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


 
        NUCLEAR POWER IN A WARMING WORLD: SOLUTION OR ILLUSION? 

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

                                HEARING

                               before the
                          SELECT COMMITTEE ON
                          ENERGY INDEPENDENCE
                           AND GLOBAL WARMING
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 12, 2008

                               __________

                           Serial No. 110-28


             Printed for the use of the Select Committee on
                 Energy Independence and Global Warming

                        globalwarming.house.gov

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

61-529 PDF                       WASHINGTON : 2010

For sale by the Superintendent of Documents, U.S. Government Printing 
Office, http://bookstore.gpo.gov For more information, contact the GPO 
Customer Contact Center, U.S. Government Printing Office, Phone 
202-512-1800 or 866-512-1800 (toll free), E-mail, [email protected] 






















                SELECT COMMITTEE ON ENERGY INDEPENDENCE
                           AND GLOBAL WARMING

               EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon              F. JAMES SENSENBRENNER, Jr., 
JAY INSLEE, Washington                   Wisconsin
JOHN B. LARSON, Connecticut            Ranking Member
HILDA L. SOLIS, California           JOHN B. SHADEGG, Arizona
STEPHANIE HERSETH SANDLIN,           GREG WALDEN, Oregon
  South Dakota                       CANDICE S. MILLER, Michigan
EMANUEL CLEAVER, Missouri            JOHN SULLIVAN, Oklahoma
JOHN J. HALL, New York               MARSHA BLACKBURN, Tennessee
JERRY McNERNEY, California
                                 ------                                

                           Professional Staff

                     David Moulton, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Thomas Weimer, Minority Staff Director




















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............     1
    Prepared statement...........................................     3
Hon. F. James Sensenbrenner, Jr., a Representative in Congress 
  from the State of Wisconsin, opening statement.................     5
Hon. Emanuel Cleaver II, a Representative in Congress from the 
  State of Missouri, opening statement...........................     6
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     8
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................     8

                               Witnesses

Mr. Alex Flint, Senior Vice President of Government Affairs, 
  Nuclear Energy Institute.......................................     9
    Written Statement............................................    12
Ms. Sharon Squassoni, Senior Associate, Nonproliferation Program, 
  Carnegie Endowment.............................................    17
    Written Statement and prepared mapping material..............    20
    Answers to submitted questions...............................    94
Mr. David Lochbaum, Director, Nuclear Safety Project, Union of 
  Concerned Scientists...........................................    38
    Written Statement............................................    41
Mr. Amory Lovins, Chairman and Chief Scientist, Rocky Mountain 
  Institute......................................................    63
    Written Statement............................................    65

                           Submitted Material

Article by Roger H. Bezdek and Robert M. Wendling on ``Real 
  Numbers: The U.S. Energy Subsidy Scorecard'' in Issues in 
  Science and Technology, National Academies of Science, Spring 
  2006...........................................................   101
Hon. Joe Barton letter from Congressional Budget Office on 27 
  July 2005......................................................   105
Article by Amory B. Lovins on Nuclear Power: economic and 
  climate-protection potential, Rocky Mountain Institute on 6 
  January 2006...................................................   109
Article by Amory B. Lovins and Imran Sheikh, ``Forget Nuclear'' 
  for Rocky Mountain Institute prepublication draft 11 March 2008   136
Article by Amory B. Lovins on Mighty Mice for Nuclear Engineering 
  International, December 2005...................................   146


        NUCLEAR POWER IN A WARMING WORLD: SOLUTION OR ILLUSION?

                              ----------                              

                       WEDNESDAY, MARCH 12, 2008

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:05 a.m. in Room 
311, Cannon House Office Building, Hon. Edward J. Markey 
[chairman of the committee] presiding.
    Present: Representatives Markey, Herseth Sandlin, Cleaver, 
Hall, McNerney, Sensenbrenner, and Blackburn.
    Staff present: Jonathan Phillips.
    The Chairman. Good morning. This is a hearing conducted by 
the Select Committee on Energy Independence and Global Warming. 
We welcome you this morning to this very, very important 
hearing.
    The hearing is now called to order.
    Decades ago, Americans from Wall Street to Main Street 
rejected nuclear power. After years of construction delays, 
reactor shutdowns and massive cost overruns, the private sector 
abandoned nuclear energy. Americans nervous about the health 
and safety of their families and communities had few objections 
to seeing the nuclear construction age grind to a halt.
    However, the growing threat of global warming has thrust 
nuclear power back into the debate. With the health of our 
planet on the line, some believe that all options, even those 
set aside long ago, merit our support. I called this hearing 
today to take a deeper look at whether continuing taxpayer 
support of nuclear power gets us closer to achieving our energy 
and climate goals or whether it is holding us back.
    All of the available evidence suggests the prospective 
costs, risks and uncertainties facing the nuclear industry are 
higher today than they have ever been. The domestic 
manufacturing and human resource capacity of nuclear power has 
dwindled. Nuclear construction worldwide has slowed to a crawl. 
And the nuclear projects currently under construction are 
plagued by the same delays and cost overruns that have always 
riddled the industry.
    In addition to these profound, direct problems, the 
collateral-damage issues--uranium mining impacts, long-term 
waste storage, nuclear weapons proliferation, targets for 
terrorism--are even greater.
    The last new nuclear plant opened in 1996 in Tennessee 
after 22 years of construction and at a cost of $7 billion. Are 
delays like this acceptable in any other industry?
    Florida Power & Light recently announced its plans for two 
new reactors at its Turkey Point facility, which it projects 
will cost from $12 billion to $24 billion. Could the most 
ambitious solar- or wind-generating station succeed if its cost 
projections included uncertainties of $12 billion?
    Another electric utility, Progress Energy, announced 
yesterday that it plans to build two reactors at an estimated 
price of $17 billion, passing on an additional cost to 
customers of about $9 per month per household. Customers would 
begin paying this surcharge beginning in 2009, 7 years before 
the project would produce a single kilowatt of electricity. Can 
the wind industry ask for and expect to receive a 7-year cash 
advance from future customers?
    At the Select Committee hearing last week, we witnessed the 
power of free markets rising to meet our energy and climate 
challenges. Private capital markets are moving billions of 
dollars into clean, renewable energy technologies, in the 
process creating new jobs and driving economic growth. As proof 
that this green revolution is taking hold, the wind industry 
installed over 5,200 megawatts of new generating capacity in 
the United States last year, about 30 percent of all new 
capacity installed in the United States.
    Worldwide, the story is the same. The 20,000 megawatts of 
wind energy capacity built in 2007 was more than 10 times that 
of nuclear. Between now and 2016, the year in which we are 
likely to see the first new nuclear plant come on line in the 
United States, the world is projected to add 361,000 megawatts 
of wind. That means, in the next 10 years, as much wind-
generating capacity will be installed as the total amount of 
nuclear capacity built worldwide over the previous half-
century.
    The job of Congress is not to fix problems by creating new 
ones or, in this case, recreating them. The innovative spirit 
of the American entrepreneur is forging a path forward. It is 
clean, it is scalable, it is distributed, it is safe, and its 
price is falling. These are claims that nuclear power cannot 
make.
    Taxpayer support for the nuclear industry over the past 50 
years has been massive. From 1950 through 2000, the nuclear 
energy industry received $145 billion in Federal subsidies in 
constant 1999 dollars, or over 96 percent of the total 
subsidies allocated to wind, solar and nuclear energy.
    The American public and financial investors are responsible 
for putting nuclear power on mothballs. Congress must think 
long and hard about the wisdom of reversing that decision. 
Let's trust and encourage the ingenuity of the American people 
to solve the energy and climate challenge. The nuclear industry 
is not going to be the economic driver of the 21st century, but 
there is abundant evidence that renewable energy will.
    That completes the opening statement of the Chair.
    I now turn to recognize the ranking member of the 
committee, the gentleman from Wisconsin, Mr. Sensenbrenner.
    [The prepared statement of Mr. Markey follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    Today, I will talk about the merits of nuclear energy, 
which is a technology that stands to produce real results in 
reducing greenhouse gasses.
    But, first, let me be clear. I understand that nuclear 
technology has drawbacks too, as do renewable resources and 
fossil fuels. While some here today will try to sell the merits 
of one technology over another, I will not do that, because, in 
the end, Members of Congress are setting policy, not selling 
energy. It is the utilities and the energy producers who will 
sell energy and electricity in the marketplace. I believe it 
should be the marketplace, not regulators and policymakers, 
which ultimately decides what sources of energy are the most 
realistic for the future. It is not Congress's job to pick 
winners and losers, but I worry that many on this panel aim to 
do just that.
    Nuclear power is efficient and cost-effective and, I 
believe, in many places, the right answer for our electricity 
needs, but it is not the right answer for all places.
    Nuclear power is an especially useful solution for reducing 
greenhouse gas emissions. Mr. Alex Flint, the senior vice 
president of the Nuclear Energy Institute, will testify today 
that the 439 nuclear power plants worldwide help avoid 2.6 
billion tons of CO2 each year. That is more than 
three times the amount of carbon dioxide produced by all the 
cars in the United States in 2005. I welcome Mr. Flint's 
testimony and look forward to learning more about the potential 
that nuclear power offers the world.
    Nuclear power is such a powerful greenhouse gas-reducing 
technology that the Nobel Peace Prize-winning U.N. 
International Panel on Climate Change cited nuclear power as 
one of the key technologies for addressing global warming in 
the future.
    As I stated at our hearing last week, renewable energy has 
its own set of benefits and drawbacks and is not technically 
feasible for all areas of the country. But renewable energy 
should be an increasing part of our energy future, just like 
nuclear power, energy efficiency and fossil fuels. The world's 
energy future needs require us to maintain a diverse portfolio 
of energy technologies.
    While some today will highlight the drawbacks of nuclear 
power, they do so without fully acknowledging the drawbacks of 
other technologies they support. For instance, a recent story 
in The Washington Post reported on the industrial pollution 
left behind by Chinese solar energy panel producers. And the 
New York Times reported this week that a biodiesel plant in 
Alabama is producing pollution as a byproduct and dumping it 
into a local river. Kermit the frog was right: It is not easy 
being green.
    As I have said many times, the advancement of technology 
must be a part of any energy security or global warming policy. 
Nuclear power should be a key part of the diverse array of 
technologies needed for the future. Plus, nuclear power's 
potential for reducing greenhouse gasses can't be ignored by 
anyone who thinks this is a pressing priority for the world. If 
we are searching for realistic solutions, nuclear power can't 
be ignored but must be approached with a healthy skepticism to 
see whether that is the right thing to do at the right time, at 
the right place.
    I have to apologize to our witnesses because, at 10 
o'clock, I have to go to the Science Committee, where Bill 
Gates is testifying. And I do want to tell him that if he wants 
more high-tech visas, he had better get realistic on how to get 
that through the Congress.
    So I thank the Chairman and yield back the balance of my 
time.
    The Chairman. Great. The gentleman's time has expired.
    The Chair recognizes the gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman and Mr. Sensenbrenner.
    There can be no doubt, or at least there is no doubt in my 
mind, that our planet is in crisis. And our constant, growing 
need for energy has inspired this potentially perilous 
situation.
    However, emerging industries, such as solar and wind 
energy, can aid our country and others in accessing enough 
energy without causing potentially dangerous effects on the 
environment and public health.
    Nuclear energy currently produces 19 percent of our 
Nation's electricity from 104 nuclear reactors, one of which is 
in my home State, not very far from my hometown, Kansas City.
    Nuclear power has the ability to produce domestic energy 
without greenhouse gasses as a byproduct. However, if we can 
recall the disaster of Chernobyl and the reactor accident at 
Three Mile Island, we know all too well that there are 
potentially harmful risks and unintended consequences.
    A large nuclear reactor produces around 25 to 30 tons of 
spent fuel annually. However, the proposed Yucca Mountain waste 
site, about 90 miles from Las Vegas, would only have the 
capacity to hold waste produced through the year 2010. Thus, 
this would only be a temporary solution, but it is a major 
risk.
    Before we invest in the new production of nuclear power, we 
need to thoroughly examine all of the threats to public safety 
and the environment that it presents. We must remember that the 
welfare of our communities is our highest priority. We must 
also consider and make decisions on which energy sources will 
work best for our future.
    I look forward to hearing the views of our witnesses this 
morning, as we discuss this and other ways that we can deal 
with this source of energy without Federal subsidies at a level 
that will break the bank.
    I would like to thank the panel in advance for your insight 
and for joining us here today. Thank you very kindly.
    I yield back the balance of my time.
    [The prepared statement of Mr. Cleaver follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Great. The gentleman's time has expired.
    The Chair recognizes the gentlelady from Tennessee, Mrs. 
Blackburn.
    Mrs. Blackburn. Thank you, Mr. Chairman. I thank you for 
the hearing.
    And I want to welcome all of our guests.
    As we know, nuclear power is a vital component to meet 
future energy needs and help America maintain its competitive 
edge. It is the most stable, least expensive and cleanest form 
of electric power generation available today. It is an 
emissions-free, domestic energy source with enough fuel stocks 
to last for centuries.
    Nuclear energy will also be a key asset to the electric 
power infrastructure as the public embraces the use of electric 
vehicles for transportation needs and if Congress enacts a 
greenhouse gas reduction scheme.
    Some critics maintain that nuclear energy is either too 
costly or that it has too poor a track record. In the past, 
that could have been true. But nuclear power plant construction 
once experienced delays and cost overruns due to licensing 
problems, poor project management and economic chaos of the 
1970s, but Congress mitigated some of these factors in the 
Energy Policy Act of 2005, and the Nuclear Regulatory 
Commission took steps last year to drastically restructure the 
licensing process to ensure all major issues are settled before 
a company starts building a nuclear power plant and puts those 
billions of dollars at risk.
    Further, over time and experience, the nuclear industry has 
vastly reduced past problems by implementing measures to manage 
and to contain risk, to financing and completing capital 
projects. And now, with modular construction, standard designs 
and integrated engineering and construction schedules, nuclear 
power plants can be built both on time and on target.
    Mr. Chairman, the key to achieving American energy 
independence is maintaining a diversity of power generation. We 
cannot rely solely on a few favored energy sources. Gas, coal, 
renewable energy and nuclear power all should play a part in 
the infrastructure.
    I yield back the balance of my time.
    The Chairman. That is great. The gentlelady's time has 
expired.
    The Chair recognizes the gentleman from California, Mr. 
McNerney.
    Mr. McNerney. Thank you. I would like to thank the ranking 
member and the Chairman for holding this timely and important 
hearing.
    My interest today is to get a deeper understanding of the 
merits and the demerits of nuclear energy. I have three main 
concerns: the economics, the safety, and nuclear proliferation.
    Safety, I believe, is an engineering issue, which reflects 
back on the economics. Proliferation is a political and 
engineering issue. So, ultimately, what I want to understand 
today is the economics, and so I am looking forward to your 
testimony. If you can elevate that to where it can be 
understood, I will very much appreciate your hearing today.
    Thank you very much. I yield back the balance of my time.
    The Chairman. Great. The gentleman's time has expired.
    All time for statements by the members has expired, so we 
will turn to recognize our witnesses.
    We are going to begin with Mr. Alex Flint. He is our 
opening speaker. He joins us from the Nuclear Energy Institute 
where he is the senior vice president of government affairs. He 
is also very familiar with these issues from his time as staff 
director of the Senate Committee on Energy and Natural 
Resources.
    We look forward to your testimony, Mr. Flint. Whenever you 
are ready, please begin.

    STATEMENTS OF MR. ALEX FLINT, SENIOR VICE PRESIDENT OF 
   GOVERNMENT AFFAIRS, NUCLEAR ENERGY INSTITUTE; MS. SHARON 
SQUASSONI, SENIOR ASSOCIATE, NONPROLIFERATION PROGRAM, CARNEGIE 
    ENDOWMENT; MR. DAVID LOCHBAUM, DIRECTOR, NUCLEAR SAFETY 
   PROJECT, UNION OF CONCERNED SCIENTISTS; MR. AMORY LOVINS, 
     CHAIRMAN AND CHIEF SCIENTIST, ROCKY MOUNTAIN INSTITUTE

                    STATEMENT OF ALEX FLINT

    Mr. Flint. Chairman Markey, Ranking Member Sensenbrenner, 
members of the committee, thank you for the opportunity to 
appear before you today. I have a written statement that I ask 
be included in the record.
    The Chairman. Without objection, it will be included in the 
record.
    Mr. Flint. Mr. Chairman, in preparation for this morning's 
hearing, I scanned through your book, ``Nuclear Peril.'' It has 
been a long time since I read it. I was struck by how very 
different the U.S. nuclear industry is today from when you 
wrote your book in 1982.
    It also reinforced for me the years and now decades in 
which you have been concerned about nuclear energy and weapons. 
It is with sincere appreciation of that concern that I thank 
you for taking the time to consider the attributes of nuclear 
energy, which make it so interesting and compelling as we 
decide how to address the challenge of climate change.
    Because of rapid population and economic growth, EIA 
forecasts global electricity demand to nearly double between 
2004 and 2030. It is extraordinarily challenging to imagine 
credible scenarios by which the world can double electricity 
production in the coming decades and concurrently reduce 
greenhouse gas emissions. To do so will take the successful 
implementation of a wide range of solutions, as Professors 
Pacala and Socolow made clear in their wedge analysis. To do so 
will require the widespread use of renewables, conservation, 
efficiency, carbon sequestration and nuclear energy.
    That conclusion is shared by leaders and governments around 
the world. My written statement includes quotes and references 
in that regard from individuals and groups, including Yvo de 
Boer, the Fourth Assessment Report of the IPCC, the World 
Energy Council, the World Business Council for Sustainable 
Development, Dr. Jeffrey Sachs, and the Progressive Policy 
Institute.
    The willingness of individuals and organizations that would 
not otherwise be so inclined to consider and now support the 
deployment of new nuclear power plants is due, in part, to the 
need to identify all credible ways to reduce greenhouse gas 
emissions. However, this reconsideration also is made possible 
by the extraordinarily safe and efficient operation of the 
existing nuclear fleet.
    In 2007, the 104 reactors in the U.S. nuclear fleet 
operated at 92 percent of capacity. That was accomplished 
because of high management standards, a focus on reliability 
and safety, and fewer and shorter outages. It enabled nuclear 
power plants, which are 12 percent of installed U.S. generation 
capacity, to produce nearly 20 percent of the electricity 
generated in the United States last year.
    Concurrently, production costs continued to fall last year 
to 1.68 cents per kilowatt hour, a record low and the 7th 
straight year that nuclear plants have had the lowest 
production cost of any major source of electricity.
    Nuclear power plants generate over 70 percent of all 
carbon-free electricity in the United States, and prevented 681 
million metric tons of carbon dioxide emissions in 2006. For 
perspective, the volume of greenhouse gas emissions prevented 
at the Nation's 104 nuclear power plants is equivalent to 
taking 96 percent of all passenger cars off the roads.
    Our nuclear power plants are also extraordinarily safe 
places to work. In 2006, our lost time accident rate was 0.12 
accidents per 200,000 worker hours. That is significantly safer 
than the 3.5 accidents per 200,000 worker hours in the 
manufacturing sector. It is even safer to work at a nuclear 
power plant than it is to work at a bank.
    At a global level, 439 nuclear power plants produce 16 
percent of the world's electricity while avoiding the emission 
of 2.6 billion metric tons of CO2 each year. And a 
new build renaissance is under way. There are 34 nuclear units 
under construction worldwide, including seven in Russia, six in 
India and five in China. In the United States, we have one, the 
5-year, $2.5 billion completion of TVA's Watts Bar 2.
    In the United States, 17 companies or groups of companies 
are preparing license applications for as many as 31 new 
reactors. Five complete or partial applications for COLs were 
filed with the NRC in 2007, and another 11 to 15 are expected 
this year. As a result, the industry expects four to eight new 
U.S. plants in operation by 2016 or so, depending on a variety 
of factors that are provided in my written statement. A second 
wave could be well under construction as the first wave reaches 
commercial operation.
    Every source of electricity has benefits and challenges. 
Capital costs for new nuclear plants are significant. However, 
when both operating and capital costs are considered, nuclear 
power will be competitive with other new sources of 
electricity.
    Chairman Markey, you mentioned the Florida Power & Light 
Company petition for determination of need. One of the things 
in that petition was FP&L's finding that the addition of new 
nuclear capacity is economically superior versus the 
corresponding addition of new gas-fired combined cycle units 
required to provide the same power output.
    At the peak of construction, a nuclear plant will employ 
2,300 skilled workers. Upon completion, approximately 700 
workers will be required to operate and maintain the plant. 
Those workers receive excellent benefits and earn pay that is, 
on average, 40 percent higher than wages earned by workers 
doing similar work in nonnuclear facilities.
    The industry also is working with organized labor to 
develop training and other programs to provide the cadre of 
highly skilled workers that our future requires. NEI supports 
the application of Federal prevailing wage requirements, 
contained in the Davis-Besse Act of 1931, to loan guarantees 
authorized by title 17 of the Energy Policy Act of 2005.
    In addition, NEI is working aggressively to revitalize the 
United States' nuclear manufacturing infrastructure. The global 
nuclear renaissance will require additional capacity for a 
range of products, from very small components to ultra-heavy 
steel forgings and castings.
    Even as we work to build the next fleet of advanced 
reactors for electricity production, we also are developing 
reactors that will provide energy security and environmental 
benefits well beyond the traditional electric sector. One 
promising next-generation technology is the high-temperature 
gas reactor. Its unique design is well-suited to meet a wide 
variety of future needs, such as the production of hydrogen, 
drinking water, industrial process heat, and to generate 
electricity appropriate for the distribution systems in 
developing countries.
    In closing, nuclear energy is the single largest source of 
non-carbon-emitting generation. It is a proven technology, 
operated at high standards, by an experienced industry that is 
committed to safety. It is the only energy option available 
today that can provide large-scale electricity, 24/7, at a 
competitive cost, without emitting greenhouse gasses.
    Mr. Chairman, that concludes my statement. I would be glad 
to take any questions.
    [The prepared statement of Mr. Flint follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Flint, very much.
    Our second witness is Ms. Sharon Squassoni, who has been 
analyzing arms control and nonproliferation issues for 20 
years. She is a senior associate in the nonproliferation 
program at the Carnegie Endowment for International Peace. She 
has also served in the Nonproliferation and Political Military 
Bureaus in the State Department.
    We welcome you. Whenever you are ready, please begin.

                 STATEMENT OF SHARON SQUASSONI

    Ms. Squassoni. Good morning. Thank you, Chairman Markey and 
Ranking Member Sensenbrenner and other members of the 
committee, for inviting me to provide comments on the topic of 
nuclear energy expansion and its contribution to mitigating 
global climate change.
    Chairman Markey, I would like to request permission to 
submit longer testimony for the record, and I will summarize my 
remarks here.
    The Chairman. Without objection, so ordered.
    Ms. Squassoni. Thank you.
    In addition, I would like to present a few graphics on 
nuclear expansion, which I understand is unorthodox, but, in 
this case, a picture may be worth a thousand words.
    Recent nuclear enthusiasm stems from several expectations: 
that it can help beat global climate change, meet rapidly 
increasing demand for electricity, combat rising costs for oil 
and gas, and provide energy security. The gap between 
expectations and reality, however, is significant. This 
morning, I will focus on what it will really take for nuclear 
energy to make a difference in terms of global climate change 
and why this is unlikely to happen.
    As you can see on the first slide, global nuclear reactor 
capacity now stands at 373 gigawatts electric, or about 439 
reactors. By 2030, under what I call a ``realistic growth 
scenario,'' which is based on U.S. Energy Information 
Administration figures, that capacity could grow about 20 
percent. Yet, since electricity demand is expected to almost 
double in that time, nuclear energy is unlikely to keep its 
market share, which could drop from the current 16 percent to 
10 percent of worldwide electricity generation.
    In the U.S. alone, according to nuclear industry estimates, 
a stable market share for nuclear energy would require the U.S. 
to build 50 nuclear reactors by 2025. At the same time, the 
U.S. would also be building 261 coal-fired plants, 279 natural-
gas-fired plants and 73 renewables projects. This is based on, 
I believe, Booz Allen Hamilton information.
    States' plans for nuclear energy, however, may be anything 
but realistic. What you are looking at now are these red dots, 
which are 2030 plans, the announced intentions of States for 
nuclear energy.
    In my second scenario, what I call the ``wildly 
optimistic'' one, the total reactor capacity would reach about 
700 gigawatts by 2030. This is not a projection but, rather, 
takes at face value what States have announced they will do. 
More than 20 nations have announced intentions to install 
nuclear capacity that do not now have nuclear power plants. 
More than half of these are in the Middle East.
    The final scenario depicts what an expansion to 1,500 
gigawatts might look like based roughly on the high-end 
projections for 2050 done by MIT in its 2003 study entitled, 
``The Future of Nuclear Power.'' I call this the ``climate 
change scenario.'' It is a little bit more than a Pacala-
Socolow wedge, which is defined as the level of growth needed 
to reduce carbon emissions by more than 1 billion tons per year 
by 2050, which equals about 1,070 gigawatts, but it is less 
than the Stern report on climate change estimates that nuclear 
energy could reduce carbon emissions between 2 billion and 6 
billion tons per year. The Stern numbers were literally off the 
map, so I did not include them here.
    For 1,500 gigawatt capacity, MIT estimated that 54 
countries, which is an additional 23 compared to today, would 
have commercial nuclear power programs. This essentially means 
a fivefold increase in the number of reactors worldwide and an 
annual build rate of 35 reactors per year.
    If we go to the next slide, you can see what this looks 
like. This is 2030 and, again, 2050. These are all new nuclear 
power states.
    Then, if you go to the next slide, you will see a closer 
look. The darker the color, the firmer the plans are. When I 
say ``announced intentions,'' some of these plants will never 
come to fruition.
    These expansion scenarios have implications for both the 
front and back ends of the fuel cycle. As the next graph shows, 
building one nuclear wedge would require tripling uranium 
enrichment capacity. So that is the first green bar that you 
see. The orange is today's enrichment capacity, about 50 
million separative work units. In the first green one, there is 
the climate change scenario. As you see, it gets much larger if 
you go to the Stern numbers.
    New states could find it economically feasible to develop 
their own enrichment. If we go to the next slide, you will see 
that is current enrichment capacity. Keep going; these are 2030 
plans. Then beyond climate change, you see that a lot more 
states could potentially be enriching. These are also a little 
bit lower than the MIT numbers, which estimated, I guess, that 
18 countries would have enough reactor capacity to merit 
enrichment.
    It is unlikely that these expansion rates will be achieved, 
however. The U.S. has just a fraction of the nuclear 
infrastructure it had decades ago, 2 decades ago, and other 
countries have not fared much better. In the last 20 years, 
there have been fewer than 10 new construction starts in any 
given year. Industrial bottlenecks are significant now, 
particularly in forging reactor-pressure vessels and steam 
generators.
    The sole company with ultra-large forging capacity, Japan 
Steelworks, has a 2-year waiting list. When it completes its 
expansion in 2010, it will only produce enough forging sets for 
eight reactors per year. The capabilities of alternative 
suppliers, such as China, are unknown.
    Other constraints include labor shortages, not just in 
engineers but also craft and construction labor, and long lead 
times for components and materials. Financing is another huge 
topic, worthy of a separate hearing. And the cost of inputs has 
risen significantly in recent years.
    Finally, the proliferation risks of nuclear expansion are 
not limited just to a three-, four- or fivefold increase in the 
number of reactors. Some states may move forward anyway, 
propelled by unrealistic expectations, and could acquire 
uranium enrichment and plutonium separation capabilities. Such 
national fuel production capabilities could introduce even 
greater uncertainty about proliferation intentions in regions 
like the Middle East because of the latent nuclear weapons 
capability of such plants. Efforts to address both supply and 
demand for such sensitive capabilities need to be redoubled.
    The current policy debate paints nuclear energy clean and 
green; advocates nuclear energy for all, even though some 
states with nuclear reactors could pose significant safety and 
proliferation concerns; and suggests that nuclear energy is a 
path to energy security.
    At the same time, U.S. officials insist that some states 
forgo developing indigenous nuclear capabilities. This confused 
message obscures important policy considerations. If nuclear 
energy----
    The Chairman. Could you try to summarize, please?
    Ms. Squassoni. Last sentence.
    If nuclear energy can't really make a difference in terms 
of global climate change, are the huge costs and risks worth 
it?
    Thank you.
    [The prepared statement of Ms. Squassoni follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you so much.
    Our next witness is Mr. David Lochbaum. He is the director 
of the Nuclear Safety Project for the Union of Concerned 
Scientists, where he leads the efforts to ensure the safety of 
nuclear power in the United States. Mr. Lochbaum has more than 
17 years of experience in commercial nuclear power plant 
startup, testing, operations, licensing, software development, 
training, and design engineering.
    We welcome you, sir. Whenever you are ready, please begin.

                  STATEMENT OF DAVID LOCHBAUM

    Mr. Lochbaum. Thank you, Mr. Chairman and members of the 
committee. I appreciate this opportunity to present our views.
    I have submitted a written statement that I request be 
entered into the record.
    The Chairman. Without objection, so ordered.
    Mr. Lochbaum. 253 nuclear power reactors have been ordered 
in the United States. 28 percent were cancelled before 
construction even began. Another 20 percent were cancelled 
after construction began. So about half of the reactors ordered 
never generated a single watt of electricity.
    But what about the other half? 11 percent of the reactors 
ordered shut down prematurely due to unfavorable economics. 14 
percent of the reactors ordered are operating today but have 
had to shut down for at least a year to restore safety levels. 
Only 27 percent of the reactors ordered are operating today 
without having experienced a year-plus safety restoration 
outage.
    The NRC anticipates 33 nuclear reactor applications in the 
near term. Running the calendar forward 55 years could yield 
the following retrospective: 33 nuclear reactors ordered, nine 
reactors cancelled before construction began, seven reactors 
cancelled after construction began, four reactors shut down due 
to economics, four reactors operating despite 1-or-more-year-
plus outages, nine reactors operating without a year-plus 
outage.
    Does past performance predict the future? Yes, when the 
underlying causes and behavior patterns are firmly in place, as 
if set in concrete.
    Nearly 30 years ago, during the 97th Congress, the House 
held a hearing on construction problems caused by poor quality 
control. Chairman Udall posed four questions: How did these 
quality assurance failings occur? Why did the failings go 
undetected so long by the owners and the NRC? What is being 
done to minimize the likelihood of future failings? How can we 
be sure that completed plants have been constructed in 
accordance with NRC's regulations?
    The answer to the first question is mismanagement by plant 
owners, a recurring theme in nuclear power plant problems since 
that hearing. Mismanagement shut down all of TVA's nuclear 
plants in the 1980s, it shut down eight reactors for over a 
year in the late 1990s, shut down Davis-Besse for over 2 years 
earlier in this decade, and caused the current problems at the 
Palo Verde plant in Arizona.
    The answer to question two is mismanagement by the plant 
owners, coupled by ineffective oversight by the NRC. The 
companion theme in nuclear plant problems since that hearing 
has been ineffective oversight by the NRC. The GAO reported in 
1997, quote, ``NRC is not effectively overseeing the plants 
that have problems. NRC enforcement actions are too late to be 
effective,'' end quote. Seven years later, almost to the day, 
GAO updated its conclusion: Quote, ``NRC should have but did 
not identify or prevent the vessel head corrosion at Davis-
Besse because both its inspections at the plant and its 
assessments of the operator's performance yielded inaccurate 
and incomplete information on plant safety conditions,'' end 
quote.
    The names and the dates change, but the underlying pattern 
of mismanagement, coupled with ineffective NRC oversight, 
remains the same.
    The answer to question three is that quality assurance 
failings during nuclear plant construction were minimized when 
we stopped constructing nuclear power plants. The problem was 
never solved; it just became moot.
    The answer to question four is that no such assurance 
exists. In 2000, the NRC reported hundreds of design errors at 
operating plants--prima facie evidence that the completed 
reactors did not meet NRC's regulations. 70 percent of those 
design errors dated back to original construction that were not 
detected.
    More recently, there are signs that the nuclear industry 
cannot even renovate its existing plants. Consider the two 
reactors at Quad Cities, licensed in 1972. 29 years later, the 
NRC approved increasing its power level by 20 percent. Within 3 
weeks, the unit 2 reactor was shut down due to repair leaks 
caused by vibrations from the hot-air steam flows. During 
restart, vibrations broke a drain line off a steam pipe. Weeks 
later, the reactor had to be shut down again when vibrations 
damaged the steam dryer. The owner reported, quote, ``The root 
cause of the steam dryer failure was determined to be a lack of 
industry experience and knowledge of flow-induced vibration 
dryer failures,'' end quote.
    If the nuclear industry is inexperienced and knowledge-
challenged about their old reactors, how can they have 
sufficient knowledge and experience to tinker with new ones?
    The Energy Bill of 2005 contains billions of dollars of 
subsidies to jumpstart a moribund nuclear industry to help 
address global warming. Nuclear power plant owners are 
protected when their mismanagement causes a reactor under 
construction to be cancelled, a reactor under construction to 
take longer and cost more, or an operating reactor to melt 
down. But how are Americans protected from global warming when 
their mismanagement causes nuclear power plant ``solutions'' to 
come up empty? Clearly, Americans deserve protection against 
the nuclear industry defaulting on its global warming pledges, 
especially since so many of our tax dollars are subsidizing 
those pledges.
    The best protection would be a zealously aggressive 
regulator enforcing safety regulations. The NRC is not that 
regulator.
    The NRC needs to take three steps toward becoming that 
regulator: institute safety culture surveys of its workforce 
every 2 years and make the results available; fill senior 
manager vacancies from a pool that includes external 
candidates; institute a rotation plan in which middle-level 
managers are rotated to other Federal agencies and middle 
managers from those agencies come to work at the NRC.
    If the NRC is not reformed, nuclear power will be more of 
an illusion than a solution to global warming.
    Thank you.
    [The prepared statement of Mr. Lochbaum follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Lochbaum, very much.
    Our final witness is Mr. Amory Lovins, who is chairman and 
chief scientist of the Rocky Mountain Institute and chairman 
emeritus of Fiberforge, Incorporated. Mr. Lovins has published 
29 books and hundreds of papers, and advises governments and 
major firms worldwide on advanced energy and resource 
efficiency.
    We are honored to have you with us here today, Mr. Lovins. 
Whenever you are ready, please begin.

                   STATEMENT OF AMORY LOVINS

    Mr. Lovins. Thank you, Mr. Chairman and distinguished 
committee members. I appreciate this opportunity to share with 
the committee some recent analysis of whether we need nuclear 
power, especially to protect the climate.
    And I request that my written submission be included in the 
record.
    The Chairman. Without objection, so ordered.
    Mr. Lovins. Thank you.
    I will summarize why nuclear power is not needed for any 
civilian purpose, how and why it is being dramatically 
outcompeted in the global marketplace by no-carbon and low-
carbon electrical resources that deliver far more climate 
solution per dollar far faster, and why nuclear expansion would 
inhibit climate protection, energy security and reliably 
powering prosperity. Even if nuclear power could attract 
private risk capital, it could not in principle deliver its 
claimed climate and security benefits, but because it is 
uneconomic and unnecessary, we need not inquire into its other 
attributes.
    Far from undergoing a renaissance, nuclear power is 
conspicuously failing in the marketplace for the same forgotten 
reason it failed previously: It costs too much, and it bears 
too much financial risk to attract private risk capital, 
despite Federal subsidies now approaching or exceeding its 
total cost.
    What is beating nuclear power at other central thermal 
plants? Micropower--that is, cogeneration plus distributed 
renewables--now produces a sixth of the world's total 
electricity, more than nuclear, at least a third of the world's 
new electricity, and from a sixth to over half of all 
electricity in a dozen industrial countries. The U.S. lags, 
with about 4 percent. Negawatts, electricity saved by using it 
more efficiently or timely, are about as big worldwide as 
micropower and cost even less.
    In 2006, nuclear power added less capacity than 
photovoltaics added, one-tenth what wind power added, and 30 to 
41 times less than micropower added. Its output growth was one-
sixth of micropower's.
    Distributed renewables won $56 billion of private risk 
capital. Nuclear, as usual, got zero. Only central planners buy 
it. China's distributed renewable capacity reached seven times 
its nuclear capacity and is growing seven times faster.
    Micropower has such huge potential that just the full 
economic use of electric efficiency, zero-carbon waste-heat 
cogeneration and wind power, with no other renewables, could 
provide roughly 13 to 15 times nuclear power's current share of 
U.S. electric generation without significant land use, 
reliability or other constraints, at much lower cost and with 
millions of good new jobs.
    Distributed generators are generally more dependable than 
centralized ones because their many small units will not all 
fail at once and can bypass the grid where nearly all power 
failures originate. Variable renewable resources--sun and 
wind--even in large amounts, need less backup than we have 
already bought and built to manage the intermittence of big 
thermal plants, especially nuclear plants, many of which can 
fail simultaneously, unpredictably and for long periods.
    The Nuclear Energy Institute says 78 percent of the new 
coal plants announced in the past couple of years got 
cancelled. I expect announced nuclear projects to do worse 
because they cost more. They have attracted no private risk 
capital, despite U.S. taxpayer subsidies that can now total 
about $13 billion per new nuclear plant, roughly its entire 
cost, which exceeds the market cap of any U.S. utility, save 
one.
    The smart money, led by Warren Buffet, is now heading for 
the exit, spooked by steeply rising nuclear costs, 
disappointments in the flagship Finnish project, competition by 
ever-cheaper micropower negawatts, and the credit crunch. The 
U.S. can have only about as many new nuclear plants as 
taxpayers are forced to buy. Heroic efforts at near or over 100 
percent subsidization will continue to elicit the same response 
as defibrillating a corpse: It will jump, but it won't revive.
    That is good for climate protection, because nuclear power 
is so expensive that it buys roughly one and a half to 11 or 
more times less carbon reduction per dollar than competing no-
carbon technologies or even fossil fuel cogeneration in 
factories and buildings.
    As the graph in my prefiled testimony's Annex E explains--
or as the graphs explain, I should say--nuclear plants cost so 
much more than competing climate solutions that spending a 
dollar on nuclear, instead of on efficient end use, worsens 
global warming more than spending the same dollar on new coal 
power. It is, therefore, time to get on with judicious 
investments that yield the most energy services and the most 
climate protection per dollar and per year.
    The straightest path to American energy security and to a 
richer, fairer, cooler and safer world is to let all ways to 
save or produce energy compete fairly at honest prices, 
regardless of their type, technology, size, location and 
ownership. That is pretty much the opposite of the Federal 
energy policy we have.
    Thank you, sir.
    [The prepared statement of Mr. Lovins follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. I thank you very much, Mr. Lovins.
    The Chair will now recognize for a round of questions the 
gentleman from Missouri, Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Again, I thank all of you.
    The issue of safety is extremely important in my community. 
We are not far from one of the nuclear facilities, one of the 
104, in our community. We are clearly aware of the two 
significant accidents that have happened in the nuclear 
facilities.
    This would go to any of you. If you were giving information 
to the 1.7 million people in our metropolitan area, what would 
you say that you believe would assure them of the safety of 
such a facility?
    Mr. Flint. If I can take that question, Congressman, I 
would tell you that the track record of the U.S. nuclear power 
plants is that they are exceptionally safe and that the safety 
is improving, and that the metrics by which the NRC tracks 
that--and there are a variety of metrics, be they from the 
Bureau of Labor Statistics, worker injury statistics that were 
in my statement, or be they the NRC's metrics where they track 
unplanned shutdowns and other issues--are all trending very 
positively.
    And so those plants are absolutely safe. They are safe from 
a perspective of their physical operations, from the way in 
which the professional staff operates those plants and from the 
security. In every manner, those plants are currently very 
safe.
    Mr. Cleaver. Yes, I mean, I listened in your statement, and 
I appreciate the information you provided with regard to the 
safety, you know, that it is as safe as working in a bank. But, 
you know, airplane travel is far, far safer than driving an 
automobile. The issue, though, is that there is a possibility 
of surviving an automobile accident. Surviving an airplane 
accident is dramatically lower. And so, you know, people are 
thinking one event at a nuclear facility, a major event, could 
be just devastating. And so people are afraid all over the 
country, which is part of the reason.
    Part of the reason, of course, is the cost, the Federal 
subsidy, which is something we would be concerned about. But 
also, I am not sure that there are a lot of electeds around the 
country who are willing to stand up and say to a community, 
``We are going to build a new facility.'' I mean, you can say 
that electeds do not have courage or whatever, but the truth of 
the matter is people are afraid.
    Mr. Flint. Congressman, we deal with that issue frequently. 
It is a question of helping people understand real versus 
perceived risks.
    I will tell you that, currently, some of the greatest 
support new nuclear power plants have for construction in this 
country comes from the elected officials whose districts 
include those plants and whose communities include those 
plants. Frankly, our polling shows that people who live nearby 
nuclear power plants, who are familiar with them, who know 
people who work at the plants so that they have those personal 
relationships and where they can talk to people, their 
neighbors, actually are some of the strongest supporters of 
nuclear power.
    So I agree with you, we have a perception problem. When we 
are given the opportunity and we sit down with people over a 
period of time and they grow to trust us and they grow to trust 
the people who work at and who operate those plants, those 
perceptions change over time.
    Mr. Cleaver. That may happen. But the other issue that we 
all would have to deal with, as it relates to a community, is 
that the waste is primarily unconverted uranium. When you say 
``unconverted uranium'' in the climate today, there is then 
going to be the discussion about, you know, what if this is 
somehow used or falls in the hands of those who would want to 
harm people in this country?
    And where do we store the waste? What area in the country 
is open and joyful about receiving the waste?
    Mr. Flint. Congressman, you, having a nuclear power plant 
near your district, are well aware of the political 
difficulties associated with storing used fuel on site.
    Ideally, the Nuclear Waste Policy Act, which requires the 
DOE to pick up used fuel beginning in 1998, over a decade ago, 
would be operative. Unfortunately, it is not. As a result, we 
store used fuel on site, be it in pools or dry casks. We do it 
very safely. That fuel is handled in a way in which it is 
protective of the health and environment. It is secure.
    Mr. Cleaver. But we can't continue to do that at each site.
    Mr. Flint. Sir, you are absolutely correct. And the 
Government's failure to move used fuel is extremely 
frustrating, particularly to politicians to whom utilities have 
made promises that used fuel will be moved.
    However, in the absence of DOE meeting its obligations, the 
utilities are responding very constructively to dealing with 
the used fuel on site, and it is currently stored safely and 
securely. It is not an ideal situation, but I can assure you it 
is very protective of health and safety.
    Mr. Cleaver. Thank you, Mr. Flint.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentlelady from South Dakota, Ms. 
Herseth Sandlin.
    Or I could ask questions and come back to the gentlelady?
    Great. Thank you.
    The Chair will recognize himself for a round of questions.
    Mr. Lovins, you heard the argument made by Mr. Flint from 
the Nuclear Energy Institute. This is a stark difference of 
opinion in terms of the economics of nuclear in our country. He 
is contending that nuclear is on the rebound, it has had a 
revival, it is about to produce perhaps four to eight completed 
nuclear power plants by the year 2016, and that the prospects 
beyond that are very rosy, indeed.
    How do you analyze the prospects as you have just heard Mr. 
Flint present them to the committee here today?
    Mr. Lovins. I am very puzzled. The motto in our shop is, 
``In God we trust; all others bring data,'' so I look at the 
numbers. I do not see any private investment in new nuclear 
plants. It has never been bid into a competitive market. It has 
never been bought in what is normally--in the current 
generation, of what is normally considered a free-market 
transaction anywhere in the world. And the competitors that the 
nuclear industry dismisses as uneconomic, impractical and 
trivial are producing more electricity today than nuclear is, 
growing tens of times faster, and it has tens of times 
nuclear's market share.
    So I fear the nuclear industry lives in a sort of ``Alice 
in Wonderland'' world in which nuclear merits every kind of 
subsidy and support because it is supposedly indispensable, 
while it actually has only about a 2 percent market share in 
the world's new electric capacity, and its competitors--
micropower and negawatts--are beating all central plants.
    The Chairman. Now, again, when you say ``negawatts,'' what 
do you mean by--you mean N-E-G, negative watts?
    Mr. Lovins. Correct.
    The Chairman. What do you mean by that?
    Mr. Lovins. And ``N'' for ``Nellie.''
    Negawatts are saved electricity, saved through either 
efficient end use or a demand response. And although they are 
not nearly as well measured as megawatts, they do appear to be 
having about the same annual capacity effect in the world, 
maybe even bigger, as micropower has.
    The Chairman. I want to go over to Mr. Flint and have him 
respond to what you are saying. I think I hear you saying that 
there is no private-sector investment in nuclear power, that 
there is no market right now for private money to be placed 
into the nuclear power market. Is that correct?
    Mr. Lovins. Yes, sir, despite Federal subsidies now 
approaching or exceeding new nuclear plants' U.S. cost.
    Now, I find this really remarkable because, normally, if 
you lay out that lavish a trough, some pigs will arrive. But I 
do not see them arriving, because the private capital market 
believes, in my view, that the reward is not greater than the 
financial cost of risk.
    The Chairman. Let me go over to Mr. Flint then.
    How do you respond to what Mr. Lovins just said? He says 
there is no private capital going into nuclear power.
    Mr. Flint. Well, Mr. Chairman, I appreciate the opportunity 
to address the issue.
    I am confronted with a situation in which many people have 
proposed that nuclear power receives a variety of different 
levels of subsidies. I have tried on occasion to duplicate the 
math, and I can't make some of those numbers work.
    And so I went off and I looked at two different sources. 
And, if you like, I can make these available for the record. I 
have the June 2006 issue of Science and Technology, which is 
the publication of the National Academies. There is an article 
in there entitled ``Real Numbers: The U.S. Energy Subsidy 
Scorecard,'' by Mr. Bezdek and Mr. Wendling of the Management 
Information Services. And they compare the subsidization rates 
of all energy technologies in the United States.
    And let me read one of their conclusions: ``Considerable 
disparity exists between the level of incentives received by 
different energy sources and their current contribution to the 
U.S. energy mix. Although oil has received roughly its 
proportionate share of energy subsidies, nuclear energy, 
natural gas and coal may have been undersubsidized. And 
renewable energy, especially solar, may have received a 
disproportionately large share of Federal energy incentives.''
    Now, that is sort of an aggregate assessment. There are two 
issues--and Mr. Lochbaum mentioned them in his statement--with 
which I am particularly familiar, so I would like to focus on 
those two things.
    The Energy Policy Act of 2005 reauthorized Price Anderson 
in title 6. In title 17, it had a loan guarantee program for 
innovative technologies. Frequently, Price Anderson and the 
loan guarantee title are considered significant subsidies for 
the nuclear energy industry.
    So I brought with me CBO's score of the Conference Report 
on the 2006 Energy Policy Act. CBO, of course, keeps track of 
how much legislation costs. Title 6, which includes Price 
Anderson reauthorization, is not even on the detail table 
attached to that score because it does not score.
    Title 17, for loan guarantees, does warrant a notation in 
the score. In particular, CBO estimated that it would score 
$100 million in outlays, and outlays only, in 2006. From that 
point on, there is a set of zeros that reach out to the end of 
the chart, because CBO estimates that the loan guarantee 
program's cost will be fully paid by the recipients of the 
loans.
    So I have to base my analysis on something, and, in this 
case, I base it on CBO's assessment. I think----
    The Chairman. Are there loan guarantees in that bill for 
solar and wind?
    Mr. Flint. Yes, sir. Title 17 applies to--and I actually 
have it with me, but it will take a minute to dig out--
``Innovative Technologies that Reduce or Sequester Greenhouse 
Gas Emissions,'' I believe is the title. It is not nuclear-
specific. So it is any technology that meets those 
requirements.
    I think part of the reason we get into these discussions 
about the subsidization rates for nuclear in particular is 
because people like Mr. Lovins and I can disagree on some of 
the fundamental issues, like what is the score of the loan 
guarantee title and what is the score of Price Anderson. When I 
turn to independent analyses, I run into things like this 
article and issues in Science and Technology that indicate that 
nuclear power is subsidized at a rate less than other 
technologies.
    The Chairman. Let me go back over to you then, Mr. Lovins. 
You have heard this contention.
    Mr. Lovins. Yes.
    The Chairman. Can you provide further analysis?
    Mr. Lovins. Well, I did not hear an answer to your 
question, Mr. Chairman. What I did hear was some selective 
quotation.
    I, actually, have also relied on the CBO findings that 
there is a well-above-50-percent default risk on nuclear loan 
guarantees. My understanding is that the $18.5 billion latest 
nuclear loan guarantee allocation occurs in a committee 
conference report, not in the actual legislative language, so 
that it evades CBO scoring.
    However, I thought your question was about the absence of 
private capital investment, and I believe that is correct. This 
is simply not an attractive option. Again, I would contrast it 
with just distributed renewables, let alone cogeneration, 
having received $56 billion of worldwide private risk capital 
in 2006 alone. If you add cogen, the total would be well over 
$100 billion, compared to zero for nuclear. And that trend 
continues.
    I was also very puzzled by Mr. Flint's remarks about 
nuclear's being competitive with other sources of electricity. 
The average 1999 through 2006 wind power price in the United 
States was 3.5 U.S. cents per kilowatt hour net of production 
tax credit, which has a levelized value of about .9 cents. This 
is all in 2006 levelized dollars.
    And even if you firm the wind power and even if you count 
the uptick in price to 4.9 average cents in 2006, because 
largely of a shortage of turbines because of the booming 
market, it is still hard to get much over a nickel a kilowatt 
hour. That is approximately a third of any plausible nuclear 
busbar cost on the margin.
    Mr. Flint. Mr. Chairman, may I?
    The Chairman. Please.
    Mr. Flint. This is a continuing dialogue, clearly. He cited 
a CBO analysis that showed a 50 percent default rate on a loan 
guarantee program for nuclear power. There was such a CBO 
analysis. It was for a loan guarantee program that was 
considered in the Energy Policy Act of 2003 on the floor of the 
U.S. Senate. That provision did not pass the Senate. It has not 
become law. The operative document is the CBO analysis of the 
2005 energy policy, a conference report which is the law. As 
you can imagine, it frustrates me significantly to have to be 
able to track every CBO analysis of nuclear-related provisions 
regardless of whether they became law or not. In this case I 
can tell you that the operative analysis shows that the loan 
guarantee title does not score.
    The Chairman. And the reason it does not score, why is 
that, Mr. Flint? How can there be a $40 billion loan guarantee 
program and have it not score and yet have the same agency, 
just a couple of years before, project that there would be a 50 
percent default rate? That doesn't make any sense. How can you 
respect an agency that projects a 50 percent default rate, says 
there is $40 billion at risk, and then scores for all of the 
subsequent years the risk to taxpayers as zero? That makes no 
sense.
    Mr. Flint. Actually, Mr. Chairman, when you read the two 
provisions and you realize that CBO was scoring two different 
proposed laws, it does make a lot of sense. The provisions were 
written very differently. The 2005 provision is written in 
accordance with the Federal Credit Reform Act which requires 
that the cost of the loan guarantees be paid in advance so that 
any cost that will be associated with those loans have to be 
paid by the project sponsors. They will write a check to the 
Federal Government to cover the total cost of the loan 
guarantee. As a result, because they are being paid in advance 
for the cost of the loans, the loan guarantee program in Title 
17 does not score. I mean, I would request that I be able to 
submit this.
    The Chairman. And we would welcome that for the record.
    [The information follows:]
    * * * * COMMITTEE INSERT * * * *
    The Chairman. Mr. Lovins, do you have any comment on this? 
This a very perplexing concept here that all of this taxpayer 
money can be at risk, and yet it is not scored in any way in 
terms of an obligation the taxpayers have assumed.
    Mr. Lovins. Mr. Chairman, in principle the project sponsors 
are supposed to put up what amounts to an insurance premium 
against default. My understanding is that it is up to the 
Department of Energy to determine what is an adequate premium, 
and that the industry expects that this Department of Energy 
will set a very low premium because otherwise the conditions 
would be unacceptable to the industry. I don't think any 
fundamental risk conditions have changed except that probably 
the risk has increased.
    And in a longer paper that I will submit for the record, 
you will find a remarkable history in which the Department of 
Energy initially proposed relatively responsible rules for its 
very generous loan guarantees under the 2005 act, but then 
progressively relaxed the rules under intense pressure from the 
nuclear and financial industries so that the loan guarantees 
are now strippable. They are 100 percent of 80 percent debt 
financing.
    The sponsor is supposed to put up what DOE considers, 
without any criteria, to be a significant equity stake. But the 
sponsors don't seem to be willing to do that, so I assume DOE's 
judgment of what is a significant equity stake will be 
appropriately relaxed. And DOE even put in language in its 
final decision saying that it may even choose to subordinate 
Federal debt to private debt. So the financial industry got 
everything it wanted and yet is still unwilling to invest.
    The Chairman. My time has expired. The Chair recognizes the 
gentlelady from South Dakota, Ms. Herseth Sandlin.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman, and thank you 
for having this hearing. I find the discussion very 
interesting, and in some ways similar to an issue that I have 
worked very hard on in the Congress. And that is the issue of 
biofuels development. And I am not comparing nuclear energy to 
biofuels, but the debate here in trying to get the facts right 
and the ongoing discussion about whether or not there is 
information based on either older technologies or information 
that has been around since the 1970s that really has evolved in 
a way that we have to address this in light of new 
technologies, in light of other new developments and in light 
of priorities that have changed from a policy perspective on 
what is the greater risk that we face, either within the 
country for national security purposes or worldwide as it 
relates to climate change.
    And so I am very interested, as I think the Chairman is, 
and others will be, to continue--whether we get some of the 
information that is being cited here on both sides of the 
argument--to try to figure out what the facts are today and 
some of the arguments and the reputations of those arguments.
    But I am interested a little bit in terms of this 
discussion of sort of the private capital investment, whether 
there is an absence of it, what the reasons may be for that. 
And a lot of what we have done in the Select Committee is taken 
testimony in other hearings as it relates to the experience of 
Europe with its cap-and-trade system.
    And so I would be interested in hearing from any of our 
witnesses today about what you know of the experience in Europe 
as it relates to nuclear energy development prior to and since 
they adopted a cap-and-trade system, and whether or not that 
has affected private capital investment and the levels of that 
investment in European countries that are looking at--that 
either had historically nuclear energy in their portfolio or 
looking at that as a possibility as it relates to the 
requirements of their cap-and-trade system.
    Mr. Lovins. Perhaps I could take that because I am very 
active in Europe. There have been no such nuclear purchases in 
Europe. The one that I expect Mr. Flint would tell you about, 
although he might find other aspects of it embarrassing, is the 
Finish project which was bought by the Finish equivalence of 
TVA. That is, it is a nonprofit customer-based consortium. It 
has long-term power purchase contracts passed through to 
customers. And it got a lot of very well below-free-market 
financing from German and French parastatals, which appears to 
many of us to be illegal, but the Commission hasn't yet said 
so. The plant after 28 months of construction was 24 months 
behind schedule and roughly $2 billion over budget, which was 
not what was supposed to be demonstrated. So this has spooked a 
lot of folks who were thinking otherwise.
    Now, the British Government has lately reversed its 
previous white paper and proposed to build replacements for its 
aging and retiring nuclear reactors and believes this can be 
done in the private market without subsidy. No other country 
has achieved that, so many of us will be interested to see how 
it can be pulled off. The main method of doing it so far 
appears to be that the government, like the French Government, 
has announced a willingness to intervene in carbon markets to 
raise carbon prices high enough for nuclear to compete. I don't 
think this will work, however, because higher carbon prices 
will equally advantage efficiency renewables and largely 
advantage co-gen as well. In other words, the competitors will 
do about as well as nuclear will out of higher carbon prices.
    The other British intervention proposed is basically to 
continue policies that discriminate against things like wind 
power of which they have an immense resource. They don't call 
it that. They say they are favoring wind power, but that has 
not so far been the practical effect.
    I think the most interesting case to watch will be France. 
They get 78 percent of their electricity from nuclear and it is 
widely considered the world leader in that regard. What is not 
often said is the program was so costly that it required costly 
taxpayer bailouts of both the largely state-owned national 
utility and the nuclear construction firm. So France today is 
using about a tenth less fossil fuel than in 1973, which isn't 
a big difference. It has a large and sometimes unsellable 
nuclear surplus. And to try to sell the surplus it has 
intensively promoted electric heating, which a quarter of 
French houses have but it is very expensive. And they are 
having to restart some inefficient old oil-fired plants to cope 
with the winter peak load that their electric heating promotion 
created, so it has made quite a mess of the electricity system.
    And having been engaged in the policy discussions in France 
from the beginning when the Cabinet was split down the middle, 
I can tell you that France is very rich in renewable energy, is 
starting to figure that out and, as in most of Europe, there is 
serious policy discussion going on that is shifting very 
rapidly toward renewables. You will find this in the latest 
European Union climate policy which is very strong on 
efficiency and renewables and not on nuclear.
    Ms. Herseth Sandlin. Mr. Flint.
    Mr. Flint. Congresswoman, if I might, before you arrived I 
told the Chairman that I was struck by the changes in the 
nuclear industry since 1982 when he wrote a book about nuclear 
power and nuclear weapons, and I think some of those changes 
are important to keep in mind. Clearly, there have been nuclear 
power plants that have had a multitude of problems with cost 
overruns and design changes and many of them eventually not 
being completed and operating.
    We have learned a great deal from that experience. And the 
way in which we hope to build nuclear power plants in the 
United States now is dramatically different than we did prior 
to that time. From 1960 through the 1970s and the early 1980s 
the U.S. nuclear industry rapidly advanced in this country. We 
scaled up the size of reactors from several hundred megawatts 
to over a thousand megawatts. Designs were evolving, plants 
went under construction without completed designs, we had 
problems with engineering and construction contracts, we built 
them in an era in which interest rates went to 18 percent as 
the economy slowed in the late 1970s and many utilities decided 
they didn't need the electricity, so they stretched out the 
plants of their own design. Or their own business needs caused 
them to stretch out the plants, the capital costs went up. We 
had a variety of issues that we have learned from.
    Now as we look around the world and we see 34 nuclear 
reactors under construction, we do have problems with cost and 
schedule in Finland, but we have learned a great deal from 
reactors under construction in China and Japan. The new EPR 
that is under construction in France is not having the same 
issues that we had with plants under construction in Finland. 
We hope to bring to the United States some of the best 
regulatory financial as well as design characteristics of 
plants being built around the world.
    We have a different licensing process in the United States, 
this one-step licensing process. We have modularized 
construction techniques that we intend to use. My expectation 
is that you are going to see nuclear power plants built here 
much more cautiously on the one hand by the utilities doing 
their analysis in advance, and on the other hand incorporating 
best-in-class capabilities from reactors around the world. This 
may be one place where it is an advantage that the United 
States is not the world leader.
    The Chairman. The gentlelady's time has expired, but we 
will go to another round as well if you would like.
    The Chair will recognize himself again. Again, I want to go 
back to this $40 billion loan guarantee program and it not 
being scored. And it is my understanding that the reason that 
CBO didn't score it is that it was put into report language 
rather than into the actual appropriations language itself. And 
by circumventing that analysis, it is able to create a false 
impression that it doesn't really cost any money or put the 
American taxpayer at risk if there is a default. And I think 
that very devious technique is something that gives a 
misimpression to the American people about the risk in the same 
way that subprime loans, in the way in which they were scored, 
gave a very grave misimpression to the American public as to 
the amount of risk that was being run.
    Mr. Flint.
    Mr. Flint. Mr. Chairman, let me make sure I am very precise 
about what I say. The 2005 Energy Policy Act, which includes 
the authority for Title 17 loan guarantees, did not score. And 
that is the CBO document that I was referring to. You are now 
referring to the 2008 Energy and Water appropriations bill. 
That bill includes two provisions. It includes bill language 
authorizing the loan guarantee program to go forward. In fact, 
that language has no cap on the volume of loans that may be 
issued. That language does not score comparable to the 2005 
Energy Policy Act, because it uses the authorities in the 2005 
Energy Policy Act. An unlimited loan volume does not score.
    The Chairman. But again, Mr. Flint, that is ridiculous.
    Mr. Flint. Mr. Chairman----
    The Chairman. No, that is an absurd conclusion. That is the 
same thing that the banking regulators were doing in not 
properly weighing the risk of subprime loans. And the more you 
had, of course, and the more diversified the risk was, the 
lower the risk was to the American consumer; when in fact, it 
was only increasing it by breaking it up into these little sub-
bits. So, again, this is just phony accounting.
    In looking at the whole history of nuclear power, Mr. 
Lochbaum went through the history of cancellations. We have got 
this Florida case where Florida Power & Light has two nuclear 
reactors that are now going to cost up to $24 billion. And, 
again, all of this is part of an illusion that is sought to be 
created by the nuclear industry and abetted by those at CBO, I 
guess, or the crafty legislators who are able to avoid having 
it counted as any potential risk for the American taxpayer.
    But the reality is that looking at the past, looking at 
what is happening in Finland right now, looking at what is 
happening to Florida Power & Light, which is seeing an 
explosion in the risk to its ratepayers, and, if it qualifies 
for loan guarantees, there is a real mess on the hands of the 
American taxpayer.
    Mr. Lovins, let me go back to you.
    Mr. Lovins. It seems to me the fundamental point here is 
not whether CBO was prevented from scoring by the way the 
legislation was enacted, but why should a mature industry that 
claims to be robustly competitive require loan guarantees or 
any other subsidies. And of course we have competing experts 
here. I happen to think since my institute did the first real 
scoring of Federal energy subsidies back in the 1980s that Doug 
Koplow has emerged as the most careful independent student of 
this subject, and I think his numbers are careful and 
transparent. And I would prefer them to the ones Mr. Flint 
cited.
    But it seems to me however big the subsidies are, they 
shouldn't be needed. And I find it very telling that the 
leading financial houses make quite clear they are not willing 
to assume the risks that they wish to impose on the public, and 
neither are the utilities. It is also clear that in the roughly 
half of the United States where investors bear their own risks 
and have no rate barriers to impose them on because those 
States have restructured their electric systems, nuclear plants 
are especially unlikely to be built. But what we are going to 
see, I think, in places that do have the traditional rate-of-
return regulation is considerable sticker shock.
    If you take a nuclear capital cost pretty near the low end 
of Moody's range, that would correspond to a busbar levelized 
cost of about $0.16 a kilowatt hour in year 2007 dollars. But 
that means the first-year revenue requirements is about a $0.26 
a kilowatt hour rate and that rate shock I think will 
reverberate considerably.
    The Chairman. Well, if the taxpayer has to pick up the tab, 
of course it will.
    Mr. Flint, in your testimony you said you expect between 
four and eight new reactors to be in operation in the U.S. by 
2016, with the possibility of a second wave of additional 
reactors, as long as the first wave is on schedule and on 
budget.
    Last week the EIA projected that by 2030 the United States 
would add 16.4 gigawatts of new nuclear generation capacity, 
which translates into roughly 15 or 16 new reactors. But 
according to Ms. Squassoni's testimony, the nuclear industry 
would have to build 50 new nuclear reactors in the United 
States by the year 2025 just to maintain its current share of 
the U.S. electricity market.
    Do you agree with EIA's projection that even with the 
current financial incentives in place, the nuclear industry is 
going to dramatically lose, not gain, in its share of the U.S. 
electricity market in the next couple of decades?
    Mr. Flint. Mr. Chairman, my statement has a number of 
issues that are going to consider whether or not the second 
wave of new nuclear power plants gets built. And I am trying to 
turn to that section right now. They have to do with a variety 
of issues that utilities will face. What is the cost of 
competing technologies, what are the costs associated with 
carbon, what is the economic growth, what are the electricity 
demands in their region of the country, what are the costs of 
nuclear built power plants as they get built? There are many 
variables thereafter that significantly influence what happens 
with that second wave. We are quite confident of this initial 
estimate of four to eight plants in the 2016 time frame. The 
issues beyond 2015, for me to make a particularly accurate 
prediction, there are simply too many business----
    The Chairman. I appreciate that, but I think it is 
important for us because we are talking about climate change. 
That is our objective here. Are you confident that the 42 to 46 
reactors needed to maintain the share of the market which the 
nuclear industry has today, can be built in the United States 
by 2025?
    Mr. Flint. Maybe I can answer the question more broadly. We 
are well aware of the challenges that are presented by the 
wedge analysis and whether or not nuclear can respond globally 
and build the number of plants necessary. Back-of-the-envelope 
calculations, you are talking 200 gigawatts of new electric 
generation in a decade in order to support the rates of growth 
that you see in the Socolow analysis. That did occur in the 
1980s. We saw that sort of growth worldwide. Now, today we do 
not have the manufacturing infrastructure, we do not have 
enough skilled labor to be able to do that. The market has 
contracted in the following decade.
    The Chairman. So is it fair to say, then, that the nuclear 
power industry, given the financial uncertainties, is not going 
to be able to grow in a manner that would be needed for it to 
accomplish the sort of expanded vision by Socolow?
    Mr. Flint. No, sir.
    The Chairman. No matter how much U.S. Federal Government 
subsidies are there for the industry?
    Mr. Flint. No, sir, it wouldn't. What you could say is the 
marketplace has responded by contracting capability in that 
regard.
    The Chairman. No, what I am saying to you is--and I just 
need you to deal with the numbers--you need 42 to 46 new 
nuclear power plants by 2025 to maintain your current share of 
the electricity market. You are projecting 4 to 8 by 2016. Are 
you saying that somewhere between 40 and 45 new nuclear power 
plants are going to be built from 2016 to 2025; is that what 
you are saying?
    Mr. Flint. Mr. Chairman, there are a number of variables 
that will affect how----
    The Chairman. I understand that. We know that we are going 
to have approximately 365,000 megawatts of wind by then, over 
100,000 megawatts of wind in the United States by 2016. We are 
here talking about between four and eight nuclear power plants 
by 2016. So as we are making our plans here to solve the global 
warming problem, we want to hear from you that you are 
confident and your industry is confident that it can build 45 
nuclear power plants by the year 2025.
    Mr. Flint. Mr. Chairman, there are analyses done by very 
reputable organizations such as the Electric Power Research 
Institute that predict construction in excess of that much 
nuclear capacity in the United States. The EPRI PRISM analysis 
predicts 64 gigawatts of new power by 2036. We are in the 
process of----
    The Chairman. Again, even by 2036 that would only keep you 
at where you are today, at 19 percent in terms of a total 
percentage of the marketplace. Is there any reason to believe 
that you are going to actually see an increase, an increase in 
the percentage of electricity that is generated by nuclear 
power by 2016, by 2025, by 2035?
    Mr. Flint. If you let me give you a complete sentence as an 
answer.
    The Chairman. Okay, please.
    Mr. Flint. We are doing a very--as we call it, a cold-
blooded analysis so that we are neither overly optimistic nor 
overly pessimistic about exactly what rates of new nuclear 
industry can support. We are in the process of developing new 
manufacturing capability, of building training centers for the 
skilled workforce. We are working with State legislators on a--
--
    The Chairman. That is not an answer. We can see where wind 
is going, we can see where solar is going. We have blinders on 
when it comes to the nuclear industry, even with these massive 
multibillion-dollar subsidies. So that is the real problem that 
we have right now, Mr. Flint. We are trying to predict a future 
looking at the reality of the marketplace, which is a renewable 
and a negawatt, an efficiency marketplace. And you want us to 
basically continue to go back to the American taxpayer to get 
loan guarantees for an industry that the industry itself can't 
garner investment from the private sector.
    Let me just stop there for a second. I want to give the 
gentlelady from South Dakota another round.
    Ms. Herseth Sandlin. Well, I appreciate that. I know we've 
got a pending vote, so I will just reserve my right to submit 
questions in writing for the panelists to pursue some of what 
both Mr. Flint and Mr. Lovins were responding to in my previous 
questions as it relates to the ability to meet some of these 
projections; what the renewables are, but what the projected 
demands are, to be able to determine whether or not as we 
develop the renewables either here, as some of the European 
countries are developing their renewables further and the tax 
incentives and government policies that go along to 
facilitating that, just whether or not that is going to be 
sufficient to meet all the projections and demands.
    So I appreciate the opportunity for another round, but I 
think I will reserve the right to submit them in writing.
    The Chairman. I thank the gentlelady. And the Chair will 
recognize himself once again.
    Again, I have to go back, Mr. Flint, to your testimony 
where you say that the potential contribution nuclear power can 
make to reducing projected greenhouse gas emissions in the 
electricity sector in coming decades is ``extraordinary.'' That 
is the word you use.
    Mr. Flint. Yes.
    The Chairman. And yet you then turn and say that you are 
doing a cold-blooded analysis of whether or not that is 
possible. So there is kind of a public representation that the 
opportunities are extraordinary, but when you are asked a 
specific question about a quantity of electricity that the 
industry is willing to represent that it will build, we don't 
hear that number. All we hear is between four and eight, which 
is a pretty wide variation between now and 2016. And beyond 
that we don't hear any specific numbers.
    Whereas the renewable electricity industry, the energy 
efficiency sector, can give us quantifiable amounts of 
electricity produced or saved that we can rely upon going 
forward in our fight against climate change. And that is the 
dilemma that we have with the nuclear industry right now.
    Mr. Flint. Mr. Chairman, I can understand your frustration. 
But recognize that we are trying to ensure that we meet the 
expectations that are established. I will give you some 
specifics. I have 17 utility companies that have announced 
plans to build 31 new nuclear reactors. That is significant. 
Those companies are spending real money in pursuit of those 
license applications.
    To give you a back-of-the-envelope estimate, a license 
application process at the NRC costs about $100 million. Recall 
the nuclear industry, we pay not only our own costs of 
submitting a license application, we also pay 90 percent of 
NRC's annual budget. We pay them. And the NRC budget for 2009 
is a little over $1 billion. So utility companies are now 
spending very real money in the development of these nuclear 
reactors.
    I can't tell you exactly what year certain reactors will 
come on line. Largely it is dependent upon whether electricity 
growth in certain regions is at 7 percent or 4 percent or 
whether it goes to 0 percent. But I can tell you that 
independent analyses, like the EPRI analysis, anticipate 64 
gigawatts of new generation by 2036. That is an extraordinary 
contribution to greenhouse gas emission avoidance.
    The Chairman. Let me go to you, Ms. Squassoni. At this 
point many people think that there is a small probability that 
the Yucca Mountain site to store all the nuclear waste in the 
United States will ever be opened. Have you looked at the 
question of how many Yucca Mountains we would need to store the 
waste that all of these new hypothetical reactors will 
generate?
    Ms. Squassoni. Thank you. Yes, I have, although people more 
expert than I say it is a little misleading to use that as a 
figure, because the limits for Yucca have been legislated at 75 
metric tons and there is a big debate about whether it could 
hold more. In part, the calculation of the kinds of spent fuel 
that will be generated depends on what you think that future 
nuclear fuel cycle will look like: Is it just lightwater 
reactors or are you going to reprocess? Will we have fast 
breeder reactors?
    And so I will rely on some other people's data--if I can 
see this here. A scenario of 700 gigawatts would require, 
according to the NRDC, 14 Yuccas. That is at the 70,000-metric 
ton limit. If you go to a one nuclear wedge, you would require 
one Yucca every 3.5 years or 20 Yuccas. And if you go to the 
MIT 2050 scenario, you would require about 30 Yucca Mountains.
    The Chairman. Let me ask you this, Ms. Squassoni. Do you 
think that the nuclear industry can ramp-up the way it did in 
the 1970s and 1980s? Is that possible in this new era as Mr. 
Flint talks about a nuclear renaissance? Can we expect to see 
dozens of new nuclear power plants come on line over a 20-year 
period?
    Ms. Squassoni. Well, I think there are a lot of factors, as 
Alex Flint has mentioned. I think you have to keep in mind that 
in the 1970s and 1980s, the period of greatest growth, we had a 
large nuclear infrastructure. We don't have that anymore, 
particularly in--I forget the figures--just in terms of the 
supporting industries.
    For example in the 1980s, the U.S. had 400 nuclear 
suppliers and 900 holders of N-stamp certificates. That is, 
nuclear qualified. Now we only have 80 suppliers and 200 N-
stamp holders, so we have a much much smaller percentage.
    The Chairman. Let me ask, in your testimony you cite some 
of the industry bottlenecks that pose a challenge to the 
nuclear industry, such as the fact that there is only one 
company in the world that can make the specialized metal 
forgings needed to build new reactors. That company has a 2-
year long wait list, and, even when it scales up, will still 
only be able to produce material sufficient for eight reactors 
a year.
    But you also cite the MIT nuclear study which says that for 
nuclear energy to play its projected climate role that there 
would have to be a fivefold increase in the number of reactors 
worldwide and an annual build rate of 35 per year. How can this 
and other projections for a significant expansion of nuclear 
energy be reconciled? What would it take, for example, to bring 
the global specialized metal forging capacity up to 35 reactors 
per year?
    Ms. Squassoni. I think there is a gap between the 
expectations and what can be accomplished in the next 10 years. 
Obviously, countries can develop specialized forging 
capabilities over time. I would say that the information 
provided to me by Japan Steel Works--I asked, Well, why does 
everyone come to you? And they said, Well, because we have 30 
years of experience, including Russian companies and entities.
    The Chairman. So what would it take to just double the 
capacity, Ms. Squassoni?
    Ms. Squassoni. Well, you have to keep in mind that JSW I 
think provides about 30--or not 100 percent of the forgings. It 
depends on what reactors will be built. But it is significantly 
greater than----
    The Chairman. In order to not even do 35 power plants per 
year, let us just say 17 power plants per year across the 
world, what would it take to double that capacity? What kind of 
investment is necessary in order to provide the materials?
    Ms. Squassoni. I would have to get back to you on that.
    The Chairman. If you would do that for the record, I would 
very much appreciate it.
    [The information follows:]
    * * * * COMMITTEE INSERT * * * *
    The Chairman. Let me go over to you, then, Mr. Lochbaum. 
You haven't had a chance to comment on what you have been 
hearing. Can you take any one of these points and comment upon 
it?
    Mr. Lochbaum. I joined the nuclear industry in 1979 after 
the Three Mile accident, so I have an alibi for that. But that 
was during the expansion, the great expansion of nuclear power 
in the United States. And looking back on that, we ramped-up 
too quickly. For example, the Nuclear Regulatory Commission 
didn't have enough staff to do the reviews of the reactors in 
the pipeline. They had interns, summer interns that were 
reviewing the safety applications that resulted in problems 
like the Connecticut Yankee final safety analysis report having 
the Millstone final safety analysis report incorporated, 
without catching the fact that it was a totally different 
reactor.
    I worked at Grand Gulf. I recall your comments around the 
time of Grand Gulf's licensing, calling it Grand Goof. I worked 
at Grand Gulf. We messed that up very badly. The original 
license for Grand Gulf was for another plant. We didn't catch 
that. We submitted it to the Nuclear Regulatory Commission and 
they didn't catch it. So the problems with ramping-up haven't 
been dealt with.
    I noticed your comments in September of last year about the 
Nuclear Regulatory Commission's plans to meet the 24-month 
review time for new reactors. The NRC plans to do that by 
farming out the work to private industry. That is totally 
unacceptable. That shows that the NRC is focused on schedule. 
Not on quality. It hasn't learned a lesson of the past. It 
seems like it is destined to repeat that mistake rather than 
avoid it. So I don't see any optimism at all for believing that 
the future will be any different than the past, except for the 
fact that we have fewer excuses for repeating that mistake, 
since we know about them now.
    The Chairman. My time has expired. The Chair recognizes the 
gentleman from New York State, Mr. Hall.
    Mr. Hall. Thank you, Mr. Chairman. I am sorry, due to the 
vote to adjourn, I was unable to hear your oral testimony, but 
I did have a chance to review it. And let me just state, first 
of all, as one who represents the 19th District in New York 
where we currently have the second and third units at Indian 
Point awaiting relicensing proceedings with the NRC at a time 
that they are leaking strontium and tritium from the spent-fuel 
cooling ponds into the groundwater and into the Hudson River, 
and when there have been a series of unscheduled outages caused 
by anything from an exploding transformer to river debris 
washing up into the water intake and clogging it, and the folks 
in Rockland County who do emergency management finding out 
about that transformer fire in particular by seeing a puff of 
smoke across the river, rather than by getting a call as the 
procedure is supposed to be. There are many people in my 
district who are nervous in particular about this plant.
    So to me there are a couple of issues. One regarding 
whether we should be investing our short precious resources in 
nuclear as opposed to renewables, which I think, given the same 
massive--and depending on whose numbers you look at, it is 
easily over $100 billion from the birth of the industry, some 
would say $145 billion, $150 billion and all kinds of 
subsidies--and insurance by the taxpayer. The only industry to 
my knowledge that has been unable to get insurance against a 
catastrophic accident, and therefore the utilities required 
that the government provide taxpayer-backed insurance. And the 
average taxpayer didn't even know this.
    So there is a question overall in terms of whether nuclear 
power, commercial nuclear power can stand on its own two feet 
if it had to compete on a level playing field against various 
other sources.
    But then there arises the question of whether one should 
relicense a plant in the area that probably shouldn't have been 
built in the first place. And certainly I don't think a utility 
today would apply to build a new nuclear plant in Westchester 
County, in an area where 8 percent of the population lives 
within a 15-mile radius of the plant. You look at where 
applications are going. They are generally going for more 
remote locations, for good reason.
    We also know that Mohammed Atta flew over the New York area 
several times on commercial flights, checking out targets. And 
one of his notes that was found in his possessions after 9/11 
included a comment about a nuclear plant that was presumed to 
have been Indian Point that he flew over as a potential target.
    At any rate I would just like to ask all of you, I guess 
one question to start with, and I may be out of time by then, 
thanks to my talking so much, but I asked our first panel last 
year when the Chairman called a security panel with Jim 
Woolsey, our former CIA chief, and Steven Haas from the Council 
on Foreign Relations, and Admiral McGinn and folks who were 
involved in the security end of this.
    If we ramp-up the kind of increase in nuclear power across 
the world--and I know that there are companies. In fact, this 
President has authorized sales of, for instance to India, of 
nuclear technology and materials and even waived, if I remember 
correctly, certain provisions of the Nonproliferation Treaty to 
be able to do so.
    What I asked that panel a year ago I ask you again: When we 
are increasing the transit by ship and by rail and by truck of 
many thousands of shipments all over the world, including in 
this country, of enriched fuel on its way to a plant and of 
spent fuel on its way to a repository, whether such a 
repository actually exists for a long-term basis or if it is a 
temporary one, are we not making eventually the explosion of a 
dirty bomb virtually a certainty?
    Feel free to go first.
    Mr. Flint. Congressman, it is important to recognize there 
have been 24,000 international shipments, or around the world 
they are having 24,000 shipments of nuclear material to date. 
Those shipments are handled safely and securely and will 
continue to be done in such a manner.
    Mr. Hall. Thank you.
    Ms. Squassoni. I think both Reuters and Nucleonics Week 
have reported recently that States are getting jittery about 
these kinds of transfers, mostly even in just the fresh fuel. I 
think if you see the kind of expansion for the global climate 
change levels, you are talking about a lot of nuclear material 
in transit, much more than we have seen now. And so I think 
that does--I don't know if it makes it a certainty, but I think 
it does increase the risk. Thank you.
    Mr. Lovins. I don't think one needs to imagine airplane 
crash scenarios, which I wrote about in a Pentagon study in 
1981, to be concerned about particularly nearsighted nuclear 
plants with their gigacurie inventories being a terrorist 
target. Most of the existing plants can be caused to melt down 
by interventions that would take readily available devices that 
can generally be operated from outside the site boundary and 
would cause the safety systems to fail.
    Mr. Hall. Thank you. My time has expired. And I just wanted 
to comment, if I may, Mr. Chairman, that the 20-some-thousand 
shipments of nuclear material around the world, I presume a 
good number of them were before the rise of Islamic terror, 
terrorists and groups that we have seen in the last several 
years. And I also assume that that number would have to be 
drastically increased in order to reach the level of total 
nuclear output worldwide that is being considered.
    So with that, I thank the Chairman and yield back.
    The Chairman. I thank the gentleman, and the Chair will 
recognize himself for another round of questions.
    Let me go back to you again Mr. Lovins, then I can go back 
to Mr. Flint. And I want to focus on this Florida Power & Light 
decision to build two reactors that could cost upwards of $24 
billion. Why would Florida Power & Light, Mr. Lovins, want to 
build two reactors that couldn't possibly generate any more 
than perhaps 2,500 megawatts and be willing to run the risk of 
having it cost them $24 billion? What is in the mind of Florida 
Power & Light or any utility that moves in that direction?
    Mr. Lovins. Having worked in the utility industry for 
several decades, I must say that what must be in their minds is 
a rare phenomenon and typically does not survive encounters 
with the capital market.
    The longer paper I will submit for the record is replete 
with statements by the bond rating agencies and others in the 
industry, and indeed by utility executives very knowledgeable 
in this field, that they would not contemplate such an 
investment or they think it is unlikely or imprudent. So I must 
presume that whoever made that statement must not know very 
much about cost-effective alternatives.
    I think we are likely to have 100 gigawatts of wind power 
installed in this country before we have our first gigawatt of 
new nuclear, if ever.
    It was interesting thinking about the four to eight plants 
Mr. Flint mentioned when the NRC expects 33 applications. Now, 
perhaps there is a difference between a plant and a unit, but 
it sounds kind of like the funnel that Mr. Lochbaum talked 
about, going from announcements to actualities.
    The Nuclear Energy Institute has noted the cancellation 
already of about three-quarters of the announced coal plants. I 
expect somewhere between that and all of the nuclear 
announcements will lead to nothing. And the global nuclear 
industry projects that in the 5 years 2006 through 2010, it is 
going to build about 17 gigawatts of capacity of which, by the 
way, most all or more than all is expected to be offset by 
retirements meanwhile, which we haven't discussed here. But 
basically the bulk of the fleet is old. The average age is 24 
years. And it will gradually go away.
    Now, compare 17 gigawatts over 5 years with the current 
construction rate just of Micro-Power let alone negawatts. 
Micro-Power today is adding 17 gigawatts about every 15 weeks.
    The Chairman. Why don't you redefine for the audience what 
Micro-Power is?
    Mr. Lovins. Micro-Power is cogeneration plus renewables 
minus big hydro. Well, Micro-Power is adding 17 gigawatts about 
every 15 weeks. In other words, times faster than the nuclear 
industry has projected. Gross additions, not net of 
retirements. I don't know what part of that number anyone who 
takes the market seriously doesn't understand.
    The Chairman. Thank you. Let me go back to you again, Mr. 
Flint. It seems like an astounding amount of money, $24 billion 
for two reactors, given the fact that, as Mr. Lovins says, 
there is likely to be 100,000 megawatts of wind by 2016 across 
the country. So Florida Power & Light, it is known as a company 
that believes in wind power, solar power, other renewables in 
other parts of the country. But here it is willing to risk 
ratepayer, and I guess taxpayer, dollars up to the tune of $24 
billion. It just doesn't seem economical. It seems to be 
completely out of sync with what is going on in the whole rest 
of the national and international marketplace.
    Mr. Flint. Well, Mr. Chairman, the reality is it is not out 
of sync, you are absolutely right. Florida Power & Light I 
believe is the largest wind utility in the United States, very 
familiar with the economics of wind going forward. But let me 
read you a little bit more from their determination of need 
petition. It said that the company, quote, has conducted an 
extensive review of information currently available within the 
industry on the expected cost of new generation nuclear units.
    Quote, the addition of new nuclear capacity is economically 
superior versus the corresponding addition of new gas-fired 
combined cycle units required to provide the same power output, 
yielding large direct economic benefits to customers. Based on 
all the information available today it is clearly desirable to 
take the steps and make the expenditures necessary to retain 
the option of new nuclear capacity coming on line in 2018, end 
quote.
    Mr. Chairman, the reality is that we are seeing significant 
increases in the cost of all types of baseload generation. What 
we say is that nuclear power will be competitive. We have costs 
that are rising as concrete and steel and labor costs rise, but 
those are the same pressures that coal and gas-fired plants are 
being subject to. The cost of natural gas is going up and one 
can only speculate as to the future of coal in whatever the 
regulatory environment will be.
    The Chairman. Go back to Mr. Lovins. You just heard the 
Florida Power & Light justification for two nuclear power 
plants costing $24 billion. What is your comment?
    Mr. Lovins. Or more precisely, for retaining the option 
value, which is very different from actually ordering a plant 
and putting cash on the barrel head to pay for it.
    I would differ in several respects with Mr. Flint's 
remarks. The Cambridge Energy Research Associates construction 
industry--or excuse me, construction cost index for U.S. power 
plants in the 3 years ending third quarter 2007 for North 
America showed a 2.31 times year 2000 cost for all main types 
of power plants, but 1.79 times for non-nuclear types; that is, 
nuclear suffering uniquely rapid cost escalation. This shows up 
very clearly not just in the nuclear numbers from the Keystone 
study last June, which were so devastating that the industry, 
and specifically NEI, misrepresents the results or ignores 
them, but also in actual comparisons.
    And I think Mr. Flint is incorrect to say that the right 
comparison--or to imply the right comparison is with other 
baseload central thermal plants, coal or gas. Those are not the 
real competitors. It is all central plants that are getting 
absolutely walloped in the marketplace by Micro-Power and 
negawatts. And the very competitors that the nuclear industry 
refuses to accept as important are eating its lunch.
    The Chairman. Thank you.
    Let me go to you, Ms. Squassoni. And let us talk about the 
nuclear power plants that are being proposed for Egypt, for 
other countries around the world that could pose 
nonproliferation threats to our country and to the rest of the 
world.
    Give us a little bit of detail as you are looking at what 
is now projected in terms of plutonium, uranium, nuclear 
materials, spreading to country after country, especially in 
the Middle East.
    Ms. Squassoni. I think you have to start with the context 
that over 27 countries have announced intentions to install 
nuclear capacity. And because they don't have nuclear power 
plants now, they lack the infrastructure, not just--I mean 
regulatory, legal----
    The Chairman. So which countries frighten you the most from 
a nonproliferation perspective Ms. Squassoni?
    Ms. Squassoni. Yemen.
    The Chairman. Keep going.
    Ms. Squassoni. I have to get out my map here. I think part 
of the proliferation concern, it is not just--you know, 
nonproliferation advocates tend to be painted as non-nuclear. 
It is not a question of non-nuclear. But when you have what 
nuclear power plants will do in these countries, it will give 
them expertise, it will give them a scientific and 
technological basis. And in the current state of the 
nonproliferation regime where we have been completely 
unsuccessful in discouraging other countries from developing 
enrichment or reprocessing plants, these countries will then 
have a further excuse, if you will, for developing the entire 
fuel cycle.
    Now, is that cost effective? No. But that doesn't happen to 
be stopping Iran, for one.
    The Chairman. So the risk we run, obviously, is that if 
nuclear becomes this global solution and they are constructed 
in Yemen, in Egypt, in Saudi Arabia, in other countries----
    Ms. Squassoni. United Arab Emirates. I mean I don't want to 
paint the--it is not that these individual countries in the 
Middle East themselves might pose a problem, but they are 
certainly looking at their options as the probability that Iran 
can't be discouraged from its nuclear program. They are 
certainly looking at their options and thinking, well, we will 
develop our own nuclear infrastructure to keep our options 
open.
    The Chairman. And that is the problem that I think I hear 
out of this testimony today. That Mr. Flint is not willing to 
project that by 2025 the nuclear industry can meet a production 
level that is perhaps upwards of 45 new nuclear power plants 
and keep it at the same level in the United States of its 
percentage of electricity generation as it has today. And to 
meet the problem globally we have to watch nuclear power plants 
be built in countries that don't have regulatory systems or 
security systems in place that would give people confidence 
that the price we are paying in increased climate protection is 
not completely counteracted by a collapse of our nuclear global 
nonproliferation regime. And that is a real price that I think 
the whole world has to understand.
    Let me turn and recognize again the gentleman from New 
York, Mr. Hall.
    Mr. Hall. Thank you Mr. Chairman. I just have a couple of 
quick questions before I have to go vote.
    Mr. Flint, I just wanted to refer to a comment that Admiral 
McGinn made in his testimony before this committee that the 
experience of the Navy with naval reactors has been very, very 
positive, unquote. And this is often brought up as a point that 
safety can be achieved to a much higher degree. And I think 
that as we all know, the Navy is not a for-profit business. 
They have sailors down in the submarine close to the reactor, 
and it is in their interest, and they spare no expense and cut 
no corners.
    And if it were decided by--I mean, this is a societal 
decision I think we are talking about. We need to as a country 
decide what mix of different sources of power we are going to 
use. But in order to gain the degree of confidence of safety 
that would generate broad public support, do you personally or 
do you think the industry would take kindly to the idea of 
being nationalized as opposed to being a for-profit bunch of 
utilities that operate in different plants?
    Mr. Flint. Congressman, if I may, I would like to answer 
that in part and take part of that as a question for the 
record. First, the U.S. utility industry is not interested in 
being nationalized. The reason I would like to take part of 
that as a question for the record is that Admiral Skip Bowman 
who previously ran the nuclear reactor program is now the 
president and CEO of the Nuclear Energy Institute and he might 
like the opportunity to address that question directly, 
particularly the issues associated with naval reactors and its 
application to the civilian sector.
    And so if I may take that part as a question for the 
record, I would be delighted to get back to you.
    Mr. Hall. Thank you.
    [The information follows:]
    * * * * COMMITTEE INSERT * * * *
    Mr. Hall. And just one more for you, Mr. Flint. A couple of 
times in your testimony you reference clean--the benefits of 
clean energy from nuclear power. I am just curious why you 
would describe as clean a technology which produces cancer-
producing radioactive isotopes that remain radioactive for 
hundreds of thousands of years.
    When we look back at King Tut 7,000 years ago, or whenever 
that was, it is pretty hard to imagine that we will actually be 
able to isolate the longer-lived radioactive products of the 
fission process for the length of time that they need to be 
isolated and protect people that need to be shielded from them.
    I mean there have been books written about this that 
speculate about a nuclear priesthood that will design some kind 
of symbolism or language that can be read by future 
civilizations and might come across our repository so that they 
know not to go in there and get too close to it.
    I mean, that is the level of--now, also we don't have a 
control planet, by the way. The fact that I have in my own 
family and friends half a dozen people who are either just 
recently deceased of cancer or fighting off some kind of 
cancer. Who happen to live in the immediate area of Indian 
Point, for instance, is something that we will never know if 
there is a connection because there is also PCBs and pesticides 
and all these other things in this one environment, this whole 
Earth that we have.
    There is no control planet, and then a planet that we can 
see what the effects would be. But I contend that it is not 
clean and it is actually fraudulent advertising to say that it 
is. Your response?
    Mr. Flint. Congressman, the issue of what to say with 
somebody who lives near a power plant and gets cancer is always 
very difficult when you are sitting directly with somebody, as 
you do with your constituents from time to time. In different 
settings, though, it is appropriate to recall that 40 percent 
of the population will get cancer during its lifetime from 
other causes, okay. The issue really is, does nuclear power 
result in any incremental increase in cancer?
    And let us look at radiation for just a moment. Currently 
we anticipate that a new disposal standard for Yucca Mountain 
will be issued that will contemplate a million-year disposal 
requirement for Yucca Mountain. We estimate that DOE will come 
up with models that will show at what rate radionuclides from 
Yucca Mountain might migrate through the environment and be 
released out to the environment and might get close enough to 
the surface to be brought up in plants and water and other 
things like that.
    Mr. Hall. Excuse me, my time has expired, so I just wanted 
to ask you--I gather that all these great lengths that you are 
going to to try to keep it isolated would imply that in fact 
the waste is not clean?
    Mr. Flint. Congressman, I would imply that the doses of 
radiation that people receive from the civilian nuclear 
industry in this country are minuscule compared to background 
and other sources of radiation. The net benefit is the issue at 
hand. So, for example, when somebody goes in for an MRI and 
receives a fair amount of radiation, the amount of radiation 
they receive from a nuclear power plant is inconsequential in 
comparison, and the benefits of the clean electricity generated 
from that nuclear power plant are tremendous.
    The Chairman. I hate to say this, the gentleman's time has 
expired. We have a very important roll call on the House floor. 
We have been constantly interrupted. I missed one or two, so I 
could keep the hearing going. I am going to ask each one of you 
to give us 30 seconds, what you want us to remember about the 
nuclear power industry as we are going forward. Begin with you, 
Mr. Flint.
    Mr. Flint. Mr. Chairman, climate change is one of the great 
challenges facing this country. I see no scenario by which we 
can possibly achieve reductions in greenhouse gas emissions 
while we meet the electricity demands of our country, estimated 
to grow at 30 percent between now and 2030, without a 
significant increase in the amount of nuclear power that we 
have. The industry is preparing to respond to that, and we will 
be able to respond to that challenge.
    The Chairman. Thank you. Ms. Squassoni.
    Ms. Squassoni. Thank you. The kinds of nuclear expansion 
that would be needed to affect global climate change are huge 
and unrealistic and incredibly costly, and moreover they carry 
with them proliferation risk that I don't think the United 
States and the international community yet have begun to really 
combat.
    The Chairman. Thank you. Mr. Lochbaum.
    Mr. Lochbaum. We have 104 nuclear power reactors in the 
United States today. We may build some in the future, we may 
not. We don't know. But we are going to have nuclear power in 
our future for a few decades. The best protection the American 
public has against that risk is an effective nuclear regulator. 
We don't have that today. We need that as soon as we can get 
it.
    The Chairman. Thank you. Mr. Lovins.
    Mr. Lovins. Nuclear power is continuing to drive an 
incurable attack of market forces just by heroic efforts to 
revive it with subsidies. But even though it is being massively 
outcompeted by larger, faster, cheaper options, Micro-Power 
negawatts, it has claimed to produce climate benefits. That 
claim is simply false. Because nuclear is so expensive that if 
the same money were spent instead on Micro-Power negawatts, we 
would get 1\1/2\ to 11 times more carbon saving per dollar, and 
we would get it sooner.
    The Chairman. Thank you, Mr. Lovins.
    We thank each of you. I think this was a very important 
panel for us to have. There are still questions I think that 
the Members of the committee who could not attend would like to 
pose to you in writing. We would appreciate written responses 
in a timely fashion.
    With that and the thanks of the committee, this hearing is 
adjourned.
    [Whereupon, at 11:05 a.m., the committee was adjourned.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

