and uses the firm's own capital to make 
direct investments where the firm sees attractive opportunities. I 
would recommend that the firm consider supporting a new nuclear plant 
investment in this country through some or all of these financing 
roles.
    In my view, the growing consensus on the effects of greenhouse gas 
emissions dictates that in the electricity sector we aggressively 
pursue a strategy of energy conservation and enhanced diversity in our 
electric generation mix. Conservation measures offer the promise of 
reducing the growth in electricity demand, and may provide the lowest 
cost alternative for reducing greenhouse gas emissions. Several states 
are providing or developing incentives through the rate-setting process 
for utilities to reduce electricity demand, and these initiatives 
should be encouraged. Nevertheless, although added conservation 
measures can reduce the growth in electricity demand, I doubt that they 
can eliminate the need for additional generation resources, at least 
for the foreseeable future.
    Nuclear power and renewable energy resources both provide the 
opportunity to add new generating capacity to the system without adding 
to greenhouse gas emissions. As I discussed above, I believe that the 
existing federal incentives, if properly implemented, will make a new 
nuclear plant economically competitive with other available generating 
alternatives. Like gas and coal-fired power plants, nuclear plants are 
baseload generating facilities, and therefore are available to operate 
essentially all the time except for relatively brief refueling outage 
periods. In general, the U.S. generating mix is becoming short of 
baseload generating capacity, and there is a need to add more baseload 
facilities. The principal drawback of nuclear is the large initial 
capital cost of the plant and the long lead time for planning, 
licensing, building, and commissioning the plant. Given the size of the 
U.S. utility industry and the relative size of the individual 
companies, I believe that a target of adding 25-30 new nuclear plants 
over about the next 20 years is realistic and achievable. This would 
effectively maintain nuclear power's share of our generating mix at 
about the current level of 20 percent and provide some additional 
greenhouse gas-free baseload generating capacity. In my view, new 
renewable energy resources such as wind, solar, and geothermal, should 
also be encouraged and supported. More than half of the states now 
require that the utilities obtain a growing percentage of their 
electricity requirements from renewable energy resources, and these 
requirements will lead to further renewable energy resource 
development. Like the initial new nuclear units, renewables tend to 
have somewhat higher economic costs than fossil-fired generation. 
Accordingly, renewables may require continued economic incentives such 
as production tax credits and federal loan guarantees to remain 
competitive at least for the near-term. This is particularly true for 
wind and solar plants, which operate at lower capacity factors than 
baseload plants, and therefore are not available to operate all of the 
time. A strong carbon cap-and-trade system will likely have a positive 
effect on the economics of nuclear power and renewable energy 
resources. Depending upon how the system is structured and how 
emissions credits are allocated, the economic benefits of a carbon cap-
and-trade system could reduce the need for financial incentives for 
nuclear and renewables at some point in the future, but until the 
detailed elements of a cap-and-trade system are adopted, in my view, it 
is too soon to tell whether such a system can replace the economic 
incentives for nuclear power and renewables.
    Like nuclear, coal provides a reliable and low cost (in terms of 
fuel and operating costs) source of baseload generation, and this 
country benefits from abundant coal resources. But, conventional coal 
plants are a major contributor to greenhouse gas emissions. I believe 
that plants using clean coal technology to reduce greenhouse gas 
emissions should be encouraged, as should research and development of 
carbon sequestration technologies. Because of differences in views 
within the industry concerning the reliability of commercial scale 
clean coal technology, and because initial plant costs are likely to be 
comparable to the initial nuclear units, financial incentives will 
likely be needed for the first group of clean coal plant projects as 
well. These incentives were provided in the Energy Policy Act of 2005 
and, if properly implemented, should encourage the development of clean 
coal technology. These plants, together with a group of new nuclear 
units, can provide needed new baseload generating capacity and help 
replace some of the older coal units in this country that are among the 
largest current emitters of greenhouse gases. Like nuclear and 
renewables, clean coal technology could also benefit from a strong 
carbon cap-and-trade system.
    Finally, natural gas is likely to provide a growing contribution to 
our electric generating mix in the future, and the more efficient 
combined cycle plants can function as baseload generating facilities. 
Although gas-fired plants contribute to greenhouse gas emissions, their 
emissions are considerably lower than those from conventional coal-
fired plants. Further, due to their low initial capital cost and short 
construction periods, new gas plants can be financed using conventional 
means without the need for federal incentives. But, as we have seen in 
recent years, actual production costs for gas-fired generation can vary 
widely due to severe price fluctuations in natural gas prices brought 
about by supply and demand considerations. Because new gas-fired plants 
can be built relatively quickly and cheaply, they are likely to become 
the utilities' primary choice to fill the short-term gap between 
electricity supply and demand after taking into consideration the 
benefits of conservation, and the contributions from renewables, new 
nuclear and clean coal baseload units.

Questions submitted by Representative Ralph M. Hall

Q1.  Mr. Asselstine, in Dr. Cochran's testimony he quotes a report by 
the Union of Concerned Scientists that says ``the NRC is not adequately 
enforcing the existing standards.'' He goes on to state in his 
testimony that ``the biggest barrier to significant improvement of U.S. 
nuclear plant safety is the poor safety culture of the NRC.'' As a 
former NRC Commissioner, do you agree with those statements?

A1. No, I do not. In general, I believe that the NRC is appropriately 
focused on ensuring the adequate protection of the public health and 
safety, and security. I believe that the NRC's safety culture is sound, 
and that the agency does an effective job in enforcing its existing 
safety standards. In my view, the steady and significant improvement in 
the regulatory and reliability performance of our 104 operating nuclear 
units over the past decade is evidence of the effectiveness both of the 
industry's operation of the plants and the NRC's regulatory 
performance. From time to time, operating experience at the plants has 
disclosed the need for additional operating initiatives by the industry 
and additional regulatory oversight by the NRC. This was the case a few 
years ago with the reactor vessel head inspection and material 
condition issues identified at the Davis-Besse plant. In this and other 
cases, I believe that the industry and the NRC have responded 
effectively to the need for additional safety and regulatory 
improvements.

Q2.  Mr. Asselstine, in your testimony you mention the loan guarantee 
program established under Title XVII of the EPAct 2005. In your opinion 
do DOE's implementing regulations for the loan guarantee program 
provide lenders the assurance they need to offer loans for the first 
wave of plants?

A2. Yes, I believe that in general, DOE's implementing regulations 
provide an adequate basis for lenders to participate in the loan 
guarantee program for a new nuclear plant. Nevertheless, a number of 
significant additional actions by DOE are needed to implement the new 
loan guarantee regulations, and the outcome of these actions will 
determine the workability and attractiveness of the loan guarantee 
component of the federal incentives for new nuclear plant development. 
In my view, the review by the DOE Loan Guarantee Program Office of 
individual loan guarantee applications, as well as DOE determinations 
of the subsidy cost for providing a loan guarantee, should provide us 
with additional insights on the cost and workability of the loan 
guarantee program.

Q3.  Mr. Asselstine, in your testimony you point out that continued 
successful implementation of all three financial support components in 
EPAct 2005 is essential for firm orders for new plants. It is my 
understanding the applications for new plants must be filed before the 
close of 2008 for qualification of the production tax credits. Due to 
this deadline are additional tax credits or incentives needed for 
continued participation by the investing and lending communities?

A3. I do not believe that additional tax credits or incentives are 
needed at this time for continued participation by the investing and 
lending communities. Your understanding is correct that in order to be 
eligible to receive a production tax credit for a new nuclear plant, 
the sponsor of the proposed plant must have submitted an application 
for a combined construction and operating license (COL) for the plant 
with the NRC by the end of 2008. A number of companies have either 
already submitted their COL license applications or stated their 
intention to submit their applications by the end of this year. Thus, 
by the end of this year, I suspect that a substantial number, and 
perhaps most, of the new proposed nuclear units will have established 
their initial eligibility to receive the production tax credit, and it 
will be possible to calculate the minimum amount of the production tax 
credit that each plant would be eligible to receive. (The plant's 
sponsor will need to achieve certain other milestones over time to 
maintain the plant's eligibility for the production tax credit.) A 
sponsor for a new nuclear plant need not have placed a firm order--that 
is, entered into a contract to purchase the plant--at the time that the 
NRC license application is filed. These orders for new plants in most 
cases, will probably be placed at some point during the NRC licensing 
process when the project sponsors and their investors have gained some 
experience with the licensing process and as developments progress on 
the other financial incentives.

Q4.  Mr. Asselstine, in EPAct 2005 we provided what you refer to as 
three complimentary financial support provisions (tax credit, stand by 
support, and loan guarantees). Are there improvements to these 
provisions or additional provisions that would improve the likelihood 
of success?

A4. I continue to believe that the package of financial incentives 
provided in the EPAct 2005, if properly implemented, are sufficient to 
bring about the development of a new group of nuclear power plants in 
this country. Accordingly, I do not see the need for additional 
statutory provisions or improvements to the existing provisions at this 
time. If the development of new nuclear plants is to be successful, it 
will depend upon the industry's performance in negotiating reasonable 
contracts for the plants, the NRC's performance in executing the 
licensing process for the new plant applications, and DOE's performance 
in implementing the financial incentive provisions. This is especially 
the case with the loan guarantee program, where key steps and actions 
are yet to be completed by DOE. Additionally, as we gain some 
experience with DOE's implementation of the loan guarantee program over 
the next one to two years, it should be possible to determine whether 
there is a need for additional funding authorizations and 
appropriations beyond those now in place for loan guarantees for 
renewables, clean coal technology, and new nuclear plants.
                   Answers to Post-Hearing Questions
Responses by Thomas B. Cochran, Senior Scientist, Nuclear Program, 
        National Resources Defense Council, Inc.

Questions submitted by Representative Ralph M. Hall

Q1.  Dr. Cochran, you mention MIT's nuclear study in your testimony and 
that it estimated that the cost of electricity generated by a new 
merchant nuclear plant would be 60 percent higher than that of a fossil 
fuel plant. Do you know what the comparison would be if the fossil fuel 
plants had CCS technology installed?

A1. In December 2006 IEA estimated ``typical cost of CCS [carbon 
capture and storage] in power plants ranges from U.S. $30 to 90/
tCO2 or even more, depending on technology, CO2 
purity and site . . .. Assuming reasonable technology advances, 
projected CCS cost by 2030 is around $25/tCO2 . . .. 
CO2 separation cost from natural gas wells may be as low as 
$5-15/tCO2.'' (http://www.iea.org/textbase/techno/
essentials1.pdf). CCS costs can also be reduced when done in 
conjunction with enhanced oil recovery.
    In the MIT study, based on modeling performed in 2003, new nuclear 
merchant plants were estimated to become competitive with coal and gas 
(assuming high gas prices) at carbon emission costs of about $100/tonne 
of C ($27/tonne of CO2). (MIT, Future of Nuclear Power, 
2003, p. 7.) This would be near the low end of IEA estimates of the 
cost of CCS. Since 2003 the estimated cost of new nuclear plants has 
doubled and is still climbing, and the cost of fossil fuels has 
similarly increased. It is more important to get federal energy policy 
right than it is to try to predict future winners in a changing energy 
market. With regard to getting the policy right Congress should: a) 
internalize the societal cost of greenhouse gas emissions primarily by 
limiting CO2 and other greenhouse gas, b) support 
demonstration of CSS options, and c) cease subsidizing new nuclear 
power plants. Nuclear power is a mature electricity generating 
technology. The federal subsidies going to new nuclear plants are not 
going to bring down their costs and are penalizing alternative 
technologies that can provide climate change mitigation more quickly, 
safely, at less cost, and with fewer environmental harms than building 
new nuclear power plants.

Q2.  Dr. Cochran, you state in your testimony that new nuclear plants 
would not be cost competitive with electricity from wind or solar. Is 
this comparison done with or without the production tax credit given to 
renewable forms of energy?

A2. The comparison is without the production tax credit (PTC). Solar 
thermal is a promising near-term cost competitor to nuclear, following 
behind energy efficiency, wind, geothermal, biomass, and high-
efficiency gas.
    There are two kinds of solar cost projections: 1) current costs 
with and without federal PTCs and State incentives, and 2) solar cell 
manufacturing cost projections based on bringing the industry to scale. 
Rooftop photovoltaic (PV) solar in California, including federal and 
State incentives, is now competitive with grid-delivered peak 
electricity at 13.5 cents per kWh (this was for a recently completed 
SunEdison project in Southern California). Thus, with current 
incentives, rooftop PV solar is competitive now with peak delivered 
electricity rates in a few parts of the country with supportive 
policies, such as California and New Jersey.
    With respect to unsubsidized future solar costs that would compete 
with nuclear electricity in the 2015-2020 timeframe, a number of thin 
film and concentrating PV manufacturers, and independent industry 
analysts, are projecting solar cell costs of $1 to $5 per peak watt, 
which would clearly make rooftop solar competitive without subsidies 
with the current delivered retail costs of nuclear electricity. 
However, getting to these low costs requires scaling up production and 
installation capacity, and hence a PTC or some other type of investment 
tax credit (ITC) to help bridge the gap between current and projected 
costs. Since non-renewable and costly nuclear already has an eight-year 
PTC for the first 6,000 MWe of new capacity, there is absolutely no 
logic or merit in denying the same treatment to renewable solar 
technologies.
    For solar thermal plants, which are more directly comparable to 
nuclear plants, the industry is projecting a decline from 15 cents 
today to about 10 cents per kilowatt hour at the busbar (including 6-12 
hours of energy storage) between now and 2015 if production capacity 
can be scaled up. Several such plants are now under construction around 
the world, and most observers feel the technology has immense near-term 
potential. In the U.S. the concentrating solar thermal power (CSP) 
industry currently has access to a $10 billion pool of DOE administered 
federal loan guarantees for renewable energy and transmission 
projects--less than half the current $20.5 billion pool for nuclear 
reactor and enrichment technology projects--and it can negotiate long-
term power supply contracts with utilities and other large customers 
that make the economics quite transparent and workable. A PTC will make 
these projects more attractive from an investment perspective and 
hasten the scale-up of the industry, but this might be needed for only 
five years or so. Thus, it is reasonable to assume that at 15 cents per 
kWh CSP plants are competitive now with some of the higher projections 
of nuclear power busbar costs, and CSP costs are projected to come down 
as industry manufacturing capacity is increased to around 10 cents per 
kWh at the busbar within five to seven years. This would make CSP 
cheaper than most projections of the cost of electricity from new-build 
nuclear plants.
    Of course, since it is centered in the desert Southwest, the CSP 
resource is a good substitute for nuclear (and coal) in that region, 
and in neighboring markets where the power can be economically and 
efficiently transmitted, such as to California, the Rocky Mountain 
West, and Texas. Obviously, CSP technology, which relies on direct 
solar radiation, is not an answer for cloudier regions of the country, 
such as the Northeast, Midwest and Southeast. Photovoltaic technology 
is appropriate in these regions, along with wind, electrical end-use 
efficiency, wave and tidal energy, industrial waste-heat cogeneration--
a large underutilized resource--and biogas. If the cost of low-carbon 
electricity using each of these sources is less than new nuclear 
plants, we should exploit them for carbon mitigation to their fullest 
extent before turning to new-build nuclear plants. Increased end-use 
efficiency alone can free-up more additional megawatts than all of the 
nuclear power plants currently proposed to be in operation by 2020, and 
at far less cost (less than five cents per kWh), so that is where we 
should turn first before throwing tens of billions of dollars at new-
build nuclear power plants. Under a carbon cap and trade scheme, their 
time as an economically preferred option may eventually come as fossil-
fueled baseload power options increase in cost and the nuclear industry 
figures out a way to standardize components and major subsystems and 
apply modern assembly line techniques to reactor production. But 
renewable energy technologies will also be improving and reducing costs 
as well. Congress should not seek to dictate a place for new-build 
nuclear by subsidizing its way back into the marketplace.

Q3.  Dr. Cochran, do you think the Federal Government should be 
spending any money on nuclear programs or nuclear R&D?

A3. Yes. There is an appropriate role for federal funding of energy 
technologies, including but not limited to: a) R&D on technologies that 
are in the national interest, but whose development is too risky 
financially, or where the time to commercialization is too long to 
interest the private sector in funding the needed R&D, and b) 
subsidizing deployment of worthy technologies in order to scale up 
production capacity for the purpose of reducing unit costs, e.g., 
subsidies discussed in the response to Question 2 above.
    I support: a) R&D and qualification of a high-burnup uranium-seed, 
thorium-blanket fuel for use in light water reactor (LWR) operating on 
a once-through fuel cycle, b) development of a smaller standardized 
transportable modular reactor LWR design of around 300-500 MWe that 
could be flexibly deployed and retrieved, c) construction of the very 
high-temperature gas-cooled reactor demonstration plant, the so-called 
New Generation Nuclear Plant (NGNP), and d) R&D on advanced safeguards 
technologies.
    A crude nuclear device constructed with highly enriched uranium 
(HEU) poses the greatest risk of mass destruction by terrorists. 
Current Radiation Portal Monitors (RPMs) installed at ports and border 
crossings and the next generation Advanced Spectroscopic Portals (ASPs) 
cannot reliably detect HEU. (See, Thomas B. Cochran and Matthew G. 
McKinzie, ``Detecting Nuclear Smuggling,'' Scientific American, April 
2008, pp. 98-104.) Thus, the Federal Government should place a much 
higher policy priority, and in some cases spend more funds, on securing 
and eliminating HEU sources worldwide. In this regard it should 
increase greatly the priority given to the development and deployment 
of alternative low-enriched uranium (LEU) fuel for the few remaining 
U.S. research reactors and the larger number of foreign research 
reactors now using HEU fuel. The Federal Government also should support 
the construction a domestic capability to make medical isotopes with 
LEU targets. Logically, this capability should be located at the 
University of Missouri, which currently makes medical isotopes in the 
University of Missouri Research Reactor (UMRR).
    Finally, the Federal Government should support university-based 
nuclear physics, chemistry and engineering programs, not only to 
educate and train people going into the field of nuclear power 
generation, but to meet nuclear-related national and homeland security, 
nuclear medicine, nuclear waste management and disposal, and nuclear 
regulatory needs.
    This is not an exhaustive list of nuclear energy R&D worth of 
federal support, but an even more comprehensive list would not include 
the Department of Energy's proposed research on advanced reprocessing 
and fast reactors as set forth in its Global Nuclear Energy Partnership 
(GNEP) vision.
                   Answers to Post-Hearing Questions
Responses by Robert W. Fri, Visiting Scholar, Resources for the Future; 
        Chair, Committee on Review of DOE's Nuclear Energy Research and 
        Development Program, Board on Energy and Environmental Systems, 
        National Research Council

Questions submitted by Chairman Bart Gordon

Q1.  Secretary Bodman took issue with the level of urgency the recent 
National Research Council review placed on closing the fuel cycle. He 
stated that it is paramount that leaders in this country seek to solve 
the issues that inhibit the expansion of nuclear power, including 
providing a durable and credible nuclear waste disposition path.

     To what extent does dry-cask storage of spent nuclear fuel--an 
option the National Research Council report seems to support--represent 
a credible waste disposition path to support the expansion of nuclear 
power that the Department of Energy (DOE) seeks?

A1. The report states that ``There is general agreement and approval by 
the USNRC that such a scheme [dry cask storage] would provide safe, 
secure, storage for at least 100 years.'' As such, this option is 
available to support the expansion of nuclear power. Indeed, it is 
available now, unlike both the Yucca Mountain project and a major 
recycling program.

Q2.  According to DOE, the findings of the recent National Research 
Council review as they relate to GNEP are based on faulty premises. In 
particular, Assistant Secretary Spurgeon stated the review incorrectly 
assumed that DOE had pre-selected technologies and the scale at which 
to build recycling facilities. He went on to state that fast reactor 
recycling will take many decades to implement and that any near-term 
deployment of commercial-scale facilities would likely rely on 
technologies similar to those that are commercially available for 
recycling in current generation reactors.

A2. As general background to this question, a letter from Dr. Ralph 
Cicerone, President of the National Academy of Sciences, to Secretary 
Bodman is attached. It summarizes the committee's arguments for 
recommending against a large demonstration or commercial facilities 
program, only one of which was based on the premature selection of 
technology.

Q2a.  What is your view of the proposal to rely initially on 
commercially available technologies, presumably MOX, while continuing 
to develop technologies for fast reactor recycling?

A2a. The committee concluded that the technical risk of skipping the 
engineering scale facilities was unacceptably high for a broad range of 
technologies. In addition, the committee concluded that there is 
neither an economic reason nor domestic policy need to proceed with 
recycling now. Dr. Cicerone's letter discusses these issues in more 
detail.

Q2b.  Assuming the long-term goal is to close the nuclear fuel cycle, 
are we more likely to succeed through the phased approach DOE seems to 
be advocating, or by waiting until R&D on the more advanced 
technologies is at a point to get directly to the end goal of fast 
reactor recycling?

A2b. The committee recommended following the general plan of the 
Advanced Fuel Cycle Initiative, which is a phased approach to the 
development of fast reactor recycling. In the view of the committee, 
this plan is the most likely to result in a tested, acceptable 
technology.

Q3.  In your written testimony, you note that the study committee you 
chaired did ``not recommend a large federal research program, because 
most of this research should be industry-supported.''

     What would you describe as reasonable goals for a research program 
and what actions would DOE need to take to help achieve those goals? 
Would new research and development facilities need to be built? If so, 
how would you recommend those costs for new facilities are shared 
between industry and DOE?

A3. This question appears to refer to research associated with the 
current fleet of nuclear power plants. The federal role in such a 
program would be to support research that the private sector cannot 
support. The most obvious example would be for DOE to provide 
specialized user facilities, such as the Advanced Test Reactor at INL. 
This facility could be used, for example, to test the design of high 
burn-up fuels developed in the private sector. Such facilities should 
be operated along the same lines as user facilities at other national 
laboratories, importantly including a policy of charging commercial 
users only incremental costs. For a more complete study of possible 
collaborative efforts, please contact INL or the Electric Power 
Research Institute for the results of a study they jointly conducted 
several years ago.

Questions submitted by Representative Daniel Lipinski

Q1.  You mention that DOE should strengthen university capabilities to 
educate young professionals and scientists to allow for a sizable 
buildup in nuclear energy production, research, and development. What 
is currently done at U.S. universities in relation to nuclear energy, 
and what do you recommend be done to expand and improve upon this work?

A1. Although university-based nuclear science and engineering (NSE) 
education programs receive financial support from a wide range of 
federal agencies as well as industry, core NSE research thrusts are 
generally not funded by the other federal research funding agencies 
because they are viewed as the exclusive jurisdiction of DOE, as set 
forth in the Atomic Energy Act. Therefore, DOE plays a crucial role in 
maintaining the core research programs and student support needed to 
sustain university NSE programs. The past DOE Nuclear Energy University 
Program was comprehensive in scope, providing fuel services for 
research reactors, basic research grants, support for industry matching 
grants (dollar-for-dollar match from industries), infrastructure 
support for university research infrastructure, as well as scholarships 
for undergraduate students and fellowships for graduate students, and 
partnerships to share reactors with other universities and industries 
and includes minority serving institutions.
    To ensure that DOE continues to play this role, the committee 
recommended that there be a separate line item for university programs 
in the Energy and Water appropriations for DOE to implement the NSE 
program outlined in EPAct05. The committee also endorsed the report of 
the American Nuclear Society, Nuclear's Human Element: A Report of the 
ANS Special Committee on Federal Investment in Nuclear Education 
(2006), which contains detailed recommendations for the design of the 
NSE program.

Q2.  What is the status of DOE's Nuclear Hydrogen Initiative with 
regard to the new technologies under development? Is the Program on 
track to deploying new light water reactor and fuel cycle technologies 
by 2015, and next-generation advanced reactors and fuel cycles by 2025?

A2. The committee's recommendations on the issues raised in this 
question are:

          The Nuclear Hydrogen Initiative is well-designed, but 
        its goals and schedule need to be coupled more closely to the 
        goals and schedules for the Next Generation Nuclear Plant 
        (NGNP). As noted below, these schedules may slip.

          The NP 2010 program is on track to support the 
        deployment of new light water technology at the rate determined 
        by private sector investment. This could be as early as 2015.

          The NGNP program is not likely to meet its schedules 
        unless the public/private partnership on which the schedule 
        depends comes into being. DOE should decide whether to pursue a 
        different demonstration program with a smaller industry 
        contribution or a more basic technology development program.

          The committee did not estimate when fuel cycle 
        facilities could be in place, but did suggest that there is 
        little economic or domestic policy reason to accelerate their 
        construction.

Questions submitted by Representative Ralph M. Hall

Q1.  Mr. Fri, in your testimony regarding the Nuclear Power 2010 (NP 
2010) Program you state that augmenting the program to ensure timely 
and cost-effective deployment of the first new reactor plants is 
necessary but that the Committee does not recommend a large federal 
research program, because most of this research should be industry 
supported. Could you provide us with examples of the research areas you 
believe should be industry supported that would augment the NP 2010 
Program?

A1. Please see the answer to Question #3 asked by Chairman Gordon.

Q2.  Mr. Fri, also in regard to the Nuclear Power 2010 Program (NP 
2010) you mention the need for strengthening university capabilities to 
educate a growing number of young professionals and scientists in 
relevant areas. Did we assist this strengthening in the America 
COMPETES Act?

A2. Although the committee did not address this question, I understand 
that Section 5004 of the America COMPETES Act was intended to bolster 
academic infrastructure for nuclear education. A committee members who 
are familiar with this legislation (and who is speaking for himself, 
not the committee) believes this program is ``perfectly positioned to 
facilitate the creation and expansion of academic programs, not only in 
nuclear engineering, but in other fields, such as nuclear chemistry, 
radiochemistry, health physics, and material sciences, that are 
critical to the long-term sustainability of nuclear energy.''

Q3.  Mr. Fri, you mention the Committee believes a research program 
similar to Advanced Fuel Cycle Initiative (AFCI) is worth pursuing and 
that DOE obtain more external input such as an independent through peer 
review of the program. What insights does the Committee expect such a 
review would provide DOE when crafting such a program?

A3. The committee recommended that DOE establish an outside review 
capability for all of its nuclear R&D programs. We suggested three 
criteria for an outside review--that it be strategic, independent, and 
transparent. In the case of the AFCI program, a strategic review would 
address the major technical choices to be made over the long duration 
of the program. It would do so with outside advice that avoids conflict 
of interest and a collective bias for any one choice. Finally, the work 
of the advisory committee would be open to comment by the entire 
nuclear R&D community, both to ensure technical accuracy and to build 
support in the community for DOE's decisions.

Question submitted by Representative Adrian Smith

Q1.  Could you please address challenges associated with nuclear waste 
transport and any reform needed to streamline the process or improve 
its safety?

A1. The committee did not address issues of transportation of spent 
fuel. However, the Nuclear and Radiation Studies Board of the National 
Research Council has published a report entitled Going the Distance? 
The Safe Transportation of Spent Nuclear Fuel and High-Level 
Radioactive Waste in the United States (2006) which may be of some help 
in addressing this question.










                   Answers to Post-Hearing Questions
Responses by Vice Admiral John J. Grossenbacher, Director, Idaho 
        National Laboratory, U.S. Department of Energy

Questions submitted by Representative Ralph M. Hall

LWR SUSTAINABILITY

Q1.  Mr. Grossenbacher, with the increased efficiency of the existing 
fleet resulting in a significant amount of additional baseload power 
generation, how much longer do you believe the existing fleet can take 
up the slack to offset other baseload sources? Will new construction be 
required to continue this offsetting?

A1. Through improvements and up-rates to the current fleet, nuclear 
generation has increased significantly over the last 20 years. However, 
by 2030, electricity demand is expected to grow to a level 30 percent 
higher than today. New plants must be built to meet demand, but it is 
estimated that the supply chain required for the construction of new 
nuclear power plants currently limits the construction of nuclear power 
plants to about four plants per year. With life extension, the current 
fleet would begin to retire in 2030. However, operating these plants to 
up to 80 years, with capital investment to upgrade existing components 
and modernize systems, could emerge as a sound business decision and an 
effective means to lock in to non-emitting capacity.

Q2.  If we are to extend the licenses of the existing fleet beyond 60 
years how will, for example, the Nuclear Power Strategic Plan with 
EPRI, address the gap before new nuclear power plants come online? Will 
this program for example examine the performance of nuclear plant 
materials beyond 60 years of service?

A2. The Nuclear Power Strategic Plan is aimed at conducting the 
research and development necessary to support the extended safe and 
reliable operation of the Nation's fleet of nuclear power plants. 
Extending operation of existing plants and building new plants will be 
necessary to meet growing demand of electricity in the U.S. Based on 
this strategic plan, the Department of Energy proposes to increase 
funding in Fiscal Year 2009 to conduct research and development on 
technical issues related to extended performance of nuclear plant 
materials, transition to digital instrumentation and control; new 
techniques for in-service inspection, including diagnostic, 
maintenance, and repair techniques; enhanced fuel reliability and 
performance; and new higher burn-up fuels.

AFCI

Q3.  Realizing the Advanced Fuel Cycle Initiative (AFCI) will take 
time, is there something in the interim that could be done prior to the 
Advanced Fuel Cycle Initiative is completed?

A3. Yes. The U.S. nuclear industry is prepared to make substantial 
investments in new reactors, but needs consistency from government 
regarding support for nuclear energy. On the research front this 
includes funding for operations, maintenance, and needed upgrades of 
domestic research facilities, as well as support for cooperative 
agreements with Japan, France and other countries for joint use of 
unique facilities. The Advanced Fuel Cycle Facility is a much-needed 
laboratory that will support both laboratory and engineering scale 
research on advanced nuclear fuel recycling, including advanced 
separations and transmutation fuel development for consumption of 
transuranics. Support for accelerating the development of this 
laboratory is urged. Given the projected need for energy from non-
carbon emitting sources, research on extending current reactor life is 
also needed, as is research on higher burn-up fuels.
    On the regulatory front development is also needed. Recycling will 
result in significantly different waste streams with much lower long-
term hazards, but current language in the Nuclear Waste Policy Act does 
not account for these differences. While most radioactive waste is 
regulated based on content and the hazard associated with that content, 
current law regulating ``high level waste'' is based solely on the 
source of the material and not the actual hazard present. Continued 
support for opening of the federal geologic repository is also urged. 
While the hazard present in waste from advanced recycling will be much 
lower per unit of energy produced than that from used fuel disposed as 
waste, there will still be a need for deep geologic isolation of a 
portion of the waste.

ADVANCED FUEL CYCLE INITIATIVE

Q4.  Along with the additional research that will take place as part of 
AFCI's longer-term goals, are there benefits to developing or 
redeveloping nuclear fuel reprocessing capabilities now using existing 
technology?

A4. Yes. Establishing the policy and regulatory framework of nuclear 
fuel recycling will serve as a catalyst for industry participation 
domestically and U.S. leadership internationally. The Nuclear 
Regulatory Commission has already received applications for 15 new 
reactors and expects that number to rise to 27 by year-end. Returning 
to a policy of recycling will not only address the waste confidence 
issue for new reactors, but also encourage industry participation in 
the development of the fuel recycling infrastructure. Transitioning to 
advanced recycling technologies will be easier with an operating 
infrastructure, including an established transportation network. 
Recovered fissile materials will also reduce the need for additional 
uranium mining and enrichment. Also, by joining the countries currently 
recycling used nuclear fuel, the U.S. will be in a better position to 
move the rest of the world forward in adopting advanced technologies 
that will end the direct separation of pure plutonium and recycle all 
the transuranic elements.

Question submitted by Representative Adrian Smith

NUCLEAR WASTE TRANSPORTATION

Q1.  Could you please address challenges associated with nuclear waste 
transport and any reform needed to streamline the process or improve 
its safety?

A1. The U.S. has safely conducted more than 3,000 spent nuclear fuel 
(SNF) shipments over the last 40-plus years without any releases 
harmful to the public or the environment. The National Academy of 
Sciences concluded in a study of SNF shipments [February 9, 2006] that 
there are no technical challenges to conducting these shipments safely 
under the current regulations. There are financial challenges 
associated with building the infrastructure and addressing the social 
and institutional concerns associated with shipments to Yucca Mountain. 
Adequate funding to train emergency responders along transportation 
corridors and to develop the fleet of transport casks, rail cars and 
the railroad to Yucca Mountain are the biggest challenges. No 
legislative reforms are needed to either streamline or improve the 
safety of these shipments.

Questions submitted by Representative Bob Inglis

U.S. NUCLEAR INFRASTRUCTURE

Q1.  Would you give your assessment of the state of the U.S.-owned 
nuclear technology and supply industries?

A1. The state of the U.S.-owned nuclear technology industries is poor. 
The supply of adequate equipment, materials, and personnel to support 
expansion of the nuclear industry in the U.S. will be problematic. As 
an example, ultra-heavy forged reactor pressure vessels are currently 
available from only one factory in Japan. It is imperative that the 
U.S. domestic nuclear infrastructure be expanded to accommodate future 
needs.

NUCLEAR INFRASTRUCTURE

Q2.  How many predominantly U.S.-owned reactor vendors were there in 
the 1970's? How many are there now? What happened?

A2. Four major U.S.-owned companies served as reactor suppliers in the 
1970s: Babcock & Wilcox, Combustion Engineering, General Electric and 
Westinghouse. Since that time, however, foreign companies have either 
acquired or bought into each of these U.S. firms.
    The French firm Framatome (now Areva) purchased a half interest in 
Babcock & Wilcox's nuclear services division in 1989. Combustion 
Engineering became a wholly-owned subsidiary of Asea Brown Boveri, a 
Swiss-Swedish multi-national conglomerate in 1990. Asea Brown Boveri 
was subsequently acquired by British Nuclear Fuels in 2000. British 
Nuclear Fuels acquired Westinghouse Electric Company in 1999. In 2006, 
Toshiba signed an agreement with British Nuclear Fuels USA Group and 
Westinghouse Electric UK Limited to acquire 100 percent of 
Westinghouse. Hitachi and General Electric combined their nuclear power 
divisions in 2006. GE-Hitachi is owned 60 percent by GE and 40 percent 
Hitachi, and is currently the only U.S.-owned reactor vendor.

Q3.  Why is the state of the U.S.-owned nuclear technology and supply 
so poor?

A3. The U.S. pioneered nuclear technology and dominated nuclear energy 
leadership in the 1970s. Nuclear development in the U.S. suffered a 
major setback, however, because of delays caused by a cumbersome and 
lengthy licensing process, the oil embargo of 1973 that led to high 
interest rates and low economic growth, and with the 1979 Three Mile 
Island accident. Not a single new nuclear power plant was ordered after 
1973, causing a major downturn in supply and business of U.S.-owned 
nuclear technology.
    Historically, the U.S. policy on nuclear energy stands in stark 
contrast to the policies in France and Japan. France now claims a 
substantial level of energy independence and almost the lowest 
electricity cost in Europe. France also has an extremely low level of 
CO2 emissions per capita from electricity generation. Japan 
has also embraced the peaceful use of nuclear technology to provide a 
substantial portion of its electricity. Today, nuclear energy accounts 
for about 30 percent of Japan's total electricity production.

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