[Senate Hearing 110-306]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-306
 
                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                                   TO

   RECEIVE TESTIMONY ON THE GLOBAL NUCLEAR ENERGY PARTNERSHIP AS IT 
           RELATES TO U.S. POLICY ON NUCLEAR FUEL MANAGEMENT

                               __________

                           NOVEMBER 14, 2007


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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota        LARRY E. CRAIG, Idaho
RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           BOB CORKER, Tennessee
KEN SALAZAR, Colorado                JOHN BARRASSO, Wyoming
ROBERT MENENDEZ, New Jersey          JEFF SESSIONS, Alabama
BLANCHE L. LINCOLN, Arkansas         GORDON H. SMITH, Oregon
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
JON TESTER, Montana                  MEL MARTINEZ, Florida

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
              Frank Macchiarola, Republican Staff Director
             Judith K. Pensabene, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Bunn, Matthew, Belfer Center For Science and International 
  Affairs, Harvard University, Cambridge, MA.....................    26
Corker, Hon. Bob, U.S. Senator From Tennessee....................    56
Craig, Hon. Larry E., U.S. Senator From Idaho....................    54
Domenici, Hon. Pete V., U.S. Senator From New Mexico.............     3
Dorgan, Hon. Byron L., U.S. Senator From North Dakota............    42
Orszag, Peter R., Congressional Budget Office....................    13
Salazar, Hon. Ken, U.S. Senator From Colorado....................     2
Seshadri, Pattabi, Partner and Managing Director, Boston 
  Consulting Group, Boston, MA...................................    43
Sessions, Hon. Jeff, U.S. Senator From Alabama...................    60
Spurgeon, Dennis, Assistant Secretary For Nuclear Energy, 
  Department of Energy...........................................     5
Todreas, Neil E., Massachusetts Institute of Technology, 
  Cambridge, MA..................................................    36
Wallace, Terry, Principal Associate Director, Science, Technology 
  and Engineering, Los Alamos National Laboratory, Los Alamos, NM    21
Wyden, Hon. Ron, U.S. Senator From Oregon........................    59

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    69

                              Appendix II

Additional material submitted for the record.....................    89


                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

                              ----------                              


                      WEDNESDAY, NOVEMBER 14, 2007

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

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

    The Chairman. Why don't we go ahead and open the hearing. 
This is a hearing on the Global Nuclear Energy Partnership. I 
want to thank the witnesses for being here.
    The purpose of the hearing is to understand the Department 
of Energy's Global Nuclear Energy Partnership, or GNEP, both 
the policy involved in the decisions, and also the programmatic 
actions and viewpoints involved.
    From 2000 to 2006, the Department conducted a research 
program which was the predecessor to GNEP, it was called the 
Advanced Fuel Cycle Initiative, or AFCI. This program performed 
research on spent fuel separations technologies that might make 
it possible to reduce the volume and heat load in a spent fuel 
geologic repository. The program had good support, and was 
authorized as a research, development and demonstration 
program, in the Energy Bill that was passed in 2005.
    It's my understanding that there were promising bench-scale 
technologies, and that for Fiscal Year 2007, the program was 
expected to begin to scale up to a demonstration phase.
    In light of that background, it was somewhat surprising 
when for Fiscal Year 2007, the GNEP program was proposed, with 
a budget nearly three times the size of the Advanced Fuel Cycle 
Initiative, or $243 million, and the proposal was to begin 
engineering design of a spent fuel separations plant, a fast 
reactor and a fuel R&D facility--none of which were planned to 
come online until the 2020, or through 2030 timeframe.
    The program seems to have undergone shifts since it was 
presented to Congress in February 2006, from deploying advanced 
separation technologies in the Advanced Fuel Cycle Initiative, 
to requests from industry for near-term technologies that 
primarily separate plutonium.
    I'd like to learn what I can about the evolution of the 
program, and the impact it will have on our spent fuel policy.
    The National Academies of Science recently evaluated the 
GNEP program. They are not here as witnesses today, but I will 
offer into the record the summary of their recommendations to 
reflect the hard work that their panel put in.
    [The prepared statements of Senators Bingaman and Salazar 
follow:]
 Prepared Statement of Hon. Jeff Bingaman, U.S. Senator From New Mexico
    Let me open today's hearing on the Global Nuclear Energy 
Partnership by thanking the witnesses for taking the time today out of 
their busy schedules to testify.
    The purpose of today's hearing is to understand the Department of 
Energy's Global Nuclear Energy Partnership or GNEP from both policy and 
programmatic viewpoints.
    From 2000 to 2006, the Department conducted a research program, 
which was the predecessor to the GNEP program, called the Advanced Fuel 
Cycle Initiative or AFCI. This program performed research on spent fuel 
separations technologies that might make it possible to reduce the 
volume and heat load in a spent fuel geologic repository. The program 
had good support and was authorized as a research, development and 
demonstration program in the Energy Policy Act of 2005. It is my 
understanding there were promising bench scale technologies and that 
for Fiscal Year 2007 the program would begin to scale up to a 
demonstration phase.
    Thus it came as a surprise when for Fiscal Year 2007, the GNEP 
program was proposed with a budget nearly three times the Advanced Fuel 
Cycle Initiative at $243M by proposing to begin engineering design of a 
spent fuel separations plant, a fast reactor and a fuel R&D facility 
all not coming on line until the 2020-2030 timeframe.
    The GNEP program seems to have undergone shifts since it was 
presented to the Congress in February 2006, from deploying advanced 
separation technologies in the Advanced Fuel Cycle Initiative to 
requests from industry for near-term technologies that primarily 
separate plutonium. I would like to learn about the evolution of the 
program and the impact it will have on our spent fuel policy.
    The National Academies of Science recently evaluated the GNEP 
program and they are not at the witness table, let me offer into the 
record the summary of their recommendations to reflect their hard work.
    Again, let me thank the witnesses for coming today and I look 
forward to learning from their testimony.
                                 ______
                                 
   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado

    Thank you Mr. Chairman and Ranking Member Domenici for holding 
today's oversight hearing on the Department of Energy's Global Nuclear 
Energy Partnership program. GNEP has significant policy implications 
for our national security and our nuclear energy industry, and today's 
hearing is an important opportunity to discuss these issues.
    GNEP has been highly touted by this Administration as a route to a 
new era of proliferation-resistant nuclear energy usage. The program 
purports to close the nuclear fuel cycle and usher in a new generation 
of advanced nuclear reactors. GNEP also espouses the global expansion 
of nuclear power through an innovative partnership of fuel-producing 
and fuel-consuming nations, and it argues for a rapid and vast remaking 
of our domestic nuclear power industry.
    These notions are radical departures from the strict, consistent 
U.S. nuclear policy of discouraging civilian nuclear fuel reprocessing 
of the last thirty-plus years. In 1974, the U.S. and the world were 
scalded when India conducted its first test of a nuclear weapon. 
President Eisenhower's ``Atoms for Peace'' program, which supported 
India's development of a civilian nuclear energy program, had led to a 
new nuclear state. Our lesson from that experience was clear: that the 
benefits of civilian nuclear programs and the risks of nuclear 
proliferation are tightly intertwined.
    GNEP represents a sea-change from our traditional policy by 
explicitly promoting the expansion of nuclear power into developing 
countries around the world. For GNEP to accomplish its stated goals 
without also increasing the risk of nuclear proliferation is a tall 
order, and will hinge critically on the technological basis of the 
nuclear fuel program it develops.
    I am deeply concerned that DOE is putting the cart before the horse 
by pushing policy decisions ahead of technical knowledge. By already 
placing great emphasis on one or two reprocessing techniques and 
advanced reactor designs, DOE is threatening to undermine the 
determination of whether a truly proliferation-resistant closed nuclear 
fuel cycle can be developed. These technologies are still in an early 
stage, and talk of commercial-scale demonstration projects is woefully 
premature. A recent National Academies report confirms the deep 
concerns that other non-proliferation experts have recently expressed 
about GNEP.
    Furthermore GNEP is expensive. If enacted as envisioned, it will be 
a multi-decade, multi-billion dollar commitment. Saying there is 
``healthy skepticism'' about GNEP's economic viability is probably an 
understatement. Studies by the National Academies, Harvard, and MIT 
suggest that reprocessing spent fuel will not become cost competitive 
with conventional interim dry cask storage of nuclear waste until at 
least 2050. Some have even argued that the diversion of our limited 
nuclear technical resources to insufficiently justified GNEP programs 
may itself pose a significant economic risk to the nuclear industry.
    As it is currently constituted and expressed, GNEP poses 
significant risks. Development of a closed, proliferation-resistant 
nuclear fuel cycle is a laudable goal--if achieved it could potentially 
transform the future of global electric power generation. I look 
forward to learning today about our witnesses' perspectives on the path 
that GNEP lays forward, and their opinions of whether GNEP is 
technologically and economically viable.

    The Chairman. Again, I thank the witnesses for coming, and 
I yield to Senator Domenici for any opening statement he would 
have.

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

    Senator Domenici. Thank you very much, Mr. Chairman. I'm 
glad we have some other Senators here. Nice to have you, 
Senator Martinez, and Senator Craig. This is one of the areas 
you have great interest in.
    I have a rather long, detailed statement. My staff is going 
to be very upset because they worked very hard to prepare it, 
at my direction, last night. Instead, I'm going to try to tell 
you what bothers me about this hearing, and about where we are; 
but let that written statement be part of the record.
    First of all, I think the problem with GNEP is that it's a 
50-year program, and the United States can't wait 50 years for 
what we need. We need something that GNEP would provide us 
with, but it's going to take way too long, and it has 
ingredients that are far too controversial for us to base the 
entire future of nuclear power on.
    Now, it's well thought out, it's terrific. If you had all 
the money in the world, and if you could produce all of the 
technical machines that they're talking about, it would be 
wonderful.
    But, Mr. Chairman, what I'm looking for, and I hope in the 
not too distant future you can join me in trying to produce 
legislation for this, is the fastest method to proceed with the 
construction of a recycling facility in the United States. 
That's sometimes called something else, but reprocessing is a 
word others use.
    Now, what I'm talking about is not far-fetched, because 
they've already done it in Europe. The problem is, we don't 
seem to like the technology they've used, the so-called PUREX, 
Mr. Chairman--because it produces a big, steady stream of pure 
plutonium. There has to be another technology, and it is very 
far along, and the product that comes out of it is not pure 
plutonium. It's a mixture, and thus, passes the test that we, 
most American leaders would put on it, that we don't want to 
promote the PUREX-type recycling.
    So, much of what I will do is listen, but what I really 
want to know, as soon as I can get it, is how can America 
proceed from where we are to the authorization and evolution 
and building of a recycling plant? If one won't do it, than 
two, but to get on with that, as soon as possible, considering 
two issues that concern me.
    First, the liability of the Federal Government, or 
potential liability that lies out there for its failure to 
remove spent fuel from reactor sites; and second, the fact that 
Yucca Mountain is getting more and more to look like a project 
that's not going to be used to put once-through spent fuel rods 
deeply underground. That idea has less and less credibility, 
and Yucca itself has less and less credibility. It can be used 
for something important, but we ought to decide rather quickly 
on what I've just iterated, and it is my hope that it is what 
we will proceed with.
    So, the witnesses will help us immensely, as we talk about 
the ingredients in this very lengthy plan that would go into 
effect and would produce everything we need. I mean, it would 
ultimately give us recycling, and in the process it would do 
many other things. But I, frankly, don't think we can wait, and 
I don't think we can spend that much money, getting where we 
need to go, as soon as we need to.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Domenici follows:]

    Prepared Statement of Hon. Pete V. Domenici, U.S. Senator From 
                               New Mexico

    Mr. Chairman, I appreciate you taking time to hold a hearing on a 
topic that I feel passionately about--addressing our spent nuclear fuel 
problem. To date, this is an issue this Congress has conveniently 
ignored.
    Mr. Chairman, last year I chaired a hearing in the Energy and Water 
Subcommittee on Appropriations that was virtually identical to the 
hearing today. At that hearing we discussed the costs and benefits of 
GNEP, the opportunities to change the way we handle spent nuclear fuel 
and, of course, the nonproliferation responsibilities. We even had some 
of the very same witnesses.
    That hearing, like today's, demonstrated that there was a broad 
consensus that this country should be pursuing research and development 
of advanced recycling technologies. To this end, the Department of 
Energy has developed, and Congress has supported, an ambitious program 
called GNEP. I am pleased to say that the only real debate now is on 
the timing of deployment of these technologies.
    Over the past couple of months, two separate entities have filed 
combined license applications to build four new nuclear reactors--the 
first such license applications in almost 30 years. The nuclear 
renaissance is underway.
    Ten years ago, many people--inside the industry and out--thought 
they'd never live to see this day. But ten years ago, I gave a speech 
at Harvard in which I made a commitment to do what was necessary to 
allow nuclear power to reach its full potential in this country. The 
fulfillment of that commitment involved years of regulatory oversight 
and legislative efforts that reached its peak in the provisions of the 
Energy Policy Act of 2005.
    However, there is one issue that we are still lagging behind on, 
and that is what to do with our nuclear waste. Ten years ago, I 
declared, and I still believe, that we must close the fuel cycle, 
developing advanced fuel recycling technologies that will provide a 
long-term, secure, economic source of fuel, while simplifying the 
permanent disposal of waste residues and maximizing repository 
capacity.
    We know this is possible. France, Japan and others have followed 
this path. We can make improvements on these programs; there are 
technologies that are more proliferation resistant that are waiting to 
be developed. However, time is not on our side. While the research 
portion of GNEP is important, we cannot let the pursuit of perfection 
stop us from pursuing what is good and achievable today.
    The status quo is not an option. CBO recently testified that the 
government's liability for its failure to take spent fuel will grow to 
$7 billion if Yucca Mountain opens in 2017, and $11 billion if it opens 
in 2020. That translates into about $1.3 billion per year. Now, 
remember that DOE has testified that the 2017-2020 opening date for 
Yucca Mountain is only achievable if a whole series of legislative 
changes are made. I have introduced a bill that addresses these issues. 
I would love to be wrong about this, but I just don't see that bill 
moving anytime soon.
    Further, Congress put a statutory 70,000 metric ton limit on the 
amount of fuel that can be placed in the repository. This means that 
Yucca Mountain will be full before the day it opens--that's just 
counting the fuel from our existing fleet of reactors. Thus, current 
law says we must start looking at our second repository before we even 
open the first.
    We must have a path forward--not fifty years from now, but NOW. We 
are left with only one choice--focus on an integrated spent fuel 
strategy that will address our liability question immediately, and 
implement a recycling strategy that will avoid the political and 
economic nightmare that would result from attempts to site a second 
repository, as the current law requires.
    For over a decade, I have believed we should close the nuclear fuel 
cycle and begin to extract the vast energy potential that exists in 
spent fuel. Despite the skepticism here in this country and on this 
committee, the Global Nuclear Energy Partnership is being well received 
internationally. Sixteen countries have joined as our partners in 
addressing the global expansion of spent fuel.
    Mr. Chairman, I'm sure I will find today's hearing very frustrating 
as we attempt to rationalize the various economic analyses to determine 
whether GNEP should be pursued while we ignore billions of dollars of 
direct costs to the American taxpayer that continue to result from our 
flawed Yucca Mountain strategy.
    Having said that, I look forward to hearing from our witnesses.

    The Chairman. All right, let me go ahead and introduce the 
witnesses. We have a full array of witnesses here, six very 
distinguished witnesses, and I want to hear from all of them.
    I think our first witness will be the Administration 
witness, Dennis Spurgeon, who is the Assistant Secretary of the 
Office of Nuclear Energy in the Department of Energy.
    Next is Peter Orszag, who is the Director of the 
Congressional Budget Office.
    Next is Terry Wallace, who is at Los Alamos National 
Laboratory, next is Neil Todreas who is at MIT, a Professor at 
MIT.
    Next, Matthew Bunn, who is a Ph.D. with Belfer Center for 
Science and International Affairs at Harvard.
    Pattabi Seshadri who is with the Boston Consulting Group.
    Thank you all very much, I gave you a little bit out of 
order there, I think Dr. Bunn, you're in the order of seating, 
I should have introduced you before Dr. Todreas.
    But, anyway, let me ask you to just go across the table 
here, and give us the benefit of your views. If each of you 
could take 6 or 8 minutes and give us the main points that you 
think we need to understand. Then we will have some questions.
    Secretary Spurgeon, go right ahead.

   STATEMENT OF DENNIS R. SPURGEON, ASSISTANT SECRETARY FOR 
              NUCLEAR ENERGY, DEPARTMENT OF ENERGY

    Mr. Spurgeon. Thank you, sir. Chairman Bingaman, Ranking 
Member Domenici and members of the committee, it is a pleasure 
to be here today to discuss the Global Nuclear Energy 
Partnership or GNEP, as it relates to U.S. policy on nuclear 
fuel management. I might add that I look forward to engaging in 
a discussion to answer the questions and discuss the issues 
that were brought up by both the Chairman and the ranking 
member in their opening statements.
    I would request, Mr. Chairman, that my written statement be 
inserted into the record, I also would like to insert 4 
documents that provide additional background and perspective. 
These documents include the GNEP Statement of Principles; an 
address before the International Atomic Energy Agency 
Scientific Forum, I delivered on September 18, that's entitled: 
Innovation, Research, and Development for the Next Quarter 
Century; a report by the GNEP Independent Review Group, made up 
of members with expertise relevant to GNEP; and finally, a 
letter from Secretary of Energy, Samuel Bodman to the President 
of the National Academy of Sciences in response to the National 
Research Council's review of DOE's nuclear energy research and 
development program.
    The Chairman. We'll be glad to include the statement of 
each of you in the record in full, and we'll include those 
other documents, as well.
    Mr. Spurgeon. Thank you, sir.
    At the outset, let me stipulate that while some aspects of 
GNEP have evolved as we have engaged the international 
community, industry and other stakeholders--and I would add 
that it will continue to evolve--the GNEP vision remains 
unchanged. This vision is to promote a significant, wide scale 
use of nuclear energy in a safe and secure manner, and to take 
actions now that will allow that vision to be achieved while 
decreasing the risk of nuclear weapons proliferation and 
effectively addressing the challenge of nuclear waste disposal.
    GNEP was created to realize these goals, and to ensure the 
United States is not only a participant, but that we regain our 
role as global leaders in nuclear energy.
    In the short time I have to describe the complex and multi-
faceted GNEP program, I think it is most important to 
understand the basic principles that guide the overall GNEP 
effort. The statement of principles is outlined on the board 
you see before you.
    This Global Nuclear Energy Partnership is cooperation of 
those States that share the common vision of the necessity of 
the expansion of nuclear energy for peaceful purposes, in a 
safe and secure manner. This cooperation will be pursued with 
the following objectives: Expand nuclear power to help meet 
growing energy demand in a sustainable manner, and in a way 
that provides for safe operations of nuclear power plants, and 
management of wastes.
    In cooperation with the IAEA, continue to develop enhanced 
safeguards to effectively and efficiently monitor nuclear 
materials and facilities, to ensure nuclear energy systems are 
used on for peaceful purposes.
    Establish international supply frameworks to enhance 
reliable, cost-effective fuel services and supplies to the 
world market, providing options for generating nuclear energy 
and fostering development while reducing the risk of nuclear 
proliferation by creating a viable alternative to acquisition 
of sensitive fuel cycle technologies.
    Develop, demonstrate, and in due course, deploy advanced 
reactors that consume transuranic elements from recycled, spent 
fuel.
    Promote the development of advanced, more proliferation-
resistant, nuclear power reactors, appropriate for the power 
grids of developing countries and regions.
    Develop and demonstrate advanced technologies for recycling 
spent nuclear fuel, for deployment in facilities that do not 
separate pure plutonium, with a long-term goal of ceasing 
separation of plutonium, and eventually eliminating stocks of 
separated civilian plutonium. Such advanced fuel cycle 
technologies--when available--would help substantially reduce 
nuclear waste, simplify its disposition, and draw down 
inventories of civilian spent fuel in a safe, secure, and 
proliferation-resistant manner.
    Finally, take advantage of the best available fuel cycle 
approaches for the efficient and responsible use of energy and 
natural resources.
    Seventeen nations have now signed this Statement of 
Principles, and have become GNEP partners. Eighteen other 
nations, and three international organizations are 
participating as observers, and several of these nations are 
expected to join as partners.
    The Advanced Fuel Cycle Initiative, technology research and 
development program, outlined in my written statement, is 
designed to provide the technology advancements needed in order 
to make the vision of GNEP and its objectives a reality.
    The Secretary of Energy often remarks that there is no 
silver bullet to our energy challenges, or to climate change. 
However, he is quick to note nuclear power's potential of 
meeting the growing demand for energy, without producing 
greenhouse gases.
    GNEP comes at a crucial time in the burgeoning expansion of 
nuclear power, and a crucial time for the Nation's energy 
security. It is the only comprehensive proposal to close the 
nuclear fuel cycle in the United States, and engage the 
international community to minimize proliferation risks, as 
well as provide--and benefit from--cooperation in policy 
formulation, technical support, and technology and 
infrastructure development.
    Thank you, Mr. Chairman. I would be pleased to answer any 
questions you have.
    [The prepared statement of Mr. Spurgeon follows:]

   Prepared Statement of Dennis R. Spurgeon, Assistant Secretary for 
                  Nuclear Energy, Department of Energy

    Chairman Bingaman, Ranking Member Domenici, and members of the 
committee, it is a pleasure to be here today to discuss the Global 
Nuclear Energy Partnership or GNEP as it relates to U.S. policy on 
nuclear fuel management.
    It is my objective today to clearly define GNEP, discuss what has 
been accomplished, and what we plan to accomplish, and how we envision 
the program developing in the future. And in line with the hearing 
topic, GNEP is crucial to developing an effective and durable waste 
management strategy in the United States, as well as around the world. 
To that end, GNEP is completely compatible with our near-term effort to 
license and open the waste repository at Yucca Mountain, and as I will 
discuss, GNEP will complement and enhance its utility.
    At the outset, let me stipulate that while some aspects of GNEP 
have evolved as we have engaged theinternational community, industry, 
and other stakeholders, the GNEP vision remains unchanged. This vision 
is to promote a significant, wide-scale use of nuclear energy in a safe 
and secure manner, and to take actions now that will allow that vision 
to be achieved while decreasing the risk of nuclear weapons 
proliferation andeffectively addressing the challenge of nuclear waste 
disposal. GNEP was created to realize these goalsand to ensure the 
United States is not only a participant, but that we regain our role as 
global leadersin nuclear energy.

Why Nuclear?
    As this committee knows well, the Department of Energy (DOE) is 
tasked with promoting America's energy supply through reliable, clean, 
and affordable energy. It is clear today that with present energy 
demand projections, an expanded supply of electricity from a variety of 
resources must be expeditiously developed. The Energy Information 
Agency projects the demand for electricity in the United States will 
increase 50% by 2030, and global demand will nearly double over the 
same period. It is this projected increase in electricity demand that 
provides the most compelling argument for the expansion of nuclear 
energy-both domestically and internationally.
    Nuclear power is the only large scale, emissions-free source of 
baseload electricity currently available capable of meeting the growing 
demand.
    Nuclear energy produces 20% of our nation's electricity, and almost 
70% of our non-emitting source of domestic electricity. Last year, 
domestic nuclear power avoided an estimated 681 million metric tons 
ofcarbon emissions. That is the equivalent of eliminating carbon 
dioxide emissions from 96% of all passenger cars in the United States. 
Volumetrically, that amount of carbon dioxide would fill an area the 
size of Washington D.C. rising 1.2 miles.
    Many countries around the world are concluding that increased 
nuclear generation is necessary to support economic growth and to avoid 
emitting additional greenhouse gases. The global expansion of nuclear 
power is a reality, with 32 reactors currently under onstruction and an 
estimated 222 in the planning phase.
    Significant steps toward adding nuclear power generating capacity 
in the United States were taken last month with the first two complete 
submissions of combined Construction and Operating License applications 
to the Nuclear Regulatory ommission. Applications for 32 new nuclear 
plants are expected from 18 different utilities in the next 3 years. 
When completed, those plants will provide over 41,000 megawatts of 
electricity, enough power to supply almost 30 million homes with clean 
and reliable electricity.

GNEP Vision
    Even as nuclear power helps the global community to keep pace with 
electricity demand, this increased use raises two important concerns: 
How will the world community deal with the possibility that the 
expansion may raise the risk of nuclear weapons proliferation? And, how 
will used fuel from nuclear power be best managed? The President 
addressed these concerns, and offered an approach to meet the projected 
growing demand for electricity and concerns over climate change when he 
announced the Global Nuclear Energy Partnership in February, 2006.
    The National Security Strategy of the United States of America 
(March 16, 2006) establishes that the United States ``will build the 
Global Nuclear Energy Partnership to work with other nations to develop 
and deploy advanced nuclear recycling and reactor technologies. This 
initiative will help provide reliable, emission-freeenergy with less of 
the waste burden of older technologies and without making available 
separated plutoniumthat could be used by rogue states or terrorists for 
nuclear weapons. These new technologies will makepossible a dramatic 
expansion of safe, clean nuclear energy to help meet the growing global 
energy demand.''
    GNEP can advance the nonproliferation and national security 
interests of the United States, particularly by reinforcing policies 
that aim to reduce the spread of enrichment and reprocessing 
technologies, andeventually eliminating excess civilian plutonium 
stocks that have accumulated. GNEP is working to foster collaboration 
between developed and developing nations to overcome shared barriers to 
developing and expanding nuclear power, which include high capital 
costs for new projects, a high degree of requisite technical and 
industrial expertise, advanced technology development, and efficient 
regulatory policy.
    At the core of the GNEP vision is strengthening nuclear 
nonproliferation, and improving safety, security, and safeguards to 
enable the expansion of civilian nuclear power for peaceful purposes. 
GNEP would make one of its primary contributions to reducing 
proliferation risk by establishing a reliable and comprehensive 
fuelservice framework. By providing assured supply of fresh fuel and 
assured disposition of used fuel, this framework would help nations 
gain the benefits of nuclear power without the need to build their 
ownsensitive fuel cycle facilities. This would discourage the spread of 
enrichment and reprocessing capabilities, which could be misused to 
produce weapons.
    Additionally, the GNEP vision addresses management of used nuclear 
reactor fuel, an issue that is mostimportant for the long-term 
viability of nuclear power. In the United States and in many 
countriesthroughout the world, the build-up of used nuclear fuel could 
inhibit the long-term expansion of nuclearpower and requires 
significant resources to maintain the necessary security and 
international safeguards. Domestically, the GNEP vision is a closed 
U.S. nuclear fuel cycle that would benefit repository capacity, produce 
more manageable waste form, conserve resources, reduce current and 
future stocks of fissile material, and foster the expansion of clean 
and reliable electricity generation.

What is GNEP?
    The Global Nuclear Energy Partnership has both broad international 
and significant domestic aspects. The global aspect of GNEP is 
manifested through voluntary international partnership initiated by the 
United States. The domestic aspect is aimed at effectively managing 
both the resources available in used nuclear fuel and the associated 
waste. The Office of Nuclear Energy funds fuel cycle research and 
technology development at national laboratories and universities 
through the Advanced Fuel Cycle Initiative (AFCI) and coordinates 
activities with the Office of Science, the National Nuclear Security 
Administration, the Office of Civilian Radioactive Waste Management, 
and the Office of Environmental Management.

International Partnership
    The international partnership is an unprecedented voluntary 
alliance of nations that share the common vision of the necessity of 
the expansion of nuclear energy for peaceful purposes worldwide in a 
safe and secure manner. It aims to accelerate development and 
deployment of advanced fuel cycle technologies to encourage clean 
development and prosperity worldwide, improve the environment, and 
reduce the risk of nuclear proliferation by taking advantage of the 
best available fuel cycle approaches.
    GNEP seeks to reduce the risk of nuclear proliferation worldwide by 
promoting technologies that will reduce foreign stockpiles of separated 
plutonium generated from the civil nuclear industry. It aims to enhance 
the international nonproliferation regime by demonstrating safeguard 
systems that incorporate advanced materials accountability, control, 
and monitoring to reduce the threat of diversion or misuse. It also 
aims to develop advanced reactor designs that reduce proliferation 
risks, and promote infrastructure development to build the capacity of 
developing nations to utilize clean and reliable nuclear power, while 
achieving the highest nonproliferation standards.
    Cooperation will be carried out under existing, and where 
appropriate, new bilateral and multilateral arrangements. The 
international partnership is the overarching organization consisting of 
like minded nations under which current and future arrangements are 
developed to further the vision of GNEP set forth in the Statement of 
Principles,* which has been signed by 17 nations.
---------------------------------------------------------------------------
    * The additional materials referred to in Mr. Spurgeon's statement 
have been retained in committee files.
---------------------------------------------------------------------------
    The Global Nuclear Energy Partnership Statement of Principles 
outline seven key goals that constitute GNEP's comprehensive vision, 
identifying areas of cooperation ranging from closing the fuel cycle 
through recycling technology, to development of reactors appropriate 
for power grids in developing countries and regions, to cooperating 
with the International Atomic Energy Agency (IAEA) to strengthen 
safeguards against nuclear proliferation. In the words of Director 
General of the IAEA, Dr. Mohamed ElBaradei, at the September 
Ministerial: ``GNEP is . . . comprehensive because it deals with all 
aspects of the fuel cycle, both the front end and the back end. GNEP 
also aims to establish a global partnership . . .  Nuclear energy is an 
international concern and we need to man it on an international 
basis.''
    In an effort to further develop policy, technology and regulatory 
foundations, multilateral and bilateral arrangements within the 
partnership are being utilized. This cooperation maximizes 
opportunities for international cooperation and also allows a secure 
avenue for engaging in sensitive fuel cycle cooperation.
    In addition to new arrangements, existing multilateral arrangements 
ensure a means to further international cooperation to achieve GNEP's 
stated goals. The Generation IV International Forum (GIF), a thirteen-
nation research and development consortium, is leading the way toward 
innovative nuclear energy systems of the future. GIF has identified six 
advanced nuclear energy systems, and the consortium is pursuing the 
research and development pathways for stablishing technical and 
commercial viability, demonstration, and potential commercialization. 
Advanced technology systems being explored under GIF share parallel 
objectives with GNEP, and GIF's work has wide-ranging applicability for 
GNEP technology. GIF is an active member of GNEP, recently attending 
the GNEP Ministerial meeting as an observer.
    DOE's International Nuclear Energy Research Initiative (I-NERI) 
also plays an important and complementary role as an existing 
multilateral agreement. I-NERI, with five international partners, 
collaborates on research and development for advanced fuel cycle 
technology, as well Generation IV and hydrogen technology.
    Bilateral cooperation that benefits GNEP in its international 
technical development efforts includes arrangements between the United 
States and Russia, Japan, China, Australia, and Jordan. As an example, 
the U.S.-Russian Bilateral Action Plan outlines national strategies in 
nuclear power; identifies the common basis for U.S.-Russian cooperation 
in advanced recycling reactors, exportable small and medium reactors, 
nuclear fuel cycle technologies, and nonproliferation-all tenets of 
GNEP. Similarly, under the U.S.-Japan Bilateral Program Plan, we have 
formed working groups to conduct joint research and development, 
furthering the work being carried out in other bilateral agreements 
under the GNEP umbrella.

Research and Technology Development-AFCI
    International cooperation leverages technology development 
activities of several countries to maximize benefits to all. In that 
context, significant domestic technology development and industrial 
investment willbe needed to realize the GNEP vision.
    The Department of Energy and specifically, the Office of Nuclear 
Energy's technology mission objective is to facilitate the research and 
development of advanced technologies and make them available to market.
    DOE facilitates both of these objectives through its AFCI program. 
The driving intent of AFCI is to close the nuclear fuel cycle by 
fostering existing technologies as well as to develop advanced 
technologies that are cleaner, more efficient, less waste-intensive, 
and possibly even more proliferation-resistant than the once through 
system.
    In order to discuss the underlying technology AFCI is developing, 
it is important to understand what we are working to accomplish. To do 
this we need to look at the back end of the fuel cycle as an integrated 
system. The fundamental goal of closing the fuel cycle is to separate 
used fuel into reusable materials and waste. Through this process, both 
components may be more efficiently managed. This allows not only the 
reuse of the fissionable materials that can provide significant amounts 
of energy, but also provides options for minimizing and efficiently 
managing the resulting waste.
    In our current ``once-thru'' fuel cycle, the used nuclear fuel is 
planned for ultimate disposal in a permanent geological repository at 
Yucca Mountain, Nevada. Recycling used nuclear fuel rather than 
permanently disposing of it in a repository would result not only in 
utilizing more of the energy in nuclear fuel, but also reduce the 
amount of material that needs disposal in a repository, and the level 
of risk posed by that material.
    By separating just the uranium and plutonium for reuse as fuel, the 
remaining material could reach roughly the same level of radiotoxicity 
as the originally mined uranium ore in approximately 10,000 years. When 
advanced recycling technologies are deployed, the separation out of 
most long-lived actinides and fission products will result in an even 
great reduction of risk and accordingly greatly diminish the amount of 
material that needs disposal in a repository.
    Present day separation technologies allow uranium to be separated 
sufficiently enough to be re-enriched for use as fresh fuel. Modified 
versions of those technologies allow a plutonium-uranium combination to 
beextracted and made into fuel, but this would not achieve the ultimate 
goal of GNEP. More advanced technologies under development through AFCI 
could be able to further partition used fuel by extracting those 
chemical elements heavier than uranium, the transuranics, for use as 
fuel to further shorten the time it takes for the waste to reach the 
radiotoxicity of natural uranium. Making transuranic elements into fuel 
for use in a fast reactor, also under development in AFCI, could allow 
additional reductions of the long-term radiotoxicity of the waste, 
perhaps reaching the radiotoxicity of natural uranium within only 
hundreds of years. In practical terms, consuming the transuranic 
elements has the potential to increase the capacity of a repository by 
reducing overall volume and heat loading by more than a factor of ten.
    Making this advanced process practical would require making the 
separation process reliable, but also establishing the ability to 
fabricate a fuel type that can be used in a fast reactor. The current 
fleet of light water reactors cannot operate with fuel consisting of 
these isotopes. Fuel development in AFCI will determine the optimum 
transuranic fuels which in turn will determine the optimum fast reactor 
technology.
    Separation and recycling technology's foremost contribution is the 
overall reduction of nuclear waste that requires permanent disposal, 
and allows for repository medium flexibility. Advanced recycling would 
reduce the volume, heat-loading, also known as thermal output, and 
radiotoxicity of nuclear waste, and could exponentially increase the 
capacity of the geological repository at Yucca Mountain. The successful 
implementation of recycling would not replace the need for Yucca 
Mountain. However, GNEP's proposedrecycling activity could mitigate the 
burden on Yucca Mountain's physical limits, and the actual and 
projected volumes of used nuclear fuel from the current fleet of 
nuclear reactors and new reactors. In practical terms the ability to 
transmute, destroy, or burn transuranics in a fast reactor is the 
principal longterm waste management benefit of GNEP.
    GNEP's principles set the path to develop and demonstrate advanced 
technologies for recycling used nuclear fuel for deployment in 
facilities that do not separate pure plutonium and eventually eliminate 
stocks of separated civilian plutonium. Such advanced fuel cycle 
technologies, when available would help substantially reduce nuclear 
waste, simplify its disposition and draw down inventories of civilian 
used fuel in a safe, secure, and proliferation-resistant manner. They 
would also end the foreign accumulation of separated plutonium in the 
civil fuel cycle and draw down existing excess stocks worldwide.
GNEP Activities
    GNEP is not a static vision, and its related policies and 
technologies are capable of evolving to meet the ultimate goals of the 
United States. Since the introduction of the Global Nuclear Energy 
Partnership last year, we have pursued an aggressive path of seeking 
input and collaboration in many venues.

                             INTERNATIONAL

    The GNEP vision is set forth in the Statement of Principles. The 
landmark first Ministerial meeting on May 21, 2007, was hosted by U.S. 
Secretary of Energy Samuel Bodman. Ministers and atomic energy 
officials from China, France, Japan, Russia, and the United States 
gathered to engage in productive discussion and issued a Joint 
Statement of Support that clearly recognized the role of nuclear power 
and a common approach to nuclear power consistent with GNEP vision.
    The second Ministerial meeting was held on September 16, in Vienna, 
Austria. The meeting was attended by a total of 35 nations and three 
inter-governmental organizations. Sixteen nations signed the Statement 
of Principles at the meeting and several others indicated interest in 
signing and becoming a partner upon formal review by their governments. 
The partners include the original five countries, China, France, Japan, 
Russia, and the United States, and eleven new countries; Australia, 
Bulgaria, Ghana, Hungary, Jordan, Kazakhstan, Lithuania, Poland, 
Romania, Slovenia, and Ukraine. The partnership continues to grow, as 
evidenced by Italy announced decision to become a partner just 
yesterday.
    In addition to the signing of the Statement of Principles, the 
September ministerial meeting established the structure and governing 
procedures for GNEP which provides for an executive committee, a 
steering group, and expert working groups. Two working groups were 
approved, and two further working groups are under consideration-
setting the partner nations on a path to immediately begin working to 
address the challenges to development of comprehensive global nuclear 
fuel services, as well as the necessary nuclear infrastructure needed 
to ensure nuclear power is developed in a safe, secure, and responsible 
manner and is used only for peaceful purposes.
    Therefore, GNEP is a vehicle for both international cooperation and 
technology development, and has, is, and will be seeking input as a 
means of making the partnership a dynamic operational mechanism. 
Collecting technical, budgetary and environmental data and input 
enables GNEP to adjust, working to make it the most effective, economic 
and technically feasible.

                                INDUSTRY

    DOE initiated significant industrial input for GNEP in May 2007 
when a Funding Opportunity Announcement (FOA) was issued. The FOA 
sought applications from commercial entities to provide technology 
development roadmaps, business plans, and a communications strategy 
supporting the GNEP conceptual design studies for a nuclear fuel 
recycling center and advanced recycling reactor. The conceptual design 
studies will address the scope, cost, and schedule to build the initial 
facilities. The technology development roadmaps will describe the state 
of readiness for their proposed processes and design concept, and the 
longer-term technology development needs to achieve the ultimate GNEP 
vision. The business plans will address how the market may facilitate 
DOE plans to develop and facilitate commercialization of advanced fuel 
cycle technologies and facilities. The communications plans will 
provide DOE with information on the dissemination of scientific, 
technical, and practical information relating to nuclear energy and 
closing the nuclear fuel cycle. DOE anticipates receiving responses 
describing commercial technology that may be deployable in the near-
term.
    In September DOE awarded over $16 million to four industry-led 
consortia to begin producing this information and data. We will receive 
the first data in January of next year and will potentially authorize 
further work with some of the consortia after analyzing the 
submissions.

                                CONGRESS

    When GNEP was introduced as part of the President's Advanced Energy 
Initiative in the Fiscal Year 2007 budget request, we requested $250 
million for AFCI. The House of Representatives approved only $120 
million in its appropriations legislation and the Senate, as you know, 
did not ultimately pass an Energy & Water Appropriations bill. In 
accordance with the Joint Resolution ultimately enacted, AFCI was 
provided with $167.5 million, one-third below the requested amount. As 
part of this appropriations process, we received significant input via 
``report language'' accompanying the respective bills.
    In February, we submitted the Fiscal Year 2008 budget request, 
which includes $395 million for AFCI. The House of Representatives 
passed an appropriations bill providing only $120 million in funding. 
The Senate has not passed its version of that legislation yet, but the 
Appropriations Committee approved a bill which would provide $242 
million. Again, Congress provided, and DOE has considered, significant 
input as part of this process. Additionally, as part of the Fiscal Year 
2006 appropriations process, Congress provided funding to provide 
grants to entities desiring to host recycling facilities to conduct 
siting studies of the proposed sites. Ultimately, Congress has not 
provided the level of funding support the Administration felt necessary 
and DOE has sought to adjust the program accordingly.

                                 PUBLIC

    Perhaps most importantly, we have sought public input, and will 
continue to do so in the future. As previously discussed, in August 
2006, DOE issued a Funding Opportunity Announcement making funds 
available to conduct detailed studies of potential GNEP sites. We 
received responses from entities representing 11 communities in eight 
states interested in hosting advanced recycling facilities, and awarded 
over $10 million to conduct the studies.
    In January, DOE initiated an environmental review of the GNEP 
program as part of the process established in NEPA. Subsequently we 
hosted 13 meetings across the country to receive public comment 
relating to the scope of this GNEP Programmatic Environmental Impact 
Statement (PEIS). Ultimately we received over 14,000 comments, and we 
are in the process of preparing a draft PEIS informed by those 
comments. We expect to issue the draft in the near future and will 
again host public meetings and receive comments that will be reviewed 
and assist us in finalizing the PEIS and preparing in coordination, a 
Record of Decision next year.

NAS Response
    Given the scope of this hearing, I think it is incumbent upon me to 
address the recent report issued by the National Research Council 
(Council), and specifically as it treats GNEP. The report's ultimate 
conclusion that has subsequently received significant media coverage is 
that, ``. . . the GNEP program should not go forward and it should be 
replaced by a less aggressive research program.'' DOE takes issue with 
several of the premises on which the Council based its conclusion, but 
I think it's important to first note that inherent in the conclusion is 
the presumption that DOE should continue to pursue efforts to close the 
fuel cycle.
    However, the Council's conclusion is based on the incorrect premise 
that DOE has already made selection of technologies and is aggressively 
moving to facilitate commercialization of those technologies. The 
Councilmistakenly assumed that because the UREX+ separations technology 
was developed in our National Laboratories and has been designated the 
``baseline'' technology for development and comparison purposes that 
DOE has in fact selected UREX+, excluding all other technologies. Not 
only is this not an accurate reflection of the AFCI program, but such a 
path is not consistent with our National Environmental Policy Act 
process which ensures such decisions are made in a deliberate and 
transparent manner, with ample opportunity for public comment.
    While the Council supports the goal of closing the fuel cycle to 
the point of rejecting a minority opinion to the contrary, DOE strongly 
disagrees with the lack of urgency the committee shows for this 
important mission. With large expected increases in the demand for 
electricity as well as serious concerns about climate change, a 
substantial increase in nuclear capacity is required worldwide. This 
creates a serious urgency to definitively develop an answer to the 
``waste question'' that is credible and durable, that provides the 
opportunity for alternative waste disposition paths while also 
minimizing the requirement for geologic repositories, and makes the 
most efficient use of nuclear resources.

Economic Justification
    Some have questioned the economic justification for closing the 
fuel cycle and doing so in the near-term. However, most who raise these 
questions fail to acknowledge that any effort seeking to close the 
nuclear fuel cycle must be viewed through a macro lens to accurately 
assess the aggregate costs and benefits. An economic analysis is 
incomplete without assigning representative value to the important 
benefits from fuel cycle options.
    Previous analyses, including some to be discussed here today, 
attempt to compare a closed fuel cycle to a direct disposal approach. 
This is an appropriate comparison of fuel cycle strategies, but in 
doing so the analysis must consider not only the dollars expended, but 
also address the goals of the used fuel management, including: 
minimization of repository requirements in both size and quantity, 
maximization of repository medium options, conservation of resources, 
and unquantifiable benefits of positive environmental impacts such as 
greenhouse gas avoidance, and health benefits stemming from noxious 
emissions avoidance. Perhaps most notably, most analyses take a narrow 
and outdated view of the security and nonproliferation benefits of 
closing the fuel cycle and ignore the significant benefits of offering 
reliable fuel services to discourage the spread of sensitive fuel cycle 
technologies.
    Beyond the omission of macro analyses, the current studies are 
heavily dependent upon the principal assumption that direct disposal 
will be available at a modest cost as we look toward an expansion of 
nuclear power. This assumption has not proven accurate to date. 
Additionally, the federal government continues to incur financial 
liability for failure to remove used fuel from existing reactor sites. 
This liability could approach $7 billion if Yucca Mountain is opened in 
2017, and will grow by an approximate annual average of $500 million 
for each additional year of delay.
    The nation's commercial reactors will have generated enough used 
fuel for Yucca Mountain to meet its current statutory capacity by the 
end of this decade, well before the current fleet of reactors is 
retired and before considering the next generation of plants. Given the 
challenges we have experienced in opening a repository, the assumption 
of unfettered expansion of direct disposal is tenuous. The burden of 
identifying the locations for multiple repositories is a cost that is 
avoided for at least a century by closing the fuel cycle. Separating 
used fuel allows for waste forms that can enable alternative, and 
likely cheaper, disposal options that were not available with a direct 
disposal approach.
    One key nonproliferation goal of GNEP is to enable the global 
expansion of nuclear power without the spread of sensitive fuel cycle 
technologies that can contribute to nuclear proliferation. Most 
analyses comparing direct disposal with recycling do not consider the 
value of the U.S. participating in a system that would relieve nations 
of the need to develop these sensitive technologies indigenously. It is 
difficult to see how the U.S. could take a central role in a fuel 
supply and take-back arrangement unless we deploy a sustainable waste 
management system. Additionally, the opportunity to eliminate the 
civilian foreign stocks of separated plutonium worldwide is enhanced by 
the availability of additional U.S. power plants licensed to consume 
plutonium bearing fuels.
    The opportunity costs of a closed fuel cycle are hard to quantify, 
however, an analysis best serves the public by going beyond the 
strictly monetary or accounting costs of technology development to 
include all benefits of a closed fuel cycle.
    The Secretary of Energy often remarks that there is no silver 
bullet to our energy challenges or to climate change. However, he is 
quick to note nuclear power's potential of meeting the growing demand 
for energy. GNEP comes at a crucial time in the burgeoning expansion of 
nuclear power, and a crucial time for our nation's energy security. It 
is the only comprehensive proposal to close the nuclear fuel cycle in 
the United States, and engage the international community to minimize 
proliferation risks as well as provide and benefit from cooperation in 
policy formation, technical support, and technology and infrastructure 
development.
    This concludes my prepared statement. I would be pleased to answer 
any questions you may have.

    The Chairman. Thank you very much.
    Dr. Orszag, thank you for being here.

 STATEMENT OF PETER R. ORSZAG, DIRECTOR, CONGRESSIONAL BUDGET 
                             OFFICE

    Mr. Orszag. Mr. Chairman, Senator Domenici, other members 
of the committee thank you for having me this morning.
    CBO's testimony this morning evaluates the cost of direct 
disposal versus reprocessing. Our conclusion is that under a 
variety of plausible sets of assumption, reprocessing is more 
expensive than direct disposal, and therefore, in evaluating 
these two approaches, you may need to weigh the costs against 
other policy objectives, and let me try to describe that in a 
little bit more detail.
    First, on the economics of reprocessing. There are 
potential economic benefits or cost reductions from, for 
example, reducing spending on newly mined uranium, and 
extending the life of uranium resources, and also potentially 
on reducing the size and need for the capacity of a long-term 
repository. But, let me just spend a moment on that topic, 
because I know it's particularly important to this committee.
    The primary restraint on a long-term repository is not the 
volume, but rather the heat of the stored waste. From that 
perspective, there is a potential benefit in terms of the waste 
from the reprocessing itself, does have lower heat content than 
spent fuel. However, once you reuse the reprocessed fuel, run 
it back through a reactor, that spent reprocessed fuel is 
hotter--it has a higher heat content--than once-through spent 
fuel. So, unless you are going to store the spent reprocessed 
fuel in some other temporary storage facility for an extended 
period of time to allow it to cool, you vitiate any potential 
benefits in terms of reducing the need or the capacity 
limitations of a long-term repository.
    Senator Domenici. Would you state that again?
    Mr. Orszag. Sure. You could imagine, again, the key thing 
in terms of the capacity of a repository is the heat content of 
the waste, and there's basically an ordering. The hottest is 
spent, reprocessed fuel, that is, you used the fuel once, you 
run it through a reprocessing facility, you use it again, you 
wind up with some waste product from that. That's the hottest--
that is the highest heat content.
    Below that is once-through spent fuel, that is, you run it 
through a reactor once, and that's what we traditionally have 
now, and that's spent fuel, and then below that is, you run the 
fuel through a reactor, you have spent fuel, you reprocess it, 
and the reprocessing process itself creates some waste, that 
does have lower heat content than the once-through spent fuel.
    But the key point is, if you're going to store the waste 
from the spent, reprocessed fuel in a long-term repository, 
which ultimately you will need to do, you can vitiate any 
potential benefits in terms of the capacity needs of that long-
term repository, from the reprocessing process.
    So, those are the potential benefits. On the other hand, 
you do need to build a facility to undertake the reprocessing, 
and as I've already noted, you still do have some need for 
long-term storage.
    We reviewed a variety of analyses that have been undertaken 
in comparing these two approaches--including some that were 
conducted by people on this panel--and concluded that if you 
take the current 2,200 metric tons per year of waste that is 
produced by U.S. reactors, and look at the potential life of a 
reprocessing facility, and look at the relative costs of 
reprocessing versus direct disposal, in present value that is 
the amount today that is equivalent to those flows. 
Reprocessing would cost at least $5 billion more than direct 
disposal, which is roughly 25 percent more than the direct 
disposal option.
    Now, there is a significant amount of uncertainty 
surrounding all of these numbers. For example, our analysis 
assumes that a reprocessing facility would operate at full 
capacity, basically continuously, and existing reprocessing 
facilities in other countries have not been able to do that. If 
the plant did not operate continuously, the cost of the 
reprocessing option would go up.
    On the other hand, our analysis also assumes that the 
current elevated level of uranium spot prices will not be 
perpetuated over a very long period of time. If uranium prices 
remain very high for a very long period of time, that makes 
reprocessing more attractive, because one of the benefits of 
reprocessing is you reduce the need for newly mined uranium.
    Our conclusion, we believe, is relatively robust across a 
variety of these assumptions, however, which is why I stated it 
the way I did. I would note that we did not take into account, 
where we did the analysis evaluating thermal reactors, and not 
advanced burner reactors, and overall analysis of GNEP, 
including the advance burner part of it would require a whole 
variety of different analyses, and it would involve different 
cost considerations, also. So, our analysis is for thermal 
reactors, and existing reprocessing technologies.
    Final point is, although reprocessing under a variety of 
plausible assumptions does cost more than direct disposal, 
there are other important policy objectives that may be worth 
taking into account in evaluating these two options, including 
extending uranium resources, including any potential effects on 
proliferation, and again, depending on exactly what is done 
with the spent, reprocessed fuel, including the capacity of a 
long-term repository.
    Thank you very much.
    [The prepared statement of Mr. Orszag follows:]

    Prepared Statement of Peter R. Orszag, Director, Congressional 
                             Budget Office

 COSTS OF REPROCESSING VERSUS DIRECTLY DISPOSING OF SPENT NUCLEAR FUEL

    Mr. Chairman, Senator Domenici, and Members of the Committee, thank 
you for the invitation to discuss the Congressional Budget Office's 
(CBO's) analysis of thecosts of two alternatives for the use and 
disposal of nuclear fuel. For the past 50 years, the nuclear waste 
produced at reactors across the United States has largely been stored 
at the reactor sites. That practice, however, has been deemed untenable 
for the long run.
    CBO's analysis compares the cost of two fuel-cycle alternatives for 
the current generation of thermal reactors. One alternative is direct 
disposal (as stipulated by current law), which involves using nuclear 
fuel once, cooling it at an interim storage site, and then disposing of 
it in a long-term repository. The second alternative is reprocessing, 
in which spent nuclear fuel is cooled and then reprocessed for one 
additional use in a reactor, and the wastes from reprocessing are 
stored in a longterm repository.
    My testimony makes the following key points:

   The cost of directly disposing of spent nuclear fuel is less 
        than the cost of reprocessing it. That basic result holds 
        across a wide range of plausible assumptions, but the magnitude 
        of the cost difference between the alternatives varies 
        significantly among different analyses.
   Two studies illustrate the range of estimates of the cost 
        difference between reprocessing and direct disposal. A study by 
        the Boston Consulting Group estimates that reprocessing spent 
        nuclear fuel would cost $585 per kilogram-or about 6 percent 
        more than direct disposal. CBO's analysis of another study, by 
        a group of researchers affiliated with Harvard University's 
        Kennedy School of Government, suggests that reprocessing would 
        cost about $1,300 per kilogram-or more than twice as much as 
        direct disposal.
   From its analysis of those and other studies, CBO concludes 
        that for the roughly 2,200 metric tons of spent fuel produced 
        each year in the United States, the reprocessing alternative 
        would be likely to cost at least $5 billion more in present-
        value terms than the direct-disposal alternative over the life 
        of a reprocessing plant. (Present-value figures convert a 
        stream of future costs into an equivalent lump sum today.) The 
        cost of reprocessing would be at least 25 percent greater than 
        the cost of direct disposal.
   Major sources of uncertainty in such estimates include how 
        much it would cost to build and operate a reprocessing 
        facility, how long the facility would last, and the market 
        value of reprocessed fuel.
   Policymakers evaluating the reprocessing and direct-disposal 
        options may be concerned not only about cost but also about 
        such potentially important issues as the impact of the 
        alternatives on the threat of nuclear proliferation and the 
        need for long-term storage space for spent fuel. Those issues 
        are largely beyond the scope of CBO's analysis.
             background on nuclear fuel-cycle alternatives
    As of 2006, 104 nuclear reactors were operating in the United 
States, with a collective generating capacity of about 100 gigawatts of 
electricity. Those reactors account for nearly 20 percent of the 
electricity produced in this country.\1\
---------------------------------------------------------------------------
    \1\ Department of Energy, Energy Information Administration, Annual 
Energy Review 2006 (June 2007), Table 8.2a, available at 
www.eia.doe.gov/emeu/aer/pdf/pages/sec8_8.pdf.
---------------------------------------------------------------------------
    All of the commercial nuclear power plants in the United States 
generate electricity by relying on the uranium-235 isotope to sustain a 
nuclear reaction. Uranium-235 is relatively scarce and typically makes 
up less than 1 percent of mined uranium ore. The bulk of that ore 
consists of uranium-238, which cannot be used directly to sustain a 
nuclear fission chain reaction. For a sustained reaction to occur, the 
uranium must be enriched-that is, the proportion of uranium-235 must be 
increased, generally to between 3 percent and 5 percent in the case of 
fuel for civilian reactors.
    After approximately four years in a reactor, too little uranium-235 
remains in the fuel to generate electricity. The spent fuel can be 
handled in one of two ways: Under direct disposal, it is placed in 
interim storage for cooling, with the goal of eventually storing it in 
a stable geologic formation over the long term. Under reprocessing-
which is done in a few countries but not the United States-a 
reprocessing facility recovers the useful components of the spent fuel 
(uranium and certain forms of plutonium) and returns them to the fuel 
cycle, where they are combined with newly mined uranium to produce more 
reactor fuel (see Figure 1).* Any waste remaining from the spent 
nuclear fuel after the uranium and plutonium are removed is intended to 
be stored in a long-term repository. Thus, under either option, some 
form of long-term storage facility is necessary.
---------------------------------------------------------------------------
    * Figures 1-3 have been retained in committee files.
---------------------------------------------------------------------------
    No long-term repository for storing commercial nuclear waste is 
currently operating anywhere in the world. The Department of Energy 
(DOE) is planning to build and operate such a repository at Yucca 
Mountain in Nevada. That facility, originally scheduled to open in 
1998, is now intended to start operating in 2017, although a later 
opening date-2020 or 2021-is more likely.\2\ That date would be nearly 
40 years after lawmakers directed DOE to begin studying potential sites 
for a deep underground repository for spent nuclear fuel.\3\
---------------------------------------------------------------------------
    \2\ Statement of Edward F. Sproat, Director, Office of Civilian 
RadioactiveWaste Management, at the 178th meeting of the Nuclear 
Regulatory Commission's Advisory Committee on Nuclear Waste, April 10, 
2007, available at www.nrc.gov/reading-rm/doc-collections/acnw/tr/2007/
nw041007.pdf
    \3\  As originally enacted, the Nuclear Waste Policy Act of 1982 
called for studies of three potential sites for long-term geologic 
repositories. Sections 5011 and 5012 of the Nuclear Waste Policy 
Amendments Act of 1987 effectively cancelled any investigation into 
sites other than the one at Yucca Mountain.
---------------------------------------------------------------------------
    With such delays, the accumulated stock of nuclear waste is 
expected to exceed Yucca Mountain's mandated capacity before the 
facility begins accepting waste for storage. One approach to that 
problem is to expand the repository's capacity, either physically or by 
lifting the mandated limit on how much waste Yucca Mountain can accept 
(an option that many observers believe could be undertaken without 
compromising safety). Another approach is to reprocess spent nuclear 
fuel for reuse in reactors. That option could increase the effective 
capacity of the repository by allowing more nuclear waste to be stored 
in a given amount of space.
    The main factor that determines the overall storage capacity of a 
long-term repository is the heat content of nuclear waste, not its 
volume. The waste that results from reprocessing spent fuel from 
thermal reactors has a lower heat content (after a period of cooling) 
than the spent fuel itself does. Thus, it can be stored more 
densely.\4\ The extent of that densification directly affects the 
relative costs of direct disposal and reprocessing. However, unlike 
waste from the reprocessing process, spent fuel that has been 
reprocessed and used again has a higher heat content than spent fuel 
that has been used only once. Storing that previously recycled spent 
fuel in the long-term repository immediately would eliminate all of the 
densification benefits of reprocessing. onsequently, for reprocessing 
to reduce the need for-and cost requirements of-long-term storage, 
previously recycled spent fuel would have to be allowed to accumulate 
at some location outside the repository.
---------------------------------------------------------------------------
    \4\ The ``densification factor'' describes that relationship; for 
example, a densification factor of 2 indicates that twice as much waste 
from reprocessing can be stored at the same total cost (in other words, 
that the unit cost of storage is half as much).
---------------------------------------------------------------------------
    Besides potentially lowering long-term disposal costs, reprocessing 
spent nuclear fuel has the advantage of reducing expenditures for 
freshly mined and enriched uranium. In effect, recovering unused 
uranium from spent fuel extends the life of unmined uranium resources. 
Furthermore, recovered plutonium is not subject to many of the fuel-
preparation costs (such as for conversion and enrichment) that are 
necessary with uranium (see Figure 1). That potential for front-end 
savings was especially appealing when the U.S. commercial nuclear 
program began in the 1950s. It became less pronounced by the 1960s, as 
uranium prices declined and uranium preparation techniques matured. 
Spot prices for uranium have recently reached historical highs 
(adjusted for inflation), but high prices would have to persist for 
decades to increase the economic viability of reprocessing.
    Reprocessing and direct disposal differ not only in potential costs 
but also in possible risks for the proliferation of nuclear weapons. 
Spent nuclear fuel itself poses little risk of proliferation because 
the plutonium it contains is mixed with highly radioactive elements and 
can be recovered only in dedicated reprocessing facilities.\5\ But the 
most widely used method of reprocessing-called plutonium and uranium 
recovery by extraction, or PUREX-yields pure plutonium, which has 
relatively low radioactivity and can be handled directly. Thus, the 
PUREX method recovers plutonium in a form that poses risks for theft 
and proliferation. Other reprocessing methods being considered by 
policymakers try to reduce those risks by not separating pure plutonium 
from spent fuel.
---------------------------------------------------------------------------
    \5\ Steve Fetter and Frank N. von Hippel, ``Is U.S. Reprocessing 
Worth the Risk?'' Arms Control Today (September 2005), available at 
www.armscontrol.org/act/2005_09/Fetter-VonHippel.asp.
---------------------------------------------------------------------------
                        REPROCESSING FACILITIES

    The United States has limited experience with commercial 
reprocessing. Three reprocessing plants were built for commercial use, 
but only one-a plant in West Valley, New York, that opened in 1966-
achieved any level of operation. The need for costly upgrades caused it 
to close in 1976, having handled only spent fuel from national defense 
operations.\6\
---------------------------------------------------------------------------
    \6\ Anthony Andrews, Nuclear Fuel Reprocessing: U.S. Policy 
Development, Report for Congress RS22542 (Congressional Research 
Service, November 29, 2006).
---------------------------------------------------------------------------
    Today, five nations-France, the United Kingdom, Japan, Russia, and 
India-have or are developing reprocessing facilities. The world's 
largest reprocessing plant is located in La Hague, France, and has a 
gross capacity of 1,700 metric tons per year. The United Kingdom has 
two reprocessing centers at its Sellafield Nuclear Site: a 900-metric-
ton thermal oxide reprocessing plant (THORP) and a facility that 
specializes in reprocessing waste for two specific British nuclear 
facilities (Oldbury andWylfa, both of which are expected to cease 
operations by 2010). Another reprocessing facility has been under 
construction in Rokkasho, Japan, since the late 1980s. The start of 
commercial operations there has been delayed several times but is now 
expected to occur later this year.

             THERMAL REACTORS VERSUS FAST-NEUTRON REACTORS

    CBO's analysis compares the cost of reprocessing nuclear fuel from 
thermal reactors-the type of commercial reactor used now in the United 
States-with the cost of using uranium fuel a single time and then 
putting all of it in a geologic repository. However, some policy 
initiatives, such as the Global Nuclear Energy Partnership, have 
focused on another type of reactor: an advanced burner reactor, which 
is a type of fast-neutron reactor. Whereas thermal reactors rely on 
less energetic, or modulated, neutrons to sustain a nuclear chain 
reaction, fast-neutron reactors rely on unmodulated (and hence more 
energetic) neutrons for a reaction. Fast-neutron reactors use plutonium 
as a fuel source rather than uranium because plutonium maintains a 
reaction with unmodulated neutrons more readily than commercialgrade 
enriched uranium does.
    Fast-neutron reactors offer several advantages. They can convert 
plentiful uranium-238 (which is not usable for nuclear chain reactions) 
into plutonium in such a way as to produce (or breed) more plutonium 
than the reactor itself uses. In that way, a fast-neutron breeder 
reactor can extend uranium resources by accessing 60 to 100 times more 
of the energy content of uranium than thermal reactors can.\7\ Fast-
neutron reactors also generate less spent fuel than thermal reactors 
do. Besides uranium and plutonium, spent nuclear fuel includes two 
other types of waste: fission products and minor actinides. Minor 
actinides decay less rapidly than fission products do. Because the 
capacity of a geologic repository depends to a significant degree on 
the long-term radioactivity of waste, it is greatly influenced by the 
amount of minor actinides present in spent fuel. Advanced burner 
reactors can potentially burn all of the actinides in nuclear fuel, so 
waste from those reactors requires less geologic storage space than 
does either spent nuclear fuel from thermal reactors or the waste from 
reprocessing thermal reactors' spent fuel.
---------------------------------------------------------------------------
    \7\ Uranium Information Centre, Fast Neutron Reactors, Briefing 
Paper No. 98 (Melbourne, Australia: Australia Uranium Association, June 
2006), available at www.uic.com.au/nip98.htm.
---------------------------------------------------------------------------
    Whereas reprocessing spent fuel is merely an option with thermal 
reactors (to extend uranium resources or to potentially expand long-
term storage capacity), it is an integral part of the fuel cycle for 
advanced burner reactors. The fuel needed to power advanced burner 
reactors can be collected by reprocessing spent fuel from thermal 
reactors or from burner reactors. Furthermore, if burner reactors are 
used to reduce thermal-reactor waste, spent nuclear fuel must be 
reprocessed.
    This testimony does not consider reprocessing in the context of 
fast-neutron reactors, for three reasons. First, no commercial fast-
neutron reactors exist in the United States and none are planned. 
Second, the 60-year-old PUREX process is essentially the only 
reprocessing method now used for thermal reactors, and given its long 
history, the cost of PUREX is better known than the costs of more-
recent reprocessing technologies that are being considered for fast-
neutron reactors. Third, reprocessing fuel for advanced burner reactors 
would probably require reprocessing nuclear waste from thermal reactors 
as a first step to create the fuel for the burner reactors and to 
manage any existing thermal-reactor waste. Thus, reprocessing thermal-
reactor waste can be thought of as a transitional element to a burner-
reactor program.

         COST COMPARISONS FOR DIRECT DISPOSAL AND REPROCESSING

    Reprocessing nuclear fuel could have several economic advantages 
over direct disposal. It could reduce spending on newly produced 
uranium fuel and extend the useful life of uranium resources. In 
addition, it could save money on long-term storage by reducing the size 
of the repository necessary to handle spent nuclear fuel or by delaying 
the need to expand such a facility in the future.
    With current reactor technology, reprocessing would also have 
economic disadvantages. First, it would require building dedicated 
facilities to recover the useful components of spent nuclear fuel and 
then to combine them into a form usable in a nuclear reactor. Second, 
previously recycled spent fuel would also need some form of long-term 
storage.
    To quantify the relative costs of reprocessing and direct disposal, 
CBO's analysis focuses on the costs of handling nuclear fuel after it 
is discharged from a reactor. In the case of reprocessing, those costs 
include the costs of reprocessing services (both recovering uranium and 
plutonium and fabricating them into usable nuclear fuel), 
transportation, and long-term disposal of wastes, partially offset by 
``fuel credits,'' which various models use to reflect the value of the 
reprocessed fuel (in the form of savings on the costs of newly 
purchased fuel). In the case of direct disposal, the costs in this 
analysis include costs for interim storage to cool the spentfuel, 
transportation, and long-term disposal.
    CBO reviewed a number of studies that shed light on the costs of 
nuclear fuelcycle alternatives, including reports by the National 
Research Council, the Massachusetts Institute of Technology, the Idaho 
National Laboratory, and the Nuclear Energy Agency of the Organisation 
for Economic Co-operation and Development (OECD).\8\ However, CBO's 
analysis focused on two studies in particular: a 2006 report by the 
Boston Consulting Group (BCG) and a 2003 report by researchers at 
Harvard University's Kennedy School of Government.\9\ Those two studies 
are the only recent analyses available that investigate the costs of 
all facets of both reprocessing and direct disposal (including 
transportation, interim storage, and credits for recycled fuel). Other 
studies consider only the costs of reprocessing or do not examine the 
various components of total costs. In addition, the two studies' 
estimates of the cost of reprocessing services-one of the largest cost 
elements-bound the range of estimates provided in, or implied by, the 
other studies. The Kennedy study's estimate of the cost of reprocessing 
services is about twice the size of the BCG study's estimate. Other 
studies that CBO examined had cost estimates for reprocessing services 
that fell within the range defined by those two reports.
---------------------------------------------------------------------------
    \8\ National Research Council, Nuclear Wastes: Technologies for 
Separations and Transmutations (Washington, D.C: National Academy 
Press, 1996); Massachusetts Institute of Technology, The Future of 
Nuclear Power (Cambridge, Mass.: MIT, 2003), available at http://
web.mit.edu/nuclearpower; D.E. Shropshire, Advanced Fuel Cycle Cost 
Basis (Idaho Falls: Idaho National Laboratory, April 2007), available 
at www.inl.gov/technicalpublications/Documents/3667084. pdf; and 
Nuclear Energy Agency, The Economics of the Nuclear Fuel Cycle (Paris: 
Organization for Economic Co-operation and Development, 1994), 
available at www.nea.fr/html/ndd/reports/efc.
    \9\ Boston Consulting Group, Economic Assessment of Used Nuclear 
Fuel Management in the United States (study prepared for AREVA Inc., 
July 2006); and Matthew Bunn and others, The Economics of Reprocessing 
vs. Direct Disposal of Spent Nuclear Fuel (Cambridge, Mass.: Belfer 
Center for Science and International Affairs, John F. Kennedy School of 
Government, Harvard University, December 2003).
---------------------------------------------------------------------------
    EVALUATING THE BOSTON CONSULTING GROUP AND KENNEDY STUDIES ON A 
                             COMMON GROUND

    The BCG study concludes that reprocessing spent fuel costs about 
$30 more per kilogram than direct disposal (which the study estimates 
at $555 per kilogram). To directly compare that estimate with the 
results of the Kennedy study, CBO modified the Kennedy study to reflect 
a similar initial framework as in the BCG study. In that framework, the 
Kennedy study implies that reprocessing costs about $700 more per 
kilogram than direct disposal. Given the volume of waste expected to be 
generated over the lives of the plants evaluated, those estimates 
suggest that the present-value cost of reprocessing exceeds that of 
direct disposal by about $2 billion for the BCG study and by about $26 
billion for the Kennedy study, as modified by CBO. (Present-value 
calculations use a discounted cost framework that describes the amount 
of funds that would be necessary in 2007 to pay all of the costs of a 
waste-management option over the assumed lifetime of a reprocessing 
plant.)
    Several differing assumptions account for much of the gap between 
those two present-value estimates. Such assumptions include the 
interest rate used to estimatethe present value of future costs (the 
discount rate), the relationship between a reprocessing plant's yearly 
operating costs and total capacity costs, the time horizon over which 
the plant operates, the cost of a long-term repository, and the degree 
to which waste from reprocessing can be stored more densely than spent 
nuclear fuel in the repository. Changes to any of those assumptions 
will affect the relative costs of the two waste-handling alternatives. 
To control for those differences, CBO's analysis imposed a common set 
of cost assumptions on the estimates from the BCG study and from the 
modified Kennedy study. In particular, CBO assumed the following:

   A discount rate of 3.5 percent, which lies between the rates 
        used in the two studies.
   Plant operating costs that equal 6 percent of the plant's 
        capital costs, a rule of thumb adopted in an analysis by OECD's 
        Nuclear Energy Agency.\10\ That figure lies between the 4.6 
        percent ratio implied by the BCG study and the 7.5 percent 
        ratio implied by the Kennedy study.
---------------------------------------------------------------------------
    \10\ Nuclear Energy Agency, Accelerator-Driven Systems and Fast 
Reactors in Advanced Nuclear Fuel Cycles: A Comparative Study (Paris: 
Organization for Economic Co-operation and Development, 2002), p. 211, 
available at www.nea.fr/html/ndd/reports/2002/nea3109.html.
---------------------------------------------------------------------------
   A lifetime of 40 years for a reprocessing plant, the 
        midpoint between the 50-year figure used in the BCG study and 
        the 30-year lifetime assumed in the Kennedy study.
   Repository costs of $1,036 per kilogram of heavy metal 
        stored in the repository, an estimate that CBO developed using 
        cost data from DOE. That cost exceeds both the $736 per 
        kilogram figure in the BCG study and the $868 per kilogram 
        estimate in the Kennedy study.
   A densification factor of 2.5 applied to repository 
        capacity, based on the study by the Idaho National 
        Laboratory.\11\ That figure is between the factor of 4 used in 
        the BCG study and the factor of 2 implied by the Kennedy study.
---------------------------------------------------------------------------
    \11\ Shropshire, Advanced Fuel Cycle Cost Basis, p. L-12.

    As those common assumptions are applied successively, the two 
present-value estimates of the difference between reprocessing and 
direct-disposal costs narrow from a range of $2 billion to $26 billion 
to a range of $5 billion to $11 billion (see Figure 2).
    Most of that remaining gap is attributable to the two studies' 
different assumptions about the costs of building and operating a 
reprocessing plant. The BCG study estimates construction costs at about 
$17 billion for a plant with a capacity of 2,500 metric tons per year. 
A meaningful comparable estimate cannot be derived from the Kennedy 
study because that analysis does not explicitly differentiate between 
capital and operating costs. The likelihood that a newly built U.S. 
plant would match either study's cost assumptions is difficult to 
judge; the historical record provides scant evidence about the overall 
cost of a reprocessing facility and its component parts. Not only are 
there few large-scale commercial reprocessing plants, but only limited 
information is available about their construction and operating costs.
    Neither the 900-metric-ton THORP facility in the United Kingdom nor 
the 1,700-metric-ton La Hague facility in France has enough capacity to 
handle the 2,200 metric tons of nuclear waste generated in the United 
States each year-the amount considered in this analysis. Thus, a 
facility larger than any past or current example would be necessary if 
a single reprocessing plant was to handle the United States' entire 
annual output of spent nuclear fuel.
    A larger facility would be more costly than existing plants, 
although to what degree is unknown. The limited information available 
suggests that the THORP plant cost around $6.3 billion to build (in 
2007 dollars). The BCG study indicates that the construction cost of 
the La Hague facility was around $18 billion (unlike the THORP 
estimate, however, that total includes a fabrication facility for 
recycled fuel, which increases the overall cost). The nearly complete 
800-metric-ton Rokkasho facility will reportedly cost about $21 
billion, but part of that cost is attributable to specifics of the 
plant's location that would not necessarily apply to a U.S. facility. 
Given the lack of numerous commercial reprocessing facilities to use as 
examples, it is difficult to know how much geographic location, 
economies of scale, and regulatory environment affect the cost of a 
reprocessing plant.
    All of the costs for reprocessing services included in this 
analysis assume that the plant would operate near capacity for its 
entire life. History, however, suggests that such an assumption might 
be optimistic and therefore that the unit cost of reprocessing could be 
higher than described here. Neither THORP nor La Hague has operated 
close to full capacity for a substantial period. THORP has been closed 
for more than two years after experiencing a radioactive leak. Before 
that, the plant operated at about 60 percent of capacity over its first 
11 years. Although La Hague has not had the technical problems of the 
THORP facility, it too is operating well below full capacity: at 
approximately 65 percent, according to recent estimates. Operating at 
less than full capacity limits the amount of spent fuel that can be 
handled for a given cost.
    Another factor that could increase the estimated cost of 
reprocessing relative to direct disposal is the discount rate used in 
present-value calculations. The rate assumed in this analysis is 
similar to those used in the BCG and Kennedy studies and slightly above 
a risk-free government rate-but it is well below the rate that might be 
applied for this type of project. A higher discount rate would result 
in a larger cost difference between reprocessing and direct disposal.
    The relative cost of reprocessing is also affected by the market 
value of recycled fuel. As noted above, the fuel credits used in this 
analysis reflect front-end savings from using recycled fuel rather than 
newly mined uranium. If the costs of uranium mining and fuel 
preparation increased, and if recycled fuel proved to be a good 
substitute for newly mined uranium in nuclear reactors, higher fuel 
credits could offset the cost of reprocessing to a greater extent. 
Although uranium prices are currently high by historical standards, it 
is not certain whether high prices will continue in the future or 
whether current prices will encourage additional uranium development 
that could lower prices. Furthermore, modifying a nuclear reactor to 
use recycled fuel entails some costs, which would offset a portion of 
the potential fuel credits from reprocessing.

                   SENSITIVITY TO VARYING ASSUMPTIONS

    Although the size of the cost difference between reprocessing and 
direct disposal depends on inputs to specific models, the conclusion 
that reprocessing is more expensive than direct disposal generally 
applies under various assumptions. CBO tested the sensitivity of the 
results to changes in some of the key parameters of this analysis.

   An increase of 1 percentage point in the discount rate 
        increases the difference in present-value costs between 
        reprocessing and direct disposal by between $3 billion and $4 
        billion.
   A reduction in the assumed operating costs of a reprocessing 
        plant narrows the cost gap between reprocessing and direct 
        disposal. For example, decreasing the ratio of a plant's 
        operating costs to its capital costs by 1 percentage point 
        reduces the present-value cost differential by between $2 
        billion and $3 billion.However, operating costs would have to 
        be at least 50 percent lower for reprocessing to cost the same 
        as or less than direct disposal.
   A change in the assumed operating lifetime of a reprocessing 
        facility has no material impact on the cost differential for 
        the two waste-handling alternatives.
   A rise in the cost of the long-term storage repository 
        reduces the difference between the costs of reprocessing and 
        direct disposal. That cost would have toincrease to a very 
        great extent, however, for direct disposal to cost as much as 
        reprocessing. Even then, if the factors responsible for the 
        increase (such as general growth in materials and construction 
        costs) also applied to the cost of a reprocessing plant, 
        reprocessing would continue to have a cost disadvantage.
   An increase in the extent to which waste from reprocessing 
        can be stored more densely than unreprocessed spent fuel (the 
        densification factor) lowers the cost of reprocessing relative 
        to direct disposal. However, reprocessing remains at a cost 
        disadvantage under plausible values for densification.

    In conclusion, the cost of reprocessing may be comparable to that 
of direct disposal under limited circumstances, but under a wide 
variety of assumptions, reprocessing is more expensive (given current 
reactor technology).
    Policymakers weighing the merits of reprocessing and direct 
disposal may have other concerns besides cost-such as extending U.S. 
uranium resources, reducing the threat of nuclear proliferation by 
adopting advanced burner technologies, or lessening the demand for 
long-term storage space. Judging whether those goals justify the added 
costs of reprocessing is ultimately a decision for policymakers.

    The Chairman. Thank you very much.
    Dr. Wallace, go right ahead.

   STATEMENT OF TERRY WALLACE, PRINCIPAL ASSOCIATE DIRECTOR, 
   SCIENCE, TECHNOLOGY AND ENGINEERING, LOS ALAMOS NATIONAL 
                   LABORATORY, LOS ALAMOS, NM

    Mr. Wallace. Good morning, Chairman Bingaman and Ranking 
Member Domenici, and the distinguished members of the 
committee. It is an honor to appear before you today to discuss 
the Global Nuclear Energy Partnership, or GNEP. I'm going to 
focus my remarks on the R&D challenges related to nuclear 
energy, and the capabilities of the Department of Energy's 
National Laboratories to address these challenges.
    I am Terry Wallace, I am the principle Director for 
Science, Technology and Engineering at Los Alamos National 
Laboratory, and Los Alamos' mission is to develop and apply 
science and technology to ensure the safety, the reliability of 
the U.S. nuclear deterrent, to reduce the global threats, and 
to solve other emerging national security challenges. There 
certainly is no emerging challenge which is greater than that 
of energy.
    Energy is a cornerstone of our Nation's prosperity, and the 
global demand is extraordinary. If the rest of the world's 
population enjoyed the U.S. standard of living today, it would 
require an immediate sixfold increase in energy production. 
This tremendous demand for energy will have many unintended 
consequences, including an unfathomable increase in greenhouse 
gases. Nuclear energy is, and must be, an important component 
of a global energy supply.
    It can be, provide reliable clean energy without generating 
additional CO2. However, a global renaissance in 
nuclear energy also generates concerns, as we've heard, about 
proliferation and waste.
    DOE introduced GNEP as an international and holistic 
approach to managing the demand for nuclear power. The recent 
GNEP review by the National Academies, endorse closing the fuel 
cycle, and a more cautious approach to major facility 
implementation.
    The Nation has the intellectual resources at its National 
Laboratories and universities to solve the technological 
challenges of the fuel cycle. However, there are significant 
research and development required to achieve an integrated fuel 
cycle. In particular, research is required in the following 
five areas.
    First, in fuels development. The advanced nuclear fuels 
that were discussed by the previous two speakers in closed fuel 
cycle will contain transuranic elements, and many of these have 
not been used in reactors in the past. It will require the 
development of new fuel fabrication techniques. For much of 
GNEP's R&D experimental needs, the National Laboratories have 
specialized facilities to address this today.
    One exception is the source of fast neutrons to test and 
certify new fuels. At the direction of Congress and DOE, for 
example, Los Alamos is working to build a materials test 
station, an enhancement of the Los Alamos Neutron Science 
Center, or LANSC, which will be able to test these new fuels in 
a very cost-effective fashion.
    The second area of research is separations. The main GNEP 
objective for separation of spent nuclear fuel is to reduce the 
proliferation risk associated with next generation processing 
plants, but also to reduce the volume of waste stored in 
geologic repositories.
    Now there are several options, but one option's been 
investigated for separation is UREX-plus, which was developed 
at the AFCI, as the Assistant Secretary mentioned before.
    The third area that we need research in is waste. A closed 
fuel cycle will result in separated waste streams. 
Particularly, separating the actinides and short-lived 
isotopes. These short-lived isotopes can be much more easily 
stored in, for example, a solid glass or vitrication, metal or 
ceramics, and these can be disposed of in a different type of 
geologic environment, or stored for a time sufficient to allow 
the radiotoxicity to be reduced.
    The fourth area that research is required in is in 
safeguards. Research on material control and safeguard 
technologies to assure non-proliferation, can enable the safe 
and secure expansion of global energy in the U.S. and beyond. 
Research on an enhanced system will require building on 
safeguard technologies, which have been quite successful in the 
past. Many of these were created at Los Alamos, and they enable 
a real-time monitoring of facility operations, and accounting 
for all nuclear materials.
    The fifth area of research is modeling and simulation. The 
advanced modeling and simulation tools, which have been 
developed for nuclear weapons work in stockpile stewardship by 
NNSA's advanced simulation and computing program, are now being 
applied in GNEP. Systems analysis studies help define and 
quantify the benefits and disadvantages of various deployment 
options for expanded nuclear energy systems. Everything from 
uranium mining to reactive instruction, to the placement of 
waste in repositories.
    In conclusion, the GNEP technology development program lays 
out a reasonable approach for closing the fuel cycle. We 
believe that with adequate R&D and critical investments in 
laboratory infrastructure, the basic processes and systems can 
be demonstrated at a reasonable scale and with a timetable 
that's consistent with the GNEP plan.
    There are no technological showstoppers to closing the fuel 
cycle, and providing a global approach to a major expansion in 
nuclear energy.
    I also thank you, and look forward to your questions.
    [The prepared statement of Mr. Wallace follows:]

  Prepared Statement of Terry Wallace, Principal Associate Director, 
          Science, Technology and Engineering, Los Alamos, NM

                              INTRODUCTION

    Good morning Chairman Bingaman, Ranking Member Domenici, and 
distinguished members of the Committee. It is an honor to appear before 
you today to discuss the Global Nuclear Energy Partnership, or GNEP. I 
will focus my remarks on the R&D challenges related to nuclear energy, 
and the capabilities that the Department of Energy's national 
laboratories provide to address these challenges.
    I am Terry Wallace, the Principal Associate Director for Science, 
Technology and Engineering at Los Alamos National Laboratory. Los 
Alamos' mission is to develop and apply science and technology to 
ensure the safety, security and reliability of the U.S. nuclear 
deterrent; reduce global threats; and solve other emerging national 
security challenges. No emerging challenge is greater than that of 
energy.
    Energy is the cornerstone of our nation's prosperity and the global 
demand is extraordinary. If the rest of the world's population enjoyed 
the U.S. standard of living today, it would require an immediate six-
fold increase in energy production. This tremendous demand for energy 
will have many consequences, including unfathomable increases in 
greenhouse gases. Nuclear energy is, and must be, an important 
component of the global energy supply. It can provide reliable, clean 
energy without generating additional CO2. However, a global 
renaissance in nuclear energy also generates concerns about 
proliferation and waste. GNEP provides a global vision that addresses 
these concerns. A key component of the GNEP plan is to offer 
international partners a secure fuel cycle, leasing fresh fuel and 
taking back of spent fuel.

                     GNEP RESEARCH AND DEVELOPMENT

    DOE introduced GNEP as an international and holistic approach to 
managing the demand for nuclear power. Within the GNEP plan there are 
two research and development objectives: commercial deployment of 
existing technologies in the near-term, and a robust long-term research 
and development program to facilitate a closed fuel cycle. The recent 
review of GNEP by the National Academies endorsed closed fuel cycle 
technology and a more cautious approach to major facility 
implementation. The nation has the intellectual resource in its 
national laboratories and universities to solve the technological 
challenges of a new closed fuel cycle.
    However, there is significant research and development required to 
achieve an integrated fuel cycle. In particular, research is required 
in the following five areas:

          1.) Fuels Development: The advanced nuclear fuels in a closed 
        fuel cycle approach will contain transuranic elements which 
        will be transmuted (burned) in an advanced burner reactor 
        (ABR). This will require development of new fuel fabrication 
        techniques. The new fuels will have combinations of elements 
        which have never been assembled in fuels before, and the 
        performance of the ensemble is a rich topic for research. For 
        much of GNEP's R&D experimentation needs, the national 
        laboratories already have the required specialized facilities. 
        One exception is a source of fast neutrons to test and certify 
        new fuels. At the direction of Congress and the DOE, Los Alamos 
        is working to build the Materials Test Station, an enhancement 
        at the Los Alamos Neutron Science Center (LANSCE), which will 
        enable testing of new fuels in a very cost effective fashion.
          2.) Separations: The main GNEP objectives for separations of 
        spent reactor fuel are to reduce both the proliferation risk 
        associated with next-generation processing plants, and the 
        volume of waste to be stored in geological repositories. The 
        UREX+ technology, developed within DOE's Advanced Fuel Cycle 
        Initiative (AFCI), is one option being investigated to provide 
        these benefits. These processes are being demonstrated with 
        Light Water Reactor (LWR) spent fuel at small scale (e.g., the 
        level of kilograms per test run). Substantial improvements are 
        possible with further development work including the baseline 
        extraction systems and product and waste form preparation. The 
        next step is for the processes to be run at much larger scales 
        and for extended periods to provide industry with the 
        information required to design commercial-scale facilities. 
        Separation methods beyond the aqueous UREX+ extraction system 
        are also under development in the AFCI program, for example, 
        electrochemical processes in molten salts for recycle of fast 
        reactor spent fuels.
          3.) Waste: One of the primary goals of the GNEP effort is to 
        reduce the quantity and radiotoxicity of waste produced during 
        nuclear power generation and to simplify the disposition of 
        those wastes. It is important to note that this longer-term 
        GNEP effort is complementary to the current initiative to 
        license the Yucca Mountain repository. Los Alamos scientists 
        are also actively participating in the DOE's effort to prepare 
        the license application for Yucca Mountain for consideration by 
        the Nuclear Regulatory Commission. Whereas Yucca Mountain is a 
        permanent solution for the commercial spent nuclear fuel 
        currently awaiting disposal, as well as defense high-level 
        waste, the GNEP research addresses the important issue of how 
        to further optimize the long-term management of nuclear waste 
        in a way that enables the global expansion of nuclear power in 
        a safe and secure manner throughout the 21st century.
          The radiotoxicity and heat-generating characteristics of 
        nuclear waste pose significant technical challenges. In 
        contrast to the ``once-through'' open fuel cycle, in which 
        spent nuclear fuel rods are sent to a geologic repository, the 
        separations and reprocessing steps of the closed fuel cycle 
        being pursued in the GNEP program would lead to separated waste 
        streams containing individual or groups of radionuclides. This 
        approach, though more complex from a chemical processing 
        perspective, leads to exciting potential advantages. Both the 
        waste form (the solid form in which a radionuclide is 
        incorporated) and the geologic repository for which that waste 
        is destined can be tailored to optimize the safety and 
        economics of the process. A particular waste form for isolating 
        one or more radionuclides can in principle be optimized for the 
        geologic and geochemical conditions of a particular repository 
        setting. Considering that a variety of geologic environments 
        are currently being considered worldwide, including granite, 
        clay, and salt, long-term R&D investigating the suitability in 
        a wide range of host environments seems prudent.
          Los Alamos and other DOE laboratories, in collaboration with 
        universities, stand ready to embark on a new, leading-edge 
        effort to tackle the considerable scientific and engineering 
        challenges posed by the waste issue. Radionuclides in waste 
        streams from a closed fuel cycle could be stabilized in either 
        solid glass, metal, or ceramic waste forms that would be 
        disposed of in mined geologic repositories, or otherwise stored 
        for a time sufficient to allow the radiotoxicity to be reduced 
        to safe levels. R&D and engineering studies are being conducted 
        to guide the selection of the solid matrix and waste loadings.
          The goal of this effort is to design waste forms that are 
        resistant to radiation damage and dissolution and mobilization 
        of the waste in the selected environment. A long-term 
        experimental and modeling program is required to achieve an 
        ability to understand and ultimately predict the long-term 
        behavior of these new waste forms in a geologic environment. 
        Fundamental understanding of the reactive dissolution of the 
        waste, as affected by self-irradiation and elemental 
        transformations due to radioactive decay, is required to 
        predict the long-term durability of a given waste form exposed 
        to a given set of physical and geochemical conditions.
          4.) Safeguards: Advanced material control and safeguards 
        technologies to support national nonproliferation objectives 
        can enable the safe and secure expansion of nuclear energy in 
        the U.S. and globally. Research on an enhanced system will 
        build on existing safeguards technologies, many of which were 
        created at Los Alamos, to enable near-real time knowledge 
        extraction of facility operations and global nuclear material 
        management. These technologies will include development of high 
        reliability, remote and unattended surveillance systems.
          It is important to note that the United States leads the 
        world in developing safeguard technologies. As an example, the 
        International Atomic Energy Agency sends every new inspector to 
        LANL for required training. Inspectors who have responsibility 
        for advanced fuel cycle facilities return to LANL for advanced 
        training. The experimental facilities at the Los Alamos Neutron 
        Science Center can provide data to enable new instrumental 
        techniques. Hot cell facilities at the Chemistry and Metallurgy 
        Research building can provide an integrated material control & 
        accountability and safeguards R&D test bed in an environment 
        where iterative development can occur in an uncontaminated 
        environment. In addition, computational capabilities developed 
        under the stockpile stewardship program can be brought to bear 
        to bring new levels of modeling and simulation to this area.
          5.) Modeling and Simulation: The advanced modeling and 
        simulation tools developed for the nuclear weapons program at 
        the national labs by NNSA's Advanced Simulation and Computing 
        (ASC) program are now being applied to GNEP. Systems analysis 
        studies help define and quantify the benefits and disadvantages 
        of various deployment options for an expanded nuclear energy 
        system, from uranium mining, to fuel fabrication, to reactor 
        construction, to emplacement of wastes in a repository.
          The modeling and simulation tools take advantage of the 
        tremendous computer power and computational physics approaches 
        that were developed for ASC. Several simulation tools required 
        minimal modifications to address the needs of nuclear fuel 
        manufacturing. As an example, the same tools used for 
        simulations of plutonium alloy casting (TELLURIDE at LANL) are 
        now employed for optimizing the casting of plutonium-based 
        metal fuels. A number of ASC codes (CHAD at LANL and DIABLO at 
        Lawrence Livermore National Laboratory) are currently being 
        updated to include the models and numerical methods necessary 
        for simulations of coupled phenomena in the nuclear fuel 
        element, such as heat transport, diffusion of fission products, 
        and thermo-mechanical deformation. This effort is aimed at 
        developing an advanced fuel performance code.
          In parallel, fundamental studies are being carried out at 
        national laboratories to advance the understanding of 
        irradiation effects on nuclear fuels and reactor structural 
        materials. The studies are focused on predicting the changes in 
        the thermal, mechanical, and chemical properties of the 
        materials as a function of burnup (cumulative radiation) to 
        determine the most probable causes of fuel element failure as 
        well as the most probable time when the failure will occur. The 
        fundamental studies are also critical in evaluating and 
        optimizing new fuel types, such as the multi-component, 
        transuranic oxide fuels (UPu-Np-Am-O).
          Similar efforts are directed at simulating coupled phenomena 
        in the nuclear reactor core. The complexity of these studies is 
        increased by the necessity to incorporate neutron fluxes and 
        their effect on the properties of the fuel and structural 
        materials. LANL gained international recognition for developing 
        one of the most advanced Monte Carlo simulations tools, the 
        MCNP (Monte Carlo N-Particle Transport) program. Building on 
        that, the simulations of the thermal-hydraulics in thermal and 
        fast reactors revealed the necessity for new, advanced 
        algorithms and high performance computational platforms. Recent 
        simulations of ASC codes performed on the first components of 
        the Roadrunner supercomputer at LANL demonstrated an important 
        increase in computational capability. Besides benefiting the 
        traditional LANL core programs, the increase in computational 
        speed will benefit the complex, large-scale nuclear reactor 
        simulations and lead to truly predictive accident scenario 
        capabilities.
          Although the thermo-chemistry of traditional actinide and 
        fission products separation methods (UREX and PUREX) is well 
        established, there are no advanced computational tools able to 
        simulate the entire separation process. This area would benefit 
        from intense research aimed at optimizing the separation 
        process and reducing the risk of nuclear proliferation. A 
        similar thermo-chemical approach is used in assessing the 
        behavior of nuclear waste at the main US repositories. 
        Comprehensive, fundamental models of chemical reactions between 
        the waste and the environment have been developed at LANL and 
        will serve as the basis for advanced simulation tools, able to 
        predict the behavior of the waste over long periods of time.

                               CONCLUSION

    In conclusion, the GNEP technology development program lays out a 
reasonable approach for closing the fuel cycle. With adequate R&D and 
critical investments in laboratory infrastructure, basic processes and 
systems can be demonstrated at reasonable scale and on a timetable 
consistent with the GNEP plan. Much of the infrastructure exists within 
national laboratories; for example the large hot cells in LANL's 
Chemistry and Metallurgy Research facility are perfectly suited for 
investigations of materials that have experienced radiation fatigue. 
There are no technological show stoppers to closing the fuel cycle, and 
providing a global approach to a major expansion of nuclear energy.
    Thank you, and I look forward to your questions.

    The Chairman. Thank you very much.
    Mr. Bunn, go right ahead.

   STATEMENT OF MATTHEW BUNN, BELFER CENTER FOR SCIENCE AND 
    INTERNATIONAL AFFAIRS, HARVARD UNIVERSITY, CAMBRIDGE, MA

    Mr. Bunn. All right. Thank you very much. Mr. Chairman and 
members of the committee, it's an honor to be here today to 
discuss the Global Nuclear Energy Partnership.
    I'm a supporter of nuclear energy, and of a strong nuclear 
R&D program, and there are several concepts in the GNEP 
umbrella, which would reduce proliferation risks and deserve 
support. But building a commercial-scale reprocessing plant in 
the near-term would be a costly mistake that would increase 
proliferation risks, rather than reducing them.
    Since 1976, the U.S. message to other countries has been 
that reprocessing is unnecessary. Now with GNEP, the message 
is, ``Reprocessing is essential to the future of nuclear 
energy, but we're going to keep the technology away from you.'' 
I think that will make it more difficult to met President 
Bush's goal of limiting the spread of reprocessing technology.
    DOE argues, on the contrary, the GNEP will provide assured 
fuel services that will give countries incentives not to build 
their own enrichment and reprocessing facilities. This is a 
worthwhile objective, but U.S. reprocessing is irrelevant to 
providing assured supply of fresh fuel, and is not necessary 
for taking back limited quantities of spent fuel from countries 
developing nuclear power for the first time.
    DOE argues that the new processes, such as the UREX-plus 
family, will be proliferation-resistant. But having other 
countries pursue UREX-plus, or power processing, would be only 
a modest improvement over the traditional PUREX reprocessing 
technology. Because deploying these processes would also give 
States experience and infrastructure that would be extremely 
helpful to a nuclear weapons program.
    Senator Domenici. Would you state that again?
    Mr. Bunn. I would say that having a UREX-plus plant would 
give them experience and infrastructure that would be extremely 
helpful for producing plutonium for a nuclear weapons program, 
it would make that program cheaper and quicker for them to 
accomplish.
    With respect to potential theft and diversion, DOE 
emphasizes that GNEP processes will not produce pure, separated 
plutonium. This is a slogan, not an analysis. Pure plutonium is 
not needed for a nuclear weapon. Nuclear weapons could be made 
directly from the roughly 50/50 plutonium/uranium mix proposed 
in the COAX process, for example, or the plutonium could be 
separated in a simple glove box. Any State or group capable of 
doing the technically challenging job of making the nuclear 
bomb from pure plutonium would be likely to be able to do the 
much simpler job of getting pure plutonium from this plutonium/
uranium mix.
    Keeping the minor actinides and possibly some of the 
lantinides with the plutonium, as proposed in UREX-plus and its 
variants, would make the product more radioactive. But the 
radioactivity would be far less than needed to deter theft, 
particularly by suicidal terrorists.
    The UREX-plus process, and pyroprocessing both take away 
the great mass of the uranium, and most of the radioactivity 
from the fission products, and are thus--result in a product 
that's much easier to get plutonium out of then is spent fuel 
that has not been reprocessed. These processes may be somewhat 
better than PUREX, but there can be no confidence that other 
countries will pursue more complex and expensive technology, 
just because we do.
    We have heard that these technologies are likely to be more 
expensive, and an obvious question is who will pay these costs? 
Are we talking about decades of government subsidies, where 
onerous regulations requiring industry to pay for un-economic 
activities.
    As, I'm sure, Professor Todreas will discuss in some 
detail, the advanced technologies proposed in GNEP are not yet 
technologically mature. It would not be a sign of U.S. 
leadership to build, essentially, a near-copy of what already 
exists in France and Japan, which is what we know how to build 
today.
    As one GNEP participant put it to me, ``I could build you a 
1975 Cadillac, but I don't know why you would want one.''
    Fortunately, there's no need for reprocessing now. Recent 
studies indicate that the technical capacity of the Yucca 
Mountain repository is far larger than the legislated capacity, 
large enough to support a growing nuclear enterprise for many 
decades to come.
    Dry casks offer a safe and proven technology that makes it 
possible to store spent fuel for decades at low cost, allowing 
time for technology to develop.
    What, then, should be done? First, I recommend that 
Congress reject proposals for near-term construction of 
commercial reprocessing plants, following the bipartisan advice 
of the National Commission on Energy Policy and of the recent 
National Academy of Science's review.
    Second, Congress should re-direct GNEP to focus on a broad 
program of long-term research on approaches to overcome the 
liabilities of both the closed cycle and the open cycle, 
focusing on a wide range of different technologies. It would be 
a mistake to down-select now, and focus only on technologies 
that could be deployed in the near term.
    Third, Congress should increase funding for some of the 
positive elements of GNEP and direct the Administration to 
devote greater attention to pushing them forward. This includes 
the fuel leasing approach, including take-back of spent fuel, 
which could allow countries to avoid establishing repositories 
of their own and give them a very strong incentive to rely on 
international fuel supply, rather than building their own 
enrichment and reprocessing facilities.
    It includes small, factory-built nuclear battery approaches 
to nuclear reactors, it could be deployed in foreign countries 
and generate electricity for a period of years, and then be 
brought back, which would make it possible to have broadly 
deployed nuclear energy with minimal proliferation risks.
    It includes greater efforts then we have pursued so far to 
develop the advanced safeguards that have been talked about, 
and to reduce the stockpiles of separated plutonium around the 
world.
    Fourth, Congress and the Administration should work 
together to establish cost-effective dry cask storage 
approaches, to address the spent fuel problems that have 
resulted from the continuing delays at Yucca Mountain.
    Finally, Congress and the Administration should work 
together to redouble our efforts to stem the spread of nuclear 
weapons, ranging from resolving the crisis with Iran and North 
Korea, to securing nuclear stockpiles around the world, to 
stopping black market nuclear networks.
    That concludes my statement, and I'd be happy to take your 
questions.
    [The prepared statement of Mr. Bunn follows:]

   Prepared Statement of Matthew Bunn, Belfer Center for Science and 
        International Affairs, Harvard University, Cambridge, MA

    Mr. Chairman and members of the subcommittee, it is an honor to be 
here today to discuss the Global Nuclear Energy Partnership (GNEP). I 
should emphasize that I am expressing my own views, which should not be 
attributed to Harvard University or to any committees or organizations 
of which I am a member. I have been asked to focus on the proliferation 
and security issues.\1\
---------------------------------------------------------------------------
    \1\ For a more comprehensive account of the issues surrounding 
near-term reprocessing in the United States, see Matthew Bunn, 
``Assessing the Benefits, Costs, and Risks of Near-Term Reprocessing 
and Alternatives,'' testimony before the Subcommittee on Energy and 
Water, Committee on Appropriations, U.S. Senate,14 September 2006, 
available as of 12 November 2007 at www.belfercenter.org/publication/
3222/); see also Frank von Hippel; Managing Spent Nuclear Fuel in the 
United States: The Illogic of Reprocessing (Princeton, N.J.: 
International Panel on Fissile Materials, Research Report 3, January 
2007, available as of 11 November 2007 at http://
www.fissilematerials.org/ipfm/site_down/ipfmresearchreport03.pdf ). For 
broader assessments of the future of nuclear energy that come to 
similar conclusions, see John Deutch and Ernest J. Moniz, co-chairs, 
The Future of Nuclear Power: An Interdisciplinary MIT Study (Cambridge, 
MA: Massachusetts Institute of Technology, 2003, available as of 12 
November 2007 at http://web.mit.edu/nuclearpower/); and Keystone 
Center, Nuclear Power Joint Fact-Finding (Keystone, Colo: Keystone 
Center, June 2007, available as of 12 November 2007 at http://
www.keystone.org/spp/documents/FinalReport_NJFF6_12_2007(1).pdf).
---------------------------------------------------------------------------
    A key GNEP goal is to expand global reliance on nuclear energy 
without increasing proliferation risks. Controlling the spread of 
enrichment and reprocessing--the technologies that make it possible to 
produce nuclear bomb material--is a critical part of achieving that 
objective.
    Some elements of GNEP could make important contributions to 
reducing proliferation risks. Unfortunately, GNEP's heavy focus on 
building a commercial-scale reprocessing plant in the near term would, 
if accepted, increase proliferation risks rather than decreasing them.

           PROLIFERATION RISKS OF NEAR-TERM U.S. REPROCESSING

    The first set of proliferation risks that should be considered 
relates to the spread of nuclear weapons-related technologies to 
additional states. Since 1976, the U.S. message has been, in effect, 
``reprocessing is unnecessary; we, the country with the world's largest 
nuclear fleet, are not doing it, and you do not need to either.'' Now, 
with GNEP, the message is ``reprocessing is essential to the future of 
nuclear energy, but we will keep the technology away from all but a few 
states.''\2\ This shift is likely to make it more difficult to achieve 
President Bush's goal of convincing other countries not to build their 
own reprocessing facilities. It has already led South Korea to express 
new interest in reprocessing, and France to begin considering exports 
of reprocessing plants to non-nuclear weapon states.\3\
---------------------------------------------------------------------------
    \2\ This formulation is adapted from Frank von Hippel, ``GNEP and 
the U.S. Spent Fuel Problem,'' congressional staff briefing, 10 March 
2006.
    \3\ On South Korea, see, for example, Mark Hibbs, ``ROK to Chart 
Fuel Cycle Policy Course Beyond Wait-and-See','' NuclearFuel, 23 April 
2007; on the French export ideas, see Ann MacLachlan, ``Areva Dual-
Track Strategy Aimed at Two Reprocessing Plants,'' NuclearFuel, 3 July 
2006. Areva, the state-owned French nuclear conglomerate, is quoted as 
saying that GNEP ``boosted'' its plans for exporting reprocessing 
plants.
---------------------------------------------------------------------------
     While it is often said that the rest of the world did not listen 
to us on reprocessing, the evidence suggests the opposite. Since Japan 
launched its first reprocessing plan in 1977, no other non-nuclear-
weapon state has begun reprocessing; Argentina, Belgium, Brazil, 
Germany, and Italy have shut down their pilot-scale reprocessing 
plants; and Taiwan and South Korea have abandoned their laboratory-
scale reprocessing efforts (both of which were associated with secret 
nuclear weapons programs).\4\ Japan is now the only non-nuclear weapon 
state that reprocesses spent fuel on its territory.
---------------------------------------------------------------------------
    \4\ For a discussion, see von Hippel, Managing Spent Fuel in the 
United States, p. 20. Other than Japan, the major commercial 
reprocessing facilities in the world are in nuclear weapon states: 
France, the United Kingdom, and Russia. Since 1976, many of their 
customers (such as Germany and Sweden, among others) have joined the 
United States in abandoning reprocessing in favor of direct disposal. 
In general, the poor economics of reprocessing have driven decisions 
more than U.S. policy.
---------------------------------------------------------------------------
    Department of Energy (DOE) officials respond by arguing that under 
GNEP, the United States will provide assured fuel services that will 
reduce countries' incentives to build their own enrichment and 
reprocessing plants. That is a worthwhile objective, and as I will 
discuss later, programs to take away countries' spent nuclear fuel 
could be a dramatic new incentive for them to rely on the international 
nuclear fuel market rather than building their own facilities. But U.S. 
reprocessing is irrelevant to providing assured fresh fuel supply--the 
principal focus so far--and if the United States or other countries are 
going to take back limited quantities of spent fuel from new countries 
developing nuclear energy, there is no requirement that this fuel be 
reprocessed.
    It is important to pursue these objectives carefully, so as to 
follow the dictum ``first, do no harm.'' Ironically, the period since 
President Bush's 2004 speech in which he laid down the objective of 
preventing the spread of enrichment and reprocessing technologies to 
countries that did not already operate such plants has seen the 
greatest explosion of interest in uranium enrichment in the nuclear 
age, with states such as South Africa, Argentina, Australia, Canada, 
Ukraine, and Belarus suddenly expressing renewed interest. If states 
perceive that a new line is to be drawn between technology ``haves'' 
and ``have nots''--a perception that early GNEP presentations on 
dividing the world into ``supplier states'' and ``recipient states'' 
contributed to--they will rush to try to ensure that they are on the 
``have'' side of the line.
    DOE officials then argue that the reprocessing approaches to be 
pursued in GNEP are ``proliferation resistant.'' But having other 
countries pursue processes in the UREX+ family rather than PUREX would 
be only a modest improvement. While UREX+ facilities could be designed 
so that modifying them to separate pure plutonium would be moderately 
costly and observable, states with UREX+ facilities would gain 
experience, infrastructure, and materials that would allow them to 
produce plutonium for nuclear weapons more rapidly and at less cost. 
For these reasons, the State Department has publicly expressed the view 
that UREX+ facilities, like PUREX facilities that separate pure 
plutonium, must remain ``forever confined'' to a small number of 
supplier states.\5\ That is a challenging objective, which will be made 
more difficult by the United States emphasizing the importance of 
reprocessing.
---------------------------------------------------------------------------
    \5\ James Timbie, U.S. Department of State, remarks to an open 
meeting of the U.S. National Academy of Sciences-Russian Academy of 
Sciences Committee on Internationalization of the Nuclear Fuel Cycle, 
17 October 2006.
---------------------------------------------------------------------------
    Similarly, non-nuclear weapon states operating pyroprocessing 
facilities would gain in-depth experience with plutonium processing and 
metallurgy, which would be very helpful to a nuclear weapons program. 
The United States should understand that pyroprocessing is a form of 
reprocessing, and the United States should oppose the spread of this 
technology to additional countries just as it opposes the spread of 
aqueous reprocessing technologies. Recent reports suggesting that the 
United States is willing to support pyroprocessing in South Korea are 
particularly troubling, as South Korea, in addition to its past 
reprocessing-based nuclear weapons program, also has an agreement with 
North Korea prohibiting enrichment and reprocessing on the Korean 
peninsula. A South Korean move away from that agreement would likely 
make elimination of North Korea's nuclear weapons program more 
difficult to achieve.
    Another difficulty is that these processes may make it easier for 
states to divert a significant quantity of plutonium without detection 
by international inspectors. Nuclear material accounting for safeguards 
is already an immense challenge at traditional PUREX reprocessing 
plants that separate pure plutonium, with accounting uncertainties in 
the range of 1 percent at plants processing 6-10 tons of plutonium 
every year. By keeping a variety of radioactive materials with the 
plutonium, UREX+ and pyroprocessing approaches will make accurate 
nuclear material accounting for safeguards substantially more 
difficult, forcing a greater reliance on containment and 
surveillance.\6\
---------------------------------------------------------------------------
    \6\ For a discussion, see Edwin S. Lyman, ``The Global Nuclear 
Energy Partnership: Will it Advance Nonproliferation or Undermine It?'' 
in Proceedings of the Institute for Nuclear Materials Management 47th 
Annual Meeting, Nashville, Tennessee, 16-20 July 2006 (Northbrook, IL: 
INMM, 2006, available as of 11 November 2007 at http://www.npec-
web.org/Essays/20060700-Lyman-GNEP.pdf); see also von Hippel, Managing 
Spent Fuel in the United States, pp. 23-24.
---------------------------------------------------------------------------
    A second set of proliferation issues focuses on possible theft of 
plutonium by subnational groups. While reactor-grade plutonium would 
not be the preferred material for making nuclear bombs, it does not 
require advanced technology to make a bomb from reactor-grade 
plutonium: any state or group that could make a bomb from weapon-grade 
plutonium could make a bomb from reactor-grade plutonium.\7\ Despite 
the remarkable progress of safeguards and security technology over the 
last few decades, processing, fabricating, and transporting tons of 
weapons-usable separated plutonium every year--when even a few 
kilograms is enough for a bomb--inevitably raises greater risks than 
not doing so. Indeed, while many of the stocks of civil plutonium that 
have built up are well-guarded, critics have argued that some 
operations in the civilian plutonium industry are potentially 
vulnerable to nuclear theft.\8\
---------------------------------------------------------------------------
    \7\ For an authoritative unclassified discussion, see 
Nonproliferation and Arms Control Assessment of Weapons-Usable Fissile 
Material Storage and Excess Plutonium Disposition Alternatives, DOE/NN-
0007 (Washington DC: U.S. Department of Energy, January 1997), pp. 38-
39.
    \8\ Ronald E. Timm, Security Assessment Report for Plutonium 
Transport in France (Paris: Greenpeace International, 2005; available 
as of 12 November 2007 at www.greenpeace.fr/stop-plutonium/en/
TimmReportV5.pdf).
---------------------------------------------------------------------------
    The administration has acknowledged that the huge stockpiles of 
weapons-usable separated civil plutonium built up as a result of 
traditional PUREX reprocessing (now roughly equal to all world military 
plutonium stockpiles combined, remarkably) ``pose a growing 
proliferation risk'' that ``simply must be dealt with.'' \9\
---------------------------------------------------------------------------
    \9\ Samuel Bodman, ``Carnegie Endowment for International Peace 
Moscow Center: Remarks as Prepared for Secretary Bodman'' (Moscow: U.S. 
Department of Energy, 16 March 2006; available at http://energy.gov/
news/3348.htm as of 12 November 2007). This characterization seems 
oddly out of tune with the schedule of the administration's proposed 
solution, advanced burner reactors that will not be available in 
significant numbers to address this ``growing'' risk for decades. In a 
similar vein, the British Royal Society, in a 1998 report, warned that 
even in an advanced industrial state like the United Kingdom, the 
possibility that plutonium stocks might be ``accessed for illicit 
weapons production is of extreme concern.'' The Royal Society, 
Management of Separated Plutonium (London: Royal Society, 1998, 
available as of 12 November 2007 at http://www.royalsoc.ac.uk/
displaypagedoc.asp?id=18551). The Royal Society renewed this warning 
and analyzed the options for action in a 2007 report. See The Royal 
Society, Strategy Options for the UK's Separated Plutonium (London: The 
Royal Society, September 2007, available as of 12 November 2007 at 
http://www.royalsoc.ac.uk/displaypagedoc.asp?id=27169).
---------------------------------------------------------------------------
    In claiming that GNEP processes would pose lower risks, DOE 
officials have repeatedly emphasized that GNEP approaches will produce 
``no pure plutonium.'' Remarkably, DOE reports that this was the ``only 
requirement'' the department imposed on the technologies industry could 
propose for near-term construction.\10\ But ``no pure plutonium'' is a 
slogan, not an analysis of proliferation resistance. Pure plutonium is 
not needed to make a nuclear bomb.
---------------------------------------------------------------------------
    \10\ U.S. Department of Energy, Office of Nuclear Energy, ``DOE 
Response to NAS-NRC Report Review of DOE's Nuclear Energy Research and 
Development Program'' (Washington DC: 29 October 2007, available as of 
11 November 2007 at http://www.gnep.energy.gov/pdfs/NAS--Response.pdf).
---------------------------------------------------------------------------
    The COEX process proposed by some for a near-term reprocessing 
plant, for example, which extracts the plutonium and some of the 
uranium together, poses nearly as much risk as processes that separate 
pure plutonium. The uranium-plutonium mix could be used directly in a 
bomb, or the plutonium could readily be separated even in a crude, 
jerry-rigged glove box, using commercially available equipment and 
materials. Any state or group capable of doing the technically 
challenging job of making a nuclear bomb from pure plutonium would 
likely be able to do the simpler job of getting pure plutonium from a 
plutonium-uranium mix without fission products. For these reasons, 
under either Nuclear Regulatory Commission (NRC). or international 
guidelines, such a mixture would still be considered Category I 
material, posing the highest levels of security risk and requiring the 
highest levels of security.\11\ When such approaches were last 
seriously considered in the United States three decades ago, the 
Nuclear Regulatory Commission concluded that ``lowering the 
concentration of plutonium through blending [with uranium] should not 
be used as a basis for reducing the level of safeguards protection,'' 
and that the concentration of plutonium in the blend would have to be 
reduced to ten percent or less--far less than being considered for 
COEX--for the safeguards advantages to be ``significant.''\12\
---------------------------------------------------------------------------
    \11\ See, for example, the categorizations in U.S. Nuclear 
Regulatory Commission, ``Part 73-Physical Protection of Plants and 
Materials,'' in Title 10, Code of Federal Regulations (Washington, 
D.C.: U.S. Government Printing Office; available as of 12 November 2007 
at http://www.nrc.gov/reading-rm/doc-collections/cfr/part073/full-
text.html); International Atomic Energy Agency, The Physical Protection 
of Nuclear Material and Nuclear Facilities, INFCIRC/225/Rev.4 
(Corrected) (Vienna: IAEA, 1999; available as of 12 November 2007 at 
http://www.iaea.or.at/Publications/Documents/Infcircs/1999/
infcirc225r4c/rev4--content.html). Any effort to define such a facility 
at only requiring Category II safeguards, on the basis of DOE's starkly 
different (and in important respects misguided) categorization 
guidelines, should be firmly rejected.
    \12\ Office of Nuclear Material Safety and Safeguards, U.S. Nuclear 
Regulatory Commission, Safeguarding a Domestic Mixed Oxide Industry 
against a Hypothetical Subnational Threat, NUREG-0414 (Washington, 
D.C.: NRC, 1978), pp. 6.8-6.10.
---------------------------------------------------------------------------
    For the longer term, GNEP is looking at processes such as the UREX+ 
family, in which the actinides and possibly some of the lanthanide 
fission products would stay with the plutonium. But the processing 
proposed in UREX+ still takes away the great mass of the uranium and 
the vast majority of the radiation from the fission products, making it 
far easier to recover plutonium from the product than from unprocessed 
spent fuel. Actinides with which the plutonium would be mixed, such as 
neptunium, are also potentially potent nuclear bomb materials. The 
situation for pyroprocessing is different in specifics, but not in the 
overall conclusion. Indeed, the plutonium-bearing materials that would 
be separated from aged spent fuel in either the UREX+ process or by 
pyroprocessing would not be radioactive enough to meet international 
standards for being ``self-protecting'' against possible theft.\13\
---------------------------------------------------------------------------
    \13\ Keeping the actinides with the plutonium provides only a small 
fraction of the radiation level considered ``self-protecting'' by 
international standards--1 Sievert/hr at 1 meter, a standard that 
should itself be fundamentally reexamined in an age of suicidal 
terrorists. The lanthanide fission products have relatively short half-
lives, and only provide substantial radiation fields if the spent fuel 
is processed fairly quickly after discharge. See Jungmin Kang and Frank 
von Hippel, ``Limited Proliferation-Resistance Benefits From Recycling 
Unseparated Transuranics and Lanthanides From Light-Water Reactor Spent 
Fuel,'' Science and Global Security, Vol. 13, pp. 169-181, 2005, 
available as of 12 November 2007 at http://www.princeton.edu/globsec/
publications/pdf/13_3%20Kang%20vonhippel.pdf.
---------------------------------------------------------------------------
    Proponents of reprocessing and recycling often argue that this 
approach will provide a nonproliferation benefit by consuming the 
plutonium in spent fuel, which would otherwise turn geologic 
repositories into potential plutonium mines many hundreds or thousands 
of years in the future. But the proliferation risk posed by spent fuel 
buried in a safeguarded repository is already modest; if the world 
could be brought to a state in which such repositories were the most 
significant remaining proliferation risk, that would be cause for great 
celebration. Moreover, this risk will be occurring a century or more 
from now, and if there is one thing we know about the nuclear world a 
century hence, it is that we know almost nothing about it. We should 
not increase significant proliferation risks in the near term in order 
to reduce already small and highly uncertain proliferation risks in the 
distant future.\14\
---------------------------------------------------------------------------
    \14\ For a discussion, see John P. Holdren, ``Nonproliferation 
Aspects of Geologic Repositories,'' presented at the ``International 
Conference on Geologic Repositories,'' October 31-November 3, 1999, 
Denver, Colorado).
---------------------------------------------------------------------------
    In short, all of the spent fuel processing approaches proposed for 
GNEP pose higher, not lower, proliferation risks than are posed by not 
processing the spent fuel at all and continuing to rely on a once-
through fuel cycle. Some of these approaches do offer modest 
proliferation advantages compared to the traditional PUREX reprocessing 
approach. But there are no grounds for confidence that our pursuit of 
these technologies will convince other countries to phase out the PUREX 
processes in which they have made large investments, particularly as 
processes such as UREX+ add several complex steps and are therefore 
likely to be more expensive.
    Ultimately, proliferation resistance should not be judged solely on 
how much material other than plutonium there may be in the product of a 
particular process, or how radioactive that product might be. Rather, 
it should be judged by a full life-cycle examination of how the 
deployment of such technologies by some states might affect the spread 
of sensitive technologies to other states; how much access to the 
materials, facilities, and expertise involved in the proposed fuel 
cycle would reduce the time, cost, and observability of a state nuclear 
weapons program; and how the large-scale adoption of such a fuel cycle 
would affect the risks of nuclear theft and nuclear terrorism around 
the world.\15\
---------------------------------------------------------------------------
    \15\ For a discussion, see Matthew Bunn, ``Proliferation-Resistance 
(and Terror-Resistance) of Nuclear Energy Systems'' lecture, 
Massachusetts Institute of Technology, 1 May 2006, available at http://
www.belfercenter.org/files/proliferation_resist_lecture06.pdf as of 12 
November 2007. For a more elaborate methodology, see Evaluation 
Methodology for Proliferation Resistance and Physical Protection of 
Generation IV Nuclear Energy Systems (Paris: Gen. IV International 
Forum, November 2006, available as of 12 November 2007 at http://
www.gen-4.org/Technology/horizontal/PRPPEM.pdf).
---------------------------------------------------------------------------
                       SECURITY AGAINST SABOTAGE

    Construction of a large reprocessing facility using the 
technologies available now or in the near term would also be likely to 
increase risks of terrorist sabotage. While such facilities could be 
designed and operated with stringent anti-terrorist security measures, 
reducing this risk to a modest level, transporting and processing 
thousands of tons of intensely radioactive spent nuclear fuel 
inevitably involves more opportunities for terrorist mischief than 
leaving that spent fuel in large steel or concrete casks.

                  COSTS OF REPROCESSING AND RECYCLING

    Reprocessing using technologies available now or in the near term 
is likely to be substantially more expensive than direct disposal of 
spent fuel.\16\ The UREX+ technology now being pursued adds a number of 
complex separation steps to the traditional PUREX process, and would 
likely be even more expensive. The capital cost of fast-neutron 
reactors such as those proposed for GNEP has traditionally been 
significantly higher than that of light-water reactors. A National 
Academy of Sciences review of separations and transmutation 
technologies such as those proposed for GNEP concluded that the 
additional cost of recycling compared to once through for 62,000 tons 
of commercial spent fuel ``is likely to be no less than $50 billion and 
easily could be over $100 billion.''\17\ While spent fuel management is 
only a small part of the cost of nuclear energy, the proposed GNEP 
approach would also require construction of a large fleet of fast 
reactors whose capital costs--the key driver of nuclear energy costs--
have always been higher than those of light-water reactors. If the 
capital costs of fast reactors remained significantly higher in the 
future, processing all U.S. spent fuel in this way would cost tens or 
hundreds of billions of dollars more than a once-through approach. Who 
will pay these costs? Are we talking about many decades of government 
subsidies, or onerous regulations requiring private industry to pay for 
uneconomic activities?
---------------------------------------------------------------------------
    \16\ Matthew Bunn, Steve Fetter, John P. Holdren, and Bob van der 
Zwaan, The Economics of Reprocessing vs. Direct Disposal of Spent 
Nuclear Fuel (Cambridge, MA: Project on Managing the Atom, Belfer 
Center for Science and International Affairs, John F. Kennedy School of 
Government, Harvard University, December 2003, available as of 12 
November 2007 at http://www.belfercenter.org/files/repro-report.pdf ).
    \17\ U.S. National Research Council, Committee on Separations 
Technology and Transmutation Systems, Nuclear Wastes: Technologies For 
Separation and Transmutation (Washington, D.C.: National Academy Press, 
1996), p. 7. Note that these figures are expressed in 1992 dollars; in 
2006 dollars, the range would be $66-$133 billion.
---------------------------------------------------------------------------
    The Boston Consulting Group study outlines the hope that if new 
facilities could be built with a much larger capacity for only modestly 
more money--and would operate close to capacity throughout their lives, 
something no real reprocessing plant has ever done--the unit costs of 
reprocessing might be much reduced. But the real experience of building 
a plant similar to the French reprocessing plant in Japan has been unit 
costs several times higher than those in France, not lower; the costs 
of the MOX fuel plant private firms are building for DOE, also based on 
French technology, are also several times higher, not lower, than those 
of the French plants. One can argue--correctly--that each of these new 
plants has unique problems, but why should we expect that a new 
reprocessing plant in the United States would avoid similar problems? 
No policy-maker should make decisions about reprocessing based on an 
expectation that the costs will be similar to those projected in the 
Boston Consulting Group report.
     Rather than relying solely on paper analyses, one can look at the 
evidence from the commercial market. The British reprocessing plant 
will be closed in a few years because it cannot get enough contracts to 
keep running; the French and Russian reprocessing plants are operating 
at far less than capacity because of a lack of contracts; to pay the 
huge costs of the Japanese reprocessing plant, Japanese utilities 
insisted on a government bailout in the form of a wires charge that 
will increase the price of electricity for all users in Japan for many 
years to come. When utilities have a choice, they do not choose to 
reprocess their fuel.

                         ROOM AT YUCCA MOUNTAIN

    Similarly, it is by no means clear that effective nuclear waste 
management and disposal in the United States will require reprocessing 
and recycle. Recent studies indicate that the technical capacity of the 
Yucca Mountain repository is far larger than the legislated capacity--
large enough to support a growing nuclear energy enterprise for many 
decades to come.\18\ GNEP is likely to make it more difficult, rather 
than easier, to get a license for Yucca Mountain, by creating 
uncertainty over what, exactly, would be disposed of there, and raising 
the possibility that wastes from a far larger number of reactors would 
be emplaced there. If Yucca Mountain opens and begins operating 
successfully--and a repository will certainly be required whether we 
continue to rely on a once-through fuel cycle or shift to a closed 
cycle--it may well be easier to get a license for using the next ridge 
over for an additional repository than it will be to get political 
approvals and licenses for several large reprocessing plants and dozens 
of fast neutron reactors.
---------------------------------------------------------------------------
    \18\ Program on Technology Innovation: Room at the Mountain--
Analysis of the Maximum DisposalCapacity for Commercial Spent Nuclear 
Fuel in a Yucca Mountain Repository (Palo Alto, Calif: Electric Power 
Research Institute, May 2006, available as of 12 November 2007 at 
http://www.epriweb.com/public/000000000001013523.pdf).
---------------------------------------------------------------------------
             WHAT'S BEST FOR THE FUTURE OF NUCLEAR ENERGY?

    Mr. Chairman, to be against near-term reprocessing is not the same 
as being against nuclear power. It is precisely because I hope for a 
vibrant and growing future for nuclear energy, to help cope with 
climate change, that I am against near-term reprocessing. Nuclear 
power's future will be best assured by making it as cheap, simple, 
safe, and proliferation-resistant as possible--and near-term 
reprocessing points in the wrong direction on every count.\19\
---------------------------------------------------------------------------
    \19\ For a similar argument that the GNEP approach ``threatens to 
set back the nuclear revival,'' see, for example, Richard Lester, ``New 
Nukes,'' Issues in Science and Technology, Summer 2006, pp. 39-46. For 
earlier discussions of this point, see, for example, John P. Holdren, 
``Improving US Energy Security and Reducing Greenhouse-Gas Emissions: 
The Role of Nuclear Energy,'' testimony to the Subcommittee on Energy 
and Environment, Committee on Science, U.S. House of Representatives, 
25 July 2000, available as of 12 November 2007 at http://
www.belfercenter.org/publication/3244/.; and Matthew Bunn, ``Enabling A 
Significant Future For Nuclear Power: Avoiding Catastrophes, Developing 
New Technologies, Democratizing Decisions--And Staying Away From 
Separated Plutonium,'' in Proceedings of Global '99: Nuclear 
Technology-Bridging the Millennia, Jackson Hole, Wyoming, August 30-
September 2, 1999 (La Grange Park, Ill.: American Nuclear Society, 
1999, available as of 12 November 2007 at www.belfercenter.org/
publication/2014/).
---------------------------------------------------------------------------
                           TECHNICAL MATURITY

    Fortunately, there is no pressing need to move forward with 
construction of a reprocessing plant in the United States in the near 
term. Dry casks offer a safe and proven technology that makes it 
possible to store spent fuel for decades at low cost. As a result, 
there is no need to rush to make these decisions--we can make these 
decisions more responsibly in the decades to come, when technology has 
developed further and economic, security, and political circumstances 
have clarified. What is needed now is patient R&D and in-depth systems 
analysis, rather than a rush to build commercial-scale facilities. As 
Richard Garwin has put it, by picking winners prematurely, the proposed 
GNEP approach ``would launch us into a costly program that would surely 
cost more to do the job less well than would a program at a more 
measured pace guided by a more open process.''\20\
---------------------------------------------------------------------------
    \20\ Richard L. Garwin, ``R&D Priorities for GNEP,'' testimony to 
the U.S. House of Representatives, Committee on Science, Subcommittee 
on Energy, 6 April 2006, available as of 12 November 2007 at 
www.fas.org/rlg/060406-gnep.pdf.
---------------------------------------------------------------------------
    It would certainly not be a sign of U.S. leadership to decide now 
to build a reprocessing plant little different from what France, 
Russia, the United Kingdom, and Japan have already built--to build, as 
one GNEP participant put it to me, a 1975 Cadillac. Rather, it would 
lock the United States in to spending many billions of dollars on 
decades-old technologies whose high costs and proliferation risks are 
already well known, and which are already failing to win contracts in 
the commercial marketplace. The idea of sending spent fuel from 
decommissioned U.S. reactors to France to be reprocessed, as DOE is 
reportedly considering,\21\ has even less merit, and should be soundly 
rejected. The reprocessing would cost well over a billion dollars, far 
more than continuing to store this fuel where it is, and would simply 
add to the multi-billion dollar problem of excess plutonium the United 
States already has. DOE has correctly identified large global 
stockpiles of separated plutonium as a dangerous problem; dealing with 
that problem by reprocessing more plutonium is like using gasoline to 
put out a fire.
---------------------------------------------------------------------------
    \21\ Jeff Beatie, ``DOE Pushing to Recycle Closed Plants' Spent 
Fuel,'' Energy Daily, 7 November 2007.
---------------------------------------------------------------------------
    The recent National Academy of Sciences review has provided an 
excellent discussion of just how premature it would be to build 
commercial-scale facilities now, unanimously recommending against 
proceeding with a GNEP program focused on near-term large-scale 
construction. As they concluded: ``There is no economic justification 
to go forward with this program at anything approaching commercial 
scale. Continued research and development are the appropriate level of 
activity, given the current state of knowledge.'' I urge the Committee 
to hear from the National Academy panel, to get the insights gained 
from their in-depth examination of the GNEP program in the context of 
other nuclear R&D.

                       POSITIVE ELEMENTS OF GNEP

    As I mentioned at the outset, other elements of GNEP could be 
significant steps to reduce the proliferation risks of nuclear energy. 
Unfortunately, these other elements have not received comparable 
emphasis and funding in the program to date.
    Fuel leasing.--First, providing assured fuel services, so that 
countries have strong incentives not to build enrichment or 
reprocessing plants of their own, is a potentially important idea.\22\ 
The current emphasis is primarily on assured supplies of fresh nuclear 
fuel; while this is an important goal, it should be recognized that the 
commercial market already provides high assurance of fuel supply 
(except for countries that are special cases outside of or in violation 
of global nonproliferation norms, such as Iran and India). less need to 
build enrichment or reprocessing fuel leasing--that is, providing fresh 
fuel to countries with a promise to take the spent fuel away--would 
allow countries to enjoy the benefits of nuclear energy without having 
to build repositories. This would create a powerful new incentive for 
countries starting new nuclear energy programs to rely on foreign fuel 
supply rather than building enrichment and reprocessing of their own. 
(Note that existing reprocessing services offered by Britain and 
France, which require that the wastes be sent back to the customer, 
would not have this advantage.) Moreover, widespread fuel leasing would 
mean that plutonium-bearing spent fuel need not build up in countries 
all over the world. There are obvious political problems with one 
country taking another country's spent fuel, but we should be working 
to address these problems--as we have in the case of taking back spent 
research reactor fuel. It is important to note that take-back of modest 
quantities of foreign spent fuel from the small numbers of reactors 
likely to be build in coming decades in new nuclear countries would not 
in any way require that this fuel be reprocessed. Russia has already 
passed legislation that allows it to enter the fuel leasing business, 
and signed a contract with Iran that requires all of Iran's spent fuel 
to be shipped back to Russia. Other countries have considered being 
hosts for international waste storage facilities. It only takes one of 
the world's 190 countries to agree to host an international repository 
(and if one country launched such an effort successfully, others might 
decide to compete with them in that highly profitable business). The 
country providing the fresh fuel and the country accepting the spent 
fuel would not necessarily have to be the same. The United States 
should be doing far more to make this vision a reality.\23\
---------------------------------------------------------------------------
    \22\ For a useful account of such fuel assurances, see Ashton B. 
Carter and Stephen LaMontagne, ``Toolbox: Containing the Nuclear Red 
Zone Threat,'' The American Interest, Vol. 1, No. 3 (Spring 2006), pp. 
28-40.
    \23\ See discussion of such international approaches in Chapter 4 
of Matthew Bunn et al., Interim Storage of Spent Nuclear Fuel: A Safe, 
Flexible, and Cost-Effective near-Term Approach to Spent Fuel 
Management (Cambridge, Mass.: Project on Managing the Atom, Harvard 
University, and Project on Sociotechnics of Nuclear Energy, Tokyo 
University, 2001; available as of 12 November 2007 at http://
www.belfercenter.org/publication/2150/), pp. 95-116. Some of the best 
current work in both analyzing and promoting regional or international 
approaches to storage or disposal of spent fuel and nuclear waste is 
being done by the Arius consortium. Much of this work was available as 
of 12 November 2007 at http://www.arius-world.org/.
---------------------------------------------------------------------------
    Reducing stockpiles of separated plutonium.--Second, the huge 
global stocks of weapons-usable civilian separated plutonium--now as 
much as all the plutonium in all the world's nuclear weapons 
stockpiles--pose significant risks, and continue to grow. Building a 
reprocessing plant or a single demonstration fast reactor in the United 
States will not do much to solve that problem. The United States should 
be doing much more to work with other countries to ensure that all 
these stockpiles are secured to the highest practicable standards, to 
limit or phase out unneeded plutonium separation where possible, and to 
ensure that plans are put in place for reducing these immense stocks 
over time. In particular, the Bush administration should renew the 
talks with Russia, almost completed in the Clinton administration, 
concerning a 20-year moratorium on plutonium separation in both 
countries, and should cooperate with other countries to work out 
disposition paths for plutonium stockpiles for which there is no 
current plan for use or disposal.\24\
---------------------------------------------------------------------------
    \24\ For a discussion, see Matthew Bunn and Anatoli Diakov, 
``Disposition of Excess Plutonium,'' in Global Fissile Materials Report 
2007 (Princeton, NJ: International Panel on Fissile Materials, October 
2007, available as of 12 November 2007 at http://
www.fissilematerials.org/ipfm/site_down/gfmr07.pdf), pp. 33-42. The 
Royal Society's report, Strategy Options for the UK's Separated 
Plutonium, outlines approaches that could be pursued for the United 
Kingdom's huge stock of separated civilian plutonium. The United States 
should encourage all countries with military or civil stockpiles of 
excess separated plutonium to bring unneeded separation of plutonium to 
an end, undertake similar examinations of their options, and implement 
approaches to safe and secure disposition of these stockpiles as 
rapidly as practicable.
---------------------------------------------------------------------------
    Small, exportable reactors.--Third, the concept that is sometimes 
called a ``nuclear battery''--small reactors that might be produced in 
a factory, shipped to a deployment site with their fuel already 
included, generate electricity there for 10-20 years, and then be 
shipped back to the factory with their spent fuel--could make it 
possible to have widespread use of nuclear energy with little spread of 
sensitive materials and expertise and few proliferation risks. Within 
GNEP, even the small level of funding devoted to ``small and medium 
reactors'' is largely devoted to medium-sized reactors that could not 
be factory-built in this way. GNEP should devote higher priority to R&D 
on nuclear battery concepts, and particularly to approaches that might 
reduce their costs--currently the main barrier to implementing this 
approach.
    Advanced safeguards development.--Fourth, as the American Physical 
Society has pointed out, the United States needs a major reinvestment 
in safeguards and security technologies to support a new nuclear 
era.\25\ DOE is taking the first steps in that direction, but much more 
needs to be done.
---------------------------------------------------------------------------
    \25\ Nuclear Energy Study Group, American Physical Society Panel on 
Public Affairs, Nuclear Power and Proliferation Resistance: Securing 
Benefits, Limiting Risk (Washington, D.C.: American Physical Society, 
May 2005, available as of 12 November 2007 at http://www.aps.org/
policy/reports/popa-reports/proliferation-resistance/upload/
proliferation.pdf).
---------------------------------------------------------------------------
                            RECOMMENDATIONS

    What, then, should be done?
    First, I recommend that Congress follow the bipartisan advice of 
the National Commission on Energy Policy;\26\ the advice of the recent 
National Academy of Sciences review of GNEP;\27\ and the advice of the 
American Physical Society study of nuclear energy and 
nonproliferation,\28\ by rejecting proposals to spend many billions of 
dollars on near-term construction of a commercial-scale reprocessing 
plant and a commercial-scale fast reactor in the United States. The 
Committee would be hard-pressed to find any independent scientific or 
engineering group that believes such construction is a good idea in the 
near term.
---------------------------------------------------------------------------
    \26\ National Commission on Energy Policy, Ending the Energy 
Stalemate: A Bipartisan Strategy to Meet America's Energy Challenges 
(Washington, D.C.: National Commission on Energy Policy, December 2004, 
available as of 12 November 2007 at http://www.energycommission.org/
files/contentFiles/report_noninteractive_44566feaabc5d.pdf ), pp. 60-
61.
    \27\ Committee on Review of DOE's Nuclear Energy Research and 
Development Program, Review of DOE's Nuclear Energy Research and 
Development Program (Washington, D.C.: National Academy Press, October 
2007, available as of 12 November 2007 at http://www.nap.edu/catalog/
11998.html).
    \28\ APS, Nuclear Power and Proliferation Resistance.
---------------------------------------------------------------------------
    Second, Congress should redirect GNEP to focus on long-term 
research on (a) advanced technologies that might have the potential to 
overcome the large liabilities of past reprocessing and recycling 
approaches; (b) improved approaches to once-through systems; and (c) 
in-depth studies of the real repository capacity likely to be available 
in different scenarios and of global uranium resources. This should 
include a much broader set of reactor and spent fuel processing 
technologies than GNEP is currently pursuing; it would be a mistake to 
down-select and focus only on technologies that could be deployed soon, 
when other technologies may have more long-term promise.\29\ As 
improved recycling and once-through technologies develop, we should 
regularly re-examine which of them appear to offer the best combination 
of cost, safety, security, proliferation-resistance, and 
sustainability. At the same time, we should not allow an expansion of 
nuclear R&D to overwhelm R&D on other promising energy technologies: 
the United States urgently needs to undertake expanded investments in a 
wide range of energy R&D.
---------------------------------------------------------------------------
    \29\ For a discussion, see Garwin, ``R&D Priorities for GNEP.'' For 
a discussion of R&D that should be pursued on improved once-through 
options, see Deutch, Moniz, et al., The Future of Nuclear Power.
---------------------------------------------------------------------------
    Third, Congress should increase the funding for the positive 
elements of GNEP I have enumerated, and direct the administration to 
devote greater attention to pushing them forward. On these points, I 
believe the approach proposed by the Senate Energy and Water 
Appropriations Committee is a major step in the right direction.
    Fourth, Congress and the administration should work to establish 
cost-effective dry cask storage approaches to address the spent fuel 
storage problems and costs that have resulted from continuing Yucca 
Mountain delays, including at least a small amount of centralized 
storage to address problems at decommissioned reactors.\30\ Whatever 
option for spent fuel disposal or processing we pursue, additional 
interim storage capacity will be needed. Storing spent fuel in dry 
casks leaves all options open for the future, as technology develops 
and political and economic circumstances change. (Indeed, since the 
Yucca Mountain repository will remain open for a century or more, even 
direct disposal will leave all options open for a long time to come.) 
At least some centralized storage capacity is needed to address 
particular needs; whether nearly all of the spent fuel should be moved 
to a centralized away-from-reactor site or site depends on a number of 
factors that require further analysis. Here, too, we should not let 
frustration with the current state of affairs prevent us from taking 
the time to get it right: a rushed process for siting and licensing 
such facilities is a recipe for public opposition and ultimate failure, 
adding to the long history of failed attempts to site centralized 
interim storage facilities in the United States. In a 2001 study, we 
provided a detailed outline of a democratic and voluntary process for 
siting such facilities, based on approaches that had been applied 
successfully in siting other hazardous and unwanted facilities, and I 
would urge that such an approach be followed here.\31\
---------------------------------------------------------------------------
    \30\ For recent discussions, see, for example, American Physical 
Society, Nuclear Energy Study Group, Consolidated Interim Storage of 
Commercial Spent Nuclear Fuel: A Technical and Programmatic Assessment 
(College Park, MD: American Physical Society, February 2007, available 
as of 12 November 2007 at http://www.aps.org/policy/reports/popa-
reports/upload/Energy-2007-Report-InterimStorage.pdf); National 
Commission on Energy Policy, Energy Policy Recommendations to the 
President and the 110th Congress (Washington, D.C.: National Energy 
Commission, April 2007, available as of 12 November 2007 at http://
energycommission.org/files/contentFiles/NCEP_Recommendations_April_--
2007_4656f9759c345.pdf), pp. 21-22; and Keystone Center, Nuclear Power 
Joint Fact-Finding, pp. 75-79.
    \31\ Bunn et al., Interim Storage of Spent Nuclear Fuel, pp. 95-
116.
---------------------------------------------------------------------------
    Fifth, Congress and the administration should work together to 
redouble U.S. efforts to stem the spread of nuclear weapons--resolving 
the crises with Iran and North Korea, securing nuclear stockpiles 
around the world, stopping black-market nuclear networks, and more.\32\ 
Ultimately, this will also require reducing the demand for nuclear 
weapons, in part by reducing the number, roles, and readiness of our 
own.
---------------------------------------------------------------------------
    \32\ For a reasonable first cut at an agenda of steps to be taken, 
see George Perkovich et al., Universal Compliance: A Strategy for 
Nuclear Security (Washington, D.C.: Carnegie Endowment for 
International Peace, 2005; available at http://
www.carnegieendowment.org/files/UC2.FINAL3.pdf as of 13 May 2007). For 
an agenda of steps to be taken specifically on preventing nuclear 
terrorism, see Matthew Bunn, Securing the Bomb 2007 (Cambridge, Mass.: 
Project on Managing the Atom, Harvard University, and Nuclear Threat 
Initiative, September 2007, available as of 12 November 2007 at http://
www.nti.org/e_research/securingthebomb07.pdf).

    The Chairman. Thank you very much.
    Dr. Todreas, why don't you go right ahead.

  STATEMENT OF NEIL E. TODREAS, EMERITUS PROFESSOR OF NUCLEAR 
SCIENCE AND ENGINEERING, MASSACHUSETTS INSTITUTE OF TECHNOLOGY, 
                         CAMBRIDGE, MA

    Mr. Todreas. Good morning, Chairman Bingaman, Ranking 
Member Domenici, and the rest of the committee. My testimony 
this morning--I'm going to focus on the state of the technology 
required for the execution of GNEP, and I'll make three 
principle points.
    The first is that I believe we need an R&D program to 
evaluate the potential of the closed cycle as an important 
national undertaking. I believe this for two reasons. First, to 
ensure national influence on the global evolution of fuel cycle 
technology; and two, creating technologies, that is 
separations, fuel fabrication, transmutation and reprocessing, 
sufficient to demonstrate that nuclear technology can recycle 
its own spent fuel if we call upon it to do so.
    You've heard of the three GNEP facilities, regarding those, 
a major decision for the Light Water Spent Fuel Center, and the 
fast reactors, the appropriate scale of facilities.
    The second point I'd make is to agree with the case being 
made for initial construction for smaller, engineering-scale 
facilities. Again, for two reasons: caution in the scale-up 
from the expected bench scale success is very prudent, and we 
need a flexible and dedicated radiation test bed for transition 
fuel development and qualification, test bed.
    Now, regarding the technologies themselves, I'll start with 
separations of spent light water fuel. You've heard there are--
the UREX-plus process, and there are two commercially 
controlled processes.
    The UREX-plus suite, an important feature of that is it's a 
series of processes in which you can extract various actinides 
and fission products, either individually, to deal with them 
separately, or in a group fashion, which secures the product. 
No free plutonium, plutonium poisoned, effectively.
    As of this summer, UREX+1a had been demonstrated relatively 
successfully at bench scale, but only over short times, and 
with fresh solvents. What does that mean? That means processed 
chemistry over the long-term hasn't been yet established, and 
scale-up not yet initiated. This development will take 
approximately till 2012 to complete the bench scale process 
development and position us for the next step.
    Among the key requirements being developed to measure this 
process, significantly is the efficiency of separation, and the 
associated acceptable losses of actinide and spent fission 
products to waste streams. Why is this important? Because you 
must control the losses, so that you avoid burdening, rather 
than assisting, spent fuel waste management.
    For transition fuels, we have a significant fabrication, 
and the radiation program needed. The irradiation program must 
prove that we can develop transmutation fuel that can go into a 
reactor and give us trouble-free operation. That means no 
failures. That's going to require operation of core loads of 
transmutation fuel in fast reactor environments with failure-
free operation. That will be very difficult for the commercial 
industry to accept in a commercial reactor, and that's why I 
advocate a test reactor.
    The computation and simulation activity has been mentioned, 
I hope and expect that the time and the cost of irradiations of 
transmutation fuels can be significantly decreased through a 
good, profitable simulation program. Because we can model the 
fuel, and then exercise real--faster than real-time computation 
to reduce the time required to develop these fuels with 
computers calibrated by experience, rather than fully in 
irradiation facilities.
    Finally, turning to the reactor, the fast reactor, we've 
got to develop fast reactors with safety characteristics that 
are firm, that can be licensed, and with capital and costs of 
fast reactors, that can gain commercial acceptance. DOE has 
properly engaged the industry to assist on this, and there are 
important system studies underway to set the requirements for 
these reactors.
    System studies are broader than that, however, which gets 
to my third point. We should evaluate a thermal recycle program 
component which has the ability or the potential to accelerate 
the start of transmutation of true materials in thermal 
reactors, and reduce the number of fast reactors needed for 
ultimate disposal of transmutation fuels.
    So, in conclusion, let me make several points. The 
development of the technology as you've heard across the board, 
here, is a large and demanding task. Significant activity is 
underway, working through the technical challenges. I agree, no 
insurmountable barriers exist, however, the scale, ownership, 
timing and ultimate cost of the GNEP facilities as strategic 
questions, their answer depends on many factors, but among 
them, importantly, is the continued progress and results of the 
development program.
    The three points I made were, that an R&D program on the 
closed cycle is important as a national priority; facilities 
should be developed and built first, at smaller engineering 
scale; and finally, thermal recycle with inert matrix fuel--
there are various thermal recycle approaches--but with inert 
matrix fuel, should be investigated, and I think, implemented.
    [The prepared statement of Mr. Todreas follows:]

 Prepared Statement of Neil E. Todreas, Emeritus Professor of Nuclear 
    Science and Engineering, Massachusetts Institute of Technology, 
                             Cambridge, MA

    Good morning, Chairman Bingaman and Ranking Member Domenici. My 
name is Neil Todreas and I am a Professor of Nuclear Science and 
Engineering (emeritus) at the Massachusetts Institute of Technology.
    It is an honor to be called before you to discuss the subject of 
the Global Nuclear Energy Partnership, a matter of considerable 
importance to the future of nuclear energy. I have been asked to 
address the state of the technology needed for the execution of GNEP.
    As an overall characterization let me be clear that DOE is only at 
the start of a very significant program of technical research & 
development, a program being conducted by a large team of dedicated and 
expert professionals which will require multiple decades of scientific 
and engineering accomplishment. Nevertheless I believe such an R&D 
program to evaluate the potential of nuclear energy systems operating 
in the closed fuel cycle is an important national undertaking. I do so 
for reasons of ensuring national influence in the global evolution of 
fuel cycle technology as well as creating closed cycle technologies 
(separations, fuel fabrication, transmutation and reprocessing) 
sufficient to demonstrate that nuclear technology can recycle its spent 
fuel if called upon to do so.
    Regarding the first reason as I've noted previously\1\, ``There are 
basically three costs of the U.S. not supporting separation technology 
going forward. First, and most importantly, we will lack the technical 
knowledge to be credible and influential in the evolution of commercial 
nuclear power. Second, we will not acquire the knowledge necessary to 
develop effective safeguards for operating reprocessing facilities in 
other nations. Third, we will not acquire the knowledge to permit us to 
make timely and informed judgments about long-term options for closed 
nuclear fuel cycles that may be of importance in future generations.'' 
These costs dictate that we pursue such R&D. The second reason is that 
enlarging the options for spent fuel management is a prudent step in 
the expected scenario of increasing nuclear power deployment.
---------------------------------------------------------------------------
    \1\ My testimony of April 6, 2008 before the Subcommittee on 
Energy, Committee on Science, United States House of Representatives.
---------------------------------------------------------------------------
    Regarding GNEP technologies let me start with the three facilities 
needed to demonstrate the key technologies:

          1. A Consolidated Fuel Treatment Center (CFTC), which will 
        conduct LWR spent nuclear fuel separations( and later 
        commercial reprocessing of burner reactor transmutation fuel.)
          2. A prototype Advanced Burner Reactor (ABR) that will 
        demonstrate transmutation of actinides and fast reactor 
        technology.
          3. An Advanced Fuel Cycle Facility (AFCF) to develop the 
        reprocessing and fabrication technologies needed for test 
        transmutation fuels and eventual recycling of ABR cores using 
        Transmutation Fuel. It will provide the experience needed to 
        design, license, and operate a commercial scale facility for 
        recycling the ABR core's Transmutation Fuel.

    A major decision for the CFTC and ABR is the appropriate scale for 
these facilities. The recent NAS review\2\ makes a strong case for the 
initial construction of smaller engineering versus large-scale 
facilities for both the LWR spent fuel separation facility and the 
burner reactor (a 100--200 MT/yr separation facility and a 50 to 100 
MWe advanced burner test reactor are suggested). Additional reasons I 
would add to this case are the need for caution in the scaleup from 
bench-scale separations success and the need for a flexible and 
dedicated irradiation test bed for transition fuel development and 
qualification.
---------------------------------------------------------------------------
    \2\ Review of DOE's Nuclear Energy Research & Development Program, 
National Research Council, Released October 29, 2007.
---------------------------------------------------------------------------
    Underlying the determination of readiness to proceed with even such 
engineering scale demonstrations is the assessment of the readiness of 
the technologies to be used. Hence I now turn to the technologies being 
developed and evaluated for operations and design of these facilities.

   Separations of LWR spent fuel in the CFTC--Several 
        approaches are being considered. UREX+ which has been under 
        development for some years in our national laboratories, 
        principally ANL and two commercially controlled processes COEX 
        and NUEX. Each of these processes meet the GNEP Statement of 
        Principles that pure plutonium will not be separated, although 
        importantly the Principles do not reference the required 
        chemical or isotopic diluents which must be combined with the 
        separated plutonium. The COEX and NUEX processes would produce 
        a mixed Uranium (U) and Plutonium (Pu) oxide product (exact 
        proportions likely differ between processes) suitable for 
        thermal reactor recycling. The UREX+ suite includes a series of 
        processes which extract various actinides and fission products 
        in groups or individually (processes +1 through +4). These UREX 
        processes can yield transuranics (TRU\3\) material for 
        fabrication into transmutation fuel for irradiation in fast 
        reactors or inert matrix fuel for transmutation in a thermal 
        reactor. Transmutation of TRU material in fast reactors as well 
        as thermal reactors is discussed later under the ABR heading.
---------------------------------------------------------------------------
    \3\ Plutonium (Pu),Neptunium (Np),Americium (Am) and Curium (Cu).

    The key GNEP requirements for these separation processes are being 
        developed as Criteria, e.g. total process losses of radiotoxic 
        actinides from separations and fabrication activities of 0.2%; 
        specific separations efficiencies for U, minor actinides\4\ and 
        key fission products; and a scalable process meeting 
        international safeguards norms (facility metric tonnage per 
        year capacity has not been yet set--total national capacity 
        needed could be about 2000 MT/yr of LWR spent fuel whereas 
        existing international facilities are about 800MT/yr ) as well 
        as General Goals, e.g. limited emissions and high-level liquid 
        waste production fuel cycle costs causing no more than a 10% 
        increase in LWR busbar cost of electricity; repository 
        acceptable waste forms; and a licensable facility.
---------------------------------------------------------------------------
    \4\ Neptunium (Np),Americium (Am) and Curium (Cu).

    Key among these requirements are the efficiency of separation and 
        the associated degree of acceptable losses of actinides and 
        fission products to waste streams, losses which must be 
        controlled to avoid burdening rather than assisting spent fuel 
        waste management. A major output of the solicitation of 
        commercial interest now underway is to learn what industry 
---------------------------------------------------------------------------
        believes is feasible regarding such specific requirements.

    The DOE selected reference technology is UREX +1a ( its separated 
        products are U, Technetium, Cesium/Strontium, TRU and all other 
        fission products). As of summer 2007 it had only been 
        demonstrated at bench-scale over short times with fresh 
        solvents. Hence variations in process chemistry over the long 
        term have not been established.

   Fabrication and Demonstration of Transmutation Fuel for the 
        ABR--the ABR will most likely be started with traditional 
        sodium fast reactor driver fuel, not fuel with transuranic 
        isotopes (TRU). As the core loadings undergo recycling, and 
        since multi-recyclings are required to effectively transmute 
        the plutonium and minor actinides,\5\ fuel elements with TRU 
        content are required. These are called transmutation fuels and 
        require a significant fabrication and long irradiation testing 
        program. A significant fabrication program is needed because 
        large-scale remote fabrication consistent with hot-cell 
        operations must be developed. Further, for oxide fuels the 
        effect of Americium (Am) due to its high vapor pressure on the 
        fabrication process is unknown as is the effect of lanthanide 
        fission products on the fuel's required oxygen-to-metal atomic 
        ratio and irradiated materials properties, both of which impact 
        achievable fuel pin performance. For the alternative metal 
        fuel, large-scale fabrication without loss of Am due to its 
        volatility must be developed and again the effect of 
        lanthanides but here on potential fuel cladding chemical 
        interactions must be resolved.\6\
---------------------------------------------------------------------------
    \5\ Various, although not particularly attractive options exist for 
minor actinide management other than irradiation of a homogeneous 
mixture with plutonium in fast reactors eg. storage (of Curium), target 
elements, and a minor actinide-only fueled reactor due to the special 
characteristics of the principal minor actinides Americium, Neptunium, 
and Curium.
    \6\ Frank Goldner, USDOE, ``GNEP Transmutation Fuel Development,'' 
Presentation to the 2007 Regulatory Information Conference, March 15, 
2007 as quoted in the NAS study cited in footnote 2.

    A long period of development is needed because the fuel elements 
        must be irradiation tested in a fast neutron reactor of which 
        none exists in the US and only a few are available worldwide. 
        First technical feasibility is to be established by fuel pellet 
        fabrication and irradiation of short pellet stacks in a 
        simulated fast neutron environment in the thermal Advanced Test 
        Reactor (ATR) in cadmium shrouded test positions. This work has 
        been underway for several years. Next, engineering feasibility 
        will be established by irradiating long length pins in the fast 
        reactor environment. Activities to initiate this phase are also 
        ongoing. Finally fuel qualification will be achieved by 
        producing a fuel pin and fuel assembly product that are 
---------------------------------------------------------------------------
        suitable for licensing.

    For the transition of the ABR core load to Transmutation Fuel , 
        lead test assemblies (LTAs) are contemplated for insertion in 
        the ABR As successful irradiation experience is gained the ABR 
        core will be gradually loaded with recycled transmutation fuel. 
        However, this concept of demonstrating satisfactory LTA 
        operation in a commercial reactor as well as the gradual 
        transition in that reactor core to a full transmutation fuel 
        loading runs counter to the prevailing fuel performance 
        approach in our commercial fleet. Specifically, the US LWR 
        commercial industry is adopting a goal of zero fuel failures by 
        2010. It is likely that commercial acceptance for operations of 
        a core load of Transmutation Fuel will require prior 
        demonstration of failure-free operation of multiple core loads 
        of identical fuel in a non-commercial facility. These factors 
        dictate that qualification of transmutation fuel for ABR 
        performance will be a long and costly process-longer than the 
        10 year period currently envisioned. The GNEP program properly 
        has Computation and Simulation as a major research ingredient. 
        It is my hope and expectation that the transmutation fuel 
        development and demonstration will be increasingly impacted by 
        such simulation capability, a capability which could decrease 
        the time and cost of in-reactor irradiations by development of 
        sufficiently accurate models of fuel behavior under irradiation 
        and their exercise by faster-than-real-time computation.

   The Design and Construction of the ABR--The GNEP ABR is 
        envisioned as a sodium-cooled fast reactor, commercially 
        designed, constructed and operated. The choice of sodium 
        coolant is plausible based on a balancing of its inherent 
        characteristics and the extensive, although not uneventful, 
        worldwide operating experience of the late 20th century. 
        Further, the benefits of coordination with existing sodium 
        reactor programs of all major nuclear development countries 
        favor the choice of sodium over alternative concepts whose 
        development is far less advanced. Nevertheless, an evaluation 
        of competing reactor technologies using a systematic set of 
        selection criteria as pointed out in the NAS report would be 
        most desirable.

    For any type fast reactor selected for GNEP, and especially for the 
        sodium option, two principal challenges for technology 
        development are the generation of a design of sufficient.

          1. safety characteristics as well as the development of a 
        risk-based, technology neutral framework for pursuing its 
        licensing and
          2. a capital and operating cost profile such that it can gain 
        commercial acceptance.

    The DOE has properly engaged industry to address these sodium 
reactor design strategies. Important systems engineering studies 
underway are also addressing what the performance requirements of these 
reactors should be, chief among them the value of the core conversion 
ratio which impacts the number of fast reactors and processing 
facilities needed. System studies should also evaluate the proposal 
below for a thermal recycle program component which was raised in my 
2006 testimony and in a minority view of the NAS study.
    It is obvious that deployment of fast reactors in numbers 
sufficient to make a meaningful transmutation contribution is far in 
the future. Our operating LWR fleet is a ready resource in which to 
conduct thermal neutron transmutation on a schedule dictated by 
development and qualification of suitable fuel materials. In the inert 
matrix fuel option, a portion of the core is loaded with inert matrix 
fuel composed of TRU and inert material, thereby eliminating the U238 
isotope which would if present transmute to Pu239, a material we set 
out to transmute and thus eliminate in the first instance. Inert fuel 
development, although already extensively studied internationally, has 
challenges, key among them the reprocessing of diluent material, which 
will require considerable further work although likely less than that 
needed for fast reactor transmutation fuel. This two-tiered fuel cycle 
option of first thermal reactor transmutation followed by reprocessing 
and then fast reactor transmutation of the resulting vastly limited 
quantity of TRU should be evaluated for the GNEP program. This strategy 
has the potential to accelerate the start of transmutation of TRU 
material and also reduce the number of fast reactors needed for the 
ultimate disposition of TRU from the LWR fleet's spent nuclear fuel.

   Grid Appropriate Reactors--GNEP proposes small-scale 
        reactors for developing economies for which fresh fuel would be 
        provided and spent fuel returned to the supplier states. GNEP 
        also designates these as ``proliferation-resistant 
        international modular reactors'' (PRIMR). As I noted in 2006, 
        ``The small scale is not necessitated by the fuel cycle but 
        rather the electrical grid and capital structure of the 
        developing economy. Such a supply and spent fuel return 
        arrangement would provide adequate proliferation safeguards in 
        an era of worldwide expansion of nuclear technology. It is, 
        however, by no means certain that the capital and fuel cycle 
        costs of these small-scale reactors would yield an attractive 
        cost of electricity (COE) for these economies. Considerable R&D 
        needs to be supported by DOE to refine such designs to a level 
        where realistic COE can be projected and proliferation-
        resistant effectiveness assessed, especially if fast spectrum 
        design options are to be considered. There are, however, some 
        innovative LWR designs already existing and pebble bed reactors 
        being developed in South Africa and China that offer 
        considerable advances in reactor safety features which bode 
        well for introduction of nuclear power into technically 
        unsophisticated nuclear economies, if competitive COE can be 
        achieved.'' The laboratory proposal is for a dual-path approach 
        for PRIMR development and demonstration. A fast-track 
        deployment of a near-term reactor to gain US leadership in the 
        rapidly emerging global nuclear market in support of GNEP 
        objectives and a second path of specific technology development 
        and demonstrations needed to deploy second generation PRIMR 
        concepts. A suitable number of concepts exist for the first 
        path. The development targets for the second path must yet be 
        established. This will be done through an assessment of user 
        country needs and constraints in concert with the international 
        community leading to the development of a set of PRIMR system 
        requirements.

    In conclusion the development of technology needed for GNEP is a 
large and technically demanding task. Significant activity is underway 
which is facing and working through the resolution of multiple 
technical challenges. No insurmountable barriers exist to my knowledge 
although my recent exposure to these extensive development programs has 
been limited by the inactivity of the Nuclear Energy Research Advisory 
Committee and consequently its key oversight activity in this area, the 
Advanced Nuclear Transformation Technology Subcommittee. The scale, 
ownership, timing, and ultimate cost of the principal GNEP facilities 
are key strategic questions. Their answer depends on many factors--
among them very importantly the continued progress and results of this 
development program.

                     APPENDIX A.--SOURCES CONSULTED

          1. DOE websites: www.gnep.gov or www.gnep.energy.gov.
          2. Advanced Fuel Cycle Initiative, FY 2008 Congressional 
        Budget Request, February 7, 2007.
          3. P. Lisowski, GNEP Presentation to Nuclear Energy Research 
        Advisory Committee (NERAC), February 20, 2007.
          4. J. Rempe et al., Status Report to NERAC. Advanced Nuclear 
        Transformation Technology Subcommittee of the Nuclear Energy 
        Research Advisory Committee, February 21, 2007.
          5. F. Goldner, USDOE, ``GNEP Transmutation Fuel 
        Development,'' Presentation to the 2007 Regulatory Information 
        Conference, March 15, 2007.
          6. Report of Advanced Nuclear Transformation Technology 
        Subcommittee of the Nuclear Energy Research Advisory Committee, 
        April 2, 2007.
          7. Fast Reactor Technology. Chris Grandy, Manager, 
        Engineering Development and Application Department, Nuclear 
        Engineering Division; Presentation to GAO, May 24, 2007.
          8. F. Carree, The Nuclear Fuel Cycle: Generation IV Nuclear 
        Energy Systems' Sustainability and Transition from LWRs, 
        American Nuclear Society Annual Meeting, Boston, Mass., June 
        26, 2007.
          9. A. Hanson, Near-Term Options for Treatment and Recycle. 
        American Nuclear Society Annual Meeting, Boston, Mass., June 
        26, 2007.
          10. Global Nuclear Energy Partnership Technology Development 
        Plan, Global Nuclear Energy Partnership Technical Integration 
        Office, July 25, 2007.
          11. A. Griffith, Global Nuclear Energy Partnership. Advanced 
        Fuel Cycle Facility (AFCF), Office of Nuclear Energy, U.S. 
        Department of Energy. GNEP Annual Meeting, October 2, 2007.
          12. Review of DOE's Nuclear Energy Research & Development 
        Program, National Research Council, Released October 29, 2007.
          13. P. Broussard, CEA R&D Program in France on Advanced Fuel 
        Cycle Processes. International Symposium: Rethinking the Fuel 
        Cycle. MIT, Center for Advanced Nuclear Energy Systems, 
        Cambridge, Mass., Oct. 30-31, 2007.
          14. P. Hejzlar, Do We Need Fast Actinide Burners for Waste 
        Management? International Symposium: Rethinking the Fuel Cycle. 
        MIT, Center for Advanced Nuclear Energy Systems, Cambridge, 
        Mass., Oct. 30-31, 2007.
          15. J. J. Laidler, Technology Options for Spent Fuel 
        Recycling. International Symposium: Rethinking the Fuel Cycle. 
        MIT, Center for Advanced Nuclear Energy Systems, Cambridge, 
        Mass., Oct. 30-31, 2007.
          16. D. Stout, Director, Office of Light Water Reactor Spent 
        Fuel Separations Recycling Used Nuclear Fuel (CFTC Project), 
        November 7, 2007.

    The Chairman. Thank you very much.
    Senator Dorgan wants to make a statement at this point.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
                             DAKOTA

    Senator Dorgan. Mr. Chairman, before we go to the final 
witness, I have to be at Senator Reid's office, the Majority 
Leader's office for a meeting, and I don't have the opportunity 
to get out of that at the moment.
    But I did just want to say that Senator Domenici and I are 
the Chair and ranking member on the Appropriations side on 
these issues, and I really appreciate you calling this hearing 
on the authorizing committee, No. 1. No. 2, I think the 
statements have been really interesting and fascinating and add 
to the body of knowledge here, so I just wanted to thank the 
witnesses, and I apologize, I have to leave early, but I've had 
a chance to review the statements and will have the opportunity 
with Senator Domenici and others on the Appropriations 
Committee to use this information, as well.
    Mr. Chairman, thank you.
    The Chairman. Senator Domenici.
    Senator Domenici. Before you leave, Senator Dorgan, might I 
say publicly, as ranking member of the subcommittee that you 
chair, a committee that I have been, effectively, chairman of 
for maybe 25 years, because when Senator Reid was there, he 
frequently let me chair, even when he was in charge. I enjoyed 
that committee immensely, and now I enjoy it with you.
    It is burdened with the biggest problems it's ever had, 
with the adequacy of budget funds for the maintenance of our 
National Laboratories, which is rather startling to both you 
and I. Your meeting with the leader wouldn't have anything to 
do with how we might solve that problem?
    [Laughter.]
    Senator Dorgan. It does not.
    Senator Domenici. Why don't we set one up and see if we 
could get one? Thank you very much.
    The Chairman. All right, Mr. Seshadri, go right ahead, 
we're glad to have you here.

 STATEMENT OF PATTABI SESHADRI, PARTNER AND MANAGING DIRECTOR, 
              BOSTON CONSULTING GROUP, BOSTON, MA

    Mr. Seshadri. Mr. Chairman and members of the committee, I 
appreciate this opportunity to testify today on the findings 
from our study on nuclear fuel recycling economics.
    First, I will briefly highlight the unique elements of our 
approach, and I'll discuss the summary of findings of the 
study. I will then conclude with the risk management benefits 
of portfolio solution, comprising a repository recycling 
combination.
    We believe there are five--a few unique aspects that 
differentiate our approach. First, the Study brings an 
industrial perspective to recycling, starting with a specific 
cost economics based on actual capital and operating expedience 
at existing AREVA facilities at La Hague and Melox.
    Second, we took an independent view in analyzing the 
estimates provided by AREVA.
    Third, we gathered and put on key assumptions from a 
variety of sources external to AREVA and this is important in 
the sense that we included interactions with senior managers at 
four of the top ten U.S. nuclear utilities as part of the 
study.
    Fourth, this is a fairly important point, because some of 
the recycling economics comes down to utilization. Our study 
recognizes that the size of accumulated spent fuel, and new 
annual spent fuel discharge in the U.S. market, and provide the 
basis for a world-scale recycling plant, operating at high 
levels of utilization and we have presumed an 80 percent 
utilization of these recycling facilities.
    This can help achieve advantaged economics. Just as world-
scale LNG petrochemical, refining and other industrial 
facilities achieve cost advantages relative to their smaller, 
less well-positioned competitors.
    Finally, our study considers criteria beyond economics that 
can provide significant risk management benefits, which I'll 
highlight.
    We compared the economics of recycling in repository 
strategies in two different ways. Today, I'll just focus on the 
second version of the comparison, which was comparing the 
economics of a recycling repository portfolio solution, versus 
a pure once-through strategy that will require an additional 
repository in the future.
    The recycling repository portfolio solution has an 
estimated net present cost of $48 to $53 billion. It is based 
on a new, integrated recycling plant, opening in the year 2020, 
in addition to the development of a repository. In comparison, 
an exclusive once-through strategy with the development of 
multiple repositories over time, has an estimated net present 
cost of $47 to $50 billion. This represents, in our mind, a $1 
to $2 billion difference in baseline estimates between net 
present costs between the two alternatives.
    We estimated the sensitivity of the conclusions to various 
factors, such as capital costs of the facilities, the price of 
uranium, discount rates, and the like. The impact of 
uncertainty in each of these variables is of the order to zero 
to 14 percent of the estimated baseline net present cost. This 
would translate to the potential of approximately $7 billion in 
variation net present costs between a portfolio solution, and a 
pure once-through solution.
    Given the uncertainties of the cost projections, both on 
the repository and the recycling facilities, we determined that 
the baseline difference of $1 to $2 billion is indeed, the 
economics of the two facilities are comparable.
    In addition to the comparable economics that are very 
important risk management benefits that we considered. First, 
developing a world-scale recycling facility has the potential 
to eliminate the need for additional repository capacity beyond 
the initial 84,000-ton capacity until the year 2070.
    Second, the recycling repository portfolio solution can 
contribute to early reduction of used fuel inventories at 
reactor sites by removing newer, hotter fuel for recycling 
within 3 years of discharge.
    Third, the recycling repository portfolio solution relies 
on existing technology with known improvements. Such an 
incremental approach, we believe, can reduce the implementation 
risks substantially, and provide an operational transition to 
future development, technology developments. In this regard, we 
would view this as a retro-version of a 1975 Chevy, but with 
all of the added amenities that you can add through 
technological improvements over the last 20 years.
    Finally, recycling offers a tool for utility nuclear fuel 
buyers to protect against future increases in uranium prices. 
The recycling solution can produce annual nuclear fuel supplies 
of 20 to 25 percent of the U.S. nuclear fuel needs, increasing 
supply security which is a significant factor as you look at 
the economics of nuclear power.
    In conclusion, our evaluation of nuclear fuel recycling 
indicates that the economics of recycling repository portfolio 
solution are comparable to a once-through or repository-only 
solution. In addition, recycling repository portfolio solution 
can provide very important risk management benefits, warranting 
further consideration of recycling in the United States.
    I would be pleased to answer any questions you may have at 
this time.
    [The prepared statement of Mr. Seshadri follows:]

 Prepared Statment of Pattabi Seshadri, Partner and Managing Director, 
                  Boston Consulting Group, Boston, MA

    Mr. Chairman and members of the Committee: My name is Pattabi 
Seshadri, and I am a Partner and Managing Director with the Boston 
Consulting Group and Leader of BCG's Americas Utility Practice. I 
appreciate this opportunity to testify before you today on the findings 
from our study on nuclear fuel recycling economics which was completed 
in July 2006.
    The Boston Consulting Group is a Global Management Consulting firm 
with over 6,000 employees across 60+ countries. BCG advises 
corporations in every major market and industry sector, as well as 
prominent public sector organizations. A majority of our clients in the 
Americas, Asia Pacific and Europe rank among the largest corporations 
in those markets. In addition, BCG also consults to and advises non-
profit and governmental organizations. The firm conducts strategic and 
economic analyses and supports implementation of major improvement 
programs at clients across a number of sectors including, energy, 
industrial goods, technology and communications, financial services, 
health care, and consumer products. BCG's energy practice comprises a 
significant proportion of our global activities.
    What I plan to present today is a summary of the findings from The 
Boston Consulting Group's study of the economics of recycling and once-
through fuel cycles. First I would like to begin by discussing the 
unique characteristics of our approach that differentiates this study 
from other such economic assessments. Then I will discuss the summary 
findings of our study including the key sensitivities in the results. I 
will then highlight the risk management benefits--beyond economics--
that we believe a portfolio solution comprising a repositoryrecycling 
combination can deliver. Finally, I will conclude with a few 
directional observations around recent market changes that have further 
affected the balance between recycling and repository economics.

                              OUR APPROACH

    There have been many studies to date that have focused on the 
economics of recycling relative to repository solutions. However, we 
believe there are five major themes that differentiate our overall 
approach to evaluating recycling economics which we would like to 
highlight prior to discussing the study findings.
    First and foremost, this study brings an industrial perspective to 
recycling, starting with specific cost economics based on actual 
capital and operating experience at existing AREVA facilities. In this 
regard, our study benefited from an ``open-book'' approach, in which 
AREVA provided us proprietary operating and accounting data from its 
operations at La Hague and Melox. In addition, we were provided 
unfettered access to a variety of AREVA's internal technical and 
economic experts in each relevant area of operation. We should note 
that this project was not meant to be an accounting audit of the data 
provided by AREVA to test its veracity. However, the level of access 
provided by AREVA helped us in gaining confidence in the underlying 
assumptions of the study and in maintaining a high level of analytical 
rigor.
    Second, we took an independent third party view in analyzing the 
estimates provided by AREVA, using our expertise in industrial cost 
analysis to validate assumptions. In many cases, we developed specific 
methodologies to triangulate on sensitive data elements or explain cost 
differences with previously reported data. For example, AREVA provided 
a bottom-up build up of recycling facility costs taking into account 
specific facilities that will be required, high value process 
improvements that can be implemented, and the unique characteristics of 
the U.S. market in terms of licensing, security, engineering and 
construction standards and requirements. In this case, we conducted a 
top down validation of the cost of the recycling plant which represents 
a significant portion of the overallcost. We estimated this just as we 
would typically assess the cost of an industrial project which involves 
introducing a state-of-the-art technology in a new market--taking into 
account local conditions, feasible range of cost improvements from 
operating experience, and the like.
    Third, in addition to accessing AREVA information we also gathered 
input and feedback on key assumptions from a variety of sources 
external to the company. We conducted informal interviews with experts 
in academia, in the Department of Energy's National Laboratories, and 
in the energy industry. Specifically, we undertook a substantial effort 
to involve key senior managers at four of the top 10 U.S. nuclear 
utilities as they are important stakeholders with regard to spent fuel 
management issues. Our effort included three separate steps--at the 
beginning of the project we solicited input on the key issues from 
their perspective; we then conducted an interim dialog on findings to 
understand and address potential areas of concern; towards the end, we 
presented our final findings in a workshop setting.
    Fourth, our study is unique in that it explicitly recognizes the 
differences in the US market relative to other international markets 
where recycling has beenimplemented. The US market has the largest base 
of legacy spent civilian nuclear fuel to be addressed--approximately 
55,000 metric tons accumulating across utility nuclear plant sites 
across the nation. In the case of some of this legacy fuel, it would 
not be advisable to directly recycle all of it, as the recycling by-
products would have adverse radioactive characteristics. However, some 
of this accumulated base can be recycled in dilution with more recently 
discharged spent fuel--providing a steady source of spent fuel for a 
large scale recycling facility. In addition, the US nuclear market also 
has a large installed base of nuclear plants annually generating 
approximately 1,900 to 2,100 metric tons of spent nuclear fuel on a 
consistent basis. Taken together, these two sources provide the basis 
for a `world scale' recycling plant that can operate at very high 
levels of utilization on a continuous basis--unlike any other facility 
in operation today. This can indeed help achieve more advantaged 
economics--just as `world scale' Liquefied Natural Gas (LNG), 
petrochemical, refining, cement and other industrial facilities achieve 
cost advantages relative to their smaller, less wellpositioned 
competitors.
    And finally, our study considers important elements beyond 
economics, such as the impact of recycling on flows of used fuel, the 
improved ability to optimize repository space in a recycling-repository 
`portfolio' solution, and the potential risk management benefits of 
such an approach. It is our view that these are important financial and 
other benefits of recycling that are not fully reflected in `straight-
up' economic comparisons.
    We would like to note that throughout this engagement, BCG had 
complete control over the emerging results, key messages, and 
analytical comparisons. Under BCG's agreement with AREVA, the company 
may only publish this report in the public domain without any further 
alterations. Any changes or alterations by AREVA would need to be 
specifically agreed to by BCG.

                    FINDINGS ON RECYCLING ECONOMICS

    We developed economic comparisons of recycling and once-through 
repository strategies using two analytical approaches. The first is a 
theoretical comparison of the estimated long-term cost of recycling 
used fuel and theestimated cost of a repository to handle the same used 
fuel in a once-through strategy. This comparison is referred to as the 
``Greenfield'' approach. In the Greenfield approach, no consideration 
was given to existing legacy fuel stored atthe utility sites. The key 
economic metric is the unit cost, expressed in dollars per kilogram ($/
kg). The Greenfield approach answers the question, ``How much would it 
cost to recycle used fuel in the U.S. over the long-term'' In this 
respect, the Greenfield approach lends itself well to comparisons with 
previous studies that have used a somewhat similar approach.
    The second approach involves comparison of recycling as a solution 
that would complement development of the Yucca Mountain repository, 
termed the ``Portfolio'' strategy, and a pure once-through strategy 
that will require additional repository capacity in the future. This 
second approach is referred to as the ``Implementation'' approach. The 
Implementation approach addresses economic questions such as, ``How 
much would it cost to implement a recycling plant in conjunction with 
the repository'' and ``What is the cost differential between a 
portfolio strategy and a once-through strategy in which only 
repositories are developed?'' In this approach, we also looked at a 
broader set of assessment criteria. In addition to the economics, the 
Implementation approach addresses issues related to flows of used fuel, 
financing requirements and risk management.
    In the Greenfield approach, we estimated the overall discounted 
cost of recycling used fuel to be in the order of $520/kg. The cost of 
a once-through strategy using a repository was estimated at about $500/
kg. Considering uncertainties that surround many of the variables used 
in the assessment, such as uranium price, repository costs, recycling 
facility capital requirements, and the like, we determined the 
economics of the two approaches to be comparable.
    In the Implementation approach, the cost of a portfolio strategy, 
based on a new integrated recycling plant opening in 2020 and handling 
2,500 tons/year, combined with development of a repository (such as 
Yucca Mountain) for high-level waste from recycling and untreated 
legacy fuel, has a total net present cost of $48-53B. The net present 
cost of an exclusive once-through strategy with Yucca Mountain and an 
additional repository is estimated at $47-50B. This represents a $1-2B 
difference in baseline estimates of net present costs of the two 
alternatives.
    As part of our economic assessment, we estimated the sensitivity of 
the conclusions to various factors, including, the capital and 
operating costs of the repository and recycling facility, the price of 
uranium, discount rates used to estimate net present costs of future 
cash outlays, and the like. The impact of each of these variables, with 
all other variables remaining constant, is of the order of 0-14% of the 
estimated baseline net present costs of each fuel management strategy. 
This translates to the potential for approximately $0-7B in variation 
in net present costs of a portfolio solution that combines a recycling 
facility with a repository and a pure once-through solution that 
includes multiple repositories over time.
    The largest uncertainty underlying this economic comparison is the 
total installed capital and operating costs--both for the recycling 
facility and for therepository. Given the intrinsic uncertainties of 
the cost projections for both of these facilities, we determined the 
$1-2B difference in baseline estimates of net present costs of the two 
alternatives to be comparable. Furthermore, even at the upper end of 
the potential net present costdifference of 14% between a recycling-
repository solution and a repository-only solution, we believe there 
are significant risk management benefits to the portfolio solution that 
make it worthy of further consideration. I will discuss these risk 
management benefits subsequently in this testimony.
    It is important to note that the total undiscounted life cycle cost 
for the recycling strategy is estimated to be about $113B, compared to 
about $124-130B for the once-through strategy in which a larger portion 
of the cost is deferred. Therefore, discount rates (or financing costs) 
used to calculate the net present costs would differentially affect the 
economics of the two solutions. We assumed a similar discount rate for 
both the solutions in order to enable a pure economic comparison of the 
alternatives. As part of this study, we did not explore 
alternatebusiness models such as public--private partnerships to 
implementing a recycling solution. While such alternatives are likely 
to incur higher financing costs, they would also provide financial 
benefits in the form of transfer of some risks to nongovernmental 
entities. We believe that such a cost versus risk trade-off across 
business model alternatives should be valued separately from the basic 
costeconomics of the two fuel management solutions.
    A key differentiating element in our assessment of recycling costs, 
when compared to previous studies is that the Integrated Recycling 
facility unit costs are significantly lower than previously published 
data. We estimated a unit cost for the integrated plant of $630/kg, 
based on a plant with the following main characteristics:

   2,500 tons per year of net capacity, based on effective 
        throughput at 300 days per year (about 80 percent of nameplate 
        capacity)
   Total capital investment (CapEx) of about $16B, which is 
        mainly composed of overnight cost of construction at market 
        price, contingencies, development, licensing and start-up 
        costs; storage costs for High Level Waste from Recycling (HLW-
        R) and used MOX fuel assemblies are also included and 
        decommissioning costs are considered after the closure of the 
        plant; and
   Operating costs (OpEx) of about $900M per year, which 
        include operating expenses for both treatment and fuel 
        fabrication, running investments, estimated taxes or taxes 
        equivalent, and other charges.

    As discussed before, AREVA provided to BCG a bottom-up estimate of 
the capital and operating costs of a new Greenfield plant in the U.S. 
market. We undertook a process of reconciling these bottom-up estimates 
with the actualcosts of recycling at existing AREVA Plants.
    Overall, the total capital investment required for the integrated 
plant is within 10 percent of the total capital investment that has 
been made over the years for the AREVA European plants at La Hague and 
Melox. We took in to consideration some key modifications that will be 
required between the existing plants and the U.S. plant, including:

   A few workshops not in use anymore or not in the scope of a 
        U.S. plant.
   No duplication of similar workshops--the La Hague and Melox 
        facilities were built ``piecemeal'' over time resulting in some 
        inefficiency (La Hague for example is made of two largely 
        independent units).
   U.S. plant larger in size to accommodate a higher volume of 
        used fuel.
   Limited optimization for some key process steps, based on 
        AREVA operational experience at La Hague.
   Additional costs and contingencies, such as costs driven by 
        specific licensing and design requirements in the U.S., 
        development costs, etc.

    It is important to note that there are inter-linked impacts that 
are difficult to clearly separate and quantify in this reconciliation 
process. As an example, when a sub-process within a plant is scaled up 
by 50-100% of its current size, there can be significant associated 
benefits around how the new process is implemented and optimized. In 
that instance, the cost of increasing the size of the process and the 
offsetting value of scale benefits and process improvements cannot be 
fully and clearly separated out--only the net total benefits can be 
clearly identified.
    Based on these assessments, we concluded that the capital 
investments and the operational expenses of the U.S. plant can be 
comparable to those of existing European plants. A key difference, 
however, is that a much higher used fuel throughput is expected in the 
U.S. plant, because of its larger size and the higher expected 
utilization. Utilization is expected to be at about 80 percent of the 
nameplate capacity, significantly higher than the current value at La 
Hague. Higher utilization in the U.S. is guaranteed by larger volume of 
newly discharged fuel and existing inventory. Thus, our recycling unit 
cost estimates, especially for treatment, are significantly lower than 
the historic unit cost incurred at La Hague and Melox.

            ADDITIONAL RISK MANAGEMENT BENEFITS OF RECYCLING

    As mentioned before, our study looked at the risk management and 
other peripheral benefits of a portfolio solution that combines 
recycling and repository approaches. While several of these features 
cannot directly be `priced' in as part of the economic comparison, the 
benefits can be compelling and need to be considered in the overall 
evaluation. Our study concluded that in addition to comparable 
economics, recycling as part of a portfolio strategy presents at least 
four important benefits.
    First and foremost, developing a `world scale' recycling facility 
has the potential to eliminate the need for additional repository 
capacity beyond the initial 83,800 ton capacity at Yucca Mountain, 
until the 2070 timeframe. In a repository-only approach, we estimated 
that an extension of Yucca Mountain capacity to its estimated technical 
capability of 120,000 tons would be required to dispose of fuel 
discharged after 2020 and an entirely new repository would be required 
for used fuel discharged after 2040.
    Second, a recycling-repository portfolio solution can contribute to 
early reduction of used fuel inventories at reactor sites--in 
particular, removing newer, hotter fuel for recycling within three 
years of discharge and eliminating the need for additional investments 
in interim storage capacity at power plant sites.
    Third, the portfolio solution relies on existing technology with 
known improvements and modifications to enhance its effectiveness. This 
would be very similar to new nuclear power plant development where 
electric utilities migrate to subsequent generations of technologies 
over time rather than starting by scaling up one-of-a-kind 
technologies. Thus, a portfolio approach has the potential to 
significantly reduce implementation risks. It can also provide an 
operational transition to future technology developments such as 
Advanced Fuel Cycles and fast reactors.
    Finally, a very important benefit of recycling is that it offers a 
tool for the nuclear power sector to protect against potential increase 
in uranium prices. Therecycling approach produces MOX and recycled UOX 
fuel to nuclear power plants. We estimate that a recycling facility 
processing 2,500 tons/year of spent fuel would produce MOX and recycled 
UOX fuel equivalent to approximately 20-25% of the US nuclear power 
plant annual fuel requirements. The production cost of this fuel is, 
for the most part, independent of uranium prices and enrichment costs. 
In addition, the facility would be located within the US, thus 
providing supply security for a portion of US nuclear fuel needs.
    We believe that access to such a supply source of recycled fuel can 
be quite valuable. Spot Uranium prices over the last two years have 
averaged approximately $75/lb compared to the 2000-2005 average of 
approximately $14/lb. This included a peak price of approximately $135/
lb in 2007. The planned build out of new nuclear plants over the next 
10-15 years has the potential to put further upward pressure on Uranium 
prices. The natural gas sector provides auseful analogy to consider the 
impact of such commodity price uncertainties. Between 1990 and 2005 the 
US power sector added approximately 250,000 MW of new gas-fired 
generation. During that same timeframe, natural gas pricesmoved up from 
an average of $1.60/MMBtu to $8.70/MMBtu, a more than fivefold increase 
in nominal terms. A steady and meaningful source of recycled nuclear 
fuel can provide a potential hedge against such price increases.

                               CONCLUSION

    In conclusion, our in-depth evaluation of nuclear fuel recycling 
indicates that the economics are comparable to a once-through or 
repository-only solution. In addition, a portfolio solution that 
implements a recycling facilitycomplementary with a repository 
development can provide important risk management benefits for the 
United States.
    A few recent trends also appear to be improving the relative 
economics and comparability of recycling to a repository solution. 
Specifically, increasing Uranium prices, the potential for increased 
future nuclear fuel demand from a nascent nuclear renaissance in the US 
power sector, and increasing cost estimates for a large scale 
repository indicate that a recycling solution can provide significant 
benefits in managing the spent fuel disposal problem.
    Mr. Chairman and members of the Committee, I appreciate having this 
opportunity to join you today. I would be pleased to answer any 
questions you may have at this time.

    The Chairman. Thank you very much.
    Thank you all for your testimony. Let me start, and we'll 
just do 5-minute rounds, here.
    First, Secretary Spurgeon, let me ask you--as I hear about 
GNEP, it seems to be quite a few different things under one 
title. One is this international partnership to advance the use 
of nuclear energy, and clearly that's something which I 
support, trying to move toward more safe use--of nuclear 
energy.
    But there are also a lot of other things in it. I notice in 
the National Academy report, although Dr. Wallace, I think you 
had a euphemism for saying that they had a ``cautious'' 
approach to the program, in fact their statement was pretty 
clear. It said, ``The GNEP program's goals are to develop and 
deploy recycling technologies that do not separate plutonium in 
advanced reactors that consume transuranic elements from 
recycled fuel. The GNEP program should not go forward, it 
should be replaced by a less aggressive research program. The 
domestic, waste management security and fuel supply needs are 
not adequate to justify commercial-scale reprocessing 
facilities, and there is no economic justification to 
proceed.''
    That's a pretty strong statement. I know you've given us 
the letter that Secretary Bodman wrote in response, maybe you 
could elaborate on that, and explain why you think there is 
strong or economic justification to proceed.
    Mr. Spurgeon. To the best of my knowledge, none of the 
efforts that went into that report were directed toward the 
economic justification. I take that as an opinion expressed by 
folks, that was not backed up by any facts within the report 
itself.
    I believe, that in their report--and they did acknowledge 
this in their press release and in their briefings of the 
report--they were not speaking of the international effort. 
What they were focused on in their comment relative to GNEP not 
proceeding, was the R&D effort to go to commercial-scale of 
advanced technology, and I think that's a key differentiation.
    They made the assumption that we had already selected UREX-
plus technology--which as has been said here--and I would agree 
with--by other members on this panel--is not ready for 
commercial-scale deployment. But they were not addressing the 
idea that we as a Department have a responsibility for long-
term R&D, to look over the horizon, to develop the kind of 
technologies, methods, systems, modeling, simulation, that will 
be needed to improve our nuclear technology in the future.
    But we also have a responsibility to help pursue and help 
commercialize existing technology, which is, for example, what 
we do with our Nuclear Power 2010 program, and implementation 
of the Energy Policy Act of 2005.
    So, it's two different things. They're recommending that 
advanced technology not go forward at a commercial scale, that 
it needs to be done at engineering scale, in a normal course of 
development. I agree with that.
    But it doesn't reflect the ability for there to be more 
near-term methods that could be used today.
    The Chairman. I guess where I'm not understanding is, as I 
understand it, the Department of Energy has announced grants of 
$60 million over 2 years to have industry come up with 
conceptual design of both this consolidated fuel treatment 
center, and the advanced burner reactor, to burn the 
transuranics from the spent fuel. Now, is it your impression 
that they would agree with that? That this is an appropriate 
thing for us to be going forward with designing and 
constructing?
    Mr. Spurgeon. No. Designing--we have not made any 
commitment, nor have we requested any funds to construct, at 
this point in time, any facilities. What we are doing now is 
getting input from industry, and the international community on 
a technology path forward. We want the technology that we 
pursue to be informed by what industry tells us is needed for 
them to be able to proceed forward with constructing 
facilities, and their recommendation as to the scale of those 
facilities.
    The definition of commercial scale varies depending on the 
technology that we talk about. The need for proceeding through 
incremental steps, is dependent on the technology that we are 
going to implement, and how advanced, or what kind of a step 
forward it is taking. If you're doing just as we're doing with 
Nuclear Power 2010, where we are going to Generation 3-plus 
reactors from the Generation-3 reactors that are in existence 
in the United States today, they go directly to ``commercial 
scale.'' That means a fairly large reactor.
    If you're talking a fast reactor that is in a much earlier 
stage of development, then the step that you would take in 
between is a smaller step. You don't go to a very large 
reactor. But, in a fast reactor system, commercial scale could 
be much smaller than commercial scale for a light water 
reactor.
    The answer to your question is, I think, in fact the 
National Academy did recommend--somewhat gratuitously, since we 
already had these contracts in place--but they recommended that 
we get more input from industry, they recommended we get more 
input from the international community. This was already 
underway, but not finalized at the time they cutoff their study 
in July of this year, so we're doing exactly what they asked to 
be done. Before we proceed forward, and go into final design or 
construction of anything, we get input so that the R&D program 
is well-informed.
    While I did not like the language that they used, because I 
think it was more headline-grabbing than anything else, the 
basis underneath much of what they were recommending are things 
that we agree with, if put in the correct context.
    Advanced technology needs a step-wise approach. If you're 
talking about incremental improvements to technology that has 
been proven at commercial scale, that can allow a more 
aggressive approach, but in no case are we advocating that the 
U.S. Government proceed to--nor have we asked in the 2008 
budget submission that you now have before you--any funds for 
constructing, or going to final design. All we're doing is 
conceptual design, so that we can inform the future R&D 
program.
    We want the R&D to be directed toward answering the 
questions that industry and our international partners--because 
we have several bilateral technology development agreements--
determine are the key questions and that allow us to move 
forward. That is why you do conceptual design, so that you're 
not just doing R&D for R&D's sake, it's focused on answering 
the proper questions.
    The Chairman. My time is up.
    Senator Domenici.
    Senator Domenici. Mr. Chairman, panelists and fellow 
Senators, let me say I'm very sorry that after my questions I 
have to leave, but I do really think this is an excellent 
meeting and forum, and it's exactly the kind of thing that I 
love about being in the Senate, and that I'll miss immensely 
when I'm not here.
    It's also very interesting to see how you disagree so 
violently, yet you are great scientists who are supposed to 
know. One would think that if you're a great scientist, what 
you all would know about this would be the same, but it doesn't 
seem so.
    We have one witness here saying, ``We can proceed, and they 
know how,'' I think that witness says that, that's the last 
witness at the table, ``because they're doing it in Europe.'' 
You don't like it, some of you don't, and American leaders seem 
to take an instant position that they're not in favor of the 
PUREX technology that's being used by AREVA and Japan--Japan's 
pretty cautious about taking care of waste, and they're doing 
it with PUREX formulation.
    It seems to me when this Senator travels, wherever I 
travel, I'm beginning to be known as being pro-nuke, and I'm 
very proud as I leave the Senate that I'm given some credit 
with moving this ahead in America, and when America moves ahead 
and comes up from a deep sleep--like Rip Van Winkle in this 
area--it takes a lot of time to catch up. We still don't have 
assurance that Congress wants to do everything necessary to 
catch up, but we've got just about everything we need.
    Except we all get asked the very same question, and that 
is, ``Oh, yes, that's all working and we read about it, but 
what are you going to do about the waste?'' That's all we get, 
you know, they're not asking what they used to about Three Mile 
Island. They know that now, they read the literature. Nobody 
got hurt at Three-Mile Island and they're past that stage. They 
don't ask about the Russian reactor, they understand that was 
not the same kind of thing. All it is, ``What are you going to 
do with the waste?''
    Let me tell you, my answer is that this country has great 
scientists, and great technocrats and great engineers, and 
we're going to find a solution, just like Europeans found a 
solution, and now the Japanese, of late.
    What's wrong with my answer? When I answer my constituents 
that way? Do some of you find fault with the answer that I make 
when they ask me? I do not say, ``We're going to use Yucca 
Mountain,'' I guess you got that. I don't tell that to the good 
constituents. Because I've come to the conclusion that we're 
not going to get there for a long time, and I also have come to 
the conclusion, that I'm not sure that we're going to put spent 
fuel rods, with all of the energy that is contained within 
them, underground in the mold that's prescribed at Yucca.
    I'm also not convinced that when the country knows that 
Yucca Mountain won't service our country in total, it will only 
do in part the country won't seek another solution. I heard one 
of the witnesses say with the legislative cap that's on it and 
some of the other restraints, it won't hold but about one-
fourth of the need--if so, we need to build three more Yuccas, 
right?
    So, my answer is not, ``We're going to Yucca.'' My answer 
is, ``We're going to find a way.''
    Now, I'm interested in this hearing because I thought you 
all were going to tell us how we could do it. I want to say one 
other thing. We have been used to being afraid of new 
technology such as the PUREX formulation. Our objection seems 
to be that it produces plutonium in the mainstream, and 
therefore it is dangerous regarding the spread of that for the 
making of bombs.
    But you know, the countries in Europe aren't afraid of 
that, they're producing it, and they're taking care of it, and 
they're running it back through. Japan has just recently built 
one, and they're not afraid of it. So, I don't know why we 
should automatically be so frightened. On the other hand, if we 
could find a technology that is not PUREX-driven, that would 
satisfy me immensely, I would be very happy.
    But, I want to come to you, Mr. Spurgeon, and I bothered 
all of you with my speech and didn't ask you a question yet. 
But I want to say to you, Mr. Spurgeon, I remember when you got 
sworn in, when you came before us and wanted this job, and you 
still look and talk like you did that day. That's really 
refreshing to me.
    I think you have done a terrific job. You're enthused, 
you're trying to do the right thing, you're unabashed, your 
mission seems to me to be one that you believe in, and I 
commend you for it. We're getting somewhere.
    I want to say to the rest of you--when America started back 
like it was coming back, and renaissance was the word used, and 
I happened to go to Europe for a speech on what was happening 
in America, I want to tell you, all of the European countries, 
even those that are way ahead of us--France, for one--they were 
all thrilled that the United States of America was coming back 
to the party from a deep sleep. You know, we can't say we're 
half awake, we've got to open both eyes, and we've got to come 
out of the sleep.
    In my opinion, if you all can help us by telling us how we 
can get from here to a recycled facility as soon as 
practicable, and how it would be done, then I would say that 
what you have to offer is something that we are glad to have; 
but we ought to make sure we've got enough technology and 
scientists who say we can do it, and how, and we ought to 
proceed.
    So, Mr. Spurgeon, I am suggesting that, I don't know that 
this international approach is the first step, it may be in its 
infancy, the first step, but I'm wondering if you would comment 
on what I'm thinking about--does the Department think it's not 
possible to do what I'm thinking about here, and expressing?
    Mr. Spurgeon. No, sir, you're not off-base at all, relative 
to our ability to put together--if there is that kind of joint 
cooperation between the Congress and the Administration, and I 
think there can be--to put together a structure to manage used 
fuel in a business-like way, looking to the future.
    Now, I'd be glad to answer that, but I would tell you, I'm 
going off the reservation a bit--and this is me talking, and 
I'm not speaking at this juncture, if you'll allow me, for 
Administration policy. I know when I speak that is the 
Administration, but I have to, if I can, come off of that just 
a little bit.
    Senator Domenici. Go ahead.
    Mr. Spurgeon. Because we can consolidate and I think we 
should consolidate management of the entire back end of the 
nuclear fuel cycle. I think it should be done in a way which 
would allow ordinary business decisions to be made, and it can 
be done in a way that does not require Federal funding.
    Because we are collecting from our utilities today, one mil 
per kilowatt hour, we have on deposit some $20 billion in the 
nuclear waste fund, and that's increasing by about $750 million 
per year. But we do not have access to that money. It can not 
be used to effectively, and reliably manage the government's 
responsibility to take spent nuclear fuel from our country's 
nuclear reactors.
    Senator Domenici. It sits there and adds to the Federal 
Government's assets, so it reduces the deficit of the United 
States every year, and the debt. But every time you try to use 
it, it runs into the notion that you aren't using it for Yucca. 
That, you know, that's the problem, and here we sit not 
intending to proceed with any rapidity with Yucca. We have $20 
billion and growing, and we have to do the same kind of things 
Yucca was supposed to do. We're trying to do it another way, 
but we're stuck.
    So, we have to address that and you're right.
    Mr. Spurgeon. I think if we address that kind of an issue 
and create the kind of structure that we have created before, 
for other purposes----
    Senator Domenici. Yes.
    Mr. Spurgeon [continuing]. Senator Corker knows one of 
them, because it's located in his area, a kind of government 
entity that can operate with a revolving fund, can pay its own 
way, and can be able to manage--whether it be interim storage, 
whether it be recycle, whether it be a geologic disposal--in 
the way that most effectively is required for the management of 
that resource. That's how you go forward with the building of 
these facilities.
    Research and development is the province of the government, 
research and development is the province of the Department of 
Energy. We need to look over the horizon, we need to develop 
the technologies that are going to be required for us to take 
the next step into the future. To go into simulation and 
modeling, to be able to reduce the cost of future plants, to be 
able to find ways in which we can create, in effect, designer 
molecules that can be able to truly provide us with alternative 
separations technologies that can go into the future--that's 
where our National Laboratory and our universities excel.
    Where we excel from a business standpoint, where we excel 
from an industry standpoint is in actually implementing those 
technologies. To be able to do that in a business-like way, to 
have access to some sort of a revolving fund, you need access 
to the receipts that are coming in each year to the nuclear 
waste fund, without funding being driven by the annual 
appropriation-process. These are ways which I think could help 
enormously, relative to how we go forward in the future to 
manage this program that needs a long-term perspective.
    Senator Domenici. Senator Bingaman, some of our people will 
stay and ask some additional questions, but if you will, I have 
to leave.
    The Chairman. All right.
    Senator Domenici. Could I say thanks to Dr. Wallace, and 
say I hope your mother's well and you at least, as a member of 
the scientific community of Los Alamos, you were at least 
smiling.
    [Laughter.]
    Senator Domenici. Maybe you feel comfortable in this 
environment, and back home it's not that way, but we'll all be 
coming up to see Los Alamos people and make sure that we talk 
to them about what's going on.
    I want to say it's very nice to have the Harvard and the 
MIT sitting side by side.
    [Laughter.]
    Senator Domenici. Having such different opinions. It sounds 
very good that you do, I won't tell you which side I come down 
on, but obviously what I have said would seem to indicate where 
I am----
    Mr. Bunn. I think our opinions may be less different than 
you think, and that I also, like Neil, support a strong nuclear 
R&D program, and want to see it go in a step-by-step fashion.
    Senator Domenici. Thank you, Senator Bingaman.
    The Chairman. All right, thank you.
    Senator Craig.

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

    Senator Craig. Mr. Chairman, thank you very much. Let me 
make a few brief comments, and then ask probably just one 
question. I want to play off both what you as the Chairman, and 
the ranking member have spoken to this morning, and my question 
will be directed at you, Dennis.
    I am not in disagreement with reprocessing, if we have the 
skill and the talent to do it, and we do. I'm also pleased to 
hear you suggest that it is not the Federal Government's role, 
it is the private sector's role, creating the right structures 
within the Federal system because of the nexus we've always had 
historically, dealing with this energy forum.
    What I do believe is important is finding a path forward 
that does two things. Which pushes the R&D, which we do well--
you've spoken to that--and that's where we ought to be focused, 
Mr. Chairman, when it comes to the resources that we can 
gender, as we bounce off from, spring off from, leap off from 
EPAC, and what appears to be--nuclear renaissance that's 
occurring out there.
    There is no question that out there, into the future, there 
is going to be substantial need both for fuel, and the 
management of the waste. We've not found a clear path forward 
to do that.
    It's been fraught with politics a good deal more than it 
has science, but that's reality. A lot of us are struggling 
with that, trying to deal with it, both for commercial 
purposes, and for defense purposes.
    But having said all of that, everyone sitting on this dais 
right now has within their States, laboratories, so we're very 
interested in what they'll be doing, and what roles they'll be 
playing in all of this.
    At the same time, we have the technologies that were spoken 
to by the last speaker, and the ability to nudge those a little 
forward. I am simply one of those that would suggest, it's not 
the Federal Government's role to do that. It may be the Federal 
Government's role to facilitate and help get that done, by the 
way we control the processes, as it relates to nuclear fuels 
and generation.
    Our role is R&D and I'm glad to hear you speak to that, 
because I think that's tremendously important, with the limited 
resources that we have available. As much as we will push in 
the future to get more budget, for these purposes, to advance 
that, to spring into new reactor concepts like NGNP, that 
operate at high-temperatures and therefore produce processed 
heat--there is already a rapidly growing industry out there.
    A group of industry interests that need processed heat, 
recognizing Mr. Chairman, that if we do climate change, and 
we're 20 years out from new technology on coal, that we're 
going to see a lot of energy switching or fuel switching going 
on, if you cap and control, and that's going to be natural gas, 
and then we want hydrogen cars, and that's going to be natural 
gas. So, government ought to be right out on the edge of 
pushing new technologies, in that respect.
    With that, and recognizing the time allotted, Mr. 
Secretary--GNEP is operating a $120 million Fiscal Year 2008 
budget, if we are not able to get you any more money, how do 
you plan to prioritize GNEP's spending under that scenario?
    Mr. Spurgeon. It will be prioritized, basically as we have 
prioritized Fiscal Year 2007. We are operating in Fiscal Year 
2007 at the $176 million rate--it is an R&D program. We are 
prioritizing, looking at what areas of research and development 
are needed to break down the roadblocks to the ultimate 
commercialization of advanced technology. We're looking at 
getting input--continuing input--because we have a program in 
place now to get input from industry via the work from the four 
consortia that have been selected.
    We want to continue that effort, to get industry input on 
the technology roadmap, to get the industry input on the 
economics, the business case for how we should proceed. But, it 
is a technology development program, that's what it will be, 
obviously at the rate of $120 million, the progress will be 
slower, there's no question about that.
    Senator Craig. So, in what I've just heard from you, how 
much of that will actually go into R&D versus reconnaissance? 
Of the money that will be spent in Fiscal Year 2008, $120 
million, how much of that will go into outreach--I call that 
renaissance--versus actual R&D at the laboratories?
    Mr. Spurgeon. The majority of it is actual R&D, if you're 
talking renaissance, do you mean the industry efforts?
    Senator Craig. The outreach that you are currently under to 
find your path forward, or to define it more clearly, as I read 
it, versus advanced fuel cycle and all the kinds of things that 
are currently underway that might lend to that path forward?
    Mr. Spurgeon. You're probably looking at--and this is 
coming totally off the top of my head, I'll give you a detailed 
answer for the record.
    Senator Craig. Sure.
    [The information previously referred to follows:]

    If the GNEP appropriation is $120 million, we expect that around 
$20 million will be used to support the four industry teams that were 
awarded cooperative agreements in September 2007 to conduct conceptual 
design studies, develop technology roadmaps, and develop business and 
communications plans to build an advanced nuclear recycling facility 
and advanced recycling reactor. Input from the industry teams will help 
inform a Secretary of Energy decision in 2008 on the path forward for 
GNEP. The remainder of the appropriated funds would support research 
and technology development into advanced fuel cycles by national 
laboratories and universities, in collaboration with international 
partners where appropriate.

    Mr. Spurgeon. But you're, talking about in excess of 75 
percent, 75-80 percent is straight R&D, in terms of money that 
we spend. The vast majority of our money is spent at our 
laboratories and universities, from the standpoint of R&D 
expenditures.
    We are doing work with industry, we think that's important 
to continue, but it informs the R&D program. Without that, 
we're kind of like a rudderless ship--we need to have 
direction, so that what we're spending is effectively spent, 
and well-directed.
    Senator Craig. OK.
    Thank you, Mr. Chairman.
    The Chairman. Senator Corker.

          STATEMENT OF HON. BOB CORKER, U.S. SENATOR 
                         FROM TENNESSEE

    Senator Corker. Thank you, Mr. Chairman, I want to thank 
the panel, obviously a very intelligent, informed group, and 
with a lot of differing opinions.
    But, I'd like to begin by asking the Secretary, you know 
the--stating and then asking--you know, as we deal with 
potentially being involved in carbon issues, and then we look 
at nuclear and just--it continues to dismay me, the lack of 
coherence, if you will, in trying to clear a pathways for us to 
do things that cause our country to be more energy secure in a 
way that actually everybody can embrace.
    But stepping away from that, just looking at recycling for 
a second, from the standpoint of us fully embracing the full 
potential of nuclear energy in our country, how urgent is the 
issue of finding a solution on the storage/recycling piece?
    Mr. Spurgeon. I think it's very urgent, because there's no 
question that spent fuel can be stored, first in pools, then in 
dry casks, it's perfectly safe, it's being done now, I don't 
disagree or dispute any of that. What we're doing today is 
safe.
    But, we don't need just the 30 or so plants that are now in 
the pipeline for potential license applications, we've had 
three to date, and we're looking at perhaps having a half a 
dozen before the end of year, maybe 20 by the end of next year.
    We need something like 300 new plants if by the middle of 
this century, we're going to make a dent in any kind of 
CO2 avoidance regime.
    When you start talking about needing that kind of an 
expansion of nuclear power, and it is doable, then you run into 
the two questions, and Senator Domenici alluded to them 
earlier--two questions we've always had with nuclear power--is 
it safe? What are you going to do with the waste?
    When you then start talking about that kind of an 
expansion, you've got to have a durable, credible, solution to 
``What are you going to do with the waste?'' I happen to 
believe that the way you deal with high-level waste is this--a 
chunk of vitrified glass that is the product of a recycling 
facility.
    This high-level waste is robust, yet is durable. It can be 
in placed in a variety of geologic media safely.
    The other thing we've got to do is simplify the waste 
management challenge. Right now if you dispose of spent fuel, 
you're looking at some 300,000 years before it would get to the 
level of radiotoxicity of natural uranium. If you look at where 
we are existing technology-wise, you might be down to somewhere 
in the 9,000-year range, based on existing--or similar to--
existing technology, not necessarily exactly what we have 
today. Anybody will tell you, this curve depends on things 
like, the burn up of the fuel, and how long after it's 
discharged, it's reprocessed--but that's a rough approximation 
as to where we are today, but that is significant. Because we 
have demonstrated licensability in this range.
    What we're trying to get, ultimately with GNEP--is down to 
this level, where we might be talking about just hundreds of 
years before the waste is to the level of toxicity of natural 
uranium.
    What that does is simplify the problem--we have to make the 
disposition of nuclear waste easier, so we have more options to 
manage it. It needs to be managed in the most appropriate way 
to the individual constituents of the nuclear waste. You can't 
do that when you just take one big lump, put it in a great big 
steel cask and stick it underground--that is a solution, it is 
workable, but it's not what we want to get to, if we want to 
expand nuclear energy the way it needs to be expanded 
worldwide.
    Senator Corker. When you say ``urgent'' how many years does 
it mean in terms of having a commercial solution? Does GNEP, 
the efforts with GNEP, take away from our ability to do that 
more quickly here in our country? Because I'm running out of 
time here, and still want answers----
    Mr. Spurgeon. Sorry.
    Senator Corker [continuing]. What is it--no, no, it was a 
great answer--what is it that you guys do agree on? In other 
words, we've heard a lot of differing testimony today, what is 
it you do agree on? The two or three things that everybody at 
this table would say, ``Yes, yes, yes.''
    Mr. Spurgeon. I'm going to guess here, because Dr. Bunn may 
not agree on this one, but I hope if I go to the point of 
saying, the ultimate need to close the nuclear fuel cycle, we 
could all----
    Mr. Bunn. Nope.
    Mr. Spurgeon. Can't even agree to that.
    The problem is, when people say, ``I don't think you need 
to close the fuel cycle, I think you can just store it safely, 
dry cask storage,'' then you come up to the issue that arises 
when you say, ``Well, wait a minute, that's not a permanent 
solution, that's not a solution to the nuclear waste issue, we 
can't just leave it lying around on the ground,'' and therefore 
that comes back to people who want to oppose new nuclear 
plants, or a large number of nuclear plants, saying, ``You 
haven't solved the waste problem, therefore you shouldn't build 
any more nuclear plants.'' We've gone through this circle, I've 
seen this move too many times, because I started in this 
business 40 years ago. Where we've gone around to, ``How are we 
going to deal with the nuclear waste?'' It was Lions, Kansas, 
we're going to vitrify it, put it in salt, and that's going to 
be the permanent solution.
    Then we came to, ``No, we're just going to interim store 
it,'' that was the Waste Policy Act of 1977. ``But that's not a 
permanent solution,'' so we changed that in the Energy Policy 
Act of 1982, now it's going to go permanent disposition of 
spent fuel, because at that point, nuclear energy was going in 
the toilet.
    So, then we come to 1987, it's still storage, interim 
storage, then ``long-term'' storage, then permanent storage 
plus retrievability. That drives you to a rock repository which 
is the, the hardest of all criteria--it has to be permanent, 
yet it has to be retrievable.
    Now we say, ``Wait a minute. We need those energy 
resources, we need a lot of nuclear power, we need a more 
durable solution, therefore, we're going to need to recycle 
that fuel, we're going to need to use the resource value that's 
contained in it, and we're going to then create a better forum 
to be disposed of,'' that gives us--for future repositories--
other alternatives that we didn't have when the Waste Policy 
Act was passed in the 1980s.
    Mr. Bunn. It seems to me, that the future of nuclear power 
will be best assured by making it as simple, as cheap, as safe, 
and as proliferation-resistant as possible, and that using the 
technologies of reprocessing, and recycling that we have 
available in the near term, points in the wrong direction on 
every one of those counts.
    It's precisely because I, too, believe that we need a 
growing nuclear power enterprise that I am so opposed to moving 
forward with the technologies that we have today. I think 
everyone on this panel, No. 1, would agree that nuclear energy 
is probably going to have to be a major part of the answer to 
climate change. No. 2, would agree that we need a strong 
nuclear research and development program.
    I think--and I would absolutely agree that if we get to the 
point where we have closed fuel cycle technologies, it will be 
cheaper, safer, and more proliferation-resistant than once-
through that we should use those technologies. I'm not opposed 
to closing the fuel cycle on principle, I'm opposed to 
solutions that are more expensive, more risky, and more 
proliferation-prone than the other solutions.
    So I think there's actually--the only key disagreement is 
whether to rush now to build commercial-scale facilities, or 
whether that doesn't make sense while we move forward with more 
advanced technologies that might have more promise for the 
longer term.
    Mr. Seshadri. Senator Corker, if I may add one 
clarification--try a point of agreement here, which would be 
that the uncertainty and the cost of both types of facilities 
is something that, I believe, everybody in this panel would 
agree to, again, that's probably a logical extension of what I 
think and I've seen, in the sense that you cannot pin down the 
cost of any of these types of facilities.
    In an industrial setting when we face those types of 
issues, we advise our clients to get the information that they 
need in order to close down the certainty. In that regard, one 
example would be to at least explore the possibility of a 
commercial scale recycling facility in a conceptual design 
stage, to get that additional piece of information that'll help 
you resolve some that uncertainty.
    The Chairman. Why don't we go on to----
    Senator Corker. I filibustered----
    The Chairman. No, you didn't----
    Senator Corker [continuing]. As good as I can, and----
    The Chairman. No, you did fine.
    Senator Wyden, and then Senator Sessions after him.

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Mr. Spurgeon, there is a big gap between 
what you say, and what the National Academy of Sciences says. 
The National Academy of Sciences was unanimous in saying that 
your program shouldn't go forward, that it can't be justified 
on any of the reasons, not a one, that the Department has put 
forward. Not economic reasons, not technical reasons, not the 
threat of nuclear proliferation with respect to the amount of 
waste that needs to be managed, you all get a goose egg from 
the National Academy of Sciences.
    Now, my question to you is--were you aware--I'm looking at 
all their publications, they put out press releases and 
reports--I'm looking at one publication and it says, and I 
quote here, ``All committee members agree that the GNEP program 
should not go forward.'' All of them. Were you aware of that, 
and just decided you'd proceed anyway?
    Mr. Spurgeon. I was very much aware of that when they 
issued their report, which was a week or so old at that point 
in time, but I think, Senator, you need to put that in context 
as to what they meant. They were very clear----
    Senator Wyden. Oh, I am very----
    Mr. Spurgeon [continuing]. In their brief they were very 
clear----
    Senator Wyden. Sir, sir, they're very clear, and that's why 
I'd like an answer to the question. They said all committee 
members agree that it shouldn't go forward, what's your 
response to what they said?
    Mr. Spurgeon. They said we should close the nuclear fuel 
cycle, but we should not take advanced technology that has not 
been proven and proceed directly to commercialization of that 
technology.
    They also made clear that their comment was not pertaining 
to the international program of GNEP, which is what we're 
pursuing with the 17 countries that have signed the GNEP 
Statement of Principles, and the other 18 countries that are 
observers to that program.
    That includes many aspects of GNEP that they are agreeing 
with--the small reactor program, the reliable fuel supply 
program--GNEP is a broad program, it is not just an R&D effort. 
The R&D portion of GNEP is the advanced fuel cycle initiative, 
that the same committee said should go forward--the R&D should 
go forward. They were disagreeing with taking the advanced 
technology and taking it directly to commercialization.
    In discussion with them, they agreed that there were 
technologies that could be commercialized directly today, 
without going through the engineering scale.
    Senator Wyden. Mr. Chairman, I would just hope that we 
could hear from the National Academy of Sciences directly, 
because I think Mr. Spurgeon wants to parse this and that. It 
says all committee members agree that the GNEP program--not 
this part or that part--should not go forward.
    Let me ask you about one other thing that concerns me 
again, out of the recommendations from the National Academy. 
You all go forward with this program that the National Academy 
is quite critical of, but you cut funding for the University 
Nuclear Research and Education programs to zero. Not a penny. 
Not for last year, not for this year. What is the rationale 
behind that?
    Mr. Spurgeon. Sir, we are spending more money in Fiscal 
Year 2007 on university programs than we spent in 2006. If our 
budget is approved for 2007, as it is submitted to the 
Congress, we will be spending even more money at universities 
for programs. You're speaking of a line item that is one part 
of the money that we spend at our colleges and universities. We 
are going up in spending.
    As these programs, research and development programs 
expand, our universities are very integral parts to their 
execution, and we certainly recognize that, they've made great 
contributions to our R&D efforts, and we would anticipate that 
they would in the future.



    Senator Wyden. This money again--I'm looking at your 
materials--zeroed it out for 2007, 2008, it goes to 
universities like Oregon, you know, Oregon State--the Congress, 
of course, is trying to add it back in. The point of this is--
and I know my time is about to expire.
    You know, what's going to happen as a result of your 
efforts is we're going to see an effort to put more waste up at 
Hanford. They can't deal with all the waste that is being put 
there, you know, today. I just hope, particularly after we hear 
from the National Academy of Sciences, Mr. Chairman, and I hope 
that we can work out an arrangement, I know time is, you know, 
very tight to find additional opportunities for discussions 
with the session winding down, we can change the priorities of 
Mr. Spurgeon's office, because I think it's bad news for 
Hanford, I think it's bad news for the country, I think it 
flies directly in the face of what objective observers are 
saying, and I hope that we'll be in a position to take another 
look, and I thank you for the time.
    The Chairman. Senator Sessions.

         STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR 
                          FROM ALABAMA

    Senator Sessions. Thank you, Mr. Chairman. This is a good 
hearing, because nuclear energy is an important part of our 
future. In my own mind, I would say that there are a number of 
goals that we should have for our energy policy in America. 
National security--we need to be less dependent on foreign oil. 
We need to reduce pollution that NOX, 
SOX, particulates, and so forth.
    We must have affordable energy. I do not believe that this 
Congress should be a part of a effort that, the end result is a 
significant increase in the cost of energy to consumers. That's 
certainly not a good policy, and we have to remember that, and 
we also want to do what we can and should to reduce 
CO2, and to work on that, so I think nuclear power 
meets all of those. I would say it meets all of those goals 
that we should have as part of our energy policy, and I think 
we've got to go forward with it.
    Now, Dr. Orszag said we're talking about a very large 
cost--$5 billion per plant to go on this reprocessing route. I 
guess Secretary Spurgeon--who would pay for this process? Is 
this going to be a cost attached to the nuclear power industry? 
Is it a cost that the taxpayers would pay? How would we connect 
any costs for future reprocessing?
    Mr. Spurgeon. Sir, if we manage this as a system, speaking 
broadly, of the overall system and structure for managing spent 
nuclear fuel, and we do it in a business-like way--we will do 
it in the least costly way that allows the job to be done. I 
don't think anyone is advocating--including myself, who I would 
call a strong advocate of recycling--that we do something that 
is going to create a burden on the consumer.
    But we do have to do things that will allow nuclear power 
to move forward and achieve its promise. It's expensive to try 
and open up----
    Senator Sessions. I guess my question is--with regard to a 
reprocessing facility and the cost that might be incurred 
there, would it be like the storage system today, that the 
nuclear power companies are sending money to the government to 
store their waste, and the government is not storing their 
waste, and they're still having to send billions of dollars 
forward. Are they going to be the ones to pay for this? Or this 
will be a taxpayer-funded project? Or have you thought that 
through?
    Mr. Spurgeon. Certainly, sir, I hope that we don't end up 
with the same situation we have with the Nuclear Waste Fund, 
where it goes in and is used to offset the deficit, or to 
offset--or to pay for other governmental programs that have 
nothing to do with taking care of the spent fuel. If we can 
create a system where we have access to those kind of moneys to 
manage the whole back-end of the nuclear fuel cycle, and we can 
do it on a business-like basis--the answer is, then the 
utilities will get something for their money which, right now, 
as you point out, they're not. What we're doing is, been 
getting sued by utilities. If, you know, we're looking at a 
potential $7 billion liability by the time Yucca Mountain is 
scheduled to open in 2017.
    Senator Sessions. How many billion dollars?
    Mr. Spurgeon. Seven.
    Senator Sessions. All of this goes toward the feasibility 
of nuclear power.
    I visited a plant in Alabama just a few weeks ago, because 
it's on the Chattahoochee River that's so dry that we're afraid 
that it may not have enough water flow to keep it operating. I 
was told the entire Southeast, Southern Company system, that 
this facility results in the lowest power in the entire system, 
cost. So, if they were shutting down plants based on economics, 
it would be the last one.
    Do any of you doubt that nuclear power--even with the 
disposal of waste--should be competitive in the next decade in 
actual cost to the consumer?
    Mr. Todreas. You mean, will be competitive. It certainly 
will be competitive. Perhaps--probably--the lowest cost.
    Senator Sessions. This is----
    Mr. Bunn. Existing plants will almost certainly be the 
lowest cost, because once the capital is paid, the operations 
costs for nuclear are quite small. New plants are still going 
to struggle to be competitive with--it depends in part on gas 
prices, and what kinds of carbon taxes come in for coal, and 
things of that kind.
    Senator Sessions. The coal factor is also important with 
regard to how clean we want the coal to be, but even at current 
technology, it would be competitive, assuming some increase in 
the price of coal, which is probably inevitable, would any of 
you disagree with that?
    Mr. Todreas. Very, very close, and probably competitive.
    Senator Sessions. Because coal has substantial pollutants, 
and carbon emissions that nuclear power does not have.
    My time is up, Mr. Chairman, thank you for hearing this. I 
just believe we've got to work through these problems, I'm not 
sure what the answer is, precisely. I'm glad, I guess, 
Secretary Spurgeon, you're not opposing an immediate move into 
recycling, but you believe it's a direction we must go, is that 
the way you would say it?
    Mr. Spurgeon. Yes, sir, I believe that the marketplace will 
determine the right time to move into that, and with that, the 
industry's willingness to proceed forward on an economic basis, 
to be able to process the fuel, and through that processing, 
create enough of a reduction in the avoided cost for future 
repositories, to make it a economically viable circumstance.
    The Chairman. Thank you.
    Let me just ask, Dr. Todreas, you've heard Secretary 
Spurgeon's explanation of how he interprets the National 
Academy's report, and what they disagree with in GNEP. Are you 
in agreement with him on that? Is that what the National 
Academy has problems with? The taking of current technologies 
to full scale commercialization? That's what I understood him 
to say that----
    Mr. Spurgeon. You're taking advanced technologies that have 
not been demonstrated beyond the lab, and taking that to 
commercialization, the National Academy disagreed with.
    The Chairman. Is that your view of what, the sum and 
substance of what they disagree with?
    Mr. Todreas. Yeah, if I answer your question relative to 
the sum and substance, I think that is the point. I think the 
Academy's report, though, is clear if you read on, in terms of 
their backing of a vigorous R&D program on the closed cycle, to 
develop the technologies.
    The Chairman. OK.
    Mr. Bunn, do you have any issue with that characterization 
of what the Academy has concluded?
    Mr. Bunn. I think the Academy does, panel did support a 
strong nuclear R&D program on--not only the closed cycle 
technologies--but on other technologies. They emphasized that 
the highest priority should be given to the Nuclear 2010 
Program, which as I understand, Assistant Secretary Spurgeon 
agrees with, completely.
    I would differ a little bit in his characterization--it 
seemed clear to me that they were not only against building 
commercial scale facilities with technologies that hadn't been 
demonstrated, but they made the point that there was no 
economic justification for rushing now to build commercial 
scale facilities, period, even with technologies that we know.
    The technologies we know, after all, are technologies that 
we also are quite familiar with, they are high-cost and high-
proliferation liabilities. If you look to the market for your 
information, what you find is that the British plant will close 
soon, because it can't get any more contracts from utilities, 
that the French and Russian plants are both operating at well 
below capacity, because of the limited ability to get contracts 
from utilities, and that the Japanese plant was so expensive 
that the utilities successfully demanded a multi-billion dollar 
bail out from the government in the form of a wires charge that 
will make electricity for all consumers more expensive in Japan 
for decades to come.
    When utilities have a choice, they don't choose to 
reprocess. I was, therefore, pleased to hear Assistant 
Secretary Spurgeon say that we'll let the marketplace 
determine. I think if the marketplace determines, we're not 
going to be building commercial scale facilities for a long 
time to come.
    I should say, by the way, there's, I think no hope whatever 
that we're going to be able to keep it to one mil per kilowatt 
hour if it's going to end up being the Nuclear Waste Fund that 
finances these operations. I think it's absurd to think that 
we're going to be able to reprocess, recycle, build fast 
reactors, et cetera, for a net cost for the utility of one mil 
per kilowatt hour.
    The Chairman. Dr. Todreas, did you want to add something?
    Mr. Todreas. Yes, let me just make a footnote, relative to 
this point that came up on university funding.
    It's clear that the Department of Energy has funded 
universities toward GNEP technologies. But what they've done is 
they've taken the base university program which covers more 
fundamental and broader aspects, and pulled that into GNEP. 
What the controversy is on is zeroing that out, not that the 
fact that the universities aren't being funded to do program-
directed things. The university program for balanced 
development needs a bit of both. That's the issue.
    The Chairman. All right.
    Dr. Spurgeon, is the Department of Energy considering 
establishing a government corporation to carry out GNEP 
activities?
    Mr. Spurgeon. There are a number of alternatives being 
considered, as possible ways to accomplish that objective. 
Basically talking to you on my own behalf, if you will, it is 
one of the structures one can look at that might be able to do 
that in a way that is self-funded, and not requiring annual 
appropriation based on the unified management of the back-end 
of the fuel cycle. So, it is something that has been given some 
thought, amongst other things.
    The Chairman. All right.
    Senator Craig, did you have additional questions?
    Senator Craig. I just wanted to close out the discussion 
that I think is important about the National Academy of 
Sciences priorities. Many of you have reacted to those 
priorities, and I think generally we all agree their reaction 
to the commercialization of GNEP technology that wasn't proven. 
The potential costs involved.
    You know, 2010 near-term reactor, yes, that was first on 
their list, second NGNP, Generation-4 or NGNP 2020, now, we 
talk about. Universities were clearly a part of their concern, 
and last, INL infrastructure.
    Any of you want to discuss that any more broadly, as it 
relates to this future that we're trying to move ourselves 
into?
    Doctor.
    Mr. Todreas. Yes, I would just go back to the INL 
infrastructure, I think Secretary Spurgeon's predecessors, when 
they designated and set up and focused on INL to have one, 
dominant, civilian national lab for development, I think that's 
a step in the right direction. But to make that work, and 
sustained, really requires activity and focus and funding as 
the Academy pointed out.
    I've been a member of NERAC--we covered that issue, made 
reports, made recommendations in that regard. We've got to hire 
the best people there, we've got to retain them. We've got to 
give them the superior facilities, and that effort long-term, 
independent program, has to be maintained, and maintained 
successfully. I hope that NERAC, as it gets reconstituted and 
reinvigorated will get back and focus on that.
    Senator Craig. Anyone else wish to make comment on those 
additional priorities that the Academy spoke to?
    Mr. Spurgeon. Be happy to. Those priorities, I agree with. 
The issue is, yes, we have to do more for infrastructure in 
Idaho, we've talked about this many times, to a degree, if this 
is our laboratory, I'm embarrassed a little bit at some of the 
state of some of the facilities, they need to be improved.
    There also needs to be emphasis on NGNP, there also needs 
to be emphasis on 2010. But, what we really come down to is, 
what is the priority of nuclear energy? Are we just talking 
about taking a very small pie, and trying to argue over what 
the slices of that pie are? How do we get the pie bigger?
    Because what is needed is a priority on our overall 
allocation of resources, and I happen to believe that it's not 
by our arguing with our friends over in the renewables area to 
say, ``You ought to take it from solar and put it in nuclear, 
you ought to take it from geothermal, you ought to take it from 
this,'' I think what we're really looking at is if energy is 
going to be one of our national priorities, we need to look at 
its proper level of overall funding, not to try and say, 
``Let's take from Peter to give to Paul.'' We need to look at 
the overall emphasis that we place on energy supply, as part of 
our national budget. In doing that, I think we can get away 
from some of this, which gets into, ``Well, gee, is GNEP taking 
away from a university program, or is 2010 taking away from 
NGNP?'' Those kind of arguments, I don't think are 
constructive.
    What we need to be focused on is the importance of all of 
these programs moving ahead, because we're looking at needing 
to rely on nuclear energy to play a much broader role in our 
Nation's energy future.
    We're now 70 percent of the non-emitting sources of power. 
So, if we're looking at increasing electric generation by 50 
percent between now and 2030, that means we need a lot more 
nuclear power, that means we need a lot more emphasis on this 
area, as a whole, not just in one piece of it.
    Senator Craig. Let me get to Dr. Bunn, then--but before I 
move to him, let me say, yes, I agree. But under the current 
model, the pie is small. The pie won't get larger, based on our 
budget constraints, unless DOE gets out of the box it's in and 
starts partnering with industry and getting the resource that's 
out there and ready to be invested in advanced technologies, 
that is, a private-Federal partnership that we've never been 
into before, we just don't think well that way. It is a new 
day, and we ought to think much differently then we do.
    Then we won't have to worry about CBO or OMB sitting there, 
with their green eye shades on, crunching numbers that may or 
may not exist. For the frustration of this Chairman and this 
person who sits on both authorizing and funding, suggesting 
that we want to push the pie larger, and we'll take it out of 
solar, and we'll take it out of wind, and I agree with you, Mr. 
Secretary, we lose when we do that.
    Right now, and for the next 25 or 30 years, the technology 
you speak so eloquently of, is the clean technology that we 
ought to be dealing with.
    Doctor.
    Mr. Bunn. I think what Assistant Secretary Spurgeon just 
said is probably another point that, if I had to guess, I would 
guess everybody on the panel agrees with--the need for a larger 
overall energy R&D investment in our country.
    I just wanted to make a plug for two particular 
technologies that are both within the GNEP umbrella currently, 
that I mentioned in my testimony.
    One is the quite small, potentially factory-built reactors 
that are sometimes called nuclear batteries that might be 
shipped to a particular site, and generate power for 10 or 20 
years, and then be shipped back. I think that has great 
potential for providing energy in the developing world, and 
great potential for doing so at low proliferation risk. The 
issue at the moment is, can you do it at a reasonable cost? 
That's going to take some R&D to find an answer to that 
question.
    Second, we--for many years--have not been investing what we 
need in the safeguards technologies of the future, including--
as I'm sure you would say--working with commercial industry to 
integrate some of the kinds of technologies that are already 
being implemented in other areas, in the commercial world. 
There is real-time tracking of inventory that goes on at Wal-
Mart's factories and warehouses that doesn't go on for nuclear 
material today, and we need to change that. So, there's a need 
for a real reinvestment in the technology of advanced 
safeguards.
    Mr. Spurgeon. We found two areas to agree on.
    [Laughter.]
    Senator Craig. Mr. Chairman, that's an advance.
    Thank you.
    The Chairman. All right.
    Senator Corker, did you have additional questions?
    Senator Corker. I guess I'm still confused about the 
urgency, then, because I look at 6 people who tremendously 
advocate nuclear energy and advancements in that way. I hear a 
Secretary talking about the recycling piece being very, very 
urgent. I hear other intelligent people saying that, really, 
it's not.
    So, Dr. Bunn, I'd love for you to address that.
    Mr. Bunn. I think if you ask the people who are running 
nuclear reactors today, and you ask the people who are seeking 
to build nuclear reactors today, they would tell you that the 
thing that's urgent is for the U.S. Government to take the fuel 
off their hands in one way or another. Once that happens, they 
don't really care very much what happens to it, ultimately. At 
least in the near-term.
    It is true that we need to be perceived by the public as 
having some kind of solution to nuclear waste in the longer 
term. I personally believe that we need to move forward in an 
expeditious way with Yucca Mountain. If we are perceived as 
succeeding in that, that will be a sufficient solution for the 
near-term.
    As I mentioned, the recent studies suggest that the 
physical capacity--and I'm well aware of the legislative 
capacity--of Yucca Mountain is many times the legislated 
capacity, and would be enough for a growing nuclear energy 
enterprise in the United States for decades.
    I should also point out that, even once we put fuel in 
Yucca Mountain, it is intended to remain open for a century or 
more, and therefore, if we develop technology that is, in fact, 
cheaper, safer, more proliferation resistant then leaving it in 
Yucca Mountain, there's absolutely nothing preventing us from 
taking it out and applying that technology at that time.
    So, what closes off options, what locks us into 
technologies, is rushing to build commercial facilities now. 
What leaves all options open, and can be done for a very low 
cost, is storing the fuel for now, and moving forward as well 
as we can with Yucca Mountain, which we're going to need 
regardless of whether we recycle or not.
    Senator Corker. I understand there may be some differences 
in how you store it, based on whether you plan to reuse it in 
the future or not, and some of those things, I guess we could 
talk about at another setting.
    But, let me just--Senator, we're bumping up against noon, 
and I know a number of us have other meetings--you showed the 
chart about the life of 9,000 years, moving down to 300 years--
what is it about GNEP that allows us to shorten that life that 
we cannot do on our own accord, right here in our own country, 
working with our own scientists? That's a piece that, I guess, 
I'm missing.
    Mr. Spurgeon. In going from 9,000 years to 3 hundred years? 
Yes, we can do it, in fact, we demonstrated it at laboratory-
scale. In fact, we're doing an end-to-end test associated with 
that right now at the Oak Ridge National Laboratory. So, can it 
be done? Yes.
    But, as was pointed out--and I think correctly so by some 
of the other panelists--there's a big difference between 
demonstrating something in the laboratory and making it work at 
commercial scale. That's really the difference. So, can we do 
it? Are we developing it? Can we be successful? I happen to 
think so. But, that will take time.
    What I was trying to point out is that there are 
intermediate steps that one can take along the way that are 
consistent with the ultimate GNEP goal. That do get us to a 
better solution than just taking spent fuel and putting it in 
the ground by itself.
    Mr. Todreas. If I could go to what I think the essence of 
your point is, it's separations. Rather than having the spent 
fuel together, and having to deal with all of the constituents, 
together and therefore being tagged with the characteristics of 
the most difficult--if you separate the pieces, the uranium, 
the actinides, the plutonium, with fission products, you can 
deal with then each separately, and you've got a shot at 
reducing times that way.
    That also goes into your urgency--urgency can be, take 
immediate steps to do something in a physical, practical way, 
but it also can be seeing that if we're going to get to 
separations in an effective way, we have to start an R&D now, 
even though the results that would come out of it are 10 years 
down the road. That's an urgency, too. To start an R&D 
vigorously and pursue it consistently.
    Mr. Wallace. I would just like to add onto that, you know, 
we're dancing around the issue in Yucca Mountain, and as the 
Assistant Secretary showed--if you're trying to design the 
repository that will last 100 to 300,000 years, which is really 
driven by an actinide, neptunium, and what its breakout would 
be--it's a problem that has no way to do an economic analysis 
about how much that would cost. So, the urgency is extreme--if 
we're going to close the fuel cycle, which we really, strongly 
believe you need to do, then you need to find a way to deal 
with the actinides.
    As the Assistant Secretary showed you, there's a way to 
deal with the short-lived isotopes. Is you vitrify, we have a 
way to do that, it's on a time-scale, so we all can deal with. 
But, if you're going to leave actinides around, especially when 
you're talking about a huge ramp-up globally, then you have to 
deal with those. It's not just uranium or plutonium, it's in 
particular, neptunium.
    Mr. Seshadri. Senator Corker, just one other point I would 
make, comment I would make on an earlier point that was brought 
up, which is preserving optionality for the country.
    If you think about an ECD solutions, a do-nothing solution 
is going to be the lowest-cost solution, and it's really not a 
solution, because you have these other issues that you need to 
deal with. Maybe--especially when you have such uncertainty in 
the cost of a repository and recycling facilities, when you 
think about it, it will be better if you look at both options 
and proceed with both options, to a point in time when you have 
better certainty on one or the other. Rather than committing to 
a technology, way up front, one or the other, way up front, and 
locking yourself into that. That's another way to think about 
the optionality. I do agree with the point that you want to 
preserve optionality, but there are extremes of how you can do 
that.
    Senator Corker. Everybody's head is shaking up and down in 
agreement on that point, too.
    So, Mr. Chairman, I thank you for bringing in such a 
distinguished panel, and thank all of you for spending time.
    I do want to know if the Bostonians are all riding back in 
a car together, or----
    [Laughter.]
    Mr. Bunn. Are all what?
    Senator Corker. Are you all traveling back together?
    Mr. Bunn. No, I don't think so. My guess is, we're fine. I 
certainly flew down.
    The Chairman. All right, well, thank you all very much. 
This has been useful testimony. I think we've gotten some good 
issues out here for discussion.
    That will end the hearing, thank you, again.
    [Whereupon, at 11:59 a.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Neil E. Todreas to Questions From Senator Bingaman
    Question 1. The Advanced Fuel Cycle Initiative developed a number 
of separations based on the Uranium Extraction Plus technology or 
UREX+.
    a. What are the advantages of the UREX+ process as compared to 
simply not separating the fuel and letting it thermally cool over a 
number of years as outlined in the MIT study?
    b. How close was the program to demonstrating the technology on a 
pilot scale?
    c. In your estimation, how far away would such a program be from 
demonstrating it on a large engineering scale?
    Answer. 1a. The fundamental advantage is that by separating the 
chemical constituents of the light water reactor spent fuel, their 
radioactive isotopes can be dealt with separately by various different 
strategies based on the basic characteristics of each isotope: for 
example half-life, toxicity, heat load, fission cross section.
    1b and 1c. It is instructive to answer these questions by creating 
a listing of throughput of the various scales of operations and their 
potential time availability. Based on my queries and request, Dr. J. 
Laidler of ANL has created such a Table which I have attached. The 
potential availability dates of the types of operations shown in this 
Table, are dates which I believe represent reasonable achievable 
estimates.
    Question 2.What is your opinion on using PUREX or variations on it 
to separate spent fuel as compared to a once through fuel cycle?
    Answer. The PUREX process separates out pure plutonium. Hence, I do 
not believe it is desirable for the U.S. to now embark upon a course to 
utilize this process for initiating reprocessing of light water spent 
fuels. I would need to be presented with the specific technical and 
potential economic characteristics of the different variants of this 
process, to then be able to decide upon the merits of their use.
    Question 3. Do you think industry by itself would adopt a MOX fuel 
cycle for the existing light water fleet?
    Answer. The U.S. industry has little to no incentive to take this 
step by itself.
    Question 4. What are the principal safety concerns with fast 
neutron reactors? Are they commercially viable?
    Answer. The principal safety concerns, as well as the desirable 
design features, vary considerably with the various candidate reactor 
types--sodium, gas lead and liquid salt-cooled reactors. Let me 
restrict my answer to the leading candidate, the sodium cooled reactor. 
Its safety concerns are the control of reactivity for several well-
established limiting transients, as well as the exothermic chemical 
reaction, should the sodium contact water or air. I believe, based on 
extensive design and considerable operational experience with sodium 
reactors worldwide, that these concerns can be effectively managed.
    Based on this past construction and operating experience, it can be 
concluded that the capital cost of the sodium reactor is currently 1.2 
to 1.5 times greater than a light water reactor. Some designers project 
that parity can be achieved; demonstration of such is the principal 
challenge for the sodium cooled reactor.
    Responses of Neil E. Todreas to Questions From Senator Domenici
    Question 1. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    Answer. 1a. It is very desirable to initiate the movement of spent 
nuclear fuel from reactor sites to storage at a few centralized 
facilities or a single site. Completion of this movement need not be 
precipitous, but should be an objective for the next several decades. 
Among potential sites is Yucca Mountain, which could be operated as an 
interim storage facility with the spent fuel stored in an easily 
retrievable manner. In the longer term a repository needs to be 
identified and licensed. The needed repository capacity might be 
impacted over the long term, i.e. multiple decades, by a successful 
reprocessing and transmutation research program demonstrating that an 
effective closed cycle can be implemented. The available capacity of a 
repository should be maximized by effective studies and design for 
thermal and radiological imposed loads.
    1b. It is still important to proceed with the application to the 
USNRC, to license Yucca Mountain since the current basis may well be 
suitable to support a successful application. In any event, the 
experience to be gained through the USNR review will be invaluable for 
any needed future repository application.
    Question 2. In previous testimony on GNEP you raised concerns about 
the manpower necessary to support an expansion of nuclear power in the 
U.S. What needs to be done in this regard?
    Answer. The manpower needs are at multiple levels--technicians, 
operators, engineers, researchers and managers--in multiple 
organizations--DOE, NRC, national laboratories, vendors + AEs, 
utilities (or operating companies) and universities. To some degree, 
particularly for technicians and engineers, recruitment from the 
general technically-educated pool, can be accomplished. However, 
nuclear power is a demanding, multi-disciplined technology, requiring 
that its technical and management leaders are well educated regarding 
the affect that design features and actions in every area can have on 
the integrated response of a reactor plant.
    Consequently, it is essential that a healthy and substantial 
nuclear engineering university community exist in the U.S. Existence of 
such a community requires substantial government and industrial support 
to convince university administrators to sustain such departments or 
programs in light of the multiple other technical and scientific areas 
that compete for their attention. Finally, the nuclear engineering 
programs need experimental facilities, key among them being university 
research reactors to impart hands-on experience to their students.
    Question 3. In your testimony you have come to the conclusion that 
the U.S. should support and R&D program to close the fuel cycle to 
ensure ``national influence in the global evolution of fuel cycle 
technology as well as creating closed cycle technologies sufficient to 
demonstrate that nuclear technology can recycle its spent fuel.'' Your 
colleague from Harvard, Dr. Bunn, seems to have come to the completely 
opposite conclusion because it would send the wrong message to the rest 
of the world. What message do you believe we send if the U.S. takes the 
leadership role in technology development, security and safeguards?
    Answer. I believe it signals that the U.S. is returning as a global 
leader in nuclear technology and that we will be engaged from a firm 
technical base in global debates on suitable directions in these areas. 
Key among these areas are the evaluation of commercial nuclear power 
including options for the fuel cycle. It will further signal that we 
will adopt choices for U.S. direction in these areas considering, in 
part, international technical understanding in these areas. We will 
also be in a much better informed position with respect to development 
and enforcement of effective safeguards.
    Question 4. You note in your testimony that GNEP is a technically 
daunting challenge, but ``no insurmountable barriers exist.'' How many 
countries have the capability to support a R&D program of this 
magnitude? Are they doing so?
    Answer. I was referring to the potential to successfully achieve 
the GNEP technical objectives. By support, I interpret that as 
participation in GNEP in a technically meaningful manner; certainly 
France, Japan and Korea are doing so. Further steps are being taken to 
engage Russia, China and potentially India; I believe these are the 
major fuel cycle R+D contributors.
    Question 5. You mentioned in your testimony a recycling strategy 
that utilizes a new type of fuel for use in existing reactors in the 
U.S. What are the advantages of this approach? Will this reduce the 
number of fast reactors you will need in the future? If uranium costs 
remain low, this will give us a way to extend repository capacity 
without fast reactors? Could this be integrated into the US recycling 
program in the future?
    Answer. The advantage of the approach--using inert matrix type fuel 
in a portion of the core of light water reactors--can achieve reactor 
operation without net accumulation of actinides, on a faster time scale 
than that required for the construction and qualification of fast 
reactors.
    This approach does require a final transmutation of fuel in a fast 
spectrum reactor to achieve desired actinide isotopic content. However 
the number of fast reactors with this dual tier approach is a 
considerable reduction from that required for a fast reactor-only 
strategy.
    Yes, this can be made a part of the US recycling program.
    Question 6. Do you think we need more R&D in the area of advanced 
nuclear fuel cycles? What should our priorities be?
    Answer. I do believe it is in our national interest to develop the 
technology for a closed fuel cycle. To do this in a timely manner 
requires an enhancement of the current AFCI level of research. As noted 
above, the thermal recycling approach should be part of this program. 
Elements of closed cycle research that should be pursued for both 
thermal and fast spectrum options are: reprocessing spent LWR fuel, 
fabrication of recycled fuel and design of reactors for these options. 
Since these steps are interrelated within each option, it is not 
prudent to focus exclusively on only one or two elements; rather, a 
program coordinating each aspect must be fashioned. It should also be 
kept in mind that fuel reprocessing is required to support the 
development of fast breeder reactors, which can utilize uranium to 
produce energy a factor of fifty or more times larger than a LWR-only 
strategy. This will eventually dispel concerns over the sustainability 
of nuclear as a CO2-free source of energy.
    The R+D program should also include activities on the once-through 
fuel cycle which could yield benefits with fewer short-term risks and 
lower costs of development and deployment than for closed fuel cycles. 
Such activities would include characterization and investigation of 
alternative waste forms, engineered barriers and geochemical and 
hydrological environments for waste repositories. Additionally, 
alternative concepts for the repository concept itself, such as the 
deep borehole disposal approach, should be investigated.
comparison of operations for development, validation and deployment of 
 lwr spent fuel processing methods based on aqueous solvent extraction 
                               processes.


------------------------------------------------------------------------
                                                           Potential
         Type of Operation             Throughput        Availability
------------------------------------------------------------------------
Laboratory scale testing of         0.5-5.0 kg        Now; several DOE
 aqueous separations processes for   (heavy metal)     laboratories have
 LWR spent fuel treatment            per run;          the necessary
                                     experiments       facilities and
                                     repeated during   equipment
                                     the year as
                                     funding permits
------------------------------------------------------------------------
Engineering-scale testing of        0.5-1.0 tonnes    2020-2025, with
 separations process segments        (heavy metal)     the Advanced Fuel
                                     per year;         Cycle Facility;
                                     extended          also there is the
                                     duration of       potential for use
                                     individual        of foreign
                                     runs; used for    facilities
                                     process           (France,
                                     optimization      Marcoule; Japan,
                                     and tests of      Tokai Works;
                                     innovative        U.K., Sellafield
                                     concepts          BTC)
------------------------------------------------------------------------
Pilot-scale testing of separations  50-100 tonnes     Possible in the
 processes (complete, fully-         (heavy metal)     U.S. program by
 integrated process)                 per year, high    2025; potential
                                     capacity          for collaboration
                                     factor; proof-    with Russia in
                                     testing of        their pilot plant
                                     industrial        that will be
                                     process and       operational in
                                     plant designs     2012-2015 time
                                                       period.
------------------------------------------------------------------------
Production-scale processing of LWR  800 tonnes per    2020-2025
 spent fuel                          year
                                     (conservative
                                     approach) to
                                     2,500 tonnes
                                     per year (to
                                     keep up with
                                     the present
                                     generation rate
                                     in the U.S.)
------------------------------------------------------------------------

                                 ______
                                 
      Responses of Matthew Bunn to Questions From Senator Bingaman

    Question 1. It is my understanding the Department is working with 
South Korea on separations technologies--do you consider this 
reprocessing?
    Answer. The Department of Energy is working with South Korea on 
technologies related to pyroprocessing, or electrometallurgical 
treatment of spent fuel. I believe that pyroprocessing should be 
considered a form of reprocessing (and should therefore be considered 
sensitive nuclear technology under the Atomic Energy Act), in that it 
chemically processes spent fuel to recover a product that is 
predominantly (though not entirely) plutonium. Rather than focusing on 
whether the word ``reprocessing'' is the best word, however, we should 
focus on the proliferation risk. As I noted in my testimony, states 
pursuing pyroprocessing will gain experience and facilities for 
chemical treatment of intensely radioactive spent fuel, and in 
plutonium metallurgy, which would be useful in reducing the time and 
cost to carry out a nuclear weapons program. For those reasons, I 
believe we should be essentially as concerned about limiting the spread 
of these technologies to additional states as we are about limiting the 
spread of PUREX reprocessing facilities to additional states.
    Question 2. Can you please explain why you view variations of the 
PUREX process as a proliferation risk?
    Answer. Processes like COEX are only modest variations on the PUREX 
process traditionally used to separate plutonium for nuclear weapons. 
In essence, rather than extracting the plutonium in pure form, they 
extract it mixed with a portion of the uranium from the spent fuel. A 
state with a COEX plant would have all the experience needed to 
separate plutonium for weapons, and the facility itself could readily 
be turned to that purpose if the state withdrew from the 
Nonproliferation Treaty. Any subnational group that had the capability 
to do the technically challenging job of making a bomb from pure 
plutonium would likely be able to do the much less demanding job of 
getting pure plutonium from this uranium-plutonium mixture if it were 
stolen. Hence the shift from PUREX to COEX-type processes offers only 
very modest benefit in reducing proliferation risks. Similarly, while a 
facility to carry out one of the UREX+ family of processes could be 
designed so that modifications to produce pure plutonium would be 
readily detectable, having such a facility would significantly reduce 
the time and cost for a country to produce plutonium for a weapons 
program. And in most scenarios, the radiation from the UREX+ product 
would not be sufficient to deter determined terrorists from stealing 
this material, or to prevent them from processing it to get bomb 
material.
    Question 3. Can you please explain what safeguards will be required 
for the use of MOX fuel as outlined by the NRC? Will they add cost to 
commercial light water reactors?
    Answer. DOE's contractors have asked for, and NRC has granted, 
substantial exemptions from NRC's rules for physical protection of 
Category I nuclear materials for the use of MOX fuel. I believe that 
some variations in physical protection approaches are warranted for a 
nuclear reactor using fabricated MOX fuel as compared to a facility 
processing HEU metal, but that the exemptions in this case went too 
far, and were granted without adequate consideration of the likely 
impact they would have on U.S. efforts to convince other countries to 
maintain high levels of security for separated plutonium and MOX. With 
these exemptions in place, the additional safeguards costs for reactors 
using MOX fuel are modest, though plants will incur high fabrication 
costs and some license amendment costs.
    Question 4. What are the estimated usage capacities of reprocessing 
plants around the world?
    Answer. The Thermal Oxide Reprocessing Plant (THORP) in Britain has 
operated at much less than its design capacity for much of its life, 
because of a series of technical problems, culminating a few years ago 
in a leak into the basement of a swimming pool's worth of radioactive 
solution, which was not correctly identified for months. While THORP is 
now back on-line, it is expected to shut by 2012 because there are not 
enough contracts to keep it afloat. The French reprocessing plants at 
La Hague are operating at somewhat more than half their design 
capacity, primarily for Electricite de France, because few foreign 
utilities are any longer willing to contract for their reprocessing 
services. The Russian reprocessing plant at Mayak has also been 
operating well below capacity for years, because of limited contracts. 
The Japanese plant at Rokkasho is still in testing, which has been 
substantially delayed.
    Question 5. Can you explain the surcharge imposed by utilities from 
the Japanese reprocessing plant?
    Answer. When the full scope of the estimated costs of the Rokkasho 
reprocessing plant became clear--over $20 billion in initial capital 
cost, and tens of billions more over the plant's projected lifetime--
the Japanese nuclear utilities told the Japanese government that they 
simply could not afford it, and asked for a bailout in the form of an 
additional charge to all electricity consumers, nuclear or non-nuclear. 
This will lead to an additional cost to consumers of tens of billions 
of dollars as a result of the construction and operation of the 
Rokkasho plant.
    Question 6. Can you please explain fuel leasing as a means to avoid 
countries undertaking a fuel cycle?
    Answer. An enterprise that could offer to provide fresh nuclear 
fuel, and then take away the spent fuel after irradiation could be a 
major breakthrough both for the future of nuclear energy and the future 
of nonproliferation. Nuclear energy would become more attractive to 
smaller countries that had never built nuclear plants before if they 
could have nuclear plants without needing their own nuclear waste 
repository. The opportunity to avoid having a nuclear waste repository 
would be a powerful incentive for countries to rely on the services of 
such an enterprise rather than producing fuel for themselves. Such an 
enterprise could include services from more than one country--and in 
particular, the country or countries that provided the fresh fuel and 
the country or countries that took the irradiated fuel would not 
necessarily have to be the same.
    Question 7. Do you support research on fuel cycle separations? 
Would you support pilot scale demonstration of promising separation 
technologies?
    Answer. I support a broad nuclear energy research program that 
would explore improved approaches to both open and closed fuel cycles. 
This would include research on separations, focusing particularly on 
exploring whether advanced technologies might have the potential to 
overcome the large economic and proliferation liabilities of 
traditional reprocessing approaches. This should include a range of 
approaches going well beyond those currently being pursued in GNEP, 
including, for example, fluoride volatility and supercritical 
CO2 technologies, along with approaches for continuous 
partial reprocessing, as were once proposed for the molten salt 
reactor.
      Responses of Matthew Bunn to Questions from Senator Domenici
    Question 1. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    Answer. I support the bipartisan recommendation of the National 
Commission on Energy Policy, which I recommend that we follow the 
advice of the bipartisan National Commission on Energy Policy, which 
reflected a broad spectrum of opinion on energy matters generally and 
on nuclear energy in particular, and recommended that the United States 
should:

          (1) ``continue indefinitely the U.S. moratoria on commercial 
        reprocessing of spent nuclear fuel and construction of 
        commercial breeder reactors'';
          (2) establish expanded interim spent fuel storage capacities 
        ``as a complement and interim back-up'' to Yucca Mountain;
          (3) proceed ``with all deliberate speed'' toward licensing 
        and operating a permanent geologic waste repository; and
          (4) continue research and development on advanced fuel cycle 
        approaches that might improve nuclear waste management and 
        uranium utilization, without the huge disadvantages of 
        traditional approaches to reprocessing.

    Several points concerning Yucca Mountain are important to remember. 
First, the nation will need a nuclear waste repository regardless of 
whether it pursues reprocessing and recycling or direct disposal. 
Second, the cost of dry cask storage for decades is much smaller (by a 
factor of 4-10) than the cost of reprocessing. When the full life-cycle 
is considered, it is still the case that reprocessing and recycling 
this spent fuel would be substantially more expensive than disposing of 
it without reprocessing. Hence shifting to reprocessing would increase, 
not decrease, the cost to the government of addressing its liability 
for managing spent fuel. Third, the physical capacity of the Yucca 
Mountain repository is very much larger than the legislated capacity--
and is likely to be sufficient to support a growing U.S. nuclear energy 
enterprise based on direct disposal for many decades to come. Fourth, 
the difficulties of siting and licensing several large reprocessing and 
fabrication plants and scores of fast neutron reactors, required to 
implement the GNEP vision as currently proposed, may be even greater 
than the difficulties of siting and licensing an additional repository, 
if and when one is needed in the future. To move toward near-term 
reprocessing now would put us on a path that would be more costly, more 
complex, less safe, less terrorism-resistant, and less proliferation-
resistant than the alternative; in my judgment such a step would 
undermine, rather than promoting, the future of nuclear energy.
    Question 2. In your previous testimony you referred to ``fuel 
leasing'' arrangements as, and I quote, ``an important and potentially 
powerful idea, which should be pursued'' for their nonproliferation 
benefits. But then you state that it is Russia that should lead this 
effort. That the U.S. simply can't do it. Why is it that the U.S. can't 
do it? So we should leave a ``potentially powerful'' nonproliferation 
initiative for Russia to implement? If the US cannot perform ``domestic 
spent fuel take back'' how can it offer foreign services?
    Answer. I believe that importing large quantities of foreign spent 
nuclear fuel into the United States is not politically realistic at 
present. Even taking back small quantities of irradiated research 
reactor fuel, which had a very compelling nonproliferation purpose, 
generated substantial controversies and lawsuits when the program was 
renewed in the 1990s. I wish it were otherwise, and I believe the U.S. 
government should be working to build support for importing at least 
limited quantities of spent fuel from countries that might build one or 
two reactors, as part of such a leasing arrangement. As I noted above, 
however, in a fuel leasing enterprise there is no essential need for 
the country or countries that accept the spent fuel to be the same as 
the ones that provided the fresh fuel. We should be working with Russia 
(which has already adopted legislation making fuel leasing possible) 
and other countries around the world with the goal, over the decades to 
come, of siting and licensing a small number of storage sites and 
repositories that could be used by countries around the world. While 
the politics of one country taking another country's nuclear waste are 
extraordinarily difficult, they are not insurmountable in the long 
term, and it is important to seek to move forward. Ultimately, it 
simply does not make sense for each of the dozens of countries that 
have one or two nuclear power plants, or even a single nuclear research 
reactor, to build its own nuclear waste repository.
    It is important to note, in any case, that reprocessing is not 
required to make an offer of fuel take-back. Once the spent fuel had 
been removed from a particular country, that country would not be 
likely to care one way or another whether the fuel was eventually 
reprocessed. Even if the fuel were reprocessed, the country that 
accepted the spent fuel would still have to dispose of the resulting 
radioactive wastes, raising the political problems of disposing of 
other country's wastes--unless these wastes were sent back to the 
country that had used the fuel, which would eliminate the large benefit 
of that country not requiring its own repository, and would make the 
``leasing'' operation no better than the commercial reprocessing 
services already offered by Britain, France, and Russia.
    Question 3. Your testimony clearly demonstrates that you are very 
knowledgeable in nonproliferation policy and you follow the nuclear 
fuel cycle developments very closely. As such, you must know the 
difficulties we will have in developing the Yucca Mountain project. The 
politics and the economics seem to defy commonsense as does the current 
budget. Your testimony states that you believe GNEP will make it more 
difficult to site Yucca. With all due respect Dr. Bunn, how can you 
further complicate a project that will open at least 20 years late if 
at all? You also propose expanding Yucca to the next ridge over. What 
do you believe the likelihood of that happening what do you suppose the 
cost might be for such a project?
    Answer. It is indisputable that there have been decades of delay on 
the Yucca Mountain project. There is at least some reason for hope, 
however, that the light at the end of the tunnel is coming into view--
but that end could be thrown into doubt by GNEP. Currently, the 
Department of Energy is working to prepare a license application for 
the Yucca Mountain repository. That application is based on direct 
disposal of spent nuclear fuel and of defense wastes. A decision at the 
last minute to radically change the type of material to be disposed of 
in Yucca Mountain, and to hold open the possibility of radically 
increasing the quantity of nuclear electricity whose waste would be 
disposed of there, would inevitably complicate the process of getting 
to an initial license.
    The latest Department of Energy analyses indicate that while the 
estimated costs of Yucca Mountain have grown, it remains fully funded 
by a 1 mill/kilowatt-hour fee. It is very likely that a second 
repository, if and when one was ever needed, would be less costly, per 
unit of wastes emplaced, because it would be able to drawn on a huge 
body of preparatory work done and lessons learned in developing Yucca 
Mountain. Hence the 1 mill/kilowatt-hour fee would likely remain 
adequate (though some adjustment for inflation over time, which has not 
yet occurred, may eventually be needed). A second repository might 
simply make use of a next ridge over at Yucca Mountain, in which case a 
large amount geologic analysis done for Yucca Mountain would still be 
relevant. Or, a second repository might be located elsewhere, possibly 
in an area with reducing chemistry (as all other advanced nuclear 
states appear to be pursuing for their nuclear waste repositories). A 
different site would also make it possible to choose a location in a 
large area of rock without the physical capacity constraints that exist 
at Yucca Mountain. There is no doubt that siting and licensing a second 
repository would be an enormous challenge but siting and licensing 
multiple large reprocessing and fabrication plants, and scores of fast 
neutron reactors (all of which will pose greater safety hazards to the 
current generation than an underground repository will) may be an even 
more difficult challenge.
    Moreover, if the United States moved toward reprocessing, 
recycling, and transmutation, as proposed in GNEP, the economic costs 
would be significantly higher (particularly if the capital cost of fast 
reactors remained higher than that of thermal reactors, as has been the 
case for decades). The 1 mill/kilowatt-hour fee would have to be 
substantially increased, or onerous regulations would have to be put in 
place requiring industry to finance uneconomic facilities, or the 
government would have to commit to sustained subsidies over many 
decades, likely to total tens or hundreds of billions of dollars.
    Question 4. Recently the CBO has estimated that the $57B price tag 
for the Yucca Mountain project could grow by at much as 40%--or $23 B, 
which is 2x the marginal cost CBO estimates that a recycling facility 
might cost. This doesn't count the growing federal legal liability, 
which CBO estimates will add $1.3 billion annually to the cost of the 
project. When you developed your cost analysis of recycling technology 
what was the cost figure you included for Yucca Mountain as a 
comparative? In light of what the CBO has testified to, how might this 
impact your economic analysis?
    Answer. As I noted earlier, estimates of the costs of Yucca 
Mountain have increased, but the latest DOE analyses conclude that the 
project remains fully funded with the 1 mill/kilowatt-hour fee. I note 
that CBO concluded that reprocessing and recycling would be 
significantly more expensive than direct disposal including their 
increased estimate of Yucca Mountain cost. It is also important to 
recognize that the traditional approach to recycling, in which the fuel 
is reprocessed, used as plutonium-uranium mixed oxide (MOX) fuel in 
thermal reactors, and then not reprocessed further, results in 
virtually no increase in repository capacity, because of the buildup of 
heat-emitting isotopes in the irradiated MOX fuel; nor does this 
approach significantly reduce the expected doses to humans and the 
environment per kilowatt-hour of electricity generated. It offers, in 
short, high cost and significant proliferation risk with virtually no 
benefit. GNEP, by contrast, envisions gaining large repository benefits 
by repeated recycling in fast reactors--but a range of studies have 
concluded that the more complex separations and fabrication processes 
envisioned would lead to even higher costs than traditional 
reprocessing. In our 2003 study, we concluded that the net present 
costs of future repository space would have to increase to some $3,000 
per kilogram of heavy metal, many times current cost estimates, to make 
this approach economically competitive on the basis of reduced 
repository cost.
    Question 5. In your closing you state that dry cask storage is a 
perfectly acceptable solution for our near term waste strategy. Where 
would you propose to locate the consolidated spent fuel site and based 
on what you know about Yucca Mountain acceptance in Nevada, what do you 
suppose the chances are of permitting such a site?
    Answer. Safe, cost-effective, and proven dry cask stores have 
already been established at many nuclear plants in the United States. 
Nevertheless, I believe there is a need for at least some centralized 
storage capacity, especially to take the fuel from sites that have been 
decommissioned, so that those sites need no longer be maintained as 
nuclear facilities. The bipartisan National Committee on Energy Policy 
and the recent American Physical Society panel on spent fuel management 
reached similar conclusions.
    There is indeed a long, unsuccessful history of efforts to site and 
license a centralized storage facility for spent fuel in the United 
States. We outlined this history in some detail in our 2001 study, 
Interim Storage of Spent Nuclear Fuel, written with colleagues at Tokyo 
University. In that study, we outlined in detail a more democratic and 
cooperative approach to siting and licensing such facilities, based on 
other groups' earlier work on a ``facility siting credo,'' which I 
believe would have significantly higher chances of success. 
Technically, there are a huge number of places in the United States 
where such facilities could be located.
    Question 6. GNEP provides a way for countries to implement their 
fuel cycles together. Not every country needs their own enrichment and 
reprocessing facilities. These facilities are indeed sensitive from a 
proliferation perspective. If we can offer these services to states 
won't this reduce proliferation risks?
    Answer. A vision focused on U.S. reprocessing is not required for 
offering other countries assured fuel cycle services, and is 
counterproductive to the effort to convince countries not to build 
reprocessing plants of their own, as I outlined in my testimony. 
Reprocessing is irrelevant to the effort to offer assured supplies of 
fresh fuel. As I have noted above, reprocessing is not required to take 
away other countries' spent fuel. But to change the U.S. message from 
``reprocessing is not needed, we do not do it and you do not need to 
either'' to ``reprocessing is essential to the future of nuclear 
energy, but we will keep the technology from you'' is likely to make it 
more difficult, not less, to convince states such as South Korea and 
Taiwan (both of whom have had secret nuclear weapons programs based on 
reprocessing in the past) not to pursue reprocessing plants of their 
own.
                                 ______
                                 
    Responses of Peter R. Orszag to Questions From Senator Bingaman

    Question 1. Can you please explain your assumed discount rate--
would you expect it to be higher based on risk?
    Answer. CBO's analysis used a 3.5 percent real discount rate, which 
is between that used in the Boston Consulting Group (BCG) and the 
Kennedy School studies. That rate is roughly consistent with that used 
by CBO in other investigations when evaluating the costs of other 
government financed programs. If the risk of the reprocessing project 
were to reflect private sector financing, the discount factor used 
would be greater than the value used in CBO's analysis, and the cost of 
the reprocessing option would be correspondingly higher.
    Question 2. How sensitive are your results to the cost of the 
facility--typically first of a kind nuclear facilities exceed initial 
estimates, the MOX facility the NNSA is building one example.
    Answer. The cost to build and operate the reprocessing facility 
exerts a substantial influence and drives much of the difference in the 
$5 billion to $11 billion range reported by CBO. That range reflects 
differences between the two studies on which CBO built its analysis. To 
the extent that costs of a reprocessing facility would exceed initial 
estimates, which is possible given the limited number of reprocessing 
plants that have ever been built worldwide, the relative cost of 
reprocessing would be towards the higher end, or perhaps above, the 
range that CBO reports.
    Question 3. Can you please explain your assumptions about how 
densely packed the waste forms are in the repository and its 
sensitivity?
    Answer. Three broad types of waste must be accounted for to compare 
the cost of reprocessing with those of direct disposal: spent nuclear 
fuel from uranium used one time, high-level wastes from reprocessing 
after the separation of plutonium and uranium, and spent fuel that had 
been previously reprocessed. The main limitation on the capacity of a 
long-term geologic repository is the heat content of the waste to be 
stored. After a period of interim storage, reprocessing wastes are 
cooler than spent nuclear fuel, but spent previously recycled fuel is 
hotter than either of the other two.
    By assuming that spent previously recycled fuel would be handled 
separately, the two studies that CBO focused on both assumed that that 
reprocessing reduces geologic storage requirements compared to direct 
disposal. Accordingly, a repository would accommodate more reprocessing 
waste than spent fuel used once by packing the cooler waste more 
densely. CBO's analysis assumes that reprocessing wastes can be stored 
2.5 times more densely than spent nuclear fuel, a value between those 
used in the BCG and Kennedy School studies.
    Question 4. Part of your analysis includes a credit for reusing the 
spent nuclear fuel in reactors, how accurate and how sensitive is such 
an assumption?
    Answer. Recycled plutonium and uranium would be potential sources 
of revenue, sometimes known as ``fuel credits,'' that could offset some 
of the costs of the reprocessing plant and reduce the cost differential 
between reprocessing and direct disposal.
    The value of those fuel credits depends on the costs of recovering 
and preparing newly-mined uranium for reactor use and the willingness 
of reactor operators to make the investments necessary to modify their 
reactors so that they can use reprocessed fuel. If the costs of new 
fuel were higher, then the value of recycled fuel would also be higher. 
If reactor operators make the investments necessary to use reprocessed 
fuel, then the market for that fuel will be accordingly stronger. The 
BCG study included adjustments for that factor in its calculation of 
fuel credits.
    Current uranium spot prices are near historical highs after a 
recent price run-up, though uranium prices have declined by about a 
third since the summer 2007 peak. For such prices to have a material 
impact on the cost of reprocessing, those high prices would have to 
persist for decades. There is little indication that high prices should 
be expected to continue for years to come or that uranium is in limited 
supply over the long term.
    Responses of Peter R. Orszag to Questions From Senator Domenici
    Question 1. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    Answer. CBO's analysis compares the economic costs of reprocessing 
nuclear waste with those of the direct disposal of that waste. Although 
reprocessing reduces expenditures on uranium mining and preparation 
costs, and may reduce long-term storage costs, the balance of the cost 
evidence suggests that reprocessing is likely to be more costly than 
direct disposal. That result reflects the fact that dedicated 
reprocessing facilities need to be built and that some form of long-
term storage remains necessary under reprocessing.
    To address the question of what is the right waste management 
strategy for the United States, policymakers also need to weigh a 
variety of factors besides the cost of reprocessing compared to direct 
disposal in the context of nuclear reactors currently in operation. 
Those other factors include the costs and benefits of adopting new 
reactor technologies and the consequences of the nuclear fuel cycle 
adopted by the United States for the proliferation of nuclear weapons.
    Question 2. In your ``split the difference'' analysis the 
additional cost of recycling is $5-$11B. However, this is the cost for 
fuel produced in the future, and assumes that a second repository is 
built for what DOE estimates it will cost to physically build Yucca 
Mountain.
    First of all, I'd like to point out that CBO recently testified 
that DOE estimates that Yucca Mountain will cost $57.5 billion, with a 
``range of accuracy of plus or minus 40 percent.'' In other words, the 
``margin of error'' on this number is $23 billion, more than twice the 
higher CBO cost estimate for recycling.
    Further, CBO recently testified in the House that the government's 
contractual liability for its failure to take spent fuel in 1998 will 
grow to $7 billion if Yucca Mountain opens in 2017, and $11 billion if 
it opens in 2020. This translates into about $1.3 billion per year.
    But here's my question: Does your analysis include any impacts on 
the costs of management of the existing stockpile of fuel, including 
the $1.3 billion per year cost to the taxpayer of DOE's failure to move 
waste, or the savings if a second repository can be avoided altogether?
    Answer. The federal government is likely to incur management costs 
on the existing stockpile of fuel for years to come under either 
scenario. Under current plans, storage costs must be covered while a 
long-term solution is being considered and developed. Under a 
reprocessing scenario, the federal government would incur similar costs 
while a reprocessing facility was being developed. Such development 
requires years of construction and significant delays are possible, as 
the Japanese Rokkasho reprocessing plant experience has shown. 
Similarly, reprocessing would not likely delay or eliminate the need 
for a second repository under current law. The Nuclear Waste Policy act 
of 1982 legislates the capacity of Yucca Mountain to be 70,000 MT of 
spent nuclear fuel or ``a quantity of solidified high-level radioactive 
waste resulting from the reprocessing of such a quantity of spent 
fuel.''\1\ The amount of spent fuel, rather than the existence of a 
reprocessing facility, determines whether a second long-term repository 
would be needed.
---------------------------------------------------------------------------
    \1\ Nuclear Waste Policy Act of 1982, Section 114(d).
---------------------------------------------------------------------------
    Question 3. You estimated a repository cost of $1,036 per kilogram 
of spent fuel. This was considerably higher than the estimates for the 
Kennedy study ($868) and the BCG study ($736). Can you tell me how you 
arrived at that value? Why are estimates for Yucca Mountain all over 
the map?
    Answer. CBO's analysis of the cost of disposing of nuclear waste 
uses the methodology developed in the BCG Study, but is estimated with 
the most recent cost and schedule data provided by the Department of 
Energy's Office of Civilian Radioactive Waste Management (OCRWM). The 
BCG methodology differs from the approach used in the Kennedy School 
study, which calculated the cost of long-term storage based on the 1 
mil (one tenth of a cent) per kilowatt-hour surcharge on electricity 
produced by commercial nuclear reactors. Although OCRWM deemed that 
surcharge adequate in 2001 to cover the life cycle cost of Yucca 
Mountain, the surcharge and those costs can not be directly linked and, 
thus, the unit cost estimates need not match. Thus, the difference in 
the estimates of the cost of Yucca Mountain between the BCG study and 
the Kennedy School study and those studies, and CBO's estimate reflect 
both different methods, and CBO's choice to use the most recent data 
available.
    Question 4. What is the percentage difference in terms of overall 
costs between recycling and once-through and how relevant is that, 
considering the uncertainties involved in making these assessments?
    Answer. Based on a review of the BCG and Kennedy School studies, 
CBO finds that the cost of reprocessing is expected to be at least 25 
percent more costly than direct disposal. CBO conducted a sensitivity 
analysis of key assumptions and found that in almost all cases was 
reprocessing more costly than direct disposal.
    One uncertainty is the construction and operating costs of the 
reprocessing facility. Historically, there have been few commercial 
reprocessing facilities in operation and publicly available cost 
information is less numerous. However, the historical record of 
reprocessing plants has been that they have operated considerably less 
than full capacity and they have proved more costly than initially 
planned, either of which increases the cost of reprocessed relative to 
direct disposal.
                                 ______
                                 
     Responses of Terry Wallace to Questions From Senator Bingaman

    Question 1. We have developed large scale computers in the 
stockpile stewardship program, can you explain the advantages of using 
these machines to model to the development of separations processes?
    Answer. Application of large-scale computing to the GNEP program 
and in this case the separations process is essential to expediting the 
long-term process development. It is not just the computer hardware but 
also the methods and simulation capabilities that were developed under 
the stockpile stewardship program that provide a scientific foundation 
to address new applications such as the fuel separations process. To 
characterize better how the current and future capabilities can be 
applied, the problem can be broken down into two parts. The first is 
the scientific methods and capabilities developed under stockpile 
stewardship that can expedite development of many applications. The 
second part is the application itself, which in this case is the 
separation process.
    To expedite the development process, the methods and capabilities 
will accelerate the testing process. These capabilities can also be 
utilized in the short-term employing existing models of the 
applications. Depending on the complexity of the application 
simulations, these tools require large-scale computing resources to 
execute many simulations that span the potential design and development 
space, or for less complex simulations the use of workstations can be 
informative. The results of the analysis of these simulations provide a 
quantitative basis to:

          a. guide experimental and modeling investments that minimize 
        the total development time required,
          b. minimize the total number of experiments required by 
        specifically designing experiments to address results from item 
        a, and
          c. minimize predictive uncertainty and increase the 
        confidence in predictive capability. The latter result allows 
        us to minimize risk and provides the basis for possible 
        licensing activities.

    While further investment is needed in these methods and 
capabilities as the complexity of the simulations increase, our current 
capabilities provide an excellent basis from which to begin work today.
    Regarding the modeling of the separations process, the current 
strategy for future separations modeling progresses from the 
microscopic scale to the macroscopic scale. The micro-scale models 
allow us to characterize material properties at a more fundamental 
scale that are then used in conjunction with macro-scale (engineering 
scale) simulations, e.g. aqueous separation techniques where fluid-
flows are present. Both micro-and macro-scale simulations will require 
large-scale computing in the long-term. This need for computing at the 
micro-level derives in great part from the fact that it will require 
first principle techniques, those at the quantum level, because there 
are no particularly good force fields for the heavy elements involved. 
In particular, molecular dynamics (MD) simulations of the interactions 
that govern the chemistry of the process can take advantage of such 
computing resources, particularly when combined with accelerated MD 
methods, which allows for simulations of longer time periods. Thus a 
goal of the current modeling, simulation and computing capabilities is 
to allow us to represent a potential process and evolve it to a better 
process through modeling and simulation and then use fewer experiments 
to validate the process model or guide improvements.
    The approaches that have been described are not unique to the 
separations process and can be extended to other aspects of a closed-
fuel cycle. We are certain that significant future challenges will 
exist in any of these areas, but we believe the approaches, developed 
as part of the stockpile stewardship program, when coupled with LANL's 
broad experience in science, engineering, simulation, and large-scale 
computing, can provide solutions to a number of important national 
issues.
    Question 2. Are there technologies short of building a fast reactor 
we could use to understand the burn up of fuels made from separated 
spent fuel? How extensive a program do you recommend in this area 
before building a fast reactor?
    There are two technology options available in the near term in the 
US for testing of fuels and materials in a fast neutron energy 
spectrum: 1) implementation of the Materials Test Station at the Los 
Alamos Neutron Science Center (LANSCE), and 2) use of existing thermal 
reactors with special ``filters'' to partially reduce nonprototypic 
thermal neutron exposure. Implementation of the Materials Test Station 
is relatively inexpensive ($30M per year over three years for a total 
of $90M, followed by annual operating costs of $10M) and will provide a 
test environment that is very prototypic of fast reactors. With the 
MTS, laboratory and university scientists will obtain critical data 
that are needed to develop the advanced fuels and materials for the 
transmutation of spent nuclear fuel. These data will be used to 
validate the predictive computer models that will be developed as part 
of an integrated program (see response to question above). In addition 
to fulfilling the fuels and materials test requirements, the MTS will 
be used to achieve other scientific breakthroughs needed to develop 
materials for fusion reactor first-wall applications, and will provide 
a unique source of isotopes for nuclear medicine research. The MTS will 
be operated as a national user facility, providing a unique environment 
for scientific research.
    Outside the US only a small number of existing fast reactors could 
be used to conduct advanced fuels irradiation tests (JOYO in Japan and 
BOR-60 in Russia). However, the US has no control over the use of these 
reactors and the priority that would be given to US tests. In addition, 
it was recently announced that the JOYO reactor will soon be shut down 
for two years. Experience with conducting fuels tests in foreign test 
reactors shows that such tests are expensive and administratively 
complex, requiring extensive government-to-government arrangements that 
require long lead times to put into place.
    The construction of a new fast reactor (Advanced Recycling Reactor) 
in the US will take 15 years, and cost about $2B. We believe that to 
offer the best chance of success, the US should take a measured 
approach and enter into a cooperative agreement with other countries 
that share similar goals. An international project (similar to the ITER 
fusion reactor) would allow us to leverage the wealth of experience in 
fast reactor technology that exists abroad. Concurrent with this 
activity we recommend implementation of the Materials Test Station over 
the next three years followed by a robust experimental program 
(conducted over approximately ten years). In addition, the current 
unfiltered thermal neutron irradiation experimental program being 
conducted under GNEP with the Advanced Test Reactor in Idaho should be 
continued. Although the test environment is not perfect, some data will 
be obtained in the interim that will advance the understanding of 
advanced fuel performance.
    Question 3. What safeguards research do you recommend for the 
separation of spent fuel?
    Answer. As the nuclear fuel cycle evolves, it is important that 
safeguards and nonproliferation technology evolve and respond 
accordingly (from both a domestic and international perspective). 
Research and technology development for advanced safeguards for the 
separation of spent fuel requires a broad based, multi-disciplinary, 
integrated experimental and computational effort. In particular, 
advances are needed in the following areas:

          a. Advanced instrumentation--adaptation of established 
        approaches to address unique aspects of advanced fuel cycle 
        materials (for example measurement of plutonium in the presence 
        of minor actinides); development of new approaches that build 
        on a foundation of the generation of basic data (for example 
        correlations between fission gamma and neutron emission in 
        energy and time requires expansion of the existing nuclear 
        physics database); online instruments (radiation and non-
        radiation based) that can dramatically reduce the number of 
        samples required for offsite chemical analysis (while chemical 
        analysis yields the most accurate results, taking samples is 
        costly and results are not timely).
          b. Systems analysis--tools are needed to optimize the 
        safeguards system design, incorporating details of the chemical 
        process in addition to tracking mass flows, these new tools 
        will incorporate a range of disparate data in a quantitative 
        sense to enable near real time knowledge extraction of facility 
        operations (for example, combining nuclear material 
        measurements, process monitoring data, video, personnel 
        locations, etc. in a manner such that different configurations 
        can be compared with regard to efficiency and efficacy); 
        evaluation of the fuel cycle system in terms of proliferation 
        risk reduction at site, region, and global scales; specific 
        analyses related to the evolving design basis threat.
          c. Modeling and simulation--advanced modeling and simulation 
        tools are required to support both instrumentation development 
        and systems analysis; these tools must span a range of length 
        and time scales from first principles (for example, integrated 
        pulse counting and source term simulation for discovery and 
        evaluation, engineered materials), to process simulations with 
        enough fidelity to objectively evaluate new safeguards 
        technologies and synergies between efficient facility 
        operations and nuclear materials management; use of advanced 
        visualization to aid in the distillation of rich data sets; 
        incorporation of advanced modeling and simulation techniques 
        across a range of computing platforms to enable R&D products to 
        be applied in a variety of situations (work station, direct 
        facility use).

    LANL stands ready to make significant contributions in all of the 
above areas, bringing our broad experience in science and engineering 
to bear on this important national issue. In particular, the following 
institutional assets can be utilized towards this end:

          a. Chemistry and Metallurgy Research facility hot cells can 
        provide an integrated R&D test bed facility for iterative 
        development in an uncontaminated environment, thus providing 
        both technology advancement and risk mitigation prior to 
        fielding expensive equipment in a real process facility (this 
        capability could be combined with separations and fuel 
        fabrication research efforts).
          b. Los Alamos Neutron Science Center can generate basic 
        physics data, particularly in the case of new data that can 
        enable discovery of novel techniques (for example, neutron and 
        gamma fission multiplicity distributions, nuclear fluorescence 
        cross sections).
          c. Advanced Simulation and Computing program investments at 
        LANL have resulted in significant computing capability, 
        enabling new levels of simulation fidelity and providing 
        potential for a virtual laboratory where evaluation and 
        optimization of new safeguards technologies can be made; 
        existing visualization techniques can provide benefits ranging 
        from realistic and immersive inspector training to assessment 
        of new data integration and analysis techniques for holistic 
        facility performance assessment.

     Responses of Terry Wallace to Questions From Senator Domenici

    Question 1. In your testimony you noted that Los Alamos has 
developed some of the leading computational capabilities used to model 
reactor physics yet neither the Department nor the labs have developed 
advanced computational tools able to simulate the separations processes 
involved in recycling. The same is true with fuel fabrication 
processes. What is involved in developing such a simulation capability 
and can Los Alamos develop this computational capability?
    Answer. Los Alamos is currently involved in developing these 
simulation capabilities as well as the hardware capabilities that are 
required, such as the petaflop level of computing as represented by the 
proposed Roadrunner machine.
    To explain what is involved, the approach used in past decades 
prior to our current level of computing became available should be 
briefly described. Models of either the fuel fabrication process or 
separations process were built with a heuristic (or empirical) approach 
based on experimentation, where the experiments were as prototypic as 
possible. In short, the process defined an experiment, and experimental 
results were used to build the model/simulation that could be used to 
study the process. To define a new different process would require new 
experiments, etc.
    Today, as a result of the large-scale computing capabilities that 
have been developed as part of the stockpile stewardship program, we 
are able to develop capabilities on a more first-principle basis. This 
has effectively allowed us to revise the older approach noted above. We 
employ theory, modeling, simulation, and experimentation in a much more 
integrated manner and define focused experiments to improve the theory 
and modeling or to assess the validity of the theory and model. Key to 
this capability is high-performance computing (at the 100 teraflop and 
petaflop speeds), with which we can now begin to do atomistic-and 
molecular-scale simulations. These computing speeds and micro-levels of 
modeling allow us to characterize material properties at a more 
fundamental scale that in turn are used in conjunction with our macro-
scale (engineering scale) simulations, for example in the areas of fuel 
fabrication and separation. Thus, our current modeling, simulation, and 
computing capabilities allow us to analyze a potential process and 
develop it into a better process through modeling and simulation and 
then use experiments to validate the process model or guide 
improvements.
    These new capabilities, which we are starting to apply to fuel 
fabrication and fuel performance and to separations, are essential to 
expediting the development process. Results provide a quantitative 
basis to:

          a. guide experimental and modeling investments that minimize 
        the total development time required,
          b. minimize the total number of experiments required by 
        specifically designing experiments to address results from item 
        a, and
          c. minimize predictive uncertainty and increase the 
        confidence in predictive capability. The latter result allows 
        us to minimize risk and provides the basis for possible 
        licensing activities.

    LANL stands ready to make significant contributions in the above 
areas by applying our broad experience in science, engineering, 
simulation, and large-scale computing.

    Question 2. Can science and technology eliminate the need for a 
second repository?
    Answer. Yes, but probably only under the scenario of a closed fuel 
cycle, and only if R&D is conducted to reduce uncertainty in the long-
term performance of closed-fuel-cycle waste forms and engineered 
systems.
    This answer presupposes that the Yucca Mountain repository is 
successfully licensed, and that legislation is passed to change the 
current restrictions regarding repository capacity. The current 
legislated capacity, measured as the total metric tons of heavy metal 
(MTHM), is inherently an open fuel cycle concept that conservatively 
limits how densely the spent nuclear fuel rods can be packed 
underground so as to not exceed temperature limits for the emplaced 
waste and surrounding rock. Under a closed fuel cycle, engineered waste 
forms with far less long-term heat output would be produced and 
disposed. With efficient separations and reprocessing, Yucca Mountain 
would have no practical heat-management constraints to disposing the 
waste from a much larger nuclear enterprise. The other technical issue 
for disposal of larger quantities of waste at Yucca Mountain than 
currently planned concerns the issue of long-term waste isolation 
capability. Here a closed fuel cycle envisioned under GNEP promises 
significant benefits, in that the long-lived, dose-contributing 
isotopes of plutonium and americium, as well as neptunium-237, will be 
recycled and consumed in fast reactors. This strategy improves the 
long-term performance of the repository for a given amount of disposed 
waste, or, alternatively, allows the waste from a larger quantity of 
generated power to be disposed safely, without exceeding performance 
limits. Finally, the separations processes envisioned under GNEP will 
be combined with R&D on new waste forms that can be designed to enhance 
the isolation capability of Yucca Mountain. With a focused research 
program, materials selected to withstand the Yucca Mountain environment 
can be designed to incorporate problematic radionuclides in a form that 
limits their escape into the groundwater.
    Question 3. What do you think the R&D priorities should be for 
radioactive waste management?
    Answer. R&D needs in the areas of separations technologies and the 
development of new waste forms should be the highest priorities. Also, 
additional R&D focused on making Yucca Mountain safer and less 
expensive should also be conducted. These R&D efforts will enable us to 
develop cost-effective, safe, and proliferation-resistant processes for 
closing the fuel cycle.
    The main objectives for the separations system for spent reactor 
fuel under development within the GNEP program are to reduce the 
proliferation risk of the fuel cycle relative to the current practice 
and to extend and enhance the use of the U.S. geological repository 
capacity by: 1) recycling of the minor actinides to recover energy, and 
2) reducing the volume, long-term radiotoxicity, and heat load of the 
waste placed in a repository. The UREX+ suite of solvent extraction 
processes that have been developed within the GNEP program provides 
these benefits, and these processes have been demonstrated with LWR 
spent fuel at the level of kilograms per test run. Further development 
work, including the baseline extraction systems and product and waste 
form preparation, is required. These processes need to be run in an 
integrated fashion, and at much larger scales and for extended periods, 
for industry to have the information required to design commercial 
scale facilities. Separation methods beyond the aqueous UREX+ 
extraction system should also be pursued, such as electrochemical 
processes in molten salts for recycle of fast reactor spent fuels. In 
the longer term, revolutionary separation processes that could 
substantially reduce the cost of the spent fuel recycling are possible, 
but the underpinning science must be established sufficiently to allow 
comparison of the new processes to existing options.
    The second broad research priority is in the area of waste forms 
that sequester radionuclides within a solid matrix. The development of 
new waste forms with superior performance characteristics is within our 
reach, but it will require long-term R&D to reach maturity. These waste 
forms of the future can be developed using a scientific approach that 
leads to a first-principles understanding of materials properties 
through the joint application of experimental tests, theoretical 
studies, and computer modeling. To achieve this advance, dedicated 
facilities are needed to measure the mechanical and chemical properties 
of the solid waste forms under self-irradiation and to test the 
longterm resistance of the waste form to dissolution and release of 
radionuclides when exposed to groundwater of various chemical 
characteristics. Models that capitalize on the high performance 
computing capabilities available at the national laboratories would be 
developed and used synergistically with the experiments. Gaining a 
robust understanding of the mechanisms of failure of waste forms due to 
mechanical or chemical degradation will allow better waste forms to be 
designed and will greatly improve the confidence that can be placed in 
regulatory models used to license a waste form and repository disposal 
concept. The result will be more durable waste forms, lower predicted 
doses, and tighter uncertainty bounds on regulatory models.
    In the area of repository R&D, the Yucca Mountain license 
application will present the safety case for the current design of the 
repository, which relies on a combination of engineered and natural 
barriers to prevent the exposure of the public to harmful radiation. 
Some costly engineered solutions have been put in place to mitigate the 
consequences of a failure of the geologic media to sequester 
radionuclides. More cost effective solutions are possible if additional 
science can be performed to ensure the validity of models of 
radionuclide mobilization and migration. R&D should be conducted to 
reduce the conservatism present in the models of the engineered and 
natural barriers, and to narrow the uncertainty ranges of those models. 
This research would serve two purposes. First, the repository as 
currently designed could be made more cost effective. Second, general 
research into repository performance, with a focus on testing designed 
to gain a more fundamental understanding of issues affecting longterm 
performance, would have beneficial impact on the projected use of Yucca 
Mountain as a repository for closed-fuel-cycle wastes. A cost-effective 
approach to conducting this research would be to integrate it with the 
NRC-mandated monitoring studies to be conducted under the Yucca 
Mountain Project Performance Confirmation Program.
    Question 4. What is the state of U.S. leadership in nuclear 
technology? Are governments in France and Japan investing more than we 
are in nuclear research and development?
    With few exceptions, the US has lost its leadership of nuclear 
energy technologies. Since the termination of the liquid metal fast 
breeder reactor program, spending on nuclear technology research and 
development has been in steady decline. In contrast, France and Japan 
have continued robust research programs at an annual level of five to 
ten times what the US is spending. For this reason they are far ahead 
of the US in large scale reprocessing and fast reactor technology-the 
very technologies needed to close the fuel cycle. Other countries are 
becoming involved in advanced nuclear energy technology development as 
well. Russia, China, and India all have advanced nuclear technology 
programs. For example, India will commission a prototype fast reactor 
in 2010 putting them substantially ahead of the US.
    GNEP presents an opportunity for the US to re-engage in advanced 
nuclear energy technologies and to re-establish itself as one of the 
leading countries in the development of nuclear energy to meet the 
worldwide growing need for safe, secure, clean, and reliable energy.
    Question 5. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    We believe the best strategy is to safely and securely store the 
existing waste in interim storage while developing the technology for 
reprocessing, transmutation and closing the fuel cycle. Developing and 
locating one or two interim storage facilities may also run into 
political obstacles so in the near term, spent fuel storage must be 
accomplished at the existing reactor sites. As part of the technology 
development for closure of the fuel cycle, an integrated waste 
management strategy should be implemented. This strategy will look at 
all the wastes from the fuel cycle and develop the best and most robust 
waste forms that are designed to fit the environmental conditions of 
the repository. With the closed fuel cycle tied to the second 
repository there will be an opportunity to look at other repository 
media such as salt or clay.
    The best path forward consists of two elements: 1) continue to 
support the current effort to license the Yucca Mountain repository, 
and 2) develop a robust R&D program for advanced waste management 
within GNEP and other DOE programs. These elements must be designed to 
ensure that inadequate waste management solutions do not obstruct the 
expansion of nuclear power to meet our pressing need for safe, carbon-
free energy sources.
    Los Alamos scientists, in partnership with Sandia National 
Laboratories, the lead laboratory for post-closure science for the 
Yucca Mountain Project, are actively participating in the DOE's effort 
to prepare the license application for Yucca Mountain by June 2008 for 
consideration by the Nuclear Regulatory Commission. This milestone is 
an enabling activity for nuclear power to move forward in the U.S., 
either with a closed or an open fuel cycle, because it will demonstrate 
the will and ability of our country to make progress in solving the 
waste issue. The team in place is confident that a credible, defensible 
license application is being prepared that will withstand the intense 
scrutiny that it will undoubtedly receive.
    Once the license application is submitted and the DOE, with help 
from the national laboratories and industry, begins to defend its 
conclusions, we should initiate studies that optimize the nation's 
waste management system, including the possibility of having the 
repository accept either spent nuclear fuel or the waste forms that 
will be produced in a closed fuel cycle. Yucca Mountain is an important 
component of this strategy, but the options go beyond Yucca Mountain to 
other geologic repository environments in the U.S. or abroad. Yucca 
Mountain could ultimately be used as currently designed, as the final 
resting place for commercial spent nuclear fuel in our current once-
through fuel cycle, as well as serving as the nation's repository for 
Defense High-Level Waste. Alternatively, the commercial spent nuclear 
fuel emplaced at the site could be retrieved and reprocessed, and Yucca 
Mountain could ultimately become the repository for the closedfuel-
cycle wastes and Defense High-Level Waste that cannot be practically 
reprocessed. A hybrid solution with Yucca Mountain hosting a 
combination of closed-fuel-cycle wastes and once-through spent nuclear 
fuel is also possible. Note that all proposed alternatives to the 
current disposal plan for Yucca Mountain will likely result in better 
predicted longterm performance of the site, thereby making acceptance 
of these alternative proposals a simpler proposition than the ongoing 
post-closure licensing effort. Other considerations relevant to the 
technical and engineering feasibility of these options would need to be 
examined in systems studies and engineering analyses to ensure that 
this concept is viable from an operations perspective. The long-term 
R&D priorities for radioactive waste management outlined in the 
response to Question 3 above are an important element of this waste 
management strategy.
                                 ______
                                 
    Responses of Pattabi Seshadri to Questions From Senator Bingaman

    Question 1. Your analysis indicates that disposal of MOX in a 
geologic repository is not considered a viable option because it could 
increase recycling costs by up to 40 percent. Can you please explain 
this?
    Answer. Used MOX is a form of spent nuclear fuel. Spent fuel from 
Light Water Reactors (LWRs) is first reprocessed to create MOX fuel. 
The fabricated MOX fuel (recycled fuel) is then used in LWRs as nuclear 
fuel. Once the fuel is consumed or `spent', it becomes a `second 
generation' of spent nuclear fuel that needs to be further consumed or 
disposed.
    Used MOX has several advantages. It still contains valuable nuclear 
energy content-the equivalent of at least 200 GWh of power generation 
potential for every ton of used MOX. This nuclear energy content can 
represent significant remaining economic value depending on prevailing 
nuclear fuel and power prices. It is also volumetrically smaller in 
quantity compared to conventional `first generation' spent nuclear 
fuel. Forexample, a reprocessing facility that processes 2,500 ton/year 
of spent nuclear fuel over 50 years leads to 15,000 tons of total used 
MOX at the end of 50 years. This is a much smaller quantity relative to 
the 55,000 tons of legacy nuclear fuel that has already accumulated at 
utility power plant sites over the past 30 years.
    Used MOX also has a disadvantage. It is `hotter' than conventional 
spent fuel-in that it contains a greater mix of plutonium and minor 
actinides such as americium. Therefore, any fuel management solution 
needs to consider how the used MOX will be consumed, stored or 
disposed.
    In our analysis, we considered a variety of options to handle used 
MOX, including:

          i. long-term storage of used MOX at the recycling facility,
          ii. recycling of used MOX to generate new nuclear fuel,
          iii. burning used MOX in an Advanced Recycling Reactor (which 
        can `consume' long lived radioactive elements such as minor 
        actinides), and
          iv. disposing of used MOX in a repository.

    The economics of handling used MOX across these options vary 
widely. The list of options considered and a high level economic 
assessment of each is described in depth in Appendix A10 of the BCG 
report-attached to this response.
    At one end of the spectrum, used MOX can (and has been) stored with 
a high degree of safety and certainty over very long periods of time, 
for example, at Areva's facilities at La Hague. Economically, this is 
the cheapest alternative to handle used MOX. Under this alternative, 
there will very limited incremental costs to the recycling solution.
    At the other end of the spectrum, if used MOX is disposed of in a 
repository, the `densification' advantage is reversed. The 
densification factor for used MOX is 0.15, which means that 150g of 
used MOX would take up as much space in the repository as 1 kg of used 
fuel. This approximately 6 times increase in the repository cost would 
be offset by the added time duration before which used MOX is disposed 
(9 years after first generation spent fuel), and the lower total 
volume of used MOX relative to first generation spent fuel. Based on 
these factors, we estimated that the additional cost of used MOX, if 
directly disposed in a repository, would be $200/kg. Under this 
scenario, this represents an increased cost of recycling of 40% 
relative to a repository only solution. We consider this figure to be 
the upper bound for our estimates, but we do not include this figure in 
the sensitivity range, since disposal of used MOX is not considered to 
be a viable option.
    Under some scenarios, used MOX could also provide positive value 
(i.e., reduce the overall cost of the recycling solution). As an 
example, as worldwide Uranium resources become tighter with significant 
usage/depletion over the next 70 years, used MOX as a source of nuclear 
fuel can have significant economic value to nuclear power plant 
operators.
    Given the range of values possible, the BCG study assumed that the 
cost of used MOX disposal will be the same as the long-term cost of 
conventional spent fuel.
    Question 2. How hard would it be to model the added cost of 
constructing fast reactors to your analysis?
    Answer. The added cost of constructing fast reactors can be modeled 
with a modest incremental effort. The key inputs required are the 
capital, operating costs, operating parameters and estimated timing of 
fast reactor deployment. The modeling effort would also need to take 
into account the value of power production from fast reactors (i.e., 
there are additional sources of value that improve the overall 
economics).
    As part of the GNEP business planning effort that engages industry 
and international players, the Department of Energy has asked four 
industrial consortia (respectively led by AREVA-MHI, EnergySolutions, 
GEHitachi, and GA) to develop business plans for nuclear fuel recycling 
in the U.S. Such business plans are likely to include an evaluation of 
fast reactor economics. Results from these initial deployment studies 
are expected to be made available to DOE in 2008.
    Question 3. What was the discount rate you used in your model--can 
you please explain you assumptions?
    Answer. The possible range of values for both the discount rate and 
the cost of capital are very broad, depending on the source of funding. 
Throughout the study we assumed that all the steps in the cycles are 
funded with public money, since the Department of Energy is legally 
responsible for the back-end of the nuclear fuel cycle. Therefore, we 
used the same publicdiscount rate for repository and recycling 
solutions.
    The value of the discount rate from public funding was triangulated 
based on historical real rate of return on long-term government bonds, 
and Office of Management and Budget (OMB) guidance. The data from these 
sources is discussed in further detail in Appendix A3 of our report. 
Based on these sources, we used a baseline discount rate of 3%.
    As mentioned before, we assumed a similar discount rate for both 
the solutions in order to enable a pure economic comparison of the 
alternatives. As part of this study, we did not explore alternate 
business models such as public-private partnerships to implementing a 
recycling solution. We recognize that under the right contractual, 
legal and financial conditions, private entities would be willing to 
invest in some elements of the recycling value chain-most notably the 
recycling plant, but potentially also the transport system and all 
interim storage facilities.
    While such alternatives are likely to incur higher financing costs, 
they would also provide financial benefits in the form of transfer of 
some risks to non-governmental entities. We believe that such a cost 
versus risk trade-off across business model alternatives should be 
valued separately from the basic cost economics of the two fuel 
management solutions.
    Question 4. How did you value MOX in your calculations and how 
sensitive is your model to the economics of reprocessing?
    Answer. The recycled fuel (both the MOX and the uranium-based 
recycled fuel, or recycled UOX) has a value and can provide a credit to 
offset some of the other costs. MOX and recycled UOX can be used in 
Light Water Reactors and are therefore comparable in value to UOX from 
mined uranium ore, after necessary adjustments for reactor adaptation 
costs, MOX acceptance costs and additional fuel enrichment, conversion, 
and fabrication costs. For each 1,000 ton of spent fuel recycled in an 
integrated reprocessing and fuel fabrication facility, the facility can 
produce approximately 120 tons of MOX fuel and 80 tons of recycled UOX.
    The value of these two sources of nuclear fuel can vary based on 
prevailing Uranium prices, fuel fabrication costs, and the upfront 
costs required to prepare LWRs to accept MOX fuel. We estimated the 
combined value of these two sources of nuclear fuel to be approximately 
$190/Kg. In this estimate, we assumed that the value of MOX fuel will 
be at a 25% discount to Uranium based fuel, to take into account the 
hard costs required for Light Water Reactors (LWRs) to accept MOX-based 
fuel and softer costs related to managing multiple vendors, and the 
like.
    The $190/Kg value of MOX and recycled UOX equates toapproximately 
25% of the estimated economics of recycling being driven by the value 
of fuel output from the recycling facility. Appendix A8 in the BCG 
report details the underlying assumptions and key drivers.
    The primary driver of value for these recycled fuel sources in 
Uranium prices. The BCG study assumed long-term Uranium prices of $31/
lb. Higher Uranium prices will substantially increase the 
attractiveness of recycling economics. For example, spot Uranium prices 
over the last two years have averaged approximately $75/lb compared to 
the 2000-2005 average of approximately $14/lb. This included a peak 
price of approximately $135/lb in 2007. The planned build out of new 
nuclear plants over the next 10-15 years has the potential to put 
further upward pressure on Uranium prices. Each $10/lb increase in 
Uranium prices would represent a 3% improvement in recycling economics. 
Such indicators suggest that the BCG study potentially significantly 
undervalued the economic benefits of recycled fuel sources.
    Responses of Pattabi Seshadri to Questions From Senator Domenici
    Question 1. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    Answer. Our study concluded that the economics of a repository only 
solution and a recycling-repository solution are comparable. Given the 
significant technical uncertainties related to a repository only 
solution, and the significant economic uncertainties related to both 
solutions, we believe the U.S. should pursue a portfolio solution to 
nuclear waste management. A portfolio approach to U.S. waste management 
strategy presents several compelling benefits, including:

          i. The potential to eliminate the need for additional 
        repository capacity beyond the initial 83,800 ton capacity at 
        Yucca Mountain, until the 2070 timeframe. In a repository-only 
        approach, we estimated that an extension of Yucca Mountain 
        capacity to its estimated technical capability of 120,000 tons 
        would be required to dispose of fuel discharged after 2020 and 
        an entirely new repository would be required for used fuel 
        discharged after 2040.
          ii. Contribution to early reduction of used fuel inventories 
        at reactor sites--in particular, removing newer, hotter fuel 
        for recycling within three years of discharge and eliminating 
        the need for additional investments in interim storage capacity 
        at power plant sites. This has the potential to reduce 
        government liability for failure to take possession of spent 
        fuel.
          iii. The portfolio solution relies on existing technology 
        with known improvements and modifications to enhance its 
        effectiveness. This would be very similar to new nuclear power 
        plant development where electric utilities migrate to 
        subsequent generations of technologies over time rather than 
        starting by scaling up one-of-a-kind technologies. Thus, a 
        portfolio approach has the potential to significantly reduce 
        implementation risks. It can also provide an operational 
        transition to future technology developments such as Advanced 
        Fuel Cycles and fast reactors.
          iv. Finally, a very important benefit of recycling is that it 
        offers a tool for the nuclear power sector to protect against 
        potential increase in uranium prices. The recycling approach 
        produces MOX and recycled UOX fuel to nuclear power plants. We 
        estimate that a recycling facility processing 2,500 tons/year 
        of spent fuel would produce MOX and recycled UOX fuel 
        equivalent to approximately 20-25% of the US nuclear power 
        plant annual fuel requirements. The production cost of this 
        fuel is, for the most part, independent of uranium prices and 
        enrichment costs. In addition, the facility would be located 
        within the US, thus providing supply security for a portion of 
        US nuclear fuel needs.

    Question 2. In your analysis you found that if a portion of the 
existing spent fuel inventories and all of the newly generated fuel was 
recycled this would eliminate the need for a second repository and 
there would still be room in Yucca Mountain through the year 2070. Is 
that correct?
    Answer. As mentioned before, in a repository-only approach, we 
estimated that an extension of Yucca Mountain capacity to its estimated 
technical capability of 120,000 tons would be required to dispose of 
fuel discharged after 2020 and an entirely new repository would be 
required for used fuel discharged after 2040.
    The recycling-repository solution can indeed eliminate the need for 
a second repository through 2070, under the specific nuclear growth 
scenarios and size of recycling facility we evaluated.
    Specifically, we assumed that there will be an installed base of 
112GW of nuclear plants producing annual spent fuel of 1,800 tons per 
year. We called this a `stationary' scenario where the existing 104GW 
installed base of nuclear power plants undergoes limited expansion over 
the next 20 years to 112GW based on the Energy Policy Act incentives. 
We also assumed that an additional 700 tons/year of `legacy' fuel can 
be processed in dilution with the 1,800 tons per year in a recycling 
facility with total throughput of 2,500 tons per year. Under this 
scenario, the 83,800 tHM of estimated Yucca Mountain capacity from the 
2001 DOE study would be sufficient to hold 50,000 tons of `legacy' fuel 
and 30,000 tons of High Level Waste (HLW) from recycling through 2070.
    We also evaluated a `nuclear renaissance' scenario where the 
existing fleet of nuclear power plants is expanded up to 160GW by 2030. 
Such a significant nuclear deployment is more likely under a scenario 
in which stringent Carbon abatement legislation is enacted and spurs 
replacement of an estimated 100 GW of the U.S. generation over three 
decades--with nuclear gaining a significant share of those builds.
    An increase in nuclear power generation of that magnitude would 
have the effect of significantly increasing the quantity of used fuel 
discharged, by about 30 percent above BCG current reference scenario of 
2,100 tons/year. Even under these conditions, in the recycling-
repository portfolio strategy, the integrated plant can accommodate all 
of the additional used fuel by not treating legacy fuel in dilution, as 
it was in the reference case. More legacy fuel would now have to be 
disposed of in Yucca Mountain. In this scenario we estimate that a 
total of approximately 100,000 tons of `legacy' fuel and High Level 
Waste (HLW) from recycling would need to be disposed of in a repository 
through 2070. This scenario can be accommodated with a small expansion 
of an existing repository. As a reference point, the technical capacity 
of Yucca Mountain has been estimated in the 2001 DOE study as 120,000 
tons.
    Question 3. The CBO estimates that there is a $5B-$11B additional 
cost for recycling over 40 years of operating a reprocessing facility-
do you believe that it would cost more than this to build a second 
repository?
    Answer. No cost estimates for a second repository beyond Yucca 
Mountain have been developed yet. Thus, absent any reliable cost 
estimate, the cost of the second repository in the economic assessment 
is assumed to be the same as the cost of Yucca Mountain ($46B in 2005 
dollars from the 2001 DOE lifecycle cost study: US DOE-Analysis of the 
Total Life Cycle Cost of the Civilian Radioactive Waste Management 
Program--2001). The uncertainty surrounding future costs of a second 
repository is significant. On the one hand, cost reductions driven by 
experience are conceivable, although building a second repository in a 
new geologic site would likely have very different features from the 
Yucca Mountain project. On the other hand, the very process of finding 
a suitable site and opening a new political dialogue could drive costs 
up significantly.
    In this respect, the portfolio strategy, while sensitive to factors 
such as cost of the integrated recycling facility, cost of Yucca 
Mountain, uranium prices, additional cost related to management of used 
MOX, and discount rate--is not impacted by uncertainties surrounding 
the cost of a second repository, until at least 2070.
    Question 4. Did your study or the analysis produced by CBO or 
Harvard consider the avoided cost of not attempting to site, construct 
and operate a second repository?
    Answer. As mentioned in response to question 3, the BCG study 
assumed that a future repository would cost the same to construct and 
operate as estimated in the 2001 DOE economic study of Yucca Mountain 
costs. Additional potential costs of siting and constructing a new 
repository were not considered. In that regard, we did not include any 
benefits from avoided incremental costs.
    Question 5. The CBO determined that another key difference between 
your study and Harvard's was in the construction and operation costs. 
Your study suggested certain ``conomies of scale'' What was the basis 
of this assumption? Is this a common practice in estimating costs for 
other industries? Have other industries realized these unit cost 
reductions?
    Answer. ``Economies of scale'' are a common driver of value in 
construction and operations in most industry sectors with significant 
capital base, and also in many non-industrial corporate administrative 
functions. For a given industry, company or facility's cost structure, 
``scale economics'' are said to exist if an increase in volume requires 
less than a proportional increase in cost. For example, if the volume 
of a facility can be doubled without doubling total cost, then unit 
cost (i.e., average cost or cost per unit volume) falls as volume 
increases.
    Common reasons why economies of scale exist include, fixed cost of 
setting up or operating a facility do not increase with size of 
facility, critical processes can be configured differently or more 
efficiently in larger scale facilities, purchasing economies come into 
play for majorcomponents, etc.
    Virtually all industries and functions within a company exhibit 
some degree of scale economics. Other industries have certainly 
realized these unit cost reductions. For example, capital costs 
(measured on a $/KW basis) for larger coal and gas-fired power plants 
are lower than those for smaller plants. In fact, these capital costs 
exhibit a 70-75% scale slope--in other word, every doubling of capacity 
reduces unit costs by 30%. Similarly, in ongoing plant operations there 
are significant economies of scale. As an example, non-fuel operating 
costs (a common measure of cost efficiency in power plant operations) 
are lower on a per MWh of power production in larger nuclear plants 
than smaller plants.
    Question 6. What is the policy implication of rising Yucca costs as 
it relates to the recycling option the BCG study contemplates?
    Answer. As mentioned in the BCG study, rising repository costs 
further reduces the economic gap between recycling and repository 
solutions. Furthermore, from a policy perspective, where there are cost 
uncertainties in two fundamentally different approaches, a portfolio 
solution that combines the two can provide important risk management 
benefits.
    Portfolio solutions are common in situations where there are large 
capital outlays and there is significant uncertainty around the capital 
spend. For example, many companies in the utility sector are pursuing a 
portfolio of generation technologies--nuclear, clean coal, renewables 
and gas--to power the future needs of their customers. An easier choice 
may be to pick the `best' technology (however it is defined) and build 
a single technology fleet of generation. However, utilities build a 
portfolio of generation technologies considering the uncertainties in 
capital costs, technology feasibility, fuel costs for each technology, 
and a range of other factors including regulatory uncertainty.
    Question 7. Recently, we saw press reports that DOE may find that 
the total life cycle cost for implementing Yucca Mountain--without 
recycling--has increased to at least $76 billion. What does this mean 
given the original BCG study's much more conservative estimates for the 
repository cost?
    Answer. In the BCG study we assumed the repository lifecycle costs 
from the 2001 DOE study (US DOE--Analysis of the Total Life Cycle Cost 
of the Civilian Radioactive Waste Management Program--2001). We then 
represented the civilian portion of these costs (estimated at 
approximately 73% of total costs) in 2005 dollars. This resulted in 
total undiscounted lifecycle cost assumption for the repository of $46B 
in 2005 dollars.
    Applying similar adjustments to the updated repository cost 
estimates would imply a new ifecycle cost estimate of approximately 
$55B in 2005 dollars. This represents a 20% increase in costs from 
previous estimates. This increase would close the economic gap between 
a epository solution and a recycling solution.
                                 ______
                                 
  Responses of Dennis Spureon to Questions From Senator Jeff Bingaman

    Question 1. It appears that the Department has shifted focus 
towards near term deployment of a fuel separations plant--does the 
Department support the use of spent fuel separations technologies that 
are variations of the Plutonium Uranium Extraction process called PUREX 
in the near-term?
    Answer. The Department is looking at a range of processing 
alternatives, including aqueous and electrochemical separations, that 
are able to recycle spent fuel and recover a portion of the energy 
value to produce electricity. The aqueous processes, including UREX, 
are all variations of PUREX. However, the Department is not considering 
any alternative that results in the separation of pure plutonium, 
because such alternatives do not support the GNEP goal to promote 
proliferation resistance here and abroad.
    Question 2. Is the Department considering sending spent nuclear 
fuel from U.S. reactors to overseas reprocessing facilities?
    Answer. The Department is examining a number of options for how 
best to transition to a closed fuel cycle in the United States given 
that a domestic recycling industry has not been developed in the U.S. 
No decision has been made on the approach the United States would take 
to transition to a closed fuel cycle. The Department is currently 
preparing a Programmatic Environmental Impact Statement (PEIS) to 
analyze whether to transition to a closed fuel cycle. Analyses must be 
further informed by, among other considerations, the technical and 
supporting studies that are currently under development by industry 
through the Advanced Fuel Cycle Initiative, the domestic technology 
development and deployment component of the Global Nuclear Energy 
Partnership (GNEP), and are scheduled for submission to the Department 
later this fiscal year as part of the May 2007, Funding Opportunity 
Announcement.
    Question 3. Is the DOE considering a government corporation to 
carry out the GNEP activities? If so how would it be funded?
    Answer. The Department is currently examining how best to implement 
GNEP activities. The Department is considering a range of options, 
including establishing a government entity to manage all aspects of the 
back-end of the fuel cycle. The Secretarial decision in 2008 on the 
path forward for GNEP will be informed by, among other considerations, 
these analyses and input from industry teams currently examining best 
transition options to a closing the nuclear fuel cycle in the United 
States.
    Question 4. If Mixed Oxide Fuel is used in the short term 
deployment scenario will it be sent to Yucca Mountain after use?
    Answer. While the used MOX fuel could be sent to a geologic 
repository, we believe a more reasonable approach would be to store the 
used MOX fuel until successful development and deployment of advanced 
recycling and fuel fabrication technologies into suitable fuel and 
fast-spectrum burner recycling reactors that would be designed to 
consume the long-lived isotopes.
    Question 5. In 1996 the National Academies estimated that it would 
require 1 fast reactor for every three light water reactors on order to 
consume their spent fuel or 33 fast reactors are required for just our 
existing fleet, does that assumption still hold true?
    Answer. Conventional light water reactor fuels utilize a uranium-
based matrix and the uranium in the fuel creates some additional 
transuranics (TRU) while some of the recycled TRU are being consumed. 
This effect is quantified by the conversion ratio (CR) which expresses 
how much TRU is produced to how much is consumed--thus the lower the 
CR, the greater the number of LWRs which can be supported by a given 
fast burner reactor. Fast reactors can be designed with a wide 
variability in CR; the range from 0.25 to 1.0 has been considered in 
GNEP fuel cycle studies. The lower limit of this range, CR=0.25, would 
support the 3:1 ratio statement. Since the CR impacts the fuel 
composition and performance of the fast burner reactor, we are now 
seeking industry input on the recommended CR for the burner reactor 
design. LWR recycle could also be used as an intermediate step for 
partial TRU destruction to reduce the required burner reactor fraction. 
We hope to be in a better position within the coming year to estimate 
achievable design characteristics of a burner reactor.
    Question 6. Has the Department performed a mass balance of the GNEP 
reprocessed spent fuel in order to ascertain the new waste streams and 
storage needed? If so please provide the Committee with this data.
    Answer. The Department is preparing a draft programmatic 
environmental impact statement (PEIS) that will include information on 
waste streams and characteristics from reprocessed spent fuel. The 
Draft PEIS is expected to be made publicly available in the near future 
for review and comment.
    Question 7. Cooperative R&D on Pyroprocessing with South Korea. The 
DOE has encouraged South Korea''. Korean Atomic Energy Research 
Institute to work with DOE national laboratories on pyroprocessing R&D. 
South Korea has a 1992 treaty with North Korea under which the two 
countries have agreed that neither will enrich uranium nor reprocess 
spent fuel. North Korea has violated this treaty but South Korea has 
said it won't in the hope that North Korea will come back into 
compliance. (North Korea recently agreed to have its reprocessing plant 
at Yongbyon disabled.) When the DOE has been asked whether its 
cooperative R&D program amounts to encouraging South Korea to violate 
its commitment not to reprocess, its response reportedly has been 
``pyroprocessing is not reprocessing.'' For the purpose of 
nonproliferation policy, reprocessing could be sensibly defined as 
separating plutonium from most or all the fission products with which 
it is mixed. Pyroprocessing of spent fuel that is more than a few years 
old does, in fact produce a transuranic product that is pure enough 
that the gamma field associated fission products no longer is intense 
enough to satisfy the IAEA's definition of ``self-protecting.'' (The 
gamma field around fifty-year-old spent fuel is ten times the intensity 
required for self-protection.) The radiation level around the product 
of pyroprocessing ten year-old spent fuel would be less than one 
percent of the self-protection level. What definition is the DOE using 
when it says that ``pyroprocessing is not reprocessing?''
    Answer. The Republic of Korea (ROK) has the sixth largest nuclear 
power program in the world. The Government of ROK has made a commitment 
not to possess reprocessing or enrichment facilities and is limiting 
the scope of its research and development on pyroprocessing, otherwise 
known as electrochemical processing, technologies. ROK is actively 
engaged in the development of advanced reactor and fuel cycle 
technology, nuclear safety, radioactive waste management, and other 
related work programs on the national, bilateral and multilateral 
levels. We gain a great deal of knowledge and experience by working 
with these ROK experts and involve them in GNEP research and 
development involving small-reactors, advanced burner reactors, 
computer modeling, safeguards and basic science, but not separations of 
spent fuel. Administration policy on pyrochemical processing 
cooperation with ROK is based on a careful evaluation of the specific 
circumstances. Decisions to pursue this cooperation took into 
consideration not only the nature of the technology but also the 
nonproliferation commitments and track record of ROK, including its 
commitment not to possess reprocessing and enrichment facilities, as 
well as its technical capabilities.
    Question 8. Purex vs. COEX. You have declared repeatedly that 
whatever reprocessing technology DOE chooses will not separate out pure 
plutonium. AREVA reportedly has offered as a technology that would 
satisfy this criterion COEX which would leave the plutonium mixed with 
uranium at a level of at least the seven percent plutonium used in MOX 
fuel or the 20 percent level that would be used in fast-neutron reactor 
fuel. Critics point out, however, that pure plutonium could be 
separated out of such a mix in a glove box without shielding. If on a 
proliferation-resistance scale, one set the difficulty of separating 
plutonium out of spent fuel at one hundred and pure plutonium oxide 
separated by PUREX as zero, where would you locate the proliferation 
resistance of the mixed oxide mixture that would be produced by COEX?
    Answer. Proliferation resistance cannot be quantified by a simple 
reference to the product of a separations process or a mixture prepared 
for recycle as a reactor fuel. However, consideration of the relative 
proliferation resistance of a particular fuel cycle process must 
distinguish between national proliferation risks (e.g., diversion of 
nuclear material or misuse of the facility by the host nation) and sub-
national risks (e.g., theft of nuclear material by a terrorist group, 
radiological sabotage), and must take into account the full range of 
extrinsic factors (such as safeguards and international commitments) 
and intrinsic factors (such as the composition and accessibility of 
plutonium-bearing materials) that affect the degree to which one 
process makes proliferation more difficult to carry out relative to 
another process.
    Lastly, the relative proliferation resistance of any spent fuel 
recycle approach must be considered in the broader context of the 
international fuel cycle architecture. A recycle facility in the United 
States that supported international fuel services would need to address 
subnational security risks, but would be a net gain for 
nonproliferation if it discouraged other countries from pursuing 
independent fuel cycles.
    Question 9. Reprocessing U.S. spent fuel in France. A nuclear-
industry newsletter reported last week that you are considering 
shipping the approximately 3,000 tons of U.S. power reactor spent fuel 
stored at U.S. sites that do not have operating power reactors to 
France to be reprocessed. At $500-2000 a kilogram, this would cost $ 
1.5-6 billion and 20-30 tons of plutonium would be separated. France's 
reprocessing contracts require that the plutonium and high-level waste 
be sent back to the customer nation. Two questions: i) What would DOE 
do with this additional separated plutonium? Pay France to make it into 
mixed oxide fuel and pay a U.S. utility to irradiate it as DOE plans to 
do with the most of 54 tons of its own plutonium.that it has declared 
excess? ii) Where will it store the high-level waste? If there is a DOE 
site willing to store high-level waste from reprocessing spent fuel in 
France, would it not be much easier and less costly and more secure (in 
not exposing more separated plutonium to possible theft) to simply 
store the unreprocessed spent fuel at that site?
    Answer. At this time, the Department is not considering shipping 
used nuclear fuel to France or any other country for reprocessing. 
Should the Department consider sending used nuclear fuel overseas for 
reprocessing in the future, the questions posed and other appropriate 
considerations would be carefully addressed.
    Question 10. Since GNEP was launched, South Africa has announced it 
is considering reviving a former uranium enrichment program, while 
Argentina, Canada and Australia have suggested they might start their 
own as well. Eight countries have notified the International Atomic 
Energy Agency that they reserve the right to pursue enrichment and 
reprocessing technologies.
    Yet GNEP was envisioned and sold as a way to stop the spread of 
enrichment and reprocessing technologies. In fact, it seems to be doing 
just the opposite, undermining decades of work the United States has 
done to discourage other countries from pursuing these technologies. 
How do you respond to this criticism?
    Answer. The policy of the United States is to discourage the spread 
of enrichment and reprocessing technologies. In his February 2004 
speech at the National Defense University, President Bush called for 
steps by suppliers to halt that spread. The Global Nuclear Energy 
Partnership (GNEP), through its reliable fuel services initiative, 
would provide countries that might otherwise consider developing their 
own indigenous enrichment and recycling capability with a viable and 
less expensive alternative.
    GNEP is one of several efforts by the United States and others to 
discourage the spread of enrichment and reprocessing technologies. This 
is particularly important now as nuclear power is increasingly being 
used worldwide to meet the growing demand for energy and enrichment 
services. In that context, it is natural for countries to consider 
entering the enrichment market both as a business opportunity and to 
address energy security concerns. The GNEP fuel services concept would 
seek to provide countries with an attractive and reliable alternative 
to developing their own enrichment or reprocessing capabilities. The 
fuel services concept is still being developed, and the role of 
countries that may supply fuel services remains to be defined. Further, 
since the business of uranium enrichment depends on economies of scale 
and faces significant technical barriers to market entry, the economic 
case for individual countries to build expensive enrichment facilities 
may be difficult to support.
    Question 11. GNEP originally envisioned engineering-scale 
reprocessing facilities, and at different times a variety of 
reprocessing technologies (UREX, UREX +, UREX+ 1 a, etc) were proposed 
at various points, seemingly in response to criticisms that the 
proposals were not proliferation-resistant. The idea of mixed oxide 
(MOX) fuel in light water reactors was off the table. Then the proposal 
shifted to commercial-scale facilities. Now it seems that the new 
proposal calls for research and perhaps smaller facilities, without a 
plan for commercial scale facilities, and that MOX might be an option 
because of industry interest. Why should the Congress provide support 
for this program when the Department does not seem to have any ability 
to produce a consistent answer for what the program is?
    Answer. The research and development component of GNEP, the 
Advanced Fuel Cycle Initiative (AFCI) program, has in fact evolved 
since GNEP was introduced in 2006. Since that time, we have sought 
input from our international partners, industry, the public, and from 
Congress. This input has proven valuable and has influenced the 
direction of AFCI. DOE continues to evaluate alternative nuclear fuel 
cycles that would improve waste management and reduce the risk of 
proliferation. This is a complex and important challenge that demands 
an objective evaluation of many alternatives. While the Department 
welcomes independent and critical scrutiny during the conceptual phase 
of this program, a range of reasonable alternatives must be evaluated 
as required under the National Environmental Policy Act as part of the 
public decision making process for major federal actions that 
significantly affect the environment. As a result, the AFCI range of 
analysis includes the consideration of technologies developed in our 
national laboratories as well as the application of more mature 
technologies. The benefits to the U.S. taxpayer of any large-scale 
application of nuclear fuel recycling technology will be weighed 
against the acceptability of cost and safety risks and the support of 
industry (both utilities and technology vendors) measured by the 
potential for private investment. The technology development aspect of 
AFCI will not be narrowed until the Secretary of Energy decides on the 
path forward in 2008, as the program has intended since its inception.
    Question 12. At the September international GNEP meeting, sixteen 
countries signed on to a statement of principles which included that 
principle that countries joining GNEP ``would not give up any rights.'' 
Secretary Bodman made a statement to the same effect. But the primary 
purpose of GNEP was to do exactly that, to get countries to renounce 
the pursuit of enrichment and reprocessing technologies. This proposal 
seems to have shifted dramatically from its initial vision. Please 
explain, aside from attempting to promote nuclear power, what the 
Department is attempting to gain from GNEP if not limit the spread of 
dangerous technologies.
    Answer. The policy of the United States remains to strongly 
discourage the spread of enrichment and reprocessing technologies. The 
Global Nuclear Energy Partnership (GNEP), through its reliable fuel 
services element, is one initiative to support that policy. By 
providing countries with a viable and less expensive alternative to 
developing their own costly enrichment and recycling capabilities, GNEP 
would offer this economic incentive for countries to refrain from 
enrichment and reprocessing without asking them to give up their 
rights. The Non-Proliferation Treaty (NPT) recognizes a right to 
peaceful uses of nuclear energy, in conformity with the 
nonproliferation obligations of the Treaty. Rather than asking 
countries to forego rights they see as inherent in the NPT, GNEP seeks 
to persuade them that other more economic avenues exist to exercising 
those rights.
    Question 13. A group of 27 nuclear experts from diverse backgrounds 
in the Nuclear Power Joint Fact Finding (NJFF) Keystone report 
concluded that the GNEP program was not cost-effective, that it can 
create a significant proliferation risk and that it would not manage 
nuclear waste successfully. According to the report, ``While 
reprocessing decreases the volume of high-level waste, the volume of 
low-, and intermediate-level wastes substantially increases.'' If there 
is MORE nuclear waste produced as a result of reprocessing, what is the 
point of pursuing the program?
    Answer. If nuclear power remains a vital part of the nation's 
energy supply throughout this century, the continued use of the once-
through fuel cycle would require multiple repositories. Recycling 
offers the potential for reducing the number of geologic repositories 
for spent fuel and high level waste that are needed relative to the 
once-through fuel cycle, which is a key benefit of GNEP. Disposing of 
spent nuclear fuel and high level waste is much more challenging and 
costly than disposing of low level waste. Accumulation of spent nuclear 
fuel in the United States will exceed the statutory capacity limit of 
the proposed Yucca Mountain repository in approximately three years, 
although the repository will likely not be available for spent fuel 
disposal for approximately 10 years. The Department of Energy estimates 
that the U.S. Government's liability from not accepting commercial 
spent nuclear fuel could be as high as $7 billion if the Yucca Mountain 
repository opens in 2017, and this liability could continue to grow by 
an average of $500 million for each year that the opening of the Yucca 
Mountain repository is delayed past 2017. The American taxpayers will 
bear these costs. To postpone the need for building significant 
additional repository capacity in the future to accommodate projected 
future discharges of spent nuclear fuel, establishing a domestic 
capability to recycle the spent nuclear fuel from at least a portion of 
the U.S. fleet of reactors could prove prudent in the long-term. The 
Department of Energy has engaged industry in studies to more fully 
evaluate requirements and approaches in this regard.
    The U.S. operates the largest fleet of commercial nuclear power 
reactors in the world. Other countries with significant nuclear power 
programs have capabilities for recycling nuclear spent nuclear fuel 
(France, United Kingdom, Russia, and Japan). Establishing a recycling 
capability in the United States could provide a future option for 
dealing with domestic spent nuclear fuel, while enhancing the nation's 
ability to promote policies favorable to non-proliferation, and 
increase the possibility of spent nuclear fuel take-back from other 
countries in the future.
    Question 14. Independent reports from nuclear energy experts 
(Keystone, Harvard, and the National Academies of Sciences) have all 
criticized GNEP for its technological immaturity. The NAS report calls 
on Congress to scale back the program, not invest more money into GNEP. 
What are some of the risks of proceeding with GNEP at an accelerated 
rate? What would be the impact of a failed reprocessing system on the 
nuclear utilities economy? Is there a risk of discrediting the nuclear 
industry or creating more waste sites like West Valley, New York?
    Answer. Deployment on a commercial-scale of GNEP advanced 
technologies for separations and fast reactors that are not mature 
would entail many risks. No final decision has been made on which 
technology will be deployed or how. While many different options will 
be considered, any near-term deployment would use the best available 
proven technologies modeled after the technologies of other nations.
    Question 15. As the Department of Energy has been promoting GNEP 
and reprocessing internationally and with industry, have any utilities 
and has any country committed to investing in reprocessing and fast 
reactor technology?
    Answer. There are a number of utilities that have expressed 
interest in the GNEP program. Several countries currently reprocess 
spent nuclear fuel. There is interest in the United States in recycling 
used fuel and developing fast reactor technology. The Department is 
working with several industry teams that responded to our May 2007 
Funding Opportunity Announcement to determine effective ways to achieve 
the goals of the GNEP program. In January 2008, four industry teams are 
scheduled to submit preliminary technical and supporting studies that 
include business plans informing the Department on matters such as 
potential facility costs, potential revenue from selling products (such 
as uranium, fuel, electricity) and costs that would need to be 
supported by government.
    Question 16. How does DOE envision a public/private cost sharing 
arrangement? How much of the expense will be borne by the private 
sector?
    Answer. DOE does envision public/private cost sharing but it has 
not determined the form this arrangement could take. DOE has engaged 
with industry through cooperative agreements in part to elicit the 
private perspective on how such an arrangement might be structured.
    As the Department evaluates the appropriate technological path for 
the Advanced Fuel Cycle Initiative, the technology development 
component of the Global Nuclear Energy Partnership, one of the factors 
that will be considered is the expected contribution from private 
partners.
    Question 17. Has the DOE done a cost analysis comparing the cost of 
reprocessing and transmutation with the cost of dry-cask storage as an 
interim solution? A17. DOE has not conducted an analysis that 
specifically evaluates the cost of reprocessing and transmutation 
verses the cost of dry-cask interim storage. The Advanced Fuel Cycle 
Initiative, the technology development component of the Global Nuclear 
Energy Partnership (GNEP), has been working with four industry teams 
through its industry engagement effort in conjunction with the May 2007 
Funding Opportunity Announcement to better assess the costs of the 
reprocessing and transmutation strategies.
    Question 18. What are the lifecycle cost estimates of reprocessing 
and transmutation [DOE has not publicly release any cost study since it 
pulled its cost numbers in 1999]? How does the cost compare with dry-
cask storage and a permanent geological repository?
    Answer. Through the Advanced Fuel Cycle Initiative, the technology 
development component of the Global Nuclear Energy Partnership (GNEP), 
the Department has engaged with industry through cooperative agreements 
to generate the pre-conceptual designs that would provide a basis for 
making these lifecycle cost estimates. The lifecycle costs for 
recycling with transmutation will depend significantly on the 
technologies being employed along with the business arrangements that 
will govern the transactions. The industry consortia are expected to 
provide information and insights into these issues. The expected costs 
of technologies will be a factor in whether or not they will be used.
    A comparison of recycling against a once-through approach depends 
on the assumptions concerning the number of geologic repositories 
needed. Under current law, the amount of material that can be placed in 
the Yucca Mountain repository is limited to 70,000 metric tons until a 
second repository is operating (even though the actually capacity of 
the Yucca Mountain repository can reasonably be expected to be several 
times larger than the statutory limit of 70,000 metric tons). If the 
assumption is made that the capacity of repositories will be limited to 
70,000 metric tons, then the costs of identifying, siting licensing and 
constructing additional geological repositories will be substantial.
    Question 19. Much of the space in a permanent geologic repository 
save through its implementation of GNEP relies on storing strontium and 
cesium above ground. Where will these fission products be stored and 
for how long?
    Answer. DOE is currently evaluating various approaches to cesium/
strontium (Cs/Sr) waste forms and storage. The draft GNEP Programmatic 
Environmental Impact Statement is examining a range of reasonable 
alternatives for disposition of Cs/Sr, including above-ground storage 
for approximately 300 years and disposal of the Cs/Sr as HLW in a 
geologic repository.
    Question 20. At the latest GNEP Ministerial, DOE stated that France 
and Japan would not be required to stop extracting pure plutonium 
[Japan re-mixes the Pu with Uranium]. Isn't there a significant risk 
that this move away from the proliferation-resistance goal of GNEP is 
legitimizing France and Japan's dangerous example of separating out 
pure Pu and stockpiling this weapons-grade material? Where the 
implications for U.S. and international nuclear non-proliferation 
efforts?
    Answer. The GNEP Statement of Principles state that the goals of 
GNEP are to ``develop and demonstrate, inter alia, advanced 
technologies for recycling spent nuclear fuel for deployment in 
facilities that do not separate pure plutonium with the long term goal 
of ceasing separation of plutonium and eventually eliminating stocks of 
separated plutonium.'' (Emphasis added.) By signing this document, the 
seventeen partners, including those now engaged in reprocessing, will 
work toward the goal of recycling spent fuel without separation of pure 
plutonium and eliminate stocks of separated plutonium. The United 
States and its partners support improving the proliferation-resistance 
of new processes and new fuels. In fact, a primary goal of the advanced 
research and development activities within the partnership is to 
develop these technologies and processes. Until such time as the 
technologies are available, France and Japan are maintaining their 
capabilities as part of their national energy and waste management 
policies. By agreeing in the Statement of Principles to ``take 
advantage of the best available fuel cycle approaches,'' they have 
committed to the goal of utilizing improved technologies once they 
become available. GNEP therefore strengthens our ability to improve 
nonproliferation practices in those countries and ratifies the intent 
of the partners to do so.
    Question 21/22. In a November 7 Energy Daily article, it was 
reported that DOE ``is planning to ask Congress for authority to take 
title to spent nuclear fuel stockpiled at closed U.S. nuclear plants 
and to reprocess it, most likely in France.'' I am extremely concerned 
about the financial cost, proliferation and contamination risk of 
shipping US nuclear waste and plutonium across the Atlantic. Many 
countries, including Germany, Switzerland and others have stopped 
reprocessing their waste in France, in part because nuclear waste from 
reprocessing was being shipped back to these countries in addition to 
the plutonium, negating their hope to reduce the amount of radioactive 
waste they need to address. In fact, France is looking for a site to 
dispose of its high-level nuclear waste generated from its reprocessing 
program. If the waste from reprocessed US waste is shipped back, what 
benefit is there to shipping US waste to be reprocessed abroad, given 
the cost, proliferation risks?
    Answer. At this time, the Department is not considering shipping 
used nuclear fuel to France or any other country for reprocessing. 
Should the Department consider sending used nuclear fuel overseas for 
reprocessing in the future, the question posed and other appropriate 
considerations would be carefully addressed.
    Question 23. How does shipping US nuclear waste to France meet any 
of the goals initially put forth by GNEP?
    Answer. At this time, the Department is not considering shipping 
used nuclear fuel to France or any other country for reprocessing. 
Should the Department consider sending used nuclear fuel overseas for 
reprocessing in the future, the question posed and other appropriate 
considerations would be carefully addressed.
    Question 24. France has not solved its nuclear waste problem and is 
losing its foreign customers, and the U.K. is planning to permanently 
shut down its reprocessing Facility (the facility has been shut down 
indefinitely since 2005 after a massive radioactive leak was 
discovered). Are there any lessons to be learned from the French and 
U.K. experience?
    Answer. DOE has a long history of working with international 
partners to leverage their knowledge and provide the maximum benefit 
for the U.S. investment. France has a successful recycling program, and 
is working on advanced technologies to further benefit their recycling 
program. The UK has not yet made a decision on the future of its 
nuclear program; a decision is expected early next year. Japan is about 
to start operation of a new recycling facility with state of the art 
safeguards. A decision to construct and deploy recycling facilities in 
the U.S. would consider the market readiness for such facilities. The 
international nature of the GNEP program enables leveraging 
international knowledge and lessons learned. Any decision on GNEP would 
be based on a sound and sustainable business model.
    Question 25. DOE has changed its reprocessing plan pursuant to GNEP 
at least four times. DOE has proposed separating out (1) plutonium and 
neptunium, (2) plutonium and un-separated transuranics, (3) plutonium 
and americium and curium and lanthanides, and (4) now DOE proposes to 
separate plutonium with uranium (COEX process). What is DOE's plan?
    Answer. There are many paths to achieving a used nuclear fuel 
recycling program in the United States. All of those alternatives 
listed in this question, as well as others, are appropriate for 
consideration as the Department provides the necessary analysis for the 
path forward for the Advanced Fuel Cycle Initiative, the technology 
development component of the Global Nuclear Energy Partnership (GNEP). 
It should be noted that a range of reasonable alternatives must be 
evaluated as required under the National Environmental Policy Act 
(NEPA) as part of the public decision making process for major federal 
actions that significantly affect the environment. The Department's 
plan for a Secretarial Decision on the path forward in 2008, after 
completing the NEPA process, has remained constant throughout the 
program's existence.
    Question 26. According to Prof. Frank von Hippel's report Managing 
Spent Fuel In The United States: The Illogic Of Reprocessing (Figure 7 
of the report http://www.fissilematerials.org/ipfm/sitedown/
ipfmresearchreport03.pdf), separating out plutonium with neptunium or 
uranium is not more self-protecting than pure plutonium despite DOE 
claims that these options would be more proliferation resistant. Will 
there be a requirement that the separated mix meet the IAEA self-
protection standard (100 rems/hr/meter)? How hard would it be to 
chemically separate uranium from plutonium to obtain pure plutonium for 
a nuclear weapon? How does this proliferation-resistance compare with 
the proliferation-resistance of our current practice of not 
reprocessing?
    Answer. Arguments about the relative proliferation resistance of a 
particular nuclear fuel process, or its nuclear materials rest on many 
elements. These elements of proliferation resistance include both 
``extrinsic'' measures such as international safeguards that address 
national proliferation, and physical protection and material control 
and accounting systems that address subnational risks and ``intrinsic'' 
factors such as barriers within the facility design that affect ease of 
access to nuclear materials or characteristics of the nuclear material 
that would complicate its use in a nuclear explosive device or weapon. 
The differences in technical capabilities of national and subnational 
proliferators must be taken into account in assessing the degree of 
difficulty intrinsic measures in particular pose.
    The external dose rate associated with a given nuclear material 
form is one factor that affects proliferation resistance. However, the 
notion of ``self-protection'' is relevant primarily to subnational 
proliferation risks. A national proliferator, especially one capable of 
designing and operating a reprocessing plant, would possess the 
technical capability to work with highly radioactive materials. In 
light of the demonstrated willingness of terrorists to sacrifice their 
own lives to carry out their missions, careful consideration needs to 
be given to the level of external dose that would prevent a subnational 
group from obtaining access to material that could be used in a nuclear 
explosive device. The relative proliferation resistance of a given fuel 
cycle process or nuclear material cannot be reduced to a single factor 
such as the external dose rate. However, consideration of the relative 
proliferation resistance of a particular fuel cycle process must 
distinguish between national proliferation risks (e.g., diversion of 
nuclear material or misuse of the facility by the host nation) and sub-
national risks (e.g., theft of nuclear material by a terrorist group, 
radiological sabotage), and must take into account the full range of 
extrinsic factors (such as safeguards and international commitments) 
and intrinsic factors (such as the composition and accessibility of 
plutonium-bearing materials) that affect the degree to which one 
process makes proliferation more difficult to carry out relative to 
another process.
    Lastly, the relative proliferation resistance of any spent fuel 
recycle approach must be considered in the broader context of the 
international fuel cycle architecture. A recycle facility in the United 
States that supported international fuel services would need to address 
subnational security risks, but would be a net gain for 
nonproliferation if it discouraged other countries from pursuing 
independent fuel cycles.
    It is relatively easy, particularly for a state-sponsored 
proliferator to separate uranium from plutonium. This is why GNEP aims 
to prevent the further spread of reprocessing capabilities.
    Question 27. Have any countries, including the 16 countries that 
signed up as GNEP partners at the second GNEP Ministerial, committed to 
forego developing or acquiring uranium enrichment and/or plutonium 
reprocessing?
    Answer. With the signing of the Statement of Principles, the eleven 
new partners indicated their support for reliable fuel services as a 
viable alternative to enrichment and reprocessing. There are other 
countries that have expressed interest in joining GNEP. and would be 
like-minded in their support of reliable fuel services. Since the 
reliable fuel services envisioned by GNEP have not yet been 
established, no country has yet made any commitments based on the 
availability of those services.
    Question 28. f fast reactors will not be commercially-viable for 
several decades at best, what is the urgency to proceed with 
reprocessing now? Please comment on the proliferation and costs risks 
of proceeding now rather than waiting until the technology is more 
mature or until uranium prices are high enough to justify this costly 
and dangerous program.
    Answer. The Department is currently collecting information to 
support a Secretarial decision in 2008 on the path forward for the 
domestic development of GNEP, through the Advanced Fuel Cycle 
Initiative (AFCI). The forecasted growth in electricity demand, coupled 
with the concern about increased greenhouse gas emissions in the United 
States, make nuclear power a viable option that can help solve these 
challenges. The Administration believes that in the long term, closing 
the fuel cycle is the best approach to developing a comprehensive and 
economical waste management strategy to support the potential expansion 
of the number of reactors and resultant used fuel in the United States. 
However, transitioning from a once-through fuel cycle to a closed fuel 
cycle in the U.S. would take years to complete. One possible approach 
would be to begin today with existing technology, which would avoid 
separation of pure plutonium, and later, introduce advanced recycling 
technologies into these facilities as those technologies mature.
    The decision on whether to proceed with advanced recycling 
technologies and close the fuel cycle has not yet been made. This 
decision is anticipated to be made in 2008, based on completion of a 
Programmatic Environmental Impact Statement (PEIS) for GNEP, input from 
industry through its cooperative agreements resulting from the May 2007 
Funding Opportunity Announcement, Departmental analyses, and other 
factors.
    Question 29. DOE has recently explained that any near-term 
construction of a fast reactor and a reprocessing facility would be 
done by industry. By your estimate, and from what you have learned from 
industry, how much would you expect industry to contribute to the cost 
of building the first fast reactor? For the first reprocessing plant? 
DOE's Notification for the Programmatic Environmental Impact Statement 
included a range of capacities and throughputs listed for the advanced 
fast reactor-250 MW/thermal up to 2,000 MW/thermal--and for the 
reprocessing plant-100 metric tons of heavy metal annually up to 3,000 
metric tons of heavy metal annually. What are the estimated costs to 
build there facilities, at the high and low range?
    Answer. The Department has solicited technical and business data 
from industry as part of the May 2007 Funding Opportunity Announcement 
to evaluate the various options available to design and construct fast 
reactor and reprocessing facilities. We expect to receive this data in 
January and April 2008, and it will be used to develop cost and 
schedule information for various options. The results of these 
analyses, as well as the Programmatic Environmental Impact Statement 
(PEIS), a non-poliferation impact analysis, and other factors will be 
considered to provide information to the Secretary on a path forward 
for advanced recycling technologies. The Department anticipates that 
the marketplace will enable the commercial sector to provide a 
substantial share of the costs.
    Question 30. DOE has often said that it needs to proceed now with 
design and construction of a reprocessing facility, even if it uses 
separation technology less advanced than the GNEP UREX process, because 
the U.S. needs to be ``part of the game'' and ``have a team on the 
field.'' In essence, DOE implies that the U.S. needs a reprocessing 
facility to play a leadership role in influencing future choices 
regarding nuclear energy technology. How would building a reprocessing 
facility that uses existing technology or minor variations on existing 
technology help the U.S. influence other countries' technology choices?
    Answer. The Department has made no recycling technology selections 
at this time and, in accordance with the National Environmental Policy 
Act, DOE is currently evaluating alternative technologies and 
approaches to closing the nuclear fuel cycle. The Department has 
engaged industry to examine ways to best introduce a closed fuel cycle 
in the United States. Through this process, industry is currently 
conducting conceptual design studies, developing technology roadmaps, 
and preparing business and communication plans for technology 
proposals. As part of this effort, the Department will receive input on 
how existing technologies could transition to advanced technologies 
with additional used fuel partitioning capabilities and with greater 
reductions in the toxicity and volume of high level waste. In addition, 
DOE is seeking input from industry to help determine whether there is a 
business case for constructing a fuel recycling facility using readily 
available processes that do not separate pure plutonium.
    Question 31. DOE has indicated that the Secretary of Energy will 
decide on the ``path forward'' for GNEP in June 2008. Which specific 
issues will the Secretary decide and what criteria will he use?
    Answer. There are several potential decisions that could be made 
through a NEPA Record of Decision (ROD). The first is a domestic 
programmatic decision whether to pursue an alternative to the open fuel 
cycle, and if so, some definition of potential implementation steps. 
Another potential decision involves whether to site, construct, and 
operate an Advanced Fuel Cycle Facility (AFCF), a research and 
development facility, and if so, whether to construct a new facility or 
facilities at one or more locations, or whether to modify one or more 
existing facilities. Criteria used in these decisions would include 
consideration of the potential environmental impacts, reduction in 
proliferation risk, technical considerations/technology maturity, 
estimated lifecycle cost, the business case, and legal and policy 
matters.
    Question 32. GNEP has many ambitious goals and objectives, and it 
seems unlikely that the department will be able to maximize all of them 
at once. Could you state for this committee what GNEP's goals and 
objectives are, in what order of priority?
    Answer. GNEP is a multifaceted effort that largely consists of two 
components: international and domestic. Internationally, GNEP is an 
international partnership, consisting of 21 nations, that seeks to 
promote a significant, wide-scale use of nuclear energy in a safe and 
secure manner, and to take actions now that will allow that vision to 
be achieved while decreasing the risk of nuclear weapons proliferation 
and effectively addressing the challenge of nuclear waste disposal. 
Domestically, through DOE's Advanced Fuel Cycle Initiative (AFCI), GNEP 
is focused on evaluating ways to effectively close the nuclear fuel 
cycle by advancing research and development and industry cooperation to 
foster advanced recycling technologies that are more proliferation 
resistant and reduce the volume and radiotoxicity of the nuclear waste 
that ultimately requires disposal in a geologic repository. GNEP was 
created to realize these goals and to ensure the United States is not 
only a participant in international discussions concerning the 
expansion of nuclear energy, but that it regains its role as a nuclear 
energy leader.
    Both components of GNEP are equally important and are essential to 
the necessary expansion of nuclear power in the United States and 
worldwide.
    Question 33. DOE has recently begun working with industry partners 
on conceptual design studies for a reprocessing facility and a fast 
reactor while DOE's national labs continue to work on the advanced 
technology needed to meet GNEP objectives--most of this advanced 
technology has thus far has only been demonstrated at the laboratory 
scale.
    In light of the time and expense needed to demonstrate the advanced 
technologies that are intended to maximize GNEP goals, what is the 
rationale of DOE's intent to proceed with an accelerated schedule for 
design and construction of a reprocessing facility and fast reactor 
using less advanced technologies that would only partially meet GNEP 
objectives?
    Answer. The Department has not made a decision to proceed with 
design and construction of a reprocessing facility or fast reactor. The 
Department has engaged industry to examine ways to best introduce a 
closed fuel cycle in the United States. Through this process, industry 
is currently conducting conceptual design studies, developing 
technology roadmaps, and preparing business and communication plans for 
technology proposals. As part of this effort, the Department will 
receive input on how existing technologies could transition to advanced 
technologies with additional used fuel partitioning capabilities and 
with greater reductions in the toxicity and volume of high level waste. 
These analyses will help inform a Secretarial decision in 2008 on the 
path forward for advanced recycling technologies.
    Implementing an interim step using mature recycling technology 
which does not separate pure plutonium could support GNEP goals: 
recovery of reusable fuel resources and subsequent generation of 
electricity, strengthen the nonproliferation regime by supporting 
reliable fuel services, and improved waste management in which the 
volume of waste is reduced with the removal of uranium and plutonium.
    Question 34. Unlike other countries that have continued 
reprocessing spent fuel, the U.S. has the opportunity to begin with a 
relatively clean slate, using advanced technologies. Yet DOE's funding 
opportunity announcement states that DOE is willing to consider 
``incremental approaches that meet the GNEP vision in a stepwise 
fashion.'' That seems to be a roundabout way of saying that the 
department will consider building facilities--very expensive 
facilities--which it knows from the outset won't meet GNEP's 
objectives. Why would the United States take this approach and risk 
locking ourselves in to technologies that won't meet our needs?
    Answer. The Department is currently evaluating a variety of options 
available to realize the goals and objectives of the Advanced Fuel 
Cycle Initiative, the domestic technology development component of 
GNEP. One option is to implement a phased approach that would start 
with current commercially available technologies and processes that 
recover a significant percentage of the energy value of used nuclear 
fuel by recycling uranium and plutonium for re-use in existing nuclear 
reactors. Implementing an interim step using mature recycling 
technology could offer benefits in support of GNEP goals: recovery of 
reusable fuel resources and subsequent generation of electricity, 
strengthen the nonproliferation regime by supporting reliable fuel 
services, and improved nuclear waste management in which the volume of 
waste is reduced with the removal of uranium and plutonium.
    The continued development of additional partitioning technologies 
would support the deployment of advanced recycling facilities that 
would recover additional energy value of the fuel for use in fast 
reactors and achieve the full waste management benefit. However, 
transitioning from a once-through fuel cycle to a closed fuel cycle in 
the U.S. will take years to complete.
    The decision on whether to proceed with advanced recycling 
technologies and close the fuel cycle has not yet been made. This 
decision is anticipated to be made 2008, based on a Programmatic 
Environmental Impact Statement, which will include input from the 
public and industry, as well as Departmental analyses, and other 
factors.
    Question 35. It has come to the attention of this committee that 
DOE is considering production of mixed-oxide (MOX) fuel for burning in 
existing reactors under GNEP. However, MOX recycling actually increases 
inventories of americium and curium--two of the elements that the 
department has said should be kept out of a geologic repository, if 
possible, in order to extend its capacity. MOX recycling also increases 
the total inventory of plutonium in circulation outside the repository, 
compared to a once-through fuel cycle. Please explain the rationale for 
considering a MOX program as part of GNEP.
    Answer. Consideration of incorporating MOX burning in existing 
reactors is driven by the deployment benefit which derives from the 
fact that, although a MOX thermal recycle would ``actually increase 
inventories of americium and curium,'' it could reduce the quantity of 
plutonium by both burning it in MOX fuel and avoiding generation of new 
plutonium from enriched uranium Light Water Reactor (LWR) fuel. This 
approach could mitigate the net accumulation of transuranics in LWR 
spent fuel, allowing fast burner reactors to be deployed in a more 
gradual manner than if transuranic elements from light water reactor 
used fuel were sent directly to fast burner reactors.
    While there might be ``more plutonium outside the repository, 
compared to a once-through fuel cycle,'' the plutonium would be fully 
removed from the waste stream and used instead to produce electricity, 
thereby contributing to the economy while reducing overall greenhouse 
gas emissions from electricity production.
    The decision on whether to proceed with advanced recycling 
technologies and close the fuel cycle has not yet been made. This 
decision is anticipated to be made in 2008, based on a Programmatic 
Environmental Impact Statement, input from industry, Departmental 
analyses, and other factors.
    Question 36. The U.S. stopped reprocessing in the late 1970s 
primarily due to proliferation concerns. GNEP proposes to develop 
advanced safeguards to address the basic GNEP goal of preventing 
diversion or theft of plutonium. The Advanced Fuel Cycle Facility, 
which is to serve in part as the testbed for developing advanced 
safeguards, is scheduled for completion in the 2020 timeframe, but this 
is the same timeframe envisioned for completing construction of the 
first reprocessing facility. What is the rationale for pursuing design 
and construction of a reprocessing facility prior to developing and 
demonstrating advanced safeguards?
    Answer. One of the key conditions to establishing a used fuel 
recycling facility in the United States is the inclusion of advanced, 
state-of-the-art safeguards technology in its design. The core of this 
technology is available today and has been incorporated, with the 
expertise of our national laboratories, in the Rokkasho plant in Japan. 
Under GNEP, the Department does not intend to rest on today's 
technology. With the Advanced Fuel Cycle Facility (AFCF), the 
Department plans to continue the advancement of all fuel recycling 
technology, including safeguards technology, to improve efficiency and 
effectiveness. Developing and demonstrating advancements in these 
technologies is an important element of GNEP. The safeguards 
improvements may be introduced, where feasible, to existing facilities 
world-wide and can be incorporated by design in future facilities in 
the United States and elsewhere.
    Question 37. GNEP prohibits reprocessing spent fuel in a way that 
separates out pure plutonium. GNEP's UREX separation technologies are 
designed to keep the plutonium mixed with other highly-radioactive 
materials found in spent fuel, thereby making it more difficult to use 
for weapons production. The committee has learned that DOE is now 
considering using less advanced technologies that result in a uranium 
plutonium mixture that is far less proliferation resistant than the 
mixture resulting from UREX technologies. What is the rationale for 
using this less advanced technology?
    Answer. The Department is currently evaluating a variety of options 
available to realize the goals and objectives of the Advanced Fuel 
Cycle Initiative, the domestic technology development component of 
GNEP. One option is to implement a phased approach that would start 
with current commercially available technologies that recover a 
significant percentage of the energy value of used nuclear fuel by 
recycling uranium and plutonium in existing nuclear reactors.
    Implementing an interim step using mature recycling technology 
could offer benefits in support of goals established in the GNEP 
Statement of Principles: recovery of reusable fuel resources and 
subsequent generation of electricity, strengthen the nonproliferation 
regime by supporting reliable fuel services, and improved nuclear waste 
management in which the volume of waste is reduced with the removal of 
uranium and plutonium.
    The continued development of additional partitioning technologies 
would support the deployment of advanced recycling facilities that 
would recover additional energy value of the fuel for use in fast 
reactors and achieve the full waste management benefit. However, 
transitioning from a once-through fuel cycle to a closed fuel cycle in 
the U.S. will take years to complete.
    The decision on whether to proceed with advanced recycling 
technologies and close the fuel cycle has not yet been made. This 
decision is anticipated to be made 2008, based on a Programmatic 
Environmental Impact Statement, which will include input from the 
public and industry, as well as Departmental analyses, and other 
factors.
    Question 38. In support of developing GNEP facilities, your 
strategic plan states that if the U.S. is going to ``participate in 
assuring access to nuclear fuel, and in the longer term, spent fuel 
services to [other countries], the U.S. must have the capability to 
provide the needed fuel cycle services''.including ``cradle to grave'' 
fuel service or leasing arrangements. Yet the United States could 
accomplish the first goal--helping assure access to nuclear fuel--
without building any GNEP facilities, for example by participating in 
an international fuel bank. As far as the second goal, we have to 
consider the question of plausibility.
    How likely is it that the American people will agree to reprocess 
spent fuel from other nations and accept all the attendant risks 
associated with transportation of that fuel and operation of the 
plant--and what would be done with the waste?
    Answer. Public acceptance would be important for any proposal to 
accept and recycle spent fuel from other countries. Public support for 
nuclear power has grown significantly, given the strong safety 
performance of U.S. reactors and growing concern over the environmental 
impact of fossil fuel use. The ability to recycle the spent fuel and 
reducing the volume of the resulting waste will be a key factor in 
public acceptance of such a proposal. In addition, the public would 
enjoy the security benefits of discouraging other countries from 
developing fuel cycle capabilities that could readily be misused for 
weapons purposes.
                     QUESTION FROM SENATOR DOMENICI

    Question 1. Given all the political obstacles, escalating cost 
estimates and finite capacity of Yucca Mountain, and the growing DOE 
liability for failure to take possession of spent fuel, what do you 
think is the right U.S. waste management strategy going forward?
    Answer. To help reduce the volume of waste that needs to be 
disposed of at Yucca Mountain, conserve resources and make the long-
term expansion of nuclear energy a reality, the Department of Energy is 
assessing near term capability of closing the nuclear fuel cycle 
through a host of options and by working with industry to explore 
concepts and technologies to meet the needs of nuclear power. 
Transitioning from a once-through fuel cycle to a closed fuel cycle in 
the United States will take time, but this is our goal.. The recycling 
industry in the U.S. would be at an early stage of development and the 
technologies, though used in other countries for years, are not used in 
the United States.
    GNEP seeks to promote the expansion of nuclear power to achieve 
environmental, economic, and energy security benefits in concert with 
reduction of used nuclear fuel volume destined for a geologic 
repository while simultaneously recovering energy content contained in 
the used fuel and making the world a safer place by providing reliable 
fuel assurance to countries that might otherwise develop enrichment and 
reprocessing capabilities. GNEP seeks to move the U.S. in this 
direction, while still addressing the core targets of reducing 
proliferation risks, and repository waste volume.
    Question 2. Some are concerned that GNEP is rushing to deploy 
technologies that are not yet ready. What recycling research and 
development technologies will be pursued under GNEP, and when?
    Answer. Both advanced aqueous and electrochemical processing 
technologies have been pursued under the Advanced Fuel Cycle Initiative 
program, the domestic technology development component of GNEP, for the 
last decade, and the Department intends to continue the development of 
these advanced technologies. Completing the technology development will 
take at least another decade or longer. In addition, the Department has 
asked industry to identify what processes could be deployed in the near 
term with minimal technical risk. The schedule on which these processes 
could be deployed would depend on a variety of factors including the 
technical maturity and successful demonstration of the technologies, 
the readiness of the market to accept such technologies, and a sound 
and commercially sustainable business plan.
    The Department is currently evaluating the option to include 
thermal recycle in existing LWR's to achieve goals established in the 
GNEP Statement of Principles. Under this approach, the development and 
deployment of technologies would be organized in two phases to obtain 
the full GNEP benefits. The first phase would rely on using incremental 
improvements of existing recycling technologies to reduce the growth in 
the stockpile of spent nuclear fuel. It would focus on separations 
technologies that do not extract pure plutonium and provide a mix of 
uranium and plutonium for fabricating plutonium-bearing fuel for use in 
existing reactors. The spent plutonium-bearing fuel would be stored for 
future recycling through the use of advanced technologies. The use of 
existing technologies would provide an initial approach to address GNEP 
goals, and would enable sufficient time to develop the more advanced 
technologies to fully address these goals.
    Under this scenario, the second phase would rely on the 
technologies that are currently being researched within the AFCI 
program: separations technologies that allow for a detailed management 
of all waste streams, and advanced fuels and reactors that would allow 
for the transmutation of key transuranic elements. The implementation 
of these technologies would start in 20 to 25 years.
    Question 3. My understanding is that the implementation of GNEP 
will be flexible, that it will be done in a way that utilizes the best 
available technology. As developments occur, how will they be 
integrated over time?
    Answer. GNEP is not a static vision, and its related policies and 
technologies are capable of evolving to meet the ultimate goals of the 
United States. Since the introduction of GNEP in 2006, we have pursued 
an aggressive path of seeking input and collaboration in many venues. 
In the design of any near-term separations facility, provision will be 
made for the addition of future improvement features. For example, 
remote maintenance of such plants would incorporate features that could 
be applied to upgrading the existing processes. The experience of the 
US government in the operation of large scale separations facilities 
for defense purposes has demonstrated such a capability repeatedly and 
successfully.
    Question 4. If we want to limit the number of repositories that we 
ultimately need to the absolute minimum, don't we need to recycle spent 
fuel?
    Answer. There are several factors that must be considered in the 
capacity and design of a geologic repository, with attention to three 
factors in particular: volume, heat load, and potential dose from 
radionuclides. Recycling does show promise in limiting the number of 
repositories but the extent to which it could accomplish this result 
varies.
    The Nuclear Waste Policy Act (NWPA) requires the Secretary of 
Energy to inform Congress before 2010 on the need for a second 
repository for spent nuclear fuel (SNF). The NWPA also limits the 
capacity of the Yucca Mountain repository to 70,000 metric tons until a 
second repository begins operations. By 2010, SNF produced from current 
commercial reactors will be very near the statutory limit of 70,000 
metric tons. Studies have shown significant reductions in the required 
amount of repository capacity can be achieved through SNF recycling. 
Also of importance is the type of repository under discussion. The 2004 
Advanced Fuel Cycle Initiative Comparison Report to Congress analyzed 
the fuel cycle strategies of a once through system, thermal recycle, 
thermal plus fast recycle, and fast recycle, to determine impacts of 
the different fuel cycle systems on waste management indicators. The 
results of the comparison support the idea that the number of potential 
future repositories can best be limited with continuous recycle of 
transuranics from SNF, as envisioned by the long-term objectives of 
GNEP.
    Question 5. The National Academy of Sciences, formed a committee to 
evaluate the Office of Nuclear Energy R&D program, including the GNEP 
initiative. While this report endorsed continued R&D of nuclear 
recycling technologies, it did not support the rapid deployment of 
commercial technology. What do you think of the conclusion of this 
report?
    Answer. While we feel that some conclusions of the report are 
accurate, such as the high-priority the report places on the Nuclear 
Power 2010 program as well as the merit of closing the nuclear fuel 
cycle, we have significant disagreement with a number of conclusions of 
the report relating to GNEP.
    As an initial matter, it is important to note that the National 
Research Council (Council) was solely reviewing and commenting on the 
Advanced Fuel Cycle Initiative (AFCI), the research and technology 
development component of the Global Nuclear Energy Partnership (GNEP), 
and not the international partnership component of GNEP, as evidenced 
by the press release that accompanied the issue of this report.
    DOE believes that the AFCI program is fundamentally consistent with 
most of the recommendations that the Council reached in its Review of 
DOE's Nuclear Energy Research & Development Program. However, the 
conclusion of the report relating to GNEP is that the program ``should 
not go forward and that it should be replaced by a less aggressive 
research program.'' We believe this conclusion is premised on the 
faulty assumption that DOE has narrowed the potential technology to be 
deployed solely to UREX+ (the baseline technology developed at DOE'S 
National Laboratories) and that it is moving too aggressively towards 
commercial deployment. However, as noted to the Council both via 
interview and in multiple documents, we have made no technology 
selection and in accordance with the National Environmental Policy Act 
are currently evaluating alternative technologies and approaches to the 
current open nuclear fuel cycle.
    DOE agrees with the council that advanced recycling technologies 
that can separate all transuranic elements from spent nuclear fuel and 
subsequently fabricate them into fuel to be consumed in a fast reactor 
require additional research. The AFCI program continues to work on the 
research and development necessary to eventually bring these 
technologies to market.
    Additionally, DOE strongly disagrees with the lack of urgency the 
Council places on efforts to deploy technologies that will close the 
nuclear fuel cycle and thereby support the necessary, robust expansion 
of nuclear power in the United States. It is projected that the United 
States will need to construct 45 new nuclear plants by 2030 merely to 
maintain nuclear energy's 20% share of electricity generation given the 
expected increase in demand. The United States must develop a waste 
management strategy that can facilitate such an expansion, and 
deployment of recycling technologies is integral to this strategy.
    The Council made some recommendations that DOE agrees with. 
Specifically the Council recommended that DOE's technical efforts 
undergo an independent peer review. DOE's Idaho National Laboratory 
sponsored a review by an independent panel of 12 fuel-cycle experts 
that was published on November 2, 2007. This panel ultimately concluded 
that, `` . . . GNEP is the right program for the United States to 
undertake at the right time.''
    Question 6. Dr. Bunn states in his testimony the he believes that 
the U.S. ``emphasis on reprocessing'' would allow non nuclear states to 
``gain in-depth experience in plutonium reprocessing and metallurgy.'' 
What do you think of this statement and do you believe that the GNEP 
program will lead to widespread dissemination of advanced recycling 
technologies?
    Answer. To the contrary, GNEP aims to close the fuel cycle in a 
manner that reduces the overall proliferation risk in the international 
nuclear fuel cycle. By developing recycle technologies that minimize 
waste, GNEP would make it more feasible to offer reliable nuclear fuel 
services as a viable alternative for countries that might otherwise 
consider developing enrichment or reprocessing capabilities. This would 
support the President's policy of seeking to prevent the further spread 
of those sensitive nuclear fuel cycle technologies. All international 
cooperation under GNEP is subject to export control and technology 
transfer review to ensure that it does not contribute to the spread of 
sensitive technologies. Cooperation on sensitive technologies is taking 
place under bilateral arrangements with countries that already have 
such technology.
    Question 7. What does the empirical evidence show with regard to 
the spread of recycling technologies as used by Great Britain, France, 
Russia and Japan versus the proliferation of enrichment technology?
    Answer. The recycling technologies currently used by several 
foreign countries (the PUREX separations process) was developed in the 
United States and was later declassified and described in the open 
literature (see ``Nuclear Chemical Engineering'', Benedict and Pigford, 
McGraw-Hill Publishing Company, 1957). Although technological 
improvements have been made, the basic process has been well-known for 
fifty years. It was used by India to separate the plutonium used for 
its first atomic explosion (described by India as a peaceful 
detonation) on May 18, 1974. Recently, North Korea used plutonium 
recovered from spent nuclear fuel via the PUREX process to test its 
first weapon.
    The technology associated with uranium enrichment is more complex 
and the relative ease with which uranium enrichment plants used to 
produce low enriched uranium for commercial nuclear power can be 
converted to weapons production with the right technologies is a 
concern. The A.Q. Khan network's proliferation of enrichment 
technologies to countries such as Libya and Iran has been widely 
publicized and is the most glaring example of the proliferation of 
enrichment technology.
    Question 8. Please explain how the GNEP program will be used to 
address the spread of nuclear material and address growing inventories 
of spent nuclear fuel.
    Answer. GNEP is intended to help limit the spread of enrichment and 
reprocessing technologies by offering reliable fuel services as a 
viable alternative for countries that might otherwise consider 
developing their own indigenous enrichment and reprocessing capability. 
By limiting the spread of these technologies, GNEP would limit the 
international spread of the capability to produce the most sensitive 
forms of nuclear material. Most of the countries that have relevant 
fuel cycle capabilities are partners or observers in GNEP, and the two 
countries that currently offer reprocessing services internationally--
Russia and France--are partners. By offering fuel services that include 
assistance in the management and disposition of spent fuel, GNEP would 
help countries manage and draw down their inventories of spent fuel. 
This in turn will reduce pressures for countries to pursue indigenous 
reprocessing capabilities to manage growing inventories of spent fuel.
    Question 9. I understand that 16 nations have joined us in GNEP, 
and not just expressed support but actually signed on the dotted line. 
France, Russia, Japan, Australia, China....what are these states saying 
to you about the future of nuclear power?
    Answer. At the September 16, 2007, GNEP Ministerial, all sixteen 
partners presented remarks about their joining the Partnership and its 
relevance to their nuclear energy policy. In the Statement of 
Principles, the Partners ``share a vision of the necessity of the 
expansion of nuclear energy for peaceful purposes worldwide in a safe 
and secure manner.'' In their remarks they focused on several key 
points. Nuclear power offers a source of reliable energy to meet 
dramatically escalating energy needs in virtually every country, 
without greenhouse gas emissions. Safety, security and nonproliferation 
are prerequisites for nuclear power development, and improved 
proliferation resistance should be incorporated into future nuclear 
energy and fuel cycle systems. The IAEA has an essential role in each 
of these areas, including helping countries develop the capacity to 
meet these requirements. Waste management solutions must be developed 
that deal with used fuel in a more efficient manner consistent with our 
non-proliferation objectives, and the research and development must be 
conducted to find such solutions. Countries interested in nuclear 
energy development stressed that adding nuclear power to their energy 
mix will be an important source of urgently needed electricity or 
desalination to improve the standard of living and to mitigate the 
rising cost of fossil fuels and the emission of greenhouse gases.
    Question 10. In his testimony Dr. Wallace noted the potential 
benefits of advanced simulation in assisting in the design of both the 
separations and fuel fabrication processes to be utilized in GNEP. 
Would this capability be useful in supporting your program?
    Answer. A key part of the long term strategy of the Advanced Fuel 
Cycle Initiative, the domestic technology development component of 
GNEP, is to apply DOE's leadership in advanced simulation as developed 
under the National Nuclear Security Administration (NNSA) Advanced 
Simulation and Computing (ASC) program and the Office of Science 
Advanced Scientific Computing Research (ASCR) program. Science-based 
virtual design capabilities can improve the design process for each of 
the key components of an advanced nuclear fuel cycle system. These 
capabilities would benefit a separations facility where, due to 
extremely high radioactivity levels, design changes are difficult to 
implement after the system has operated and improve the process of 
qualifying new reactor fuel forms which currently can take up to 20 
years and $200 million to develop for each new fuel form. Advanced 
simulation capabilities could also extend to fast reactor designs, 
waste forms and repository analysis, the design of safeguards systems, 
and to improved seismic design of critical nuclear safety systems. In 
short, virtually every aspect of the nuclear fuel cycle including its 
safety, performance, cost, manufacturability, reliability, security and 
proliferation resistance could be improved through the design and 
analysis techniques made possible by advanced computing and simulation. 
This potential and the US leadership in advanced computing is 
internationally recognized. Our key international partners, such as 
Japan and France are expressly interested in working with us to develop 
these computational capabilities.

                      QUESTION FROM SENATOR WYDEN

    Question 1. Earlier in 2007, DOE spent more than $10 million to 
fund 11 detailed siting studies for the GNEP facilities, including 
Hanford. Those studies were to be used in the programmatic 
environmental impact statement (PEIS) process. When will the draft EIS 
be released? Will it rank the 11 sites, and will one or more sites be 
selected as a preferred alternative? What fuel treatment technologies 
and what advanced burner reactor technologies will be included in the 
draft PEIS and will specific technologies be identified as preferred 
alternatives?
    In the Committee hearing, Mr. Spurgeon stated that DOE would not be 
making decisions on which reprocessing and reactor technologies GNEP 
would deploy any time soon and that the NAS panel misunderstood the 
schedule for making these decisions. When will these technology 
decisions be made?
    Answer. The Draft Programmatic Environmental Impact Statement 
(PEIS) is under development and is anticipated to be issued in the near 
future. The draft PEIS will examine a range of technology alternatives, 
covering both near-term and long-term timeframes. The Department is not 
currently planning to identify a preferred site for locating recycling 
facilities. Technology selection is not anticipated until after the 
expected Secretarial decision in 2008.
    Question 2. Please identify all studies and analyses developed by 
the GNEP program of the radioactive waste volumes and sources of the 
different fuel cycles being considered for the program, e.g. 
transuranic, low-level, greater-than-class-C, high-level. DOE is 
currently in violation of the Tri-Party compliance schedule for 
cleaning up radioactive and chemical contamination at Hanford. What 
impact would selection of Hanford as a GNEP reprocessing site have on 
waste volumes and clean-up schedules for the site?
    Answer. The draft PEIS will contain the estimates of wastes 
generated under each of the alternatives being evaluated, including the 
no action alternative. Information included in the Draft PEIS was 
derived from a variety of sources, including the conceptual design 
studies developed to date under GNEP. Copies of those source and 
reference documents will be included in the Administrative Record 
supporting the PEIS. Primary report sources include the following: 
Waste Generation Forecast and Characterization Studies (WH-G-ESR-G-
00051 and WH-G-ESR-G-00054) and AFCF NEPA Data Study Project No. 27989. 
Additional supporting studies and analyses are contained in further 
reports which will be included in the administrative record.
    DOE believes that selecting Hanford as a site for a GNEP 
reprocessing facility would have no impact on the site's clean-up 
schedule. The Hanford clean-up is independent of the GNEP activity by 
NE.
    A number of other studies can be found on our website under 
Congressional reports: http://www.ne.doe.gov/publicInformation/
nePICongressional Reports2.html.
    Question 3. Please identify all studies and analyses developed by 
the GNEP program of the security and proliferation risks of the 
different fuel cycles and the different candidate sites being 
considered for the program. How will the security and the proliferation 
risks of the different fuel cycles and the different candidate sites be 
dealt with in the PEIS?
    Answer. An element of the purpose and need for this action by the 
Department includes supporting the expansion of domestic and 
international nuclear energy production while reducing the risks 
associated with nuclear proliferation. To meet its nonproliferation 
goals with regard to spent nuclear fuel recycling, DOE will only assess 
as reasonable alternatives those processes that do not separate pure 
plutonium. The PEIS will evaluate a range of reasonable alternatives 
that are responsive to this purpose and need. The PEIS will evaluate a 
set of design basis accidents as well as beyond design basis accidents 
for each of the alternatives.
    The Department's National Nuclear Security Administration is 
preparing a nonproliferation impact assessment that will address the 
programmatic alternatives being evaluated in the PEIS and will help 
inform the Secretary's Record of Decision. This assessment will build 
on established evaluation methodologies, particularly the Evaluation 
Methodology for Proliferation Resistance and Physical Protection of 
Generation IV Nuclear Energy Systems, developed by the Proliferation 
Resistance and Physical Protection Evaluation Methodology Expert Group 
of the Generation IV International Forum (Revision 5, dated November 
2006, is available online at http://www.gen4.org/Technology/horizontal/
PRPPEM.pdf). NNSA is refining and applying these methodologies to GNEP 
through the project on Proliferation Risk Reduction Assessment. The 
first report under that project is UREX/COEX Proliferation Risk 
Reduction Study, by Robert Bari, Brookhaven National Laboratory, Jor-
Shan Choi, Lawrence Livermore National Laboratory, Jon Phillips, 
Pacific Northwest National Laboratory, Joseph Pilat, Los Alamos 
National Laboratory, Gary Rochau, Sandia National Laboratories, Roald 
Wigeland, Argonne National Laboratory, Kory Budlong Sylvester, Los 
Alamos National Laboratory, March 13, 2007.
    The conceptual design studies being developed for GNEP will include 
security and proliferation risk considerations in the alternatives 
studies and design process. Security and proliferation resistance are 
considerations that will be addressed through the design process for 
facilities and technologies, and factor into site selection. The design 
process under DOE 0 413.3 also requires the development of a 
vulnerability assessment, beginning in the conceptual design stage, to 
assure adequate security considerations are included in the design. 
Site evaluation in the PEIS for the AFCF includes the potential impacts 
of design basis and beyond design basis accidents to workers, the 
public and the environment.
    A site selection for the Consolidated Fuel Treatment Center and the 
Advanced Burner Reactor will not be made based on this GNEP PEIS. 
Further NEPA review would be required at a future point in time prior 
to any site selection for such facilities.
    Question 4. Please identify all studies and analyses developed by 
the GNEP program of the economic costs and risks of the different fuel 
cycles being considered for the program.
    Answer. A listing of recent economic analysis papers and reports 
based on work sponsored by the program is provided below:

    --D. Shropshire, K. Williams, B. Boore, J.D. Smith, et. al., 2007, 
            Advanced Fuel Cycle Cost Basis, INUEXT-07-12107, April 
            2007.
    --D. Shropshire, K. Williams, J.D. Smith, B. Boore, 2006, Advanced 
            Fuel Cycle Economic Sensitivity Analysis, INUEXT-06-11947, 
            November 2006.
    --D. Shropshire, 2007, A Documented Resource for Nuclear Fuel Cycle 
            Cost Information, Transactions of the American Nuclear 
            Society, Volume 96, June 24-28, 2007, Boston, MA, page 117.
    --K. Williams, 2007, Fuel Cycle Economic Analysis Using an Excel 
            Spreadsheet, Transactions of the American Nuclear Society, 
            Volume 96, June 24-28, 2007, Boston, MA, page 119.
    --V. Bhatt, J. Morton, A. Reisman, J.Lee, 2007, Assessing Market 
            Deployment of GNEP Technologies, Transactions of the 
            American Nuclear Society, Volume 96, June 24-28, 2007, 
            Boston, MA, page 144.
    --E. Schneider, K. Rankin, 2007, An Econometric Model of the 
            Uranium Market, Transactions of the American Nuclear 
            Society, Volume 96, June 24-28, 2007, Boston, MA, page 113.
    --G. Rothwell, C. Braun, 2007, Cost and Market Structures in 
            International Nuclear Fuel Cycles, Transactions of the 
            American Nuclear Society, Volume 96, June 24-28, 2007, 
            Boston, MA, page 146.
    --A. Phillips, J. Jacobson, D. Shropshire, 2007, VISIO1V.ECON A 
            Dynamic Model for Evaluating Nuclear Fuel Cycle Costs, 
            Transactions of the American Nuclear Society, Volume 96, 
            June 24-28, 2007, Boston, MA, page 121.
    --D. Shropshire, J. Morton, 2007, Nuclear Power: Applications of 
            Industrial Ecology, Transactions of the American Nuclear 
            Society, Volume 96, June 24-28, 2007, Boston, MA, page 687.
    --E. Hoffman, J. Smith, 2007, Economics of the Nth Advanced Burner 
            Reactor, Transactions of the American Nuclear Society, 
            Volume 96, June 24-28, 2007, Boston, MA, page 137.
    --G. Rothwell, K. Williams, 2007, Costs of Developing and 
            Commercializing the Advanced Recycle Reactor, Transactions 
            of the American Nuclear Society, Volume 96, June 24-28, 
            2007, Boston, MA, page 135.
    --D. Shropshire, K. Williams, J.D. Smith, B. Boore, 2006, Advanced 
            Fuel Cycle Economic Sensitivity Analysis, Transactions of 
            the American Nuclear Society, Volume 95, November 12-16, 
            Albuquerque, NM, page 172.
    --D. Shropshire, J. Chandler, 2006, Financing Strategies for a 
            Nuclear Fuel Cycle Facility, 14th International Conference 
            on Nuclear Engineering, ICONE14-89255, July 17-20, Miami, 
            FL.

    Copies provided to the Committee.
    Question 5. To date, GNEP development has been financed from 
appropriated funds. What is the DOE's plan to financing development and 
construction of U.S. GNEP fuel cycle facilities? Will these continue to 
be financed from appropriated funds? Or will DOE turn to utility fees 
or other financing mechanism and when will that decision be made?
    Answer. Through the Advanced Fuel Cycle Initiative, the domestic 
technology development component of GNEP, the Department is seeking 
input related to funding options for advanced fuel cycle facilities 
through technical and supporting studies currently being prepared as 
part of the May 2007 Funding Opportunities Announcement. Industry teams 
are preparing technology development roadmaps, business plans, and a 
communications strategy supporting the conceptual design studies in an 
effort to inform a Secretarial decision expected in 2008.

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                                 December 13, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
Hon. Pete V. Domenici,
Ranking Member, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Chairman Bingaman and Ranking Member Domenici: As the United 
States seeks to reduce our reliance on foreign sources of oil and 
reduce our greenhouse gas emissions, it is becoming increasingly clear 
that to meet our current and future energy demands we must ensure that 
we have a balanced portfolio of energy supplies including nuclear. Over 
the last 30 years the United States has reduced its nuclear 
technological base and our leadership position in the world. While 
Congress and the Administration have recently initiated a number of 
important programs to support the deployment of new nuclear generation 
capacity domestically, the Administration's Global Nuclear Energy 
Partnership (GNEP) can be pivotal in re-establishing our nation's 
leadership position domestically and abroad.
    The GNEP program has become one of the most recognizable 
international efforts to address the global use of nuclear energy and 
limit the proliferation risks associated with the nuclear fuel cycle. 
The Administration has made major strides in bringing the international 
community together by concluding agreements with eighteen nations on a 
``Statement of Principles'' that addresses the prospects of expanding 
the peaceful uses of nuclear energy including enhanced safeguards, 
international fuel service frameworks, and advanced technologies. These 
countries have come to the same conclusion: we face growing electricity 
demand concurrent with reducing greenhouse gas emissions to control 
climate change and a strong nuclear program is a key component to 
achieving that end.
    In many respects we are at a critical juncture in demonstrating 
U.S. global leadership in nuclear energy advancements not only in 
developing new generation reactors but, in particular, deploying spent 
nuclear fuel burning and recycling technologies that reduce the waste 
disposal burden on the environment while recovering useable fuel 
material. Today, instead of taking action we continue to cede this 
leadership and promising world market role to countries that have 
continued their efforts to close the nuclear fuel cycle because of the 
United States decision to suspend its support for reprocessing in the 
late 1970's. A lack of commitment to this mission will translate into 
missed job opportunities for the industry and American workers to gain 
from the nuclear resurgence that is currently underway.
    The companies involved in the GNEP program believe, contrary to the 
recent National Academy of Sciences report on the Nuclear Energy 
program, the essential technology to support the goals of GNEP exists. 
In fact, DOE has taken steps to engage the industry to ensure that the 
knowledge and expertise of the private sector is available to support 
the Secretary of Energy's June 2008 Record of Decision on closing the 
fuel cycle in the U.S. The industry focus will be to provide input and 
recommendations from the conceptual design studies, technology 
development roadmaps, business plans, and the communications strategy 
regarding a nuclear fuel recycling center and advanced recycling 
reactor. This effort will better define the scope, schedule, cost and 
business arrangement to determine if a commercial solution for closing 
the fuel cycle in the US is sustainable.
    On behalf of each of our companies and partners, we urge you to 
support the GNEP program. Thank you very much for your consideration of 
this request.
            Sincerely,
                                          Dorothy Davidson,
              VP NE & Science Programs, AREVA Federal Services LLC.
                                            John Wilcynski,
                               Executive VP, Energy Solutions, LLC.
                                             Chris Monetta,
           Senior Vice President, GE-Hitachi Nuclear Americas, LLC.
                                              Ronne Froman,
  Senior Vice President, Management, Energy Group, General Atomics.
                                 ______
                                 
  Statement of the National Research Council of the National Academies

                                SUMMARY

    Growing energy demands, emerging concerns about the emissions of 
carbon dioxide from fossil fuel combustion, the increasing and volatile 
price for natural gas, and a sustained period of successful operation 
of the existing fleet of nuclear power plants have resulted in a 
renewal of interest in nuclear power in the United States. The Office 
of Nuclear Energy (NE) in the U.S. Department of Energy (DOE) is the 
main agent of the government's responsibility for advancing nuclear 
power. One consequence of the renewed interest in nuclear power for the 
NE mission has been rapid growth in the NE research budget: by nearly 
70 percent from the $193 million appropriated in FY 2003 to $320 
million in FY 2006.
    In light of this growth, the FY 2006 President's Budget Request 
asked for funds to be set aside for the National Academy of Sciences to 
review the NE research programs and budget and to recommend priorities 
for those programs given the likelihood of constrained budget levels in 
the future (DOE, 2005). The programs to be evaluated were Nuclear Power 
2010, the Generation IV reactor development program, the Nuclear 
Hydrogen Initiative, the Global Nuclear Energy Partnership (GNEP)/
Advanced Fuel Cycle Initiative (AFCI), and the Idaho National 
Laboratory facilities program. The committee's evaluation of each is 
summarized below, along with its assessment of program priorities and 
oversight and it relevant recommendations.
    All but two members of the committee concur in the assessments 
presented in this report, and their views are presented in Appendix A. 
In particular, all committee members agree that the GNEP program should 
not go forward and that it should be replaced by a less aggressive 
research program. The authors of Appendix A would ``hold DOE R&D 
spending [on the less aggressive fuel cycle research program] to pre-
2003 levels, before AFCI'' and they believe that ``DOE is the wrong 
agent for developing commercial technologies beyond the early 
laboratory stage.''
    Separately, three other committee members who do agree with all the 
recommendations in the report expressed a preference for an alternative 
to the technology preferred by GNEP. They describe this preference in 
Appendix B.

                           NUCLEAR POWER 2010

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

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

    Recommendation.--DOE should expand NHI program interactions with 
industrial and international research organizations experienced in 
chemical processes and operating temperatures similar to those in 
thermochemical water splitting. NE should also broaden the hydrogen 
production system performance metrics beyond economics for example, it 
could use the Generation IV performance measures of economics, safety, 
and sustainability.

           OTHER GENERATION IV NUCLEAR ENERGY SYSTEM PROGRAMS

    The second major concept for development in the Generation IV 
program, the SFR, seems vague at this time and appears to involve 
selected studies of technology issues that are principally beneficial 
for commercialization rather than being explicitly linked to the long-
term technology needs of nuclear energy. The committee is concerned 
that the Generation IV concept evaluation criteria for reactor 
development adopted by the Generation IV Roadmap were not applied in 
the selection of the VHTR and SFR. The Generation IV R&D priorities 
have been shifting with minimum discussion of criteria and 
alternatives.
    The program resources are barely adequate for basic studies related 
to NGNP and the VHTR design and entirely inadequate for exploring the 
SFR at a research level (unless the new GNEP program also includes 
basic research components), for investigating other reactor concepts, 
and for developing crosscutting reactor technology systems. The use of 
the Generation IV program metrics to compare the high temperature 
reactors and fast-reactor systems for dual missions--a process heat 
mission and a fuel cycle flexibility mission--appears to be absent from 
the current program.
    Recommendation.--Within the Generation IV program, NE should 
modestly and reasonably support long-term base technology options other 
than the VHTR and the SFR, particularly for actinide management, using 
thermal and fast reactors and appropriate fuels.
    Recommendation.--Though NE currently focuses on the VHTR for 
process heat and the SFR for advanced fuel cycles, it should assess the 
cost-benefit of a single reactor system design to meet both needs.

     THE ADVANCED FUEL CYCLE INITIATIVE AND GLOBAL NUCLEAR ENERGY 
                          PARTNERSHIP PROGRAMS

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

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

    Three facilities are key components of the GNEP program as 
currently planned: (I) a nuclear fuel recycling center, or centralized 
fuel treatment center (CFTC), (2) an advanced sodium-cooled burner 
reactor (ABR), a fast-neutron reactor, and (3) an advanced fuel cycle 
facility (AFCF). At the time of the writing of this report, the latest 
information the committee had was that the baseline separation process 
was UREX+1a, although some other comparable separation technology, most 
notably pyroprocessing, may be adopted at a later stage.
    All committee members agree that the GNEP program should not go 
forward and that it should be replaced by a less aggressive research 
program. A majority of the committee favors fuel cycle and fast reactor 
research, as was being conducted under AFCI; however, two committee 
members recommend against such research, as described in Appendix A. 
The GNEP program is premised on an accelerated deployment strategy that 
will create significant technical and financial risks, engendered by 
the premature narrowing of technical options. Moreover, there has been 
insufficient external input, including independent, thorough peer 
review of the program. Specifically,

   Domestic waste management, security, and fuel supply needs 
        are not adequate to justify early deployment of commercial-
        scale reprocessing and fast reactor facilities. In particular, 
        the near-term need for deployment of advanced fuel cycle 
        infrastructure to avoid a second repository for spent fuel is 
        far from clear. Even if a second repository were to be required 
        in the near term, the committee does not believe that GNEP 
        would provide short-term answers.
   The state of knowledge surrounding the technologies required 
        for achieving the goals of GNEP is still at an early stage, at 
        best a stage where one can justify beginning to work at an 
        engineering scale. However, it seems to the committee that DOE 
        has given more weight to schedule than to conservative 
        economics and technology. The committee concludes that the case 
        presented by the promoters of GNEP for an accelerated schedule 
        for commercial construction is unwise. In general, the 
        committee believes that the schedule should be guided by 
        technical progress in the program.
   The cost of the GNEP program is acknowledged by the DOE not 
        to be commercially competitive under present circumstances. 
        There is no economic justification to go forward with this 
        program at anything approaching commercial scale. DOE claims 
        that the GNEP is being implemented to save the United States 
        nearly a decade in time and a substantial amount of money. In 
        view of the technical challenges involved. the committee 
        believes that the opposite will likely be true.
   Several fuel cycles could potentially meet the eventual goal 
        of creating a justifiable recycling system. However none of the 
        cycles proposed, including UREX+ and the sodium fast reactor, 
        is at a stage of reliability and understanding that would 
        justify commercial-scale construction at this time. Significant 
        technical problems remain to be solved.
   The qualification of multiply-recycled transuranic fuel is 
        far from reaching a stage of demonstrated reliability. Because 
        of the time required to test the fuel through repeated 
        refabrication cycles, achieving a qualified fuel will take many 
        years.

    The committee believes that a research program similar to the 
original AFCI is worth pursuing.\1\ Such a program should be paced by 
national needs, taking into account economics, technological readiness, 
national security, energy security, and other considerations. As noted 
in Chapter 1, however, considerable uncertainty surrounds the 
technology and policy options that will ultimately satisfy these needs. 
For this reason, the committee believes that the program described 
below should be sufficiently robust to provide useful technology 
options for a wide range of possible outcomes. On the other hand, the 
program should not commit to the construction of a major demonstration 
or facility unless there is a clear economic, national security, or 
environmental policy reason for doing so.
---------------------------------------------------------------------------
    \1\ The differing views of two committee members are presented in 
Appendix A.
---------------------------------------------------------------------------
    Recommendation.--DOE should develop and publish detailed technical 
and economic analyses to explain and describe UREX-Fla and fast reactor 
recycle as well as a range of alternatives. An independent peer review 
group, as recommended in Chapter 6, should review these analyses. DOE 
should pursue the development of other separation processes until a 
fully fact-based comparison can be made and a decision taken on which 
process or processes could be carried to engineering 
scale.Recommendation. DOE should devote more effort to the 
qualification of recycled fuel, as it poses a major technical 
challenge.
    Recommendation.--DOE should compare both the technical and 
financial risks of such a program with the potential benefits. Such an 
analysis should undergo an independent, intensive peer review.
    Recommendation.--DOE should bring together other appropriate 
divisions of DOE and nations that recycle fuel, because one aspect of 
the GNEP program is that some nations recycle fuel for other user 
nations.
    Recommendation.--DOE should defer the Secretarial decision, now 
scheduled for 2008, which the committee believes is not credible. 
Moreover, if it makes this decision in the future, DOE should target 
construction of new technologies at most at an engineering scale. DOE 
should commission an independent peer review of the state of knowledge 
as a prerequisite to any Secretarial decision on future research 
programs.

                       IDAHO NATIONAL LABORATORY

    NE is the lead Program Secretarial Office (PSO) for the Idaho 
National Laboratory (INL), and as such a significant part of NE's 
management responsibility and budget is devoted to INL. This 
responsibility will continue to be a major one for NE, since the 
management of INL's physical facilities presents two challenges.
    First, new or rejuvenated facilities are required to support the 
new mission and vision for the laboratory. The laboratory envisions 
that within 10 years, INL will be the preeminent national and 
international nuclear energy center with synergistic, world-class, 
multi-program capabilities and partnerships. To achieve its ambitious 
goals, INL must attract and retain world-class scientists and engineers 
in a multiplicity of engineering and scientific disciplines. INL must 
have a budget allowing it to acquire and maintain state-of-the-art 
facilities and equipment that will be used by researchers of the 
highest technical competence to lead the development of nuclear power 
as a valued energy option nationally and internationally.
    The second challenge is to maintain the remaining infrastructure in 
good condition. NE/INL is the landlord for a large, multitenant site in 
deteriorating condition. DOE employs several metrics to assess the 
condition of infrastructure. Overall, the INL facilities are rated 
adequate and the overall utilization, good. However, the backlog of 
deferred maintenance is high in relation to the value of the assets. In 
FY 2004 the ratio stood at 11.8 percent for INL's nonprogrammatic 
assets; the DOE target for this ratio is 2 to 4 percent.
    The committee considers that INL is an important facility and 
provides important capabilities to support NE's mission, which is to 
use nuclear technology to provide the United States with safe, secure, 
environmentally responsible and affordable energy. INL has developed a 
strategic vision and a long-term (10 years) plan on this basis. 
However, the funding being provided to INL by NE is substantially less 
than what is needed to fulfill that vision.
    Recommendation.--NE should set up and document a process for 
evaluating alternative approaches For accomplishing NE-sponsored 
activities, assigning these tasks appropriately, and avoiding 
duplication.
    Recommendation.--NE should set up a formal, high-level working 
group jointly with the Idaho Operation Office (ID) and INL (Battelle 
Energy Alliance [BEA]). Consideration

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