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




                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION
                                ________

              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman

 CHET EDWARDS, Texas                DAVID HOBSON, Ohio
 ED PASTOR, Arizona                 ZACH WAMP, Tennessee
 MARION BERRY, Arkansas             JO ANN EMERSON, Missouri
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                     KEN CALVERT, California
 JOSE E. SERRANO, New York          
 JOHN W. OLVER, Massachusetts       

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

             Dixon Butler, Terry Tyborowski, Taunja Berquam,
             Robert Sherman, and Lori Maes, Staff Assistants

                                ________

                                 PART 8

                          DEPARTMENT OF ENERGY
                                                                   Page
 Weapons Activities and Naval Reactors............................    1
 Nuclear Nonproliferation.........................................  191
 Nuclear Energy and Nuclear Waste.................................  367


                                ________

         Printed for the use of the Committee on Appropriations







      PART 8--ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2009

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2009

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
                  PETER J. VISCLOSKY, Indiana, Chairman

 CHET EDWARDS, Texas                DAVID HOBSON, Ohio
 ED PASTOR, Arizona                 ZACH WAMP, Tennessee
 MARION BERRY, Arkansas             JO ANN EMERSON, Missouri
 CHAKA FATTAH, Pennsylvania         MICHAEL K. SIMPSON, Idaho
 STEVE ISRAEL, New York             DENNIS R. REHBERG, Montana
 TIM RYAN, Ohio                     KEN CALVERT, California
 JOSE E. SERRANO, New York          
 JOHN W. OLVER, Massachusetts       
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

             Dixon Butler, Terry Tyborowski, Taunja Berquam,
             Robert Sherman, and Lori Maes, Staff Assistants

                                ________

                                 PART 8

                          DEPARTMENT OF ENERGY
                                                                   Page
 Weapons Activities and Naval Reactors............................    1
 Nuclear Nonproliferation.........................................  191
 Nuclear Energy and Nuclear Waste.................................  367


                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE

 44-154                     WASHINGTON : 2008



























                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman



 JOHN P. MURTHA, Pennsylvania             JERRY LEWIS, California
 NORMAN D. DICKS, Washington              C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia          RALPH REGULA, Ohio
 MARCY KAPTUR, Ohio                       HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana              FRANK R. WOLF, Virginia   
 NITA M. LOWEY, New York                  JAMES T. WALSH, New York     
 JOSE E. SERRANO, New York                DAVID L. HOBSON, Ohio 
 ROSA L. DeLAURO, Connecticut             JOE KNOLLENBERG, Michigan    
 JAMES P. MORAN, Virginia                 JACK KINGSTON, Georgia 
 JOHN W. OLVER, Massachusetts             RODNEY P. FRELINGHUYSEN, New Jersey        
 ED PASTOR, Arizona                       TODD TIAHRT, Kansas   
 DAVID E. PRICE, North Carolina           ZACH WAMP, Tennessee            
 CHET EDWARDS, Texas                      TOM LATHAM, Iowa
 ROBERT E. ``BUD'' CRAMER, Jr., Alabama   ROBERT B. ADERHOLT, Alabama        
 PATRICK J. KENNEDY, Rhode Island         JO ANN EMERSON, Missouri       
 MAURICE D. HINCHEY, New York             KAY GRANGER, Texas      
 LUCILLE ROYBAL-ALLARD, California        JOHN E. PETERSON, Pennsylvania           
 SAM FARR, California                     VIRGIL H. GOODE, Jr., Virginia             
 JESSE L. JACKSON, Jr., Illinois          RAY LaHOOD, Illinois                   
 CAROLYN C. KILPATRICK, Michigan          DAVE WELDON, Florida      
 ALLEN BOYD, Florida                      MICHAEL K. SIMPSON, Idaho
 CHAKA FATTAH, Pennsylvania               JOHN ABNEY CULBERSON, Texas        
 STEVEN R. ROTHMAN, New Jersey            MARK STEVEN KIRK, Illinois       
 SANFORD D. BISHOP, Jr., Georgia          ANDER CRENSHAW, Florida            
 MARION BERRY, Arkansas                   DENNIS R. REHBERG, Montana 
 BARBARA LEE, California                  JOHN R. CARTER, Texas       
 TOM UDALL, New Mexico                    RODNEY ALEXANDER, Louisiana        
 ADAM SCHIFF, California                  KEN CALVERT, California    
 MICHAEL HONDA, California                JO BONNER, Alabama       
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas              
                                    
                  Rob Nabors, Clerk and Staff Director



                                  (ii)

























 
          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2009

                              ----------                              

                                          Wednesday, April 2, 2008.

                 WEAPONS ACTIVITIES AND NAVAL REACTORS

                               WITNESSES

THOMAS P. D'AGOSTINO, ADMINISTRATOR
BRIGADIER GENERAL (RETIRED) ROBERT L. SMOLEN, DEPUTY ADMINISTRATOR FOR 
    DEFENSE PROGRAMS
ADMIRAL KIRKLAND H. DONALD, DEPUTY ADMINISTRATOR FOR NAVAL REACTORS

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky. I would like to call the hearing into 
session. The subcommittee will come to order.
    The Subcommittee on Energy and Water Development meets 
today to hear testimony on the Department of Energy's fiscal 
year 2009 budget request for programs in the National Nuclear 
Security Administration.
    I want to welcome Administrator Thomas D'Agostino. And, Mr. 
Administrator, and I guess, Mr. Secretary, I want to 
congratulate you sincerely on your appointment. I am very happy 
for you, and I think it was a very wise choice.
    Mr. D'Agostino. Thank you very much, Mr. Chairman. I 
appreciate it.
    Mr. Visclosky [continuing]. On his confirmation as 
Administrator of the National Nuclear Security Administration.
    The Administrator is also accompanied by General Robert L. 
Smolen, who is Deputy Administrator for Defense Programs.
    And I also want to welcome you, General.
    As well as Admiral Kirkland H. Donald, Deputy Administrator 
for Naval Reactors.
    And, Admiral, always good to see you.
    The national security missions of the NNSA are vital to the 
interests of the United States, not only the nuclear weapons 
program and the nuclear Navy but also the nuclear 
nonproliferation mission we will hear about tomorrow.
    While the issues we are discussing today are profound, they 
also involve considerable sums of money. Our responsibility is 
to ensure that the dollars provided by the American taxpayer 
for the weapons complex are spent pursuant to a coherent 
strategy and as wisely as possible.
    Last year the committee found the case for the Reliable 
Replacement Warhead unconvincing and provided no funds for RRW. 
We said we would consider this issue only after having in hand 
an overarching strategy, the number and nature of weapons 
needed to implement that strategy, and a satisfactory plan for 
reducing the size and cost of a nuclear complex in a reasonable 
time frame.
    First, the strategy; second, from the strategy, we derive 
the stockpile numbers and types of weapons; and third, from the 
numbers and types, we derive the complex. We need to be looking 
at all three at once, of course, but I do believe the decisions 
flow in that order. We can't say, ``Build a new complex, and 
then we will figure out precisely what we want to use it for.'' 
Neither can we say, ``We need a new weapon, and we will develop 
a strategy at some undetermined date in the future.''
    Two days ago I received a report from the administration 
titled, ``National Security and Nuclear Weapons in the 21st 
Century.'' It will be one of the subject areas we will examine 
today.
    Mr. D'Agostino, General Smolen and Admiral Donald, your 
full written testimony will be entered into the record. After 
the hearing, we will have questions for you to answer for the 
record. And I ask that you have the responses and any 
supporting information requested by the subcommittee cleared by 
your office or the Department of Office of Management and 
Budget and delivered in final form to the subcommittee no later 
than 4 weeks from today.
    I would also ask that if Members have additional questions 
they would like to submit for the record, that they please do 
so to the subcommittee by 5:00 p.m. this afternoon.
    Normally at this point I would recognize Mr. Hobson for his 
opening statement. It is not, I would want to make clear, out 
of disrespect or disinterest in any fashion that he is unable 
to be here at the beginning of the hearing. He will be here 
shortly, and we will have his statement entered into the 
record.
    Also, just in anticipation, we have a members-only briefing 
and meeting on the Defense Subcommittee. Since he and I share 
that responsibility as well, I think he will then depart, and 
again, not out of lack of interest or concern but necessity.
    So we will get to the statements. But before that, probably 
the most important thing we will do today, and that is, I have 
to congratulate Mr. D'Agostino and Admiral Donald for the Naval 
Academy's stunning, well-deserved victory over Notre Dame last 
year in football in South Bend. And it has been a long time 
coming, and I would be remiss and not a gentleman if I did not, 
at the outset of this hearing, congratulate you on your fine, 
outstanding victory.
    Mr. D'Agostino. Yes, sir. Thank you.
    Mr. Simpson. Is there a team that beat Notre Dame last 
year? I must not have been aware of that.
    Mr. Visclosky. They were the best team that beat Notre Dame 
last year.
    And let us proceed to the statements, gentlemen.
    Mr. D'Agostino. Thank you, Mr. Chairman. I guess that was 
45 years in the making, so it took us a little while. I 
appreciate your comments.
    Mr. Visclosky. It may take us another 45.
    Mr. D'Agostino. Thank you very much. And I appreciate the 
opportunity to discuss the President's fiscal year 2009 budget 
request for the National Nuclear Security Administration.
    As you know, we have a number of fundamental national 
security responsibilities for the United States, and I am here 
to discuss the overall mission.
    I am pleased to have with me Admiral Donald, the Deputy 
Administrator for Naval Reactors, and General Bob Smolen, our 
Deputy Administrator for Defense Programs.
    NNSA is examining how to proceed into the future to address 
evolving national security needs in a manner that anticipates 
significant changes in how we manage our national security 
programs, our assets and our people. Our 2009 request will go a 
long ways toward making significant progress in many areas of 
focus, including those that we have embarked upon in fiscal 
year 2008 and in 2007.
    We anticipate the overall request of $9.1 billion to enable 
us to accomplish the following: First, we begin the process of 
reducing the size of the nuclear weapons complex and changing 
it from a Cold War nuclear weapons complex to a 21st-century 
integrated national security enterprise. This includes 
shrinking the size of the complex and consolidating special 
nuclear materials at fewer sites, increasing funding for 
cybersecurity by 22 percent over the amount provided in 2008, 
and improving cost savings associated with supply chain 
management, building upon the $5 million of savings we have 
achieved in 2007. We anticipate the savings in 2008 to be 
significantly greater than that and will leverage that out into 
the future. And I can talk about that in some detail later on, 
sir.
    Second, the program will further advance nuclear 
nonproliferation to counter nuclear and radiological terrorism. 
This will include continuing our planned increases and budget 
requests for nonproliferation activities, which build upon the 
doubling of the spending in these efforts since September 11, 
2001, increasing funding to nuclear counterterrorism activities 
by 40 percent over the amount provided in 2008, increasing 
spending by 14 percent to secure highly enriched uranium and 
other radiological source materials as part of the Global 
Threat Reduction Initiative, and continuing and completing 
security activities under the Bratislava Agreement with the 
Government of Russia.
    Third, this program will secure and maintain an aging 
stockpile, including continuing our Defense Program's ``Getting 
the Job Done'' initiative by staying focused on delivering 
products to DOD in a timely and cost-effective manner; 
increasing the number of weapon dismantlements by 26 percent 
over the weapons dismantled in fiscal year 2007 and continuing 
to build on successes we have had in the past there; addressing 
current and anticipated challenges associated with certifying 
the stockpile without underground testing; and, fourth, 
ensuring the safety and reliability of 103 operating naval 
nuclear propulsion plants and continue the Naval Reactors 
development work on nuclear propulsion technology to support 
required capabilities as well as meeting future threats for 
U.S. security.
    And finally, expanding our technical excellence while 
developing the next generation of national security, scientific 
engineering and program management talent.
    While we seek to shrink the overall size of the nuclear 
weapons complex significantly, we believe that this will 
provide us an opportunity for increased focus in a couple of 
different areas. One is nuclear nonproliferation; the second is 
nuclear counterterrorism; the third, nuclear forensics work; 
and the fourth, continued support to our Intelligence 
Community, which is largely outside of the Department of Energy 
but supports the Intelligence Community as a whole.
    Before concluding and taking your questions, I want to 
briefly mention a few items that you may be interested in.
    As you know, nuclear weapons remain a cornerstone of our 
Nation's strategic defense posture, even as we continue to 
downsize our stockpile. I am pleased to acknowledge last week, 
and I understand from your statement, that we submitted a 
classified white paper on the future of the nuclear weapons 
stockpile, and we are working to be able to take out the 
classified sections and release an unclassified version. I am 
confident that it is important to get as much information out 
in the public as possible.
    While our nuclear deterrent remains safe, secure and 
reliable, the supporting infrastructure for that deterrent, 
even as it gets smaller, is very old. And with many of our 
critical facilities well over 50 years old, maintaining the 
current infrastructure is not an option. It is just falling 
apart. It is too old, it is too expensive, it is too big, and 
it does not address the Nation's security needs.
    Addressing these issues I believe is possible, particularly 
now that we have our strategy out, to be able to be done to 
make that transition to a much smaller complex over the next 10 
years without budget increases. That is the management 
challenge, and I think it is a challenge we can meet.
    In addition, this is driven by the Department of Defense, 
and combatant commanders belief that the effort to study 
replacement concepts is important to the long-term assurance of 
the stockpile. We believe that this is a key ingredient toward 
reducing the size of the stockpile beyond the already 50 
percent reductions we have accomplished since 2001 and the 
further 15 percent reductions ordered by the President last 
December in 2007.
    And, finally, our ability to effectively dispose of 
plutonium materials coming out of our increased dismantlement 
programs and our work to consolidate materials is critical to 
the effort to reduce the worldwide nuclear danger. This is 
viewed by the administration as a critical national security 
program. Just as the Global Threat Reduction Initiative program 
seeks to repatriate and secure highly enriched uranium from 
around the world and ultimately convert that material into 
beneficial energy use, so, too, does plutonium disposition seek 
to eliminate excess plutonium and also provide the added 
benefit of energy production. I think the committee recognizes 
that.
    We are working to comply with the direction given to us in 
the 2008 Consolidated Appropriations Act while preserving vital 
national security mission focus. To that end, I have ordered 
that the Pit Disassembly and Conversion Facility management be 
shifted to the Office of Defense Programs.
    With respect to the MOX program, we have requested that it 
be funded through the Nuclear Energy account, consistent with 
the act. However, we cannot transfer the management of this 
program to the Office of Nuclear Energy. I am advised by the 
Department's general counsel that the 2008 Consolidated 
Appropriations Act did not direct this transfer. Without 
statutory authority, we are prohibited from taking this action 
by the Department of Energy Organization Act and by the NNSA 
Act.
    I want to assure the committee that I want to seek a 
solution to this and will commit my time to work with you to 
work on an appropriate path forward to work this out. This is 
the advice that I have received by my general counsel 
yesterday.
    Thank you, Mr. Chairman. I look forward to working with you 
and members of the Subcommittee on this program. And I look 
forward to answering your questions, sir.
    [The written statement of Thomas D'Agostino follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Visclosky. Admiral.
    Mr. D'Agostino. We will do one statement, sir, if that is 
okay.
    Mr. Visclosky. Okay.
    Administrator D'Agostino, I appreciate the cooperation on 
Pit disassembly. On MOX, the money would be spent out of NE but 
the management would stay, if I understand the statement 
correctly.

                                  MOX

    Mr. D'Agostino. Barring any further changes, sir, that is 
right. As you know, we have requested money for MOX in the NE 
account. We would, through an economy act, transfer support of 
MOX to the Nuclear Energy program, for the management of that 
activity by the team of people that we have. For the Pit 
Disassembly and Conversion Facility, we have decided that that 
is something that is completely within my authority to do, and 
I have recognized the desire of not only the committee but of 
Congress to make that transfer. And we have provided that 
shift.
    Mr. Visclosky. On the 2009 budget for MOX, did it end up 
coming up here after OMB in NN, not NE, for the monetary 
request?
    Mr. D'Agostino. No, it came up in the NE account, nuclear 
energy account.
    Mr. Visclosky. For MOX for 2009?
    Mr. D'Agostino. Yes, sir.
    Mr. Visclosky. Okay. If I could, I am just going to ask one 
question here at the beginning, and then I will recognize Mr. 
Wamp.

                         COMPREHENSIVE STRATEGY

    Getting to the strategy, you indicate that a report was 
sent up. I have for the record the language from the omnibus 
appropriations bill that was signed into law. As far as looking 
at a comprehensive strategy for the use of weapons, as well as 
how we defend ourselves against those types of weapons, and not 
necessarily just in a nuclear sense, but conventional means and 
intelligence means.
    Mr. D'Agostino. Right.
    Mr. Visclosky. Are you saying that the report you sent up 
is that strategy? Or is it the strategy for the complex for the 
weapons?
    Mr. D'Agostino. The report that we sent up provides a 
broader strategy look. It actually looks to answer some 
specific questions that we received from Congress the year 
before. I believe there were seven fairly specific questions on 
that, describing this transition from policy, first; supplies 
of the stockpile, second; what it does to the infrastructure, 
third--drawing that connection between those three pieces.
    This paper provides that information. And, additionally, it 
provides a classified section on what is going on in the rest 
of the world, to put our program in context with the global 
security environment, which is a factor that the Department of 
Defense considers.
    Mr. Visclosky. Now would it be your understanding that the 
Secretaries of Defense and Energy, for example, people in the 
Intelligence Community, have looked or are looking at the 
overarching strategy that the weapons in the complex fit into?
    Mr. D'Agostino. Yes. Well, the Intelligence Community has 
helped inform the Secretary of Defense and Energy on this. It 
is a 20-some-odd-page classified white paper. And it puts into 
context the kinds of changes, the basis, if you will, for our 
current approach. If you recall, the 1,700 to 2,200 
operationally deployed strategic warheads is based on what the 
country needs for its own national security in the context of 
what is going on in the rest of the world.
    Then it translates that into this question of is there a 
better way to further reduce the size of the stockpile? I think 
that is a question that we feel is important. From my 
standpoint, it drives a lot of the costs in our program. I have 
a parochial desire, if you will, sir, to understand that and 
have those numbers driven down appropriately. But I don't want 
to be in a situation of having to ask you, sir, for example, to 
overbuild an infrastructure to support. So what that document 
should do is describe how we can get to an appropriately sized 
stockpile.
    I happened to be with General Chilton last night, Commander 
of Strategic Command, and General Cartwright, the Vice Chairman 
of the Joint Chiefs of Staff, and we briefed Senate Energy and 
Water Members as well as authorization Members last night in 
the Senate, talking about this connection, because it is very 
hard to have just a piece of paper describe all of the pieces 
and the connection on how much further we can go.
    And I would be happy, sir, to actually arrange a time when 
the three of us could come talk to you and the committee in 
that context. Whether it is a briefing or testimony, I think 
either one would work fine.
    Mr. Visclosky. Thank you.
    Mr. Wamp.
    Mr. Wamp. Thank you, Mr. Chairman.
    Welcome to all three of you, particularly you, Tom. I just 
want to say, I have seen the whole transformation here pre-
NNSA/post-NNSA. I thank you for your service, because you are 
as strong in this position as anybody has been in my 14 years 
of service and 10 years on this committee.
    Mr. D'Agostino. Thank you.
    Mr. Wamp. But I will tell you, two of the biggest 
challenges that we face--the three biggest challenges we face 
on this subcommittee, from my perspective, are the Corps of 
Engineers and the need for reforms there, because the last 6 
years are not near as good as the first 6 years of my 12 years 
on Approps with the Corps of Engineers. And their big projects 
are not being managed well, and it is costing us a whole lot 
more money than it was ever supposed to.
    Another big problem is on environmental management, the 
same kind of problem. And this committee ends up wrestling with 
the administration on funding the mistakes more than the 
successes. And that is a real hole you dig for yourself in our 
business.
    Mr. D'Agostino. Right.

                        ENVIRONMENTAL MANAGEMENT

    Mr. Wamp. And I want to start on that front, because we 
have to know that the management will be there for the 
investments that you are asking for. And so I want you to, kind 
of, give me an update on NNSA, honest assessment from your 
perspective on your ability to handle the funding for big 
projects.
    I said, a year ago, I hate to be parochial, but when you 
get the NNSA missions, parochial--Oak Ridge is really at the 
heart of the whole complex, so it is not parochial to talk 
about the big projects, because, frankly, they are bang, bang, 
bang. Uranium is central to this whole issue, and we are kind 
of the center of uranium for the country.
    HEUMF is almost finished. Following that, UPF, the need for 
that. The preferred alternative of where all this goes in your 
reconfiguration and what you laid out just in general terms on 
it is too expensive, it is too old, that we are not really 
preparing for the future. Intelligence will tell us what we 
have to do. How we do it and the resources necessary to do it 
is what is debated here at this committee. There is a thing 
called CMC that may follow that.
    Give me, then, a report on how you are able to manage these 
big projects. Again, we are about to finish HEUMF, and, 
frankly, compared to these other investments this committee is 
making, it is going to be a successful completion.
    Mr. D'Agostino. Yes, sir.
    Mr. Wamp. And then can we go into another major project? 
And how is your preferred alternative lining all of these 
investments up over the next 10 years?
    Mr. D'Agostino. Certainly. Thanks very much for the 
question.
    I share your concern on management of large projects. It is 
something that is always on my mind. Last year, when I was 
acting in this position with Mr. Ostendorff as he came in and 
we transitioned roles there for a while, we agreed that what we 
needed to do over the next 18 months, which we are obviously 
halfway through is focus. To me, it is about leadership and 
focus.
    I had the experience in Defense Programs, which General 
Smolen is now managing, 2 years ago to say, let's get together 
a list, make it clear what people expect, what the leadership 
wants the organization to do, put it on one sheet of paper, 
promulgate it out, hold our senior executives accountable for 
it, actually put that sheet of paper in their performance 
plans, put in our contractors' performance plans, and then 
focus on delivering on those items.
    It worked well in Defense Programs. We had very significant 
success in delivering on our products and on the efficiencies. 
And General Smolen is carrying that through in Defense 
Programs.
    We are going to apply the same thing for the broader NNSA 
as a whole. And I have a list. Now, unfortunately, it is not 10 
items. It is 15 items for the whole NNSA on things that we will 
do this year in the NNSA. And I am holding my managers 
accountable for it.
    So it is leadership and accountability, to start off with.
    I recognize that the key one of the elements is project 
management. One of my six focus areas is project management. We 
have undertaken and we have actually qualified and certified 
our Federal project managers. In the past, before 2005, we were 
not in that situation. Since that time, we have qualified and 
certified our project managers, just like happens out in 
industry, to standards, and we check on their standards and 
make sure they are qualified. I learned that from the Navy in 
my days in the Naval Reactors organization, and it is 
absolutely vital to have people that know what their job is and 
what they are supposed to be doing.
    Since 2005, we have only had one project in the NNSA that 
has had to be rebaselined as a result of not establishing a 
good performance baseline. I am not satisfied with that; I want 
to get those numbers to zero. Once we establish a performance 
baseline, that is what we deliver on.
    But you asked about how we were doing. I think we are 
heading in the right direction. I think we have a lot of 
challenges left on these large, unique projects, but I think we 
are heading in the right direction.
    Los Alamos has done much better on safety and security. 
They have reduced the amount of security holdings from 80,000 
pieces of classified information down to 5,000 pieces of 
classified electronic media. They are reducing their vault-type 
rooms. Mike Anastasio, the Director of the Los Alamos National 
Laboratory, really gets it, the fact that he has to manage that 
lab as an integrated laboratory, not as a confederation of 
small laboratories that was what, in my view, we had in the 
past.
    At Y-12, at your site, sir, we have already demonstrated 
this past year about $27 million in cost savings through this 
program. We call it the Y-12 Throughput Improvement Program. We 
have had a 300 percent increase in components for the B61 life 
extension at Y-12 as a result of the actions that General 
Smolen has taken. And we have also had a 320 percent increase 
in uranium machining operations.
    I, personally, think that is remarkable, given the state of 
the infrastructure at Y-12 right now. Building 9212 is a mess. 
Safety at the laboratories is much better. Our days-away 
reportable cases and total reportable injury rates have 
improved by not ones and twos of percentages, but by tens, 
twenties, thirties, forties and fifties of percentages. I think 
the work at the Kansas City Plant has been significant in 
integrating supply chain management.
    I want to shift to is away from the past, which is where we 
had eight independent contractors each with their own systems 
and policies and approaches, and operate this outfit as an 
integrated national security complex where we leverage our 
procurement buys. We have $5 million of auditable, demonstrated 
savings and procurement last year. We think we can increase 
that at least to about $30 million this year, and I have 
charged to increase that even further. This is this idea of 
reverse auctions, so where we have our suppliers competing for 
our business.
    I am excited about what the future will hold here. I don't 
dismiss this as easily accomplished. And that is why the 
challenge for me is to get the complex smaller. I have to get 
it focused. Each organization needs to know what they are 
supposed to do. And I believe that there is a real opportunity 
to continue on on some of the advances we have made in the 
past.
    Mr. Wamp. Is your process complete now on the preferred 
alternative and pursuing the UPF in Oak Ridge and it being the 
uranium center?
    Mr. D'Agostino. It is not completed. Last week we just 
finished our 20th meeting. We had 20 public hearings from 
around the complex. We actually added one to make it up to 20. 
We have essentially doubled the amount of time that the public 
is allowed to comment on this, because we recognize that this 
is a big activity and we do want to get public input. We have 
received 50,000 comments to date.
    We have been clear to the public, even though we will 
likely close the input period on April 10th. We are continuing 
to analyze input, that we will continue to take public input, 
because we want to make sure we have that.
    But we are well under way toward getting ourselves situated 
where we have a decision opportunity that we can tee up, talk 
to the committee beforehand, and tee up a decision this year.
    Mr. Wamp. By fall?
    Mr. D'Agostino. By fall, yes, sir.
    Mr. Wamp. Mr. Chairman, I will wait. I know I have gone 
over the 5-minute rule.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thanks, Mr. Chairman.
    Welcome to the committee. It is good to see you back again, 
both of you--all three of you.
    Admiral Donald, let me ask you a quick question before I 
get into a series of these. Back in 2005, a senior DOE official 
testified before this subcommittee regarding two building at 
the DOE INL campus, buildings 651 and 691. According to this 
official, ``These facilities may offer an exceptional 
opportunity to consolidate materials and components in a 
location with robust security features in place.''

                              INL STORAGE

    These buildings aren't too far from the Naval Reactors 
site. Given the sensitive nature of the materials you work 
with, do you have any need for additional secure material 
storage or consolidation of INL?
    Admiral Donald. First, thanks for the opportunity to be 
here today. And I do want, before I get a chance to move on 
with that, to just thank the committee, subcommittee for the 
support that they have given this program over the years and 
contributing to the successes that we have enjoyed.
    Mr. Simpson. Before you answer, let me tell you, as I have 
told you personally, you almost forget that the Naval Reactors 
are out there, because you never hear anything bad about them. 
They are always doing their job. And the people of Idaho are 
very supportive of the job you are doing.
    Admiral Donald. Yes, sir. Thank you very much. And it is a 
two-way street. I think the relationship between the State and 
Naval Reactors program is as good as it has ever been, and it 
helps us do our job and certainly with the support of this 
committee.
    With respect to your specific question, right now I would 
tell you, sir, no, sir, I don't have any need for an additional 
secure storage for materials. What the major work that we are 
involved in out there now, as you are well aware, is dry 
storage of our spent nuclear fuel in preparation for ultimate 
repository storage, wherever that may be.
    That work is progressing well now. We went in full 
production in 2006. We have just received our first shipment of 
fuel from the INTEC facility here within the last 2 weeks, and 
that is being processed as we speak right now. So, from an 
infrastructure point of view and an overall storage point of 
view, we are satisfied where we are right now.
    I will take your question back and will review that just to 
make sure that we are fully satisfied for the long term.
    But the bigger issue that faces us right now in Idaho that 
you and have I discussed previously is we have some aging 
facilities out there, and we believe we have an agreement with 
the State of Idaho to put forth our continued presence out 
there to do the work that the Navy needs and the Nation needs. 
And it is obvious that we will need to do some recapitalization 
out there. So those project plans are in the preliminary works 
right now, and we would certainly take under advisement any 
recommendations that you might have in that regard.
    Mr. Simpson. Mr. D'Agostino, let me ask you, let me go 
through a little history that I am sure you are aware of.
    Mr. D'Agostino. Well, maybe not.
    Mr. Simpson. Ambassador Brooks's testimony on March 18 of 
2005: ``NNSA has begun to work with the Department of Office of 
Nuclear Energy, Office of Science, the Office of Environmental 
Management to evaluate the use of two facilities at the Idaho 
National Laboratory for interim storage from throughout the 
NNSA complex.'' And it describes the facilities. It says, ``But 
these facilities may offer exceptional opportunity to 
consolidate materials or components in a location with robust 
security features.''
    Mr. D'Agostino. Right.
    Mr. Simpson. 2006--that was 2005-2006 language in the 
conference report by this committee: ``The conferees provided 
an additional $5 million for project engineering and design 
funding to begin a new construction project to upgrade CPP 651 
and CPP 691 at the Idaho National Laboratory for complex-wide 
material consolidation of special nuclear material. The 
conferees direct the Department to include a PED line-item 
project to continue this activity in fiscal year 2007 budget 
request.''
    Fiscal year 2007, although there was not a budget because, 
it was done through the long-term CR, the House language says, 
``The committee directs the start of construction projects at 
the Idaho National Laboratory retrofitting building 651 and 
completing building 691 to handle special nuclear material 
consolidation of storage. The committee directs the $5 
million''--that is the $5 million from previous years--
``provided to the Office of Security and Performance Assurance 
for planning the material consolidation construction activities 
in fiscal year 2006 conference report be reprogrammed to the 
NNSA Office of Safeguards and Securities for its intended 
purpose.''
    Fiscal year 2008, language in the conference report: 
``Funding for safeguards and securities includes $71,751,000 
for construction activities, and an additional $14,846,000 is 
provided for the refurbishment of building 651 and completion 
of building 691 at the Idaho National Laboratory to handle 
special nuclear material consolidation storage and other 
missions. The amendment bill transfers the $4.9 million,'' 
which is from the year before, from the year before, from the 
year before, ``provided in fiscal year 2006 to the other 
defense activities accounts to begin planning activities for 
the Idaho project.''
    I assume this is well under way.
    Mr. D'Agostino. Okay. You have a better history memory than 
I have, sir.
    Mr. Simpson. Well, it is written down.
    Mr. D'Agostino. But if I could, the answer to your question 
on the assumption is, no, it is not under way. And I would like 
to explain, if I could.
    Back in 2005, Ambassador Brooks's testimony and maybe in a 
discussion with you, sir, about all the options that we were 
looking at on consolidating special nuclear materials.
    Mr. Simpson. And let me point out here, this was not my 
idea. This it was NNSA's idea.
    Mr. D'Agostino. Right. I understand, sir. Which was, we 
wanted to make sure that all options were on the table in 
looking at what is the most effective way, not only for the 
NNSA but for the Department as a whole, which we are a part of, 
to consolidate special nuclear materials.
    It was thought at the time that ultimately, our destination 
for plutonium was to Savannah River in order for it ultimately 
to be turned into mixed oxide fuel and to be burned up in light 
water reactors to generate electricity. There were a lot of 
questions at the time on whether that final destination was 
actually going to be an avenue that was open for the Department 
to proceed.
    And so we said at that point in time that was not clear, 
that that was going to happen, but we wanted to get that 
material moving and out because it has a lot to do with 
security. Because we knew it was either that or we invest 
hundreds of millions of dollars in Washington State to upgrade 
security to handle what we expected was an ever-increasing 
design basis threat problem.
    Since that time and in late 2006, early 2007, not but 14, 
15 months ago, kind of in between all of the bills that were 
either continuing resolutions or the money was being passed on 
from year to year, a couple of things happened.
    One is we finished our analysis on how much material had to 
be moved, what it would take to move it, and whether we 
introduce more risk by packaging and unpackaging and moving it 
twice versus moving it once. That analysis had been done.
    Two is, in concert with that, we looked at the upgrades to 
the two buildings, the 651--one of them was a completion of the 
building and I think one of them was an upgrading of the 
building of those two facilities, what it would take to 
actually get those things up to security standards. And the 
estimate at the time was over $300 million to upgrade those 
facilities.
    Since that time, the pathway to Savannah River opened up 
and the need to have either an interim storage location for it 
or a consolidated place became less obvious. And the thought 
that instead of spending $300 million to permanently upgrade 
the security, finish the buildings and upgrade the security--is 
that it is significantly cheaper to move the material once from 
Washington to South Carolina.
    So there are a couple of parallel activities in that 
process. Ultimately, our desire, if we would move material, is 
we would move it in a way that mission work goes with it versus 
just a storage location. I think from a standpoint of the folks 
in Idaho, if we are going to move material, we want to do it 
because there is a reason why, that there is real work going 
on, versus just security.
    But in this case, the cost and the safety elements of the 
problem drove us to say, it doesn't make sense to invest $300 
million to serve as what I would call a way station, if you 
will, between Washington State and South Carolina.
    Mr. Simpson. So what have you done with this committee and 
the money that has been appropriated for it?
    Mr. D'Agostino. Right now the money, it is $14.7 million.
    Mr. Simpson. Plus the $5 million that keeps getting 
reappropriated from previous years.
    Mr. D'Agostino. My team has analyzed and thinks there are 
two things to do with it. One is, as a result of the 
Consolidated Appropriations Act of 2008, the resources required 
for us to do long-term stewardship, environmental stewardship, 
which is work at Lawrence Livermore, in Sandia, and Kansas 
City, had been cut in half. Some of that money we would like to 
put toward those activities, because ultimately we are subject 
to State fines by not meeting our environmental commitments if 
we don't put the resources there.

                         MATERIAL CONSOLIDATION

    But two is, Idaho does have a role with material 
consolidation that we are doing at Sandia. There is some sodium 
debris bed-bearing material that we would move up to Idaho to 
join with the rest of the material that is in Idaho and invest 
in reprocessing capability to clean up this highly enriched 
uranium sodium debris-bearing material.
    So I have, within the Department of Energy--I don't believe 
it has come up to Congress yet--we will probably have a request 
that comes up to ask the committees to consider this type of a 
change, in essence, a reprogramming to have it focused not on 
upgrading buildings that we don't think we need, that don't 
have direct mission attached to it, but on work that is 
associated with special nuclear material consolidation, similar 
kind of a need, mission need and upgrading and doing long-term 
stewardship.
    Mr. Simpson. Are there other NNSA activities at Idaho that 
that money could be spent on?
    Mr. D'Agostino. I haven't looked into the details on that, 
but we can look and check before we send up the reprogramming.
    Mr. Simpson. Like the D&D facility, which is supposed to be 
$4.5 million, or the disposition of the highly enriched uranium 
at $1.6 million? There are other activities out there.
    Mr. D'Agostino. Oh, absolutely. There is no question about 
it. It could be done.
    Mr. Simpson. But you feel the ones at Los Alamos are more 
important?
    Mr. D'Agostino. Well, I don't think it is Los Alamos. It is 
Lawrence Livermore. We received 50 percent of the money we need 
to fulfill our commitments to our States on environmental 
stewardship. And if we don't put money there, well, we will 
lose money by paying fines.
    Mr. Simpson. What are the fines?
    Mr. D'Agostino. Excuse me, sir?
    Mr. Simpson. What are the fines?
    Mr. D'Agostino. It depends on the site. But it is on the 
order of $7 million to $12 million per year. It is in the 
million-dollar range, multimillion-dollar range. I would like 
to provide those numbers to you.
    Mr. Simpson. Certainly, if you are going to ask for 
reprogramming of it, I would like to see what the details of it 
are.
    Mr. D'Agostino. Certainly. I would be glad to, sir.
    Mr. Visclosky. And if you could include in that information 
the fines, too, that would be terrific.
    Mr. D'Agostino. We will do that.
    Mr. Visclosky. Mr. Hobson.

                     Mr. Hobson's Opening Statement

    Mr. Hobson. Thank you, Mr. Chairman.
    I am sorry I was late. I was introducing a real hero at the 
Veterans Committee, a young man who was hurt in Iraq. There is 
a problem with the Defense Department and the coordination on 
eye injuries that are resulted from IED types of injuries. I 
apologize to everybody for being late.
    Two things I would like to do. Are there any other Naval 
Academy graduates in here that want to stand up and be 
recognized for beating Notre Dame while we do that? Anybody? 
Any Notre Dame guys? Academy guys?
    All right. I figured there was a guy over there too. Okay. 
I just thought you wanted to take credit.
    Mr. Visclosky. I congratulate all of the academies.
    Mr. Hobson. Ohio State won last night, if any of you missed 
that. Wrong tournament, but we won.
    I would like to introduce three very important people in my 
life who are here today. Katie Nunner, Alex Nunner and Samuel 
Nunner, who are sitting in the back, are three of my seven 
grandchildren.
    You guys stand up.
    [Applause.]
    They are a piece of work. And they are with grandpa or 
``Poppy'' today, as I am called. We brought them to the hearing 
so they could experience what this is all about. I am not sure 
whether that is a good thing or not.
    Thank you guys for being here. I have four questions I 
would like to get through, if we can. They relate to one of my 
favorite projects.
    As you know, Congress explicitly moved the MOX project out 
of NNSA to the Office of Nuclear Energy, and the funding along 
with it. Your general counsel has made an interpretation that 
the NNSA Act precludes the transfer of project managers out of 
NNSA. So this project continues to be managed within the NNSA 
despite explicit direction from Congress to the contrary in a 
bill signed by the President of the United States.
    This is one of those Alice in Wonderland moments I 
sometimes get in this job. Here we have you, the 
administration, telling us, the Congress, that we can't do 
something because you have decided that we have told ourselves 
we can't do it even when it tells us we can. As Alice said, ``I 
can't put it any more clearly, sir, because it isn't clear to 
me.''
    So let's go through a scenario. Is the Department's 
position that the NNSA Act prevents you from making this 
transfer? Do you believe the language in the act constrains 
what Congress in a bill signed by the President can transfer 
from NNSA or only constrains what the Secretary and the 
administration can move?
    Mr. D'Agostino. Mr. Hobson, as you probably know, I am not 
a lawyer, but I have been advised by my general counsel that 
the act prevents me from making this transfer.
    I have stated that I am interested in working with the 
committee to figure out how we get to an appropriate 
accommodation.

                              MOX PROGRAM

    Mr. Hobson. Well, let me tell you, normally, in law, the 
last law is the law that prevails when you pass legislation. 
And so, is it the Department's position that the NNSA Act 
prevents you from making this transfer? I am sorry--is it 
correct that you do not dispute the ability of the Congress to 
move the funding from MOX out of NNSA? That the only real issue 
is the management of the MOX program?
    Mr. D'Agostino. I think the funding of the MOX program 
clearly has been moved out. We have requested it in the nuclear 
energy account. My general counsel tells me I can't move the 
management out. We want to make sure that whether it is through 
an economy act arrangement that we meet the intent of Congress 
and the committee to move that forward.
    Mr. Hobson. When we read the section 3212 of the NNSA Act, 
we do not find any mention of the constraint of the transfer 
of, quote, ``management,'' unquote, of the program. The act 
language only references the transfer of functions vested by 
law in any organizational unit or component.
    Again, is it your position that the NNSA Act does limit 
your ability to move the management of MOX from the NNSA to NE?
    Mr. D'Agostino. My position is informed by the Department's 
general counsel, which tells me I can't do that.
    Mr. Hobson. I guess the problem is, do you arrive at the 
conclusion from reading between the lines of the statutory 
text, or do you have supporting information from the 
authorizing committees that reveals the congressional intent 
behind this provision?
    Mr. D'Agostino. I haven't reached that conclusion. I am 
reaching it based on the advice I got yesterday from the 
Department's general counsel.
    Mr. Hobson. But you don't know how he is arriving at that?
    Mr. D'Agostino. I haven't seen the document that describes 
to me personally how he has arrived at that. This is something 
that came in last night.
    Mr. Hobson. You don't have any knowledge of any guidance 
from the Armed Services Committee provided to the NNSA 
regarding the transfer of MOX?
    Mr. D'Agostino. I don't have any specific guidance saying 
not to transfer the MOX, no, sir. I recognize there is a legal 
view that I received from the Department's general counsel that 
says that the Department's organization act and the NNSA Act 
prevent the Secretary and I from transferring this project.
    Mr. Hobson. That is what I want to get to. It seems like 
neither the NNSA Act nor the 2008 omnibus specifically 
addresses the management of the MOX program in statutory 
language. So you have an apparent conflict between these two 
provisions. In general, as I said before, conflicts between 
statutory provisions are resolved in favor of the later-passed 
law.
    In the case of MOX, the 2008 omnibus is later passed in the 
NNSA Act. Why have you not followed the general principle of 
statutory interpretation when resolving this apparent conflict? 
Because your general counsel doesn't know what he is doing, or 
he has taken a position that the administration wants?
    Mr. D'Agostino. No, the administration does not want one 
position or the other. I think what the administration is 
trying to do is make sure that we address this. First of all, 
we need to determine if I am statutorily allowed to make these 
types of changes and then, address the intent of Congress.
    We leaned forward on this, Mr. Hobson, by making sure that 
we asked for, in fiscal year 2009, resources in the NE budget, 
because this is the part that was clear that we could do that, 
because we want to satisfy the intent of Congress.
    The question of the actual day-to-day management of the 
project is something that is important for me. The question 
earlier that we had talked about, talking about sound project 
management, recognizes that the more things that are kept in 
limbo, the more difficult it is for the project.
    Mr. Hobson. Let me go to two other things, and they relate 
to this.
    Is it your position that the funding and overall 
responsibility for the MOX project has been transferred to the 
Office of Nuclear Energy and the only remaining question deals 
with the transfer of existing management staff that presently 
work on the project?
    And, secondly, does that mean that the Assistant Secretary 
Spurgeon is now the head DOE official responsible for the MOX 
project, as we intended?
    Mr. D'Agostino. Right now, because the resources are in the 
NE account that are requested currently in 2008 and requested 
in 2009 in the NE account, that Mr. Spurgeon is part of that 
management line responsibility. Right now, the day-to-day 
management, he gets supported by project managers that are 
currently in the nonproliferation program. But, ultimately, 
that chain of responsibility will start with the Federal 
project director, go to Mr. Spurgeon and go up to the 
acquisition executive, which is the Deputy Secretary of Energy.
    Mr. Hobson. And who is that now?
    Mr. D'Agostino. The Acting Deputy Secretary is Mr. Jeff 
Kupfer.
    Mr. Hobson. Okay. You never know, changing chairs.
    I understand that you, as the NNSA Administrator, wrote a 
letter last week to the Chairman of the Defense Nuclear 
Facilities Safety Board asking the DNFSB to conduct a review of 
the red oil problem with the MOX plant and determine whether 
the appropriate safety features and controls have been 
incorporated to prevent or mitigate red oil explosions.
    Frankly, it is good that somebody at DOE has finally 
awakened to this problem that we have raised and was raised. 
But I find it curious that you signed this request to the 
DNFSB. In fact, your letter states that the NNSA is 
constructing the mixed oxide fuel fabrication facility at the 
Savannah River site.
    So the question again arises, who is responsible for the 
MOX plan, you or Assistant Secretary Spurgeon?
    Mr. D'Agostino. I am supporting Mr. Spurgeon right now, 
because, in essence, we have the corporate history on the MOX 
plant. The MOX team has been aware of concerns with red oil. 
That is why we have the design, particularly, that has been 
actually operating for over 20 years with no incidents or 
problems with red oil.
    That is why we asked the Defense Board many years ago to 
put out their technical bulletin on what types of controls that 
we need to put in place. And, in fact, the Defense Board said, 
``As part of your design, you need to have certain technical 
controls in place.''
    Now that the design is essentially completed, it is 
entirely appropriate at this point to ask the Defense Board, 
``Hey, how did we do? Did we meet the intent of these control 
features? Are they adequately in this design?'' We feel they 
are. The Nuclear Regulatory Commission feels they are. But this 
independent--what I would call completely independent check by 
the Defense Board, who are very technically competent--will 
give me and Mr. Spurgeon the comfort in knowing that this will 
not be an issue for this MOX plant.
    Mr. Hobson. One thing that troubled me, you said the 
Nuclear Regulatory Commission says you are in compliance?
    Mr. D'Agostino. The Nuclear Regulatory Commission is the 
regulator in charge of this particular facility from a 
regulation standpoint.
    Mr. Hobson. I understand. They said you are in compliance 
on the red oil?
    Mr. D'Agostino. They have looked at red oil--I am not sure 
if it is for this particular--I am not sure when that review 
actually happened. But I talked to the Chairman, Dr. Klein, a 
few weeks ago, and he told me personally that this is not an 
issue for the MOX plan at all. So he is very comfortable.
    Mr. Hobson. I am going to have a meeting with him, too, so 
I am going to talk to him about it.
    Mr. D'Agostino. Good. Yes, sir.
    Mr. Visclosky. He told you that, but you don't have 
anything in writing from the NRC on that?
    Mr. D'Agostino. Not that I am aware of. I am sure that the 
MOX folks that do the MOX on a day-to-day basis probably have 
written NRC input on this. But Dr. Klein has told me his team 
has looked at this and is very comfortable with the project.
    Mr. Hobson. I think the review is still ongoing. I don't 
think it is final.
    The other thing I want to get--if we have to subpoena it, 
maybe we have to--is the general counsel's opinion that tells 
you that you can't do what we think you should do and what we 
think the law says you should do.
    Mr. D'Agostino. Yes, sir.
    Mr. Hobson. We are going to challenge that, because I don't 
think that is correct. I mean, you can find a lawyer who is 
normally saying ``no'' to something you don't want. Getting 
somebody to say ``yes'' is a lot harder. Some guys are more in 
tune. I want to see it, because I don't believe it.
    Mr. D'Agostino. Okay.
    Mr. Hobson. If we have to penetrate the counsel's office or 
someplace else, to get somebody to rule on this we are going to 
do it.
    The intent of Congress is here. We have had a problem with 
this agency and other agencies of this particular 
administration saying, ``Well, we don't care what they say in 
the Congress. We are going to do what we want to do.'' Both 
this committee and the other committee I sat on, have asked 
every official to come forward. We have been a lot of places in 
this committee where they just thumb their noses at us because 
we don't count. Well, we are going to count. This Chairman is 
going to make sure we count. This committee is going to stand 
accounted.
    The Chairman and I are in sync on this. We are not going to 
allow an administration to flout a law that they signed. Plus 
there is no signing letter I know. I hate those signing letters 
anyway. I think they are inappropriate and probably 
unconstitutional, if somebody challenges them at some point. I 
don't believe there is any signing letter on this. Hence, there 
is no reason, in my opinion, from a legal standpoint, that you 
can't do this. That is my position. I don't know what other 
people's positions are, but that is mine.
    Thank you.
    Mr. D'Agostino. Right.
    Mr. Hobson. You are chirping what some lawyer is telling 
you. I happen to be a lawyer.
    Mr. D'Agostino. Well, Mr. Hobson, I want to assure you and 
Chairman Visclosky that we do not thumb our noses at the 
committee. We take this responsibility very seriously. I want 
to make sure the management is right. I want to make sure the 
project delivers on its performance baseline. To me, that is 
the most important thing, because we made a commitment on a 
cost schedule and scope. We, the Department have to deliver on 
that.
    Mr. Hobson. You guys, I have to tell you, are a better crew 
than some of the others that have been here. You have done a 
better job. And, Admiral, you have done a better job. We 
appreciate it. But we are frustrated, and we are going to keep 
kicking at the can.
    Mr. D'Agostino. I understand. And we will follow up with 
your request.
    Mr. Hobson. Sorry. I have to go to the Defense hearing on 
the supplemental now. Thank you.
    [Mr. Hobson's written opening statement follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Visclosky. Mr. Ryan.
    Mr. Ryan. I am going to pass for now, Mr. Chairman.
    Mr. Visclosky. Okay. Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman.

                           LAWRENCE LIVERMORE

    Mr. D'Agostino, I understand the budgetary pressures that 
are forcing significant workforce reduction over at Lawrence 
Livermore. The lab, as you know, played a critical role in 
creating and maintaining the modern U.S. nuclear deterrent, and 
certainly it maintains a significant peer-review status for 
unique research and development.
    I wanted to ask a question: What these workforce reductions 
are going to do to peer review and nuclear research; what the 
impacts of the reductions at Lawrence Livermore--are they going 
to be able to sustain weapons expertise there? And what are we 
doing to stabilize the position at Lawrence Livermore to 
maintain some capability? And lastly, are there any other 
additional workforce reductions planned at Lawrence Livermore?
    Mr. D'Agostino. Mr. Calvert, thank you for your question. I 
would like to answer that and also provide the Deputy 
Administrator, who has direct responsibility, to add to that, 
if I could.
    Mr. Calvert. Sure.
    Mr. D'Agostino. Peer review is incredibly important for the 
program. We have undertaken a look at how to shape the 
workforce at each of our three laboratories to be forward-
looking, future-focused, versus kind of rearward-focused, not 
just nuclear weapons but focus on the nuclear counterterrorism 
support to the Intelligence Community and nonproliferation.
    It is the view of the lab director, Dr. Miller, that 
looking at reshaping his force right now makes the most sense. 
We have offered a voluntary, self-select early option for a 
number of folks to voluntarily leave with incentives so that we 
can start reshaping this workforce. As I understand it, we have 
about 215 people signed up to that.

                            AGING WORKFORCE

    Mr. Calvert. On that issue, I have been told anecdotally of 
the aging workforce and the significant difficulty in 
attracting new people to replace these highly trained 
individuals, and especially how we move that expertise onto 
this new generation of designers and researchers. Is that a 
problem?
    Mr. D'Agostino. It is something that we are looking at 
closely. We are working with the Defense Department on a study 
to look at the work that Hank Chiles--Admiral Hank Chiles is 
heading up that study to look at not just the NNSA workforce 
but the DOD workforce, delivery platforms and other things, how 
all these pieces tie together. And it is called a critical 
skills study.
    And what is clear is that, not surprisingly, that the way 
you keep people interested in the work that they are doing is 
to give them real work to do. And so what we are focusing on is 
making sure that they are focused on providing deliverables to 
the Defense Department.
    And what we have found out is is that we have some real 
critical shortages in the NNSA. I will give you one example, 
probably is the best, is this area of nuclear forensics which 
is a capability that started off in the weapons program but has 
tremendous nuclear counterterrorism benefits. So, because we 
have stopped underground testing over 13 years ago, what we 
find--you know, that used to be the forcing functions to 
exercising radioanalytic chemistry skills. So, naturally, that 
workforce that was doing that capability is getting older, and 
it is hard to replenish that.
    We have found that, to do nuclear forensics--in other 
words, to find out how nuclear material is moving around the 
world, to be able to track material and to be able to do 
predetonation analysis--we have to have that skill exercise. So 
George Miller and Mike Anastasio at Los Alamos are looking at 
how do we reinvigorate that particular skill set. So we don't 
need it for underground testing; that is fine. But we do need 
it for the future. We think this country will need it for many 
decades in the future.
    Maybe if you want to talk a little bit about--because I 
know you have been talking with the lab director himself most 
recently.

               General Robert Smolen's Opening Statement

    General Smolen. Mr. Chairman, gentlemen, first I would like 
to thank you. It is great to be here today. This is my first 
opportunity to testify before the committee. I did Air Force 
nuclear programs in another part of my life, and it is an honor 
to be with my colleagues here working these important issues.
    I did, as a matter of fact, speak with George Miller on 
workforce issues as recently as last night. Let me assure you, 
sir, that one of the things that we are doing is taking a very 
hard look at where the expertise is and where we might be able 
to transition that.
    Within the complex itself, certainly within the defense 
programs piece, I can speak to, but there are other areas of 
the complex as well where if there are reductions in personnel 
some of these individuals that have critical skills or very 
important skills could be utilized in other areas. George and I 
had that discussion about should we make those reductions, how 
could we mitigate that in some way by looking at other 
opportunities within the complex where people might have 
opportunities to serve.
    It is a very difficult time with regard to the contract and 
the funding that we have associated with it, and so we do 
anticipate that there probably will be additional reductions 
across the complex.
    The 20 to 30 percent that we estimated over time with 
complex transformation is a part of this as well. So we are 
just doing everything we can to make it that.
    Mr. Calvert. Would it be accurate to say that you would be 
increasing the workforce at Los Alamos or would that be a----
    General Smolen. No, sir, I don't think I could determine 
that at this point because there are some decisions that still 
need to be made. So I couldn't really say.

                      LAWRENCE LIVERMORE LAB COSTS

    Mr. Calvert. While we are on Lawrence Livermore, the 
National Ignition Facility, did you know it has had significant 
budgetary problems? It should be online, I understand, later 
this year, or next year, I guess.
    General Smolen. Yes, sir.
    Mr. Calvert. When you say online, is that going to be all 
lasers functioning? So will all the lasers have been installed?
    General Smolen. I believe they will all be functioning by 
2010 is the estimate.
    Mr. D'Agostino. Yes, it will be 2009.
    General Smolen. 2009, 2010.
    Mr. D'Agostino. For full power, our commitment, and this is 
project management principles, that full power, to that first 
ignition experiment, our commitment is to get that done by 
2010.
    But, before you actually get to full power you want to 
demonstrate that all your lines, laser lines are working and 
synchronized and lined up appropriately. That will clearly be 
done, in fact, probably, certainly in 2009 and I think later on 
this year. But right now we have had, 144 beams actually up and 
operating right now, which is very close to the 192 total. So 
we are well under way on that.
    One thing I might add, sir, on your question, George Miller 
has recognized that the laboratory, Lawrence Livermore 
Laboratory, needs to get its costs down in order to be able to 
provide services to the intelligence community because, 
appropriately, the other agencies that looked at the Department 
of Energy laboratories consider cost in their decision, which 
is a good thing, and we know that some of our customers are 
thinking that as costs go up they go off and look elsewhere to 
see how they are going to address their need.
    So I know this may not provide comfort, but paradoxically, 
as George looks to shape his workforce and reduce his overhead 
costs, it will actually, he believes, and I believe, and Bob 
believes, drive more business appropriately from the other 
national security agencies to go get answers to their technical 
questions. Right now we do a lot of that, almost $700 million 
worth of intelligence community support across the Department 
of Energy.
    Mr. Calvert. There is only one other place that could shift 
to; isn't that correct? I mean, if it is not at Lawrence 
Livermore it is going to shift over to Los Alamos.
    Mr. D'Agostino. Lawrence Livermore, but PNNL, for example. 
For strictly weapons information that is absolutely correct, 
sir. But a lot of capabilities, radiation detection work 
happens at PNNL up in Washington State. Argonne, Oak Ridge 
National Laboratories are big players as well in working 
together.
    This is the thing we talked about earlier. For example, 
Sandia and Oak Ridge are working together on a computing effort 
because we wanted to make sure that we get the Office of 
Science work as well.

                                REACTORS

    Mr. Calvert. One quick question, Mr. Chairman, for the 
Admiral, the reactors that we are presently using on primarily 
submarines and aircraft carriers, do you see in the future that 
we may be moving toward putting reactors in other types of 
ships such as cruisers or other ships because of the fuel 
problems we are having?
    Admiral Donald. Yes, sir, there has been ongoing discussion 
inside the Navy. Obviously there was some legislation last year 
that was passed that placed some guidance in for future 
propulsion for larger surface ships, cruisers and above. Where 
the Navy is in that right now is going through an analysis of 
alternatives, typical acquisition, it is an acquisition 
requirement.
    Part of that analysis of alternatives has been completed 
that looks at the ship type and the propulsion type, and there 
have been a wide range of propulsion types that have been 
looked at for the cruiser, the next generation of cruiser, 
including nuclear, nonnuclear and various configurations of 
each.
    What has to be done before any decision would be made to go 
further with nuclear is that the Navy has to firmly define the 
warfighting requirements for the ship and the capabilities to 
deliver those requirements. Then you get into the engineering, 
and it is really associated with the radar and the combat 
systems, the missile systems and things of that sort that would 
need to be part of the capabilities of the ship.
    Once you know that piece, then you can enter back into the 
propulsion and ship design and make an informed decision as to 
what do you really need. Do you need nuclear? Could it be 
satisfied with a conventional plant? That decision has not been 
made yet. We are not far enough along in the analysis of 
alternatives to do that.
    Having said that, I would tell you we have done nuclear 
power cruisers before. We have had them in the Navy. They have 
all been inactivated. We are confident in our ability. If we 
are chosen, if our alternatives were chosen, we are confident 
in our ability to build it and to supply it for the Navy if it 
meets the needs of the Navy and the needs of the Nation. So we 
have done a good deal of work in that right now, and we are 
ready for the Navy's decision whatever that turns out to be, 
sir.
    Mr. Calvert. Thank you, sir.
    Mr. Visclosky. Mr. Berry.
    Mr. Berry. I will pass at this time, Mr. Chairman. Thank 
you, sir.
    Mr. Visclosky. Mr. Wamp, did you want another one?
    Mr. Wamp. Yes, thank you.

                           FACILITY PROBLEMS

    Mr. Secretary, you touched on 9212 just barely when talking 
about Oak Ridge and with the Defense Safety Board's 
recommendations. Just explain whatever your quandary must be on 
the administration not moving forward with the improvements, 
9212, that are recommended?
    Mr. D'Agostino. Yes, sir. Thank you for the opportunity. 
The Defense Board has raised in a number of letters to me 
personally the concerns that they have with the facility. There 
are concerns with their age, of course, the fact that there are 
potentially some upgrades we could do to beef up the seismic 
standards on the facility itself.
    What the Defense organization program has done, is they 
have gone through that facility completely from stem to stern 
and put together a list of upgrades that if we were going to be 
in that facility forever, if you will, starting off with that 
as a foundation, what types of upgrades would have to happen? 
We have rank ordered them from highest risk to lowest risk and 
have the dollar elements associated with that. That is on one 
side of the equation.
    The other side of the equation is, you know, the costs 
associated with the amount of risk and instead of investing 
those dollars and maintaining the past, this 150 acres of 
highly enriched uranium space that we want to collapse down to 
15 acres or is it better to look towards the future, put those 
resources towards a UPF, uranium processing facility, for 
example.
    There is a judgmental decision point that has to get made 
on while I am going to do these changes and upgrades, I am 
going to accept risk here and I lack those resources to go plan 
for the future. That balance, from a big picture standpoint 
that balance has been made.
    The Board has appropriately the singular focus on nuclear 
safety, and they are very valuable to Bob and I on providing 
independent technical safety input. I use them as a tool. In 
effect, they help me because they are not coming directly from 
my organization, but they provide independent input.
    We will have some disagreements most likely on whether we 
drew the line in the right spot, whether we should have gone up 
or down, whether we are accepting too much risk or not enough.
    I am confident, but I get less confident as time goes on. I 
am confident that we drew that line in the right spot last 
year, but I am less confident as time goes on. These facilities 
are old. One way or the other, I don't think it is worth 
maintaining. I mean, I would rather move quickly to the future, 
which is a smaller complex of uranium activities and ultimately 
is going to be a much cheaper one.
    Mr. Wamp. In a follow-up to that--and I have had 
conversations with Chairman Visclosky and when Mr. Hobson was 
chairman he was able to come down. I have invited Chairman 
Visclosky at some point just to see the footprint, because it 
is a World War II----
    Mr. Visclosky. I don't mean to correct my colleague 
inviting me to come, he told me I had to come.
    Mr. Wamp. No, sir. No, sir.
    Mr. D'Agostino. I don't know if I am allowed to second 
that.
    Mr. Wamp. If I told you, I said, please, and then said we 
invite you, sir.
    But it is a World War II era site, and it is real obvious. 
When then Chairman Hobson came, the whole shrinkage issue 
became very real to him, that you have to do this because of 
just the incredible antiquation.
    So that kind of leads me to one final question, and that is 
all these acronyms, IFDP stands for Integrated Facilities 
Disposition Plan, which is an Oak Ridge plan both at the Oak 
Ridge National Laboratory and at the Y-12 National Security 
Complex; two, effectively shrink with your plan for missions 
and modernization taking the old facilities down. Because, I 
mean, you can build the new facilities, but if the old 
facilities are still your responsibilities and there, the 
maintenance costs are through the roof of maintaining old 
business whether they are being used or not, and there are just 
tons of them.

                                  IFDP

    So comment, if you will, on our plan for IFDP. That has to 
be squeezed in the middle of these missions as well and the 
missions, meaning new facilities for the missions and following 
the intel needs, you know, little things like design basis 
threat thrown on top of that and then all the complications of 
the new world that we live in. But IFDP is important for us, 
but it is not easy to fund.
    Mr. D'Agostino. That is right. I will comment on that and 
then I will ask Bob if he has anything to add.
    One thing I would say is you hit the nail on the head on 
the last point. It is absolutely the right thing to do. It is a 
matter of looking at the resource requirements to take down 
these very large facilities, not just at Y-12 but obviously at 
Oak Ridge and the whole reservation. We want to do it, it is a 
matter of how do we do it in a flat budget and how do we 
reprioritize?
    What I can tell you is this for the NNSA, outside of the 
Defense Programs budget, to make sure that people understood I 
was serious about reducing the size of the nuclear weapons 
complex and shifting it into a national security enterprise 
that is appropriately sized for the future, I carved out in the 
2009 budget request about $75 million to do a transformation 
disposition program. It is actually take down the buildings now 
type of an activity. You may have heard me talk about 600 
buildings the DP organization has identified that need to be 
taken down across the complex. I have carved out $75 million as 
part of our request to start working down that 600 building 
list and getting ourselves out of that.
    Some of the expense on the IFDP has to do with process 
contaminated--some of the facilities are very expensive to take 
down because they have contaminated processes in them. Those, 
we have an agreement with the Environmental Management 
organization to figure out--and Jim Rispoli's organization to 
figure out how we do that balance between the two. Where do we 
draw the line between the two organizations? Because this is 
not about throwing the liability over the fence so I don't have 
to worry about it anymore. As long as the buildings are up, 
there are costs associated with that.
    Mr. Wamp. General, do you want to add?
    General Smolen. Sir, I would just add it is really correct. 
It is a resource issue associated with that along with some of 
the buildings and a variety of buildings that we have that are 
vacant that we could tear down, others that have environmental 
issues and will require a little more time. It is a little more 
complex to get those buildings down and that debris away.
    Mr. Visclosky. Thank you.

                                  RRW

    I am going to recognize Mr. Ryan in one moment. I do have a 
question I want to get to first and that is on advanced 
certification. As I think everyone understands, the committee 
and ultimately the Congress and the President who signed the 
bill into law zeroed out money for RRW.
    In your statement today, Mr. D'Agostino, on page 7 you 
indicated under Defense Programs that the request also 
continues efforts called out in the explanatory statement 
referenced in section 4 of the omnibus bill to address issues 
raised in the recent JASON summer study of the feasibility of 
certifying RRW designs without nuclear testing.
    Is NNSA spending money on studying the certification of the 
RRW design?
    Mr. D'Agostino. One thing I want to make clear, and I 
appreciate the opportunity to clarify, we have stopped all 
activities on the reliability replacement warhead. We put out a 
direction in very early January of this year, consistent with 
the omnibus appropriations to stop all activities after RRW.
    In our request for fiscal year 2009, we appreciate the 
identification of the advanced certification line to address 
the certification questions, particularly those raised in the 
act which described addressing the questions that the JASON 
raised in their report on RRW.
    What we are asking for in fiscal year 2009 is $10 million--
first of all, is money to continue on the advanced 
certification effort that was started in 2008 because we want 
to continue that activity.
    Mr. Visclosky. In general, advanced certification or 
advanced certification on RRW?
    Mr. D'Agostino. To answer, the general advanced 
certification question.
    Mr. Visclosky. Not on RRW?
    Mr. D'Agostino. Yes--well, the RRW line, if you will, that 
we are asking for.
    Mr. Visclosky. Is 2009?
    Mr. D'Agostino. In 2009, because what we don't want to do 
is play games. We want to be very clear that we think the 
committee's questions with respect to certification are the 
right questions to get answered, and we think to fully answer 
those questions there is some maturation of the RRW design that 
we would like to do in fiscal year 2009 to answer those 
questions raised in the JASON's report.
    What that does is it allows us to fully answer the 
certification questions. It does not allow us to finish a phase 
2 study on RRW.
    Mr. Visclosky. You are not spending any money in 2008?
    Mr. D'Agostino. On RRW?
    Mr. Visclosky. On RRW certification?
    Mr. D'Agostino. Right.
    Mr. Visclosky. Your request is for 2009.
    Mr. D'Agostino. Yes, we will talk to you about that, that 
is right. But in 2008 we are strictly staying away from the--
the focus is to stay away from the RRW piece on the JASON's 
report on certification. They brought up some very good points 
in their report which I think the committee has asked us to 
answer.
    It is a question of the need to do additional experiments 
to kind of understand failure modes, the need to figure out 
whether--what I would call generic surety features that could 
be added to an existing stockpile, how that might impact 
certification. Because I believe the committee's desire was to 
try to understand how do we stay away from, if you will--I may 
be putting words in the committee's mouth that I don't mean 
to--how do we stay away from building a new warhead but get 
some of the benefits, the enhanced safety and security benefits 
that we talk about on the RRW side. So that is the second 
element that the JASON's identified.
    The third piece is how do these materials interact with 
each other, kind of over time.
    The fourth is the peer review process improvements.
    Mr. Visclosky. I appreciate your answer, because, 
obviously, it is fair to ask for money for 2008, but just feel 
compelled to--I am sorry, for 2009. I feel compelled, and you 
tell me you are not spending any money on advanced 
certification in 2008 on RRW because the language is a new 
campaign, $15 million, is the new campaign focus very narrowly 
on addressing the long-term scientific issues. And you have 
discussed some of those related issues to continued 
certification of the nuclear stockpile.
    Mr. D'Agostino. Right.
    Mr. Visclosky. Without underground testing and the 
scientific uncertainties identified by the JASON review. It was 
no RRW.
    Mr. D'Agostino. Right.
    Mr. Visclosky. I just wanted to make sure there wasn't any 
misunderstanding of that language. I appreciate your answering. 
Thank you, sir.
    Mr. D'Agostino. Right, if I could just add, what we wanted 
to do--we looked very closely at the language in the omnibus. I 
think it said existing stockpile. I don't know if it said 
future systems or not. I thought it might have said that. But 
what Mr. Ostendorff and I and Bob Smolen--when we looked at 
that we said we need to be very clear on our 2009 request and 
we need to be very clear on what we are doing in 2008.
    In fact, that is why I signed a letter in January, which I 
would be very happy to provide, making it clear that I don't 
want any expenditures on RRW in 2008.
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    Mr. Visclosky. Because in your detailed justification, you 
did talk about an analysis being applied to the existing RRW 1 
design to credit certification concepts and then continue that 
could be applied to a warhead-like extension. But again that is 
your 2009 request, as I understand it, the distinction; is that 
right?
    Mr. D'Agostino. That is right.
    Mr. Visclosky. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman.

                                WARHEADS

    I have a warhead question and a couple of contractor 
questions. So in the first one maybe, General, you could answer 
as well. On the W78, then the notice isn't the warhead of the 
future--and you guys are asking for $43 million to maintain the 
weapon. And if we keep it going until notional LEP in 2022 it 
is about $700 million that we would spend without regard to 
inflation.
    So this weapon has some deficiencies, seems like it is not 
the weapon of the future. If you had to drop a warhead out of 
the force, would this be on the short list?
    General Smolen. No. Right now we have two weapons for 
Minuteman. So if we were to drop a warhead then that would 
leave us with the single warhead. So I don't think we would 
prefer to be in a single option.
    Mr. Ryan. Are you in agreement with that?
    Mr. D'Agostino. Yes, I am. I think there are, just as there 
are with things that you keep around for long periods of time, 
aging issues that come up.
    This warhead has some aging issue and thus we had this 
long-term plan. I know we are asking for a lot of money in 2009 
right now just to maintain. But there is this view that if we 
have to keep this warhead well out into the future we will need 
to do some life extension. The specifics on the aging issue are 
classified, which I would be glad to share with you, sir.
    But that is one of the reasons why--there are requirements 
that will come from the Defense Department. Generals Chilton 
and Cartwright essentially set the standard for what those 
requirements are. They think maybe there is a better way to not 
have to rebuild those Cold War warheads and maybe we can get by 
with fewer types of warheads. That reduces the impact on Bob's 
infrastructure that he has to maintain. So I think I would 
agree with that.

                         CONTRACTOR PERFORMANCE

    Mr. Ryan. One of the issues we are trying to hammer away at 
the last few committee hearings is with contractor performance 
on some of these contracts. How does DOE in your mind 
institutionalize the knowledge of contractor performance across 
these different programs?
    We have had scenarios where the best example is one of the 
key competitors for the Los Alamos and the Livermore contracts 
had substandard performance on non-NNSA contracts at Hanford 
and Nevada.
    What are you guys doing as far as getting information on 
contractors who may not have met the performance levels and try 
to prevent them from maybe getting contracts in the future, at 
least knowing about it beforehand?
    Mr. D'Agostino. Since I was the source selection official 
for one of those contracts, and I can say this. I wouldn't say 
this if I didn't think I could publicly.
    Mr. Ryan. Unlike some of us.
    Mr. D'Agostino. No, no, I didn't mean to imply that at all. 
But I am familiar with the example that you cited, and without 
mentioning the company's name, I can tell you what we did. As a 
requirement of submitting a proposal, we ask the companies that 
submit proposals, I think in this case it was 5 years' worth of 
performance data.
    In this case, I recognized that the performance data was 
only submitted as of the date that the proposal was submitted. 
In this case I think it was July, June of a couple of years 
ago, 2 years ago. But the decision was made about 6 months 
subsequent to that.
    So what I did was I asked our procurement executives to go 
back and get me the most recent DOE decisions on all of the 
performance, contract performance, not just for the team that 
ultimately won, but for all of the bidders in this case--and 
there were only two bidders. I considered those, and they did 
change the score, the numerical score and ranking and made the 
decision a bit tougher. I will tell you honestly they made the 
decision a bit tougher.
    But what sealed it for me was kind of the thing we talked 
about earlier, which is management and leadership, and it was 
clear to me that the management structure and the 
accountability chain and the winning proposal was outstanding 
and allowed me, as ultimately the lead shareholder of this 
corporation, if you will, representing the American people and 
accountability to you was that I had an ability, under the 
proposal that I selected, to be able to fairly strictly enforce 
performance expectations and reward and consequently punish 
behavior, if you will. I think some of the improvements we have 
over the past few years demonstrate that.
    But I will tell you because of the problems at Hanford and 
some of the other sites it narrowed the scoring range a little 
bit. There is no question about it.
    Mr. Ryan. So this information is coming beforehand?
    Mr. D'Agostino. Absolutely. The source selection official 
and the source evaluation boards, the officials and an 
individual on the board takes into consideration not just what 
the proposer submitted but also takes into consideration the 
recent grades that the Department has attributed to each of 
these particular contractors, and it did make it a tougher 
decision.
    Mr. Ryan. Thank you, Mr. Chairman.
    Mr. Visclosky. I know Mr. Simpson and Mr. Calvert have 
quick questions. We may start voting soon.
    If I could, I have two areas I would like to just briefly 
cover and then obviously we are going to have to go to the 
record here.
    In October of 2006, the Department came up and they had 
Complex 2030.
    In December, we received the vision for the future complex, 
and it now talks about 2017.
    The broad question I have is 2017, if you would, knowing 
that this continues to be an evolutionary process, and there is 
no endpoint per se, but is 2017 now the end and you have 
essentially shaved off 13 years?
    Mr. D'Agostino. I will answer that, and if General Smolen 
has anything to add it is okay if he would add that. The 
Complex 2030 was an unfortunate title, in my view, now looking 
back on it.
    Mr. Visclosky. I am not attributing it to you because it 
was someone else who came up with it.
    Mr. D'Agostino. Well, but it was my responsibility, so I 
made that decision.
    Mr. Visclosky. We are aware today----
    Mr. D'Agostino. Right. I think what the 2030 actually 
represented--not the change in the complex, but actually the 
stockpile itself--recognizing that we felt that we included 
changing the whole stockpile over at that time to have a much 
smaller, much more focused stockpile.
    So actually the infrastructure changes that we had in place 
in that 2030 vision was largely going to be done by the 2020 
timeframe, if you will, late 2017. So what we felt, we 
recognized, and I think you have been very clear about, well, 
we can't wait 20 years to do something, that the majority of 
the success of the program in setting out that right path is 
going to happen in the next 10 years and has to be set in the 
next 10 years.
    Mr. Visclosky. Could I, because I want to be fair to my 
colleagues on time, and it is not out of interest in this case, 
because it is a huge point here, if you can provide to us, if 
you would, in some fashion, and we can talk at the staff level, 
because I don't want to put you to any extra work, but just so 
I have a clear understanding myself, in a rather simple fashion 
on an annual basis what it looks like in 2030 what it looks 
like in 2017, so I am certain in my mind what we are now 
looking at?
    Mr. D'Agostino. Absolutely. We will be glad to provide 
that.
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    Mr. Visclosky. The other question--and it would be for the 
record--and I realize definitions are important too because he 
had an interchange with Mr. Calvert on NIF. As you are quite 
familiar, last year I had my list on stockpile stewardship and 
major construction, which included NIF, MESA, DARHT and the 
advanced computational cells.
    If you could, for the record, on NIF, MESA and on DARHT, we 
had asked and made observations about the original estimates, 
this is data placement of the budget and what those current 
estimates are, and also you clearly explain to the committee 
what your definition of the end is.
    Mr. D'Agostino. Right.
    Mr. Visclosky. I notice that with NIF, for example, it was 
March of 2009, but definitely as one of the last lasers in 
place is it 2010, is it 2009, just so I have a sense.
    Mr. D'Agostino. Absolutely.
    Mr. Visclosky. Along that line on DARHT, and I would end 
mine on this, is that second axis is not yet completed that is 
to be completed. Is there any plan on, if you would, 
constructing a new DARHT system in some future date?
    Mr. D'Agostino. I can answer that now or for the record.
    Mr. Visclosky. Just if you could answer that question and 
then if you would like to supplement it for the record.
    Mr. D'Agostino. Certainly I would like to supplement for 
the record.
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    The DARHT second axis has been tested. We are doing the 
final acceptance of the criteria and should have that done in 
the next few weeks.
    Mr. Visclosky. I understand it is working.
    Mr. D'Agostino. It is actually working, it is actually 
quite incredible, 1 billion electron volts are shooting down 
there, and it is just fantastic. We should get that done in the 
next few weeks and we should be up and operating the shots.
    Our plan is to fully utilize the DARHT facility. We expect 
a utilization to go out to the 2025, if not later, timeframe. 
We don't have, and the idea is if we do have to build out in 
the future, more to an additional hydro test capability we 
would probably not do it at Los Alamos. We would do it at the 
Nevada Test Site. There is nothing in our budget request.
    Mr. Visclosky. So you have no money in 2009 to even begin 
down that road, because my upset is we are not quite done.
    Mr. D'Agostino. Right.
    Mr. Visclosky. Haven't at least talked and so there is no 
money in 2009.
    Mr. Calvert or Mr. Simpson.
    Mr. Calvert. I will just submit mine for the record, Mr. 
Chairman.
    Mr. Visclosky. Okay.

                           NNSA CLEANUP COSTS

    Mr. Simpson. In your conversations with Congressman Wamp 
talking about the cleanup liabilities that NNSA has and the 
transfer of those liabilities to EM, do you have an estimate of 
what the total long-term liabilities are at NNSA in terms of 
cleanup?
    Mr. D'Agostino. We don't have it to the degree that I feel 
comfortable calling it a budget quality estimate. We understand 
the buildings that we want to take down.
    We are working on an arrangement with the EM organization 
to say, we think, who is going to take down what.
    Mr. Simpson. Will there be an attempt to transfer those 
liabilities to EM? The reason I asked this is NE has 
liabilities that are at different sites, NNSA has liabilities 
that are at different sites that are truly EM issues, and it is 
all one government.
    I would like to have the cleanup liabilities that 
Environmental Management is responsible for under Environmental 
Management rather than the different programs out there.
    Mr. D'Agostino. I think that is right. I think some of the 
cleanup, and this goes back to the chairman's statement on 
definitions, my view of cleanup when I tear down any nonprocess 
contaminated building I don't need the EM to do that because it 
is a bulldozer and dump truck type of work and can be done for 
fairly little money, doesn't require EM expertise. I don't want 
to transfer that over to EM because I think that is my 
responsibility to clean up my own mess.
    EM clearly has the expertise, the project management 
expertise, they have been doing this for a while. We don't want 
to transfer--we want to transfer those types of liabilities 
appropriately over to Jim Rispoli, but we are not done yet with 
having this down to a point where I feel comfortable. It is 
certainly not ready for prime time, sir.
    Mr. Simpson. I appreciate that.
    Mr. Visclosky. Would you yield to me for one second?
    Mr. Simpson. Sure.
    Mr. Visclosky. I have the 600 buildings in my mind and 
there is no notation about transfer responsibility or removal. 
If you could enumerate for the record because transfer is not 
the end--and I guess that is why we are having the 
conversation--is enumerate more clearly than the 600 and 
actually who and what gets transferred, what actually comes 
down with the 2009 request?
    Mr. D'Agostino. We will be glad to do that. We have a 
specific list and an allocation process we will be glad to 
describe to you and the staff.
    [The information follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
                        ENVIRONMENTAL MANAGEMENT

    Mr. Simpson. NE and NNSA and all the different agencies get 
listed under Environmental Management, what truly is 
Environmental Management's long-term responsibilities. That 
gives us a better understanding of what we will have to 
appropriate in the future to address those issues.
    To me it is not just a matter of transferring those 
liabilities to get them out of your budget or NE's budget. It 
is so we have a planning process for how to address them.
    Let me ask you another brief--probably not brief--series of 
questions.
    The Department of Energy's National Nuclear Security 
Administration issued its draft supplemental environmental 
impact statement on transforming the Nation's nuclear weapons 
complex. A final decision has been promised for the end of 
fiscal year 2008.
    Your draft SPEIS contains many interesting proposals to 
consolidate uranium-plutonium processing in different 
configurations. The consolidated nuclear processing center 
idea, for instance, would have all of these materials in one 
place where it can be more easily guarded and where it would 
pose a much smaller risk to the environment and the public.
    The adversity report last year recommended that all weapons 
manufacturing be consolidated in one center with significant 
costs and security benefits. Your draft preferred alternative 
for complex consolidation would take the furthest extreme and 
keep manufacturing scattered among many existing sites.
    Now the question is is the NNSA recommendation so radically 
different from that of this distinguished group, and 
specifically what components of the RISK E analysis do you 
disagree with?
    General Smolen. Sir, I will start in general terms. There 
were subsequent studies that looked at the cost estimates of 
being able to actually do that, and it was determined that in 
many cases it would be more advantageous based on the 
facilities that were available, the workforce that was 
available, to not consolidate everything.
    Mr. Simpson. Costwise?
    General Smolen. Yes.
    Mr. Simpson. Could you provide a record of the DOE's cost-
benefit analysis comparing those recommendations with DOE's 
draft alternative and explain why the draft preferred 
alternative is superior to the risky recommendation?
    General Smolen. Yes, we will be happy to do that.
    [The information follows:]

              Complex Transformation Cost-Benefit Analysis

    On April 4, 2008, the following documents were supplied to the 
Committee:
           ``Independent Business Case Analysis of 
        Consolidation Options for the Defense Programs Special Nuclear 
        Material and Weapons Production Missions,'' TechSource 
        Incorporated Report Prepared for the National Nuclear Security 
        Administration, December 2007.
           ``Office of the Secretary of Defense Cost Analysis 
        Improvement Group Independent Assessment of the National 
        Nuclear Security Administration's Proposed Nuclear Weapons 
        Production Complex Modernization Program,'' January 10, 2008. 
        This included the Institute for Defense Analyses Report, 
        Economic Analysis of National Nuclear Security Administration 
        Modernization Activities.

    Mr. Simpson. Have you had the NNSA cost analysis of the 
alternatives verified by any independent entities such as the 
CAIG?
    General Smolen. Yes, sir. The independent business case has 
been done for that. There was also a Department of Defense Cost 
Analysis Investment Group, the CAIG, that conducted an 
investigation on that. They believe that this is a better 
alternative.
    Mr. Simpson. I appreciate it and look forward to looking at 
that information. Thank you.
    Mr. Visclosky. We have about 30 seconds, and you have a 
budget of $828 million on the table. What is your biggest 
problem, in 30 seconds. What is your biggest concern?
    Admiral Donald. First off, I again appreciate the support 
that we have had. The key focus of what we wanted to ensure 
first and foremost is safe and effective operation of these 
reactor plants that are on the fleet right now.
    I am satisfied, and I believe you should be confident that 
the budget we have had this year and the budget we will have 
next year will ensure that that continues for the Nation and 
for the American public.
    The one issue that is starting to cause me some difficulty, 
however, if you go back and look at 2007 and the continuing 
resolution 2008, the consolidated appropriations bill, and with 
a potential for a continuing resolution next year, there has 
been a consistent erosion against my budget, $47 million 
between 2007 and 2008 and could be as much as $54 million next 
year.
    In the grand scheme of things what these folks are talking 
about over here doesn't seem like a whole lot of money but it 
is having an impact on my ability to do advanced technology 
work, to support work to sustain my facilities, and it is 
having an impact.
    Mr. Visclosky. In purchasing power, is it nominal or real 
dollars?
    Admiral Donald. This is real dollars that we are talking 
about here, sir. It is something that is unique--we haven't had 
this much in the past--but in the past 2 years we have seen it, 
and it is causing an impact and it is causing me concern about 
the long-term health of the program.
    Mr. Visclosky. Gentlemen, we will go. I appreciate your 
service. We will follow up. We have a large series of questions 
for the record. They are enumerated majority and minority. 
Again, thank you very much.
    [Questions and answers for the record follow:]

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                                           Thursday, April 3, 2008.

             DEPARTMENT OF ENERGY: NUCLEAR NONPROLIFERATION

                                WITNESS

WILLIAM TOBEY, DEPUTY ADMINISTRATOR, DEFENSE NUCLEAR NONPROLIFERATION

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky [presiding]. The subcommittee will come to 
order.
    The Subcommittee on Energy and Water Development meets 
today to hear testimony from Mr. William H. Tobey, deputy 
administrator for defense nuclear nonproliferation, on the 
nuclear nonproliferation activities at the Department of 
Energy.
    Nuclear nonproliferation is a priority of this 
subcommittee. Mr. Tobey, we attach great importance to the work 
that your office does.
    The President has said that the biggest threat facing this 
country is weapons of mass destruction in the hands of a 
terrorist network. This subcommittee agrees. This is reflected 
in the actions taken in the FY 2008 omnibus bill at our 
insistence.
    We transferred MOX to NE, but we should have confidence in 
the security of our own plutonium. Additionally, speaking for 
myself, I was fearful that if MOX was not transferred, it would 
have consumed most of the nuclear nonproliferation budget.
    We transferred Pit Disassembly to Directed Stockpile Work, 
since it is a defense function and should not, in any way, 
distract from your work from either a management or fiscal 
perspective.
    We increased funding for nuclear nonproliferation by $330 
million.
    Regrettably, despite his observation, the President's 
request falls short, while evidencing a certain symmetry: 
Weapons activities go up 5 percent; nuclear nonproliferation 
goes down by 7 percent.
    Mr. Tobey, I believe there are many nonproliferation 
programs at the department achieving important national 
security goals. Based on the decisions reflected in this budget 
request, it is obvious we need to have a serious discussion 
about departmental priorities.
    Your full written testimony will be entered into the 
record.
    After the hearing, we may have some questions for your to 
answer for the record. And I ask that you have the responses 
and any supporting information requested by the subcommittee 
cleared by your office, the Department of Office of Management 
and Budget, and delivered in final form to the subcommittee no 
later than four weeks from today.
    I also ask that members who have additional questions and 
would like to submit them for the record, please do so by 5:00 
p.m. this afternoon.
    And now I would recognize my good friend, Mr. Hobson, for 
any opening statement he may have.
    Mr. Hobson. Thank you, Mr. Chairman.
    Good morning, Mr. Tobey.
    Mr. Tobey. Good morning.

                     Mr. Hobson's Opening Statement

    Mr. Hobson. You may have heard that I will be retiring from 
Congress at the end of this year. And one of the things I will 
miss talking about is DOE's nonproliferation program.
    In concept, it is a critical piece of keeping the homeland 
safe and the world stable and, frankly, is one of the more 
important programs in the entire Department of Energy. What I 
really enjoy talking about, besides MOX, which I will come back 
to, is trying to make sure the program is really working.
    Nonproliferation has received a lot of funding in recent 
years, including significant increases over the president's 
requests. And we need to understand what the American taxpayers 
are getting in return for that investment.
    Your program has had some marked successes, but it is hard 
to discuss those because so many of the details are classified. 
That is a problem, frankly, because it is difficult for you to 
build and increase support for your strategy and work.
    I would like to recommend you put some thought into how you 
can make more of your successes public. I am not picking on 
your program here. I have made the same recommendation for our 
nuclear weapons stockpile and continue to hold out hope.
    No one will argue with the importance of your work. I can, 
however, argue with whether you are spending your funding on 
the highest-return items. I am afraid no one really knows, 
including probably you, until we have a comprehensive 
accounting of where dangerous material exists and what it would 
take to secure it.
    You are in an awkward position. You know the threat is out 
there in principle, but you can't possibly know if there is 
something else you should be doing to keep us safe.
    I think that position is what led to the latest fiasco with 
the initiatives for proliferation prevention program. The 
program started out to address a very specific need, and then 
it looks like it went on auto-pilot.
    We don't really know yet if any U.S. taxpayer funding went 
in to support the Iranian nuclear program, so I am not going to 
go into that now. What we do know is that NNSA has no real exit 
plan for the program. And that tells me that no one within the 
program has questioned whether it should be phased out. That is 
not the kind of critical thinking that I like to see within our 
programs. We need a much more analytic and objective approach 
to guide our nonproliferation investments in the future.
    Now, I said I would have to chat about MOX just a bit. It 
is, after all, my least favorite yet most often mentioned DOE 
topic. And I really thought we had helped MOX last year when we 
moved it to Nuclear Energy. But the department doesn't seem to 
recognize a good thing when it is handed to them. That also 
means that NNSA gets to be grilled on MOX one more year, as Mr. 
D'Agostino found out yesterday.
    Mr. Tobey, I hope you are ready to defend in depth this 
flagrant disregard of congressional direction.
    Mr. Visclosky. Mr. Tobey.

                     Mr. Tobey's Opening Statement

    Mr. Tobey. Chairman Visclosky, Ranking Member Hobson, 
members of the committee, it is a real pleasure for me to be 
here this morning, because I take great pride and pleasure in 
speaking about the programs that we undertake and the people 
who run them.
    I am mindful of the comments that I just heard about the 
committee's support for our programs, and I appreciate that, as 
well. The fact that the committee places great priority and 
attaches great importance to our work is heartening to me. And 
it is very helpful to have bipartisan support for the programs 
that we undertake.
    Before I go into the details of our budget request, I just 
wanted to emphasize once again how proud I am of the men and 
women who undertake our programs. They brave conditions which 
include temperatures ranging from 40 degrees below zero. In 
construction projects, they have been present or at scenes 
where there has been small arms or rocket fire. They have faced 
hostile conditions in some of the most isolated regimes in the 
world. And yet, every day, they do their job to detect, secure 
and dispose of dangerous nuclear material. And of them I am 
enormously proud.
    Like Representative Hobson, I, too, will be drawing my time 
with this program to a close. And I am sorry about that, but I 
am proud to have been associated with it.
    The fiscal year 2009 budget request for the Office of 
Defense Nuclear Nonproliferation totals $1.247 billion. This 
amount will allow us to continue our mission to detect, secure 
and dispose of dangerous nuclear and radiological materials; 
strengthen international nonproliferation partnerships; and 
meet evolving proliferation and international security threats.
    Specifically, this funding will advance Defense Nuclear 
Nonproliferation priorities to: One, enhance national 
capabilities to detect and interdict nuclear and radiological 
materials at key seaports and border crossings; two, reduce and 
eliminate stores of highly enriched uranium and vulnerable 
radiological materials across the globe; and, three, work to 
ensure the sustainability of nuclear security upgrades in 
Russia and the international nonproliferation system.
    Many of our efforts focus on nuclear materials and facility 
security. We recognize that the best way to reduce the threat 
that a proliferator or a terrorist could acquire nuclear 
weapons is by denying them access to the necessary nuclear and 
radiological materials in the first place.
    To that end, our fiscal year 2009 request will allow us to 
accelerate our work, including installation of radiation-
detection systems at nine additional ports under our Megaports 
program, for a total of 32 Megaport sites worldwide; helping to 
secure 49 border crossings and other high-risk points of entry 
under our Second Line of Defense program; and expanding export 
control and commodity identification training activities with 
more than 50 countries.
    Additionally, in 2009, we will undertake a new initiative 
to strengthen international safeguards to prevent the diversion 
of nuclear material to nonpeaceful uses. This Next-Generation 
Safeguards Initiative will develop the safeguards and 
technologies and human resources needed to sustain our 
nonproliferation efforts while promoting international 
partnerships and meeting the challenges of growing nuclear 
energy demand.
    Underpinning all these efforts is our nonproliferation 
research and development work, through which we will continue 
our leadership as the principal federal sponsor of long-term 
proliferation-related R&D on nuclear detection and 
characterization.
    Our fiscal year 2009 request will allow us to accelerate 
our efforts under the Global Threat Reduction Initiative to 
convert HEU-fueled research reactors around the globe to use 
the less proliferation-sensitive low-enriched uranium.
    We will also continue to repatriate U.S.- and Russian-
origin highly enriched uranium to secure sites, secure high-
priority nuclear and radiological sites globally, and secure 
and remove orphaned radiological sources that could be used in 
dirty bombs.
    To date, we have removed enough nuclear material for nearly 
70 nuclear weapons and secured more than enough radiological 
sources for 8,030 bombs.
    In fiscal year 2009, we will convert an additional eight 
HEU reactors to LEU, remove an additional 700 kilograms of HEU, 
and secure an additional 125 radiological sites across the 
globe.
    Last year I updated you on our progress under the 2005 
Bratislava joint statement on nuclear security, in which we 
have partnered with Russia to secure its nuclear weapons and 
sites of highest concern. I am pleased to report that we have 
completed 85 percent of these key upgrades to date, that work 
is under way at the remaining sites, and we are on target to 
complete our work by the end of this year.
    In fiscal year 2009, should Congress grant our request for 
resources, our focus will be on completing additional high-
priority security work beyond the Bratislava agreement and 
working with Russia to put in place the systems and procedures 
required for long-term Russian sustainability of U.S.-provided 
security upgrades.
    Additionally, our fiscal year 2009 budget request also 
includes funding to ensure the shutdown of the last remaining 
plutonium production reactor in 2010. We will prevent the 
production of about a half a ton of weapons-grade plutonium 
annually. We will continue our effort to dispose of excess U.S. 
highly enriched uranium, and facilitate Russia's commitment to 
dispose of 34 tons of Russian weapons-origin material.
    These material security efforts enhance our work to 
strengthen the nonproliferation regime and the multilateral 
partnerships supporting it. In this regard, we will continue to 
support the work plan of the Global Initiative to Combat 
Nuclear Terrorism and to advance the objectives of the United 
Nations Security Council Resolution 1540, which mandates 
effective export controls, criminalizes proliferation of 
weapons of mass destruction by nonstate actors, and requires 
states to secure proliferation-sensitive materials.
    We will likewise continue our technical and diplomatic 
support of U.S. efforts on the Non-Proliferation Treaty, within 
the Nuclear Suppliers Group, and on multilateral initiatives 
such as the international fuel assurances and disablement of 
North Korea's nuclear facilities through the use of State 
Department funds.
    We recognize that, just as today's proliferation and 
terrorism threats are global in scope, so, too, must be the 
responses we undertake to address them. As I stressed earlier, 
these are dynamic programs designed to address today's evolving 
proliferation and nuclear terrorism threats. We have made a lot 
of progress in tackling a threat that many people thought we 
could not effectively address. We will continue to undertake 
our global mission as smartly and as efficiently as possible.
    To that end, in fiscal year 2009, we will continue our 
efforts to accelerate our programs w we can and create 
synergies among our efforts, emphasizing cost-sharing and 
sustainability with our international partners, and strengthen 
our commitment to program and project management.
    And before I close, it may be helpful for me to take a 
moment to address some of the comments that were made in the 
opening statements, which, effectively, I think were 
essentially questions about the program, and perhaps also to 
take the opportunity to highlight some of our successes, 
because I am mindful of what Representative Hobson had said 
about the fact that some of our successes are perhaps a bit 
underappreciated.
    And I would like to take advantage of this forum to let 
people know that we have, in fact, converted 51 reactors in 29 
countries from the use of highly enriched uranium to low-
enriched uranium and shut down an additional four such 
reactors. This has enabled us to return over 1,700 kilograms of 
highly enriched uranium, either to Russia or to the United 
States or perhaps even to third countries, for secure storage 
of this material.
    As I mentioned earlier, we have secured 85 percent of the 
nuclear weapons in material storage sites of concern under the 
Bratislava Initiative in Russian, and that work is under way at 
the balance of those sites and is due to be completed by the 
end of this year.
    We have trained literally thousands of border inspectors or 
customs officials, export license officials, in both the United 
States and overseas, to detect and to deter and to prevent the 
trafficking of illicit material that is of proliferation 
concern.
    We have overseen the downblending of over 320 metric tons 
of highly enriched uranium from Russia. This has provided 
almost half of the fuel for U.S. energy reactors, for U.S. 
power reactors. Thus, on average, one in 10 lightbulbs in 
America is run by material that was once in weapons that were 
aimed at us or our allies.
    I think these are all enormous successes. And I am proud to 
be associated with them, even though I think that the credit 
really belongs to the people who are directly running the 
programs.
    I would also be happy to discuss in greater detail the 
measures that we have taken in response to both our own 
perceptions of the evolving nature of Russia, our own review of 
the GIPP program, the GAO report of that program, and concerns 
that have been expressed in Congress.
    I have discussed it with the staff, and I would be happy to 
talk about both the interim steps that we have taken and longer 
steps that we are contemplating, that, frankly, we would like 
to discuss with members of Congress and make sure that we can 
build a consensus around them so that people can be comfortable 
with where the program is headed.
    And then, finally, with respect to the MOX program, I know 
that it was discussed yesterday with my boss. And I would be 
happy to discuss it, although, frankly, I don't have much to 
add to what he said or to what he cited our lawyers as saying.
    Thank you for your attention. I would be happy to answer 
any further questions.
    [The written statement of Mr. William Tobey follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Hobson. So you didn't bring anything from the lawyers 
today for us to talk about or to look at----
    Mr. Tobey. I did not.
    Mr. Hobson [continuing]. As we talked about yesterday. In 
the hearing, we talked about trying to understand your lawyers' 
position, because we challenged it. And we can't really 
challenge it until we see it. So that gives me some problems.
    If somebody would have gotten the message as a result of 
the hearing yesterday, and you would have shown up prepared or 
a lawyer would have shown up with you and been prepared. We 
need to discuss what is a very, I think, broad and negative 
reaction from the administration and the secretary to the 
Congress. This should not exist. A law was signed by the 
President.
    If there is a language problem, we need to know what the 
language problem is because we are going to change it, or I 
think, the chairman is going to change it.
    So I am a little sorry you didn't show up today with that.
    Mr. Tobey. I understand that the lawyers are working on a 
written opinion and that they will be able to share it with you 
as soon as it is done, and that they anticipate that it will be 
done quickly.
    Mr. Visclosky. I would just add to Mr. Hobson's 
observations, because when he spoke about the issue of MOX 
yesterday and its continued residence in nuclear 
nonproliferation, I was silent. And I would hope no one takes 
that as somehow a change in opinion by myself. But I thought 
that Mr. Hobson simply had covered the ground very well. And, 
as I like to describe him, he is the real lawyer on this 
committee. I don't have enough malpractice insurance, myself, 
to proceed.
    But it is an important issue. And there was a clear intent, 
from my perspective, as to what the Congress of the United 
States wanted to do. The initiative resided with this 
subcommittee, but ultimately the House of Representatives, the 
Senate of the United States, in a bipartisan fashion, in a law 
signed by the President of the United States, said, ``This is 
what we want to do.'' And now we do have counsel downtown 
quibbling over language.
    Now, they may see it differently. We do, too. We do, too. 
And we will make our very best efforts to make sure that 
whoever shows up next year doesn't have to talk to a lawyer to 
read clear, precise English and understand what the intent of 
the United States Congress, in a bipartisan fashion, was.
    And so I just want to make that clear. That is our 
position; that is not Mr. Hobson's position.
    Mr. Tobey, I have just a couple questions, and then I will 
turn it to Mr. Hobson. And this is on GNEP.
    The nuclear nonproliferation budget request states, ``On 
February 6, 2006, Secretary Bodman announced a new, 
comprehensive strategy to promote the expansion of nuclear 
power, known as GNEP.''
    Why does nuclear nonproliferation think it has the mission 
to promote nuclear power internationally? Is that not the job 
of the International Atomic Energy Agency?
    Mr. Tobey. Well, obviously, the U.S. government and the 
International Atomic Energy Agency can share similar missions.
    I guess I would note that our primary interest in the 
issues related to GNEP and the expansion of nuclear power is 
making sure that it is done in a way that is consistent with 
our nonproliferation objectives. And we think that GNEP 
actually can advance our nonproliferation objectives.
    And we have been interested in fuel-cycle issues before 
GNEP was proposed, and our interest would remain regardless of 
whether or not GNEP were actually pursued as a policy.
    Mr. Visclosky. So when we are talking about advanced 
reprocessing facilities, that assists in your nonproliferation 
efforts?
    Mr. Tobey. We think that there is a potential for the use 
of technology to advance nonproliferation goals by, for 
example, diminishing incentives for other states to have 
indigenous enrichment and reprocessing, enabling the drawing 
down of existing stocks of separated plutonium, advancing 
proliferation-resistant reactor technology, and by advancing 
safeguards technology.
    Mr. Visclosky. Let me ask you this. The committee provided, 
I believe, $50 million last year for the International Fuel 
Bank to do those very things without reprocessing or recycling. 
What have you done about that?
    Mr. Tobey. We have prepared a letter that would go to the 
IAEA noting that this money is available, and started 
discussions with the State Department about what terms and 
conditions we would be approaching the IAEA with.
    But our intent is to--we appreciate the fact that this 
money was appropriated. We would like to see the fuel bank 
established. We would like to make sure that it is established 
in the way that truly does advance our nonproliferation 
objectives by ensuring that it diminishes incentives for 
indigenous enrichment and reprocessing.
    Mr. Visclosky. And the fuel bank, if I understand, the 
concept is to provide countries with nuclear power for civilian 
use without having to have the apparatus and infrastructure to 
produce the fuel in the first instance.
    Mr. Tobey. Exactly.
    Mr. Visclosky. Well, from a nonproliferation standpoint, 
would that not be a higher order of priority than assisting 
people as far as encouraging reprocessing or recycling?
    Mr. Tobey. We don't encourage reprocessing or recycling----

                                  GNEP

    Mr. Visclosky. Let me ask you the same question in a 
different fashion, then. Do you have a sense, or can you 
provide for the record, how much money you have expended in 
2008 on the proposed International Fuel Bank and how many 
dollars your agency has actually spent promoting GNEP, as to 
which your priorities are? And if you could do that for the 
record, that would be terrific.
    Mr. Tobey. Okay.
    Mr. Visclosky. The next question I have--and Mr. Hobson may 
have a particular interest in this--is, what is your statutory 
authority in nuclear nonproliferation to take on the GNEP 
mission?
    My understanding is GNEP is a function of NE. And I do not 
remember in our bill last year that we had language 
transferring that authority to nuclear nonproliferation. How 
did your lawyers work that out? You can take on 
responsibilities for reprocessing without any language from us, 
but you can't get rid of MOX even though we have language.
    Mr. Tobey. We don't have responsibility for reprocessing. 
And, in fact, we are eager to create international systems in 
which other countries would be discouraged from enrichment and 
reprocessing.
    Mr. Visclosky. Well, GNEP is funded, the last time I 
looked, in our budget under Nuclear Energy. So what gives you 
authority to do GNEP?
    Mr. Tobey. I don't think that we do GNEP. I would say that 
NE does GNEP.
    Mr. Visclosky. The secretary, on February 6th, suggested 
that you have GNEP activities.
    Mr. Tobey. I mean, we participate in policy deliberations 
regarding GNEP in order to ensure that our nonproliferation 
objectives are met. And GNEP can perform significant 
nonproliferation goals. I mean, as I outlined, there are four 
ways in which GNEP could advance our nonproliferation 
objectives. And we do, as a consequence, have a vital interest 
in making sure that the GNEP program does exactly that.
    Mr. Visclosky. If you could, for the record, provide how 
much money you spent doing policy relative to GNEP?
    Mr. Tobey. Sure.
    Mr. Visclosky. Also, if you could include in that any of 
your travel monies that have been used to support GNEP.
    And how much is in your 2009 request to support GNEP 
activities?
    Mr. Tobey. We really look at it as efforts to support 
advanced fuel-cycle technologies that would be more 
proliferation-resistant.
    Mr. Visclosky. Yes. But that is GNEP. That is what you said 
earlier.
    Mr. Tobey. Well, it can involve GNEP, but it can also 
involve a variety of other activities. I mean, for example, we 
also talked to the IAEA about advanced safeguard technologies, 
which would be compatible with an expansion of nuclear power. I 
mean, I referenced in my opening statement the Next-Generation 
Safeguards Initiative.
    As you know, I am sure, nuclear energy has basically lain 
dormant within the United States for decades. It is apparently 
resurging in the United States, and it is resurging abroad as 
well. If we are going to keep pace, from a nonproliferation 
standard, we need to make similar investments in advanced 
safeguards technology.
    Mr. Visclosky. If you could, for the record, have your 
staff go back and ferret out what monies, whether it be policy 
meetings, but particularly travel--who traveled and where for 
what--and provide that for the record for 2008 and for 2009.
    Mr. Tobey. Okay.
    Mr. Visclosky. One other question, and then I will turn to 
Mr. Hobson.

        INTERNATIONAL NUCLEAR SAFEGUARDS AND ENGAGEMENT PROGRAM

    The International Nuclear Safeguards and Engagement Program 
is requesting $11 million in 2009 to work with advanced fuel-
cycle partners to develop and implement next-generation 
safeguard technology for advanced reprocessing facilities and 
fast reactor fuel cycles.
    How is that distinguished from GNEP?
    Mr. Tobey. Well, I would say that the safeguards technology 
is necessary if we are going to be----
    Mr. Visclosky. I am not arguing that, but if you are doing 
that yourself, how does GNEP play into this?
    Mr. Tobey. I think GNEP is focused on trying to develop 
technologies that would be useful to produce energy and, 
admittedly, in a way that is responsible from a proliferation 
standpoint and a waste disposition standpoint.
    Our focus is really on the nonproliferation and safeguards 
aspects of those activities.
    Mr. Visclosky. Which is what you are asking for $11 million 
for.
    Mr. Tobey. Right.
    Mr. Visclosky. Right. But then there is also GNEP 
activities.
    Mr. Tobey. There is----
    Mr. Visclosky. That is what the secretary is saying.
    Mr. Tobey. Well, I think what the secretary is reflecting--
I am not familiar with the exact quotation that you are 
referring to. But I think the secretary is aware that GNEP does 
advance our nonproliferation goals and that we participate in 
GNEP policy deliberations.
    Mr. Visclosky. Okay. And I have additional questions on the 
safeguards and engagement program, but I will defer now and I 
will have those for the record, and would turn to Mr. Hobson 
now.
    Mr. Hobson. Let me start with just a comment.
    Mr. Lantos and I sponsored a bill here in the House that 
passed the House on this fuel bank. It has not passed the 
Senate yet, although we went ahead and provided funding.
    I would hope that the administration would support--because 
they did support the bill--would support the passage of that 
bill in the Senate, especially since Mr. Lantos has passed 
away.
    Senator Nunn was here. He made a big plea for the bill when 
he was here. I had already sponsored it before he was here, 
which kind of surprised him.
    So anything the administration could do to get that bill 
done. It is one thing that could be bipartisan. It is hard to 
get things out of the Senate right now. That is one thing that 
I think would advance the cause.
    I have two questions I want to ask in this round.
    Each year, we provide billions of dollars to support 
nonproliferation efforts. Obviously, we place a great deal of 
importance on the success of these activities. As I said 
earlier, we don't have a clear idea of your current and out-
year plans and priorities.
    Frankly, I do not understand how we can be confident of 
your agency's direction when you do not yet have a 
comprehensive accounting of sensitive material nor, apparently, 
cross-checks in place to ensure U.S. taxpayer funds are not 
supporting Russia's institutions working on Iran's nuclear 
program.
    Please update the committee on your efforts with other 
agencies to develop a comprehensive database of sensitive, 
unsecured material globally. Why should be confident that you 
are working to address the greatest threats before this 
assessment is complete?
    Mr. Tobey. Well, as I am sure you know, the department's 
intelligence office is responsible for developing this 
database, and they are doing so.
    Our assessment--but even before that assessment is 
complete, I think it has been possible to make judgments about 
where the greatest threats emanate from. I think it was clear 
that, especially in the early to mid-1990s, the threat was 
mainly from Russia and other states in the former Soviet Union.
    A year ago, I talked about how, as our programs are 
actually brought to completion--and, as I mentioned, we are 
nearly done with the Bratislava work--we will be shifting our 
efforts in two regards: We are moving from the first line of 
defense--the guns, guards and gates that surround nuclear 
weapons and material facilities within Russia--to second lines 
of defense, at border crossings and Megaports.
    And then we are also beginning to worry about the threats 
that--well, we are more than beginning. We are worried about, 
and taking action on, the threats that are emanating elsewhere. 
Now, in part, that can be addressed through the second line of 
defense, but we can also expand our work on commodity 
identification training and export licensing.
    And then the other way in which our strategy is shifting to 
meet new threats is to move from a focus on nuclear material to 
radiological material, or from the nuclear weapons material to 
the civil material. And there, as you know, we have expanded 
our work to convert reactors and return highly enriched uranium 
and to secure radiological sources.

                    DEFENSE NUCLEAR NONPROLIFERATION

    Mr. Hobson. The FY 2008 omnibus appropriations bill 
required Defense Nuclear Nonproliferation to transition the 
management of two construction projects to other offices. 
Specifically, the bill required that the management of the 
Mixed Oxide Fuel Fabrication Facility be transferred to DOE's 
Office of Nuclear Energy, and the Pit Disassembly and 
Conversion Facility be transferred to NNSA's Office of Defense 
Programs.
    We understand that Defense Nuclear Nonproliferation has 
been developing a memoranda of understanding with the Offices 
of Nuclear Energy and Defense Programs that will allow for 
continued participation in program management.
    What is the status of these agreements?
    Mr. Tobey. Well, the legal status, I think as we discussed 
earlier, was discussed by Administrator D'Agostino yesterday, 
and he cited the lawyers' finding. And I don't have much to add 
about that.
    Under that, there has been ``economy act transfer,'' under 
which the funds for the MOX program were transferred within the 
department, so that the Office of Fissile Materials Disposition 
continues to run that program.
    The Pit Disassembly and waste building projects have been 
transferred by the administrator to the Defense Programs 
Office.
    Mr. Hobson. No legal opinion?
    Well, anyway, please describe any continued involvement 
that Defense Nuclear Nonproliferation may have in management of 
these two construction projects, and justify why Defense 
Nuclear Nonproliferation believes it needs to continue to be 
involved, as you talked about.
    Mr. Tobey. Well, with respect to the MOX, as I mentioned, 
the legal opinion indicated that the language contained in the 
Nuclear Energy account in the Consolidated Appropriations Act 
in 2008 did not transfer the MOX project. So that, as I 
mentioned, is still continuing to be managed by the Office of 
Fissile Materials Disposition within Nuclear Nonproliferation.
    With respect to the two other projects, the Pit Disassembly 
and the waste building, those have been transferred to Defense 
Programs. And aside from trying to coordinate three 
interrelated projects, essentially collocated at a similar 
site, we don't participate in the management of that project.
    Mr. Hobson. To whom does the management team at the 
Savannah River site report? To you, or to Assistant Secretary 
Spurgeon?
    Mr. Tobey. Well, ultimately, the management team reports to 
the deputy secretary of energy as the federal acquisition 
executive.
    Mr. Hobson. I didn't ask you ultimately. Ultimately, they 
are supposed to respond to the taxpayer.
    To whom does the team report?
    Mr. Tobey. To the Office of Fissile Materials Disposition, 
which reports to me.
    Mr. Hobson. Okay. To whom does the contractor that is 
designing and building the MOX plant report, you or Assistant 
Secretary Spurgeon?
    Mr. Tobey. Well, to the federal project director, who 
reports through the Office of Fissile Materials Disposition, 
which reports to me.

                          MOX BUDGET ESTIMATE

    Mr. Visclosky. Do you have an estimate as to how many 
dollars in your budget are being spent on MOX because of people 
having to report and manage through nuclear nonproliferation?
    Because you have some people at nuclear nonproliferation 
doing nuclear nonproliferation work. But from Mr. Hobson's line 
of questioning, the construction of MOX and the management here 
is still residing at nuclear nonproliferation, and there must 
be some costs associated in your budget with that management 
activity.
    Mr. Tobey. I assume their salaries, et cetera, yes.
    Mr. Visclosky. Could you provide to the committee an 
estimate of that?
    Mr. Tobey. Sure.
    Mr. Visclosky. Because it would appear, while we have a 
serious disagreement with the administration on where it should 
reside, we are told that at least the money was moved. But 
money is still being expended in nuclear nonproliferation for 
MOX. And I don't think there has been any dispute, even when 
the Secretary of Energy was up here, that that is not supposed 
to happen.
    And if there is a legal dispute here, as to where this 
ought to reside--if nothing else, I was certainly expecting you 
ought to be reimbursed from NE from that MOX money for any 
expenses you have incurred so you can spend it on your intended 
purpose, nuclear nonproliferation. I really like what you do on 
nuclear nonproliferation. I want every penny we give you spent 
on nuclear nonproliferation, not managing MOX.
    So I would like an estimate for the record as to how much 
you are out of your budget for nuclear nonproliferation 
purposes that ought to be reimbursed through NE, if there is at 
least no disagreement about where the money ought to reside.
    Mr. Berry.
    Mr. Berry. I don't have any questions, Mr. Chairman.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    Welcome to the committee. You will be glad to know that the 
word ``MOX'' will not come out of my mouth for the rest of this 
hearing.
    [Laughter.]
    That is the only time. That is the only time.
    Some of the work you do is actually--in fact, the work you 
do do in nonproliferation is probably some of the most 
important work that our government does. And I appreciate the 
work that you have done.
    Let's talk about Megaports for a minute. You said there 
were 32 Megaports worldwide?
    Mr. Tobey. Yes, sir.
    Mr. Simpson. How do you determine which are priority ports 
and which are not priority ports? Is it by the volume of 
traffic that goes through?
    Mr. Tobey. Volume is one consideration, but the threat in 
the area, the level of trafficking.
    And, frankly, I have also shifted--the initial study was 
done by one of our National Labs. They took a whole variety of, 
sort of, threat factors that went into that calculation. I have 
urged that the program also examine more closely geographic 
considerations associated with what I think are the most 
obvious proliferation threats.
    So, for example, North Korea, which has a demonstrated 
record of proliferating certainly missile material and has a 
demonstrated record of a nuclear program, meant that we needed 
to place higher priority on ports that North Korean materials 
went through.

                               MEGAPORTS

    Mr. Simpson. Is there a Megaport within the United States?
    Mr. Tobey. No. Megaports work is done entirely abroad. DHS 
does the work within the United States. We work with DHS on 
ports abroad, as well.
    Mr. Simpson. Just out of curiosity, why are we doing 
Alexandria rather than the port where most of the traffic goes 
through at the--I can't remember the name. It is in Sinai, 
where the Red Sea comes out. It is their major port in that 
area. And we are doing Alexandria for some reason, which is a 
very minor port, in terms of volume.
    Mr. Tobey. I think I would have to get back to you on that. 
I don't know.
    Mr. Simpson. We recently visited Alexandria and Salalah, 
and you will be happy to know that the equipment, when we went 
in for them to show us how it worked, didn't work at either 
port. So that was kind of--the X-ray equipment and so forth. 
They said it was because too many of us were standing in the 
trailer and it threw off their direction of--I don't know; it 
was kind of weird.
    But anyway, now I have lost my train of thought. The theory 
is here that we are going to screen every container that comes 
into the United States before it gets to the United States, is 
that right?
    Mr. Tobey. That is my understanding of the law, yes.
    Mr. Simpson. That is one of the budgetary impacts of the 
passage of H.R. 1, the 9/11 Commission recommendations, which 
requires 100 percent screening of containers from foreign 
ports. And has NNSA adequately adjusted its FY 2009 budget 
request, as well as its future budget projections, for the 
Megaport initiative to address this legislation?
    Mr. Tobey. Well, this is an area where we are giving higher 
priority. As I mentioned, we were shifting in that direction 
even before this legislation was passed.
    The ultimate responsibility for screening cargo coming into 
the United States is a DHS responsibility. We work closely with 
DHS, but my understanding of our mission is to work--the 
division of labor is that the Department of Homeland Security 
is responsible for making sure that cargo is screened before 
coming into the United States.
    The Department of Energy's efforts are to address the 
threat of illicit trafficking of materials, regardless of 
origin or destination. So we are dealing with cargo that may 
never come to the United States but could still pose a threat 
to our interests, because, obviously, if a nuclear weapon or 
radiological materials became loose in commerce, it would be a 
threat to us.
    Mr. Simpson. Sure. From your perspective, do you think we 
will ever get to a point where we screen every container that 
comes into the United States?
    Mr. Tobey. It is a personal opinion, but I think it is a 
very, very difficult mission.
    Mr. Simpson. I realize this may be a better question for 
Homeland Security. One of the things that--as an example, in 
Salalah, it is kind of a transshipment port, where ships come 
in from all over, they offload things, they put them on 
different ships, they send them out. There is not a lot of 
material from Oman and the region that actually comes directly 
in and is then shipped.
    Are we ever going to get to a system where, as an example, 
when I check into an airport in Idaho Falls, Idaho, they don't 
then screen me in Salt Lake and then again in Cincinnati before 
I get to Washington, D.C. Once you are in the system and 
screened in the system, you don't get rescreened at every port, 
which is different than the port system we have now.
    And with transports, that creates a real problem, when all 
you are doing is--do we have a system in place where we are 
able to screen a container as it originally comes into the 
system, and then essentially it is screened and done?
    Mr. Tobey. This is really a question, I think, that would 
best be addressed to DHS, with respect to containers coming to 
the United States. But my understanding is that they are trying 
to work toward such a system, where cargo is screened at the 
last port before coming to the United States and then would be 
certified for entry to the United States.
    But I would want to look carefully at that concept of 
operations, because, unlike the airport system that you cite, 
where travelers are basically in an area where they don't have 
access to weapons or other dangerous material, once a ship 
leaves a port, it can be visited by smaller ships or make stops 
at ports that don't have such facilities, and you couldn't 
necessarily be confident that the cargo was clear.
    Mr. Hobson. Would the gentleman yield?
    Mr. Simpson. Sure.
    Mr. Hobson. That is very interesting. We think the 
Department of Energy is very arrogant. But let me tell you, the 
DHS people are even more arrogant. It is extremely difficult to 
get anybody to respond to anybody about DHS. When you do, they 
just say, ``We do what we want to do.'' That is their response. 
So if you guys think you are bad, they are even worse.
    Mr. Tobey. I am heartened.
    [Laughter.]

                          NNSA'S IPP PROGRAMS

    Mr. Simpson. In December of 2007, in the GAO report 08-189, 
the GAO raised serious concerns about the management and 
direction of the NNSA's Initiatives for Proliferation 
Prevention, the IPP programs, which was begun in 1994, which 
encouraged former Soviet Union scientists to enter nonmilitary 
work in the short term and create private-sector jobs for these 
scientists.
    Essentially, we wanted to keep these scientists employed in 
some fashion, rather than on the market for countries to be 
able to come in and hire and bring into doing things that we 
didn't want them to do.
    The GAO report was relatively critical of the program, 
including ``excessive carry-over balances, overstated 
accomplishments, and the lack of an exit strategy for the 
program.''
    Given the recent findings of the GAO and the hearings held 
by the House Energy and Commerce Committee, how does the NNSA 
propose to revise the budget for the IPP program to address 
concerns that have been raised? And how much have you requested 
for this budget for direct and indirect support of former 
weapons scientists, and how does this compare with previous 
years?
    Mr. Tobey. Sir, we have given this program a lot of 
thought, in response both to, as I mentioned, to changing 
conditions in Russia, the GAO report.
    And I would add parenthetically that we agreed with all of 
the recommendations of the GAO report, except for one, which 
dealt with a comprehensive review of the program. But a review 
of the program was completed in the summer of 2006. And as the 
GAO completed its work, we were in the midst of and had not yet 
completed all the findings from that review.
    So we are keenly aware that the program needs to be 
changed. And I have been talking to committee staff and members 
of both the House and the Senate about the changes that we are 
attempting to undertake.
    Our initial views, though, are premised on the belief that 
controlling technology is part of a balanced nonproliferation 
program, that we should attempt to control both technology and 
materials. And if you are going to control technology, you 
probably need some sort of scientific engagement program.
    That said, I think it should be a relatively modest 
program. And I would note for context that this program has 
shrunk over years. The Nuclear Cities Initiative was eliminated 
entirely. And the overall level of funding is down by about 50 
percent, and we think, frankly, it could down further.
    We have taken some interim steps, which have involved 
basically freezing any of the projects that might be 
controversial so that no criticism could be made that we have 
made matters worse as we have tried to work through longer-term 
steps. And we have undertaken a review with our colleagues in 
the interagency to try and standardize the State Department and 
DOE programs.
    Over the longer term, we have put forward some ideas which, 
frankly, I am trying to see if they can serve to build a 
consensus on continuing the program under this basis. And I 
welcome this conversation as a part of that process. And I have 
talked to committee staff and, as I say, others about this.
    So these are our initial ideas about how to reform the 
program, but I am open to suggestions. And there are many 
stakeholders, we understand, on both sides of Capitol Hill and 
also outside, in terms of others.
    And there, the steps that we are contemplating taking are: 
to continue our Russian and former Soviet Union projects at 
high-priority institutes but phasing out those at lower-
priority institutes; gaining Russian agreement over the next 
several months on an approach to cost-sharing; continuing 
programs that might address threats emanating from Iraq or 
Libya, and be prepared to support new projects in places, for 
example, like North Korea, if that were to become possible; 
that we would shift nonproliferation technology projects out of 
the IPP program, so those that, for example, dealt with 
advancing safeguards technology would be done through the 
Safeguards Office, just simply so that there would be clarity 
of the objectives; and then, as I mentioned, finalize an 
interdepartmental and interagency agreement on an approach to 
advanced fuel-cycle projects, cost-sharing, which are the 
priority institutes, et cetera.
    We anticipate that that would lead to probably a 
reallocation of funds that we would be interested in moving 
toward advanced safeguards, next-generation safeguards, as I 
mentioned. And perhaps, if the North Korea tasks go forward, we 
may need to move some funds there.
    I would note also that, frankly, for the current fiscal 
year we had asked for $20 million, and the Congress gave us $30 
million. So this is not something that we have been pushing.
    Mr. Simpson. Right. I think you will find that most of us 
are supportive of the fact that we need to engage these 
scientists and not let them get on the market, because 
eliminating the spread of nuclear technology includes those 
individuals who know it, and so forth. And so I think the 
program is an important program. But we want it to be an 
effective and cost-effective program.
    And there will be a series of questions that we have that 
we will submit for you, which will deal more specifically with 
the program. But is there an end to this program?
    Mr. Tobey. I think that is a good question. I mean, I 
realize that there has been criticism of the program because 
there is no exit strategy. But an exit strategy--you know, at 
some level, if you continue to worry about a threat emanating 
from these institutes, you should continue to be there.
    We could take the view that, just as we are going to wind 
down our MPC&A projects by 2012, we should wind down our 
scientist engagement programs.
    On the other hand, the fact that we are ending our security 
upgrade programs, which are far more expensive--there are a lot 
more capital costs, et cetera, involved in that--that might 
make you come to a conclusion that it is a reason to continue 
the scientist engagement programs, to ensure that we understand 
that the measures we want to happen on sustainability are 
actually practiced, that there is a security culture in place, 
that we understand that their scientists know what needs to be 
done.
    I lean toward the latter, but I am certainly open to 
discussing that.
    Mr. Simpson. Do you ever get feedback from the Russians 
that we are trying to employ their scientists, get them out of 
this nuclear arena and stuff that we are involved in in that 
activity, and one of our complaints in this country is that we 
don't have enough nuclear scientists, that we need to engage 
more in nuclear education and so forth?
    Mr. Tobey. I haven't heard that from the Russians.
    Mr. Simpson. Good.
    Mr. Visclosky. Mr. Tobey, in your answer--and I appreciate 
the efforts you are making on the IPP program, based on the 
study. If you could, for the record, as far as the initiatives 
you have taken, how many of those you think will actually be 
implemented by the end of this fiscal year and which ones would 
take place in 2009, I would appreciate that.
    Mr. Tobey. Okay.
    Mr. Visclosky. Thank you.
    Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Tobey.

                            SECURITY ISSUES

    I think you said in your opening statement, talking about 
WMD and the related technologies, equipment and expertise, 
``This poses one of the most serious threats to United States 
and international security.'' Certainly the President has said 
that; I certainly agree with it. I think this discussion on 
nuclear nonproliferation is more important than any hearing 
anywhere in the Capitol today or next week or the month after.
    But I want to ask you about the budget.
    We have got Al Qaida. The administration says Al Qaida is 
clearly trying to do everything it can to get its hands on 
nuclear weapons. And we have seen the quotes from its leaders 
saying if they ever got their hands on a nuclear weapon, it 
would be their religious duty, unbelievably, to try to detonate 
that in the United States.
    I won't take time saluting you for the good things you have 
done--a lot of good work in Russia, a lot of good work on 
trying to stop the spread of nuclear materials. And I do salute 
you for that. But we have still got a lot of work to be done.
    As I understand it from your testimony, only 12 of 75 
Megaports have been given radiation-detection equipment. I 
think you are working on 17 others. That still leaves a lot of 
others out there. Only 117 of 350 border crossings have 
radiation-detection equipment. Technology challenges still in 
that detection equipment.
    As I understand it, only 2 percent of ship containers, less 
than 2 percent of ship containers are X-rayed overseas. That is 
not comforting. I wonder how we would feel if we only had--and 
that is the Department of Homeland Security's responsibility--
but I wonder how we would feel if only 2 percent of passengers 
getting on commercial aircraft were being checked.

                          BUDGET CUTS CONCERNS

    And then we have materials protection work that needs to be 
done outside of Russia.
    Respecting the progress that the Department of Energy has 
made in nonproliferation but recognizing the needs that have 
not yet been met, why would you ask for a $79 million cut in 
the proliferation detection research and development, knowing 
we need more research, in terms of addressing some of the 
technological challenges?
    Why would you ask for a cut of $195 million in the 
Materials Protection and Cooperation account? Recognizing we 
have accomplished a lot of Russia, but there are a lot of other 
non-Russian countries where we could do material protection 
work.
    And then why have you cut the Second Line of Defense 
account by $54 million?
    I don't understand those cuts, given the increasing threat, 
your statement, and the high priority this should be. I would 
like to hear your answer, please.
    Mr. Tobey. Sir, well, I appreciate the concern that you 
have about those threats, and we share that concern.
    I think the best thing that I can do with respect to your 
question is to provide some context in terms of the thinking 
and how we ended up where we did in terms of the budget.
    The first point that I would make is that I don't think the 
president's budget--the cuts you cite are those from the 
current appropriation. And I understand why you cite those as 
cuts.
    Mr. Edwards. It is because they are cuts.
    Mr. Tobey. The president's budget, though, I think was not 
a response to the 2008 appropriation, where that bill was 
passed very, very late in our 2009 budget cycle. In other 
words, essentially, those budget decisions had already been 
even before we knew where the Congress had come out on the 
amounts that were appropriated.
    I would add that our budget has roughly doubled since 
2001----
    Mr. Edwards. What is your budget? For nuclear 
nonproliferation programs.
    Mr. Tobey. The current request is for $1.247 billion.
    Mr. Edwards. 1.247. Let me just say for the record then--I 
won't ask you to respond to this--that is equivalent to three 
days' expenditure for the Iraq war.
    Please go ahead.
    And doubling since 2007--that does not take into account 
inflation, is that correct?
    Mr. Tobey. That is correct.
    Mr. Edwards. It doesn't take into account the devaluation 
of the dollar, which has been very significant for overseas 
activities, is that correct?
    Mr. Tobey. That is correct.
    Mr. Edwards. Okay. Please go ahead.
    Mr. Tobey. And the budget philosophy that we have followed 
is, after that budget, to put these programs on basically a 
gentle up-slope, even though other parts of the federal 
government were under more pressure.
    Mr. Edwards. How is cutting $79 million, $195 million and 
$54 million a ``gentle up-slope''?
    Mr. Tobey. Well, I was citing that from our previous 
request. In other words, we budgeted out over five years, and 
that plan is for a gentle up-slope. Our request for 2009 was a 
gentle up-slope from our request from 2008.
    In the meantime, the Congress----
    Mr. Edwards. But a significant down-slope from what we 
appropriated.
    Mr. Tobey. The Congress did appropriate considerably more.
    Mr. Edwards. Let me get to the----
    Mr. Tobey. And there was one further point I wanted to 
make, was to repeat something I said last year when asked about 
the possibility of more money. I said that if the Congress saw 
fit to appropriate more money and the president signed it into 
law, we would spend it enthusiastically, and we are.
    Mr. Edwards. Well, I will just conclude with this. It just 
seems to me our country decided to try to end World War II and 
protect perhaps a million American lives against war with Japan 
by the Manhattan Project. We decided in 1960 to put a man on 
the moon by the end of the decade, and we did it. We decided 
there are a lot of potholes in highways around the country, and 
we had billions of dollars to fix it.
    The president says this is the number-one unmet national 
security need; it should be our nation's top priority. I will 
just say, when I look at the budget, notwithstanding the good 
work that you have done--and you have done a lot of good work--
I don't think there would be enough evidence in the budget 
request to convict us if we were accused in a court of law of 
making this our number-one national priority.
    And it just seems to me that when it comes to protecting 
our country from nuclear threats, which you know better than I 
do exist out there, we should cut no corners. And this doesn't 
look like a man-on-the-moon, Manhattan-style project. And I 
would think protecting America from nuclear terrorist attacks 
would be more important than putting a man on the moon and 
certainly equivalent to trying to develop the atomic bomb to 
end World War II.
    We will look forward to continuing to work with you.
    I assume that all needs have not been met. Put it this way: 
I am not going to ask you if this is an inadequate budget, 
because I know OMB tells you you have to say, ``Yes, it is an 
adequate budget.'' But all needs have not been met, in terms of 
nuclear nonproliferation efforts, have they?
    Mr. Tobey. There is more work to be done, sir.
    Mr. Edwards. Okay. Thank you.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Calvert.
    Mr. Calvert. Thank you, Mr. Chairman.

             SECURING NUCLEAR ARSENAL AND NUCLEAR MATERIAL

    Sir, based on your testimony, we have spent a considerable 
amount of money, obviously in Russia and other places, to 
assure that the security of the arsenal and the material takes 
place.
    As you are aware, last year six nuclear weapons flew from 
one Air Force facility to another in place of dummies and 
obviously by accident. And just recently, we found that four 
fuses instead of batteries were sent to Taiwan, and for 18 
months, they sat there. And the Department of Defense didn't 
even know that they had sent those fuses, even though Taiwan, 
apparently, had contacted the Department of Defense on several 
occasions and let them know that they had something there that 
they thought were helicopter batteries.
    Obviously, that is not your purview, the Department of 
Defense, to secure their own weapons and their own fuses, et 
cetera. But perceptually, as you go around the world convincing 
others to secure their nuclear weapons and to secure their 
nuclear material, is that being shot back to you, about are we 
doing enough to secure our own nuclear arsenal and our own 
nuclear material?
    Mr. Tobey. Frankly, we try and deal with these issues in a 
cooperative way. So, far from having these things shot back to 
us, we occasionally cite them and say, ``Look, we understand 
that materials security is a difficult matter, and that is why 
it requires extra caution, extra measures.'' And, as a 
consequence, you know, we are willing to cite even our own 
failings, when they become public, in dealing with other 
countries to encourage them to improve their practices.
    Just as an example of this, I had a discussion with our 
Russian colleagues, and I cited the fact that, you know, a 
friend of mine is a parachutist. At the back of a parachuting 
magazine, they often have what they call incident reports. The 
incident reports are there not out of a, sort of, ghoulish 
interest, but to prevent others from having the same activity 
occur. And I cited reports of either material getting loose or 
these other things as our equivalent of incident reports, and 
we should treat them as such.
    Mr. Calvert. On that, do we have complete assurity that the 
fuses weren't reverse-engineered in Taiwan?
    Mr. Tobey. That really is an area where I don't have any 
knowledge of what has gone on there.
    Mr. Calvert. While we are talking about activities within 
the United States, I noticed that in your budget request you 
have $14.4 million to secure domestic sources. So I guess the 
question would be, why do you need that money to secure 
domestic sources? You must believe that we are not doing enough 
to secure our own nuclear material.
    Mr. Tobey. The domestic sources are domestic radiological 
sources that become disused by industry. And there isn't a good 
disposition path for some of those sources. Or they might have 
been owned by companies that have become bankrupt. So we have 
actually secured some 16,000 sources.
    Mr. Calvert. Isn't it true that, because, rightfully or 
wrongfully, since we have not moved ahead with Yucca yet and we 
have a secure location to place a lot of this material, we have 
hundreds of locations where we have radioactive material just 
kind of out there? Is that an accurate statement?
    Mr. Tobey. Well, it is accurate, certainly, to say that 
there are hundreds----
    Mr. Calvert. Is it accurate to say that some locations are 
more secure than others?
    Mr. Tobey. Yes. We are working to upgrade the security, 
with both private industry and other elements of the 
government, of radiological sources.
    Mr. Calvert. How secure would you say that material is?
    Mr. Tobey. Well, I said in my opening statement that one of 
our priorities is, in dealing with what we perceive as a 
dynamic threat, has been to move from the nuclear weapons 
material, which we are winding down our work on, to the 
radiological--the civil nuclear and radiological material. So I 
am concerned about it.

                                PAKISTAN

    Mr. Calvert. One last question, regarding Pakistan. We all 
read the newspapers and the difficulties that Pakistan is 
having with their government. What is your assessment of the 
dedication and competence of the Pakistani military to secure 
their own nuclear arsenal?
    Mr. Tobey. My understanding is that they have a very 
professional military. And I believe they are motivated to 
secure their own arsenal.
    Mr. Calvert. So if an unfortunate circumstance takes place 
where a government that is not favorable to the United States' 
interest takes over, you believe that the nuclear weapons 
systems would be secure?
    Mr. Tobey. Well, there you have moved into the realm of the 
political, and I am not an expert on how the Pakistani military 
relates to their political superiors.
    Mr. Calvert. So the answer is we don't know.
    Mr. Tobey. Well, the answer is I don't know.
    Mr. Calvert. Thank you, Mr. Chairman.
    Mr. Simpson. Would the gentleman yield for just a second?
    Mr. Calvert. Sure.

                        SECURE STORAGE LOCATIONS

    Mr. Simpson. These U.S. sources of unsecured material, 
where do we store those? Where do we put them?
    Mr. Tobey. We----
    Mr. Simpson. You are looking for secure storage locations, 
because I am going to suggest a couple. Where do we put them 
now?
    Mr. Tobey. My understanding is that they go into a facility 
called the WIPP, at this point.
    Mr. Simpson. So they go for permanent repository?
    Mr. Tobey. Yes.
    Mr. Simpson. If there are places where they need to be 
stored, let me suggest there are a couple places called 651 and 
691, which are pretty good locations.
    Mr. Hobson. Yes, I don't think that is correct. WIPP only 
takes defense material.
    Mr. Tobey. Perhaps I had better look into it and get back 
to you.
    Mr. Hobson. Yes.
    Mr. Simpson. If you need additional space, I know where we 
can find it.
    Mr. Hobson. But let me tell you, WIPP is a great repository 
and ought to be, at some point, enlarged, because it has done a 
great job.
    Mr. Edwards. Where is it?
    Mr. Hobson. New Mexico.
    Everybody on this committee, in my opinion, if you want to 
see a success story in repositories, that is one you ought to 
visit at some point. They are receptive, it works well, and it 
is a success story. It is in a rock formation that could, in 
some places, be used a lot better than where we are doing some 
other things. However, the way this is set up, I don't think it 
takes that.

                                PAKISTAN

    Mr. Visclosky. And, Mr. Tobey, following up on Mr. Calvert 
too, do you have enough money in your 2009 request relative to 
the activities you undertake with Pakistan? Is there any 
shortfall we should be concerned about from a monetary and 
budgetary standpoint? Because we have other questions for the 
record, but I am just wondering about the money.
    Mr. Tobey. Sir, I----
    Mr. Visclosky. Do you want to get back to us? I just want 
to make sure you have enough money.
    Mr. Tobey. Okay.
    Mr. Hobson. If, by some hook, you have gotten this material 
into WIPP, I would like to see the Office of Counsel's legal 
opinion that allows you to do that.
    [Laughter.]
    Okay?
    Mr. Tobey. Certainly.
    Mr. Hobson. If they don't have it, I am sure they can 
manufacture it.
    Mr. Visclosky. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman.
    A couple of questions, a couple of different areas. I 
appreciate you coming.
    Let me first, kind of, second what Mr. Edwards was saying 
with regard to the budget and the priorities of the 
administration. And there is nothing more frustrating than 
rhetoric saying one thing and the numbers submitted by the 
administration saying something different.
    I have a question on how you determine which entities will 
execute the various activities within your nonproliferation 
programs. In other words, how do you decide how the work will 
be done--private sector, DOE labs, universities? The broad 
agency announcement is one vehicle that allows for a head-to-
head competition to select the most cost-effective solution, 
but it is rarely used. So how do you determine?
    Mr. Tobey. I believe it is a combination of a number of 
factors, including costs, expertise, urgency of the need. There 
are varying levels of, for example, familiarity with Russian 
institutes. In some cases, the National Labs are quite 
familiar. In other cases--of course our work varies greatly, in 
terms of the actual activities. I mean, we have gone to small 
businesses for large amounts of our Megaports work.
    So, I mean, it varies enormously. Obviously, with 
construction projects in Russia, the expertise that is needed 
is also different.
    Mr. Ryan. So there is no straight, kind of, formula or 
information that you need in----
    Mr. Tobey. Well, we do so many different types of things. 
You know, we are building fossil fuel power plants at Seversk 
and Zheleznogorsk. We are putting up Megaports detectors at 
ports around the world that are much smaller construction 
projects. We are dealing with Russian institutes. It really 
varies a great deal from project to project.

                        COMPETITIVE SOLICITATION

    Mr. Ryan. The omnibus provided direction to conduct a 
competitive solicitation open to all federal and nonfederal 
entities. And I understand that you have issued the 
solicitation, something that other elements of DOE seem to have 
difficulty doing.
    Did you have any difficulties getting the solicitation out 
the door? Are there any lessons that other programs should 
learn from your experience?
    Mr. Tobey. Not to my knowledge. And I am sure we would be 
willing to talk to our DOE colleagues if that would be helpful.

                                 RUSSIA

    Mr. Ryan. Okay. And then, lastly, we have been talking a 
little bit about Russia. One of the issues is the insider 
threats. And I don't know if you touched upon this before I got 
here or not. But what programs are you developing to try to 
counter some of this that is happening over there with the 
bribery?
    You know, it is one thing to put a fence up and make sure 
people aren't coming in and out that you don't know. But it is 
the old adage with the local shop, you know, it is the inside 
person working there that is going to steal money from you.
    What are you guys doing in terms of trying to combat that 
and having some kind of system in place?
    Mr. Tobey. That is a very serious threat, and there is no 
perfect single answer to it.
    The fences and, for example, metal and radiation detectors 
can help, so that people entering and existing facilities need 
to go through these things. And that should help to deter and 
perhaps detect efforts.
    We also have helped in terms of personal reliability 
programs. And that is a part of it.
    I would say the largest single part of it is an appropriate 
security culture, making sure that the management understands 
that there is a comprehensive web of activities that need to be 
undertaken to attempt to deal with the insider-threat issue.
    And, in that regard----
    Mr. Ryan. Is that done by the Russians, or is that----
    Mr. Tobey. Done by the Russians. But we work with the 
Russians on these issues to discuss best practices and 
practical means of putting them into place. And we have helped 
to build a facility to train Russian guards.
    So it is a whole range of activities, because no one of 
them can actually achieve what we would hope to. And I agree 
with you, that is an extremely serious threat.
    That is also one of the reasons why we are working hard on 
sustainability. Several members have cited the fact that we 
have made an enormous effort in Russian security. And I agree 
we need to protect that investment.
    And so we are working to ensure that the Russians have a 
proper security culture. We have reached an agreement with Ros-
Atom on the principles of sustainability. And we have been 
talking with our counterparts in the Russian military, as well.
    Mr. Ryan. Is there anything more we can do from this end?
    Mr. Tobey. To the extent that you all visit Russia, I would 
be----
    Mr. Ryan. I was hoping you would say that. No, I am 
kidding.
    Mr. Tobey [continuing]. I would greatly appreciate the fact 
that you could mention the need to get the Bratislava work done 
and the need to apply good sustainability measures.
    Mr. Ryan. Okay. Well, we may consult you when we head over 
there.
    Mr. Tobey. Good.
    Mr. Ryan. Get your advice.
    Mr. Tobey. Thank you.
    Mr. Ryan. Thank you.
    Mr. Visclosky. Mrs. Emerson.
    Mrs. Emerson. Thank you, Chairman.

                        REPROCESSING ACTIVITIES

    Welcome. Thanks for being here. I have got three questions 
I want to ask you about reprocessing activities, if I could.
    In the larger scheme of all the different proliferation 
risks around the world, how would you rank the relative risk of 
the plutonium separated by reprocessing activities in France 
and the United Kingdom?
    Mr. Tobey. I don't see the activities in France and the 
United Kingdom as serious proliferation threats. As you know, 
both of those are nuclear weapons states. However, this is a 
technology that we, as an administration, the president 
personally, has said he would like not to spread.

                         NONPROLIFERATION RISK

    Mrs. Emerson. So how would you compare the nonproliferation 
risk of this weapons-usable material in those countries 
relative to the same material in other countries and also 
relative to other special nuclear materials and dirty-bomb 
materials?
    Mr. Tobey. I guess I would--well, there are two ways in 
which, in the abstract, without talking about specific 
countries, in which separated plutonium might pose a threat. 
One is that the government of the country in which the material 
resides could use it for its own program, a breakout program, 
if you will, under the NPT. And the other is in which it might 
be diverted, either to a rogue state or to a terrorist 
organization.
    You know, and I think you have to look at each of those 
circumstances before looking at----
    Mrs. Emerson. So, from a nonproliferation standpoint, is 
the real concern the materials, the reprocessing activities 
that produce those materials, or the countries that are running 
the activities that produce the materials, from your 
perspective?
    Mr. Tobey. I guess it is all three. I mean, I don't mean to 
be difficult, but North Korea achieved its nuclear capability 
by reprocessing its spent fuel. Obviously, that is an enormous 
proliferation threat, from our perspective. What France and the 
U.K. has done is not a threat, from our perspective.
    Mrs. Emerson. Okay. Let me just stop there only because I 
am losing my voice here. So if you all want to follow up at all 
with those questions, feel free. Thanks.
    Mr. Visclosky. Mr. Serrano.
    Mr. Serrano. No questions, Mr. Chairman.
    Mr. Visclosky. Mr. Hobson.
    Mr. Hobson. The department is supporting special 
legislative authority in a different bill for this work. Why 
are you pursuing this special authority in a non-DOE bill? And 
are you asking for this language in the upcoming supplemental?

                              NORTH KOREA

    Mr. Tobey. The North Korea work is a difficult question 
because, frankly, we don't know exactly what the North Koreans 
will permit us to do--import disablement and dismantlement.
    We are concerned that the Glenn Amendment prevents us from 
spending money within North Korea to disable or to dismantle. 
If, in fact, we were permitted to go forward in North Korea, 
the costs could be quite substantial.
    But we don't, frankly, know whether that would be possible. 
And that confronts us with a budget quandary. It is difficult 
for me to come forward and say that I would like a specific 
amount of money from you for work in North Korea when I don't 
know whether in fact we would be permitted to spend it.
    I will tell you openly, though, that if, in fact, we were 
permitted to go forward as fast as possible, the costs 
associated in 2008 would be about $50 million, and the costs 
for 2009 would be about $360 million.
    Mr. Hobson. Well, let me ask you about that. How much of 
the Nuclear Nonproliferation budget is designated in the 
request for activities relating to this disablement or 
dismantlement and verification of nuclear activities in North 
Korea?
    Considering the negotiations with North Korea--well, that 
is one question. I have got another one that will go with what 
you are talking about.
    Mr. Tobey. There is a relatively modest amount of money, I 
think, to----
    Mr. Hobson. You have got some money now.
    Mr. Tobey. Right, we do. But my understanding is that we 
can't spend that money in North Korea because of the Glenn 
Amendment.
    Mr. Hobson. Considering that negotiations with----
    Mr. Tobey. I am sorry, sir. We are doing what we can to 
prepare and spending money within the United States. So we have 
undertaken some long-lead-time procurements. We are working on 
some technological solutions that could be useful.
    Mr. Hobson. Because you know where I am going. Can you 
reduce your budget? If you are not considering negotiations 
with North Korea as they have reached an impasse, and if 
further disablement and dismantlement and verification 
activities in North Korea may not be implemented, can NNSA 
reduce its 2009 request? Or are you just going to figure out 
how to spend it all?
    Mr. Tobey. The strategy we have taken is to try and ask for 
relatively modest amounts of monies to deal with this activity 
for things that would be useful probably in any event--these 
would be useful national capabilities--and not to ask for the 
larger amounts of money that would be necessary if we could do 
all that we would hope we would do.
    Mr. Hobson. My problem with a lot of the ways we act is 
like when I was in the military 40 years ago. We would have 
money in an account, and if we didn't spend it all that year, 
we were worried that we wouldn't get it back next year.
    You guys operate, I assume, still under the same thing. 
Trying to spend all your money, because you are worried if you 
don't spend it all this year that everybody is going to look at 
you when they make up your budgets and say, ``Well, we will cut 
this back.'' Then you would have to start all over again. I 
worry about that.
    Mr. Tobey. We have done essentially the opposite. And, 
frankly, it concerns me because it means that we are at some 
risk. I mean, we would have right now unfunded obligations or 
unfunded activities to the tune of $50 million for 2008 and 
$360 million in 2009 if we were to go forward as fast as we 
could in disabling the North Korean nuclear program.
    Mr. Hobson. All right. Let me go back to one other one 
here.

                              IPP PROGRAM

    The GAO issued a report in December containing some 
devastating criticisms of the IPP program. What steps has DOE 
taken to implement the recommendations GAO made in its recent 
report on the IPP program?
    Mr. Tobey. As I noted earlier, we agree with all of the 
recommendations of the GAO, save one, and that one was on the 
comprehensive review. We believe that that review was, in fact, 
taken.
    We are working to implement those recommendations. We are 
going beyond that, as I mentioned, in that we froze projects of 
concern that were mentioned in Congress elsewhere; that we have 
gone to the interagency to establish terms of reference that 
would govern not only our program but also the State 
Department's program and ensure that there is consistent 
application of the standards across both of those things; that 
we have determined that we are going to limit our projects to 
high-priority institutes and phase out the others; that we will 
gain Russian agreement over the next several months on cost-
sharing; that we would phase out projects at institutes not 
rating as high-risk; that we would continue programs that would 
deal with the threats from Iraq and Libya and maintain a 
capability to deal with other areas, for example, North Korea, 
should it become necessary; that we would pursue 
nonproliferation technology projects outside of the IPP; and 
that we would formalize this interdepartmental and interagency 
agreement that we would aim for; and that we would, in fact, 
probably be interested in shifting some of the funds away from 
this program.
    And, as I mentioned, this plan is one in which I am 
attempting to consult with members of Congress on and am eager 
to have input.

                                  MOX

    Mr. Hobson. Let me ask you one last thing. In the MOX area, 
we did this whole deal to begin with, to get the Russians to do 
something with a certain amount of their weapons-grade 
plutonium.
    Did the Russians ever sign an agreement?
    Mr. Tobey. Well, they signed the Plutonium Disposition 
Agreement in 2000. Secretary Bodman and Director Kiriyenko 
issued a joint statement on the Russian path forward recently.
    Mr. Hobson. What did that statement say?
    Because the Russians have told us were are nuts. The guy 
sat right in here with Pete and me, and he said, ``You people 
are nuts.'' He said, ``You are going to go ahead and you are 
going to do this program and spend all this money. We think it 
is old technology; we are not going to do it.'' I have been 
saying that they told us this; nobody listened. But for jobs' 
sake, we went forward and did this deal that the secretary and 
the President made to give jobs to South Carolina. In return 
for what, I don't know, but I suspect I know.
    So we are going forward. The Russians said, ``We are not 
going to do that technology. And we are not going to do it. We 
are going to do it a different way, if we do it. But we will do 
it.'' The Russians have a tendency in their mind to technically 
live up to treaties and agreements that they sign. They may not 
do this for generations, because they are going to do it in a 
different way. They are going to do it in a fast reactor, which 
I tried to get our people to do, but, naturally, that wasn't 
part of the deal made by this administration.
    And all along, I was told by one United States Senator two 
years ago that this agreement was signed and that he had seen 
it. That changed. It wasn't really signed. Then there was a 
fight over liability, which I don't think was ever resolved.
    So where are the Russians today under the agreement that 
was signed many years ago? We are going forward and going to 
spend $11 billion on what they think is a nutty deal. The 
chairman and I sat here with the Russians, in this room, when 
they told us this. So we didn't make it up.
    What are they doing today?
    Mr. Tobey. Sir, we did listen to you.
    Mr. Hobson. No, you didn't, because you went ahead and 
spent $11 billion or you are going to spend it. If you think it 
is only $11 billion, you would believe in the tooth fairy. It 
is going to be a heck of a lot more than $11 billion before you 
are done.
    But go ahead.
    Mr. Tobey. You urged us that the Russians should pursue a 
disposition path that was reliant upon fast reactors.
    On November 19th of last year, Secretary Bodman and 
Director Kiriyenko issued a joint statement that said that, 
taking into account the work of experts carried out pursuant to 
the joint statement of July 2006 on plutonium disposition and 
also the technical consultations and the possibility of 
involving the BN-600 and BN-800 fast neutron reactors in 
Russia's program, have arrived at the following mutual 
understanding concerning U.S.-Russian cooperation in this area: 
Ros-Atom plans to implement the Russian program for plutonium 
disposition within the framework of the strategy for developing 
Russian nuclear energy based on irradiating weapons-grade 
plutonium in the form of MOX fuel in, A, the BN-600 reactor at 
Beloyarsk NPP and, B, in the BN-800 reactor, which will be 
built at the same site.
    They are pursuing their plutonium disposition path through 
the use of MOX fuel in fast reactors. And it is likely that 
they will actually begin disposition of their fuel before we 
do. They will complete it, likely, somewhat after we do. But 
the two programs will be on approximately the same trajectory.
    Mr. Hobson. Do you have anything other than a press 
release?
    Mr. Tobey. Well, this is a joint statement issued by----
    Mr. Hobson. I know, but a joint statement is a joint 
statement; it doesn't mean anything. It is not a signed 
agreement. Anybody can deviate at any time. I can get together 
a lot of guys and give a press release. That is all that is, is 
a press release.
    Frankly, what you are telling me is they are doing it in a 
way that is cheaper, probably better, and creates better return 
on the dollar than our program. They are using a new 
technology; we are going to go back and use an old technology. 
We could have done it the other way also.
    Mr. Tobey. Well, with respect to whether----
    Mr. Hobson. We are going to subsidize some guys to use it, 
which we are doing today.
    Mr. Tobey. With respect to----
    Mr. Hobson. You won't tell us how much subsidy you are 
giving to Duke Power either.
    Mr. Tobey. With respect to whether or not we have an 
agreement, this joint statement we regard as a political 
commitment. We understand that it will need to be codified in 
amendments to the Plutonium Disposition Agreement, and we are 
working on that with the Russians. We have submitted to them 
draft amendments to that agreement. We anticipate being able to 
negotiate it.
    I would add, also----
    Mr. Hobson. I would hope in my lifetime. I won't say in my 
congressional career, because it is coming to an end. But in my 
lifetime I would hope to see that. The other agreement that was 
supposed to be signed was never signed, as far as I know.
    Mr. Tobey. I would add, also, that this agreement we 
believe is consistent with the Russian overall energy plan. And 
as a consequence, they are much more likely to follow it.
    Mr. Hobson. They told us years ago, that is what they were 
going to do. We kept insisting to do it a different way----
    Mr. Tobey. That is why I am saying I listened to you last 
year when you made this point, and we negotiated a joint 
statement that allowed a different path, that will allow the 
Russians to go forward.
    Mr. Hobson. I just don't like the waste of $11 billion when 
the Russians sat here and everybody--four years ago or three 
years ago--said, ``We are not doing it.'' Everybody in our 
Energy Department said, ``Oh, yeah, they are going to do it, 
they are going to sign it.'' The Senate says, ``Oh, yeah, they 
are going to sign it.''
    Well, they never did sign it. They told us in the very 
beginning of the negotiations years ago that that is what they 
were going to do, and we just didn't listen once again.
    We are going to waste a bunch of taxpayers' dollars for a 
jobs program that I think is nuts. But, you know, I lost.
    Mr. Tobey. Sir, in addition--I understand that you oppose 
the program overall, but you also asked me to do three things, 
with respect to the program: to make sure that we had a 
defensible baseline; to make sure that we looked at additional 
missions; and to get the Russian program in order. That is what 
you asked of me last year.
    Mr. Hobson. Hopefully you have.
    Mr. Tobey. And I would argue that we have done all three of 
those things.
    Mr. Visclosky. I owe Mr. Serrano recognition, but I do just 
want to follow up on Mr. Hobson's line of questioning.
    In your budget for 2009--talking about MOX, in 2007 there 
was no request for Russian materials disposition. There was no 
request in 2008 for Russian materials disposition. You asked 
for a million dollars this year. What is the million dollars 
for?
    You know, $1 million. What is MOX? $11 billion? What are 
you going to do with a million dollars?
    Mr. Tobey. Well, we understand that the Russian program, 
you know--what we need to do is get the Plutonium Disposition 
Agreement amended consistent with the joint statement that we 
have talked about. There are some costs associated with that. 
We will need to negotiate this with them. But we understand 
that this is not----
    Mr. Visclosky. So we are going to give them--is the million 
dollars--because the money has been flowing to the Russians, 
obviously, for them to do MOX.
    Mr. Tobey. Pardon me?
    Mr. Visclosky. The money for the agreement with the 
Russians, that money in the past, up until 2007, has been money 
for Russia out of this account.
    Mr. Tobey. Right. Right. I am sorry, I misunderstood.
    Mr. Visclosky. Now, this million dollars----
    Mr. Tobey. I will have to get back to you on what the 
million dollars is for.
    Mr. Visclosky. Well, let me ask you this: Is it going to 
the Russians?
    Mr. Tobey. I need to get back to you, sir.
    Mr. Visclosky. Okay. Thank you.
    You must have penmanship like me.
    Mr. Tobey. Yes. I think I will have to get back to you.
    Mr. Hobson. Can you do that before the end of this year?
    Mr. Tobey. Sure.
    Mr. Visclosky. No, I am very concerned--because it is just, 
a million dollars, for the average person--not just the average 
person--to anyone--that is a lot of money. For this program, 
where it has been tens and hundreds of millions of dollars 
going through--well, I shouldn't say hundreds of millions, 
because there isn't a lot of money going to Russia on this.
    And Mr. Hobson is absolutely correct. We sat at this table, 
whatever the date was, and it has been some time ago, and they 
just were dismissive, to be polite about it.
    Mr. Tobey. They were dismissive of the use of MOX with 
light water reactors. They wanted to use fast reactors. And we 
have agreed with them on a disposition path that would use fast 
reactors.
    So, anyway, so I think that is real progress, frankly.
    Mr. Visclosky. But for the last few years, we haven't asked 
for any money, but now we are asking for a million. One, is it 
going to the Russians, or is it going----
    Mr. Tobey. I will have to get back to you on that.
    Mr. Visclosky [continuing]. To somebody in your department? 
And what is it for? I would appreciate it.
    And with apologies to Mr. Serrano, just two other little 
clean-ups here.
    Mr. Hobson has hit a line of questioning on--and, I 
believe, also Mr. Simpson has--on the IPP program. I would just 
have one final point on that, relative to GNEP.
    Recognizing that there is no formal U.S.-Russian agreement 
for nuclear cooperation, what steps has DOE taken to ensure 
that any cooperation and assistance provided to IPP projects in 
Russia to advance the Global Nuclear Energy Partnership are 
compliant with the terms and requirements of the Atomic Energy 
Act?
    Mr. Tobey. We made sure, sir, that the technology flows 
were from Russia to the United States, not the other way 
around.
    Mr. Visclosky. So you are saying you are compliant.
    Mr. Tobey. Yes.
    Mr. Visclosky. Okay. And one----
    Mr. Tobey. In other words, the Atomic Energy Act governs 
U.S. technology going overseas. We made sure that the 
technology flows, in this case, weren't the other way.
    Mr. Visclosky. Okay.
    Mr. Ryan had a series of questions about competition, 
which, again, the entire subcommittee and Mr. Hobson and I take 
very seriously. You did respond, but if you could, just for a 
moment, for me, or if you want to expound further in the 
record, that would be fine.
    The labs do great work. I think, too often, because our job 
is to fix problems and things, we tend to be very critical. I 
understand they do very good work.
    But I have always been very concerned that, outside of the 
weapons labs, there are other labs. There are some great 
learning institutions in the private sector. You are doing 
everything to make sure of that competition. The labs have the 
expertise, so the labs get it.'' And, again, that could 
absolutely be true, and I am all for it. You are making every 
effort to make sure it is a fair fight, as far as these 
competitions, between the private sector, universities, other 
labs, as well as the weapons labs. I just would want to be 
assured of that.
    Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman.
    A couple of days ago, the New York Times reported on a GAO 
report which indicated that the Department of Energy has a 
stockpile of partly processed uranium that could be sold for 
great profit.
    Do you happen to know who this material could be 
potentially sold to? Are there any proliferation concerns if 
this material is sold abroad?
    Mr. Tobey. I think that this, as I understand it--and I 
deal with this to some extent, but it is not directly under my 
control--the amount of uranium that is sold by the department 
into the open market is governed by law, so that we don't 
distort the market.
    I think that it is primarily sold to U.S. utilities, and 
that if it is, in fact, sold abroad, it would be sold under the 
same conditions that any uranium would be, that we would make 
sure that we knew who the end-user was, that it was used for 
peaceful purposes, nuclear-energy generation, et cetera.
    Mr. Serrano. So this is by law, you say, that----
    Mr. Tobey. Correct. The Atomic Energy Act and other laws 
govern--well, the Atomic Energy Act governs where it can be 
sold. And there are laws, I believe, regarding the amount of 
material that can be sold from our stockpiles.
    But, as I say, that is not directly under my control, so--
--
    Mr. Serrano. I understand.
    Mr. Chairman and Mr. Ranking Member, I would like to see 
the committee get information as to--the gentleman says it is 
not under his control--whose control is it under, and just to 
double- and triple-check that this uranium is not going to land 
up where it shouldn't land up.
    Mr. Tobey. The Office of Nuclear Energy is actually in 
charge of the sales.
    Mr. Visclosky. We have a hearing with that office on 
Thursday of next week, Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    Just one quick question, kind of in response to Mr. 
Edwards' and Mr. Ryan's question about the president's priority 
in his budgeting.
    How much of your budget--if you can put it terms of how 
much of--how much of your budget is dependent on the 
cooperation of other countries?
    I mean, it is hard to budget to do North Korea if North 
Korea doesn't cooperate and allow us to do that. It is kind of 
hard to get into the closed cities in Russia if Russia doesn't 
allow us to do that. We can't just go to every country and say, 
``We want to put a Megaport here.''
    Mr. Tobey. I paused only because I was thinking about maybe 
an extreme position. I think it is defensible, though maybe not 
perfectly defensible, that all of our budget depends on 
cooperation with other countries at some level.
    Mr. Simpson. So, actually, if we just threw a whole ton of 
money at you, that doesn't necessarily mean you could spend it 
effectively or that nonproliferation would be a higher 
priority?
    Mr. Tobey. That is correct.
    And also we are constrained by things like construction 
seasons. You know, we couldn't go faster, for example, in 
completing the Bratislava Initiative. We are going as fast as 
we can, given the constraints of construction seasons in 
Russia, where it can get to 40 degrees below zero, the number 
of Russian contractors that are permitted by the Russian 
government to operate in their sensitive facilities. There is 
only a limited number of those contractors, who have limited 
capabilities, et cetera.
    Mr. Simpson. As an administrator that is responsible for 
making sure that taxpayers' dollars are spent wisely, is it 
ever possible that you can budget too much money, that it 
wouldn't be spent effectively?
    Mr. Tobey. Sure. I mean, it is, yes.
    Mr. Simpson. So necessarily looking at the bottom line 
doesn't indicate whether this is a priority with the president 
or not.
    Mr. Tobey. I believe that is right. And I would take 
vigorous issue with anybody who said that this isn't a 
presidential priority.
    Mr. Simpson. I agree with you. I have talked to him 
personally about it, and I know it is. So I just wanted to make 
those points clear, after some of the comments that were made. 
I appreciate it. Thank you.
    Mr. Tobey. Thank you, sir.
    Mr. Visclosky. Mr. Calvert.
    Mr. Calvert. No additional questions at this time, Mr. 
Chairman.
    Mr. Visclosky. Mr. Tobey, I understand that on measuring 
the success of protecting nuclear materials, we measured the 
success of this program by the number of sites that have been 
protected. The need for the program is apparently winding down.
    In 2006, the administration changed the accounting and 
measuring mechanism, as far as success, by measuring the 
percentage of facilities that have received upgrades rather 
than the percentage of materials captured by the upgrades. Why 
was the change in method made?
    Mr. Tobey. I think it was made because, frankly, we didn't 
have accurate data on the amounts of material that were at 
particular sites. That is something that the Russians--we can 
make estimates of that, but the Russians don't disclose how 
much material is at which sites to us.
    And I know that, in my case, what I was interested in--and 
some of this change started before I arrived; some of it 
happened afterwards--but when I became involved in it, what I 
was interested in were objective measures.
    And I wanted, also, to make sure that we didn't count half-
measures as sites that had actually been completed. In other 
words, either the security work is completed or it is not 
completed. So when I talk about the 85 percent where work had 
been completed, that is where we believe that all that is 
necessary to be done has been done.
    There actually, in the remaining 15 percent, in some cases, 
maybe all cases, there had been at least interim measures that 
had improved the security somewhat while we were working on the 
longer-term solution, but I don't count those.
    Mr. Visclosky. While we are talking about security, I would 
follow up on Mr. Ryan's line, you responded to the whole issue 
of the personnel at these facilities. If there is something we 
are missing or can be more helpful on in that regard, we would 
certainly want you to let us know.
    Mr. Tobey. Thank you.
    Mr. Visclosky. Are there any activities or projects that 
will be completed or nearing completion under your control in 
fiscal year 2009? Any in particular?
    Mr. Tobey. Well, the end of Bratislava actually falls, 
obviously, within 2009, because we are working on calendar year 
2008.
    We are hopeful that the Zheleznogorsk reactor can be shut 
down within fiscal year 2009. The program might still 
continue--well, it would still continue, because there are 
obligations to finish some of the construction that enables the 
shutdown of that reactor. But, obviously, from the standpoint 
of U.S. interests, what we want is the reactor to be shut down.
    Mr. Visclosky. If the program comes to an end, as far as 
the elimination of weapons-grade plutonium, will you have an 
office in Russia or will that office close when the program is 
completed?
    Mr. Tobey. The office in Russia is associated--at the 
embassy--is associated with a wide variety of activities, so it 
would not close. But we are anticipating closing--there is an 
office in Washington that deals with the elimination of 
weapons-grade plutonium production, and we anticipate closing 
that.
    Mr. Visclosky. Okay.
    You had mentioned the reactor program in Russia, and I 
would have a couple of questions on that. According to the 
budget documents, the Seversk project is scheduled for 
completion by the end of December 2008. You have referenced 
that.
    One of the questions I have is--is the fossil fuel facility 
completed at this point in time?
    Mr. Tobey. No.
    Mr. Visclosky. When is that going to be completed?
    Mr. Tobey. The Seversk plant?
    Mr. Visclosky. Yes.
    Mr. Tobey. I better get back to you on that.
    But we are in a situation now where there has been--there 
are two reactors there, as you know. They have gone into 
alternating modes so that only one is in operation at any one 
time. The next step will be a complete shutdown of one of the 
reactors. And I think we are either at or near that prospect. 
And then, this summer, both reactors will be completely shut 
down.
    Now, there are----
    Mr. Visclosky. In the summer of 2008?
    Mr. Tobey. Summer of 2008. So we are actually a couple 
months ahead of schedule on that.
    Now, the completion of construction is obviously associated 
with but not perfectly timed to the shutdown of the reactors. 
We are actually going to do a little better. There will be some 
construction that will occur after the shutdown of both 
reactors.
    Mr. Visclosky. So the reactors potentially are shut down 
prior to the----
    Mr. Tobey. To the completion, right.
    Mr. Visclosky [continuing]. The fossil fuels coming on-
line.
    Mr. Tobey. Well, it is not binary. Parts of it are coming 
on-line.
    Mr. Visclosky. Okay, okay. As opposed to the whole thing, 
just flipping a switch and it all coming on. Okay, I got you.
    When you say they will be shut down this summer, can they 
be started back up?
    Mr. Tobey. I would anticipate that the Russians will 
decommission these reactors. They do not want to operate these 
reactors.
    Mr. Visclosky. But you don't know for sure.
    Mr. Tobey. Let me get back to you on that. These are old, 
dangerous reactors that the Russians do not want to operate. 
They are obligated to shut them down. The agreement is that 
they will shut them down.
    Mr. Visclosky. But the question is----
    Mr. Tobey. Let me get back to you on what measures will be 
taken.
    Mr. Visclosky. Yes, how will they--measures so they can't 
start them up.
    They are not shut down yet. Are they producing any weapons-
grade material currently?
    Mr. Tobey. Yes.
    Mr. Visclosky. Okay.
    Mr. Tobey. They have gone to alternating mode in Seversk. 
Zheleznogorsk continues to operate. However, that material is 
governed by the agreement, and it needs to be safeguarded and 
can't be used for weapons purposes under the agreement.
    Mr. Visclosky. Okay. And then, for the record, if you could 
provide--and you have, to a large degree, answered the question 
as to the completion----
    Mr. Tobey. We will get you the exact dates.
    Mr. Visclosky. After the reactors are permanently shut 
down--and I am assuming, based on any change in the record 
testimony, that that will happen--will Russia have any capacity 
to produce weapons-grade plutonium in reactors?
    Mr. Tobey. Well, these were purpose-built reactors, these 
among others. And these are the last three of the plutonium 
production reactors. As you know, nuclear reactors, by their 
nature, produce plutonium.
    Mr. Visclosky. Okay.
    The NNSA is engaged in a program to convert research 
reactors that use highly enriched uranium which have weapons 
applications to low-enriched uranium. Through the end of last 
year, you had apparently converted a total of 55 reactors, with 
only a handful to go. When will this program be completed, as 
far as all the at-risk research reactors being converted?
    Mr. Tobey. I need to get back to you with the exact date.
    Mr. Visclosky. Okay. Are we within a year or two?
    Mr. Tobey. No. In fact, and when you mentioned the fact 
that there were only--my count is that we have converted----
    Mr. Visclosky. I misspoke, is what you are saying.
    Mr. Tobey. No, no, sir. It is very close. I just want to 
clarify. We converted 51; we shut down four. So that totals 
with your 55.
    Mr. Visclosky. Okay, okay.
    Mr. Tobey. But the total number is in the range of 135.
    Mr. Visclosky. Oh.
    Mr. Tobey. Now, there are difficulties with that, in that 
some reactors can't be converted without the use of new reactor 
fuel, high-density reactor fuel. And we are working on 
development of that fuel.
    Additionally, there is a fairly large number of such 
reactors in Russia. And while we have worked hard to get their 
agreement to convert, we don't yet have it.
    Mr. Visclosky. So some of that 130-odd reactors are 
actually not in the United States.
    Mr. Tobey. Correct. Well, many of them are not.
    Mr. Visclosky. Many of them, most of them probably, are 
not.
    Mr. Tobey. Yes. The majority of the ones that we have 
converted have been outside of the United States.
    Mr. Visclosky. I am going to have to learn more about that, 
because, in my mind, this was a U.S. program, territorially a 
U.S. program. So I will have to educate myself.
    Mr. Tobey. We would be happy to provide a briefing.
    Mr. Visclosky. Thank you.
    Yes, go ahead.
    Mr. Hobson. I visited Chernobyl, and I visited some other 
facilities in Russia, and the way they looked at exposure to 
radiation is a lot different than we do. Frankly, the world has 
a double standard, because if we would have done in the world 
and to our citizens what they did to their citizens, we would 
still be beat up for it. They don't seem to be being beat up 
for it.
    Two things I want to ask.
    First, one of the reasons they had a problem at Chernobyl 
was a design problem. They didn't have simulators. And they had 
a training program going on at the time. We built at least one 
or two or three simulators for them in their nuclear power 
program.
    Has there been any more of that? Or do they need more? Or 
are we done? Do you know anything about it?
    Mr. Tobey. Sir, I am sorry that I don't.
    Mr. Hobson. It is not weapons----
    Mr. Tobey. Exactly.
    Mr. Hobson [continuing]. But it still deals with those 
plants about which we are talking, the ones that can become 
problems.
    Okay, let me switch to the other one.
    Do you know what is happening with building the new--I 
forget what they call it--cover for Chernobyl? You know, it is 
cracking, and they have problems. Is that under your bailiwick?
    Mr. Tobey. It is not, sir. And I don't know.
    Mr. Hobson. I don't know either. I think we need to know in 
this committee, because that is a huge environmental problem.
    Mr. Tobey. I would be happy to try and get you an answer on 
that.
    Mr. Hobson. The world seems to be kind of standing around. 
The Russians are certainly standing around.
    They don't seem to look at this stuff like we do. I mean, I 
got closer to a core than I would have ever gotten here. Some 
guy--a Russian--stood between me and the core, so he absorbed 
all the radiation. Here, they probably wouldn't even let us on 
the floor to see the rods.
    So there is a difference. And that is part of our 
difficulties in our understanding of how we deal with these 
people.
    One of the things we don't want to have happen is, where 
there are design flaws, as there were in those plants. You 
know, the French have done cookie-cutter plants. We didn't; the 
Russians didn't. We should all look and see, as we go into 
these next generations of plants, that we don't have all these 
different designs. We need to know what is going on when there 
are design problems.
    We have had a design problem and some technical problems in 
one plant that Marcy Kaptur talks about. There acid was eating 
through.
    So that really isn't your area. I am just trying to figure 
out whose area it is because some of these things have weapons 
potential, some of them have explosive potential. I don't know 
who that is, but we need to look at that in this committee and 
make sure that we are doing our responsibilities. Mr. Chairman, 
we need to ensure that somebody doesn't come back and say we 
didn't fund the right things at the right time.
    Mr. Tobey. We will try to get you an answer as to who has 
participated in that.
    Mr. Hobson. And I thank you for taking to heart some of the 
stuff that we have tried to do in the chairman's and my 
stewardship of these programs. As you can tell, we don't take 
this stuff lightly. I personally, and I believe the chairman 
does, think this is an area that is very important to the 
security of this country and of our children and grandchildren.
    Mr. Tobey. I try to use hearings as an opportunity to 
listen.
    Mr. Hobson. Thank you. Appreciate it. And, I hope, respond.
    Mr. Tobey. Certainly.
    Mr. Hobson. If we could get your lawyers to do that, we 
would be a lot better off.
    Mr. Visclosky. You knew he was going to go there.
    And just backing up, when you get back to us on the 
reactors in Russia, I guess, as far as a shutdown, I attach, 
for my purposes, the word ``irreversible.''
    And we will just have two more questions, and then I think 
we will be done.
    DOE has been criticized by the Congressional Research 
Services for doing vulnerability assessments in Russia from 
drawings and photographs rather than site visits. Is this a 
practice that is still in use?
    Mr. Tobey. No. And, in fact--well, let me say this. Do we 
use drawings and photographs only? No. We visit sites.
    Mr. Visclosky. Okay.
    What are some of the metrics used to determine if security 
at a given site is adequate? And would the definition of 
``adequate'' be the same as you would use it for a facility in 
the United States?
    Mr. Tobey. It would certainly be based on the same 
standards, but our knowledge of--even though our knowledge is 
extensive of Russian facilities, it is not perfect and by no 
means equivalent to what we have here.
    I guess that what I could say is that, I mean, when we 
think about nuclear material security, we have an internal list 
of over 400 questions, and we think about those sorts of things 
in assessing Russian facilities. I don't know if that is 
responsive to your question. But we try and use the same 
objective standards. Our ability to do so is somewhat limited, 
because we don't have the same access.
    Mr. Visclosky. I don't have anything else.
    Mr. Serrano, you don't have anything? You are set.
    So we will conclude. And I would echo Mr. Hobson's words, 
is I do, myself, believe what you do is very important, and 
appreciate your efforts and your department's efforts.
    A lot of the questioning today and, as you know, a lot of 
our efforts for a year and more, with the initiatives taken 
when Mr. Hobson was chairman here, is to make sure that there 
is a clear line of demarcation as far as the nonproliferation 
program, so we can be focused and concentrated and hopefully do 
our very best. Which is why my colleague and I still share a 
great upset that, despite our best efforts last year and a lot 
of effort, I just think we are getting nickeled and dimed. And 
not necessarily--I am not suggesting by you, but we are getting 
nickeled and dimed here.
    And the point of this was to be very focused on NN, to 
increase the funding and to make sure we can do the best job 
possible. So I hope you understand that is the whole point of 
today's hearing, is to make sure those lines are as clean as 
possible.
    Mr. Tobey. I certainly understand that, sir.
    I would note that I believe that a balanced 
nonproliferation effort must detect, secure and dispose of 
dangerous material.
    Mr. Visclosky. Thank you very much.
    Mr. Tobey. Thank you, sir.
    [Questions and Answers for the record follow:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
                                          Thursday, April 10, 2008.

         DEPARTMENT OF ENERGY--NUCLEAR ENERGY AND NUCLEAR WASTE

                               WITNESSES

DENNIS R. SPURGEON, ASSISTANT SECRETARY FOR NUCLEAR ENERGY, U.S. 
    DEPARTMENT OF ENERGY
EDWARD F. SPROAT, III, DIRECTOR, OFFICE OF CIVILIAN RADIOACTIVE WASTE 
    MANAGEMENT, U.S. DEPARTMENT OF ENERGY

                 Chairman Visclosky's Opening Statement

    Mr. Visclosky. The subcommittee will come to order. The 
Subcommittee on Energy and Water Development meets today for 
the 10th and final hearing on the administration's proposed 
fiscal year 2009 budget request for programs under this 
subcommittee's jurisdiction. As such, I would like to point out 
it is also the Ranking Minority Member's last subcommittee 
budget hearing, as Mr. Hobson--it will be a joy to some, I am 
sure, to hear--will be retiring at the end of this term. It is 
somewhat poetic that the hearing happens to be on nuclear 
energy and Yucca Mountain, two programs Mr. Hobson has 
championed during his tenure as Chairman, and he continues to 
do so as Ranking Member.
    Mr. Hobson took initiative to support the expansion of 
nuclear power in this country. There is no nuclear interest in 
his district in Ohio. Mr. Hobson has pursued expanding nuclear 
energy in this country because it is a clean source of energy 
and domestically generated for energy security, both of which 
benefit the welfare of our country.
    Mr. Hobson has been a tireless supporter of Yucca Mountain, 
recognizing that the growth of nuclear energy is dependent on 
having a place for the waste. It would have been easy for him 
to use the Yucca Mountain budget request to fund other 
activities, given the opposition in the Senate to it. Mr. 
Hobson believes in good policy over political expediency and 
has remained firmly committed to the project.
    More generally, I would also point out that we all serve on 
the Energy and Water Subcommittee. Water is vitally important 
today, and I believe it is one of the two great natural 
resource issues of this century. During my tenure on this 
subcommittee, we have tended to be the water subcommittee, 
sublimating to a large degree our energy responsibilities to 
the other body in conference. That changed under Mr. Hobson's 
chairmanship. While the gentleman from Ohio led the fight for 
financial and project management reform within the Army Corps 
to maximize its efficiency and expand--and expend the 
taxpayers' dollars more wisely, I am most struck that in all my 
years on this subcommittee, he made us relevant as a leader of 
the energy subcommittee.
    Five years ago, instead of following past practice and 
generally ceding to the other body for additional water 
resources, Mr. Hobson engaged all of us in a conference that 
resulted in a wiser, more balanced energy policy, one that led 
to the greater benefit of the American people.
    Our bill in fiscal year 2004 was a far better product and 
moved energy policy in a positive direction because Dave Hobson 
chaired this subcommittee. And in each of the successive years, 
we have built on that foundation he laid 5 years ago, and 
perhaps that was his 5-year plan.
    He has led us well. He has taught us well. And in 
particular, he has taught me how to chair a subcommittee. He 
has been our best friend.
    But now let me also move to the matters at hand, the fiscal 
year 2009 budget request for nuclear energy in the Office of 
Civilian Radioactive Waste Management. Today from the 
Department of Energy to discuss the fiscal year 2009 budget 
request, we have Mr. Dennis Spurgeon, Assistant Secretary for 
Nuclear Energy; and Mr. Edward Sproat, Director of the Office 
of Civilian Nuclear Waste. The budget request for the Office of 
Civilian Nuclear Waste is $494.7 million, essentially identical 
to the fiscal year 2008 requested amount, but now for different 
purposes.
    According to your testimony, Mr. Sproat, the license 
application for Yucca Mountain will be delivered to the Nuclear 
Regulatory Commission by June 30th of this year. I look forward 
to hearing about what you hope to fund for your office in 2009.
    The fiscal year 2009 budget request for the Office of 
Nuclear Energy is $853.6 million, which does not include the 
Mixed Oxide Fuel Fabrication Plant, counter to the direction of 
legislation passed by the United States Congress and signed by 
the President of the United States into law in December of 
2007. Including the administration's request of $487 million 
for MOX, the NE request is $1.34 billion. This includes a 
request for $301.5 million for the Global Nuclear Energy 
Partnership in its third iteration before the committee.
    I also understand that Mr. Sproat and Mr. Spurgeon have 
been talking and discussing with other committees of Congress 
on the financing of spent nuclear fuel disposition. So I have a 
supposition that there is a fourth iteration in the works. We 
will have questions on all of these topics.
    Gentlemen, welcome. And let me ask each of you to present a 
summary of your remarks. Your full written testimony will be 
entered into the record. After the hearing, we will have 
questions for you to answer for the record. And I would ask 
that you have responses back to us in 4 weeks.
    But before recognizing you, Mr. Hobson, do you have an 
opening statement?

                     Mr. Hobson's Opening Statement

    Mr. Hobson. Yes. Thank you, Mr. Chairman.
    First of all, you caught me off guard on your comments. I 
very much appreciate those comments. So often in Congress, we 
say, ``my good friend, the gentleman from so and so,'' and that 
just comes as a natural thing. However, in this case it has 
been true with both of us. We became good friends on this 
committee. We really didn't know each other that well before we 
got on this committee together, although we have been on 
Defense. But we did work, I believe, as a team. I think we 
continue to work as a team. I think that is important, and we 
did, together, change some directions that were different on 
the committee.
    I was talking to staff this morning in my office about 
this. This committee is more than just the House water 
committee and project or the House energy committee, depending 
on which part of the country you come from; that the committee 
has begun to look beyond our own parochial interests and into 
the interests of this country as a whole.
    I personally believe that one of the reasons that we both 
looked at the energy side is that we both have children. I have 
some grandchildren; he hopes to have some grandchildren. We 
look at what is going to affect our country probably as 
strongly as anything else in this world. We have had the luxury 
of having had low-cost energy to spur our industrial and 
economic development in this country. That is changing. We also 
face climate change. As we look at those two things, I think we 
jointly believe in alternate types of energy. But in that mix, 
in order to have the biggest impact, we are going to have to 
have nuclear power, which is green. Part of that green is how 
we handle the waste.
    I remember one of my first disappointments in this 
committee was dealing with the administration--I guess that is 
kind of an oxymoron--on Plan B out of OMB. And then I found out 
there was no Plan B in the funding of Yucca Mountain, much to 
my chagrin. After believing that there was a Plan B, I had been 
told so, that was the beginning of one of my really 
disappointing times in this whole arena. I am optimistic that 
in my lifetime we will see the reemergence of nuclear power and 
other sorts of energy sources so that this country will 
maintain its quality of life for which we have worked so hard 
over these years. We will not transfer all of our assets to 
other countries in the world simply because we are so dependent 
on foreign oil or natural gas.
    I have enjoyed probably as much as anything I have done in 
my life, being on this committee and being Chairman of it for 4 
years. I walked in, and Pete became my friend. I didn't know a 
lot about this committee. Maybe that was good in a way. And I 
didn't have any preconceptions, and I suddenly found out that 
the preconception of a lot of people was that this committee 
wasn't allowed to be involved in energy. We could play around 
with certain labs a little bit, and we could do water projects, 
but since I didn't have any water projects, I wasn't really 
interested in that.
    The intellectual challenge of the energy side really 
intrigued me, and the way we found the Corps of Engineers in 
shambles also interested me. I think of the many efforts that 
we did together in the Corps, I think the Corps, to its credit, 
has continued to follow the efforts that we made to improve 
their systems. The beneficiary of that is certainly the 
taxpayer of this country, but the Corps itself is a better 
place today.
    I wear their little hat. I have a little Corps of Engineers 
black hat that I wear--as a matter of fact, I wore it all the 
way to Florida when I drove my daughter down there this last 
weekend. It was fun to wear it and watch people look and say, 
what is that old guy doing wearing that hat?
    This committee has been fun, and everybody we have had on 
this committee has contributed in a very positive way. I know I 
have bought a lot of jewelry with Mr. Pastor and his wife over 
the years on a number of trips we went on. And John was on my 
previous committee. Chet was there. We have all worked 
together. I guess on our side, Jo Ann is the last of the Ohio 
Wesleyan people when I leave. And we have new members. Ken and 
I knew each other. We have traveled together. I am not going to 
tell about the trips with Mr. Rehberg and Simpson. Those are 
probably better not told. And Zach has been a good friend. I am 
the first guy that gave to Zach's--if you guys don't get mad 
about this, I was the first guy that gave to his campaign. We 
met a long time ago. The staff has been wonderful to deal with 
over the years and I appreciate all of their help.
    Now I get to the part that they wrote for me, but I usually 
change it anyway. It is nice to see Mr. Spurgeon and Mr. Sproat 
today. My staff has been feeding me quotes from Yogi Berra to 
use in my hearing statements. Now, my baseball acumen is 
probably limited to throwing out a couple of opening pitches, 
but I did get them over the plate, and that is probably the 
closest thing--Yogi Berra didn't catch them, but that is about 
as close as I have. However, in today's hearing, there is a 
famous Yogi Berra saying that I think is probably relevant: The 
future ain't what it used to be. In the case of nuclear energy, 
a more accurate statement would be the future ain't what it 
ought to be.
    Over the past 7\1/2\ years, this administration, in my 
opinion, had a golden opportunity to put nuclear energy on a 
sound footing for the future. In the absence of a real solution 
for spent nuclear fuel, I worry that the nuclear renaissance 
will be stalled out before it ever really gets started.
    Mr. Sproat has shown a single-minded focus on getting the 
license application for Yucca Mountain submitted to NRCC later 
this year, and that focus is somewhat admirable, but it means 
that Mr. Sproat and his colleagues have ignored any 
alternatives that might have moved spent fuel sooner or might 
have become necessary if political opposition continues to 
block progress on Yucca Mountain.
    And let me say, I just read a quote by somebody the other 
day that there is talk now of storage in certain sections of 
the United States and in an interim sort of basis or a more 
permanent sort of basis, and even one in a deep repository 
other than the Yucca Mountain. And, you know, it seems to me I 
hear echoes of somebody else having said that about 4 or 5 
years ago when it was considered ill-conceived and poppycock or 
something like that. But it seems that things do go around, and 
maybe someday something positive will happen.
    On the nuclear front, there is much less clarity on what 
the Department is trying to accomplish. Sometimes the priority 
is on financial assistance to the nuclear industry to get 
existing reactor designs licensed and built, sometimes it is on 
advanced reactor technologies, and sometimes it is on advanced 
recycling technologies. Unfortunately, the Office of Nuclear 
Energy has spun around in so many circles over the Global 
Nuclear Energy Partnership that it squandered its credibility 
not just for GNEP, but, in my opinion, also for the larger 
nuclear energy issues.
    I said at this hearing last year that there were three 
challenges that define what we expect the DOE to do in the near 
term: First, reduce the $7 billion in liability facing the 
Federal Government over its failure to dispose of commercial 
spent fuel, reduce the need for eight more Yucca Mountains by 
the end of the century, and make it possible for NRC to license 
new reactors while finding an assured disposal pathway for 
spent fuel. Unfortunately, the Department has done little or 
nothing to address the challenges that I laid out last year.
    As today will probably be my last time to espouse on this 
topic, I was hoping to have something really positive to say 
about the progress DOE has made over the last several years. 
Unfortunately I can't. Yes, there is some cause for enthusiasm 
that a number of new reactors are now in the licensing process, 
but I hope to see dozens of new reactors, because if we are 
going to really make a change, we probably need at least 30 
just to maintain where we are and probably another 30 to really 
flip where we are going. And I certainly hoped that before we 
built new reactors, we had provided real solutions for spent 
fuel. I think it is one of the most stupid things I have ever 
seen in my life to take perfectly good rods and put them down 
in a hole and leave them for 10,000 years. Those rods are 
useable if you get to them fast enough, about 98 percent after 
the first use, but nobody does it. And when we do try to do 
something like that, we subsidize the hell out of somebody. But 
anyway, that will get me off another thing I don't want to get 
off on.
    To build more reactors without a solution for spent fuel is 
both short-sighted and irresponsible. I am already worried that 
we are leaving our children and grandchildren a legacy of spent 
fuel from existing reactors. So what does the Department do? It 
encourages the construction of more reactors with still no 
solution in sight to spent fuel.
    Now we hear the Department is shopping around the idea of 
assigning responsibility of spent fuel to a new entity outside 
of DOE. While this proposal may help correct the obvious 
inattention and mismanagement of the Department, it won't help 
you overcome the skepticism here in Congress.
    I am extremely disappointed that this administration has 
made so little progress on these issues. I know it isn't 
realistic to expect you to hit a home run on spent fuel, but at 
least you ought to go down swinging and maybe hitting. I 
wouldn't even mind if you hit a couple of foul balls trying to 
get there, trying to get a hit. But I guess I am disappointed.
    Hopefully someday I can come back, Mr. Chairman, and come 
into this room and thank this committee and an administration 
for moving forward on these issues and solving these problems 
for the future and--not just the future, the future quality of 
life of the people in this country. I guess I am not optimistic 
about that over the next 8 months, 9 months, whatever it is. I 
worry that we haven't left the foundation that the next 
administration will pick up on, and this will languish even 
longer.
    So with that dismal outlook--even though I do love this 
committee, let me say I have probably enjoyed this committee 
intellectually as much as Defense has been a good intellectual 
committee for both of us. Of course I loved MILCON. I am not 
sure I like the configuration today, that it would be awfully 
hard to do, Chet. But it is a better configuration than when I 
had it, because I tried to get some stuff through that you now 
have got, and I congratulate you on that.
    This is, I guess, my swan song. I wish it would have been 
more positive on these budget things. When I first came, I was 
number two to John Kasich on the Budget Committee when we 
balanced the budget. Hence, we tend to look at things from that 
standpoint. Dennis and Edward, it is your show, and I am just 
disappointed that we didn't get further along on some of these 
things than we did, Mr. Chairman. Thank you for your friendship 
over the years, sir. I appreciate it.
    Mr. Visclosky. Thank you.
    Mr. Spurgeon.

                    Mr. Spurgeon's Opening Statement

    Mr. Spurgeon. Chairman Visclosky, Ranking Member Hobson and 
members of the subcommittee, I am here to discuss the fiscal 
year 2009 budget request for the Department of Energy's Office 
of Nuclear Energy. Our Nation's strength and prosperity is 
built on security and the availability of reliable sources of 
energy. A cornerstone to these goals of continued economic 
growth and a sustainable energy future is nuclear power.
    The Office of Nuclear Energy's budget request supports the 
near-term expansion of safe, reliable, carbon-free nuclear 
power and the development of advanced nuclear technologies now 
and into the future. It is significant to note that since 
President Bush took office, his administration has increased 
its funding request for nuclear energy in every year for the 
past 7 years. We can take some pride in this increase, but from 
historical perspective, our total budget request for 2009 is 
less in absolute dollars than the resources we were devoting to 
nuclear energy the last time I served in government, more than 
30 years ago in the Ford administration. In constant dollars, 
today's budget is about one-third of the budget we prepared in 
1976. In fiscal year 2009, a total of $1.4 billion is requested 
for nuclear energy activities.
    I would now like to take a moment to highlight our program 
areas and their corresponding budget requests. In fiscal year 
2009, the President's budget requests $241.6 million for 
Nuclear Power 2010 in support of industry costs shared, near-
term technology development, and regulatory demonstration 
activities focused on enabling an industry decision to build a 
nuclear plant by 2010. To this end, the program will continue 
to support industry interactions with the Nuclear Regulatory 
Commission on new plant license applications as well as first-
of-a-kind design finalization for standardized reactor designs.
    The request also supports the issuance of conditional 
agreements for stand-by support in fiscal year 2009.
    This budget request also includes $301.5 million for the 
Advanced Fuel Cycle Initiative in support of the Global Nuclear 
Energy Partnership. The fiscal year 2009 request supports 
research and development on fuel cycle technologies that will 
support the economic and sustained production of nuclear 
energy, while minimizing waste and satisfying requirements for 
a controlled, more proliferation-resistant nuclear materials 
management system.
    The request also supports ongoing international activities 
to establish a framework for ensuring a reliable international 
fuel supply and the availability of grid-appropriate reactors.
    I recognize the committee's direction to provide increased 
agencywide competition for our Advanced Fuel Cycle Initiative 
R&D funds between national laboratories, universities and 
commercial entities. I further recognize the length of time 
that it takes to implement this type of open competition, and 
we have already initiated preparation of one or more 
competitive solicitations to award up to $150 million in fiscal 
year 2009, subject to appropriation and via open competition.
    This budget requests $70 million for the Generation IV 
program. This request supports critical research and 
development to achieve design goals and make the next 
generation nuclear plant licensable, sustainable and economic. 
In fact, I would like to announce that today DOE will be 
issuing a request for information for the public and 
expressions of interest from potential participants for the 
Next Generation Nuclear Plant demonstration project. This is 
the next step for the Department to form a cost-sharing 
partnership with industry to design, license and potentially 
build a high-temperature demonstration reactor capable of 
producing hydrogen, electricity and/or process heat at the 
Idaho National Laboratory. Additionally, the Department is 
seeking public comments to inform its development of a strategy 
for the NGNP project.
    The fiscal year 2009 budget requests $16.6 million for the 
Nuclear Hydrogen Initiative to support research and development 
on enabling technologies, nuclear-based, hydrogen-based 
technologies, and technologies that will apply heat from 
Generation IV nuclear energy systems to produce hydrogen.
    Finally, $222 million is requested to maintain and operate 
the Department's unique nuclear facilities and infrastructure 
at Idaho National Laboratory, Los Alamos National Laboratory 
and Oak Ridge National Laboratory.
    I would also like to note that the fiscal year 2009 budget 
request continues our commitment to fostering an expansion of 
nuclear engineering programs at our universities. We have 
committed to designating 20 percent of the funds appropriated 
to our R&D programs for work to be performed at universities. 
At the level set forth in the President's request, 20 percent 
would provide almost $77 million for this work.
    Mr. Chairman, that concludes my opening statement. I would 
be pleased to answer your questions.
    Mr. Visclosky. Thank you very much.
    [Mr. Spurgeon's written testimony follows:]

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    Mr. Visclosky. Mr. Sproat.

                     Mr. Sproat's Opening Statement

    Mr. Sproat. Morning, Mr. Chairman, Mr. Hobson and members 
of the committee. Thank you for the invitation to appear this 
morning.
    First of all, I would like to thank the committee for your 
support to our program for our fiscal year 2008 appropriation. 
We asked for $494.5 million last year, and this subcommittee 
recommended full funding of that, and I very much appreciate 
that.
    I would like to remind the committee of when I appeared 
before you last year at this time and asked for that $494.5 
million, what I said we would accomplish with that money and 
give you an update on where we stand with that. I said that we 
would submit a license application to the Nuclear Regulatory 
Commission for the construction of the Yucca Mountain 
repository no later than June 30th of this year. I said we 
would certify the licensing support network that contains the 
millions of documents to support the litigation associated with 
the license application no later than December of 2007. I said 
we would complete the supplemental Environmental Impact 
Statement for Yucca to go in with the license application in 
June of this year. I said we would do the report on the need 
for a second repository and provide it to Congress this year. 
And I said that we would complete the EIS for the Nevada rail 
line associated with the repository this year.
    Now, as this committee, I am sure, is painfully aware from 
the process that you all had to go through, that the amount of 
money that my office eventually got in the fiscal year 2008 
appropriation was $108 million less than what we requested. 
However, obviously that presented significant management 
challenges to me and my management team with that appropriation 
finally coming effective at the end of the first quarter of the 
fiscal year. But we have made substantial progress in changing 
the management approach within the Office of Civilian 
Radioactive Waste Management, and I am very happy to report to 
this committee, and I am very proud of my team, that we will, 
in fact, meet or beat our schedule on all of those deliverables 
this year despite that $108 million cut in the appropriation 
that we finally received in fiscal year 2008. And I will talk 
more about some of those, I am sure, during the opportunity for 
questions.
    There is a fallout, though, of that reduction. That $108 
million less than the President's request for fiscal year 2008, 
it was $100 million less than the President's request in fiscal 
year 2007. As a result of that, when I was in front of this 
committee last year at this time, I talked about the best 
achievable date of opening the repository by March of 2017. 
That date is no longer achievable. And I will talk a little bit 
more about what we are doing in terms of rebaselining the 
program in a minute. But the March 2017 date is one of the 
casualties of that reduced funding in fiscal year 2007 and 
2008.
    Turning to fiscal year 2009, budget request is $494.7 
million, essentially a flat request from what the President 
asked for in 2008. If you remember when I appeared before you 
last year, I presented the required cash flows for the 
repository program in order for it to be able to open in March 
of 2017, assuming an unconstrained cash flow. And I think you 
may remember that that chart that I showed you showed that we 
would require $1.2 billion in fiscal year 2009 to meet that 
March 2017 date.
    As you will note, we are asking for significantly less than 
that, and you may ask why. And the answer is that we recognize 
the budget realities of the appropriations process. The fact 
that we have received $100 million less in 2007, $108 million 
less in 2008 despite the intent of this subcommittee, we 
recognize that it is very, very unlikely that the Congress 
would give us the significantly increased funding that we would 
need to build the repository on the shortest critical path 
schedule.
    So what we are doing is we are rebaselining our schedule 
with a different set of assumptions, and the key different 
assumption is that the Congress will not give us access to the 
Nuclear Waste Fund and increase funding for this program until 
the Nuclear Regulatory Commission gives us the actual 
authorization to construct the repository, which we would 
anticipate in 2011 or 2012. So we are now rebaselining the 
program with that different input assumption of essentially 
flat funding over the next 3 or 4 years. And then what I intend 
to do is I will provide to this committee and to the Congress 
what the revised baseline and best achievable date for the 
repository is based on that set of assumptions which, based on 
my experience now in my 2 years in government services, is 
probably a more realistic assumption on my part in terms of the 
funding profile we can expect in the short term. However, in 
2009, our focus will be on defending the license application in 
front of the Nuclear Regulatory Commission and beginning the 
detailed design that is needed to support construction and 
fast-track construction once the repository construction 
authorization is received. And we have the adequate funding to 
proceed with construction.
    Obviously I am also going to spend time and money further 
developing the DOE organization for it to be able to execute 
its mission of overseeing the licensing, the construction and 
the operation of the repository and the transportation system.
    Let me just talk a little bit in closing about--I know we 
are going to have some discussions about interim storage and 
about some other concepts associated with the back end of the 
fuel cycle. Let me be very, very clear, as I hope I was last 
year. Under any scenario whatever, the country needs a deep 
geological repository for high-level waste. Recycling won't 
make that go away. It just is needed. And the only site we have 
as a country right now as mandated by Congress is Yucca 
Mountain, and that is somewhat of a driver of my single-
mindedness of moving the license application forward on Yucca 
Mountain.
    But it is also very clear to me that we will not be able to 
build this repository unless we fix the funding mechanism that 
the Congress set up in the Nuclear Waste Policy Act by allowing 
us to have access to both the $750 million a year of fees that 
the utility users pay into the Nuclear Waste Fund as well as 
eventually the corpus and the interest on that fund so that we 
can actually build the repository at an optimum rate. With flat 
funding at the funding levels that we have, this program has 
historically had, over the past decades in the $400 million to 
$500 million range, we won't be able to build the repository 
and the transportation system that is needed to bring the fuel 
there.
    In closing, let me just say that we have made substantial 
progress. The Department of Energy has made substantial 
progress over the past year in moving this repository program 
forward. I have a very high confidence level that the license 
application we are about to deliver to the Nuclear Regulatory 
Commission will not only be accepted, but that we will get a 
construction authorization for the repository. And I have a 
very high confidence level in the senior DOE management team 
that I will leave behind me at the end of my tenure in this 
position to move this program substantially.
    And so I respectfully request that the committee and the 
Congress approve the President's request that we are asking for 
fiscal year 2009 and allow us to proceed with the execution of 
this project. And thank you very much for your attention. I 
will be glad to answer whatever questions you might have.
    Mr. Visclosky. Thank you very much.
    [Mr. Sprout's written testimony follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Visclosky. I just have a couple of questions, and then 
I will turn to Mr. Hobson.

                          LICENSE APPLICATION

    You have mentioned submitting the license application by 
June 30th. Are there any potential impediments that might still 
keep you from meeting that date as we sit here today in April?
    Mr. Sproat. Not that I am aware of, Congressman. I have a 
meeting out in Las Vegas next week with all of my senior 
management team, both Fed and contractors, for a final review 
and sign-off where they are going to look me straight in the 
eyes and say, we believe it is done, it is correct, and we 
recommend that it be submitted to the NRC. And assuming how 
that meeting goes, and I am anticipating it to go well, but I 
have the final decision on whether or not it is ready to be 
submitted, and I will make that decision sometime next week. 
After that point in time, then I will authorize it to go to the 
printer. And once the printing process is done and final checks 
are done inside DOE, we will submit it to the NRC sometime in 
June.
    Mr. Visclosky. You cover some of this in your testimony. I 
would like to get into it as far as any budgetary change and 
certainly acknowledge that you had a reduction of this past 
year, and that that has changed things. The request for 2009 is 
significantly less than the funding profile you laid out for 
the project last year. At the time, you indicated the 
repository project would need $1.2 billion this year to stay on 
schedule for 2017, and the budget request is for $495 million. 
Can you talk about that change in funding and what it means for 
2009?
    Mr. Sproat. Sure. Having now lived through two budget 
cycles in my short tenure in the Federal Government, I have----
    Mr. Visclosky. Scary, isn't it?
    Mr. Sproat. I have gotten a much better sense of the 
reality of the process and how difficult it is. It has become 
very clear to me that the only way we are going to build this 
repository at the cash flows we need between $1.2 billion to 
$1.9 billion a year is to have access to the Nuclear Waste Fund 
and the fees coming in. And because of the way the 
appropriations process is set up right now, with the fees being 
classified as mandatory receipts and the appropriations being 
classified as discretionary appropriations, we have a mismatch 
in the revenue stream and the expenditures associated with this 
program that was not anticipated by the Congress when the 
Nuclear Waste Policy Act set up the funding mechanism.
    I personally believe that until we get that fixed, and 
based on my own experience at the House Budget Committee 
hearing we had on this topic last fall, that between the Office 
of Management and Budget, the Congressional Budget Office, the 
House Budget Committee and the Senate Budget Committee, there 
is a recognition that this mismatch and disconnect exists, but 
the willingness to fix it is, I would say, weak at best because 
of the impacts it would have in terms of whatever additional 
funding gets allocated to this program, that money would have 
to be found from somewhere else. And we are going to have to 
work through that issue as best we can.
    But right now, based on that experience, I believe that 
this flat-funding profile is more of a reality of what this 
program can expect to face. And what I am hoping, and that is 
all I can do at this stage of the game, is that when we get the 
construction authorization from the NRC in 3 or 4 years, the 
Congress will then say, okay, we can go build this, let's go 
fix the funding stream, and let's go build it, and that that is 
what this budget reflects.
    Mr. Visclosky. Could you compress that 3 or 4 years if you 
had additional monies now, or is there just some certain time 
you think this is going to take before you----
    Mr. Sproat. I don't expect that 3- to 4-year licensing 
window to be compressed. I believe the NRC will be hard pressed 
to meet that 3- or 4-year window. The Nuclear Waste Policy Act 
mandated the NRC to complete their review and make their 
decision within 3 years, and gave them a fourth year if they 
felt it was needed and informed the Congress of that need. We 
already have preliminary indication from the State of Nevada 
and other intervenors that they would expect to file in the 
neighborhood of between 350 and 500 contentions to the NRC 
contesting certain aspects of the license application. Those 
contentions would have to be reviewed by the NRC staff and the 
NRC hearing boards. It is going to take a while.
    So additional funding over this 3- or 4-year period will 
not compress the licensing period. What it would do, though, is 
would allow us to move forward with more--moving the detailed 
design needed to support the actual construction to move that 
forward faster. It would also allow us to move forward with the 
transportation infrastructure that is actually needed to move 
the waste to Nevada.
    So when I presented to the Congress last year the 
integrated baseline, it looked at not just building the 
repository, but the rail lines and the National Transportation 
System. And it is that part of the program that is going to be 
underfunded by this reduced funding in the short term.
    Mr. Visclosky. When do you think you will have a new time 
baseline that you will then be able to provide us with a 
comparison for your current cost baseline and a new cost 
baseline?
    Mr. Sproat. Based on where we stand right now, I would 
expect--be able--here in mid-April, I would expect to be able 
to do that in June.
    Mr. Visclosky. Two other questions, and I will turn to Mr. 
Hobson.
    The NRC, Mr. Sproat, has indicated the funding constraints 
will make it difficult for them to complete the 3-year review. 
We just talked about that. I recognize that Congress cut NRC's 
Yucca Mountain activities by $8.2 million for this fiscal year; 
however, it is my understanding that the Office of Management 
and Budget, part of the executive branch, reduced the NRC's 
2009 budget request for your activities by $41 million. Given 
that lack of support as far as requests for the NRC by the 
administration, what is Congress supposed to do?
    Mr. Sproat. That is a hard question to answer. First of 
all, I was certainly not involved with any of the discussions 
between the NRC and OMB, so I can't really talk about what was 
said and what the rationale for that was. I don't know. 
However, I will say----
    Mr. Visclosky. Let me--go ahead.
    Mr. Sproat. I would not be surprised if there was some 
skepticism with OMB--within OMB of DOE's ability to actually 
deliver the license application when we said we would, given 
the budget cut. And I wouldn't be surprised if some of that 
skepticism was factored into that decisionmaking. They wouldn't 
be the first group that I have been involved with or I have had 
contact with that was skeptical that we would actually be able 
to pull off getting a license application in this year. So I 
suspect there is maybe some skepticism about DOE's capability 
to perform that was factored into that decisionmaking.
    Mr. Visclosky. And we just talked about the NRC's time 
line, and I understand it is their responsibility and not 
yours. But given that reduction in monetary requests for them 
for 2009, do you think that would have any additional adverse 
impact as far as stretching that time line out?
    Mr. Sproat. It is certainly very possible, primarily if for 
no other reason this licensing proceeding in front of the NRC 
not only being the first of its kind in terms of first-of-a-
kind regulation, first-of-a-kind facility, it is going to be 
probably the most contentious licensing proceeding the NRC has 
ever had in front of it based on the early data that we have 
from the potential intervenors. So they are going to have their 
hands full.
    Mr. Visclosky. Do you believe the private sector or a new 
nongovernmental corporation could build and operate the 
repository for less and more quickly than DOE?
    Mr. Sproat. Not necessarily. And let me explain that. 
Having a private entity or a government semiprivate entity 
managing the whole back end of the fuel cycle has a lot of 
appeal to it, and it could certainly solve some of the problems 
that the Federal Government faces right now, things like 
leadership turnover, the ability to do long-term contracting, 
the ability to offer competitive compensation to attract the 
people with the right skill sets needed to actually pull a 
venture of this magnitude off. So it can certainly help. But 
obviously there would need to be legislation to set that entity 
up, and if that legislation didn't address some of the other 
key issues that currently hamstring this process, it will have 
accomplished nothing.
    The issue of the funding stream and the access to the 
Nuclear Waste Fund, the issue of land withdrawal, the issue of 
who has got responsibility for the legacy liability of the 
Federal Government associated with nonperformance--or partial 
nonperformance on the contracts; there are a number of issues 
like that that would have to be appropriately and adequately 
addressed in that enabling legislation in order for that 
concept to work well.
    Mr. Visclosky. Mr. Hobson.
    Mr. Hobson. You ought to memorialize a lot of that stuff, 
because when you are gone, it starts all over again. That is 
part of the problem.

                              MOX TRANSFER

    Let me talk to Mr. Spurgeon about something here. Mr. 
Spurgeon, as you know, Congress transferred the funding for the 
MOX project--you figured I was going to start with that, didn't 
you--the defense nuclear nonproliferation to your office and 
transferred the management responsibility as well. We 
understand that the Office of General Counsel has issued advice 
preventing at least--temporary advice preventing the transfer 
out of the NNSA of the management staff who are working on the 
project. Mr. Spurgeon, the question is, are you still the 
Assistant Secretary in the Department that is ultimately 
responsible for the MOX project, or is it someone else?
    Mr. Spurgeon. Mr. Hobson, I do continue to have, because 
the funds were allocated by OMB to the Office of Nuclear Energy 
from the 2008 budget, a fiduciary responsibility for that; 
however, I have not been given management responsibility 
pursuant to advice that was given from the--or I would call it 
interim advice that was given from the Office of General 
Counsel to the Secretary. So I do not have a direct management 
responsibility for it: However, I do maintain myself current 
relative to the financial expenditures because I do feel some 
fiduciary responsibility for the proper expenditure of funds 
for that project.
    Mr. Hobson. Well, explain the chain of command over the 
team of Federal managers at Savannah River and over the 
contractor working on this project.
    Mr. Spurgeon. The chain of command goes up from the 
Savannah River team of managers to the NNSA, who has then the 
headquarters management up through the deputy--the 
Administrator and Under Secretary responsible for NNSA. That is 
the operational chain of command. What I have is an ability to 
make recommendations to them were I to feel that they--that 
there was not a proper expenditure of those funds. But I am not 
involved in any way in the direct line management of that 
project.
    Mr. Hobson. So you don't have effective operational control 
over the NNSA employees?
    Mr. Spurgeon. No, sir, I do not.
    Mr. Hobson. We provide your office with the funding and the 
responsibilities for MOX project, yet it seems that DOE's legal 
interpretation at this point has prevented you from exercising 
full authority. So the question do DOE employees and 
contractors on the MOX project report to you, they don't?
    Mr. Spurgeon. No, sir.
    Mr. Hobson. Okay. Are you personally accountable for how 
all of the MOX funding provided the Office of Nuclear Energy is 
being spent, or are some of those funding decisions being made 
elsewhere in DOE? The funding decisions I am talking about.
    Mr. Spurgeon. Well, obviously as funds are spent for 
construction of that project, those are made by the Federal 
project manager who resides in Savannah River.
    Mr. Hobson. My main question is, under the current 
situation--I think you probably already answered it--do you 
have full management control over all aspects of the MOX 
project?
    Mr. Spurgeon. No, sir.
    Mr. Hobson. You don't?
    Mr. Spurgeon. No, sir.
    Mr. Hobson. Well, this is something we have got to get at 
and we have got to get resolved. It appears to me that this is 
once again indicative of this Department that, even though a 
bill is passed by the United States Congress and signed by the 
President of the United States, will not take the directed 
action. It is not just with this issue, there are lots of other 
issues where the Department says, we don't care what the 
Congress of the United States says, we just go ahead and do 
what we want to do.
    You would agree that the President signed the bill, right?
    Mr. Spurgeon. Yes, sir, he did.
    Mr. Hobson. Okay. And there is certain language in the 
bill, right?
    Mr. Spurgeon. Yes, sir, the bill and the committee reported 
that--that accompanied it.
    Mr. Hobson. Here is the dangerous part of this. If your guy 
hangs his hat on the report language, and you continue to do 
this in this Department and other departments, you are going to 
see everything written in the bill language. When that happens, 
the ability for the Department to do the work in the way I 
think it should be done is going to go away. That is where we 
are heading with this stuff, and I don't think that is good. I 
am not going to be here, but I don't think that is a good 
position for an administration to take.
    Let me ask you this: Is there a signing letter accompanying 
this when the President signed the bill saying, we are not 
going to do certain things? I mean, I think they are 
unconstitutional, but they have these letters that they hang 
their hat on. Is there one with this?
    Mr. Spurgeon. I am not aware of one.
    Mr. Hobson. I am not either. I am not either. And that 
disturbs me even worse. First of all, I don't like those 
letters. Second of all, if there is not one with this, I don't 
know why they are hanging their hat the way they are. Maybe 
somebody at OMB didn't, or maybe the Secretary didn't, but the 
President must have, because if it had risen to that level, 
they would have done one of those letters. But they didn't. 
They didn't. And that should be duly noted by the arrogance--
and I call it arrogance--of this Department.
    Somebody told this guy to write this. He didn't dream this 
up. This is what is wrong with the relationship between this 
administration and this Congress. If the President had ever 
expressed problems with this, or his surrogate, it might be 
different, but he didn't, he didn't.
    I am emotionally upset about this issue particularly 
because it is personal with me. But there are other places 
where we have this same problem, especially with this 
Department. We have them someplace else, too, but in this one 
particularly, the arrogance of this Department is what is 
undermining its effectiveness. We have tried to have dialogue. 
We don't get anywhere with the agency. They continue to flout 
the will of Congress. I think it causes Mr. Sproat some 
problems. It causes other parts of this agency to have problems 
that are not necessary if they would just work together and be 
a little less arrogant.
    I have other questions, but some people have to leave, and 
I don't want to take the time from the Members at this point. 
We have a whole book here we are going to go through.
    Mr. Edwards. Mr. Chairman, thank you.
    I would like to begin my time as someone who served on two 
subcommittees with Dave Hobson. I would like to add to your 
comments and thank you, Mr. Chairman, for honoring Mr. Hobson 
for his service to Congress. In my serving on those two 
subcommittees under his leadership, I always found him to be 
smart, knowledgeable, he went the extra mile to do his 
homework, and, yes, tough, but never tough for toughness's 
sake, but tough because of his championing the constitutional 
role of Congress, be a check and balance in the executive 
branch, to carry out the responsibility we have, an important 
one, to oversee the executive branch. And he has been 
bipartisan in that effort. He has been willing to be tough on 
the Democratic administrations or Republican administrations in 
the same way he has been willing to work with Democratic and 
Republican members of his committees and of this House.
    In my book he has always been a model of what public 
service is all about. It has never been about him or his 
personal interests. It has been about what he has perceived the 
Nation's interests to be. And personally I have considered it a 
privilege and an honor to serve with him. And this isn't a 
eulogy, you are not going away tomorrow, but it is an important 
time, and I thank you, Mr. Chairman, for noting it, that this 
will be the last time that he will have served as Chairman or 
Ranking Member of a budget hearing in this committee.
    And of all the many legacies of Mr. Hobson, too, that I 
want to thank him for publicly, because I have watched him 
closely on these, is one--is his leadership role in bringing 
about better housing for tens of thousands and ultimately 
hundreds of thousands of military families that are 
sacrificing, even as we are sitting here in the comfort of this 
room. They will have world-class housing because of his 
leadership on the Military Construction Subcommittee.
    And also as a father, I am grateful to him for his hands-on 
management and leadership of nuclear nonproliferation programs. 
Because of Mr. Hobson, there is a vast quantity of nuclear 
material that is now well-guarded, and who knows, it might have 
been that grapefruit size of material that he helped better 
protect that might have been the very highly enriched uranium 
that a nuclear terrorist might otherwise have stolen and 
brought devastation to American cities.
    So for all of those reasons, Mr. Hobson, I am grateful that 
I had the privilege to serve with you.

                       EXPANSION OF NUCLEAR POWER

    Secretary Spurgeon, my one question goes to the issue of 
the expansion of the nuclear power plants. I strongly support 
the expansion of nuclear power in the United States. In your 
written testimony, I believe you said that we will need 40 to 
45 new nuclear power plants in the United States by 2030 to 
maintain our present position with nuclear power as a source of 
about 20 percent of our electric power needs. Is that----
    Mr. Spurgeon. That is about correct, sir. The number of 
plants depends on the size of the plant that----
    Mr. Edwards. And I think you testified also that this 
nuclear renaissance isn't occurring just here in the United 
States, but throughout the world; is that correct?
    Mr. Spurgeon. Yes, sir.
    Mr. Edwards. My question to you then is, what do we need to 
do as a Nation and as a world to ensure that as we have this 
needed expansion of nuclear power as a source of energy, that 
we do not undermine our protections against the threat of 
nuclear terrorism? What are we doing to address that challenge, 
and what do we need to do perhaps we are not doing?
    Mr. Spurgeon. Congressman, that is a very good question, 
and it is the fundamental basis under which we have created the 
Global Nuclear Energy Partnership.
    We are looking at the possibility by the middle of this 
century of going from today's 31 nuclear countries around the 
world to perhaps something like 86 countries that might have 
nuclear power by the middle of this century. To do that, we 
have to create a regime that will allow that to happen safely 
and securely, and the best way to create that kind of regime is 
to create a structure--where the nuclear nations of the world 
can come together voluntarily as a group to agree on the basic 
principles that will underlie how we will do this safely and 
securely.
    That is the fundamental purpose behind the Global Nuclear 
Energy Partnership. We now have some 21 countries who have 
signed that statement of principles, which, by the way, was 
originally drafted by the State Department, and I give them 
full credit for the original draft of that statement of 
principles. But without that kind of a global partnership, 
without that kind of a global agreement, we then--have no--
structure under which to be able to assure that when new 
countries come into the nuclear world, that they have the 
necessary infrastructure. This is very key because an accident 
any place in the world will have great effect all around the 
world, not just in that particular country.
    Similarly, we need to assure that we can manage the fuel 
cycle growth as it occurs around the world such that sensitive 
facilities remain in a limited number of countries. Sensitive 
facilities, I am talking about enrichment and reprocessing 
facilities.
    The reactor itself is not the thing that we are most 
worried about. We are worried about the fuel when it is not in 
the reactor, when it is enriched and what you can do with 
enriched material, and when it is recycled on the back end. And 
we have to recognize that even though today the United States 
is not recycling its fuel from its light water reactors, most 
of the other--nuclear nations are. And if you look downstream, 
most people will say you can argue over when we will need to 
recycle fuel from our fleet of reactors, but most people will 
agree at some point, that will be something that everyone will 
want to have the capability of doing.
    We need to manage that growth in a responsible way, so that 
is what we are doing. That is the fundamental reason behind 
what we are doing internationally in the Global Nuclear Energy 
Partnership, and we are doing it as a government-wide effort. 
This is not the Department of Energy going off by itself and 
doing something independently; this is done totally in 
coordination with the State Department and our National 
Security Council as we develop these partnerships. And the 
Secretary himself has been the chairman of these initial 
organizing ministerial meetings that we have had.
    Mr. Edwards. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Rehberg.
    Mr. Rehberg. Thank you, Mr. Chairman. Do I have you to 
thank for the jerky this morning?
    Mr. Visclosky. Yes, sir. The tofu.
    Mr. Rehberg. The tofu. If you will bear with us, the three 
of us on this end of the dais would like to sing For He's a 
Jolly Good Fellow to Mr. Hobson.

                        NRC LICENSE APPLICATION

    Being new to the committee, I am not particularly familiar 
with the NRC's application process. Just exactly what does it 
entail as far as I understand the contentions and all? Are we 
talking about beyond the storage itself and the safety and the 
liability aspect? Are we talking EPA? Are there other areas of 
responsibility, other agencies that you are going to have to 
coordinate? And I guess the final part of my question would be, 
is there a streamlined permitting process?
    I clearly understand you suggested that it does not matter 
how much money we spend; it is not going to get there any 
quicker. All I want to know is, aside from the political 
aspect, is there something that can keep it from happening? 
Because any good bureaucrat can delay this thing for 10 years, 
and any good politician can see that it never happens.
    Mr. Sproat. Just so we are clear, we are talking about the 
NRC license?
    Mr. Rehberg. Correct.
    Mr. Sproat. The proceeding process, the NRC's license 
application review process is very well documented and very 
well set out. It is what it is going to be. And it involves 
both a review of the license application by the NRC staff; they 
will send us--after we get the license application, they will 
send us questions, what they call requests for additional 
information. We will give them written responses back to answer 
those questions.
    At some point in time, as that dialogue proceeds, the 
Commission staff will write their safety evaluation report, 
where they evaluate both the safety of the operation of the 
repository while it is open, and then the long-term evaluation 
of the safety of the repository after it is closed over a 
million-year period. So that is one part of the review process.
    In parallel with that, parties who want to intervene in the 
proceedings--State of Nevada will be one; there will be 
others--they will submit what are called contentions to the NRC 
where they will pick specific issues in the license application 
and say, we do not agree with this, whatever the issue might 
be.
    The NRC then has hearing boards that are set up that are 
independent from the staff. They will receive the contentions. 
We will have an opportunity to reply to them, say whether, you 
know, give some sort of reply to the hearing board. The NRC 
staff will have some chance to reply. The administrative law 
judges will then decide whether or not to admit those 
contentions on the docket for hearings; and then for those 
contentions that are admitted there will actually be hearings, 
and the judges will decide either in favor of the staff, the 
applicant, which would be DOE, or the interveners.
    When that whole process grinds to its eventual end, 
eventually there is a decision by the full Commission itself as 
to whether or not to grant the license application.
    Now, in terms of what would slow that process up, besides 
just the appropriations process, the DOE and the NRC, there are 
two things that have to happen that are still not done. One is 
when the Nuclear Waste Policy Act was written it gave the 
Environmental Protection Agency the responsibility to set the 
long-term radiation limits for the repository. EPA issued a 
rule twice that has been remanded by the courts, and they are 
in the process of finalizing a revision of that rule, which has 
not been issued yet. We keep hearing that is going to happen 
soon, but we don't know exactly when.
    We do not need that standard to submit our license 
application. The NRC will need that standard issued in order to 
make a final determination that our repository design meets 
that standard.
    Mr. Rehberg. Okay. Is it true that Nevada did, in fact, 
back in the mid-70s, support this project?
    Mr. Sproat. Yes, it is. In 1975 there was a joint 
resolution of the Nevada legislature, signed by the governor, 
that basically invited the Department of Energy to put the 
Nation's high-level waste repository in Nevada in exchange for 
a solar energy facility.
    Mr. Rehberg. Have they done a commensurate rejection or 
change of that support?
    Mr. Sproat. I would say--I do not know whether or not they 
issued a formal resolution countermanding or withdrawing that, 
but once the Nuclear Waste Policy Act amendment was passed in 
1987, the State's official position is to be anti-Yucca 
Mountain and do everything in their power to stop it.
    Mr. Rehberg. In your mind, though, give me an estimate of 
Federal dollars that have been spent in Nevada that in essence 
is an economic development component of their State.
    Mr. Sproat. For this program, over its life which started 
with early site evaluations back in the 1970s up until now, we 
have spent just about a total of $10 billion on the Yucca 
Mountain program. Not all of that has been in Nevada. However, 
the vast majority of it has, probably in the neighborhood of at 
least 6 to 7 billion.
    Mr. Rehberg. So now that they have changed their position, 
there would be an opportunity for us to recoup that cost from 
the State of Nevada through their gaming revenues since they no 
longer support----
    Mr. Sproat. I do not believe that is a legal or political 
option at this stage of the game.
    Mr. Rehberg. Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Pastor.
    Mr. Pastor. Thank you, Mr. Chairman.
    Good morning. I want to go back to the Yucca Mountain after 
reading your testimony. In the 2009, it is $494.5 million. And 
it seems like you are not optimistic that that is going to 
happen.
    Mr. Sproat. Based on my experience the last 2 years, I 
would be--I have to say, I am very much appreciative of what 
this committee did last year to try to get us what we asked 
for.
    Mr. Pastor. But I think your optimism is lessened by your 
testimony, so--but you have a number of points that you want to 
accomplish in 2009 with that amount of money that would 
probably be reduced. And I had a curiosity because some of the, 
I think, mandated expenditures----
    Mr. Sproat. Yes, that's correct.
    Mr. Pastor [continuing]. You put at the end, like paying 
the taxes to Nevada and funding agreements that you probably 
had for a long time to the States and regional groups.
    Mr. Sproat. Yes.
    Mr. Pastor. And then funding your responsibilities with 
just storage data, data storage systems.
    Mr. Sproat. Uh-huh.
    Mr. Pastor. I think those are things that probably have a 
greater importance than where you placed them in your points.
    Mr. Sproat. That could be.
    The point I was trying to bring and how I set that up was 
that there is what I call the mission-critical activities----
    Mr. Pastor. Right.
    Mr. Sproat [continuing]. That my organization needs to 
execute to keep this program moving forward. I did not put the 
mandated requirements, the State of Nevada and the counties, in 
that same bin. They are just kind of like what I call the 
overhead costs of executing the program that is mandated by the 
law.
    Mr. Pastor. But like most budgets, those come off the top.
    Mr. Sproat. No. I understand. And in fact they do come off 
the top.
    Mr. Pastor. Okay.
    Mr. Sproat. But in terms of--from my management 
perspective, they are just there.
    Mr. Pastor. No. I understand. But in looking at it, they 
come off the top. So you have a certain amount that will 
probably be lessened; now you have these programs that are 
going to cut off the top.
    So I guess the question I am getting to is, let's stay with 
494, and you take the mandated costs, what I call ``mandated,'' 
what do you have left, 390 or less than 300?
    Mr. Sproat. Instead of me guessing on the number, I prefer 
to get back to you.
    Mr. Pastor. Just give me a ballpark figure. Is that one-
third of your budget?
    Mr. Sproat. No. It is a smaller percentage than that, 
because we have agreements to fund payments in lieu of taxes to 
Nye County, we have payments to the State.
    Mr. Pastor. Sure. What percentage would it be, more or 
less?
    Mr. Sproat. Probably about 35 percent.
    Mr. Pastor. So about a third. I was right, about a third. 
So then about two-thirds, then you follow the other points?
    Mr. Sproat. Yes.
    Mr. Pastor. One is to defend the license application. If 
you are going to submit the application in June, the likelihood 
is that the defense will not start probably for about a year.
    Mr. Sproat. No. That is not quite right.
    Mr. Pastor. Okay, enlighten me.
    Mr. Sproat. What will happen is, when we submit the license 
application in June, the NRC does what they call an acceptance 
review, and that will take about 3 months. And that is where 
the staff goes through this 8,000-plus page application and 
they determine, have we answered all of the questions that they 
expect us to answer? And do we have sufficient information in 
there for them to do a more detailed technical review? That 
will take about 3 months.
    Once that starts, then they immediately start sending us 
these RAIs that I talked about, requests for additional 
information; and then the intervening parties will be 
submitting contentions in anticipation of the hearings.
    So we will be extremely busy and challenged, quite frankly, 
to answer both the requests for additional information from the 
staff and addressing the contentions from the hearing board and 
the interveners at the same time. And that will start in the 
fourth calendar quarter of this year.
    Mr. Pastor. So one-third of your budget is gone for 
mandatory.
    What percentage of your budget would go to that category?
    Mr. Sproat. I would say probably a minimum, a minimum of 25 
percent. And the reason I am vacillating a little bit on that--
--
    Mr. Pastor. Twenty-five percent of the remaining two-
thirds?
    Mr. Sproat. Yes. And the reason I am vacillating a little 
on that is because it is going to be very dependent upon the 
number of requests for additional information we get and 
contentions we get and the number and amount of man-hours we 
need from the scientists and the engineers on the technical 
side to address those.
    Mr. Pastor. And then you have the other ones. Begin 
detailed design?
    Mr. Sproat. Yes.
    Mr. Pastor. So we are down about 140 million that you have 
left. How much is that going to take?
    Mr. Sproat. That is the part of this program that is 
probably the most heavily impacted by this reduced funding 
request from what I showed the committee at $1.2 billion last 
year.
    To put the license application together, we need to have 
the design done to a sufficient level of detail for the NRC to 
review and answer the safety questions. But it is not the same 
level of detail we need to actually go build it to, which is 
much more detailed.
    Mr. Pastor. I understand that.
    The question was, how much money are we talking about more 
or less?
    Mr. Sproat. In terms of----
    Mr. Pastor. To begin the design for the facilities 
required.
    Mr. Sproat. Just about the entire remaining part, except 
for maybe about 20 to 30 million, which we will be using 
internally within the DOE organization to staff it up and to 
strengthen it to be able to execute this program going 
forwards.
    Mr. Pastor. So about 120 million?
    Mr. Sproat. I would say that is probably a pretty good 
number.
    Mr. Pastor. So then you have the remaining about 20 million 
to do the rest?
    Mr. Sproat. Yes. That is pretty much right.
    Mr. Pastor. You have indicated that--well, if it is 
reduced, as you anticipate reductions, which one would probably 
become a less priority of the ones you----
    Mr. Sproat. As the funding is further reduced, we have the 
fixed costs, the overhead costs as I would call them; we have 
the license application defense, which is absolutely critical 
path--we will never build a repository if we do not get a 
license----
    Mr. Pastor. Right.
    Mr. Sproat [continuing]. So it would come out of everything 
else, which is essentially the design work. We would just have 
to slow it down. That will have an impact down the road on the 
schedule in lessening our ability to begin construction right 
away if we get a construction authorization from the NRC.
    Mr. Pastor. Now, in your testimony you also tell us that 
the administration has given us proposed legislation. Where is 
it?
    Mr. Sproat. Well, that is a good question.
    Mr. Pastor. I like to ask good questions. That is the crux 
of the problem, you know.
    Mr. Sproat. It is lost in committee.
    Mr. Pastor. Okay. Which committee?
    Mr. Sproat. I believe on the Senate side it is Senate 
Energy and Resources, and I believe over here it is probably in 
the House Energy and Commerce Committee. And the crux of that 
legislation is, we crafted it to be--to address all of the 
issues that were out there that we were aware of that could 
either stop or significantly slow down the repository going 
forward, issues like the funding issue with the Nuclear Waste 
Fund, issues like land withdrawal.
    Going back to Mr. Rehberg's question, one of the issues 
that also still needs to be resolved is, even if the NRC says 
we are willing to give you an authorization to build this, the 
Secretary of Energy needs to have control of that land in 
perpetuity. And right now it is public land and it requires a 
land withdrawal act by the Congress to withdraw it from further 
public use. So that is required also; that is something else 
that that legislation addresses.
    So there are a number of issues like that that this 
legislative package we sent up in the last Congress and again 
at the beginning of this Congress addressed to help us expedite 
moving this forward.
    Mr. Visclosky. If the gentleman would yield for a second.
    Mr. Pastor. Yes.
    Mr. Visclosky. Would the legislation also contain language 
on the waste confidence issue?
    Mr. Sproat. I believe it does. It does address waste 
confidence.
    Mr. Pastor. You described that the political willingness is 
weak at best.
    Mr. Sproat. That is my sense.
    Mr. Pastor. So you think it might slip from 2017 to 2020 
now to--what is our problem in the Senate? Let me ask that 
question.
    Mr. Simpson. Let me guess.
    Mr. Sproat. It is difficult to bring things to the floor in 
the Senate because of their rules.
    Mr. Simpson. Good answer.
    Mr. Pastor. How do you see the House moving it since----
    Mr. Sproat. Well, and we--based on the discussions I have 
had with some staff, I feel very strongly the House is very 
supportive of trying to move this program forward. And they are 
somewhat frustrated, and--I guess that is a broad 
generalization.
    Mr. Pastor. Sure.
    Mr. Sproat. They are somewhat frustrated by the Senate's 
inability to move this issue forward.
    And my own sense is everybody has somewhat of a wait-and-
see attitude; that based on the difficulties the Department has 
had in the past with making progress on Yucca, I think the 
predominant sense is, let's wait and see if DOE actually gets 
its license application in, and let's wait and see if the NRC 
actually gives them an authorization to construct. And if that, 
in fact, happens, then we will go ahead and do something about 
this.
    That is my sense. I may be wrong, but that is my sense.
    Mr. Pastor. Mr. Chairman, thank you.
    Mr. Visclosky. I will recognize Mr. Calvert, but would 
reiterate my concern about legislating away with confidence. I 
understand the impulse and the desire, but it is a physical 
problem we need to resolve as well.
    Mr. Calvert.

                           NUCLEAR POWER 2010

    Mr. Calvert. Thank you, Mr. Chairman. I am also new on the 
committee, so I have some issues that I would like to bring up 
with Mr. Spurgeon.
    What follow-up program are you planning after the Nuclear 
Power 2010? Would you provide for a summary of a new Idaho 
National Laboratory Electric Power Research Institute plan for 
light water reactor R&D?
    Mr. Spurgeon. Yes, sir. We have a number of things that we 
are looking at that might not only provide for additional 
safety work on light water reactors, but get to the point of, 
what we have to do in order to--potentially extend the life of 
our existing light water reactor fleet beyond 60 years.
    As my staff knows, I always joke that that is my number one 
priority is life after 60.
    Mr. Calvert. What impact has the recent 2008 National 
Academy of Sciences review of the Office of Nuclear Energy had 
on how your office operates today?
    Mr. Spurgeon. I have to say, for the most part, we find a 
great deal to agree with in terms of the report of the National 
Academy of Sciences. First of all, they were very supportive 
that the Nuclear Power 2010 program should be fully funded. And 
if you will notice in this budget request that we have, we are 
fully funding our Nuclear Power 2010 program.
    The second basic issue that they had was that we need to 
make sure for our advanced research and development programs 
that they do proceed in a step-wise fashion; and we totally 
support that. You need to go from bench scale to engineering 
scale to prototype scale prior to getting to a large-scale plan 
for implementation.
    I think there was a little bit of confusion about when we 
talked about needing to go to commercial scale. We were not 
talking about jumping over for advanced technologies going to 
commercial scale, we were talking about the ability to take 
what is available internationally and make minor variations of 
that in order to get started with things like recycle in the 
near-term time frame, while we are at the same time proceeding 
in a step-wise fashion to develop the fast reactors and the 
advanced recycle processes that we would look to for the 
ultimate implementation of the advanced fuel cycle initiative 
concept.
    Mr. Calvert. Finally, I do not know if you have the answer 
to this, but when do you think that a license to build a 
nuclear reactor is going to be--a new nuclear reactor in this 
country? Do you think there will be a license issued before the 
end of this administration?
    Mr. Spurgeon. There are currently nine combined operating 
licenses that have been submitted by nuclear plant operators to 
the Nuclear Regulatory Commission that would cover some 15 
plants. Those are already submitted. And we are looking at 
perhaps 10 more being submitted in this year.
    The Nuclear Regulatory Commission's announced schedule for 
the first of these combined operating license applications is a 
42-month schedule. So we are talking about 3\1/2\ years from 
the time these were submitted; and we had, you know, as I said, 
we have had nine of them submitted this year.
    We certainly hope, and that is our whole intention, that 
after the first ones go through the process that those that 
follow can basically reference the first ones for each 
individual reactor technology so that that time can be 
shortened substantially.
    Mr. Calvert. I guess just for the committee's edification, 
when do you think that, at the soonest, we could possibly see a 
new nuclear reactor being built within the United States?
    Mr. Spurgeon. And go into operation, sir?
    Mr. Calvert. Yes.
    Mr. Spurgeon. 2015.
    Mr. Calvert. Thank you.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman.
    I would first of all like to associate myself with the kind 
remarks and recognition that have been extended to the ranking 
member and former chairman, Mr. Hobson, of this committee. He 
is most deserving of all of the kind things that have been said 
about him. And let's hope that that legacy, Mr. Chairman, does 
not turn into an ice sculpture when you leave.
    Mr. Hobson. I know what you are talking about.
    Mr. Berry. I think you made great contributions in the way 
you have worked, and I certainly appreciate it.
    I would also associate myself with the remarks and the 
comments that the ranking member made about these matters. I 
have been on the committee long enough to know that I am not a 
nuclear physicist and probably never am going to be. It just 
seems almost like Groundhog Day each year. When we go through 
this, we see timelines moved, and just over and over again 
there is never enough money. Sometimes we are told that even if 
you give us more money, we cannot do it any faster than that. I 
know that some of that may be correctable or may be fixable, 
but some of it may not be.
    My question, I think that whole Yucca Mountain thing just 
drives me crazy. I do not see what the problem is. From the 
information that I have seen, if we had it ready to go today 
and the ability to start storing waste there, we would have 
half enough capacity for what we need to do. Is that correct?

                        NUCLEAR WASTE POLICY ACT

    Mr. Sproat. With the current administrative limit that the 
Nuclear Waste Policy Act put on us of 70,000 metric tons, that 
is correct.
    Mr. Berry. What are the plans for dealing with that?
    Mr. Sproat. The Nuclear Waste Policy Act requires the 
Secretary to provide to Congress a report on the need for a 
second repository by January 1st of 2010.
    We are going to submit that report to the Congress probably 
in the next 3 months, shortly after the license application for 
Yucca goes in. And we are going to present to Congress not only 
the analysis of when Yucca will be fully committed--which, by 
the way, is in the spring of 2010; from the fuel being 
discharged from reactors, the existing reactor fleet in the 
spring of 2010.
    Not only will we give Congress that analysis, but we will 
present Congress with several options of what to do about the 
issue, one being, obviously, moving forward with a second 
repository program--which, by the way, is not going to be our 
recommendation--and the other is to remove the administrative 
70,000 metric ton limit on Yucca. Because based on the 
scientific work we have done, the analysis we have done, the 
environmental impact studies, we know it can hold significantly 
more than that.
    So when we give you that report in a couple of months, you 
will be able to see not only what is driving this issue, but we 
will give you some options and recommendations about what to do 
about it.
    Mr. Berry. Thank you, sir.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Simpson.

                              COMPETITION

    Mr. Simpson. Thank you, Mr. Chairman.
    Mr. Spurgeon, thanks for coming here today, and thanks for 
the work you have been doing in a tough environment, I know. As 
you might have guessed from some of the comments that have been 
made earlier, there is oftentimes a feeling in Congress, 
correctly or incorrectly, that DOE does what it wants to do and 
ignores what Congress says in their language. They can find 
somebody to interpret it how they want and et cetera, et 
cetera, et cetera.
    I think some of that feeling exists currently with the 
language that you mentioned in your testimony about competing 
the SEI funds with universities and other labs, the $150 
million for competition. Could you talk a little bit about 
that? I noticed you said that you are getting ready to go out 
for competition on that.
    And what exactly that means. What is the implication for 
the labs? What is that going to do to the program?
    Mr. Spurgeon. Let me start by making it very clear that 
from the Secretary's standpoint, certainly from my standpoint, 
I am all for competition. I would freely admit that we did not 
look at the language that was in the report of the 2008 bill 
that came out--whenever it was, December 26th or thereabouts--
and interpret it the way in which we now understand it was 
intended to be interpreted.
    But I might add to that that perhaps members of this 
committee did not also understand the full import of what that 
language implied. And that is because it was directing us to 
compete half of our R&D budget in an open competition, an open 
competition to include national laboratories, industry, and 
universities. And so why I say that perhaps we did not 
understand it thoroughly at the time is as a matter of 
practice--it is not an absolute, but as a matter of practice we 
do not cause universities to compete against national 
laboratories for their funds. It is kind of like putting, you 
know, a lightweight in the ring against a heavyweight. You kind 
of know who is going to win.
    And we know that this committee's intention--we believe 
that this committee's intention has always been to provide 
additional support for universities, and we support that. As a 
matter of fact, in the 2009 budget you will see we want to set 
aside 20 percent of the work for universities.
    But the issue at hand really came down to, how do you do 
that in the middle of a fiscal year? And I have to say when I 
look at all our spreadsheets and financial data, that was 
assembled for me by our staff and our financial people, I get a 
headache.
    And so I go back to something very simple.
    Mr. Hobson. That is kind of like we do when we see OMB's 
stuff.
    Mr. Spurgeon. That is, we had a $180 million budget in 
round numbers. There is $30 million of directed work, that is 
two $15 million earmarks for hot cell improvements at 
laboratories, leaving us with a $150 million budget.
    We were on a $10-million-per-month spend rate because we 
were on the lower of the House and the Senate until the omnibus 
bill was passed. So by the time that that bill was passed, we 
had spent $30 million.
    In addition, when you want to then re-go through some sort 
of a cutback in the middle of the year, the people that are 
doing that work, we cannot just beam them someplace. There has 
to be a wind down of that.
    So I can say that, you know, where we are today is an 
enormous challenge. But even had we understood correctly what 
the intent was, it would take at least 2 months for us to wind 
down that program. And so we were looking at--you know, you are 
looking at perhaps another $20 million that would be 
necessary--in fact, perhaps more, because if those people 
cannot be reassigned to some other work, then you end up with 
other kind of costs.
    So in round numbers then you are looking at us having $100 
million of budget authority going forward for the balance of 
the time period where one would compete. To compete $75 million 
required us, or would require us to remove that or deobligate 
that $75 million. That brings us down to about $25 million of 
unencumbered funds.
    If you just look at what overhead we have per month to be 
able to manage this program and throughout the laboratories and 
so forth, that is about a million and a half a month. And so we 
would have to--unless we are just going to totally shut 
everything down, that would be about $9 million. That leaves us 
$16 million of available funds. That would cause us to go from 
a $10-million-per-month spend rate to roughly a $2.6-million-
per-month spend rate. That is a substantial impact that cannot 
be made up by any less travel or whatever kind of activity. So, 
in addition--you know, so that would impact everything.
    That means that it is going to impact universities in the 
middle of a fiscal year. That would mean that it is going to 
impact the industry work that we have going on. And that would 
mean that it is going to impact necessary work that we have 
going on in our national laboratories.
    So, from that, what we have been doing is trying to look at 
how can we meet the intent that Congress wants; and we are not 
arguing with the intent, but how can we do that practically. 
And to do that practically means that we can this year go out, 
and what we are doing is, we are intending to go out with a 
competition with 2008 money of $15 million; and we are making 
plans now to go out now so that we can be ready for the 
beginning of the next fiscal year with funds to go out for up 
to $150 million.
    I do not know how much funds we are going to have available 
in 2008, but our problem is, if we are going to do open 
competitions, then we have the additional challenge of having 
to do that in advance; otherwise, we are always behind the 
curve. And I would tell you practically the idea of putting our 
national labs in the same pot with industry and universities, 
in addition to, I think, making it more difficult for our 
universities, which is not what we want; it takes away our 
ability.
    We used the Idaho National Laboratory basically to help us 
manage the program. They are our lead laboratory. If now Idaho 
National Laboratory has to go in the same competitive pot, we 
cannot use them anymore because we are going to have to do that 
work ourselves.
    So what we are trying to do and what we have tried to do is 
not ignore Congress by any means or stretch of the imagination, 
but say, look, we understand what you want, we tried to put 
together and we are putting together a program to go forward 
that recognizes where you are trying to go with increased 
competition. I recognize you want to bring more industry 
involvement. I support bringing more industry involvement. The 
Department supports bringing more industry and university 
involvement, especially. And so how do we do that without 
playing 52-card pickup here in the middle of a fiscal year?
    That is what our objective is.

                                  GNEP

    Mr. Simpson. I appreciate that. It is a problem we need to 
resolve, and do it as quickly as possible.
    Speaking of Congress'--what Ranking Member Hobson said--
skepticism with DOE occasionally, let me ask you a couple 
questions about GNEP. You know, I often criticized DOE when I 
first came on this committee 6 years ago for not having a long-
term plan, for not being able to explain to me where we were 
going to be next year, 5 years, 10 years down the road. And I 
complimented DOE because GNEP, either perfect or imperfect, was 
at least a plan that I could look at and say, this is what we 
want to do in the arena of nuclear energy.
    There were aspects of it that private industry did not 
necessarily support because that was not their ball game. And I 
understand that. But overall, it seemed like a fairly decent 
proposal of where we wanted to take nuclear energy in this 
country, and in the world really. And as you said, there are 
going to be an awful lot of nuclear countries in the future. 
And how can you deny--you know, if we have nuclear energy, how 
can we deny someone else who wants to have nuclear energy as 
part of their energy source?
    I understand that there are 22 international partners 
currently in this. And they, as I understand it, are very 
supportive of the concept of GNEP and where we are headed. And 
yet we have had a difficult time selling GNEP to Members of 
Congress. I do not know if it is because of the lack of 
credibility, or the skepticism that comes with Congress of DOE, 
or if it is not agreeing with the program. But as you know from 
the budget that you have received in the last couple of years 
relative to the request, it has been substantially different; 
and your ability to do what you wanted to do there has been 
hampered by not having the resources that you requested.
    So I want to ask you, what do you think the source of 
skepticism is in Congress and what can we do to--I do not want 
to say ``get Congress on board,'' but to be more supportive of 
what we are doing long term here?
    I think anybody that rationally looks at the energy 
future--and I think everyone here has mentioned it: Nuclear 
energy is going to be part of our future. If you are concerned 
about global warming, nuclear energy is definitely a part of 
the future. If you are worried how we are going to store 
nuclear waste and how we are going to get rid of the nuclear 
waste, reprocessing is a part of our future. We need to get on 
with some of these demonstration projects and get them under 
way.
    And yet our committee has been very reluctant because we 
are afraid you are moving at a more rapid rate and you are 
going to go out and actually construct something and get us 
down a road that we may not want to go down.
    What is your response?
    Mr. Spurgeon. Well, I think it is a number of different 
things. But there is probably a fundamental underpinning to 
some of the skepticism associated with GNEP that goes back to 
when it was rolled out.
    As an aside, I would say I have had the occasion a couple 
of times to go through and describe what we are trying to do 
from the standpoint of both domestic and our international 
activities without ever using the word GNEP. And when I got it 
all done, you know, it was sort of like, well, gee, that is 
logical and that is a great vision, and you are going about it 
the right way, you know, we have to get people together with 
us. We cannot do this as a Lone Ranger if we are going to get 
some international order to how we are proceeding forward.
    I get all the way to the end where they say, it is a great 
idea; and then I say, by the way, this is GNEP, and the 
response I get is, I do not like GNEP. So there is an issue 
there.
    But part of it, one piece of it is the word 
``reprocessing.'' Because that has been a word since 1978, and 
most of the people that grew up in the nonproliferation 
community have had a basic aversion to anything that says 
reprocessing or MOX associated with it in the vernacular. So 
there is that natural pull-back.
    And there still are a number of people that believe that, 
you know, if the United States does not reprocess, if the 
United States does not recycle in its light water reactors or 
fast reactors later on that other people will not either, that 
that will happen. Obviously, that has not proven to be the 
case, but nonetheless there still remains that feeling out 
there in some quarters.
    But I would say that I do not think we have done as good a 
job of basically explaining it as we could. I think we maybe 
confused people when we talked about the need for long-term 
R&D, and in the next breath will say that we need to also in 
the interim move forward with commercial scale facilities. And 
people put those two together and they do not fit together.
    GNEP, as it was rolled out, is a long-term program. It 
involves recycling using fast reactors. And basically the long 
pole in the tent is, when are you going to have fast reactors? 
And when I say that, I do not mean the demonstration plant that 
you could have in the 2020s or whatever time frame, depending 
upon funding. But when are you going to have a large number of 
commercially viable fast reactors in operation in the United 
States? And that is decades away.
    Because you have to not only go through the whole research 
and development and demonstration process, but then you have to 
go through the process of cost reduction; which is like what 
the light water reactors have been doing to get them 
competitive with light water reactors, before you are going to 
have a substantial quantity of those that can then recycle this 
fuel.
    So, yes, the AFCI program is an R&D program. That is what 
it is designed to be; that is what it is. When we talk about 
something other than that, we are talking about an incremental 
change to a technology that is available on the international 
scene. So I think it is partially that in terms of the 
confusion.
    But let me add one other thing that we need desperately in 
this country. And since you are asking the question, I will use 
the opportunity to divert to that.
    Our whole nuclear R&D infrastructure has atrophied. And I 
am not just talking our human capability in this country, but 
our facilities. You know, it is one thing to encourage the 
education of new engineers and scientists, which we desperately 
need to do; but the second thing is, we need a place for those 
people to work. And we need machines; we do not have advanced 
reactor machines in this country anymore for people to operate 
on. We do not have an advanced fuel cycle facility--I am 
talking about an R&D facility that can support all reactor 
types. Those things are desperately needed if we are going to 
rebuild the infrastructure.
    If you go out to Idaho, it is littered with the facilities 
that were very important to our nuclear development in the 
past. You know, the TREET facility, the PBF, you know, you just 
go down the list. We do not have those anymore, and we need to 
reestablish that capability.
    So when I talk about wanting to build something in the 
advanced concept today, I am talking about building necessary 
research facilities: A NGNP demonstration plant, a fast reactor 
demonstration plant, an advanced fuel cycle facility, test 
facility that can work on both liquid metal and gas reactor 
fuels. If we do not have those, it is just not good enough to 
have a nice building and desk for our new engineers to work 
behind. They need facilities.
    Mr. Simpson. I appreciate that. And I will ask some more 
questions as we go along.
    But I appreciate the fact that you addressed the 
infrastructure needs, and the money you sent out to Idaho to 
help with the infrastructure needs, because you are right, we 
do have to have these facilities. And they are all essential, I 
think, if a nuclear renaissance is a reality.
    And so I appreciate your work on that, but I have some more 
questions I will ask a little bit later.
    Thank you, Mr. Chairman.
    Mr. Visclosky. I am going to recognize Mr. Olver, but would 
point out that for some years now the administration, talking 
about the need for new bright minds to be educated in nuclear 
physics, has not asked for money for the educational program. 
And this committee had to move it to NRC so that moneys would 
be provided, and we included the money for that education. 
There are a lot of existing facilities, nuclear in nature, and 
the administration did not ask for money for upgrades in 
investment for efficiencies and improvements in existing 
nuclear facilities.
    So I would just make that observation for the record vis-a-
vis, let's go build something new, which might be one reason 
for some skepticism.
    Mr. Olver.

                    OFFICE OF NUCLEAR ENERGY FUNDING

    Mr. Olver. Thank you, Mr. Chairman. Thank you very much.
    Mr. Secretary, you have charge of the Office of Nuclear 
Energy?
    Mr. Spurgeon. Yes, sir.
    Mr. Olver. And you said in your testimony--I think the 
written testimony says, a total of $1.4 billion for nuclear 
energy activities. Is that the whole of the budget for the 
Office of Nuclear Energy? Is that the only thing that comes 
under your jurisdiction?
    Mr. Spurgeon. That is the whole of the budget.
    But if you notice, within there is a substantial chunk--
almost a third of that is under the category of other defense 
activities, which is where the money for the MOX program was 
put in the 2000--MOX construction program was put in the 2009 
budget.
    Mr. Olver. It seems to me there have been a number of 
reorganizations. I have been plowing through, back and forth, 
over the congressional requests; and I find under ``total for 
nuclear energy'' a substantial drop--853 million; it is more 
than a hundred million drop from the previous year, which 
represents a reorganization, I guess.
    And then I go over and find a uranium enrichment 
decontamination fund. Is that under you?
    Mr. Spurgeon. No, sir, that is under the Environmental 
Management Organization.
    Mr. Olver. Okay. All right. Then I do not know where to 
find things.
    Is the nuclear waste disposal, is that under your office?
    Mr. Spurgeon. No, sir, that is Mr. Sproat. That is Yucca 
Mountain.
    Mr. Olver. And the director of the----
    Mr. Sproat. Office of Civilian Radioactive Waste 
Management.
    Mr. Olver. Civilian Radioactive Waste Management is not 
under the Office of Nuclear Energy?
    Mr. Spurgeon. No, sir, it is not.
    Mr. Olver. Okay. All right.
    So that nuclear waste disposal, is the total budget that is 
under your responsibility 247 million? Or the request?
    Mr. Sproat. The total request is 494.7 million. And there 
is a civilian portion and a defense portion.
    Mr. Olver. I see. So there are things under defense that 
are under either of your--that is why I am trying to figure out 
where this is headed.
    The way these things are presented is about as opaque as it 
is possible to be. It certainly is not possible for anybody to 
do, without an enormous amount of digging, which we as 
individual Members do not have the capacity to do. Though the 
subcommittee staff will tell me that they know exactly what is 
going on, and I am sure they do.
    All right. I am going to leave that for a moment. I wanted 
to, if I can find it--my understanding is we have 104 reactors, 
functioning reactors, right now, power reactors?
    Mr. Spurgeon. Yes, sir, we do.
    Mr. Olver. How many are in the process of decommissioning? 
None of those?
    Mr. Spurgeon. None of those.
    Mr. Olver. How many reactors that were previously 
functioning are in the process of decommissioning or are fully 
decommissioned? Do we have any fully decommissioned?
    Mr. Spurgeon. Yes, we do. Yes, we do, and I will have to 
get you the number. Up in your area the Yankee Atomic Plant in 
Rowe, Massachusetts, is fully decommissioned, other than there 
is still some spent fuel.
    Mr. Olver. I realize that I had given you an out by asking 
``process of decommissioning.''
    I really needed to know how many are decommissioned fully 
and how many are in process, somewhere along the way, are 
outside the 104.
    Mr. Spurgeon. I will give you that for the record. I know a 
number of them just ticking them down, but I have not tried to 
add up that number.
    [The information follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Olver. In the budget this past year there was language 
in the report, in the 2008 budget, which reads in part, 
``demonstrates that DOE can move forward in the near term with 
at least some element of nuclear waste policy''; and then, 
``The department should consider''--well, directed--the whole 
thing says, ``The department is directed to develop a plan to 
take custody of spent fuel currently stored at decommissioned 
reactor sites to both reduce costs that are ultimately borne by 
the taxpayer,'' and it goes on.
    And the suggestion was made to possibly consolidate spent 
fuel from decommissioned reactors either at existing Federal 
sites or existing operating reactor sites or competitively 
selected interim storage sites.
    Is there any progress that has been made? I think that is 
probably in your bailiwick.
    Mr. Sproat. I have that, sir.
    That report is being drafted and it is undergoing final 
revision. We will get it up here to this committee, since you 
asked for it, probably right around the beginning of June.
    Mr. Olver. Am I covering the same ground somebody else has 
covered?
    Mr. Sproat. No.
    Mr. Olver. Okay. You think we will have it by the beginning 
of June?
    Mr. Sproat. In early June. And what you will see in that 
report is, first of all, a description of what the Department 
currently has the authority to do regarding spent nuclear fuel 
and removal from the shut-down reactors.
    It will also talk about what the Department has done in the 
past in terms of attempts to move that fuel and what successes 
or lack thereof we have had.
    Mr. Olver. You are not able to give us a hint of what the 
recommendations are going to be? Is it going to be just leave 
them where they are?
    Mr. Sproat. No. No. What we are going to try and do is make 
sure the committee fully understands what we currently have 
capability to do under current legal authority, what additional 
legal authority we would need in order to be able to do that. 
And we would give you an estimated plan in terms of cost, 
schedule, and recommendations that, if you want to do it fast, 
here is the kind of authorities we would need in order to be 
able to expedite it and do it as fast as we could.
    So we are going to try to give you all that information.
    Mr. Olver. All right. So we are going to see it in a couple 
months in any case?
    Mr. Sproat. Yes.
    Mr. Olver. This very pregnant paragraph in the report ends 
with a sentence reading, ``The Department should engage the 
sites that volunteer to host GNEP facilities as part of this 
competitive process,'' which then leads me to ask a few 
questions.
    Mr. Simpson had already--he understands, and you nodded 
your head, Mr. Secretary--that there are 22 international 
partners. In your written testimony you point out that there 
are 31 countries that operate reactors, producing 372, I think 
that is--what does GWe mean?
    Mr. Spurgeon. That is a thousand megawatts. So, in effect, 
if you had a thousand megawatt plant----
    Mr. Olver. So GWe is a gigawatt?
    Mr. Spurgeon. That is a gigawatt.
    Mr. Olver. Okay. I wondered what the ``e'' was supposed to 
be.
    Mr. Spurgeon. Gigawatt electric.
    Mr. Olver. Gigawatt electric?
    Mr. Spurgeon. Yes.
    Mr. Olver. You carefully gave that projection for what 
would be over some years for 55 countries doing so, rather than 
only 31. But earlier on the U.S., you did give us the number--I 
guess you gave the capacity or the production in 807 billion 
kilowatt hours, which does not look--I mean, that is not the 
same.
    It is billion kilowatt hours. That is not 807 gigawatts. 
Eight hundred billion kilowatts would be----
    Mr. Spurgeon. I suppose this is like the budget table, you 
know, where we are trying to make it more difficult for you. 
Hopefully, that is a joke, not an honest assessment.
    Mr. Olver. I will take it as a joke.
    I can understand, but it seems to me it is being opaque if 
you are giving a series of comparisons and you do not give the 
comparisons in the same units.
    Mr. Spurgeon. Point well taken.
    Mr. Olver. What is the gigawattage that our present 104 are 
producing?
    Mr. Spurgeon. Approximately 100 gigawatts.
    Mr. Olver. Oh, 100 gigawatts. Okay. I guess I should have 
inferred that would be something close to each plant produces 
about one gigawatt.
    Mr. Spurgeon. Yes, sir. But let me tell you, in defense of 
the folks that write all these things for me--in defense of 
that, what we are trying to point out is that while the 
capacity of our nuclear reactors in this country is about 100 
gigawatts, what has been happening over time is, because of 
increased efficiency of operation, the amount of total kilowatt 
hours that is produced by those plants--because the gigawatt is 
the capacity, but then that is multiplied by how much time it 
operates and at what power--what has happened is that we have 
become more efficient over these last 10 years by a great deal 
in operating our nuclear plants, to the point that the amount 
of power that they produce is substantially more today than it 
was 10 years ago, even though the plant itself is the same.
    Mr. Olver. I intended to ask you, and I realize I am out of 
time here, and I will sit around and wait until another round, 
but somewhere within just the last few days, within the last 10 
days or so, I saw an article which said that since the--I 
cannot find my note on it here, as I am filing back and forth--
that since we dropped the first bomb on Hiroshima in 1945, 10 
percent of all the energy used in the world has gone into the 
production, development, redevelopment, retooling, changing the 
warheads and so forth of the nuclear facilities, nuclear 
weapons systems that have gone into the Cold War and the 
development of the nuclear weaponry of the five major powers.
    I suppose they meant to include anybody who has got 
weaponry, so others that have it as well.
    Have you seen that?
    Mr. Spurgeon. I have not seen that, and so I cannot speak 
to the precise number. But a key to the development of nuclear 
weapons was the enrichment of high-enriched uranium and the 
processes----
    Mr. Olver. Very energy consumptive.
    Mr. Spurgeon. Very energy consumptive of the old processes 
that were used for most of the time when we were building high-
enriched uranium.
    We are no longer enriching uranium to weapons level in the 
United States.
    Mr. Olver. But the number is an absolutely stunning number, 
in essence.
    Mr. Spurgeon. Yes.
    Mr. Olver. And, yeah, we may have found more efficient ways 
of doing this stuff----
    Mr. Spurgeon. In fact, we are not doing it at all anymore.
    Mr. Olver. I do not know exactly how much, but that is an 
absolutely startling number.
    Mr. Spurgeon. Centrifuges today, the gas centrifuge 
consumes about 5 percent of the amount of power to produce a 
given amount of enriched uranium as did the old gaseous 
diffusion plant. So that gives you an idea how much more energy 
efficient the enrichment process has become.
    But when you go all the way to very highly enriched 
uranium, it does take an enormous amount of energy, if using a 
gaseous diffusion plant, to make that weapons-grade material.
    Mr. Olver. I will stop there. I will come back later. 
Thanks.
    Mr. Visclosky. Mrs. Emerson.

                          RECYCLING SPENT FUEL

    Mrs. Emerson. Thanks, Chairman.
    Thank you all for being here today. I want to ask Secretary 
Sproat a question about recycling or reprocessing. Recycling 
spent nuclear fuel will, I mean, technically reduce the amount 
of waste destined for a repository, but we are still going to 
need radioactive waste repositories, correct?
    Mr. Sproat. That is correct.
    Mrs. Emerson. So how will adoption of recycling 
technologies affect the need for sites such as Yucca Mountain?
    Mr. Sproat. Well, first of all, as you point out in your 
question, if we were to move to full recycling and closing the 
nuclear fuel cycle, we still need a deep geologic repository. 
The countries that are currently doing recycling, like France, 
Japan, they are all pursuing a deep geologic repository for 
their high-level waste stream that comes out of the recycling 
process. So that is a given.
    One of the key things, though, about the recycling process 
is that while it does reduce the amount of high-level waste, it 
does produce significant amounts of greater-than-class-C waste, 
so there are other waste streams that come out of it.
    If you think about taking multiple nuclear fuel rods and 
recycling them to create a new nuclear fuel rod for an advanced 
reactor, you still have a volume of material that comes out of 
the waste stream from that process that has to go somewhere. So 
just in terms of volume, while the toxicity may be reduced and 
the amount of high-level waste may be reduced, there is still a 
significant waste stream that comes from that process that 
needs to go somewhere.
    Mrs. Emerson. So then you will have to keep track of all 
those materials. Well, and how do you deal with the logistics 
of moving those? Just--we are obviously talking in a 
hypothetical fashion here. You move it now; we just do not know 
about it.
    Mr. Sproat. Well, it is not that clandestine. There have 
been literally hundreds of shipments of both commercial spent 
nuclear fuel as well as defense spent nuclear fuel and high-
level waste across the country, incident free, for decades. And 
the regulatory regime is set up, the transportation 
infrastructure is set up. This is something we know how to do 
and know how do safely and have been doing for a long time.
    So it is a bit of a misconception that the public, quite 
frankly, has that we do not know how to move these things, we 
do not know how to do it safely, and it has never been done 
before. It is just not true.
    Mrs. Emerson. But given--I mean, hypothetically again, if 
we move more toward a recycling regime, will we not--I mean, so 
we may need more Yucca facilities or something like that. And 
if we are already having the trouble that we are having now 
with perhaps getting agreement on using Yucca as a site, what 
in the world is the backup plan?
    Mr. Sproat. Well, in terms of the backup plan, so to speak, 
we have an issue in this country today. If you think about 
nuclear waste, there is not only the high-level nuclear waste 
that the law says is currently destined for Yucca Mountain, but 
there are less--other lower levels of nuclear waste, class A, 
class B, class C and greater than class C. We do not have in 
this country designated facilities to dispose of those waste 
streams yet. And, quite frankly, one of our dilemmas is what to 
do with some of that.
    And so there is the issue of not only the back end of the 
nuclear fuel cycle and the high-level waste issue which is at 
Yucca, and we have the transuranic wastes going to the Waste 
Isolation Pilot Project in New Mexico, but the other 
commercial-level facilities that are currently in place for 
class A, class B and class C, they are getting filled and they 
are having difficulty finding places that want to host another 
facility for those.
    So we do have some issues.
    Mrs. Emerson. And how will we resolve them then?
    Mr. Sproat. I think one of the biggest issues--now I am 
talking personal opinion and observation--one of the biggest 
issues is the ``not in my backyard'' scenario. And while all of 
us, you know, think we have our favorite place that obviously 
wants to welcome this facility--Nevada was one of those areas, 
too, at one time. And so, unfortunately, because of the long 
period of time it takes to develop these facilities and to 
license them, my observation of the political process is that 
eventually local opposition will develop and can find a way to 
slow things down.
    So it is a dilemma that I am not sure I have a very good 
answer for in terms of how you overcome that.
    Mrs. Emerson. Go ahead, David.
    Mr. Hobson. Why do you not put a competition on the street? 
You know, there are people out there. We did this, and there 
are people who say, let us take a look at it.
    Mr. Sproat. Sure.
    Mr. Hobson. We might be willing to do it.
    We have one of the greatest formations in this country. It 
is in a number of States, and the WIPP has been a wonderful 
success.
    There was a politician the other day who suggested that it 
might be used as a model for something else--not a member of 
this body, I might add. If you allow people the opportunity--
and what was the thing for which we put the competition out--
interim storage--there will be a number of people who come 
forward and say, we are interested.
    I think we defeat ourselves before we start, Mr. Sproat, by 
saying that the NIMBY factor is there. No question, there are 
certain parts of this country that are not going to take this 
stuff. There are other parts that will stand up and say, it is 
jobs in our area; it is clean, and it works. We have a model; 
WIPP is a great model.
    Mr. Spurgeon. Mr. Hobson, we have done that, as you know, 
and ended up with 11 sites that did volunteer. Two of them 
happened to be in the general facility of where WIPP is.
    And the other thing we do find with respect to the 
acceptance of nuclear facilities--this includes reactors, and I 
think it could be extended to fuel recycle facilities--is those 
people living nearest ones that are already operating are the 
most supportive. You know, we are looking at polling data that 
would show, something like 85 percent of people living near a 
nuclear facility are supportive of nuclear power and that kind 
of a facility. It is folks that are not--do not have the 
experience with it that have a fear factor associated with it.
    So can we move forward? The answer is yes. And can we look 
at downstream, you know, with when you do recycle, you do 
create a waste form that does not have to be retrievable. In so 
doing you can have many alternative geologies that you can then 
consider that might be both less expensive and perhaps more 
acceptable to the local population.
    Mrs. Emerson. When we were talking at the beginning, at the 
outset, of both France and Japan looking for deep storage 
facilities, are they facing the same kinds of public opinion 
issues that we are?
    Mr. Sproat. Yes, they are. France has done a very good job, 
in my opinion, in terms of laying out a multiyear plan, laid 
out by their assembly, their general assembly, that they are 
following, and--but they have not selected their final 
repository site. They are still studying it.
    Japan is a very interesting case study in that they looked 
for volunteer communities because they felt it is very 
important that the local community embrace the idea of having a 
high-level waste repository. They actually had a town 
volunteer. The mayor was voted out of office 6 months later, 
and on the basis of--the anti-nuclear candidate came in and 
basically kicked him out.
    Mr. Hobson. Tell her about the Swedes and the Finns.
    Mr. Sproat. The Swedes and the Finns--in fact, I am going 
there in 2 weeks. They have--of course, they only have two 
nuclear plants or three nuclear plants in their country--and 
they are planning on putting their repository on one of those 
sites. And as Dennis said, the local population around those 
plants are very familiar with nuclear, they are very 
comfortable with them, and they kind of have a little bit of 
ownership about the nuclear waste that is already there, so 
they do not have a big problem with putting it underground 
permanently in that facility.
    I am not sure that example is directly translatable to us 
in our culture and our 104 nuclear plants.
    Mr. Spurgeon. The difference, though, is that in Japan and 
in France they do take their used fuel and they do process it. 
And so what they, in effect, are doing is interim storage on 
the back end----
    Mrs. Emerson. I see.
    Mr. Spurgeon [continuing]. Where they go through and 
process it, create vitrified glass logs and then store those 
glass logs on site in a--it looks like a great big hockey rink 
is what it looks like, but you can walk in there and literally 
walk on top of all the high-level waste generated by the French 
nuclear program since it began in one kind of a facility.
    Mrs. Emerson. And there really has not been a huge public 
outcry at all, has there?
    Mr. Spurgeon. No, not in the area of La Hague.
    Mrs. Emerson. Thank you very much.
    Mr. Visclosky. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman. I just wanted to follow 
up on one of the questions because I did not quite understand 
the answer.
    As far as sheer space for the waste, what would be saved by 
the recycling process? I mean, you said there was all this 
other ancillary waste that comes about. From just sheer 
numbers, sheer space, what would we save through recycling?
    Mr. Spurgeon. It depends on the medium in which you store 
the waste. If you are just talking Yucca Mountain, you are 
perhaps more heat-limited than you are space-limited relative 
to how much space that it might take.
    But if downstream you are then looking at--because Yucca 
Mountain someday is going to be full, whenever we get to that. 
If you are looking at storing a product that might be a 
vitrified glass form, there are other formations that you could 
use that would not be so limiting relative to space or to 
migration of radio nucleides from it.
    Mr. Ryan. So it would take up as much space, but it would 
not have all the complexities of Yucca Mountain?
    Mr. Sproat. Yes. That is a good way of looking at it.
    Mr. Ryan. Thank you.
    Mr. Sproat. It would not be as toxic and have as long-term 
toxicity as the high-level waste form we currently have.
    Mr. Ryan. Okay.
    One of the other questions with Yucca getting pushed back 
now, you do not have access to the Nuclear Waste Fund, and you 
are saying that that is not going to affect the processing part 
of it, but it will affect you lining up the transportation 
issues and--I forget what else you said--the detailed design 
issues?
    Mr. Sproat. Just so I am clear, that will not impact--over 
the next 3 to 4 years of the licensing process, it will not 
impact our ability to proceed and support that licensing 
process. What it is doing is, it is lengthening out the 
critical path of the overall program, which includes not just 
the design and building of the repository, but the design and 
building of the rail line in Nevada to bring the shipments to 
the repository, and the buying of the casks and the other 
equipment we need for the national transportation program to 
bring everything to Nevada.
    And when I give the committee later this summer the revised 
baseline for the program, I will be able to show you more 
quantitatively what the impact on the schedule is, given this 
reduced funding assumption over the next 3 to 4 years.

                       FUNDING FOR YUCCA MOUNTAIN

    Mr. Ryan. So--I think Mr. Visclosky may have asked this: So 
if you were asked in 3 or 4 years if we gave you more money 
than you would have budgeted for, if we gave it to you from now 
to then----
    Mr. Sproat. Yes.
    Mr. Ryan. This is a time issue, this is not a money issue. 
Is that what you are saying from that perspective?
    Mr. Sproat. Let me make sure I understand your question the 
way you intended it.
    If we had higher funding than what we are requesting, we 
could, in fact, accelerate the design at both the repository 
and the rail line that are on the critical path of getting the 
repository open.
    But it is not just the money issue alone that is going to 
drive when that date occurs. It is number one, do we get the 
construction authorization from the NRC and when does that 
happen? Do we get the land withdrawal legislation that allows 
us to withdraw that land from further public use so the NRC 
will give us the final authorization to build? And, in fact, 
can we expect a dependable level of funding at the $1.2 to 1.9 
billion a year it is going to take to execute that program on 
the fast track?
    Those are really the key issues. They drive the schedule.
    Mr. Ryan. You need money to execute all that? Is that what 
you are saying?
    Mr. Sproat. Yes. Yes.
    Mr. Ryan. And how much do you need, ideally, in those 3 or 
4 years before the permitting is done?
    Mr. Sproat. I guess the best way to look at that--and I 
will be glad to send this up to you--in the presentation I made 
to the committee this time last year we showed what I call the 
``best achievable schedule,'' how fast could we operate and 
open the repository if everything went right with an 
unconstrained cash flow. And what that showed is that for 2009 
it was about 1.2 billion, and it went up to about 1.7 or 1.8 
billion over that next 3- or 4-year period.
    And that is how I would answer your question. That is, if 
we had an unconstrained cash flow, that is how we would execute 
the program to get it open as fast as we could.
    Mr. Ryan. So when you are trying to do the rail line--I 
understand that you would need money to build that and to buy 
the equipment and all that, but as far as the process leading 
up to where, before you are actually laying down rail lines, 
you cannot start working on any of those issues?
    Mr. Sproat. We actually have money in this budget this year 
to do some of that, to do some of the surveying along the rail 
line, because we will be issuing our final record of decision 
on the rail alignment and final environmental impact statement 
later in this year, in the next 2 months, 3 months. And then 
the intent is, in fiscal year 2009, to begin the surveying of 
that so we can actually begin the detailed design of that track 
bed. So there is money in there to do that.
    Mr. Ryan. Let me just ask one final question. And before I 
do, I just want to join the chorus here of praising Mr. Hobson.
    Being a fellow Member from Ohio and having the opportunity 
to travel a little bit with him, those of us that are coming up 
through the ranks in Congress from Ohio politics, he is the 
gold standard. And I just want to thank you for taking us young 
whippersnappers under your wing.
    And he has turned me on to nuclear power, and I am a 
believer now; I drank the Kool-Aid.
    Mr. Hobson. Is not that glowing?
    Mr. Ryan. One final question.
    Mr. Hobson. Wait a minute.
    Mr. Ryan. Yeah.
    Mr. Hobson. You need to tell him that the rail line that 
you do is not going to go through Clark County.
    Mr. Sproat. That is correct.
    Mr. Hobson. Everybody needs to know that.
    Mr. Sproat. The rail line, the Department made a decision, 
a record of decision, several years back that the primary mode 
of moving the spent nuclear fuel from across the country to the 
site is by a rail line. The trouble is, there is no rail line 
from the Yucca Mountain site out to the Nevada State border to 
the main rail line, so we have to build that. And as part of 
coming up with those routings we decided and, you know, not to 
route the rail line through Clark County and through Nevada, 
because there is a rail line that goes right through downtown 
Las Vegas. And there is all sorts of toxic materials that go 
down through there now, and we said probably not the right 
thing to do.
    Mr. Pastor. Clark County is Las Vegas?
    Mr. Sproat. Yes, in Las Vegas, that is correct.
    Mr. Hobson. That is just a big political thing. You start 
talking about the railroad, some reporter out here writes you 
guys are going to site it, and then everybody is going to get 
all excited.

                   LIABILITY COSTS OF ONSITE STORAGE

    Mr. Ryan. It is going to go right through the MGM Grand.
    One final question. The fact that Yucca will get moved 
back, you are saying, without the money and then Yucca gets 
moved back, what kind of pressure does that put on the local 
facilities that are currently holding the waste?
    Mr. Sproat. All of the existing nuclear power plants have 
on-site storage. All of them have wet spent fuel pools that 
when fuel is taken out of the reactor it goes right in the 
spent fuel pool.
    All of the ones that are getting to the point or have 
gotten to the point where those pools are full have created on-
site interim storage, where they have basically concrete pads 
outdoors, which are in secure areas, and the spent fuel is 
stored dry in steel and concrete casks--very safely stored. And 
as the plants are getting closer to their fuel pools being--the 
newer plants are getting closer to their fuel pools being 
filled, they are building these interim storage facilities. So 
they have the capability to do that.
    The licensing, the NRC has the licensing process to do 
that. There are--I forget the exact number, but there are a 
substantial number of plants that already have that, so it is 
not a technical issue and it is not a political issue 
generally, except maybe right in the area of the plant 
sometimes.
    The bigger issue is the cost to the U.S. Taxpayer because 
of that delay. The issue is we, the Department of Energy, have 
standard contracts that we were required to enter into under 
the Nuclear Waste Policy Act with every nuclear plant operator. 
You cannot get a license unless you have a contract with DOE to 
take your spent fuel. That standard contract required us to 
begin performance in 1998.
    The law also does not allow us to actually start picking up 
the fuel and taking possession of it until the repository is 
open. As a result, DOE is in partial breach of the contract, 
and there are 70-some lawsuits currently in the courts where 
the government is being sued for partial breach of the 
contract, and that liability continues to grow.
    So the primary financial impetus to the U.S. Government to 
move this thing forward and to get it going and get it open 
is--besides, obviously, the national security and the national 
energy issue, is the real legal issue associated with liability 
because the DOE has not performed on these contracts yet.
    Mr. Ryan. Great. Well, keep up the good work.
    Mr. Sproat. I will try.
    We are estimating--if we open the repository in 2017, we 
are estimating that that total liability would be about 7 
billion. Now, the industry believes it is a lot higher, but we 
have higher confidence in our own numbers.
    But to give the committee a better feel for the impact of 
delay, if we delay the repository from 2017 to 2020, we expect 
that liability to grow from 7 billion to almost 11 billion. So 
the numbers are not insubstantial.
    And also, just so you know, the courts have ruled that the 
Nuclear Waste Fund cannot be used to pay that liability. It has 
to come from the judgment fund.
    Mr. Simpson. The courts have ruled that way?
    Mr. Sproat. Yes, the courts ruled in 2002. There was a 
court case about whether or not the Nuclear Waste Fund could be 
used to reimburse the utilities for their costs that they would 
not have incurred if the government had performed. And the 
court ruled that, essentially, those were damages that the 
utilities' own funds could not be used to reimburse them for 
the damages caused by the government's partial breach of the 
contract.
    Mr. Visclosky. Mr. Sproat, we have about 4 minutes. We are 
going to have to go. But since you are on the subject, the 
Office of Environmental Management is requesting funding in 
2009 to reimburse the judgment fund for claims against the 
government resulting from EM actions or inactions. You are not 
making a similar request.
    Mr. Sproat. No, we are not.
    Mr. Visclosky. Is there a particular reason?
    Mr. Sproat. As it has been explained to me, there is 
evidently an act that--I forget exactly what the name of the 
act is--that requires that if an agency is found in breach, and 
the judgment fund needs to pay out, the agency needs to 
reimburse the judgment fund.
    The issue is with this litigation on these contracts, I 
believe there are two issues legally that impact this. One is 
that we are not buying something from these folks; we are 
contracted to provide them a service. And so the law as it is 
currently written I do not think applies to that situation. It 
had not contemplated that situation for the Federal Government 
of contracting to provide a service that it did not provide.
    Mr. Visclosky. If the law would change, assuming that is 
correct for the sake of argument, would the industry support 
DOE requesting appropriations to pay out of the judgment funds 
so the fines were coming out of your budget? And I am not 
saying that because you somehow failed, but that there would be 
more pressure if it is coming out of your pocket instead of a 
generalized----
    Mr. Sproat. Depending upon your point of view on whether or 
not you want to see the program move forward, that could either 
be a good thing or a very self-defeating thing. Personally, I 
believe, given the difficulty we are having in getting the 
funds to execute the program and make it happen, if that 
funding level stayed where it was, and a substantial portion of 
it was diverted to reimbursing the judgment fund, essentially 
the program would come to a complete stop.
    Mr. Visclosky. Got you.
    Mr. Ryan, I hate to make you wait, but we have three votes. 
We are almost done with one, and we should be back very 
shortly.
    [Recess.]

                                  GNEP

    Mr. Visclosky. Mr. Spurgeon, I will start it again. I think 
Mr. Hobson is going to be coming back as well.
    On GNEP, according to the GNEP strategic plan, the DOE 
plans to prepare a decision package by June of this year so 
that the Secretary of Energy can make a decision whether to 
proceed with building a nuclear fuel recycling center and a 
prototype advanced recycling reactor, assuming that a credible 
technology pathway has been developed and a credible business 
plan exists. What specific criteria will you use for the June 
2008 decision given the uncertainties that surround the 
initiative?
    Mr. Spurgeon. Well, there just will not be a June 2008 
record of decision. We are not to that point yet where a 
reasonable amount of information is available to support such a 
thing. Neither will we have by that point in time the NEPA 
Programmatic Environmental Impact Statement complete.
    When that schedule was put together, and when those 
objectives were put together, we were anticipating not only a 
substantially higher funding profile, but being much farther 
along in our NEPA process than we currently are today. So I 
would look to the end of this year, and this being more of a 
transition document that would be the Secretary's 
recommendation as to this is where we are, and this is how I 
think we ought to proceed. But by no means are we going to be 
in a position to recommend any major demonstration-scale 
facilities or their construction at this time.
    What we hope to do is get to the point where we might be 
able to become much more definitive relative to a research and 
development facility for all fuels by that point in time, but 
there is no question we are behind on getting to the point 
where we could have the foundation for a reasoned 
recommendation for a demonstration-scale facilities for either 
the fast reactor or for a recycle plant.
    Mr. Visclosky. On the recommendation, would that be October 
1st, the fiscal year, or January 1st, the calendar year?
    Mr. Spurgeon. I would look at it as part of a transition 
document from this administration to the next.
    Mr. Visclosky. Okay. And as far as recommendations made, 
either as far as the recycling center or a reactor or 
potentially a research, relative to the 413 process order, 
would that represent one of the critical decision points, CD-0, 
CD-1, CD-2, as far as a transitional document or 
recommendation?
    Mr. Spurgeon. Certainly. If we get to that point--we are 
really at CD-0 at this point, statement of mission need, but we 
would follow the DOE order for anything that is going to be 
government funded.
    Mr. Visclosky. Relative to that, then, for 2009, you would 
not have any construction dollars in your budget for GNEP.
    Mr. Spurgeon. No, sir.
    Mr. Visclosky. DOE has often said that it needs to proceed 
now with design and construction of a reprocessing facility 
even if it uses separation technology less advanced than GNEP 
UREX process because the U.S. needs to be part of the game and 
to have a team on the field. DOE implies that the U.S. needs a 
reprocessing facility to play a leadership role, and there has 
been some discussion about that today, in influencing future 
choices regarding nuclear energy technology. If we would use 
existing technology or a minor variation, do you think, that 
would be enough, to move us into that position as far as 
influencing others' decisions?
    Mr. Spurgeon. I think so. And, in fact, part of the 
agreement relative to the GNEP statement of principles is--and 
this is I think one of the positive aspects of that--is we have 
achieved agreement by the partners that we will move away from 
processes that separate pure plutonium.
    The basic issue here, from an ability to prevent a 
potential terrorist or whatever from being able to get ahold of 
material that they could rapidly put in a device that could 
create a nuclear explosive, is the degree to which that 
material is diluted by nonfissile material. So it is very 
important for us to not add to the supply of separated 
plutonium around the world, which is what is happening at this 
point. So moving away from that, and providing leadership to 
show that it is economically feasible and very competitive to 
engage in a process that does not separate out pure plutonium, 
I think, has real value.
    Mr. Visclosky. Okay. Understanding that you would be in a 
position to make a recommendation in a transition document, 
would part of that be consideration as to how facilities, 
whether they be a fast reactor, reprocessing facility, be paid 
for in the future as far as the private sector being involved 
in potentially partnering and paying for part of that?
    Mr. Spurgeon. Yes, sir. We do look at the models on which 
we would move forward with a number of these programs. 
Obviously, from an R&D standpoint, that is something that we 
are going to have to provide the underpinning for. But when we 
get to the point of building, whether--building, for example, a 
fast reactor demonstration facility, we are looking for that to 
be a partnership effort; in the case of the fast reactor, very 
likely an international partnership effort.
    We do have a trilateral agreement between the United 
States, Japan and France, and we are proceeding along the lines 
of cooperating with them such that the United States would not 
have to bear the whole burden of any such facility that would 
be built, just as perhaps in a different way, but not too 
dissimilar from the way we are looking at going toward a 
demonstration facility for the Next Generation Nuclear Plant or 
the gas/coal reactor plant in cooperation with some sort of an 
industry consortium.
    Mr. Visclosky. I am fine for right now.
    Mr. Hobson.

                               MOX ISSUES

    Mr. Hobson. I have a series of questions on something else, 
but, you know, one way we could have solved some of this is if 
you guys support the Lantos-Hobson bill. I know you did not 
come up with the idea, so it does not work. If the 
administration did not come up with it, you do not want to do 
it. However, we have a bill that we authorized and funded. If 
implemented, it would make winding up with weapons-grade 
plutonium a lot less likely. Former Senator Nunn is a 
proponent. We set up a fuel bank by the United Nations that 
would do all of this, and you would have to do none of this.
    I might also add if you had taken the $11 billion from the 
MOX plant and gone to the fast reactors, like the Russians are 
doing, we might have gotten there faster. Enough said on that.
    You understand what I am talking about. The Lantos-Hobson 
bill is something that if this administration, in the last 
months, could use to send a message to the world that they 
really cared about this situation. It would put the Iranians 
and other people on the defensive. You could talk about this 
program run by the United Nations.
    Mr. Spurgeon. But we are supporting that, sir.
    Mr. Hobson. It has not gone anywhere.
    Mr. Spurgeon. The reliable fuel supply is a key ingredient. 
We have two major subcommittees as part of GNEP. One is 
infrastructure, which I talked about a little bit before about 
countries wanting to get into this having the necessary 
infrastructure. The second is reliable fuel supply. And the 
United States is right now in the process of blending down 17.4 
metric tons of high-enriched uranium to low-enriched uranium 
that we have committed to this fuel bank.
    So we are very much in support of the IAEA, i.e., the 
United Nations', effort to create such a fuel bank to take away 
the excuse that countries such as Iran might have that they 
need to have their own indigenous----
    Mr. Hobson. There are $50 million in the bill to move 
forward on this, and I would like to see it moving forward. It 
would be a really good--how can I put it--monument to Mr. 
Lantos and his thoughtfulness in this area.
    Mr. Spurgeon. Yes, sir. We support it.
    Mr. Hobson. I want to go back to reports that have surfaced 
about the, quote, red oil problem at the MOX plant and the 
potential for explosion from this problem. I assume you are 
familiar with it?
    Mr. Spurgeon. Yes, sir.
    Mr. Hobson. Do you consider this problem totally resolved 
at this time such that DOE can proceed with design and 
construction?
    Mr. Spurgeon. I know the problem is being addressed. I 
believe the problem has been totally accommodated in the design 
of the plant. And I know that the Administrator of NNSA has 
asked the Defense Nuclear Facilities Safety Board to basically 
have a look at it to provide their advice to him. That is a 
plant that is licensed by NRC, so consequently NRC is the one 
that finally goes through it.
    Mr. Hobson. Does the Nuclear Regulatory Commission consider 
the red oil problem to be totally resolved, or will the DOE not 
know for certain until the NRC considers the operating license 
for the MOX plant?
    Mr. Spurgeon. Because I am guessing here, knowing how NRC 
works, nothing is final until they give you a final license. 
But it is my understanding, and this is based on anecdotal 
evidence, not based on absolute fact, that NRC is comfortable 
with what has been done by the program office and by the people 
in the field relative to the red oil issue.
    Mr. Hobson. Can you reassure the committee that the 
Department will not have to make any changes to the design, 
construction or operation of the MOX plant or incur any 
additional costs to address the red oil problem? I do not think 
you can.
    Mr. Spurgeon. I cannot sitting here, no, sir.
    Mr. Hobson. So we do not know whether we are going to have 
to come back and spend a massive amount of money to solve a 
problem on this plant.
    Mr. Spurgeon. I am familiar with red oil much more from my 
old days in the reprocessing business than in the current 
environment with respect to the MOX plant.
    Mr. Hobson. USEC or where?
    Mr. Spurgeon. No, this was back in the days of Allied 
Chemical. We built the Barnwell plant.
    Mr. Hobson. Okay. Let me on another thing. The Department 
is liable for some massive fines to the State of South Carolina 
if the MOX plant does not become operational by certain dates, 
dates that there is no chance--you might even agree--the 
Department will meet. Knowing you cannot meet these State 
deadlines, why has the Department not submitted a legislative 
proposal to eliminate the fine provision or at least modify the 
dates to match what is a realistic construction schedule for 
the MOX plant?
    Mr. Spurgeon. Let me take that one for the record, sir.
    Mr. Hobson. You do not want to answer it?
    Mr. Spurgeon. I do not know the answer to the question. I 
will get the answer for you, sir.
    Mr. Hobson. If the fine provision is not modified 
legislatively, who will pay the necessary fines to the State of 
South Carolina?
    Mr. Spurgeon. I would only be guessing if I gave you an 
answer. Let me get back to you with an answer.
    [The information follows:]

     Legislative Proposal To Modify Dates Fine Provisions To Match 
                  Construction Schedule for MOX Plant

    The Department remains willing to work with Congress to revise 
section 4306A of the Atomic Energy Defense Act.

    Mr. Hobson. I hope it is in my term.
    Mr. Spurgeon. We leave on the same day, unless with all of 
this I am leaving much earlier. I do not know.
    Mr. Hobson. We never know these days. I find out some guy 
is getting appointed somewhere to something all the time.
    Will the funding for those fines come from your budget or 
the Office of Nuclear Energy, and does your outyear budget 
projections for nuclear energy include such fines?
    Mr. Spurgeon. My outyear budget does not include them, but 
I cannot answer anything more.
    Mr. Hobson. If they are not in your budget, you know, where 
are they shown in the Department's budget or elsewhere in the 
Federal budget? You do not know either.
    Mr. Spurgeon. I cannot answer.
    Mr. Hobson. Somebody better figure this out because, you 
know, they are going to happen unless somebody does a 
legislative fix. I tried to say this to this administration 
back when they were screwing around with this a number of years 
ago. However, because of elections in South Carolina and deals 
they made in South Carolina, nobody wanted to address this 
stuff. Nobody wanted to address it, and now I suspect that this 
is one of those things that is going to be left for somebody 
else to do down the road. Everybody is going to look back and 
say, ``how did this happen?''
    I am asking the question. It is on the record. If this 
Congress does not do anything about it, we are going needlessly 
to pay fines to the State of South Carolina, I mean, you are a 
taxpayer, I am a taxpayer. This is dumb. This is dumb.
    Mr. Spurgeon. I am a big taxpayer.
    Mr. Hobson. Can you imagine what somebody sitting out there 
who is losing their house because of some stupid loan is saying 
to us? How can you be fined after putting all this money and 
this program in South Carolina. South Carolina said they want 
it, went all the way to the White House to get it done, and 
now, expects to be paid a fine. The only people who like that 
are people who live in South Carolina because it says more 
money to South Carolina. Everybody else in the country says, 
another stupid deal out of Washington. Just stupid.
    This kind of stuff makes us all look not only totally 
inept, but dumb and stupid. I do not get it, you know. I just 
do not get it.
    Anyway, I am not going to talk any more about red oil 
today. I hope someplace down the road we get some resolution to 
this. I would hate to wait until NRC gets done with all of its 
stuff and then comes back and tells you that you have to do all 
these other thing. We are going to have some people looking at 
it. Just to be sure, we are going to have some people looking 
at it. Aren't we, Mr. Chairman?
    Mr. Visclosky. Yes, sir.
    Mr. Olver.

                             FISSION ENERGY

    Mr. Olver. Thank you, Mr. Chairman.
    Actually, Mr. Secretary, I think there are some areas that 
you and Mr. Hobson agree on. You certainly believe in the need 
for nuclear energy as a power source over a period of time. And 
I agree, too, that we are going to need that, as far as I can 
tell. Although there are some people that think we ought to be 
putting a huge amount of effort into research and development 
on fusion, and stop all of this business about what are you 
going to do with the high-level waste, because the waste is so 
much less in the case of fusion, if you could finally make it 
work.
    So, yes, I agree that we are going to need fission nuclear 
energy for a considerable period of time. Recall for me, remind 
me, it is U-238, that is the fissionable material?
    Mr. Spurgeon. 235, sir.
    Mr. Olver. 235. And that is the only isotope that is the 
subject of the fission. So it is the 235 that we are--is it 236 
or 238 that is the major portion?
    Mr. Spurgeon. 238.
    Mr. Olver. 238 is the major portion. Okay. So what is the 
percentage of 235?
    Mr. Spurgeon. Point 7 percent, seven-tenths of 1 percent.
    Mr. Olver. U-235 is .7 percent. And for power purposes you 
need to enrich it to what level?
    Mr. Spurgeon. On the order of 4 percent.
    Mr. Olver. Four. And for bomb purposes it is to what?
    Mr. Spurgeon. Fully enriched.
    Mr. Olver. What does that mean?
    Mr. Spurgeon. In excess of 93 percent.
    Mr. Olver. Ninety-three percent. Okay. All right.
    So when you made the comment that you are diluting 17 tons, 
of highly enriched, I suspect that highly enriched that was 
defense materials, weapons-grade material that is now being 
diluted----
    Mr. Spurgeon. Yes.
    Mr. Olver [continuing]. To get that back to be able to use, 
and I take it you must have meant by going to low-enriched to 
get back to power-grade.
    Mr. Spurgeon. Yes, that is correct.
    Mr. Olver. Okay. All right. Fine. I understand what you are 
doing now. Okay.
    And now I would like to go back and--by the way, I have 
notes around here. It is a little bit difficult to keep track 
of what I am trying to do, but I just noticed one. And I wanted 
to ask you, and I will do it as an aside here, but I will get 
back to the main point. In your testimony you had deplored 
rather strongly the loss of infrastructure in the nuclear 
industry, both in the way of capital facilities, demonstration 
sorts and pilot sorts, that could be used, but also the 
personnel and so forth and the training aspects. There is 
something like I think it is 77 million for university items. 
If you had your way, how much would that program for support of 
university research and development, university-level R&D, 
where the nuclear scientists are being trained and getting 
their feet wet, how much would that be?
    Mr. Spurgeon. Well, first of all, I would like to see it 
get to the level where we would be spending the 77 million. We 
are not there at this point.
    Mr. Olver. But that is the recommendation for this year.
    Mr. Spurgeon. Yes, sir.
    Mr. Olver. What is it in the 2008 budget?
    Mr. Spurgeon. We are looking to try to set aside money, and 
I know this has to be discussed with the committee relative to 
the direction that it be--a majority of it be competed between 
national labs, universities, and industry, I would really like 
to be able to fence off a certain amount or a certain 
percentage of funds so that universities would be able to count 
on a continuing funding level, because what they are doing, you 
know, the big thing for this money is it allows universities to 
hire professors, professors to hire graduate students, and to 
have some certainty over--because we issue 3-year grants, and 
what you want to do is have predictability of funding going 
into the future for them, just like we like to have 
predictability--or Mr. Sproat was saying he would like to have 
predictability on funding available for him in building the 
repository.
    Mr. Olver. And there is no such money in the 2008 budget or 
the 2007 budget that goes directly to that purpose?
    Mr. Spurgeon. It is not fenced, no. As the Chairman 
mentioned, there was a university fellowship program that my 
department administered up in the time period prior to last 
year, and the administration's request for that program was 
zero, and the Chairman or this committee, I think, recommended, 
or the Congress recommended, in the end that that program be 
reestablished and be housed within the Nuclear Regulatory 
Commission for the 2008 time frame.
    Mr. Olver. All right. Well, Mr. Chairman, tell me when I 
must stop. You want me to stop? All right. Look, he is giving 
me----
    Mr. Visclosky. You are Chairman on another committee.
    Mr. Olver. I want to go back to where I was with you having 
clarified for me exactly what the levels of enrichment were. 
Under GNEP we have 22 partnership agreements apparently with 
other countries. Now, this must track somehow the provisions of 
the Nuclear Nonproliferation Treaty. Are those partnerships, 
are the 21 or the 22 that are our partners in that agreements 
also apply to working--are Britain, France, China and Russia 
also signers to the same partnership agreements?
    Mr. Spurgeon. They are all part of the Global Nuclear 
Energy Partnership.
    Mr. Olver. I realize that, but would China be able to say 
that they have 22 partners also?
    Mr. Spurgeon. Yes.
    Mr. Olver. Because they are all signers to those 
partnerships agreements then?
    Mr. Spurgeon. This is not a United States and others. This 
is everyone within the Global Nuclear Energy Partnership is 
equivalent.
    Mr. Olver. But there are only five countries who are 
eligible to be producing--to be making nuclear-grade materials 
eligible legally under the treaty if they are signers of the 
treaty. You have indicated there are nine countries other than 
in addition to the 22 that are making--that have nuclear. I 
guess I am wrong. You take out 5, the 5 nuclear powers, from 
the 31 total, so it is down to 26.
    Mr. Spurgeon. Yes. The difference here is that what I 
mentioned is there were 31 countries that have nuclear power 
today, not necessarily that are part of----
    Mr. Olver. Which includes India and Israel and North Korea 
who have nuclear power, but also would be in countries that 
have been trying to enrich or have done enrichment.
    Mr. Spurgeon. It would include India. Israel does not have 
nuclear power reactors.
    Mr. Olver. They do not?
    Mr. Spurgeon. I am sorry, Israel does not have a commercial 
nuclear power reactor. They have a research facility. This is a 
difficult one to deal with.
    Mr. Olver. All right. I will stop. I will stop.
    Mr. Visclosky. Mr. Simpson.
    Mr. Olver. I will come back. I will think a little bit.

                   CONFLICT OF INTEREST RESTRICTIONS

    Mr. Simpson. Thank you.
    I want to get back to the relationship between the Congress 
and this committee and the Department, if I could, for just a 
minute, because some of the concerns I think that the committee 
has and some of the issues the committee has often deal with 
politics within the Department. We know there are politics that 
are played here, but there are oftentimes politics played 
within the Department depending sometimes on where employees 
come from, what labs they come from, et cetera, et cetera, et 
cetera.
    You came from the United States Enrichment Corporation.
    Mr. Spurgeon. Actually, I came from a golf course in 
Florida.
    Mr. Simpson. I would like to have come from there, too.
    Did the Department place any restrictions on you to avoid 
any conflicts of interest with your old employer?
    Mr. Spurgeon. I had to do a number of things. I worked for 
more than one person in the nuclear industry. But anybody 
coming into my position cannot have any financial connection 
whatsoever to energy companies, particularly nuclear energy 
companies.
    Mr. Simpson. I would assume that you have similar ethics 
restrictions that apply to your career staff working within the 
Department?
    Mr. Spurgeon. Yes. People are required to file financial 
disclosure statements associated with their past interests. But 
it is a lot more stringent, if you will, for people that go 
through the Senate-confirmed political appointee process.
    Mr. Simpson. If you have on your staff an employee that 
came from one of the national labs, worked for a contractor at 
one of the national labs, do the same conflict-of-interest 
restrictions prevent that employee from making decisions that 
affect funding for their home laboratory, if you will?
    Mr. Spurgeon. I am very familiar with my restrictions. I am 
less familiar with the actual legal issues pertaining to people 
that are not at the political level. And I would like to answer 
that question for the record so that I do it correctly.
    [The information follows:]

                   Conflict of Interest Restrictions

    Executive branch employees are governed by both statutory and 
regulatory conflict of interest standards. These standards, briefly 
described below, apply to all federal employees, including former 
national laboratory employees.
    The statutory conflict of interest standards are found in 18 U.S.C. 
208. Specifically, executive branch employees are prohibited from 
participating personally and substantially in an official capacity in 
any particular matter in which they, to their knowledge, have a 
financial interest. This prohibition extends also to financial 
interests which are imputed to the employee, including, among others, 
those of their spouse or minor children. If an employee continues to 
have a financial interest in his former employer, this criminal statute 
would prevent his participation in a particular matter that impacted 
that financial interest unless the employee received a waiver of the 
participation restriction or a regulatory exemption applied.
    The regulatory conflict of interest standard is found at 5 C.F.R. 
2635.502. This provision prohibits an employee from participating in a 
matter that will specifically affect the financial interests of an 
employer for whom the employee worked in the past year if a reasonable 
person with knowledge of the relevant facts would question the 
employee's impartiality in the matter. In this instance, an employee 
may not participate in the matter unless authorized to do so. An 
employee's immediate supervisor, in consultation with the Office of the 
General Counsel, may authorize the employee to participate in such a 
matter based on a determination, made in light of all relevant 
circumstances, that the interest of the Government in the employee's 
participation outweighs the concern that a reasonable person may 
question the integrity of the agency's programs and operations.

    Mr. Simpson. Okay. Where does the GNEP manager come from? 
What lab?
    Mr. Spurgeon. The deputy manager. I am the GNEP manager----
    Mr. Simpson. Right.
    Mr. Spurgeon [continuing]. But the deputy manager worked at 
Los Alamos National Laboratory.
    Mr. Simpson. Los Alamos is a weapons lab.
    Mr. Spurgeon. Yes, sir, but they do a lot of things other 
than weapons today. But they are principally a weapons 
laboratory, yes, sir.
    Mr. Simpson. And, of course, one of the debates that is 
going to go on in Congress is that as weapons work decreases, 
weapons labs and representatives from those areas are going to 
substantially try to get work from other laboratories to 
maintain workload in those weapons laboratories.
    I have noticed that Los Alamos has a substantial amount of 
GNEP work. It leads the GNEP safeguards campaigns; has major 
roles in fast reactor transmutation fuels, separations and 
waste forms campaigns; also provides the GNEP country 
coordinator for Russia.
    What control do you have over the money when you send it to 
a weapons lab?
    Mr. Spurgeon. Well, you have control from the standpoint of 
they are using the money to perform the statement of work that 
is assigned to them. You know, they do report, and we have a 
structure set up to coordinate work that is done at all of our 
laboratories, which Idaho is the technical manager of. And Mr. 
Philip Fink runs that program for us at Idaho. But we have 
control of the scope of work, and we have control of the 
funding that is allocated to them.
    But, you know, I would tell you what Los Alamos's budget 
is. For this year it is $30 million, but $15 million of that 
was directed by the committee. So it is really 15--for our what 
I would call the programmatic work that we have defined and $15 
million for the hot cell upgrade improvement work that was 
directed by the committee.
    Mr. Simpson. I think some of the concern is that some of 
the money is being directed--how do you say this--for political 
purposes rather than necessarily where the work ought to be 
done. But I have noticed--yeah, that is a first. I have noticed 
regarding how much control you have over funding that you send 
to Los Alamos, in section--U.S. Code 2410, section 3220, Status 
of Contractor Employees, each officer or employee of a 
contractor of the administration shall not be responsible to or 
subject to the authority, direction, or control of any officer, 
employee or the Department of Energy who is not an employee of 
the administration except the Secretary of Energy.
    I am just wondering how much control you have over those 
employees. Do you have the same control over those employees as 
you would have if they worked at the NE lab?
    Mr. Spurgeon. No, because I am not the programmatic officer 
for the Los Alamos Laboratory. That is an NNSA laboratory from 
the standpoint of its major reporting relationship. I do not 
own the national--the Idaho National Laboratory, but that is 
the phrase we use, because I do accept ownership and 
responsibility for the Idaho National Laboratory. I do not for 
the Los Alamos National Laboratory.
    Mr. Simpson. So you actually have more control over the NE 
lab than you do if the money goes to Los Alamos.
    Mr. Spurgeon. In general, yes, sir.
    Mr. Simpson. The same question could be asked, I guess, Mr. 
Sproat, the Department has designated Sandia as the lead lab on 
Yucca Mountain, the Yucca Mountain project?
    Mr. Sproat. Yes.
    Mr. Simpson. In light of that same section that I just 
read, how are you able to maintain effective operational 
control over Sandia?
    Mr. Sproat. Actually, let me answer the question from two 
vantage points; one is contractual, one is managerial. 
Contractually, the contracting officer that has control of the 
contract with Sandia resides in NNSA. So in terms of who can 
formally give direction and change a contract for that--for 
Sandia for their work for us, it has to go through the 
contracting officer who is in NNSA. So that is the contractual 
legal piece.
    The reality is from a management piece in terms of how we 
work with them, how we work together, the Sandia senior manager 
who runs their project for Yucca is--I consider him part of my 
senior management team, and he is involved in our monthly 
meetings. I meet with them biweekly. So from a management 
standpoint they are integrated into my senior management team. 
But from a contractual standpoint, when we have to make a 
change to their contract, legally we have to go through NNSA. 
The arrangement has worked out very well, as far as I am 
concerned.
    Mr. Pastor. Would the gentleman yield?
    Mr. Simpson. Sure.
    Mr. Pastor. You know, we are all human beings. What happens 
if there is all of a sudden a conflict, personality or dispute? 
Who has the final say?
    Mr. Sproat. I am happy to report that in the 2 years we 
have had this contractual relationship with them, we have not 
had that problem.
    Mr. Pastor. But things change.
    Mr. Sproat. Yeah, they might.
    Mr. Pastor. That is the reality. Things change. But the 
question is who will have--who will be the determining factor 
if there is a conflict of what is going to happen, what is not 
going to happen? Regardless if--you know----
    Mr. Sproat. I would hope that what would happen is that, 
you know, we have been able to maintain a very good collegial 
relationship with the folks over at NNSA who have the 
contractual control of the contract, and if we have had any 
issues at all--and, quite frankly, there has been nothing that 
has been elevated to my level that I have had to work with Tom 
D'Agostino's organization to resolve. I would hope in the 
future that kind of relationship, good working relationship, 
would be maintained. But I have not run into that problem so 
far.
    Mr. Pastor. You know, at one point if there is a conflict, 
the resolution is going to say this person or that person. That 
is what I am trying to find out.
    Mr. Spurgeon. Resolution would go to the Secretary, unless 
he designated that to the Deputy Secretary, because that is 
where we all come together. If either, you know, Ward or I 
could not agree with Mr. D'Agostino relative to one of these 
issues, it would go to the Secretary for resolution.
    Mr. Simpson. There will be a conflict at some point in 
time. Even my wife does not agree with me all the time.
    Could you provide us for the record a copy of your internal 
decision memorandum on this designation of Sandia as your lead 
lab? And also provide for the record a copy of the legal 
memorandum of your Office of General Counsel addressing the 
legal questions involved in designating as your lead laboratory 
an NNSA entity that is by law not subject to your authority, 
direction or control.
    Mr. Sproat. I have not seen those, so if I can find them we 
will get them up here, and we will get back to you one way or 
the other in terms of what we have. That decision was made 
before I came.
    Mr. Simpson. Okay.
    Mr. Sproat. I was confirmed. So I was not involved in that 
decision. I do not know what documentation exists. I will have 
to see what we have.
    [The information follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Simpson. What overhead rate is Sandia charging your 
program? What percentage of all nuclear waste disposal funding 
that you send to Sandia is taxed by the lab to conduct at their 
own discretion lab-directed research and development?
    Mr. Sproat. Let me take that question for the record. I 
just do not know.
    Mr. Simpson. Okay. I appreciate it.
    [The information follows:]

                            Sandia Overhead

    As of March 31, 2008, the overhead rate the Sandia National 
Laboratory is charging the Office of Civilian Radioactive Waste 
Management is 34 percent. Of this rate, 8 percent is for laboratory 
directed research and development.

                 POTENTIAL SITES FOR SECOND REPOSITORY

    Mr. Simpson. One other question I have, if that is okay, 
Mr. Chairman. I expect that the Department will start its 
search for a second repository site looking again at the 
alternative sites that were initially considered for the first 
repository. What were those sites?
    Mr. Sproat. Before I answer that specific question, let me 
just go back and just clarify your lead-in to the question.
    We currently do not--as a matter of fact, we are 
specifically--under the current Nuclear Waste Policy Act, we 
are specifically prohibited from beginning to evaluate a 
potential site for a second repository until and unless 
authorized by Congress. So we do not currently have the 
authority to do that. However, with the report we are going to 
send up here shortly, we will in that report talk about not 
only how the Yucca Mountain site was selected, but the other 
sites that were evaluated and how far we got in that evaluation 
when that decision was made.
    But to specifically answer your question, in the original 
triage of sites for the first repository, there were nine sites 
in six States. And there was one in Louisiana, two in 
Mississippi, the Yucca Mountain site in Nevada, two in Texas, 
two in Utah, and one in Washington State. And those sites 
through their initial screening were screened down to three 
sites, one in Nevada, one in Texas, one in Washington State. 
And then based on the further refined results, Congress decided 
to only authorize us to fully investigate the Yucca Mountain 
site. At that time there were also identified up to 17 
potential sites for a second repository, pretty much east of 
the Mississippi, and they were at 16 different States, and some 
of those had a little more--were looked at in a little more 
detail than others. But we will provide that information in the 
second repository study to the Congress that we will send up 
here in a few months.
    Mr. Simpson. I need to have you clarify. Section 161 of the 
Nuclear Waste Policy Act states the Secretary may not conduct 
site-specific activities with respect to a second repository 
unless Congress has specifically authorized it and appropriated 
funds for such activities, which is what you just mentioned.
    Mr. Sproat. Yes.
    Mr. Simpson. Do you interpret that language to mean the 
Department cannot do any work on a second repository without 
further authorization, or does it mean that the Department can 
pursue studies on a variety of alternative sites for a second 
repository, including site-specific studies of those multiple 
sites, as long as you do not narrow it down to a single site?
    Mr. Sproat. The interpretation that the Department has 
taken, as I have been informed, is that any of those site 
characterization activities, site studies, requires to actually 
understand what is underneath the ground, drilling holes, that 
type of thing, and it is the Department's current 
interpretation of that section of the Nuclear Waste Policy Act 
that that is specifically prohibited.
    Mr. Simpson. Okay.
    Mr. Visclosky. Mr. Fattah.

                            LOAN GUARANTEES

    Mr. Fattah. Thank you, Mr. Chairman. And I have a number of 
questions.
    I come from a State that has a number of active nuclear 
facilities in Pennsylvania, and I generally am very supportive 
of nuclear. In last year's omnibus we authorized 20 billion in 
loan guarantees for this purpose. And in this year's budget 
request there is a proposal to essentially hold that over to 
2011. The budget submission says that the earliest possible 
date for solicitation is April 15th. So the first thing I would 
like to know is what the status of this potential solicitation 
is, and then what is the down side of not proceeding forward?
    Mr. Spurgeon. Congressman, the loan guarantee is a very 
important program to us relative to getting the nuclear 
industry jump-started here into these new plants. We go through 
a process. I have drafted an implementation plan, which by the 
legislation is required to come up to sit before Congress for 
45 days. That is in review at this point in time preparatory to 
it being transmitted to the Congress. And following that, 
assuming approval of our plan to go forward, we would then 
issue solicitations immediately thereafter for loan guarantees; 
not just for nuclear loan guarantees, but also for loan 
guarantees for renewables, et cetera. And so that process is 
designed to go forward here this spring and summer.
    Mr. Fattah. On the nuclear, is this for front-end 
facilities and also----
    Mr. Spurgeon. This is both for the reactor and for the 
front-end facilities, yes, sir.
    Mr. Fattah. As I recall, we said that at least $2 billion 
should be used for front-end facilities.
    Mr. Spurgeon. That is correct; $18\1/2\ billion for the 
reactor program and $2 billion for the front-end facilities. 
And so that will go forward.
    To your question about extending the time, you know, 
basically we were required to complete the activity on loan 
guarantees by 2009, but looking at what it takes, and looking 
at the schedule for licensing of nuclear facilities, one of the 
key final steps for issuing the actual loan guarantee is the 
receipt of a combined operating license for the nuclear 
facility, and that will not happen by 2009. So we could be 
dealing with a conditional guarantee at that point in time 
conditioned on receipt of a license, but we really believe that 
for us to be able to complete this job, and this is not just 
bureaucratic, it takes a long time, properly, we do need to 
have that guarantee extended to 2011. And we also ask for some 
of the other guarantees to be extended to 2010 rather than the 
September 2009 drop-dead date, if you will.
    Mr. Fattah. When you get finished with this deal, if we 
were looking back at it and the 20 billion in loan guarantees, 
in your judgment what would we have accomplished prospectively 
in terms of moving these issues forward?
    Mr. Spurgeon. We would have gotten started with 
construction of new nuclear power plants in the United States 
and paved the way for future continued development of nuclear 
energy.
    Mr. Fattah. Would you quantify that in any way? I mean, 
just hypothetically, what do you think we can get done with 20 
billion in loan guarantees?
    Mr. Spurgeon. One, what I think we can start, because I 
would like to see--this is my personal, this is not the 
administration's suggestion here--is that we would have 
substantially more than $20 billion worth of guarantee 
authority, and, in fact, you would have some sort of a 
revolving fund established for continuing guarantees, much as 
the EX-IM Bank does for export of this technology.
    But what that does for you and what it does for the 
consumer is lowers the cost of capital. And the number one cost 
in building a nuclear facility is the cost of capital. They are 
expensive facilities to build, but they are very inexpensive 
facilities to operate. So by lowering the cost of capital, 
allowing companies, sponsors to increase the debt-to-equity 
ratio, of that project, has a substantial reduction in the cost 
of power coming out of that facility.
    We have run some numbers for one proposed plant, and going 
on assumptions for loan rates and capital and debt-to-equity 
ratio between having a loan guarantee and not having a loan 
guarantee, that can come up as much as 40 percent difference in 
the cost of power coming out of the busbar for that plant, and 
that translates into better things for the consumer, but also a 
more competitive environment for use of nuclear energy for our 
industry in this country.
    Mr. Fattah. Thank you very much.
    And thank you, Mr. Chairman.
    I understand this is Mr. Hobson's perhaps last hearing. I 
want to thank him for his leadership on the subcommittee and 
his friendship. And the Nation and its energy and water are 
better off because of his work.
    Mr. Hobson. Thank you.
    Mr. Fattah. Thank you.
    Thank you, Mr. Chairman.
    Mr. Visclosky. Mr. Pastor.
    Mr. Pastor. I was checking to see if this is going to be 
our last hearing since everybody is saying good-bye to you.
    Mr. Fattah. Is it a rumor, or I think it is fact?
    Mr. Pastor. I was trying to find out if this is our last 
hearing. Okay.
    Mr. Spurgeon. We understood it has already been decided 
this was the last hearing.
    Mr. Pastor. I ask this question after the conversation with 
one of my colleagues about Los Alamos and the Idaho National 
Lab, so I figure I can ask it since I do not have any labs. The 
Idaho National Lab, as I understand, is your lead laboratory 
for nuclear energy.
    Mr. Spurgeon. Yes, sir. I am program secretarial officer 
for the Idaho National Laboratory.
    Mr. Pastor. And I guess early discussions have pointed out 
it seems we may not be as serious of making it the lead lab. 
And so the question I would have is, is there a 10-year plan 
that would implement some of the things that we have talked 
about and be able to--including, as you said yourself, 
developing the research, developing the demonstration projects 
that would put us years ahead? And do we have such a master 
plan that you could share with us or give us some highlights 
this afternoon?
    Mr. Spurgeon. Yes, sir. Well, this afternoon, no, but I 
will be glad to provide additional material relative to the 
long-range plan for the Idaho National Laboratory, including 
what is being done and what is being proposed by the laboratory 
themselves for their future. That is obviously something that 
is a job that our contractor out there, the Battelle Energy 
Alliance, is responsible for.
    But in addition to that, what I have under way is an effort 
to look long range at what facilities, what research 
facilities, this country needs over the next 20, 30, 40, 50 
years to support a resurgence of nuclear energy in the United 
States, with the objective that we have that as a body of data, 
and then we can compare that with what we have today in this 
country; and even taking some credit for what exists in some of 
our partner countries that we might be able to leverage, and 
with the difference between that, then develop a specific plan 
for implementation as to how we refacilitize the nuclear 
infrastructure in this country.
    I would say that, you know, my colleagues in the Office of 
Science have done a great job at doing that in basic research. 
I think we need to in some ways emulate that relative to 
applied facilities, applied research and development, for the 
nuclear industry. And that is what we intend to do.
    Mr. Hobson. Would the gentleman yield for a second?
    Mr. Pastor. Yes.

                         NATIONAL LABORATORIES

    Mr. Hobson. One of the things we tried to do, and the 
Secretary kind of thumbed his nose at us, was to get the labs 
to have business plans and 5-year budgets. Business plans would 
have said where they were going to go so we could better manage 
the agency and would have less conflict year to year. He just 
kind of walked away from that. Other agencies, I might say, 
have not walked, such as the Corps of Engineers.
    I think it would be beneficial to the long-term assets of 
this country. Our national labs are seed corn for this country. 
I am not out to close them down, I do not think we should. In 
fact, we should enhance them. But the missions may change. We 
tried to change the Cold War footprint in the nuclear weapons 
era and got a lot of push-back. The department just dismissed 
the Overskei report like it did not exist.
    But I would suggest in this last hearing that somebody 
revisit--either this administration or the next--this idea of 
having what every good business does out there. Have a plan for 
the future that is not just on a 2-year budget or a year 
appropriations budget. This country would be better served long 
term.
    So you do not have to respond to that, but I think----
    Mr. Spurgeon. I will respond. I will say I agree with you.
    Mr. Hobson. Well, the Secretary does not.
    Mr. Spurgeon. I do not know about that.
    Mr. Pastor. I was trying to get back to this idea if we 
have designated the Idaho National Lab as the lead lab for 
nuclear energy, then I would have thought that possibly--and as 
I understand, that plan is being developed--that you would have 
the research, demonstration projects, the models, the mockups 
for where we are going to be in generating energy in the future 
or power in the future. And yet what disturbed me a little bit 
was the dialogue we were having with Los Alamos and Idaho and 
the possible $15 million being directed by this subcommittee. 
And so I am beginning to wonder like what is happening? Are we 
getting away from that plan of having Idaho be the lead lab, 
and why are we getting this confusion, I guess my question is?
    Mr. Spurgeon. Sir, not at all from the standpoint of Idaho 
being the lead lab, but we also have to recognize that we have 
unique capabilities that are resident in many of our 
laboratories that from a national perspective do not make sense 
to duplicate in several different locations. And so what Idaho 
does, in addition to being our lead laboratory, but as part of 
that function they are charged with the responsibility to 
coordinate that. We do have a 10-year site plan for the Idaho 
site, but they also coordinate activities.
    For example, we are talking about Los Alamos. Los Alamos is 
key to our safeguards work. I mean, a lot of the classified 
work associated with safeguarding nuclear materials is really 
that expertise is resident in Los Alamos from their long time 
frame of dealing with weapons and how you safeguard them. We 
are looking to provide that kind of security for nuclear 
materials looking into the future and how can we better protect 
these kind of materials.
    So it is not to say that Idaho becomes the only laboratory 
dealing in the nuclear arena, no. Oak Ridge has a major role to 
play in our nuclear development program, as does Argonne. So we 
have expertise that is resident in various parts of our 
laboratory system. The idea is to be able to effectively 
coordinate that, kind of one-stop shopping where we count on 
the Idaho laboratory to provide that coordination effort.
    Mr. Pastor. Possibly past practice and maybe even current 
practice--and this is the question--of having different 
contractors at different labs who can and may probably restrain 
activities, because of the personnel, the memos of 
understanding, contractual management; that you do not have the 
ability to declare a particular lab to be the lead, and yet not 
being able to maybe even remove some of this expertise from one 
area to the other because of contractual agreements you have 
with different contractors. But historically, I guess, that is 
water under the bridge, and in your tenure do you think that 
there could be better ways to run the labs so we can ensure 
that each one has a principal role in what we have an interest 
in and be able to be more effective and possibly more 
efficient?
    Mr. Spurgeon. What we have put together is an R&D road map, 
which is designed to integrate, okay, this is where we are, and 
this is where we want to go, and this is the R&D that we need 
to perform in order to get there. Tie that then with these are 
the kind of facilities that we are going to need in order to 
accomplish those objectives. And we have that kind of a road 
map. And, yes, that is what from, you said, in my tenure, what 
I want to leave behind.
    I do not think, as I mentioned to the Chairman, that we are 
going to get to the point of saying, and, yes, I want to build 
a fast reactor, and I want to build it right here, because we 
are not going to be that far. But I think we can identify the 
kind of research and development that is still going to be 
needed for us to get to that point and a pathway to get from 
here to there.
    Mr. Pastor. Sitting up here and sometimes listening to the 
questions other members have and your response that, due to 
different contractors at different labs, memorandums of 
understanding and actual management, that probably the system 
we have in place may hinder the pathway and there may be bumps 
in the road that may cause this not to get too into the plan as 
quickly as we would like or it would cause us to begin 
detracting from the plan, that is my concern as I sit here and 
listen to the conversation.
    Mr. Spurgeon. There is always going to be competition, and 
competition for funds is always present.
    Mr. Pastor. I am not talking so much about the competition. 
I am talking about the system as it is set up. And different 
contractual agreements probably restrict you in your ability to 
even go forth on the plan that you have set forth and want to 
implement.
    Mr. Visclosky. I guess I would follow up on Mr. Pastor's 
line of questioning about Idaho's facility specifically; and I 
was going to address it at the end about your statement today, 
about the Gen IV solicitation. This may not be the best 
analogy, but it is the one that comes to mind, NNSA has a 
number of programs they want to pursue, some construction, some 
not. But we continue to ask them for that strategy. I would 
acknowledge in your case you suggest you have your strategy on 
GNEP. On the site plan for Idaho--and, of course, I also assume 
as far as the solicitation there is no determination at this 
point as to, what this is going to be, where it is going to be 
or anything else.
    My concern would be, if you don't have a plan for Idaho for 
10 years--and I would translate it into some of these other 
facilities--in the end what we end up doing is planning around 
other decisions that are independently made. I guess that is 
more a statement of concern than----
    Mr. Spurgeon. Gosh. It is a challenge. Because we do have a 
10-year site plan for Idaho, but yet we also then get into NEPA 
space and things in terms of getting to the point where we can 
make a particular site selection or determination for a 
particular facility.
    Now with respect to NGNP, we are perhaps aided a little bit 
in that that was in the Energy Policy Act of 2005, which 
basically selected the site as part of the Energy Policy Act. 
So what we are really doing with the expression of interest is 
we are now getting to the point of coming down to, okay, we are 
going down this path and we are focusing on licensing, but now 
let us focus on, okay, what is the business arrangement, what 
is the consortium, how are we actually going to get this 
project built?
    Because it is going to be a cost share between government 
and industry. And when you get into that space, then you have 
to define the relative roles and you have to define how that 
sharing is going to take place and the vehicle that is going to 
be used in order to actually implement it.

                      UNIVERSITY RESEARCH REACTORS

    Mr. Visclosky. Mr. Spurgeon, we have talked about nuclear 
education, but there is a program for university research 
reactors. The research community would indicate that the $3.7 
million requested in 2009 for research reactors is not 
sufficient to pay for the cost of the fuel alone, let alone the 
cost of transporting that fuel. The indication to us is that 
the real need for 2009 for university research reactors is 
closer to $15 million. What would be your reaction to that?
    Mr. Spurgeon. The 3.7 is for fuel. When you say the real 
need is closer to 15, I am not sure the context in which that--
and I am going to turn around to see if anybody knows the 
context. Okay. I am not aware of a--I have to say I thought we 
had a pretty open communication on the issue of research 
reactors and fuel, but I am not aware of how you could get from 
3.7 to 15 in terms of----
    Mr. Visclosky. In fairness, let us get back to you and your 
staff, because the universities will say that is not enough for 
the fuel alone. And then they factored in at least 
transportation, if not some other factors, and the indication 
to us is that it is some factor of $15 million instead of 3.7.
    Mr. Spurgeon. All I can say is our intention was to be able 
to supply the universities with the fuel that they need for 
their research reactors; and if we have got some sort of a 
glitch here, we need to address it.

                       NUCLEAR POWER 2010 BUDGET

    Mr. Visclosky. On nuclear power 2010, the budget request 
for 2009 is $241.6 million, which is an increase of $84.3 
million over the projected baseline for 2009. Why the increase 
in acceleration?
    Mr. Spurgeon. Just as you say, there has been some 
acceleration in the nuclear power 2010 program. But a big part 
of that and about two-thirds of the increase is associated with 
increased regulatory costs. That is both the fees we pay to NRC 
for the NRC's review of the license application. That is due to 
additional questions and requests for information that NRC is 
making that then the utilities and/or the vendors that are 
pursuing the application need to be able to respond to.
    And there have been some new requirements or I would put it 
in the context of very strong suggestions relative to changes 
in some of the basic design parameters, such as the ability to 
withstand a large aircraft impact, that have caused us to go 
back and caused the manufacturers, i.e., and utilities to go 
back and do a little bit of change to their standardized design 
program.
    Mr. Visclosky. No.
    Mr. Spurgeon. That is about two-thirds of it. They are 
getting more specific and more detailed in the design.
    And maybe I should say this. Historically, when this 
program was begun, it was somewhat theoretical. Because it was 
the idea of can we pursue a license application through the NRC 
to get a combined operating license to demonstrate the process 
without there being anyone at that point in time ready to sign 
up or seriously interested in actually building a plant.
    Well, along the way, fortunately, and successfully I would 
say, is that we now have nine combined operation license 
applications. So what have developed for both the boiling water 
reactor and the pressurized water reactor was a need for more 
detail relative to the design in order to enhance the level of 
detail in the design in order to allow it to be not only 
licensed but, in effect, look to the point where it can be 
effectively priced.
    Mr. Visclosky. Let me ask you this. Earlier in the decade, 
we were told on the baseline projections that the total amount 
that was going to be requested for 2010 was $586.5 million. If 
2010 would be fully funded at the administration's request for 
2009, that would mean that the amount necessary to fill out the 
program in 2010 is $5 million. Is that all it is going to be in 
2010?
    Mr. Spurgeon. I anticipate that we will request more than 
that in 2010 but that the program will come to an end in 2011 
as was originally planned, and the additional funds would be as 
I have indicated from the standpoint of what the changes were.
    Mr. Visclosky. The baseline for '10 is $93.1 million, and 
the baseline for '11 is 29.2, and then there is residual, I 
assume, to close out the '12. So you are right about the '11. 
What should we anticipate?
    Mr. Spurgeon. I will get you a number. Obviously, we are in 
the 2010 budgetary process right now.
    [The information follows:]

                       Nuclear Power 2010 Funding

    For planning purposes, the Department has estimated that $136.6 
million is needed in FY 2010 to complete the program scope by 2011.

    Mr. Visclosky. Everybody here who has spoken today supports 
nuclear power, and I am not only speaking for myself. But $586 
million cash to the industry to apply for licenses that they 
can make a profit, when does it end? We just had a discussion 
about $20 billion in loan guarantees, and there is a suggestion 
that there has to be an extension of that, and there is a cost 
to us in the budget for that. And the government is doing 
research and development. You have talked about GNEP at some 
significant cost.
    I misspoke earlier, and I am going to retract my statement 
and point out that you did request $10 million for life 
extension programs for existing reactors. I misspoke. You are 
correct, and I am not. And there are other dollars here. How 
much do they need to get started?
    Where I come from in Gary, Indiana, $586 million to push 
paper in license applications to show you can get something 
done, along with $20 billion, that ought to at least turn the 
key in the engine.
    Mr. Spurgeon. First of off, let me say, relative to your 
comment, yes, I think it is turning the key in the engine. And 
the proof of the pudding is that we have these license 
applications going through, and we just announced yesterday or 
the day before that there has been an EPC contract entered into 
with Southern Company and Westinghouse.
    Mr. Visclosky. Things are going smoothly, so we don't 
need----
    Mr. Spurgeon. Sir, we are like on the roller coaster. You 
know, we are chugging up to that first hill. We are not quite 
over the top yet. Because what we are trying to do is get it 
over the top so that it can have its own momentum for that 
point forward. But the point is that this is a cost share 
program with industry. Industry is putting up the same number 
of dollars. In fact, more, because--and there is probably 
somebody here from NEI that----
    Mr. Visclosky. Will they make a profit?
    Mr. Spurgeon. Well, hopefully, yes. We certainly hope they 
will make a profit, because that indicates things are going 
well in the nuclear industry. And what this can do for jump-
starting not only our own energy security in this country but 
what it can do for jobs is just enormous.
    Mr. Visclosky. I am not arguing any of that. I am asking, 
how much do the taxpayers owe one particular industry, cold 
cash, to work through a licensing process? And you are going to 
get back to us on 010--not 010, 10.
    Mr. Spurgeon. 10.
    Mr. Visclosky. Ballpark, 100, 150, 125?
    Mr. Spurgeon. I will give you a straight-out speculation. 
Because between me and coming to you next January stands a 
number of hurdles that we have to cross. But if we had our way, 
I think we would probably be in the order of $140 million.
    Mr. Visclosky. Which then leaves us with 2011. Do you want 
to speculate----
    Mr. Spurgeon. Now, that one I think we are back down. We 
are basically done in 2011. That is cleanup in 2011, because 
the license application will be----
    Mr. Visclosky. We were told we would be done at $586 
million.
    Mr. Spurgeon. I understand, sir. And I think this program, 
albeit with a $90 million change, has turned out to be very 
beneficial to the taxpayer and the ratepayer in this country.
    Mr. Visclosky. I am going to turn to Mr. Hobson.
    I would just say that that is breathtaking and would also 
add to the list of monies that the taxpayers are providing to 
the industry the educational monies that are now spent through 
the national Nuclear Regulatory Commission, as well as the 
increase in funding for the Nuclear Regulatory Commission, all 
of which also assists the nuclear industry.
    Mr. Hobson.

                        YUCCA MOUNTAIN CAPACITY

    Mr. Hobson. I want to ask the question about Yucca and the 
Department's plan when it is filled. When Yucca has reached 
capacity, will you look at spending more on another repository 
site or do you assume we will be recycling by then? Will we 
find some other ways to do things? At what are you looking now?
    Mr. Sproat. As you know, Congressman, the current 
legislative limit on the capacity of Yucca Mountain is 70,000 
metric tons heavy metal. And one of the things, just so that 
the committee is clear, that a lot of people don't recognize is 
that number is based on the front end of the fuel cycle.
    So, in other words, if I took all 70,000 metric tons of 
spent nuclear fuel at Yucca and put it through some magic 
process so it could fit in this glass, if it was over 70,000 
metric tons in the beginning I couldn't put it in Yucca.
    So in the report we are going to send up here to the Hill 
in a month or two, we are going to talk about the options, and 
we are going to give you recommendations. But the least-cost, 
fastest recommendation is to legislate away the 70,000 metric 
ton limit and allow the Nuclear Regulatory Commission to set a 
licensed limit based on our evaluation of the technology of the 
mountain. And we will address what studies we have already done 
that give us some indication of what that limit is, and it is 
probably at least double the size.

                              GNEP TRAVEL

    Mr. Hobson. I am going to ask a question about travel. 
Basically, the committee requested several years ago for the 
Department to provide us with a listing of all the foreign 
travel conducted in relation to GNEP. The total amount of 
funding spent was really not enormous, but the details of these 
trips are somewhat troubling. Let me read you one example.
    In 2006, after you took over as Assistant Secretary, a 
contractor from Los Alamos traveled to France and Romania. The 
stated purpose of the trip was to attend a conference in France 
and present a paper on nuclear fuel materials.
    Reading further, one discovers that the traveler from the 
laboratory is actually the same individual who organized this 
conference in France. That is a pretty good deal when you can 
get away with it, especially since it was a month-long trip to 
Europe where the dollar is not particularly good. We would have 
been better off having it here.
    Who approves this kind of stuff? Do you do that or does 
somebody else do that?
    Mr. Spurgeon. Well, I would not be directly involved in 
approving that particular kind of travel. We do have a number 
of technical interchanges. Most of the travel, when we break it 
down, is----
    Mr. Hobson. But do you understand the perception problem 
with something like that when people start looking at this 
stuff and they say, hey, this guy got a month-long trip to 
present a paper on a thing he put together.
    GNEP has been a good source of foreign travel. I am 
particularly in trouble that what we have done is gone out, 
enlisted people to get into this thing, especially in light of 
the committee's concern about GNEP and the additional partners 
we are getting.
    I don't think that Senegal brings a whole lot of value in 
this deal. I have been to Senegal some time ago, and it just 
doesn't make sense to me. These are the kinds of things that 
give us problems in spending Federal dollars. It is the 
perception of what goes on.
    Anyway, let me just say--the last thing I want to say 
today. I have a number of questions I am not going to ask.
    Gentleman, I want to thank you for your service. I know we 
beat you up on this stuff. That is our job.
    I do think, and I will say this publicly and I have told 
you this before, there needs to be more private dialogue 
between the Department and us. We could avoid a lot of problems 
as we did with the Corps of Engineers a couple of years ago. We 
get along a lot better. It would be better if we had more of a 
back and forth before we get to these hearings, and if we had 
more meetings along the way, rather than just the pistols going 
out.
    I hope in the rest of this year we will all try to come 
together and talk as we go through this thing. I hope you will 
leave to your successors the idea that the better way to do 
things is to listen and try to work with the committees. It 
makes everybody's life a lot easier. Maybe these hearings 
aren't as much fun for us, but they would be more fun for you.
    The greatest source of dialogue, unfortunately, winds up 
being the committee; that is not the best place to do it. I 
will leave you with that thought.
    We have tried to say it before. But with the Department of 
Energy, it just really hasn't worked real well. I don't know 
how you do it the last 9 or 10 months, but I hope we can work 
together. It would make the dollars spent a lot better and 
waste a lot less time on reports, if everybody could get this 
mutual understanding of trust with each other. It doesn't have 
to be adversarial like it seems to have gotten.
    Both of you are very qualified people and have some good 
staff people. We just need to figure out how we work together 
better.
    Thank you very much.
    Thank you, Mr. Chairman; and I thank everybody for their 
comments. I have to take a phone call on a nuclear energy 
problem that I am trying to fix before I leave here which will 
make Leslie and some other people happy if we can get it done. 
Thank you very much.
    Mr. Simpson. Mr. Chairman, just a quick question.
    I am going to have some questions that I submit for the 
record, Mr. Secretary, particularly the fact that we have 
appropriated about $200 million for NGNP over the last 4 years, 
including $115 million last year. I want to look at the plans 
that the Department has for how you are going to spend the $115 
million this year and a detailed list of how the funds have 
been spent over these 4 years on NGNP. I will submit that for 
the record.
    [The information follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Simpson. And just to clarify--not to clarify but to 
make sure I have it clear in my mind, the INL is in the NE's 
direct chain of command. It is an NE laboratory, right?
    Mr. Spurgeon. Yes, it is.
    Mr. Simpson. Argonne National Lab, Oak Ridge National Lab 
and some others, they are not in the direct chain of command, 
but there is no statutory bar on control of those?
    Mr. Spurgeon. Right. They are science laboratories, yes, 
sir.
    Mr. Simpson. You do work with----
    Mr. Spurgeon. Yes, sir.
    Mr. Simpson. Los Alamos, Livermore and Sandia. There is, in 
fact, a statutory bar on any exercising authority, direction or 
control over any of the labs, right?
    Mr. Spurgeon. That is correct.
    Mr. Simpson. Now the question, Mr. Sproat, I know you have 
said that even if the U.S. pursues recycling and a permanent 
repository is needed for defense spent nuclear fuel and high-
level waste, with the exception of Navy fuel, the national 
spent nuclear fuel program at the Idaho National Laboratory has 
prepared for your office the licensing documentation for the 
defense nuclear fuel and high-level waste. Does the EM decision 
not to request funds for this program in 2009 jeopardize the 
ability to defend the license and ultimately dispose of the 
material?
    Mr. Sproat. I don't know, Congressman. That is the first 
time I have heard about that proposal, and I have had no 
conversations with any folks that I know about this. So it is 
really the first time I have heard about the issue.
    Mr. Simpson. Could you get back to us and talk to them and 
see if it jeopardizes your ability to defend this?
    Mr. Sproat. Yes. That is my top priority.
    Mr. Simpson. I appreciate that. Thank you.
    [The information follows:]

     National Spent Nuclear Fuel Program at the Idaho National Lab

    The Offices of Civilian Radioactive Waste Management (OCRWM) and 
Environmental Management (EM) have worked closely in the past to ensure 
the Department realizes its strategy for the permanent disposition of 
its spent nuclear fuel and high-level radioactive waste. As we proceed 
through the licensing process for the Yucca Mountain repository, we 
will be looking to EM for technical support in responding to any 
inquiries and requests for information from the Nuclear Regulatory 
Commission (NRC) concerning defense spent nuclear fuel and high-level 
radioactive waste. EM recognizes the importance of the unique 
capabilities of the National Spent Nuclear Fuel Program, including its 
role in supporting OCRWM to adequately address NRC inquiries and 
requests during the licensing review process. EM will take the 
appropriate measures to support the defense of the license application.

    Mr. Simpson. And I do want to thank both of you for the 
work that you do. I know you come in with a flak jacket and all 
that kind of stuff. But, actually, the give and take is good 
for the committee and I think good for the Department. So I 
appreciate it. Thank you.

                     NEXT GENERATION NUCLEAR PLANTS

    Mr. Visclosky. A couple more questions.
    Mr. Spurgeon--and, again, I would stand corrected because 
there is apparently $10 million in your budget to develop 
technologies and practices that could help increase the life of 
today's plants. Two quick questions on that.
    It is in the Gen 4 nuclear energy systems initiative, which 
is focused on the next generation of nuclear reactors, is that 
the most appropriate place for that program to be run? And the 
follow-up question is, how much could you effectively use to 
help existing facilities? You talked about the strides that 
have been made as far as productivity.
    Mr. Spurgeon. Yes, sir, I think it is good seed money to 
get started. If that program is as successful as I think it 
could be, we would obviously be coming back for that line to 
continue to be increased because it provides the least 
expensive way to be able to sustain nuclear capacity. 
Obviously, plants that are already written off, they are there. 
They are already fully depreciated. Even though it may cost 
some money to do whatever retrofits would be required in order 
to allow license extension, that is money very well spent.
    Relative to the line item--I am not trying to duck this--
but this gets into the philosophy of not creating new line 
items or trying to--because I would frankly tell you when we 
originally submitted this, I put it in a different line item. 
But this was in terms of the budget submission and decided to 
be consolidated and that was determined to be the best place to 
consolidate it.
    Mr. Visclosky. On the money side, from your perspective, 
2010 is adequate to start----
    Mr. Spurgeon. I think 2010 is adequate to start, yes, sir.
    Mr. Visclosky. If you could--and we have had some 
discussion already about the fuel bank. Could you just give 
impressions of the fuel bank program and where you are and the 
Department is for 2008 and looking at 2009?
    Mr. Spurgeon. We have announced that we--when we talk about 
blending down 17.4 metric tons of highly enriched uranium--and, 
by the way, NNSA is the organization that does this, so that I 
am being clear as to where these programs reside. But I am 
going to make a guess here. Blended down, that is worth about 
half a billion dollars, $500 million or so. So the U.S. 
contribution to this fuel bank is very substantial, and the 
Secretary has publicly supported our participation in this.
    The things that then go on and what we are doing, and there 
have been meetings in Vienna with a number of people, there 
were a number of proposals as to how this bank will actually 
operate. And you now get into the weeds of, okay, we now have 
the material in the bank. What are the conditions under which 
you can draw the material from the bank? How do we set that up 
from an IAEA standpoint? How do they administer it?
    That is where the system is now. We have had people say 
that are going to support the concept, and now it gets down 
into the nitty-gritty. Now let's develop the basic operating 
vehicles that are going to allow it to function.

            BENEFITS TO NEVADA FOR ACCEPTANCE OF REPOSITORY

    Mr. Visclosky. Mr. Sproat, one last item on Nevada. And 
there has at least been general question as to how many dollars 
have been spent in Nevada on Yucca. But are there specific 
benefit programs that have been discussed for the State in 
anticipation of their acceptance of the depository?
    Mr. Sproat. The Nuclear Waste Policy Act specifically 
authorizes the Secretary of Energy to engage in discussions 
with the State of Nevada on potential benefits packages, 
everything from payments in lieu of taxes to a wide range of 
opportunities. Once the Yucca Mountain site was selected by the 
Congress back with the Nuclear Waste Policy Act Amendment back 
in 1987 and the State made the decision that it would fight the 
repository, the State has been unwilling to enter into any 
discussions whatsoever with the Federal Government regarding a 
benefits package. So, essentially, you know, I know that there 
were attempts to have discussions before, and they have been 
rebuffed.
    Mr. Visclosky. So it is not a question of losing them. It 
is just at this point there is no discussion----
    Mr. Sproat. The State has shown no interest in having any 
discussions on that issue.
    Mr. Visclosky. I want to thank the members who are here, as 
well as Mr. Hobson in absentia, and Mr. Spurgeon, Mr. Sproat 
for your time and especially your courtesy in staying during 
the votes. It was a disruption, but I appreciate that.
    And, obviously, we aren't in unanimity on all issues, but I 
would add my voice, and I appreciate your service. And, Mr. 
Sproat, in particular you have a very difficult--I mean you 
both do--but Yucca has been very hard as far as the financing 
issue. And from what you are saying, Mr. Sproat, you have 
learned many things in the last couple of years.
    Mr. Sproat. Yes, I have. But I appreciate the committee's 
support.
    Mr. Visclosky. We learn every day.
    Gentlemen, thank you very much.
    [Questions and Answers for the Record follow:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]



                           W I T N E S S E S

                              ----------                              --
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                                                                   Page
D'Agostino, T. P.................................................     1
Donald Admiral K. H..............................................     1
Smolen, Brigadier General (Retired) R. L.........................     1
Sproat, E. F., III...............................................   367
Spurgeon, D. R...................................................   367
Tobey, William...................................................   191















                               I N D E X

                              ----------                              --
--------

                 Weapons Activities and Naval Reactors

                                                                   Page
Aging Workforce..................................................    43
Chairman Visclosky's Opening Statement...........................     1
Complex Transformation (600 Buildings)...........................    69
Comprehensive Strategy...........................................    25
Contractor Performance...........................................    54
Environmental Management.........................................26, 77
Facility Problems................................................    46
General Robert Smolen's Opening Statement........................    44
IFDP.............................................................    48
INL Storage......................................................    29
Lawrence Livermore...............................................43, 45
Material Consolidation...........................................    32
MOX..............................................................25, 34
Mr. Hobson's Opening Statement...................................    33
NNSA Cleanup Costs...............................................    67
Reactors.........................................................    46
Warheads.........................................................    54

             Department of Energy: Nuclear Nonproliferation

Budget Cuts Concerns.............................................   221
Chairman Visclosky's Opening Statement...........................   191
Competitive Solicitation.........................................   226
Defense Nuclear Nonproliferation.................................   214
GNEP.............................................................   211
International Nuclear Safeguards and Engagement Program..........   212
IPP Program......................................................   229
Megaports........................................................   216
MOX............................................................215, 230
Mr. Hobson's Opening Statement...................................   192
Mr. Tobey's Opening Statement....................................   193
NNSA's IPP Programs..............................................   218
Nonproliferation Activities......................................   227
North Korea......................................................   228
Pakistan.......................................................224, 225
Reprocessing Activities..........................................   227
Russia...........................................................   226
Secure Storage Locations.........................................   224
Securing Nuclear Arsenal and Nuclear Material....................   223
Security Issues..................................................   220

         Department of Energy--Nuclear Energy and Nuclear Waste

Benefits to Nevada for Acceptance of Repository..................   456
Chairman Visclosky's Opening Statement...........................   366
Competition......................................................   399
Conflict of Interest Restrictions................................   425
Expansion of Nuclear Power.......................................   390
Fission Energy...................................................   423
Funding for Yucca Mountain.......................................   415
GNEP......................................................401, 418, 451
Liability Costs of Onsite Storage................................   416
License Application..............................................   385
Loan Guarantees..................................................   443
MOX Transfer...................................................387, 420
Mr. Hobson's Opening Statement...................................   367
Mr. Sproat's Opening Statement...................................   378
Mr. Spurgeon's Opening Statement.................................   371
National Laboratories............................................   445
Next Generation Nuclear Plants...................................   455
NRC License Application..........................................   392
Nuclear Power..................................................397, 448
Nuclear Waste Policy Act.........................................   399
Office of Nuclear Energy Funding.................................   404
Potential Sites for Second Repository............................   442
Recycling Spent Fuel.............................................   411
University Research Reactors.....................................   448
Yucca Mountain Capacity..........................................   450