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



 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                       WEDNESDAY, APRIL 18, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:35 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Feinstein, Reed, 
Domenici, Craig, and Allard.

                          DEPARTMENT OF ENERGY

                National Nuclear Security Administration

STATEMENT OF HON. THOMAS P. D'AGOSTINO, ACTING UNDER 
            SECRETARY FOR NUCLEAR SECURITY AND 
            ADMINISTRATOR, NATIONAL NUCLEAR SECURITY 
            ADMINISTRATION
ACCOMPANIED BY:
        WILLIAM H. TOBEY, DEPUTY ADMINISTRATOR FOR DEFENSE NUCLEAR 
            NONPROLIFERATION, NATIONAL SECURITY ADMINISTRATION
        ADMIRAL KIRK DONALD, DIRECTOR, NAVAL NUCLEAR PROPULSION, U.S. 
            NAVY

                  STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. This is a hearing of the Appropriations 
Subcommittee on Energy and Water Development. We will be joined 
shortly by ranking member, Senator Domenici. And, I welcome 
Senator Craig.
    The hearing today will be for the purpose of reviewing the 
fiscal year 2008 budget request for the National Nuclear 
Security Administration (NNSA). The proposed budget for NNSA is 
nearly $9.4 billion. That's 39 percent of the Department of 
Energy's total budget for fiscal year 2008, an increase of $306 
million above fiscal year 2007's operating plan, but only a $71 
million increase over the administration's fiscal year 2007 
budget request. The weapons activities request is $6.5 billion. 
The nuclear nonproliferation request is $1.67 billion. This 
represents about 18 percent of the NNSA total budget. The 
remainder of the NNSA's budget is made up of $808 million for 
naval reactors and $394 million for the Office of the 
Administrator.
    NNSA's fiscal year 2008 budget request appears measured 
when weighed against fiscal year 2006 and 2007, but if you go 
back a few years, we see a very substantial increase in funding 
has taken place in these accounts. In 2001, NNSA's budget was 
$6.7 billion. That has grown by about $2.7 billion in the past 
eight fiscal years.
    I'm trying to, as a new chairman of this subcommittee, 
understand as much as I can about what this budget means, what 
these activities are. This is, obviously, an interesting, 
complicated area of the Federal budget and it's an interesting 
and complicated set of policy issues.
    Mr. D'Agostino, you represent an organization that is 
involved in very important and very complicated matters. And, 
we appreciate your being here today to testify. You are 
involved in our nuclear weapons programs in this part of our 
Department of Energy. There's not much that we do that is more 
important than those issues, including the issue of 
nonproliferation. Mr. Tobey, you are involved in that issue.
    I'll be asking some questions later about the issue of the 
construct of nuclear weapons, the RRW program, the issue of the 
nonproliferation efforts that are underway. This is a, just a 
critically important function of our Government. We need to try 
to make sure we get this right. It's about national security. 
It's about stopping the spread of nuclear weapons around the 
world, stopping the spread of nuclear technology.
    We face, at this time, very significant issues with 
countries like Iran and North Korea over the issue of 
enrichment capabilities and nuclear weapons production. The 
list of nuclear weapon countries, both rogue and nonrogue, 
could very well grow in future years. If that's the case, that 
will, in my judgment, increase the threat to our country.
    And so, all of these things are very, very important. I 
can't have answers, don't have answers to all of the questions 
that are posed by these issues that we'll talk about today. 
But, I think we need to continue to explore and ask questions 
about them all and try to understand where we're headed.
    Let me call on Senator Craig. If you have any opening 
comments, Senator Craig.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Well, Mr. Chairman, there is a portion of 
this budget that I know a good a deal about, so let me tell you 
about it. And, I say that because few understand and oftentimes 
are quite surprised when I say out in the middle of the high 
deserts of Idaho rests a nuclear submarine or at least the 
ingredients of it as it relates to nuclear propulsion. And, I 
say that because I'm talking about the construct, or the 
construction of, in 1953, a Nautilus prototype reactor, which 
really started our nuclear Navy and I suspect--Admiral, did you 
train in Idaho?
    Admiral Donald. I did not, sir.
    Senator Craig. You did not.
    Mr. D'Agostino. I did. Yes, sir, I did.
    Senator Craig. There, Mr. D'Agostino did. And, quite often 
when you talk to those of the nuclear Navy, they will have 
spent time in Idaho. Now, having said that, that is really, as 
we all know, one of the great success stories of the nuclear 
side of us, as a country. Not only what we've done with the 
nuclear Navy, the successes, the changes in the type of 
reactors, the fuel cycle.
    I say this publicly, loudly, as often as I can, had we been 
as dedicated to the commercial side of nuclear electrical 
generation as we were to nuclear propulsion and the refinement 
of reactor and fuel cycle, we would without question be leading 
the world today in highly efficient reactors of a kind that we 
are attempting to imagine. But, we're not there because we 
stopped. We did not do that with the nuclear Navy.
    Also, I will say that in 1967, the advanced test reactor at 
the INL, our national lab, began to tackle the nuclear fuels 
reliability and materials testing issue. It was commissioned in 
1967 to support the Navy's nuclear propulsion program. And, all 
I can say is that all of us can be extremely pleased with those 
successes. There is none finer in the world today than what we 
have accomplished with our nuclear Navy.
    And, as a result of that, I am, you know, pretty open, 
pretty direct, and extremely proud that so much of that was 
accomplished at the national laboratory in southeastern Idaho. 
So, obviously I look at the broader issues involved in this 
portion of the budget, but I focus very closely on a portion of 
it that deals with the Idaho facility and the ongoing work that 
we do and the science. The Office of Energy, Nuclear Energy and 
Science and transitioning the ATR to a national users facility 
that industry and the academic community can access for all 
that we're attempting to do today, Mr. Chairman, as it relates 
to the dynamics of the nuclear industry and the fuels that will 
ultimately be part of that growing industry as we now see it.
    Senator Dorgan. Senator Craig----
    Senator Craig. Again, gentlemen, thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Thank you very much.
    Senator Reed.
    Senator Reed. Mr. Chairman, I have no opening statement. 
Thank you though.
    Senator Dorgan. Let me make one additional comment, because 
I think it's important to say that the issues we will talk 
about today, RRW, nonproliferation, and so on, are not issues 
that we deal with in isolation. These issues are part of a 
larger national and international discussion about nuclear 
weapons policies, about stock, our stockpile, reliability, 
about nonproliferation, about test ban treaties, and so on. 
There's a, so my point is, these are big issues. You know, we 
work everyday in areas here in Congress that have some big 
issues and some small issues. These are very big issues that 
have national and international consequences.
    And, Mr. D'Agostino, thank you for being here. It's been a 
pleasure to meet you and begin to work with you in these 
months. And, I would include your entire statement as a part of 
the permanent record and ask you to summarize and introduce as 
well, Admiral Donald and Mr. Tobey.

                 STATEMENT OF HON. THOMAS P. D'AGOSTINO

    Mr. D'Agostino. Thank you, Mr. Chairman and members of the 
subcommittee. I'm Tom D'Agostino, the Deputy Administrator for 
Defense Programs and I'm accompanied today by Will Tobey, on my 
left, who is the Deputy Administrator for Defense Nuclear 
Nonproliferation. And, Admiral Kirk Donald, on my right, the 
Deputy Administrator for Naval Reactors.
    As you mentioned earlier, the President's fiscal year 2008 
budget request for the NNSA is $9.4 billion. It supports three 
basic national security missions. The first is to assure the 
safety, security, and the reliability of the U.S. nuclear 
stockpile, while at the same time transforming that stockpile, 
making it smaller essentially, and the associated 
infrastructure. The second major mission is to reduce the 
threat posed by nuclear proliferation. The third is to provide 
a reliable and safe nuclear reactor propulsion system for the 
United States Navy.
    In order to accomplish this mission, we developed a vision, 
which we call Complex 2030. And simply put, this vision has 
four main portions to it. The first is to transform the nuclear 
weapons stockpile by making it smaller, by making it safer, and 
by making it more secure. The second element is to reduce the 
size of the nuclear weapons infrastructure, decreasing the 
footprint in the United States of that infrastructure and the 
impact on the environment. The third is to change the way we do 
business, drive more efficient business processes. And, the 
fourth is to sustain and improve the science and technology 
base that's gotten us to this point and allows us to have such 
a strong national security.
    I'm pleased to report today that stockpile stewardship is 
working. This program has successfully sustained the safety, 
security, and reliability of the U.S. nuclear arsenal without 
the need to conduct an underground nuclear test. Many actions 
to transform the size and operations of the complex, transform 
the stockpile, and drive the science and technology base are 
well underway.
    We are reducing the number of sites with large quantities 
of special nuclear materials and consolidating these materials 
within the remaining sites. We're maintaining an accelerated 
rate of dismantlement of retired warheads. We want to take 
these weapon systems apart. We are reconstituting the nuclear 
weapons production capability and we have revived our ability 
to extract tritium for use in the stockpile at our new tritium 
extraction facility in South Carolina.
    I'd like to emphasize that our recent Reliable Replacement 
Warhead announcement addressed the selection of a baseline for 
further study. It was not an announcement to actually, or a 
decision to actually, build a replacement warhead.
    Over the next 9 to 12 months, our plans are simply to 
develop a detailed cost, scope, and schedule baseline for a 
Reliable Replacement Warhead for the Trident submarine launched 
ballistic missile. With this baseline, we'll be able to develop 
the details and the plans necessary for us to evaluate whether 
we need to make a decision on further reducing the number of 
life extensions that we have planned and reducing the overall 
size of the stockpile itself. We will work very closely with 
the Congress as we move forward, to ensure that we proceed in a 
step-wise measured and well understood manner in this respect.
    One of the major benefits of a Reliable Replacement Warhead 
approach is that it reinforces our nonproliferation commitments 
and objectives. This strategy will allow us to increase our 
warhead dismantlement rate, sending a strong message to the 
world that we're taking meaningful steps toward further 
stockpile reductions. Additionally, increased long-term 
confidence and the credibility of the U.S. nuclear deterrent 
will assure allies and obviate any need for them to develop and 
field their own nuclear forces.
    Finally, the improved security features of a Reliable 
Replacement Warhead concept will prevent unauthorized use, 
should this warhead ever fall in the hands of terrorists. In 
the area of nuclear nonproliferation, the NNSA has worked with 
over 100 international partners to detect, prevent, and reverse 
proliferation of weapons of mass destruction. We're securing 
and reducing the quantity of nuclear and radiological 
materials, bolstering border security overseas, strengthening 
international nonproliferation and export control regimes, and 
conducting cutting-edge research and development of nuclear 
detection technologies. All of these are key mission areas for 
the nonproliferation program.
    Meeting our commitment under the Bratislava Agreement, to 
conclude security upgrade activities at the Russian nuclear 
sites by the end of 2008, is our highest priority. As a result 
of our efforts to accelerate this work, we are well positioned 
to successfully reach this milestone on schedule. In addition 
to our work with Russia, some of the highlights in the 2008 
budget include completing installation of radiation detection 
monitors at ports in Belgium, Oman, and the Dominican Republic 
and continuing the MOX fuel fabrication facility project to 
eventually dispose of surplus U.S. plutonium and support in the 
U.S. role in international nonproliferation efforts.
    The Naval Reactors Program includes development work 
necessary to ensure nuclear propulsion technology provides 
options for maintaining and upgrading current capabilities, as 
well as meeting future threats to U.S. security.
    A majority of funding supports the top priority of ensuring 
the safety and reliability of the 103 operating naval nuclear 
propulsion plants. This work involves continual testing, 
analysis, and monitoring of plant and core performance, which 
becomes more important as the reactor plants age.
    The nature of this business demands a careful and measured 
approach to developing and verifying nuclear technology. 
Designing needed component systems and processes and 
implementing them in existing and future plant designs.
    Long-term program goals have been to increase core energy, 
to achieve life-of-the-ship cores and to eliminate the need to 
refuel nuclear powered ships. Efforts associated with this 
objective have resulted in plant core lives that are sufficient 
for a 30-plus year submarine and an extended core life planned 
for the next generation aircraft carrier.
    In summary, there is an effective synergy between the 
NNSA's weapons activities and nonproliferation activities. For 
example, we have dismantled more than 13,000 weapons since 
1988. Plans are operationally deployed, United States, Russian, 
and strategic nuclear warheads will not exceed 1,700 to 2,200 
by December 2012. In 2003, the Department of Energy completed 
dismantlement of most nonstrategic nuclear warhead, nuclear 
weapons, limiting our stockpile of these systems to less than 
one-tenth of cold war levels.
    In 2004, President Bush approved a plan that will cut the 
U.S. stockpile by almost one-half from the 2001 level. And, by 
the end of 2012, the Department's efforts will have reduced the 
stockpile to its smallest level in several decades. In addition 
to weapons dismantlement, the Department is making tremendous 
progress to reduce and eliminate fissile material made surplus 
to defense requirements.

                           PREPARED STATEMENT

    I'm confident the NNSA is heading in the right direction in 
the coming fiscal year. This concludes my statement and I look 
forward to your questions.
    Thank you, Mr. Chairman.
    [The statement follows:]

            Prepared Statement of Hon. Thomas P. D'Agostino

    Thank you for the opportunity to discuss the President's fiscal 
year 2008 budget request for the National Nuclear Security 
Administration (NNSA). This is my first appearance before this 
committee as the Acting Under Secretary for Nuclear Security and NNSA 
Administrator, and I want to thank all of the members for their strong 
support for our vital national security missions.
    In the 7th year of this administration, with the strong support of 
Congress, NNSA has achieved a level of stability that is required for 
accomplishing our long-term missions. Our fundamental national security 
responsibilities for the United States include:
  --assuring the safety, security and reliability of the U.S. nuclear 
        weapons stockpile while at the same time transforming the 
        stockpile and the infrastructure that supports it;
  --reducing the threat posed by nuclear proliferation; and
  --providing reliable and safe nuclear reactor propulsion systems for 
        the U.S. Navy.
    The fiscal year 2008 budget request for $9.4 billion, an increase 
of $306 million from the fiscal year 2007 operating plan, supports the 
crucial missions to ensure the Nation's nuclear security.

                           WEAPONS ACTIVITIES

    Stockpile Stewardship is working--the nuclear weapons stockpile 
remains safe, secure and reliable. Throughout the past decade, the 
Stockpile Stewardship Program (SSP) has proven its ability to 
successfully sustain the safety, security and reliability of the 
nuclear arsenal without resorting to underground nuclear testing. The 
SSP also enables the United States to provide a credible strategic 
deterrent capability with a stockpile that is significantly smaller. To 
assure our ability to maintain essential military capabilities over the 
long-term, however, and to enable significant reductions in reserve 
warheads, we must make progress towards a truly responsive nuclear 
weapons infrastructure as called for in the Nuclear Posture Review 
(NPR). The NPR called for a transition from a threat-based nuclear 
deterrent, with large numbers of deployed and reserve weapons, to a 
deterrent that is based on capabilities, with a smaller nuclear weapons 
stockpile and greater reliance on the capability and responsiveness of 
the Department of Defense (DOD) and NNSA infrastructure to adapt to 
emerging threats.
    To meet these objectives, we developed a transformation vision and 
strategy, the cornerstones of which are Complex 2030 and the Reliable 
Replacement Warhead (RRW). We are boldly moving forward to implement 
this strategy now, bringing us closer to achieving an even smaller 
stockpile, one that is safer and more secure, one that offers a reduced 
likelihood that we will ever again need to conduct an underground 
nuclear test, and ultimately, one that enables a much more responsive 
nuclear weapons infrastructure.
    Over the next several years, our performance will not only be 
measured by the success of our continuing efforts to maintain the 
nuclear stockpile, but also, by the success of our efforts to plan and 
achieve a truly responsive nuclear weapons infrastructure for the long-
term strategic needs of the Nation. What do we mean by ``responsive 
nuclear weapons infrastructure?'' By ``responsive'' we refer to the 
resilience of the nuclear enterprise to unanticipated events or 
emerging threats, and the ability to anticipate innovations by an 
adversary and to counter them before our deterrent is degraded. 
Unanticipated events could include complete failure of a deployed 
warhead type or the need to respond to new and emerging geopolitical 
threats.
    The elements of a responsive infrastructure include the people, the 
science and technology base, the facilities and equipment to support a 
right-sized nuclear weapons enterprise as well as practical and 
streamlined business practices that will enable us to respond rapidly 
and flexibly to emerging needs. More specifically, a responsive 
infrastructure must provide proven and demonstrable capabilities, on 
appropriate timescales, and in support of national security 
requirements.
    We are focused on four implementing strategies to achieve our 
transformational objectives: (1) transform to a modernized, more cost-
effective safe and secure complex; (2) transform the nuclear stockpile 
in partnership with the DOD; (3) create a fully integrated and 
interdependent complex; and, (4) drive the science and technology base 
essential for long-term national security.
    We are taking many concrete steps today to make this transformation 
vision a reality. The completion of a Supplemental Programmatic 
Environmental Impact Statement (PEIS) for Complex 2030 in accordance 
with the National Environmental Policy Act (NEPA) will mark the most 
significant of these steps. Although the original notice of intent for 
the PEIS did not include a Consolidated Nuclear Production Center 
(CNPC), we have determined that it is important to include this concept 
as an alternative to be evaluated in the draft PEIS. The scoping period 
concluded in January 2007, and a Record of Decision for the future 
configuration of the Complex is anticipated in 2008. While we await the 
results of the NEPA process, many actions to transform the stockpile, 
transform the operation of the Complex, and drive the science and 
technology base are already well underway. Specifically, we are:
  --Reducing the number of sites with Category I/II special nuclear 
        material (SNM) and consolidating such material within the 
        remaining sites. This process has begun with the initial 
        shipment in 2006 of plutonium from Lawrence Livermore National 
        Laboratory (LLNL) and the removal of Category I/II material 
        from Los Alamos National Laboratory (LANL) Technical Area 18. 
        Within the next 5 years, we expect to eliminate the need for 
        Category I/II SNM security at Sandia National Laboratory (SNL).
  --Dramatically accelerating the dismantlement of retired weapons. The 
        Pantex Throughput Improvement Program has resulted in a 
        significant improvement in throughput and we expect our 
        dismantlement rate for fiscal year 2007 to exceed that of 
        fiscal year 2006 by nearly 50 percent. Additional activities 
        are also underway to increase the rate at which weapons can be 
        dismantled and dispositioned at Y-12.
  --Reconstituting the Nation's nuclear weapon production capability by 
        implementing our plans to ramp up to 30-50 pits per year at 
        LANL by 2012.
  --Reviving our ability to extract tritium for use in the stockpile at 
        the new Tritium Extraction Facility at the Savannah River Site 
        (SRS).
  --Developing a weapons program Science and Technology roadmap to 
        define the full set of capabilities needed to sustain the 
        future stockpile.
  --Streamlining and improving business practices by adding multi-site 
        incentives to current contracts, enhancing line management 
        structures to strengthen accountability, consolidating facility 
        organizations and establishing a systems integration structure.
    To foster confidence in the transformation process and to ensure 
that the Complex remains focused on meeting our current commitments, we 
established a ``Getting the Job Done'' list for the nuclear weapons 
complex in April 2006. By January 2007, the following commitments were 
complete: (1) delivering B61-7 and B61-11 Alt 357 Life Extension 
Program (LEP) first production units; (2) delivering the full 
capability of the Advanced Simulation and Computing Purple Machine; (3) 
updating pit lifetime estimates; (4) supporting the Nuclear Weapons 
Council (NWC) decision in November 2006 to proceed with the RRW 
strategy; and (5) extracting tritium for use in the stockpile at the 
new Tritium Extraction Facility.
    The weapons complex is also on track to fulfill the remaining 
fiscal year 2007 commitments of: (1) continuing to deliver our products 
(e.g., limited life components) to DOD; (2) eliminating the backlog of 
surveillance units consistent with an enhanced evaluation strategy 
(except the W84 and W88); (3) accelerating the dismantlement of retired 
weapons in fiscal year 2007 by 50 percent; (4) delivering the W76-1 LEP 
first production unit; and (5) certifying the W88 with a new pit and 
manufacturing 10 W88 pits in fiscal year 2007. Delivery on these and 
future near-term commitments during transformation of the weapons 
complex is essential to the continued safety, security and reliability 
of the stockpile.
    Another area where we are making tremendous progress to transform 
the Complex is in our efforts to secure nuclear weapons, weapons-usable 
materials, information, and infrastructure from theft, compromise or 
harm. We established and staffed within the Office of Defense Nuclear 
Security, a Program Evaluation Office to ensure the effectiveness of 
both our implemented security programs and security line management 
oversight. Additionally, we have met the requirements of the 2003 
Design Basis Threat and are firmly on track to meet the requirements of 
the 2005 DBT at all sites by fiscal year 2011. We are also rapidly 
improving our cyber security standards and practices. As the committee 
is aware, we recently experienced a major cyber security incident at 
LANL. While this incident has highlighted some additional areas for 
improvement, NNSA has been vigorously implementing measures over the 
last 2 years to strengthen the cyber security posture across the 
Complex. We are strongly committed to and are actively addressing the 
issues identified by the LANL incident and applying the lessons learned 
complex-wide. Sustaining and improving the security of the nuclear 
weapons complex is an integral component of NNSA's core mission, and 
thus represents one of our highest priorities.
    As we continue to draw down the stockpile, we have become concerned 
that our current path--successive refurbishments of existing warheads 
developed during the cold war and to stringent cold war 
specifications--may pose an unacceptable risk to maintaining high 
confidence in system performance over the long-term. Specifically, the 
directors of our nuclear weapons laboratories have raised concerns 
about their ability to assure the reliability of the legacy stockpile 
over the very long-term absent nuclear testing. Our DOD partners share 
these concerns. The evolution away from tested designs through a LEP 
approach, resulting from inevitable accumulations of small changes over 
the extended lifetimes of these highly optimized systems, is what gives 
rise to these concerns.
    Our decision to embark on the path to an RRW does not result from a 
failure of the stockpile stewardship program, as some have suggested, 
but is a reflection of its success. The SSP has revealed the need to 
pursue this new RRW path. Moreover, aggressive pursuit of the new 
scientific tools currently in use and being developed under the SSP is 
essential, not only to sustain existing warheads as long as they are 
needed, but to our efforts to design, develop and produce replacement 
warheads that are safer, more reliable, and cost-effective over the 
long term without nuclear testing.
    We are pursuing the RRW strategy to ensure the long-term 
sustainment of the military capabilities provided by warheads in the 
existing stockpile, not to develop warheads for new or different 
military missions. Another major driver for the RRW approach was the 
realization after 9/11 that the security threat to our nuclear 
stockpile had fundamentally changed. The security features in today's 
stockpile are commensurate with technologies that were available during 
the cold war and with the threats facing the United States at that 
time. Major enhancements in security are not readily available through 
system retrofits via the LEP approach.
    We believe that features of the RRW concept will serve as the key 
``enabler'' for achieving a smaller, more efficient and responsive 
infrastructure and opportunities for a smaller stockpile. The RRW will 
relax cold war design constraints that maximized yield to weight ratios 
and thereby allows us to design replacement components that are easier 
to manufacture, are safer and more secure, eliminate environmentally 
dangerous materials, and increase design margins, thus ensuring long-
term confidence in reliability. Moving forward with the RRW program 
will further allow us to take advantage of the scientists and engineers 
who are retiring soon and who possess the unique skills and experience 
of designing, developing, and producing nuclear weapons.
    Moreover, the benefits of the RRW approach reinforce our 
nonproliferation commitments and objectives. Because these warheads 
would be designed with more favorable performance margins, and be less 
sensitive to incremental aging effects, they would reduce the 
possibility that the United States would ever be faced with a need to 
conduct a nuclear test to diagnose or remedy a stockpile reliability 
problem. This will bolster efforts to dissuade other countries from 
testing. Moreover, once a transformed production complex demonstrates 
that it can produce replacement warheads on a timescale in which 
geopolitical threats could emerge, or respond in a timely way to 
technical problems in the stockpile, then we can eliminate many spare 
warheads, reducing further the nuclear stockpile. The RRW strategy will 
allow us to increase our warhead dismantlement rate, sending a strong 
message to the world that we are taking meaningful steps towards 
further stockpile reductions. Additionally, increased confidence in the 
U.S. nuclear deterrent will assure allies and obviate any need for them 
to develop and field their own nuclear forces. Finally, the improved 
security features of RRW will prevent unauthorized use should a warhead 
ever fall into the hands of terrorists.
    On November 30, 2006, the NWC established the feasibility of the 
RRW program as a long-term strategy for maintaining a safe, secure and 
credible nuclear deterrent. On March 2, 2007, the Nuclear Weapons 
Council (NWC) approved a design for a joint NNSA and U.S. Navy program 
to provide a replacement warhead for a portion of the Nation's sea-
based nuclear weapons. We have begun the process for the RRW design 
definition and cost study, the results of which will inform the 
decisionmaking process within the administration and Congress as to 
whether to proceed to the next phase, engineering development.

                        NUCLEAR NONPROLIFERATION

    Acquisition of nuclear weapons, weapons of mass destruction (WMD) 
capabilities, technologies, and expertise by rogue states or terrorists 
stands as one of the most potent threats to the United States and 
international security. The continued pursuit of nuclear weapons by 
terrorists and states of concern underscores the urgency of NNSA's 
efforts to secure vulnerable nuclear weapons and weapons-usable nuclear 
materials, to improve capabilities to detect and interdict nuclear 
weapons or materials, to halt the production of fissile material, and 
ultimately, to dispose of surplus weapons-usable materials. The fiscal 
year 2008 budget request will enable NNSA to continue the activities 
that support these crucial threat reduction initiatives.
    Preventing access to nuclear weapons and material has many 
dimensions. Our number one highest priority is to keep these dangerous 
materials out of the hands of the world's most dangerous actors. Absent 
access to sufficient quantities of key fissile materials, there can be 
no nuclear weapon. Much of our emphasis has focused on Russia because 
that is where most of the poorly secured material was located. We have 
made remarkable progress cooperating with Russia to strengthen 
protection, control, and accounting of its nuclear weapons and 
materials. Meeting our commitment under the Bratislava Joint Statement 
to conclude security upgrade activities at Russian nuclear sites by the 
end of 2008 will be our chief priority in fiscal year 2008. As a result 
of our efforts to accelerate this work in the wake of 9/11 and the 
momentum created by the Bratislava process, we are well-positioned to 
reach this significant milestone on schedule. Although our direct 
upgrade efforts are drawing to a close after over a decade of work, we 
will continue to work cooperatively with Russia to ensure the long-term 
sustainability of the systems and procedures we have implemented.
    Not all nuclear material of concern is located in Russia. We are 
working with other partners to secure weapons-usable nuclear materials 
worldwide and to strengthen security at civil nuclear facilities. One 
area of concern is research reactors, which often use a highly enriched 
uranium (HEU) fuel suitable for bombs. Our Global Threat Reduction 
Initiative (GTRI) seeks to convert research reactors worldwide from HEU 
to low enriched uranium (LEU) fuel and further to repatriate U.S. and 
Russian-supplied HEU from these facilities to its country of origin. A 
major accomplishment was the return of 268 kilograms of Soviet-origin 
HEU from Germany to Russia, where it will be down blended to LEU fuel. 
This repatriation operation represents the largest shipment of Soviet-
origin HEU conducted to date under the GTRI.
    We are taking aggressive steps to interdict weapons-usable nuclear 
materials and to prevent dissemination of nuclear related technology 
via strengthened export controls and improved international 
cooperation. As a complement to improving physical security, the Second 
Line of Defense Program works to enhance our foreign partners' ability 
to interdict illicit trafficking in nuclear materials. Under this 
program, we deploy radiation detection systems at high-risk land-border 
crossings, airports and seaports, increasing the likelihood of 
interdiction of diverted nuclear materials entering or leaving the 
country.
    The Megaports Initiative, established in 2003, responds to concerns 
that terrorists could use the global maritime shipping network to 
smuggle fissile materials or warheads. By installing radiation 
detection systems at major ports throughout the world, this initiative 
strengthens the detection and interdiction capabilities of our partner 
countries.
    To prevent the diffusion of critical technologies, we are training 
front line customs officers around the world. We are working to 
implement U.N. Security Council Resolution 1540, which establishes a 
requirement to criminalize proliferation involving non-state actors and 
encourages states to strengthen export control laws and improve 
enforcement. Because keeping terrorists from acquiring materials will 
be easier if we limit enrichment of uranium or reprocessing of spent 
fuel, the President proposed in 2004 a new initiative, the Global 
Nuclear Energy Partnership (GNEP), which would provide nations which 
refrain from developing or deploying enrichment and reprocessing 
technology assured access to the benefits of nuclear power.
    These are critical steps but they alone cannot address the problem. 
Indeed, there is enough fissile material in the world today for tens of 
thousands of weapons. An integral part of our strategy, therefore, has 
been to induce other states to stop producing materials for nuclear 
weapons, as the United States did many years ago. We recently tabled a 
draft treaty at the Conference on Disarmament in Geneva to do just 
that. We also supplement international diplomatic efforts with 
bilateral programs. For example, Russia still produces weapons-grade 
plutonium, not because it needs it for weapons, but because the 
reactors that produce it also supply heat and light to local 
communities. We are replacing these reactors with fossil fuel plants. 
By 2008, two of the existing three plutonium-producing reactors in 
Russia will shut down permanently, with the third shut down by 2010.
    As previously indicated, there are a number of effective synergies 
between NNSA's weapons activities and our nuclear nonproliferation 
objectives. For example, we are disposing of the substantial quantities 
of surplus weapons grade material that resulted from the thousands of 
warheads that we have dismantled by down-blending it to lower 
enrichment levels suitable for use in commercial reactors. We are also 
working with Russia to eliminate Russian HEU. Under the HEU Purchase 
Agreement, nearly 300 metric tons of uranium from Russia's dismantled 
nuclear weapons--enough material for more than 11,000 nuclear weapons--
has been down-blended for use in commercial reactors in the United 
States. Nuclear power generates 20 percent of American electricity and 
half of that is generated by fuel derived from Russian HEU. As a 
result, one-tenth of the U.S. electrical energy need is powered by 
material removed from former Soviet nuclear weapons. In addition to the 
efforts on HEU, the United States and Russia have each committed to 
dispose of 34 metric tons of surplus weapon-grade plutonium.
    If we are to encourage responsible international actions, the 
United States must set the example. We have dramatically improved 
physical security of U.S. nuclear weapons and weapons usable materials 
in the years since the attacks of 9/11. We recently withdrew over 200 
metric tons of HEU from any further use as fissile material in nuclear 
weapons, a portion of which will be devoted to powering our nuclear 
navy for the next 50 years, obviating the need over that period for 
high-enrichment of uranium for any military purpose. Seventeen tons 
will be blended down and set aside as an assured fuel supply as part of 
global efforts to limit the spread of enrichment and reprocessing 
technology.
    The risk of nuclear terrorism is not limited to the United States 
and the success of our efforts to deny access to nuclear weapons and 
material is very much dependent on whether our foreign partners share a 
common recognition of the threat and a willingness to combat it. Last 
July, just before the G-8 summit, Presidents Bush and Putin announced 
the Global Initiative to Combat Nuclear Terrorism to strengthen 
cooperation worldwide on nuclear materials security and to prevent 
terrorist acts involving nuclear or radioactive substances. Paired with 
U.N. Security Council Resolution 1540, we now have both the legal 
mandate and the practical means necessary for concrete actions to 
secure nuclear material against the threat of diversion.

                             NAVAL REACTORS

    Also contributing to the Department's national security mission is 
the Naval Reactors Program, whose mission is to provide the U.S. Navy 
with safe, militarily effective nuclear propulsion plants and ensure 
their continued safe, reliable and long-lived operation. Nuclear 
propulsion enhances our warship capabilities by providing the ability 
to sprint where needed and arrive on station, ready to conduct 
sustained combat operations when America's interests are threatened. 
Nuclear propulsion plays a vital role in ensuring the Navy's forward 
presence and its ability to project power anywhere in the world.
    The Naval Reactors Program has a broad mandate, maintaining 
responsibility for nuclear propulsion from cradle to grave. Over 40 
percent of the Navy's major combatants are nuclear-powered, including 
aircraft carriers, attack submarines, and strategic submarines, which 
provide the Nation's most survivable deterrent.

               FISCAL YEAR 2008 BUDGET REQUEST BY PROGRAM

    The President's fiscal year 2008 budget request for NNSA totals 
$9.4 billion, an increase of $306 million or 3.4 percent over the 
fiscal year 2007 operating plan. We are managing our program activities 
within a disciplined 5-year budget and planning envelope, and are 
successfully balancing the administration's high priority initiatives 
to reduce global nuclear danger as well as future planning for the 
Nation's nuclear weapons complex within an overall modest growth rate.
    The NNSA budget justification contains information for 5 years as 
required by sec. 3253 of Public Law 106-065. This section, entitled 
Future Years Nuclear Security Program, requires the Administrator to 
submit to Congress each year the estimated expenditures necessary to 
support the programs, projects and activities of the NNSA for a 5-year 
fiscal period, in a level of detail comparable to that contained in the 
budget.
    The fiscal year 2008-2012 Future Years Nuclear Security Program--
FYNSP--projects $50 billion for NNSA programs though 2012. This is an 
increase of about $1.5 billion over last year's projections in line 
with the administration's strong commitment to the Nation's defense and 
homeland security. The fiscal year 2008 request is slightly smaller 
than last year's projection; however, the outyears are increased 
starting in 2009. Within these amounts, there is significant growth 
projected for the Defense Nuclear Nonproliferation programs to support 
homeland security, including new initiatives and acceleration of threat 
reduction programs and increased inspection of seagoing cargoes 
destined for ports in the United States.

                       WEAPONS PROGRAM ACTIVITIES

    The fiscal year 2008 budget request for the programs funded within 
the Weapons Activities Appropriation is $6.51 billion, an approximately 
3.8 percent increase over the fiscal year 2007 operating plan. It is 
allocated to adequately provide for the safety, security, and 
reliability of the nuclear weapons stockpile and supporting facilities 
and capabilities.
    This request supports the requirements of the SSP consistent with 
the administration's NPR and subsequent amendments, and the revised 
stockpile plan submitted to the Congress in June 2004. Our request 
places a high priority on accomplishing the near-term workload and 
supporting technologies for the stockpile along with the long-term 
science and technology investments to ensure the design and production 
capability and capacity to support ongoing missions. This request also 
supports the facilities and infrastructure that must be modernized to 
be responsive to new or emerging threats.
    The Department has made significant strides over the past year to 
transform the nuclear weapons complex. The ``Complex 2030'' planning 
scenario was introduced in 2006 and has already resulted in a number of 
accomplishments. We have not created a separate budget line for our 
transformational activities in the fiscal year 2008 President's 
Request. Implementation actions to bring about transformation are 
incorporated into existing program elements: Directed Stockpile Work 
(DSW), Campaigns, Readiness in Technical Base and Facilities (RTBF), 
and Secure Transportation Asset. The approach to transformation relies 
extensively on existing line program organizations taking 
responsibility for individual actions required to change both the 
stockpile and its supporting infrastructure. While the administration 
continues to assess the plans and funding projections for certain 
elements of NNSA's complex transformation strategy, this budget 
contains resources to support a number of transformational initiatives 
underway within our base program activities.
    In fiscal year 2008, we are requesting $1.45 billion for DSW, an 
increase of $21.5 million over the fiscal year 2007 operating plan. We 
will continue an aggressive dismantlement plan for retired warheads and 
consolidation of special nuclear material across the nuclear weapons 
complex. Both of these efforts will contribute to increasing the 
overall security at NNSA sites. In fiscal year 2007, funding was 
increased to cover upfront costs associated with tooling procurement, 
procedure development, Safety Authorization Basis work, hiring of 
production technicians, and equipment purchases, which will support 
future-year dismantlement rates. The fiscal year 2008 request reflects 
the required funding to support the planned dismantlement rates 
reported to Congress. Funding at higher levels was unnecessary once the 
dismantlement process was improved with fiscal year 2005 and fiscal 
year 2006 funding. In May 2006, the NWC directed that the W80 LEP be 
deferred to support NNSA efforts to transform the nuclear weapons 
complex and continue work on a RRW. At the same time, the B61 and W76 
LEP workloads are increasing, since they both will have entered the 
production phase by fiscal year 2008. DSW also supports routine 
maintenance and repair of the stockpile and supports managing the 
strategy, driving the change, and performing the crosscutting 
initiatives required to achieve responsiveness objectives envisioned in 
the NPR. Our focus remains on the stockpile, to ensure that the nuclear 
warheads and bombs in the U.S. nuclear weapons stockpile are safe, 
secure, and reliable.
    Progress in other elements of the SSP continues. The fiscal year 
2008 request for the six Campaigns is $1.87 billion, a $113 million 
decrease from the fiscal year 2007 operating plan. The decrease in 
program funding is required to balance overall weapon activity 
priorities, specifically the transition of the W76 LEP from R&D to 
production, the consolidation of computing facilities, and a large 
decrease in Readiness Campaign activities associated in part to the 
transition of Tritium Extraction Facility to full operations. The 
Campaigns focus on scientific and technical efforts and capabilities 
essential for assessment, certification, maintenance, and life 
extension of the stockpile and have allowed NNSA to continue ``science-
based'' stockpile stewardship. These Campaigns are evidence of NNSA's 
excellence and innovation in science, engineering and computing that, 
though focused on the nuclear weapons mission, have broader application 
and value. The use of DOE Office of Science facilities in supporting 
Stockpile Stewardship science and engineering will increase modestly at 
the same time that access to NNSA's science facilities is extended to a 
broader community of users.
    Specifically, $425.8 million for the Science and Engineering 
Campaigns provides the basic scientific understanding and the 
technologies required to support DSW and the completion of new 
scientific and experimental facilities in the absence of nuclear 
testing.
    The Readiness Campaign, with a request of $161.2 million, develops 
and delivers design-to-manufacture capabilities to meet the evolving 
and urgent needs of the stockpile and supports the transformation of 
the nuclear weapons complex into an agile and more responsive 
enterprise. In February 2007, startup of the Tritium Extraction 
Facility at the Savannah River Site was completed, making possible the 
use of new tritium in the U.S. stockpile for the first time in 18 
years.
    The Advanced Simulation and Computing (ASC) Campaign is a key 
example of NNSA excellence and innovation in science and engineering, 
establishing world leadership in computational simulation sciences with 
broad application to national security. The request of $585.7 million 
for the ASC Campaign supports the development of computational tools 
and technologies necessary to support the continued assessment and 
certification of the refurbished weapons, aging weapons components, and 
the RRW program without underground nuclear testing. As we enhance and 
validate the predictive science capabilities embodied in these tools, 
using the historical test base of more than 1,000 cold war era nuclear 
tests to computer simulations, we can continue to assess the stockpile 
to ensure that it is safe, secure, and reliable.
    The $412.3 million request for the Inertial Confinement Fusion 
Ignition and High Yield Campaign is focused on the execution of the 
first ignition experiment at the National Ignition Facility (NIF) in 
2010, and provides facilities and capabilities for high-energy-density 
physics experiments in support of the SSP. To achieve the ignition 
milestone, $147 million will support construction of NIF and the NIF 
Demonstration Program and $232.2 million will support the National 
Ignition Campaign. The ability of NIF to assess the thermonuclear burn 
regime in nuclear weapons via ignition experiments is of particular 
importance. NIF will be the only facility capable of probing in the 
laboratory the extreme conditions of density and temperature found in 
exploding nuclear weapons.
    NIF will join the Z pulsed-power machine at Sandia National 
Laboratories and the Omega Laser at University of the Rochester's 
Laboratory for Laser Energetics as world leading facilities in 
providing quantitative measurements that close important gaps in 
understanding nuclear weapons performance. NIF, Omega, and Z are 
complementary in their capabilities, allowing scientists from both 
inside and outside the nuclear weapons complex to contribute to a 
better understanding of the high energy density physics of nuclear 
warheads. NIF will provide the only access in the world to 
thermonuclear ignition conditions and the Omega laser with its 
symmetric illumination and very high repetition rate provides a large 
amount of quantitative information. The Z facility is especially suited 
for accurate measurement of materials properties that are crucial to 
weapons performance. These facilities will be operated as national user 
facilities in order to obtain the best return on investment and maximum 
contribution to the Stockpile Stewardship mission.
    The Pit Manufacturing and Certification Campaign request of $281 
million builds on the success of manufacturing and certifying a new W88 
pit in 2007 and addresses issues associated with manufacturing future 
pit types including the RRW and increasing pit production capacity at 
LANL. There are plans to increase pit production capacity at LANL to 
meet national security needs. LANL is not only an interim capability 
for pit manufacturing at the present time, but it serves as the United 
States' sole capability. We continue to be the only nuclear weapon 
state without a true manufacturing capability.

 READINESS IN TECHNICAL BASE AND FACILITIES (RTBF) AND FACILITIES AND 
             INFRASTRUCTURE RECAPITALIZATION PROGRAM (FIRP)

    In fiscal year 2008, we are requesting $1.96 billion for the 
maintenance and operation of existing facilities, remediation and 
disposition of excess facilities, and construction of new facilities. 
Of this amount, $1.66 billion is requested for RTBF, an increase of $49 
million from the fiscal year 2007 operating plan, with $1.36 billion 
reserved for Operations and Maintenance and $307 million for RTBF 
Construction. Some new facility construction (e.g., NIF, MESA, TEF, and 
DARHT) is budgeted in applicable Campaigns.
    This request also includes $293.7 million for the Facilities and 
Infrastructure Recapitalization Program (FIRP), a separate and distinct 
program that is complementary to the ongoing RTBF efforts. The FIRP 
mission is to restore, rebuild and revitalize the physical 
infrastructure of the nuclear weapons complex, in partnership with 
RTBF. This program assures that facilities and infrastructure are 
restored to an appropriate condition to support the mission, and to 
institutionalize responsible and accountable facility management 
practices. In response to NNSA's request, Congress extended the FIRP 
end date from 2011 to 2013 to enable successful completion of the FIRP 
mission. The Integrated Prioritized Project List (IPPL) is the vehicle 
that the FIRP program will rely on to prioritize and fund outyear 
projects to reduce legacy deferred maintenance. These projects 
significantly reduce the deferred maintenance backlog to acceptable 
levels and support the SSP mission and transformation of the complex.
    These activities are critical for the development of a more 
responsive infrastructure and will be guided by decisions resulting 
from the Complex 2030 Supplemental Programmatic Environmental Impact 
Statement and the National Environmental Policy Act (NEPA) process. 
Since a significant fraction of our production capability resides in 
World War II era facilities, infrastructure modernization, 
consolidation, and sizing consistent with future needs is essential for 
an economically sustainable Complex. Facilities designed according to 
modern manufacturing, safety, and security principles will be more 
cost-effective and responsive to a changing future. For example, a 
facility could be designed to support a low baseline capacity and 
preserve the option, with a limited amount of contingent space, to 
augment capacity if authorized and needed to respond to future risks.
    Having a reliable plutonium capability is a major objective of NNSA 
planning. Options for plutonium research, surveillance, and pit 
production are being evaluated as part of the Complex 2030 NEPA process 
with a Record of Decision anticipated in 2008. The baseline Complex 
2030 planning scenario relies on Los Alamos National Laboratory 
facilities at Technical Area 55 to provide interim plutonium 
capabilities until a consolidated, long-term capability can be 
established. This interim strategy relies on the proposed Chemistry and 
Metallurgy Research Replacement-Nuclear Facility (CMRR-NF) to achieve 
all the objectives of (1) closing the existing Chemistry and Metallurgy 
Research (CMR) facility, (2) replacing essential plutonium capabilities 
currently at Lawrence Livermore National Laboratory, and (3) achieving 
a net manufacturing capacity of 50 pits per year. However, the 
increasing cost of the CMRR-NF and the need to ensure that near- and 
long-term planning for plutonium facilities are integrated requires 
that we complete our Complex 2030 decision process before committing to 
construction of the CMRR-NF. Since the CMRR Radiological Laboratory, 
Utility, and Office Building (CMRR-RLUOB) is required under all 
scenarios, this project will proceed as planned.
    The Highly Enriched Uranium Materials Facility (HEUMF) and the 
proposed Uranium Processing Facility (UPF) will allow a reduction of 
the high security area at the Y-12 National Security Complex from 150 
acres to 15 acres. This reduction will combine with the engineered 
security features of the two structures to meet the DBT at 
significantly reduced costs, to lower non-security costs, and to 
provide a responsive highly enriched uranium manufacturing capability. 
UPF planning is consistent with the timing of decisions from the 
Complex 2030 PEIS process.

                      SECURE TRANSPORTATION ASSET

    In fiscal year 2008, the budget request includes $215.6 million for 
Secure Transportation Asset (STA) Program, an increase of $6 million 
from the fiscal year 2007 operating plan, for meeting the Department's 
transportation requirements for nuclear weapons, components, and 
special nuclear materials shipments. The workload requirements for this 
program will escalate significantly in the future to support the 
dismantlement and maintenance schedule for the nuclear weapons 
stockpile and the Secretarial Initiative to consolidate the storage of 
nuclear material. The challenge to increase secure transport capacity 
is coupled with and impacted by increasingly complex national security 
concerns. To support the escalating workload while maintaining the 
safety and security of shipments, STA is increasing the number of 
SafeGuards Transporters (SGT) in operation by 2 per year, with a target 
total of 51 in fiscal year 2014. Due to resource constraints, SGT 
production has been slowed from three to 2 per year, extending the 
original 2011 endpoint target date.

                 ENVIRONMENTAL PROJECTS AND OPERATIONS

    The Environmental Projects and Operations/Long-Term Stewardship 
Program is requested at $17.5 million in fiscal year 2008. This program 
serves to reduce the risks to human health and the environment at NNSA 
sites and adjacent areas by: operating and maintaining environmental 
clean-up systems; performing long-term environmental monitoring 
activities; and, integrating a responsible environmental stewardship 
program with the NNSA mission activities.

                   NUCLEAR WEAPONS INCIDENT RESPONSE

    The Nuclear Weapons Incident Response (NWIR) Program responds to 
and mitigates nuclear and radiological incidents worldwide as the 
United States Government's primary capability for radiological and 
nuclear emergency response. The fiscal year 2008 request for these 
activities is $161.7 million, of which $28 million is reserved for the 
implementation of two new initiatives that will strengthen the Nation's 
emergency response capabilities--the National Technical Nuclear 
Forensics (NTNF) and the Stabilization Implementation programs.
    The National Technical Nuclear Forensics Program will establish a 
DOE capability to support post-detonation activities and enhance DOE 
Technical Nuclear Forensics capabilities. The development of this 
capability will facilitate the thorough analysis and characterization 
of pre- and post-detonation radiological and nuclear materials and 
devices as well as prompt signals from a nuclear detonation. Developing 
forensic capabilities of this nature is crucial to the overall 
objective of nuclear material or device attribution.
    Stabilization is a new concept and a new capability aimed at using 
advanced technologies to enhance the U.S. Government's ability to 
interdict, delay and/or prevent operation of a terrorist's radiological 
or nuclear device until national assets arrive on the scene to conduct 
traditional ``render safe'' procedures. NNSA has actively sponsored new 
research in this area and, additionally, is leveraging emerging 
technologies that have been demonstrated successfully by the DOD in 
support of the global war on terrorism. In the implementation phase, 
NNSA will transfer these matured projects into operational testing, 
potentially followed by their transition into the collection of tools 
available to Federal response teams.

                        SAFEGUARDS AND SECURITY

    The fiscal year 2008 request for Defense Nuclear Security is $744.8 
million, an increase of $121 million above the fiscal year 2007 
operating plan. This increase will accommodate the increased cost of 
sustaining the implementation of the 2003 DBT and the phased 
implementation of the 2005 DBT in 2008 and the outyears. Full 
implementation of the 2005 DBT will occur at: the Pantex Plant in 
fiscal year 2008; Lawrence Livermore National Laboratory in fiscal year 
2008; the Nevada Test Site in fiscal year 2009; the Y-12 National 
Security Complex in fiscal year 2011; and, LANL in fiscal year 2011. 
During fiscal year 2008, the program's efforts will largely be focused 
on eliminating or mitigating identified vulnerabilities across the 
nuclear weapons complex by bolstering protective force training, 
acquiring updated weapons and support equipment, improving physical 
barrier systems and standoff distances, and reducing the number of 
locations with ``targets of interest.'' Physical security systems will 
be upgraded and deployed to enhance detection and assessment, add delay 
and denial capabilities, and to improve perimeter defenses at several 
key sites.
    The fiscal year 2008 request for Cyber Security of $102.2 million 
is focused on sustaining the NNSA infrastructure and upgrading elements 
designed to counter cyber threats and vulnerabilities from external and 
internal attacks. This funding level will support cyber security 
revitalization, identify emerging issues, including research needs 
related to computer security, privacy, and cryptography. Additionally, 
the funding will provide for enhancement, certification, and 
accreditation of unclassified and classified systems to ensure proper 
documentation of risks and justification of associated operations for 
systems at all sites. The funding within this request will also be 
applied to foster greater cyber security awareness among Federal and 
contractor personnel. NNSA will sponsor a wide range of educational 
initiatives to ensure that our workforce possess the ever-expanding 
cyber security skills critical to safeguarding our national security 
information. Funding provided to NNSA sites will be conditioned upon 
their implementation of a risk-based approach to cyber security.

                    DEFENSE NUCLEAR NONPROLIFERATION

    The Defense Nuclear Nonproliferation Program mission is to detect, 
prevent, and reverse the proliferation of weapons of mass destruction 
(WMD). Our nonproliferation programs address the danger that hostile 
nations or terrorist groups may acquire weapons-usable material, dual-
use production or technology, or WMD capabilities. The fiscal year 2008 
request for these programs totals $1.673 billion, a slight decrease 
from the fiscal year 2007 operating level. This reduction is the result 
of NNSA achieving and approaching important milestones in our nuclear 
security work in Russia, including the completion of major security 
upgrades at several sites under the Material Protection, Control, and 
Accounting (MPC&A) Program and the anticipated end of construction of a 
fossil fuel plant in Seversk by the end of calendar year 2008 under the 
Elimination of Weapons Grade Plutonium Production (EWGPP) Program.

                   GLOBAL THREAT REDUCTION INITIATIVE

    The administration's fiscal year 2008 request of $119 million for 
the Global Threat Reduction Initiative (GTRI) is an increase of $4 
million over the fiscal year 2007 operating plan. The GTRI reduces the 
risk of terrorists acquiring nuclear and radiological materials for an 
improvised nuclear or radiological dispersal device by working at 
civilian sites worldwide to: (1) convert reactors from the use of WMD-
usable HEU to LEU; (2) remove or dispose of excess WMD-usable nuclear 
and radiological materials; and (3) protect at-risk WMD-usable nuclear 
and radiological materials from theft and sabotage until a more 
permanent threat reduction solution can be implemented. Specific 
increases in the GTRI budget reflect, for example, the serial 
production and delivery of 27 100-ton casks for transportation and 
long-term storage of 10,000 kg of HEU and 3,000 kg of plutonium removed 
from the BN-350 reactor site in Kazakhstan.

           INTERNATIONAL MATERIAL PROTECTION AND COOPERATION

    NNSA's International Material Protection and Cooperation fiscal 
year 2008 budget request of $372 million is a decrease of $101 million 
from the fiscal year 2007 operating plan. This decrease reflects the 
successful completion of nuclear security upgrade work at Russian 
Strategic Rocket Forces and Russian Navy sites. International material 
protection work continues in other areas, including the continuation of 
security upgrades at a significant number of sites within the Russian 
nuclear complex, including those operated by the Federal Atomic Energy 
Agency (Rosatom), and the 12th Main Directorate of the Ministry of 
Defense. Security upgrades for Russian Rosatom facilities will be 
completed by the end of 2008--2 years ahead of the original schedule, 
consistent with the Bratislava Initiative.
    The MPC&A Program is also focused on reducing proliferation risks 
by converting Russian HEU to LEU and by consolidating weapons-usable 
nuclear material into fewer, more secure locations. In fiscal year 
2008, we will eliminate an additional 1.2 metric tons of HEU for a 
cumulative total of 10.7 metric tons.
    Our Second Line of Defense (SLD) Program, a natural complement to 
our efforts to lock down vulnerable nuclear material and weapons, 
installs radiation detection equipment at key transit and border 
crossings, airports and major ports to deter, detect and interdict 
illicit trafficking in nuclear and radioactive materials. During fiscal 
year 2008, the SLD Program plans to install detection equipment at an 
additional 51 strategic overseas transit and border sites. Under the 
Megaports Initiative, we have deployed radiation detection and cargo 
scanning equipment at six ports to date in Greece, the Netherlands, 
Bahamas, Sri Lanka, Singapore and Spain. During fiscal year 2008, we 
plan to install detection equipment at three additional large ports: 
the port of Antwerp in Belgium, the port of Caucedo in the Dominican 
Republic, and the port of Salalah in Oman.
    Additionally, we are joining elements of the Megaports Initiative 
and the Container Security Initiative (CSI) under a new maritime 
security initiative, the Secure Freight Initiative (SFI) Phase I. This 
new initiative is a partnership between host governments, commercial 
container shipping entities and the U.S. Government that serves to 
increase the number of containers physically scanned for nuclear and 
radiological materials and to create a detailed record of each U.S.-
bound container. Data from radiation detection equipment provided by 
NNSA and from non-intrusive imaging equipment provided by the 
Department of Homeland Security (DHS) will enhance the identification 
of high-risk containers and facilitate the prompt resolution of 
potential nuclear or radiological threats.

              NONPROLIFERATION AND INTERNATIONAL SECURITY

    While the thrust of GTRI and MPC&A is to secure nuclear sites, 
convert reactors, and repatriate fuel from reactors worldwide, NNSA's 
Office of Nonproliferation and International Security (ONIS) provides 
technical and policy expertise in support of U.S. efforts to strengthen 
international nonproliferation arrangements (e.g., the Nuclear 
Suppliers Group, United Nations Security Council Resolution 1540 and 
the Global Initiative to Combat Nuclear Terrorism). The ONIS staff also 
fosters implementation of global nonproliferation requirements through 
engagement with foreign partners and the redirection of WMD expertise, 
and helps develop and implement mechanisms for transparent and 
verifiable nuclear reductions. The fiscal year 2008 budget request for 
the Office of Nonproliferation and International Security is $124 
million. This request includes funds for providing technical support to 
strengthen the International Atomic Energy Agency safeguards system and 
supports programs to improve foreign governments' export control 
systems. This request will augment U.S. nonproliferation cooperation 
with China and India, and enhance transparency and scientist 
redirection activities with Russia, Ukraine, Kazakhstan, Libya and 
Iraq.
    The budget request also supports activities to build up the 
nonproliferation component of the Global Nuclear Energy Partnership 
(GNEP) initiative. While GNEP is a long-term vision for the future of 
expanded use of nuclear power, NNSA plays an important role by 
providing leadership and technical expertise in the areas of safeguards 
technology, safeguards cooperation, and fuel supply arrangements to 
mitigate the proliferation risks that otherwise might accompany the 
expansion of nuclear power around the world envisioned by GNEP.

           ELIMINATION OF WEAPONS GRADE PLUTONIUM PRODUCTION

    Turning to programs that focus on halting the production of nuclear 
materials, the Elimination of Weapons Grade Plutonium Production 
(EWGPP) Program staff are working toward completing the permanent 
shutdown of two of the three remaining weapons-grade plutonium 
production reactors in Seversk and Zheleznogorsk, Russia. The fiscal 
year 2008 budget request of $182 million is a decrease of $44 million 
from the fiscal year 2007 operating plan, reflecting the planned 
completion of the fossil fuel heat and electricity facility at Seversk. 
The budget request provides the funding required to shut down these 
reactors permanently and to replace the heat and electricity these 
reactors supply to local communities with energy generated by fossil 
fuel plants by December 2008 in Seversk and by December 2010 in 
Zheleznogorsk. The reactors will be shut down immediately once the 
fossil-fuel plants are completed, eliminating the annual production of 
more than one metric ton of weapons-grade plutonium.

                     FISSILE MATERIALS DISPOSITION

    In addition to curbing the production of dangerous nuclear 
materials, NNSA is working to reduce the existing stockpiles of nuclear 
materials in both Russia and the United States. To that end, the fiscal 
year 2008 Fissile Materials Disposition budget request of $609 million 
will contribute to the elimination of surplus U.S. and Russian weapon-
grade plutonium and surplus U.S. highly-enriched uranium. Of this 
amount, $522.5 million will be allocated toward disposing of surplus 
U.S. plutonium, including $333.8 million for the Mixed Oxide (MOX) Fuel 
Fabrication Facility and $60 million for the Pit Disassembly and 
Conversion Facility (PDCF) and the Waste Solidification Building. Of 
the remaining amount, $66.8 million will be devoted to the disposition 
of surplus U.S. HEU and $20.2 million will be focused on supporting 
activities common to both programs.
    This budget request also provides funding for ongoing efforts to 
dispose of surplus U.S. HEU, including down blending 17.4MT of HEU in 
support of establishing the Reliable Fuel Supply Program, available to 
countries with good nonproliferation credentials that face a disruption 
in supply that cannot be corrected through normal commercial means. 
This initiative marks the first step towards a key GNEP policy aim of 
creating a reliable nuclear fuel mechanism, providing countries a 
strong incentive to refrain from acquiring enrichment and reprocessing 
capabilities.

       NONPROLIFERATION AND VERIFICATION RESEARCH AND DEVELOPMENT

    The fiscal year 2008 budget requests $265 million for 
Nonproliferation and Verification Research and Development. This effort 
includes a number of programs that make unique contributions to 
national security by researching the technological advancements 
necessary to detect and prevent the illicit diversion of nuclear 
materials. Within the Proliferation Detection Program, fundamental 
research is conducted in fields such as radiation detection, which 
supports national and homeland security agencies. It also advances 
basic and applied technologies for the nonproliferation community with 
dual-use benefit to national counter-proliferation and counter-
terrorism missions. Specifically, this program develops the tools, 
technologies, techniques, and expertise for the identification, 
location, and analysis of the facilities, materials, and processes of 
undeclared and proliferant WMD programs. As the sole provider for the 
science base to the U.S. national nuclear test monitoring system, the 
Nuclear Explosion Monitoring Program produces the nation's operational 
sensors that monitor from space the entire planet to detect and report 
surface, atmospheric, or space nuclear detonations. This program also 
produces and updates the regional geophysical datasets enabling 
operation of the Nation's ground-based seismic monitoring networks to 
detect and report underground detonations.

                             NAVAL REACTORS

    The Naval Reactors fiscal year 2008 budget request of $808 million 
is an increase of $26 million from the fiscal year 2007 operating plan. 
Naval Reactor's development work ensures that nuclear propulsion 
technology provides options for maintaining and upgrading current 
capabilities, as well as for meeting future threats to U.S. security.
    The majority of funding supports Naval Reactor's number-one 
priority of ensuring the safety and reliability of the 103 operating 
naval nuclear propulsion plants. This work involves continual testing, 
analysis, and monitoring of plant and core performance, which becomes 
more critical as the reactor plants age. The nature of this business 
demands a careful, measured approach to developing and verifying 
nuclear technology, designing needed components, systems, and 
processes, and implementing them in existing and future plant designs. 
Most of this work is accomplished at Naval Reactors' DOE laboratories. 
These laboratories have made significant advancements in extending core 
lifetime, developing robust materials and components, and creating an 
array of predictive capabilities.
    Long-term program goals have been to increase core energy, to 
achieve life-of-the-ship cores, and to eliminate the need to refuel 
nuclear-powered ships. Efforts associated with this objective have 
resulted in planned core lives that are sufficient for the 30-plus year 
submarine (based on past usage rates) and an extended core life planned 
for CVN 21 (the next generation aircraft carrier). The need for nuclear 
propulsion will only increase over time as the uncertainty of fossil 
fuel cost and availability grows.
    Naval Reactors' Operations and Maintenance budget request is 
categorized into six areas: Reactor Technology and Analysis; Plant 
Technology; Materials Development and Verification; Evaluation and 
Servicing; Advanced Test Reactor (ATR) Operations and Test Support; and 
Facility Operations.
    The $218 million requested for Reactor Technology and Analysis will 
support work that ensures the operational safety and reliability of 
reactor plants in U.S. warships and extends the operational life of 
Navy nuclear propulsion plants. This work includes continued 
development of the Reactor System Protection Analysis for the next 
generation aircraft carrier, CVN 21. These efforts also support 
continued work on core design concepts for submarines.
    The increasing average age of our Navy's existing reactor plants, 
along with future extended service lives, a higher pace of operation 
and reduced maintenance periods, place a greater emphasis on our work 
in thermal-hydraulics, structural mechanics, fluid mechanics, and 
vibration analysis. These factors, along with longer-life cores, mean 
that for years to come, these reactors will be operating beyond our 
previously-proven experience base.
    The $115 million requested for Plant Technology provides funding to 
develop, test, and analyze components and systems that transfer, 
convert, control, and measure reactor power in a ship's power plant. 
Naval Reactors is developing components to address known limitations 
and to improve reliability of instrumentation and power distribution 
equipment to replace aging, technologically obsolete equipment. 
Development and application of new analytical methods, predictive 
tests, and design tools are required to identify potential concerns 
before they become actual problems. This enables preemptive actions to 
ensure the continued safe operation of reactor plants and the 
minimization of maintenance costs over the life of the ship. Additional 
technology development in the areas of chemistry, energy conversion, 
instrumentation and control, plant arrangement, and component design 
will continue to support the Navy's operational requirements.
    The $110 million requested for Materials Development and 
Verification supports material analyses and testing to provide the 
high-performance materials necessary to ensure that naval nuclear 
propulsion plants meet Navy goals for extended warship operation and 
greater power capability. These funds support the test assemblies for 
use in ATR, post irradiation examination of the materials tested at 
ATR, and destructive and non-destructive examinations of spent navy 
nuclear fuel and reactor component materials.
    The $204 million requested for Evaluation and Servicing sustains 
the operation, maintenance, and servicing of Naval Reactors' operating 
prototype reactor plants. Reactor core and reactor plant materials, 
components, and systems in these plants provide important research and 
development data and experience under actual operating conditions. 
These data aid in predicting and subsequently preventing problems that 
could develop in fleet reactors. With proper maintenance, upgrades, and 
servicing, the two prototype plants will continue to meet testing needs 
for at least the next decade.
    Evaluation and Servicing funds also support the implementation of 
the dry spent fuel storage production lines that will put naval spent 
fuel currently stored in water pools at the Idaho Nuclear Technology 
and Engineering Center (INTEC) on the Idaho National Laboratory (INL) 
and at the Expended Core Facility (ECF) on the Naval Reactors facility 
in Idaho into dry storage. Additionally, these funds support ongoing 
decontamination and decommissioning of inactive nuclear facilities at 
all Naval Reactors sites to address their ``cradle to grave'' 
stewardship responsibility for these legacies and minimize the 
potential for any environmental releases.
    The $58.8 million requested for Advanced Test Reactor Operations 
and Test Support sustains the ongoing activities of the INL ATR 
facility, owned and operated by the Office of Nuclear Energy (NE), 
Science and Technology.
    In addition to the budget request for the important technical work 
discussed above, facilities funding is required for continued support 
of Naval Reactor's operations and infrastructure. The $60 million 
requested for facilities operations will maintain and modernize the 
program's facilities, including the Bettis and Knolls laboratories as 
well as ECF and Kesselring Site Operations (KSO), through capital 
equipment purchases and general plant projects.
    The $10 million requested for construction funds will be used to 
support the project engineering and design of a materials research 
technology complex and ECF M290 receiving and discharge station and to 
support the design and construction of a shipping and receiving and 
warehouse complex.

                      OFFICE OF THE ADMINISTRATOR

    This account provides for all Federal NNSA staff in Headquarters 
and field locations except those supporting Naval Reactors and the 
Secure Transportation Asset couriers. The fiscal year 2008 budget 
request is $394.7 million, an increase of $54 million over the fiscal 
year 2007 operating level.
    This budget request is consistent with the funding trajectory 
needed for personnel support in an account that is comprised of over 70 
percent salaries and benefits. NNSA needs to attain a steady-state 
staffing level of about 1,950 FTEs in fiscal year 2008 to support 
current mission needs and to implement workforce planning for 
succession. Information Technology (IT) for the Federal staff is also 
included in this account, and the fiscal year 2008 IT Request reflects 
efficiencies planned for A-76 efforts initiated in fiscal year 2006. 
The outyear budget addresses significant challenges due to the impacts 
of escalation on payroll and needed support to the NNSA Federal staff.
    The budget request includes funding for activities that were 
previously funded by the former Offices of Environment, Safety, and 
Health and Security and Safety Performance Assurance that transferred 
to the NNSA. Pursuant to section 3117 of the John Warner National 
Defense Authorization Act for fiscal year 2007 (Public Law 109-364), 
beginning in fiscal year 2008, the functions, personnel, funds, assets, 
and other resources of the Office of Defense Nuclear 
Counterintelligence of the NNSA are transferred to the Secretary of 
Energy, to be administered by the Director of the Office of 
Counterintelligence of the Department of Energy.

      HISTORICALLY BLACK COLLEGES AND UNIVERSITIES (HBCU) SUPPORT

    A research and education partnership program with the HBCUs and the 
Massie Chairs of Excellence was initiated by Congress through earmarks 
in the Office of the Administrator Appropriation in fiscal year 2005, 
fiscal year 2006 and fiscal year 2007. The NNSA has implemented an 
effective program to target national security research opportunities 
for these institutions to increase their participation in national 
security-related research and to train and recruit HBCU graduates for 
employment within the NNSA. The NNSA goal is a stable $10 million 
annual effort. In fiscal year 2008, the Office of the Administrator 
appropriation will provide continued funding of $1 million to support 
certain HBCU activities. The programs funded in the Weapons Activities 
Appropriation will provide approximately $4 to $6 million of support to 
HBCU programs. In addition, the Defense Nuclear Nonproliferation 
Appropriation will provide approximately $2 to $3 million to this 
program. Lastly, the Naval Reactors Program will fund approximately $1 
million of HBCU programs in fiscal year 2008.

                               CONCLUSION

    I am confident that NNSA is headed in the right direction in the 
coming fiscal year. The budget request will support continuing our 
progress in protecting and certifying our Nation's strategic deterrent, 
transforming our nuclear weapons stockpile and infrastructure, reducing 
the global danger from proliferation and weapons of mass destruction, 
and enhancing the force projection capabilities of the U.S. nuclear 
Navy. It will enable us to continue to maintain the safety and security 
of our people, information, materials, and infrastructure. Taken 
together, each aspect of this budget request will allow us to meet our 
national security responsibilities during the upcoming fiscal year and 
well into the future.
    A statistical appendix follows that contains the budget figures 
supporting our Request. I look forward to answering any questions on 
the justification for the requested budget.

                     Fiscal Year 2008 Budget Tables

   NATIONAL NUCLEAR SECURITY ADMINISTRATION--APPROPRIATION AND PROGRAM
                                 SUMMARY
                        [In millions of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                 2006 Current    Operating       2008
                                Appropriations      Plan       Request
------------------------------------------------------------------------
National Nuclear Security
 Administration (NNSA):
    Office of the                       354.2         340.3        394.7
     Administrator............
    Weapons Activities (after         6,355.3       6,275.6      6,511.3
     S&S WFO offset)..........
    Defense Nuclear                   1,619.2       1,683.3      1,672.6
     Nonproliferation.........
    Naval Reactors............          781.6         781.8        808.2
                               -----------------------------------------
      Total, NNSA.............        9,110.3         9,081      9,386.8
------------------------------------------------------------------------
NOTE: The fiscal year 2006 column includes an across-the-board
  rescission of 1 percent in accordance with the Department of Defense
  Appropriations Act, 2006, Public Law 109-148.

    The NNSA budget justification contains information for 5 years as 
required by sec. 3253 of Public Law 106-065. This section, entitled 
Future Years Nuclear Security Program (FYNSP), requires the 
Administrator to submit to Congress each year the estimated 
expenditures necessary to support the programs, projects and activities 
of the NNSA for a 5-year fiscal period, in a level of detail comparable 
to that contained in the budget.

               OUT-YEAR APPROPRIATION SUMMARY--NNSA FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                             Fiscal     Fiscal     Fiscal     Fiscal     Fiscal
                                                           Year 2008  Year 2009  Year 2010  Year 2011  Year 2012
----------------------------------------------------------------------------------------------------------------
NNSA:
    Office of the Administrator..........................        395        405        415        425        436
    Weapons Activities (after S&S offset)................      6,511      6,705      6,904      7,111      7,324
    Defense Nuclear Nonproliferation.....................      1,673      1,798      1,845      1,893      1,942
    Naval Reactors.......................................        808        828        849        870        892
                                                          ------------------------------------------------------
      Total, NNSA........................................      9,387      9,736     10,013     10,299     10,594
----------------------------------------------------------------------------------------------------------------


            WEAPONS ACTIVITIES--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work....     1,372,327     1,425,722    1,447,236
    Science Campaign...........       276,670       270,458      273,075
    Engineering Campaign.......       247,907       162,786      152,749
    Inertial Confinement Fusion       543,582       489,706      412,259
     Ignition and High Yield
     Campaign..................
    Advanced Simulation and           599,772       611,973      585,738
     Computing Campaign........
    Pit Manufacturing and             238,663       242,392      281,230
     Certification Campaign....
    Readiness Campaign.........       216,567       201,713      161,169
    Readiness in Technical Base     1,654,840     1,613,241    1,662,144
     and Facilities............
    Secure Transportation Asset       209,979       209,537      215,646
    Nuclear Weapons Incident          117,608       133,514      161,748
     Response..................
    Facilities and                    149,365       169,383      293,743
     Infrastructure
     Recapitalization Program..
    Environmental Projects and   .............  ...........       17,518
     Operations................
    Safeguards and Security....       797,751       761,158      881,057
    Other......................  .............       17,000  ...........
                                ----------------------------------------
      Subtotal, Weapons             6,425,031     6,308,583    6,545,312
       Activities..............

Use of Prior Year Balances:
    Security Charge for               -32,000       -33,000      -34,000
     Reimbursable Work.........
    Use of Prior Year Balances.       -37,734   ...........  ...........
                                ----------------------------------------
      Total, Weapons Activities     6,355,297     6,275,583    6,511,312
------------------------------------------------------------------------
Public Law Authorization: John Warner National Defense Authorization Act
  for fiscal year 2007 (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Weapons Activities:
    Directed Stockpile Work.  1,483,417  1,520,502  1,558,515  1,597,478
    Science Campaign........    282,741    275,622    270,390    275,626
    Engineering Campaign....    147,090    144,448    142,614    145,417
    Inertial Confinement        406,098    413,186    411,851    407,487
     Fusion Ignition and
     High Yield Campaign....
    Advanced Simulation and     598,241    583,643    570,873    582,243
     Computing Campaign.....
    Pit Manufacturing and       291,945    339,462    357,622    347,269
     Certification Campaign.
    Readiness Campaign......    190,477    184,703    180,357    183,946
    Readiness in Technical    1,698,403  1,765,458  1,862,729  1,952,633
     Base and Facilities....
    Secure Transportation       228,300    237,749    253,037    262,118
     Asset..................
    Nuclear Weapons Incident    169,835    178,327    187,243    196,605
     Response...............
    Facilities and              286,572    297,096    304,330    312,000
     Infrastructure
     Recapitalization
     Program................
    Environmental Projects       32,471     29,923     30,864     31,574
     and Operations.........
    Safeguards and Security.    924,410    969,881  1,017,575  1,067,604
                             -------------------------------------------
      Subtotal, Weapons       6,740,000  6,940,000  7,148,000  7,362,000
       Activities...........
    Security Charge for         -35,000    -36,000    -37,000    -38,000
     Reimbursable Work......
                             -------------------------------------------
      Total, Weapons          6,705,000  6,904,000  7,111,000  7,324,000
       Activities...........
------------------------------------------------------------------------


     DEFENSE NUCLEAR NONPROLIFERATION--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and              312,658       270,387      265,252
     Verification Research and
     Development...............
    Nonproliferation and               74,250       128,911      124,870
     International Security....
    International Nuclear             422,730       472,730      371,771
     Materials Protection and
     Cooperation...............
    Global Initiatives for             39,600   ...........  ...........
     Proliferation Prevention..
    HEU Transparency                   19,288   ...........  ...........
     Implementation............
    Elimination of Weapons-           187,100       225,754      181,593
     Grade Plutonium Production
    Fissile Materials                 468,773       470,062      609,534
     Disposition...............
    Global Threat Reduction            96,995       115,495      119,626
     Initiative................
                                ----------------------------------------
      Subtotal, Defense Nuclear     1,621,394     1,683,339    1,672,646
       Nonproliferation........

Use of Prior Year Balances.....       -92,215   ...........  ...........
                                ----------------------------------------
      Total, Defense Nuclear        1,619,179     1,683,339    1,672,646
       Nonproliferation........
------------------------------------------------------------------------
NOTE: The fiscal year 2006 Current Appropriation column includes
  additions for international contributions to the Elimination of
  Weapons-Grade Plutonium Production Program in the amount of
  $12,677,000, and the use of prior year balances in the amount of
  $2,215,000 for an approved appropriation transfer action to the Office
  of the Administrator.
Public Law Authorization: John Warner National Defense Authorization Act
  of 2007, (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Defense Nuclear
 Nonproliferation:
    Nonproliferation and        305,105    335,564    353,047    364,528
     Verification Research
     and Development........
    Nonproliferation and        133,041    158,693    166,479    174,276
     International Security.
    International Nuclear       408,209    402,458    407,161    414,009
     Materials Protection
     and Cooperation........
    Elimination of Weapons      138,929     24,507  .........  .........
     Grade Plutonium
     Production.............
    Fissile Materials           660,796    771,190    802,786    813,378
     Disposition............
    Global Threat Reduction     151,920    152,588    163,527    175,809
     Initiative.............
                             -------------------------------------------
      Total, Defense Nuclear  1,798,000  1,845,000  1,893,000  1,942,000
       Nonproliferation.....
------------------------------------------------------------------------


              NAVAL REACTORS--FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                Fiscal Year
                                  Fiscal Year       2007     Fiscal Year
                                  2006 Current   Operating       2008
                                 Appropriation      Plan       Request
------------------------------------------------------------------------
Naval Reactors Development:
    Operations and Maintenance        734,877       747,648      765,519
     (O&M).....................
    Program Direction..........        29,997        31,380       32,700
    Construction...............        16,731         2,772       10,000
                                ----------------------------------------
      Total, Naval Reactors           781,605       781,800      808,219
       Development.............
------------------------------------------------------------------------
Public Law Authorizations: Public Law 83-703, ``Atomic Energy Act of
  1954'' ``Executive Order 12344 (42 U.S.C. 7158), ``Naval Nuclear
  Propulsion Program'' Public Law 107-107, ``National Defense
  Authorizations Act of 2002'', title 32, ``National Nuclear Security
  Administration'' John Warner National Defense Authorization Act for
  Fiscal Year 2007, (Public Law 109-364).


                 OUT-YEAR FUNDING PROFILE BY SUBPROGRAM
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal     Fiscal     Fiscal     Fiscal
                              Year 2009  Year 2010  Year 2011  Year 2012
------------------------------------------------------------------------
Naval Reactors Development:
    Operations and              771,700    795,700    822,500    836,800
     Maintenance............
    Program Direction.......     33,900     35,100     36,400     37,700
    Construction............     22,400     18,200     11,100     17,500
                             -------------------------------------------
      Total, Naval Reactors     828,000    849,000    870,000    892,000
       Development..........
------------------------------------------------------------------------


    Senator Dorgan. Mr. D'Agostino, thank you very much for 
your testimony.
    I'd like to ask a few questions, then I will call on my 
colleagues and then I will finish with the remainder of my 
questions so that my colleagues have ample time as well.

                      RELIABLE REPLACEMENT WARHEAD

    Let me ask first about the RRW program. I want to have you 
tell us how that came to be. What was, what created the 
existence of RRW? Some colleagues here in the Congress say that 
is an outgrowth of the program that was rejected, the Earth 
Penetrater Bunker Buster program and it morphed into an RRW 
program. Can you tell me, what is the origin of the RRW 
program?
    Mr. D'Agostino. Certainly, Mr. Chairman. But, I'd like to 
dispel the notion that it is an outgrowth of any, so-called 
bunker buster. The RRW program is a natural piece or element in 
the stockpile stewardship strategy. As you're aware, in the 
early 1990s the country decided to forego underground testing 
and a few years after that we endorsed a strategy of stockpile 
stewardship. This is the idea of spending resources into 
upgrading our science facilities to understand what happens as 
weapons age and to embark, essentially, on what we are in right 
now, a life extension program strategy.
    Life extension program means taking the existing warheads 
that we have and investing money to build those warheads 
exactly like they were built 10, 20, 30, 40, 50 years ago to 
make sure that they would perform as in the past because we 
aren't going to do a test anymore, underground test.
    RRW came out as a result of confluence of two things. One, 
our science tools expanded greatly. Our computing capability, 
the models and codes that we use to simulate the aging 
warheads, as well as this life extension program, made us 
realize that we're dealing with warheads that were designed 
quite differently. They were designed to maximize the yield of 
a warhead to the weight of the warhead itself. We wanted the 
most tightly designed warhead on the top of that missile 
because the Department of Defense, at the time, was interested 
in lots of weapons and being able to launch them long 
distances. And, it was also at a time when we were constantly 
designing new warheads every 10, 20 years we were exercising 
our capability. We never worried about the aging of weapons.
    And so, as we looked at what happens in the future, can a 
weapon that was designed to be replaced every 20 to 25 years 
last 30, 40, 50, 60 years? And, especially what does that do to 
our margins and more importantly, what does that do to our 
confidence? We don't want to be in a situation where we have to 
conduct an underground test.
    So, we decided to embark on an RRW approach because our 
concern was that we wanted to be able to add more design margin 
into the warhead. We wanted to put security features into the 
warhead which addressed the future threats, not the threats 
that we had in the past. And, we're also concerned about not 
wanting to replicate cold war processes and cold war techniques 
because these are very expensive.
    Senator Dorgan. Mr. D'Agostino, I want to be able to ask 
you a second question.
    Mr. D'Agostino. Oh,----
    Senator Dorgan. Thank you.
    Mr. D'Agostino. [continuing]. Certainly.
    Senator Dorgan. I want to ask a couple questions about RRW. 
I do have some questions for Mr. Tobey. But, several weeks ago, 
you and General Cartwright were in front of the Senate Armed 
Services Committee. Senator Reed asked you a question and I 
reviewed that because part of RRW relates to the question of 
whether there needs to be testing. And, let me read you the 
transcript because I want to try to understand what this means.
    Quoting Senator Reed, ``If it becomes clear at some point 
that it is not possible to certify without testing, would you 
support terminating the effort?'' General Cartwright, ``I would 
come back to this subcommittee and tell you why we've got to 
that position and what the criteria or what the detail was 
behind that and then we would have that discussion.'' Then 
Senator Nelson said, ``If it becomes clear at some point that 
it wouldn't be possible to certify the RRW without nuclear 
testing, would you support terminating the effort?'' Mr. 
D'Agostino, you indicated, I'm quoting you, ``I would say that 
because it's one of the most significant criteria that we've 
had to proceed down this path, we would have to examine that. I 
mean, we'd have to say, `Why would we go forward and continue 
with the effort.' ''
    Today's testimony, you talk about offering a reduced 
likelihood that we will ever again need to conduct an 
underground nuclear test. The question is, is there any reason 
for someone to read some subtle shift here? It seemed to me 
there might be a subtle shift. I think most of us proceed under 
the assumption that the, the understanding is, that RRW will 
not require testing. Is that still your position?
    Mr. D'Agostino. My position is certification of an RRW 
design will not require underground testing. There's a broader 
question: As weapons age there's no guarantee, in fact no one 
can guarantee today's stockpile might not require an 
underground test. We don't know all of the details on how 
materials age. And so, to certify the RRW, in my view, based on 
the information I've reviewed and the proposal submitted by Los 
Alamos and Lawrence Livermore, would not require underground 
testing to certify it.
    I'd like to add, because the design margins on the RRW are 
based solidly on tested history that already existed. The 
country's invested a lot of money in developing a nuclear test 
database. Taking advantage of that I'm confident that what we 
have in an RRW design, at this point, again, it's only on paper 
and that's where it will stay until we decide to move forward, 
but that we are further away and have a reduced likelihood 
compared to a cold war stockpile. I'm concerned that if we stay 
with a cold war stockpile, as it currently exists, that our 
chances are testing are much greater than if we shifted to an 
RRW strategy.
    Senator Dorgan. The, my understanding is that the State 
Department has not done any studies. And, I wonder if the 
Department of Energy has with respect to whether the activities 
of an RRW will have any impact on our objectives with respect 
to nonproliferation. I mean, this will be a larger 
international debate. Has there been an analysis of that, the 
consequences of that by the Department of Energy? I believe it 
has not been done by the Department of State.
    Mr. D'Agostino. If I could answer that, I could ask Mr. 
Tobey to follow with me. When we, before we made an RRW 
decision and announcement, we did consult with our allies in 
NATO and we also talked to Russia and China about the strategy 
we're approaching. In almost all cases, we had, it was well 
understood why we were proceeding down this path. There was no 
study to my knowledge, per se, of directly taking, essentially 
a straw vote if you will, on exactly how things were done.
    Mr. Tobey. Mr. Chairman, we have given that matter some 
thought. And, I think, frankly, the questions that you're 
asking are exactly the right ones.
    In analyzing nonproliferation or disarmament impacts of 
such a system, I think the right questions relate to whether or 
not such a system would reduce or increase the need for nuclear 
testing, whether it would reduce or increase pressures to, or 
would enable a reduction or an increase, pressure for an 
increase in the size of arsenals, and whether or not it would 
improve the safety and security in weapons. I think by most 
standards, and certainly the objectives of the RRW Program 
would be to lead to conditions that would actually improve 
nonproliferation and disarmament objectives. So therefore, it 
is entirely consistent with our nonproliferation policy.
    Senator Dorgan. I have one additional question, then I will 
defer to my colleagues and then I will ask some questions at 
the end.
    Back in 1974, then Secretary of State indicated that he 
felt it was urgent to create ``global standards for nuclear 
security.'' And, it's been now roughly 30 years. We're still 
not quite there. We do have some standards, but without the 
kind of definition, I think, most people feel is necessary. Mr. 
Tobey, can you describe to me what efforts are underway, from 
your standpoint, with respect to those issues?
    Mr. Tobey. Certainly, and one of the most important 
nonproliferation efforts we have underway is meant to address 
exactly that. Last year, Presidents Bush and Putin, just before 
the G-8 Summit in St. Petersburg, announced the global 
initiative to combat nuclear terrorism. I think there are two 
ways to look at this program. One, it's an effort to apply the 
lessons we've learned and the standards we've developed and the 
practices we put into place in former Soviet states worldwide.
    Another one is to allow for the practical means to 
implement the legal requirements of U.N. Security Council 
Resolution 1540. We've started with a small core of states, the 
G-8 plus four others, Kazakhstan, Australia, China, and Turkey. 
We were joined later by Morocco. We adopted, first, the 
statement of principles. We've since had a meeting to adopt a 
work program and we hope to greatly expand the organization in 
a meeting next month in June in Kazakhstan.
    Senator Dorgan. Mr. Tobey, thank you very much.
    We've been joined by the ranking member, Senator Domenici. 
I will call on Senator Domenici, then I will call on Senators 
in order of appearance.
    Senator Domenici.
    Senator Domenici. Mr. Chairman, I think that would be a bit 
unfair, so I would ask that we not do it. And, because I was 
late and it was my own fault. I attest that to everyone. Please 
don't think it was more important than any old meeting. I just, 
it just got away from me. So, you can assume it was a very fun 
meeting or a lot of fun or something.
    I just didn't get away from it. And, I looked up and I 
thought, ``My God, D'Agostino is finished and I'm almost 
finished.''
    So, I would rather go about third and that will be fair for 
you and fair for me.
    Senator Dorgan. All right. Well, as former chairman you 
certainly, we would certainly want to recognize your right to 
proceed next----
    Senator Domenici. I'll go after----
    Senator Dorgan [continuing]. As ranking member. All right.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman.

                   GLOBAL NUCLEAR ENERGY PARTNERSHIP

    The NNSA's 2008 budget includes $10 million for 
nonproliferation activities within Global Nuclear Energy 
Partnership (GNEP). Is this enough to provide the global 
security that is required for a program of this magnitude?
    Mr. Tobey.
    Mr. Tobey. Senator, I think it's a good start. As you know, 
we're at the very early stages of the Global Nuclear Energy 
Partnership. I think it would be fair to regard GNEP as a 
nonproliferation program. I believe it is such for four 
reasons. First, it should diminish incentives on States to have 
indigenous enrichment programs. Second, it should allow us to 
reduce separated stock, stockpiles of separated plutonium. 
Third, we intend to use it to improve proliferation resistant 
reactor technology. And fourth, we aim to improve safeguards 
technology.
    Senator Craig. So, you referenced it as a good start, 
therefore, I used the word is it enough, is it adequate based 
on where we are with this initiative, to fund it appropriately?
    Mr. Tobey. Yes sir, it is. I meant good start in the sense 
that the GNEP program will proceed. We will need to spend more 
money on nonproliferation efforts related to it in the future.
    Senator Craig. Europeans have been recycling used nuclear 
fuel for over 30 years without an incident or hint of separated 
material theft. Are you looking at their programs and 
incorporating their experiences into GNEP?
    Mr. Tobey. We're certainly looking at their programs. 
Although I think what we're trying to do is to reach a 
situation in which we would not have, as I mentioned, separated 
stocks of plutonium, pure plutonium or nearly pure plutonium, 
which are a greater nonproliferation threat. If you look at 
incidents that have been made public about nuclear materials 
that have gotten loose I think it would tend to indicate that 
those are the cases in which we need to be concerned about. So, 
we hope to use advanced technology to avoid pure plutonium or 
nearly pure plutonium.
    Senator Craig. I think my concern, as it relates to the 
program and the long-term character of getting it online, 
costs, and all of that, is that as much of the successes around 
the world that we can incorporate, we ought not be spending our 
time, therefore, reinventing when there are successes out there 
that are measurable and usable.
    Mr. Tobey. Well, we certainly would like to learn from the 
experience of others. I think we would also like to be 
technology leaders, in this regard. And hopefully improve the 
nonproliferation characteristics of the technology for 
recycling fuel.
    Senator Craig. Thank you, Mr. Chairman.
    Gentlemen, thank you.
    Senator Dorgan. Senator Craig, thank you.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    And, thank you gentlemen for your testimony.

              PIT PRODUCTION/RELIABLE REPLACEMENT WARHEAD

    Mr. D'Agostino, do you know how many and what types of pits 
the complex would require to make in 2030 as part of your 
forward looking analysis?
    Mr. D'Agostino. I'm sorry Senator Reed. I missed the first 
part of the question.
    Senator Reed. Do you know how many and what type of pits 
the complex will be required to make in 2030, if you're doing 
your 2030 planning now?
    Mr. D'Agostino. Right now our plan is to build an interim 
capability of between 30 and 50 pits by the 2012 timeframe and 
to increase our capability, given our current requirements. The 
DOD, the Department of Defense, which sets the requirements for 
the Department of Energy, has currently projected, based on 
what I would say a pre-RRW type stockpile, of a need to go to 
about 125 pits per year. Which is the idea of being able to, 
over a 40-year period, replace the pits in the ongoing in 
steady state, nuclear stockpile. Every 30 or 40 years you'd be 
replacing a pit. The size, the number and type of pits, are 
clearly very dependant on the size of the stockpile itself and 
so there's that linkage there.
    Senator Reed. And, also dependant upon the progress on the 
RRW?
    Mr. D'Agostino. I think so for a couple of reasons. One, 
because of the RRW, we'll have an opportunity when we look at 
the RRW replacement strategy to look at pits that we already 
have built, essentially, in the past that can potentially be 
reused in future stockpiles.
    As you're probably aware, we had tasked our laboratories to 
take a hard look at the design and to look at the lifetimes of 
plutonium metal and the pits itself. That analysis was 
completed last year and we had the JASONS take an independent 
look at that and they validated the fact that our plutonium pit 
life, metal life times are a bit longer than we had expected. 
Up to between 85 and 100 years in some cases. That's good news 
because it provides us the flexibility to look at pits that 
we've already built. And, I think, ultimately, will allow us to 
have the smallest plutonium capability that the country might 
need instead of getting in to building a pit capability of 125 
and up. We might be looking at 125 and down from the size of 
plutonium capability.
    Senator Reed. The pit manufacturing and certification 
campaign also includes $24.9 million for the consolidated 
plutonium center.
    Mr. D'Agostino. Yes, sir.
    Senator Reed. Specifically indicate how you're going to 
spend that money.
    Mr. D'Agostino. That money would be used to do preliminary 
design. I don't like to look at it as a building right now 
because it's far from that. It's to do the studies that need to 
be done to determine the exact size that it needs to be to 
handle our future stockpile, and to take a look at the 
technologies that might need to be in this facility.
    As I mentioned earlier in my opening, one of the answers 
that I gave earlier, we're interested in making a design that's 
manufacturing a simple and as environmentally safe and as 
worker safe as possible. In the past, that was not a 
consideration. It's not that people in the past didn't care 
about these topics, it's that 30-40 years later we know a lot 
more about impacts of these materials on human safety. So, 
those types of studies, technology development activities and 
siting studies to support the work that we're going to be doing 
because we're looking at a number of different sites. That's 
what the $24 million is for.
    Senator Reed. I think the chairman opened up some very 
important questions with respect to RRW and I want to follow 
up. Some of these are very specific.
    First, the RRW schedule presently is in phase what?
    Mr. D'Agostino. Right now we are in what we call phase 2A, 
which is a design definition and cost study phase. That's what 
I would propose that we were going to be doing in fiscal year 
2007. That's what we were authorized to do, and into fiscal 
year 2008. That phase is very important because it will 
provide, what I call the detailed cost, the detailed scope, and 
the detailed schedule. That is not just the Department of 
Energy's cost, scope, schedule, but includes our work with the 
United States Navy, because it's their interface with the Navy 
systems. That needs to be done in order for us to be in a 
situation where we can look at how that influences the size of 
the stockpile, our life extension strategy, and the number of 
different types of systems, which I think are so important for 
both the committee and as well as myself to understand.
    Senator Reed. Thank you very much.
    I have additional questions, but I'll wait for another 
round, Mr. Chairman. Thank you.
    Senator Dorgan. Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.

                 PACIFIC NORTHWEST NATIONAL LABORATORY

    And, I just have a quick parochial issue I wanted to query 
you about. And, it's an issue of the Pacific Northwest National 
Laboratory that's in my home State of Washington and I think 
you're aware of the need to replace the unique facility that 
supports an important national security mission. It's going to 
be affected by the Hanford clean up schedule. And, I wanted to 
thank you for your active support in this project that involves 
partners from the Office of Science and Department of Homeland 
Security (DHS) as well. And, I noticed that the NNSA budget 
does not include funds in 2008 for this project, and I wanted 
to find out from you if you continue to support this project.
    Mr. D'Agostino. I'll answer the question. I'd like to ask 
my colleague to amplify if he could. I appreciate your 
comments. We do support this project. The type of relationship 
we have with the Department of Homeland Security and my sister 
organization within the Department, the Office of Science, lays 
out what I would say, a commitments page on how we are going to 
integrate funding requests. In fiscal year 2008, the NNSA 
element of that is zero dollars. There are more details and 
probably Will can take it from here and talk about how we've 
integrated the three organizations together.
    Senator Murray. Mr. Tobey.
    Mr. Tobey. Certainly, Senator Murray. The zero dollars is 
really a reflection of the fact that the NNSA has been out 
ahead of the other two partners, well ahead of the other two 
partners in our spending rate on this. And frankly, I think it 
just made sense for us to be at approximately the same rate of 
spending as the other two partners. It doesn't reflect a lack 
of support for the program.
    Senator Murray. And, I assume that you would not object if 
money's added to the budget for this project?
    Mr. Tobey. Well, of course I support the President's 
budget, Senator.
    Senator Murray. Okay. Well, I would then ask, I assume 
you're going to request additional, or sufficient funding in 
the 2009 request for where you need to be.
    Mr. Tobey. We're certainly going to try and make sure that 
we support the project, we would very much like it to go 
forward. We would like the spending for it to be proportionate 
among the partners that are funding it.
    Senator Murray. Okay. Thank you very much, Mr. D'Agostino.
    Mr. D'Agostino. Thank you, Senator.
    Senator Murray. We do appreciate your support of this. This 
is very critical and we want to make sure it continues to move 
forward. And, we know the importance of all the partners 
involved in it, but we've got to keep it moving. So, thank you 
very much.
    Mr. D'Agostino. Thank you, Senator.
    Senator Dorgan. Thank you, Senator Murray.
    Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Senator Feinstein, it's good to see you here. I didn't 
think I would see you on this issue as soon as this. And, I 
assume I will hear you address this issue in a negative manner, 
the new nuke formation. I hope not.

                           PREPARED STATEMENT

    But, I want to say, I have an opening statement that I 
would just ask you make a part of the record.
    Senator Dorgan. Without objection.
    [The statement follows:]
             Prepared Statement of Senator Pete V. Domenici
    Thank you Mr. Chairman, I would like to welcome our witnesses. We 
have Tom D'Agostino, Acting Administrator for NNSA who is joined by 
Admiral Kirkland Donald, Naval Reactors, and Mr. Will Tobey, Nuclear 
Nonproliferation.
    Gentlemen, I appreciate your participation and hard work at the 
NNSA. You have a challenging job and these budgets make your job an 
even greater challenge.
    Mr. D'Agostino, I would like to congratulate you for executing the 
Reliable Replacement Warhead design competition and making a difficult 
selection between the two extremely innovative designs.
    As an original sponsor of the RRW program, I continue to believe 
that this program provides the best opportunity to transform the 
stockpile and reduce the overall number of warheads and weapons 
systems.
    It is clear to me that without a demonstrated capacity to produce a 
weapon that applies state-of-the-art use controls, increased 
reliability margins, and the ability to be certified without testing, 
military leaders will not accept a significantly smaller stockpile than 
we have today as they manage future risks through a massive inventory 
of weapons. Mr. D'Agostino, I want to compliment you for your advocacy 
of this program. You have worked hard to articulate the vision for this 
program since its inception in the fiscal year 2005 Energy and Water 
Conference Report.
    However, if this program is to survive and we are to realize the 
goal of a smaller deterrent, then it is vital for this administration 
to defend this program.
    Today, I will be sending a letter to the Secretary of Defense, 
Secretary of State and the National Security Advisor urging them to 
take a more active role in supporting the RRW program and to answer the 
concerns that have been raised with the creation of the RRW weapon 
system.
    This administration has a strong record on reducing our nuclear 
stockpile. They are committed to reducing the stockpile to its lowest 
levels since the Eisenhower Administration, and the RRW is consistent 
with this objective.
    For anyone interested in further reducing our nuclear stockpile and 
building on the current momentum--now is the time for action, and the 
RRW program is the right vehicle.
    Now let me turn to the other aspects of this budget request.
    I do have concerns about the cuts to the science, engineering and 
experimental activities that support the science-based stockpile 
stewardship activities. Funding for these activities has been cut by 
more than $113 million in this request. I believe the focus on 
transformation puts too much emphasis on facilities and not enough on 
science.
    Going forward it is vital that we sustain our scientific 
capabilities, especially with an RRW design. The JASONs, an independent 
team charged with evaluating the RRW program, also indicated that 
resolving important scientific questions is critical to having 
confidence in the stockpile without underground testing.
    The facts speak for themselves; all three of the labs received a 
net reduction in funding, while funding for the manufacturing plants 
was increased despite the fact there is $60 million in unobligated 
balances at the plants.
    I am surprised by the differences between the Office of Science and 
NNSA budget requests for fiscal year 2008. The Office of Science is 
committed to fully utilizing its experimental facilities and expanding 
its computational and simulation capabilities.
    The NNSA budget has taken the opposite strategy and reduced funding 
for science and experimental activities and proposes to reduce the 
number of NNSA computers from three machines to two.
    I do not believe this strategy is sustainable.
    Now let me turn to Nonproliferation. One of the most challenging 
projects before this subcommittee has been the MOX plant. This facility 
remains the preferred alternative to eliminating 34 tons of excess 
weapons-grade plutonium and fulfills our commitments under the Fissile 
Materials Agreement with Russia.
    I am told by NNSA that the MOX plant remains the most cost 
effective and timely solution to eliminate this material.
    I continue to support this initiative and believe DOE should do 
more to dispose of excess plutonium as a means to mitigate the rising 
security costs. The fiscal year 2008 request includes $881 million for 
security, an increase of $120 million above the fiscal year 2007 level. 
I am concerned that security costs continue to take a larger and larger 
bite out of the mission.
    Mr. D'Agostino, your testimony only makes brief mention of your 
consolidation efforts. I would like to learn more about NNSA's strategy 
to permanently dispose of our excess material and put a stop to the 
rising security costs.
    Mr. Chairman, I believe we need to give very close scrutiny to the 
level of assistance we are providing Russia. When we initiated many of 
the projects under the Cooperative Threat Reduction initiative, Russia 
did not have the financial means to protect and secure nuclear material 
within its country.
    Now, that picture has changed and Russia enjoys a budget surplus as 
they have profited immensely from the high price of crude oil and 
natural gas. I no longer support providing massive subsidies to 
Russia's military establishment and believe they should now be expected 
to pay for their full share of the nonproliferation obligations.
    I intend to work with the NNSA to identify areas where we can 
reduce our subsidies to Russia.
    Finally, I would like to make mention of the success of the Naval 
Reactor program. This program supports the safe and reliable operations 
of 103 nuclear plants in our naval warships.
    I am very proud of the long-term record of success of this program 
and I wish you well in the future.
    Mr. Chairman, I appreciate your patience and I will have several 
questions for our witnesses.

    Senator Domenici. But, I want to say, for a small 
committee, we have a very big sized plate that is full, not 
just full of money, but full of some of the most important 
issues to the American people that any subcommittee, any full 
committee should have, much less this small subcommittee that 
you chair. That people wonder, what in the world is energy and 
water anyway.
    And, we have a series of funds in here for Russia. Let's go 
back about 8 or 10 years, and I want to look at this with you 
very in-depth because I'm wondering whether we ought to give 
them anything. I was the proponent of the Russian programs. 
But, Russia's got more money than we do to spend. If they don't 
care about the nonproliferation, I'm just wondering why we 
should. These are nonproliferation programs, pure American 
dollars. That's one program.
    We've got GNEP in here, at least we've got to fund some of 
it. It's a huge program to finish the closed fuel cycle on 
nuclear energy, of nuclear waste and the development of nuclear 
power. Big monster program with three or four stopover points 
where buildings would be built, technology would be applied 
that is, as much as the biggest we've got around would be built 
anew. Do we do it or not? Do we have enough money? Good 
questions. Clearly, we have some big problems with whether or 
not the entity that you run today, Mr. D'Agostino, NNSA, 
whether it's working right or not. We're not going to have a 
long time in my opinion.
    Mr. D'Agostino. Right.
    Senator Domenici. Before it's determined that you cleaned 
it up and fixed it, or you didn't and it failed.
    Mr. D'Agostino. Right.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Domenici. That's a giant job after we had so much 
faith in that new approach to handling the weaponry. Then we 
have last, but not least, the RRW program.
    I want to say to you, sir. If you represent the 
administration, and if they favor this program like I assume 
they do. And, if they assume, like I do, that it is a 
tremendous approach to reducing the stockpiles of nuclear 
weapons dramatically in the United States, both in number and 
size, within a reasonable time. And, that the same should occur 
and accrue to the Soviet Union, Russia, who has big monsters 
and they keep rebuilding them, monstrous bombs. And, we are 
supposed to set the world on edge here by telling that we are 
for the newest of technology in the RRW and to get on with the 
first, the second little batch of funding, which is going to 
bring a huge debate. And sir, if you represent the 
administration, you better leave this hearing and advise them 
that we better hear from some very big members of this 
administration who are charged with this problem and who have 
credibility. Because they are going to be attacked, this 
program is going to be attacked as being not what we say it is, 
or what you say it is, but something else, without any 
question.
    Mr. D'Agostino. Yes, sir.
    Senator Domenici. The opposite. I have found lacking, and I 
told the chairman, I found lacking the Secretary of Defense's 
ideas and yet, this is a defense program as much as it is not. 
I found that Secretary Rice was not forthcoming, at least had 
not been. And, I found that the Secretary of Defense has not 
been forthcoming. And, I believe that in short order this 
subcommittee ought to know from all of them, how they stand and 
why, and can we really do this, and is it good for the country 
and why.
    It's not too tough for me. I don't need much explaining 
right now. I'm not that smart, but I got a jump start because 
we funded a little bit of it last year. I think you know that. 
But, to me, if we can not convince people that it is time to 
have a new generation, completely different kind of nuclear 
weapons, a complete gigantic build down.
    Incidentally, this administration has a done a terrific job 
of building down the nuclear stockpile. They are the only 
administration that comes close to reducing to the levels of 
the Eisenhower administration, in reducing warheads that 
Americans had available for war use. This administration did it 
in spades. Now they want, without testing, they aren't saying, 
``Let us test.'' They're adding to this that they won't test, 
right? Is that right, Mr. D'Agostino?
    Mr. D'Agostino. Yes, sir. To certify the warhead, that's 
right.
    Senator Domenici. This whole new thing will say, ``We'll 
produce the weapon and we'll produce assurance it will work. It 
will be small, it will be different, and you won't have to test 
it.'' Right?
    Mr. D'Agostino. That's right, sir. That's right. To certify 
the warhead we will not have to test. I believe it will reduce 
the likelihood, certainly, especially compared to the stockpile 
we have right now, we would ever need to test.
    Senator Domenici. Mr. Chairman, I have about 20 more that 
I'll put in later. I do want to thank you for your diligence 
and say what a great start this subcommittee's had, and is 
going to have under your leadership. In my opening remarks, if 
I don't get any more of them in here, I will put them in the 
record.
    I'll close by saying, Admiral, I hope that every time you 
appear before this subcommittee, the fact that you are asked no 
questions does not mean that, that we have anything but the 
greatest admiration for the work you do. If every department of 
the Federal Government could accomplish its mission pursuant to 
its goal as set and never miss the pencil point, we would have 
short hearings and great praise.
    Admiral Donald. Yes, sir. Thank you very much. It's an 
honor to appear before this subcommittee, and I do appreciate 
the support the subcommittee's provided over the years to this 
program. It's been a large part of the success.
    Senator Dorgan. Senator Domenici, thank you.
    Senator Allard.

                           PREPARED STATEMENT

    Senator Allard. Thank you, Mr. Chairman. I have a statement 
I'd like to make a part of the record if I might.
    Senator Dorgan. Without objection.
    [The statement follows:]
               Prepared Statement of Senator Wayne Allard
    Thank you, Mr. Chairman, for holding this important hearing today 
on the National Nuclear Security Administration budget request for the 
coming fiscal year 2008.
    Over the years I have consistently supported sustaining our nuclear 
weapons stockpile, as well as efforts to develop concepts for future 
weapons. I believe that our Nation's national security is strengthened 
by our possession of such weapons.
    Some opponents of these weapons believe that they are a threat to 
our civilization. Others believe our possession of such weapons raises 
the possibility that they might be used. Many believe that if the 
United States dismantled its nuclear stockpile, then other nations 
would follow suit. And, unfortunately, some believe that nuclear 
weapons should be destroyed no matter the cost to our national 
security.
    These arguments do not always reflect the global security 
environment. First, as more than 50 years of deterrence has proven, the 
best way to ensure that a nuclear weapon is not used is to have a 
strong national defense, including nuclear weapons.
    Additionally, opponents have attacked the Bush Administration's 
nuclear weapons initiatives over the past few years, including the 
feasibility study for the Robust Nuclear Earth Penetrator, the 
development of Advanced Concepts, enhanced test readiness, and the 
construction of a new modern pit facility.
    The question that I continue to raise is where do we go from here? 
After the test moratorium went into effect and the stockpile 
stewardship program ramped up, most of our efforts became centered on 
sustaining our current nuclear stockpile. Given the political dynamics 
of the post-cold war era, this strategy seemed to make sense. But, we 
must all recognize that this decision only put off, at least for the 
time being, a larger policy decision about the future of the U.S. 
nuclear weapons stockpile. We must face the facts that our current 
stockpile is on average approaching 20 years in age.
    Again, thank you Mr. Chairman for bringing us here today and I look 
forward to hearing Mr. D'Agostino's testimony today on these and many 
other issues.

                   SECURITY AT NATIONAL LABORATORIES

    Senator Allard. It seems like the Department of Energy 
consistently has problems that raise concerns about being able 
to protect our Nation's secrets. And, we've just got a 
inspector general's report, March 2007, where we have computers 
that are missing, as far as inventories are concerned. And, I'm 
brought back to--was it 1997, 1998 I--think, Senator Domenici, 
where we had computer and security problems related to 
computers at Los Alamos and our national laboratories.
    Senator Domenici. Yes.
    Senator Allard. And, we are back in with the agencies that 
have some of our Nation's top secrets losing computers again. 
And, I'm wondering if you can explain to us how that happens?
    Mr. D'Agostino. This is my question?
    Senator Allard. Yes.
    Mr. D'Agostino. Admiral?
    Senator Allard. How do you pronounce your name?
    Mr. D'Agostino. D'Agostino, Senator.
    Senator Allard. D'Agostino. Okay.
    Mr. D'Agostino. Yes.
    Senator Allard. Got you.
    Mr. D'Agostino. Thank you. It's hard. I believe you might 
be referring to the counterintelligence laptops.
    Senator Allard. This is an inspector general report and it 
was on the counterintelligence section, yes.
    Mr. D'Agostino. That's right. With respect to control of 
material, of computers and security in general because I think 
it's not just a problem that exists at one site. It's something 
that the Secretary and I are very concerned about across all 
areas.
    Most recently, as you are well aware, we had a concern at 
Los Alamos National Laboratory last fall that resulted in 
multiple inspections by the inspector general, and the 
Government Accountability Office to look at what is going on 
with respect to cyber-security. We call it cyber-security. What 
we have found as a result of that, we had too many directives 
that were issued, by memo or email and not enough, actually, 
written down in a clear concise way and put into the contracts 
themselves. So the contractors had, what I would say, is too 
much conflicting information.
    Since that time, the Secretary had directed our Chief 
Information Officer to look at this particular problem 
specifically and the inspector general investigation that was 
done. He commissioned a special task force to look at that 
specific problem. Mr. Pike, who is the Chief Information 
Officer, provided a report. I was part of that task force that 
looked at that. We came out with a number of recommendations to 
deal with it.
    The Secretary is implementing those recommendations, in 
fact, two of the biggest recommendations were to start from 
scratch and simplify the cyber-security directives to make sure 
that it's clear what we expect from our contractors, how we 
expect our contractors to perform. And, more importantly, put 
those requirements in the contracts themselves.
    Those contract modifications are being put into the 
contracts themselves and then the next step is follow through 
with oversight by the Federal site offices and headquarters to 
make sure that we tie expectations and performance, money, and 
reward fee that we have to it. I can't explain that specific 
incident and I apologize. I don't have the details behind that 
particular incident on the laptops, but I know the Secretary is 
very concerned about this particular problem and we're taking a 
look at it, not just at the nuclear weapons laboratories and 
not just across the eight nuclear weapons sites, but across all 
17 laboratories within the Department of Energy.
    Senator Allard. It's my experience here in the Senate that 
this is a chronic problem with the Department of Energy losing 
track of computers. We always set up a committee to check it 
out and recommendations are applied and, you know, 4 or 5 years 
later it erupts again. And, I'm hoping that somebody around 
here is beginning to take this problem seriously. I think it's 
intolerable, from my point of view.
    Mr. D'Agostino. Right.
    Senator Allard. My question is, do you have money to make 
sure that you have proper controls over our Nation's classified 
information?
    Mr. D'Agostino. I know the answer to that question is yes 
and I'll explain how. In fact, right now within the NNSA our 
cyber-security budget has gone up by more than 15 percent 
compared to fiscal year 2007. But, actually there's more to it 
than that.
    For fiscal year 2009--we're putting our budget together for 
that right now--we're applying what we call risk-based and risk 
management decision processes to make sure that we know what it 
takes to fund that area. My expectation in 2009 is we'll be 
seeing additional resources in this area to address these 
particular problems. Resources are part of the problem, but the 
other part of the problem is attitude and understanding and 
having clear expectations.
    The one thing I've learned in this job over the last couple 
of years and in Defense programs is that setting clear, simple 
expectations is very important, having the expectations defined 
in contracts and in performance expectation, performance 
evaluation plans, and tying financial resources to those 
expectations so it actually drives behavior. I think that's how 
were going to get to solving this problem.
    Senator Allard. Mr. Chairman, I have one more question. I 
can either ask it now, if you'd like, or wait for another 
round.
    Senator Dorgan. You may proceed.
    Senator Allard. Okay, thank you.
    Senator Dorgan. Then I'll call on Senator Feinstein.
    Senator Allard. Thank you.

                 MIXED OXIDE FUEL FABRICATION FACILITY

    I strongly support the Mixed Oxide Program in Savannah. I 
think it's also referred to as MOX Plus, am I correct?
    Mr. D'Agostino. We just call it MOX.
    Senator Allard. Okay. When do you plan to complete your 
design work for the facility and then when do you plan on to 
begin construction and have you got any thoughts about cost 
scheduling?
    Mr. Tobey. Senator, the design is some 90 percent complete 
at this point. Small portions of the designs balance will go on 
for years because it just makes sense to do some of the design 
as the building is completed. We're ready to begin construction 
as soon as we're permitted by law, after August 1 of this year. 
And, it would, the construction would go on for some 15 years, 
is the baseline.
    Senator Allard. And, when do you think you'll be able to 
process materials?
    Mr. Tobey. The construction will be complete in 2016. We'd 
be able to process materials immediately thereafter.
    Senator Allard. Thank you.
    Mr. Tobey. And, it would run for 15 years after that.
    Senator Allard. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Allard, thank you.
    Senator Feinstein.
    Senator Feinstein. Thank you very much, Mr. Chairman.
    Mr. D'Agostino, I want to thank you for the time you spent 
with me on Monday.
    Mr. D'Agostino. Yes, ma'am.

                      RELIABLE REPLACEMENT WARHEAD

    Senator Feinstein. I want to say that you're a straight 
shooter and that you're honest and direct. And, I want you to 
know that I really appreciate this.
    Mr. D'Agostino. Thank you.
    Senator Feinstein. I believe I now have a very good idea of 
what is involved in this warhead. This is a real point of 
conscious for me. I grew up following Hiroshima, 15 kilotons, 
and Nagasaki, 7 kilotons. And, I saw the wake of that all 
during my childhood. And, the mushroom cloud was the thing we 
most feared growing up----
    Mr. D'Agostino. Right.
    Senator Feinstein [continuing]. In this very great country. 
A December 2006 report by the national laboratories, has showed 
us that the plutonium pits have a lifespan of at least 85 
years. And, it's my understanding that next week, the American 
Association for the Advancement of Science is expected to issue 
a report calling on the administration to develop a bipartisan 
policy on the future of nuclear weapons and nuclear weapons 
policy before moving ahead with the RRW. My vote on this, 
depends on whether I believe this is, in fact, a new nuclear 
warhead. I told you that Monday. I have thought about it all 
day Tuesday. I've gone over in my mind, those things that we 
shared in that classified briefing.
    I worked with Sam Nunn, when he was in the Senate of the 
United States. And, I want to quote for a moment, his testimony 
on March 29 before the House Energy and Water Appropriations 
Subcommittee. And he noted, and a quote, ``On the RRW itself, 
if Congress gives a green light to this program in our current 
world environment. I believe that this will be misunderstood by 
our allies, exploited by our adversaries, complicate our work 
to prevent the spread and use of nuclear weapons and make 
resolution of the Iran and North Korea challenges all the more 
difficult.'' That's Sam Nunn, who's the chairman of the Nuclear 
Threat Reduction. And, I think very well respected for his 
background and work in this area.
    I would hope that every member of this subcommittee would 
get a classified briefing on this proposed new, proposed change 
in the warhead. Let me ask this question. Has the NNSA assessed 
the impact of the United States development of a new warhead on 
U.S. nonproliferation efforts, including efforts to convince 
other countries not to acquire nuclear weapons? And, how do you 
justify this cost to our nonproliferation efforts?
    Mr. D'Agostino. Thank you, Senator. I appreciate your 
comments earlier.
    I'm going to answer it and I'd like Mr. Tobey, as well, to 
talk a little bit about the international piece. His folks 
spend a tremendous amount of time overseas talking about this 
very subject. I don't recall if you were in the room when I 
responded earlier to the idea.
    Before we made the announcement on the Reliable Replacement 
Warhead concept, we did talk to our allies, the North Atlantic 
Treaty Organization (NATO), as well as other allies, including 
Russia and China about the strategy and the understanding that 
we want to reduce the size of our stockpile. As I mentioned to 
you earlier this week, I'm committed to making sure that when 
we reduce the size of our stockpile and we look at a future 
nuclear deterrent, that my responsibility is to make sure that 
that deterrent is as safe and as secure as humanly possible, as 
our technology allows it to be. I'm convinced that our cold war 
stockpile has, even though we assess it on an annual basis 
right now.
    Senator Feinstein. You assess that it's safe and secure on 
an annual basis?
    Mr. D'Agostino. Assess it, assess it's safe and secure on 
an annual basis. That over time, we'll be put into a situation 
where this country will be faced with a question that I don't 
want the President, whomever the President may be in the 
future, to have to decide whether we need to conduct an 
underground test. I want to stay as far away from the 
underground test question as possible.
    The question in my view, becomes if there is a future 
nuclear deterrent, and I do understand Senator Nunn's comments, 
then how should, what should it look like? I believe it should 
be small, as small as possible.
    I believe the nuclear footprint on the United States, how 
many sites and the size of the sites and how much money the 
Nation invests over a lifetime, should be commensurate with 
that. I believe that the Nuclear Posture Review that was put 
out a few years ago, which was the concept of replacing the 
large number of nuclear warheads as a nuclear deterrent during 
the cold war is not as good as having a small number of very 
safe and secure warheads with the ability of the Nation to 
respond in the future.
    Right now we are faced, I believe, with a fairly important 
point, as you are absolutely right, on what strategy is the 
right strategy. I'm concerned that if we go down a track of, 
without considering this, without understanding what RRW really 
means, then we won't actually have the information that I can 
present to you and say, ``This is what it really means with 
respect to how small the stockpile can be.''
    Senator Feinstein. Which you don't have yet.
    Mr. D'Agostino. I don't have that, that's right, ma'am. 
And, that's what I'd like to do in the next 9 to 12 months, is 
to develop the cost, the schedule, and scope with the United 
States Navy to give you a real number. How much it costs? What 
are the offsets? How small does the stockpile get as a result 
of this? What does this mean to nuclear testing, exactly what 
does this mean to nuclear testing? And, how many more nuclear 
weapons should we be dismantling? I want to be able to put that 
in writing, almost like a contract, if you will.
    Senator Feinstein. Could you speed it up and do it before 
we vote on whether to approve this appropriation?
    Senator Dorgan. Would the Senator yield on that point?
    Does the appropriation request for this coming fiscal year 
also include some small amount of money for an RRW-2, which 
would be a follow up, follow-on contract? And, if so, what, 
what's the purpose of talking about a second RRW before the Air 
Force, prior to making the decision the Senator from California 
is asking?
    Mr. D'Agostino. That's a good question, sir. We have to 
look at our B61 bomb. The B61 bomb is an Air Force bomb. It was 
designed in the early 1960s, essentially, almost 40, 45, 50 
years ago. It's got vacuum tubes inside the system itself. We 
have other concerns that I'll be glad to talk specifically in a 
classified session, I'll be glad to talk about that.
    And so, the idea was, do we--right now, we're going to be 
doing a life-extension plan, starting in the 2012, 2010 to 2012 
timeframe. And the question is, does it make sense to rebuild a 
bomb? As we will do if we don't move forward in a different 
direction or we build bombs the same way we did back in the 
1950s and 1960s? I think that's irresponsible to do that. The 
technology has changed so much in the last 50 years. The 
threats have changed so much in the last 50 years. It would be 
irresponsible for us to replicate the past.
    I don't think it's right for our workforce, it makes them 
work on components like Beryllium. Beryllium is a very 
hazardous material, and causes berylliosis, which is a disease 
we didn't know about 50 years ago. In fact, this Nation is 
spending money right now, essentially compensating our workers 
who, over the past 40 years have devoted their life to national 
security, and now are finding themselves sick. I don't want to 
get into that in the future.
    Senator Feinstein. Would you go back to your proposal?
    Mr. D'Agostino. I think it would make sense and I want to 
make sure the subcommittee gets the detailed information on the 
cost, the scope and the schedule of what an RRW could do, and 
that's what we're working on right now. We are authorized and 
appropriated to do that, and we are doing that. And it's going 
to carry forward into 2008.
    When we get that information together, and when we can look 
at what this means to the size of the stockpile, to what things 
we take off the table from our current plans, and how does this 
impact the actual infrastructure--and I use that term to 
describe buildings and processes--and how much money we save 
from that, I think the actual data that I have right now is 
compelling, but I want it to be, what we call, budget quality. 
In other words, the quality that I feel I can stand behind, and 
come to this.
    Senator Feinstein. I thought what you had said to me 
earlier, that it might be possible to actually speed up the 
reduction of the nuclear fleet, so to speak.
    Mr. D'Agostino. Oh, okay, yes, ma'am. We were talking about 
dismantling warheads.
    Senator Feinstein. Right.

                         WARHEAD DISMANTLEMENT

    Mr. D'Agostino. Yes, ma'am. A little bit different from 
RRW, we're going as quickly as possible given the resources to 
work with the Navy to get the picture right.
    On dismantlements, what we did last year was we made a 
unilateral decision outside of the Defense Department space, to 
accelerate by about 25 percent, on average, our dismantlements 
of cold war nuclear warheads.
    In fact, in fiscal year 2007, this year, we're in right 
now, we had made a commitment, I made the commitment to the 
Secretary, and the Secretary talked to the Secretary of 
Defense, of a 49 percent increase in the number of warheads 
we're dismantling, compared to fiscal year 2006.
    In all likelihood, we're going to not only hit that target, 
we're going to exceed it. We'll probably dismantle twice as 
many warheads this year as last year. The key will be keeping 
on that pace year in and year out. Right now, even though we've 
dismantled 13,000 warheads in the timeframe I mentioned 
earlier, in the 1990s, and we have a number of warheads to 
dismantle, that what we've got is a plan that takes us out into 
the early 2020 decade. And, ultimately, in the end, we need to 
pull that date, the end date, up forward.
    Senator Feinstein. How many warheads are in the RRW, long-
term program?
    Mr. D'Agostino. If you take the concept to its end. If we 
believe that we're going to have fewer and safer and securer, 
it would be the number of warheads that I can talk about 
publicly, it's the Moscow Treaty number of 1,700 to 2,200 
warheads plus, a number of what we call reliable spares.
    Because, when we say operationally deployed, these are 
warheads that are with the Department of Defense, whether 
they're in silos or at Navy bases, and we need to maintain a 
fraction of that number within the Department of Energy because 
we do surveillance. We take some systems out and we replace 
them to check on their quality.
    That is ultimately the number that you need to understand 
and that I need to understand that the Department of Defense 
can collectively come to. I have in my mind what it could be, 
it would be not appropriate, I don't believe, to discuss it in 
public until I've had a chance to talk to the Defense 
Department.
    Senator Feinstein. So, we could sit down with you, again, 
in a classified way and go over some of this?
    Mr. D'Agostino. Yes, ma'am----
    Senator Feinstein. Because it's very important.
    Mr. D'Agostino. [continuing]. Yes ma'am, I'd be glad to do 
that, I will look forward to it, thank you.
    Senator Feinstein. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Feinstein, thank you.
    I think that might be a good idea, I'm interested in this 
issue of deployed weapons, versus total weapons, and the 
circumstances surrounding that, weapons spares, et cetera.
    Mr. D'Agostino. Yes, sir.
    Senator Dorgan. And I think that is most appropriately 
discussed, I think, in a classified setting.
    Senator Domenici, did you have other questions you wish to 
ask?
    Senator Domenici. First I want to say to the members of the 
subcommittee that are here, and in particular, Senator 
Feinstein, that it is quite amazing, as a Senator, to be able 
to say in the record this afternoon that great issues like the 
one we are discussing are frequently done without a lot of 
television, via a hardworking subcommittee. I'd say this one 
works hard, it couldn't produce anything if it didn't, it's so 
complex, unless we just abdicated to someone and said, ``We 
don't want to do anything,'' and your questioning indicates to 
me that you can join in a discussion that is predicated upon 
good sense of the past, and some good thinking about the 
future, even if it's in the most complicated, and almost 
horrific context, that has to do with building nuclear weapons 
and dismantling and destroying them.
    I do want to say to you that someone like me whose age you 
would just have to guess, because I'm in such great shape, 
nobody knows I'm a very old man, and people think I'm 55--
pretty good, right? But, what I wanted to say to you, whatever 
generation I came from, I had the same recollection of the 
bombs, and I learned an awful lot more about it by being not 
too far from Los Alamos for my childhood.
    When we used to drive to Los Alamos as a family, in our 
family car, just for the pleasure of being turned down by the 
armed guards at Los Alamos who would tell this wonderful little 
American family, ``Well, you can go no further, make a U-turn 
and go home.'' And we used to all wonder in our car, and talk 
with my dad, who had only a fourth grade education, about all 
of the things we imagined that were going on behind that high 
wall. That was it, that was the central focus for all of the 
building that has occurred since then, that you are aware of.
    I then involved myself very deeply in the next phase around 
here, which had to do with stopping testing, underground 
testing, unless the American future was at stake. And, I 
learned all I could about that, and for the first time, in 
spite of my great friend Sam Nunn, who just called me yesterday 
for a wonderful, ever-so-often conversation, if I had that I 
would have asked him about it, but I forgot. Because we agree 
on most things, but I would ask him if he would sit down with 
me, and discuss the alternatives, which I think he must do. 
Because his voice is too loud to remain unfettered, he must 
tell us what he will do, if he won't do this.
    Because that's going to end up being the question--if we're 
not going to do this, in terms of a dismantlement and change, 
what are we going to do? Are we going to leave this stockpile 
as our legacy, this one, and say, ``We just hope we never have 
to test.'' I don't want to do that, because I feel kind of 
confident that this subcommittee could make a good decision. 
And I think we ought to make the decision, not leave it for 10 
years from now, when somebody will make it secretively, and 
you'll hear about it as a puff out there in Nevada, because we 
can't tell the world what we did.

                 MIXED OXIDE FUEL FABRICATION FACILITY

    Now, having said that, I wanted to ask you about MOX, and 
the facility--how is it coming, and if we budget what the 
President asks for, where will we be? Whose got MOX?
    Mr. D'Agostino. Well, I'm going to ask Mr. Tobey to comment 
on that, and I can follow through.
    Mr. Tobey. Senator, as you probably know, we are ready to 
start construction after August 1 of this year. We're eager to 
do so, we believe it's an important program. It's consistent 
with U.S. national security and nonproliferation interests. We 
would aim to have the facility complete by 2016, and to operate 
it for at least 15 years thereafter.
    Senator Domenici. What is it going to do, so we'll all have 
on the record--we're going to build this building and do 
something, what are we going to do?
    Mr. Tobey. In the first instance, we will dispose of at 
least 34 metric tons of U.S. plutonium access to defense needs.
    Senator Domenici. Where did we get that?
    Mr. Tobey. Pardon me?
    Senator Domenici. Where did we get that?
    Mr. Tobey. From the dismantlement of weapons.
    Senator Domenici. Our own?
    Mr. Tobey. Yes sir. And it will also, it is part of an 
agreement with Russia under which Russia would also dispose of 
34 metric tons of weapons-grade plutonium.
    Senator Domenici. And I'm very glad to say, as a member of 
this subcommittee, I had something to do with that. In fact, I 
sat over there in Russia, with the President of the United 
States, seeing if they would agree. They agreed, and it took 3 
more years before we could get started. Now, we have people 
saying, we shouldn't build in the United States--shouldn't 
proceed in the United States.
    I knew all the answers that I, questions I asked, but it's 
absolutely impractical to me to have a facility that over the 
ages, we could not build because of political problems. It 
approved on all sides, and then the Russians agree to dismantle 
and deliver the equivalent of 34 tons of plutonium to be run 
through a MOX facilitating plant to produce mixed oxide fuel. 
That's what it is, isn't it?
    Mr. Tobey. Yes, sir.
    Senator Domenici. Where it gets its name--that's going to 
be reusable, isn't it?
    Mr. Tobey. Yes, it would become fuel for U.S. reactors.
    Senator Domenici. Fuel for U.S. reactors----
    Mr. Tobey. With significant value.
    Senator Domenici [continuing]. And we have people not 
wanting to do it. I wonder what they would want to do with the 
residual that is high-flying plutonium. And we get to run it 
through this piece of equipment, and it changes from that to 
something much less maligned than its current status, is that 
right?
    Mr. Tobey. Yes, sir, it is. There are no good alternatives, 
certainly none that would provide the nonproliferation 
benefits. And frankly, simply continuing to store the material, 
using 50-year life cycle costs, is the most expensive thing we 
could do with it.
    Senator Domenici. You got it.
    Mr. Tobey. And, given that the half-life of plutonium is 
24,000 years, it's not unreasonable to use a 50-year life cycle 
cost standard.
    Senator Domenici. I thank you very much, and I want to say 
to the chairman that I would like to join in a more in-depth 
briefing if you would like that, and of course, the Senator 
from California wants to do that, and I would like to go with 
you so we don't have to do it twice if you think that's a good 
idea.
    Senator Dorgan. Senator Domenici, I think what we will do 
is arrange a classified briefing and invite members of the 
subcommittee to it, so that we can have a fuller discussion in 
a classified setting of all of these issues.
    Mr. Tobey. Yes, Mr. Chairman.
    Senator Dorgan. Senator Reed. I have no further questions.
    Senator Reed. Thank you very much, Mr. Chairman.

                      RELIABLE REPLACEMENT WARHEAD

    I want to just cover some specifics. I think the questions 
have been asked, but I just want to nail things down. We're in 
phase 2A right now in the RRW, when do you anticipate 
requesting permission from the Nuclear Weapons Council and the 
Congress to start phase 3?
    Mr. D'Agostino. Senator, I'd expect it'll take us 9 to 12 
months to finish this phase 2A activity, probably putting us in 
the January/February timeframe of next year, roughly. Then we 
would take that decision to the Nuclear Weapons Council. I sit 
on the Nuclear Weapons Council with Mr. Krieg and others from 
the Defense Department.
    We will look at that phase 2A study. In particular, we will 
look at what it does to what we call the nuclear weapons 
stockpile memorandum. This is a memorandum the President 
ultimately signs and sends over to Congress, which provides the 
details on the size of the stockpile. And, I think what I--not 
only do I believe as a matter of course, but I think it's 
important for this Congress is to understand how RRW drives the 
size of that and provides the details of the stockpile.
    We will have a vote within the Nuclear Weapons Council on 
whether to move forward on what we call phase 3, which is a 
little bit of a development phase, or design development phase, 
where we would do some engineering work. We would run more 
calculations, maybe do some materials tests, so that would be 
later on next year.
    Senator Reed. Later on, being July, June, August--just to--
--
    Mr. D'Agostino. We're having our first meeting with the 
Navy out at Lawrence Livermore on May 1, so I'll have a 
schedule, probably in another 2 months that I can come talk to 
you about, sir.
    Senator Reed. Just, specifically, and you've already, I 
think, answered this in response to other questions--the RRW 
design is a new warhead, will be a new warhead, correct?
    Mr. D'Agostino. It is a new design for an existing warhead. 
I'm not a lawyer, but it's an existing military capability. 
It's a replacement warhead, but it's a new design for that 
warhead.
    Senator Reed. The warhead is the one for the Navy program, 
the D-5 missile program?
    Mr. D'Agostino. It's to replace the W76, that's right, sir.
    Senator Domenici. Senator?
    Senator Reed. Yes, sir.
    Senator Domenici. Can I ask you if you would do me a favor?
    Senator Reed. Yes, sir.
    Senator Domenici. Out in the audience are 10 trainees from 
the NNSA Training Program, Mr. D'Agostino, it's your training 
program for students from up in your country?
    Mr. D'Agostino. Yes, Senator, they are what we call Future 
Leaders. The average age in the NNSA is close to 50 years, and 
we recognize that we need to train and bring in the best folks 
we can, similar to the model that Admiral Rickover and Admiral 
Donald go off and interview and bring in bright people, bring 
new ideas into the organization. Ten of them are here, sir.
    Senator Domenici. Could they stand up?
    Mr. D'Agostino. Sir.
    Senator Domenici. Mr. Chairman, I greatly appreciate you 
permitting us to do this, and could I just welcome them, thank 
you for coming, and we hope you have a good time.
    Mr. D'Agostino, thank you for being so cordial to them.
    Mr. D'Agostino. Thank you, sir. I appreciate it, it's good 
to see them here. I appreciate having them here.
    Senator Dorgan. All of us welcome you, and we hope that 
you've enjoyed the subcommittee hearing, and we appreciate your 
service to our country by serving in public service, which is a 
very honorable and important thing to do. So, we welcome you 
here.
    Senator Reed.
    Senator Reed. I think a critical question here, with 
respect to RRW is the issue of testing. Is it a specific 
objective of the program to be able to eliminate the need for 
testing in the future? Yes or no, is that going to be a 
specific objective?
    Mr. D'Agostino. I want to be very precise in my answer, I 
think it's a little bit more difficult than a yes or no. But, 
here's what I'm going to say--we will not move forward with 
RRW, if it requires a test to certify that warhead. That is not 
something I would recommend to the Nuclear Weapons Council. It 
would be a long discussion in the Nuclear Weapons Council 
before that happened.
    Now, we do assess, on an annual basis, our stockpile for 
testing. I can't predict what might happen 40 years from now, 
as that warhead ages, but that's not, my view, is not moving 
forward.
    Senator Reed. Because Admiral Donald's been so cooperative, 
he never gets asked a question.

                           NAVY HOME PORTING

    Admiral Donald--how does your Office of NAVSEA and the 
Department of Energy participate in the overall EIS process for 
Navy home porting changes for potential additional submarines 
for Guam? In 20 words or less.
    Admiral Donald. Yes, sir, we participate with the Navy 
anytime there's an environmental impact statement or a home 
port change or a significant--potential significant impact to 
the environment. We participate as part of that team, obviously 
with concerns about the facilities that may be needed to 
support the nuclear-powered ships in the area, obviously with 
our environmental record, that subject is a matter of public 
record as well. And that's part of that consideration should 
that, any expansion be required in that area.

               NONPROLIFERATION RESEARCH AND DEVELOPMENT

    Senator Reed. Thank you, sir. The chairman's been very 
kind, but I have one additional question, Mr. Tobey. You might 
want to take this for the record, because we, we talked about 
this before, I think, in the Armed Services Committee, which 
is--if additional funding were available for nonproliferation 
research and development, how would you use it? And--would you 
like to take that one back and send us a note, or----
    Mr. Tobey. I think I actually would like to answer that, if 
that's all right, Senator?
    If the Congress appropriated, and the President signed 
additional funding for research and development, I think we 
would direct that funding toward greater efforts on 
radiological detection. That's a critical effort that will 
support our abilities across the board, as you may understand, 
and as we've discussed. We're moving our efforts from those 
that are concentrated mainly on the former Soviet states, to 
threats that are originating elsewhere, and also from the 
immediate facilities that house nuclear weapons and material 
where our work is coming to closure, to being more vigilant on 
borders, and in other places.
    And, in order to meet the emerging threat, we do need to 
work on radiological detection, we are working on radiological 
detection, and the President's budget does support that. But, 
that would be an area of additional interest.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman, you've been very kind.
    Senator Dorgan. Senator Reed, thank you very much.
    These are--as I indicated when I started--very complicated 
issues. And I have tried very hard to meet with a lot of 
people, study these issues, try to understand these issues in 
recent months. And there's a lot to know, and a lot to 
understand, and many answers that you don't have, Mr. 
D'Agostino, and I don't have, and Senator Domenici doesn't 
have--but we have to try to, as best we can, think through 
these issues, in the context of what is in the best long-term 
interest of this country.
    The survival of this planet, I think, depends on our 
getting these things right. We've been very lucky that for 60 
years, we have not had another nuclear weapon used in anger. 
Because once one is, a planet in which there are 15,000 to 
20,000 nuclear weapons, and the release of them back and forth, 
this civilization will cease to exist, at least as we know it.
    I said earlier, at another hearing, that I very much 
opposed and felt it reckless for those at a time, who talked 
about the potential use of nuclear weapons, the need to build 
new nuclear weapons, the need to build designer nuclear 
weapons, the need to be able to burrow into caves and create 
bunker busters, and some talked about nuclear weapons were 
simply another weapon, and they were usable, were needed to be 
used under certain circumstances, I view that as pretty 
reckless, and pretty troubling, personally.
    Because there are a lot of nuclear weapons that exist, and 
because our country has signed up to a treaty that says we 
agree to some sort of goal at some point, not described with 
respect to time, that we would like to abolish nuclear weapons. 
Because of all of that, I mean, the question for all of us now 
is how do we reach into the future, and describe a future 
without nuclear weapons, or at least moving toward the 
reduction of nuclear weapons?
    I want to just tell you, I read a book awhile back that 
describes something I'd previously read in a--I believe, Time 
or Newsweek, about October 11, I believe it was exactly 1 month 
after September 11, 2001. A time during which a CIA agent code 
named Dragon Fire reported that a small, I believe 10 kiloton, 
at least, a small Russian nuclear weapon had been stolen, and 
had been smuggled into either New York City or Washington, DC, 
by terrorists, and was to be detonated in a major American 
city. That didn't hit the press, was not a part of a public 
story, but for about 1 month, at least, there was great, great 
concern about whether or not that report was accurate.
    It was later discovered to have not been an accurate 
intelligence report, but in the post-mortem, the evaluation was 
that it was perfectly plausible, that perhaps someone could 
have stolen a 10 kiloton nuclear weapon. Perhaps, if stolen, 
and gotten by a terrorist organization, it was plausible that 
it could have been smuggled into an American city, and 
plausible that such a weapon could have been detonated. And 
then we wouldn't be talking about several thousand casualties, 
we'd perhaps be talking about several hundred thousand 
casualties.
    That is the angst about the potential loss of, or stealing 
of one nuclear weapon. One. There are about, we believe, 20,000 
on this Earth. I think the survival of our planet depends on 
our getting all of this right--we've been very lucky for 60 
years. Maybe we'll be lucky for the next 600 years, I don't 
know.
    We have, in fact, a Stockpile Stewardship program in this 
country, that goes on, has gone on for some while. That means 
that we work on the weapons that exist, to make sure that they 
are weapons that are available in the event that we were 
threatened as a country, so there's nothing new about stockpile 
stewardship, about people in your organization that routinely 
do this kind of work.
    The RRW program, my colleague from California raises 
definitional questions, I don't know the answers to those. I 
think the discussions that will continue now in the early 
stages of this program, we'll try to find those definitions, 
and try to think through--what are the consequences, Senator 
Domenici asked, what are the consequences of not proceeding? 
Senator Feinstein would ask, what are the consequences of 
proceeding? That's the sort of thing, it seems to me, that this 
country needs to grapple with as a set of policies.
    Senator Domenici today has said that--and he showed me the 
letters--that he has written to the Secretary of State, 
Secretary of Defense, and one other--and I think, this is--as 
I--the reason I describe all of this at the end of this 
hearing, is this is not just some other issue. Senator Domenici 
is right--this subcommittee has in its lap some very serious 
questions to answer.
    You, Mr. D'Agostino, run an organization that is very, very 
important, and also needs to get this right, working with us to 
get it right, and I've said previously, with some of the folks 
who have appeared, I'm impressed with the quality of some of 
the folks who have come to public service, I'm very impressed, 
Mr. D'Agostino, with your willingness to sit with us----
    Mr. D'Agostino. Thank you.
    Senator Dorgan [continuing]. You and I have had a chance to 
visit on a couple of occasions, and have traveled to New Mexico 
to Sandia. I thank you for serving our country.
    I'm not sure how I come out on all of this at this point. 
I'm trying to understand it all, it's very complicated. And I 
don't think my colleague, Senator Domenici, would allege it's 
simple at all----
    Senator Domenici. Oh.
    Senator Dorgan [continuing]. It's very complicated, for 
everybody on all sides.
    But I pledge that I, and I think all members of this 
subcommittee want to try to find a way to get to the right 
answer here on these issues. Because I think the survival of 
the planet, at some point, I don't think it's expressing it too 
starkly--depends on our doing the right thing.
    And, so I want to thank the witnesses for coming. Mr. 
Tobey, thank you, you have a very important part of this. I'm 
going to submit to you some questions, and Mr. D'Agostino, I'm 
going to submit some additional questions to you.
    Mr. D'Agostino. Sure.
    Senator Dorgan. Admiral, thank you for your service.
    And, let me again, to the new leaders, say to you--I think 
public service is an unbelievable honor. Those of you who come 
to Government and say, ``I want to be a part of this,'' thanks 
for doing that, and it's nice to see an agency that worries 
about the future. I think it's sort of crass and unbelievably 
inept of you, Mr. D'Agostino, to define 50 years of age as old.
    Mr. D'Agostino. I apologize.
    Senator Dorgan. But, we welcome to those of you, if you 
choose to have them, it does you no service on this 
subcommittee, does it?
    But in any event, thanks for being worried about renewal 
for those old codgers who are nearing 50.
    Mr. D'Agostino. I don't have much hair.
    Senator Dorgan. Senator Domenici, thank you, and let me 
thank the witnesses, this hearing is recessed.
    Senator Domenici. Mr. Chairman?
    Mr. D'Agostino. Thank you, Mr. Chairman.
    Senator Dorgan. Yes?
    Senator Domenici. I just want to say, and then you 
certainly are welcome to comment, you used the word that we 
have been ``lucky'' for the last 60 years, I think you really 
mean, we have been fortunate. We have not been lucky--we have 
spent more brain power of the highest quality, and more money, 
if money means anything, than on any other issue or program 
that has to do with military, we've spent more on nuclear 
weapons and the defense that goes with them, and defending from 
them, and making sure they're never used. Because most of what 
we spend money on is to make sure nobody uses them, because 
they know they can't use them, because they know for absolutely 
for certain, that it would be a useless gesture. We spend much 
on that. And there's much to learn from how well we've done as 
we move ahead with what we contemplate in the future.
    And I know what you meant, and you know what I meant. I 
sounded flippant a couple of times, in speaking about Sam Nunn, 
I didn't intend to be, and you don't intend to be, and use any 
of the words here, they're all most difficult.
    Senator Dorgan. No, I think, but I use the word luck for 
this reason. I think in 1945 had someone said, ``You know what? 
We're going to build thousands of additional nuclear weapons, 
thousands of them, and by the way, in the next 62 years, none 
will be used in anger, that's going to require some 
unbelievably good work, and a little luck.''
    Senator Domenici. You got it.
    Senator Dorgan. I think most people would believe that to 
be the case.

                     ADDITIONAL COMMITTEE QUESTIONS

    The subcommittee will submit the balance of the questions 
for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted to Hon. Thomas P. D'Agostino
            Questions Submitted By Senator Pete V. Domenici

                              COMPLEX 2030

    Question. Mr. D'Agostino, Last year GAO reviewed the NNSA's Complex 
2030 and had several recommendations that NNSA address as part of its 
$1.5 billion transition plan. The GAO was critical of the NNSA decision 
to proceed with a plan, without knowing the military requirements for 
the stockpile.
    GAO recommended that DOD should provide clear, long-term 
requirements for the stockpile, including quantity, type and mission. 
Based on this information NNSA could then develop cost estimates based 
on the military requirements and then develop a transformation plan to 
support the preferred stockpile.
    Mr. D'Agostino, it appears that without the Department of Defense 
requirements it would be tough to develop an accurate or precise 
transformation plan.
    Has the Department of Defense provided its long-term requirements 
for the stockpile? What about pit capacity and future RRW requirements?
    Answer. The President defines the size and composition of the 
nuclear weapons stockpile by his Nuclear Weapons Stockpile Plan (NWSP), 
which is reviewed annually. The official requirements documents, such 
as the NWSP, may lag expectations relative to the size and composition 
of the future stockpile. Consequently, our transformation plans must be 
sufficiently robust to cover a realistic range of future requirements.
    With the President's commitment to achieving the smallest possible 
stockpile size consistent with national security, future production 
requirements are likely to support a much smaller stockpile. In 
evaluations led by the Department of Defense, we have established a 
range of possible stockpile scenarios that bound the most likely threat 
environments of the future. For each scenario, we have determined 
warhead production capabilities and capacities, including the 
manufacturing quantities needed for plutonium and highly enriched 
uranium components. Thus, the range of possible scenarios provides 
bounds for production capabilities and capacity ranges that we might 
need in the future. The capabilities to design, certify, and produce 
Reliable Replacement Warhead (RRW) concepts and to manufacture 125 
(net) pits per year are consistent with these evaluations.
    As warhead quantities are reduced, it is important to recognize 
that defining future capability requirements becomes more important 
than specifying capacities. We must have a given capability (e.g., 
manufacturing uranium parts with specific characteristics) regardless 
of whether we are making one or several hundred warheads. We frequently 
find that the capacity provided by the mere existence of a specific 
capability is sufficient to provide quantities needed to support a 
small stockpile. For example, a new plutonium facility designed 
according to modern lean manufacturing, safety, and security practices 
could have a minimum capacity in the range of 125 RRW pits per year and 
a lower value for legacy pits. Reducing the design capacity further 
would not result in significant reductions in facility square footage 
or cost. However, eliminating a specific capability requirement reduces 
the floor-space and fixed-cost for maintaining that capability in a 
state of readiness. One benefit of an RRW approach is that fewer 
challenging or problematic capabilities must be maintained when 
compared to legacy systems, thus, enabling better optimization of the 
Complex in the long-term.
    Question. Without the DOD requirements, how has the NNSA adopted 
the transformational plan? What if one or more of the elements such as 
the RRW isn't implemented?
    Answer. We need to transform the nuclear weapons complex 
infrastructure whether we proceed with Reliable Replacement Warhead 
(RRW) concepts or retain legacy designs. However, RRW concepts enable 
better optimization of the Complex in the long-term because some 
specific capabilities (e.g., beryllium component production) do not 
have to be retained. A primary objective of nuclear weapons complex 
transformation is to establish a responsive infrastructure capability 
that is sustainable and cost-effective for the long-term. There are key 
capabilities that must be present to meet this objective. The Complex 
must have functional capabilities to: (1) design, develop, and certify 
nuclear weapons; (2) manufacture and surveillance of plutonium 
components; (3) manufacture and surveillance of uranium components; (4) 
produce and manage tritium; (5) manufacture and surveillance of non-
nuclear components; (6) assemble and disassemble nuclear weapons and 
components; (7) storage and transport of nuclear weapons and material; 
and (8) provide the science, engineering, and technology essential to 
our nuclear deterrent and our ability to respond to technological 
surprise. In the absence of detailed projections of stockpile size and 
composition for future decades or without an RRW, transformation plans 
must be sufficiently robust to cover a realistic range of future 
requirements.
    Question. Have you reviewed the GAO findings and how has this 
changed your strategy as a result?
    Answer. The Government Accountability Office (GAO) findings in 
Views on Proposals to Transform the Nuclear Weapons Complex (GAO-06-
606T) reiterated that decisions regarding nuclear weapons complex 
transformation must be based on good information. We concur and thus 
the GAO findings have not changed our strategy. Specific findings 
identified four actions that the GAO felt were critical to successful 
transformation:
  --Clear long-term requirements from the Department of Defense (DOD) 
        for the nuclear stockpile.
    The National Nuclear Security Administration has been working 
jointly with the DOD to establish a range of possible stockpile 
scenarios that bound the most likely threat environments of the future. 
For each scenario, we have determined required warhead production 
capabilities and capacities, including plutonium and highly enriched 
uranium operations with some sprint capacity. This set of possible 
scenarios bounds the range of production capacities that we might need 
in the future to plan proposed production facilities. Given that 
stockpile projections will never be exact or remain stable for decades 
into the future, bounding future estimates of required production 
capabilities and capacity ranges are sufficient.
  --Accurate cost estimates of the proposals for transforming the 
        weapons complex.
    We have undertaken a process in compliance with the National 
Environmental Policy Act before issuing a Record of Decision containing 
specifics for the plan to transform the physical infrastructure of the 
Complex. Transforming the physical infrastructure is costly and impacts 
other transformation actions. Cost estimates of the alternatives for 
transforming the weapons complex are being prepared in parallel with 
the ongoing preparation of the Complex 2030 Supplement to the Stockpile 
Stewardship and Management Programmatic Environmental Impact Statement 
(PEIS). Business case studies are progressing concurrently with the 
PEIS, which are considering life cycle costs, decontamination and 
demolition costs, present worth analyses, cash flow analyses, 
qualitative analyses, and comparative costs. These business case 
studies will be instrumental in determining the course of action to be 
chosen in the late 2008 Record of Decision.
  --A clear transformation plan containing measurable milestones.
    We are committed to establishing annual ``Getting the Job Done'' 
lists and multi-year Complex 2030 transformation progress measures. 
These represent measurable milestones that are meaningful to 
stakeholders. However, a number of the progress measures of greatest 
interest to stakeholders are dependent on the Complex 2030 Record of 
Decision to be released in late 2008.
  --An Office of Transformation with the authority to make and enforce 
        its decisions on transformation.
    In order for transformation to be successful, new approaches must 
be firmly anchored in the culture of the entire enterprise. This means 
implementing line organizations and programs must own the new 
approaches to ensure changes are sustainable and will outlast any 
single office. The Office of Transformation, which was established in 
June 2006, is my agent of change within the National Nuclear Security 
Administration (NNSA) for nuclear weapons complex transformation. It is 
establishing transformation implementation strategies and ensuring 
ownership of changes by existing line organizations. While the Office 
of Transformation has my full support, I am the one responsible for 
seeing that the commitments we make to transformation are implemented. 
I have the authority to make and enforce decisions on transformation.
    Let me clarify one comment about the cost of transformation. There 
is no $1.5 billion transition plan in our documents or the April 2006 
GAO report. Some media and non-governmental organizations have 
incorrectly quoted a November 2006 GAO report estimating a total $150 
billion cost of the NNSA nuclear weapons enterprise over the next 25 
years as equal to the cost of transformation. NNSA plans to achieve 
transformation to Complex 2030 through existing programs and management 
structure, and within projected funding levels. If major new facilities 
are justified, incremental funding requests for capital projects will 
be supported by business case analyses.

                 CLOSING LOS ALAMOS NATIONAL LABORATORY

    Question. Some Members of Congress have suggested closing LANL. It 
strikes me that this would be contrary to our Nation's national 
security needs and unachievable based on the LANL mission 
responsibilities.
    It's no secret that I am a supporter of our national laboratories 
and I believe we should continue to take necessary steps to improve the 
safety and security at the labs--as well as make the necessary 
investments to continue to support world class scientific research.
    Mr. D'Agostino, can you detail for us why we need LANL and what 
role they play in our national security.
    Answer. From a National Nuclear Security Administration (NNSA) 
perspective, Los Alamos National Laboratory (LANL) is responsible for 
the majority of warheads in the nuclear weapons stockpile. Personnel at 
the laboratory are intimately involved with the maintenance, 
surveillance, and assessment of the warheads designed at LANL. LANL 
plays a key role in the annual assessment of the safety and reliability 
of the nuclear weapons stockpile, in the absence of nuclear testing. We 
are presently still tied to our underground test data for our legacy 
systems. Advances in science and technology enable a Reliable 
Replacement Warhead (RRW) strategy and will provide a future predictive 
capability for legacy and RRW-type systems; LANL is critical in the 
advance of our science and technology base. The experienced staff and 
the premier facilities at LANL are key to our nuclear weapons program. 
LANL also contributes to other aspects of national security such as 
threat reduction and support to the Department of Defense and the 
Department of Homeland Security and analysis of intelligence 
information. Overall, LANL is a critical contributor of science and 
technology that underpins U.S. national security.
    Question. Can you also elaborate the practical impacts to science 
and research if we were to shut down the lab and divide up the 
workforce?
    Answer. Los Alamos National Laboratory (LANL) continues to have a 
critical role in the National Nuclear Security Administration (NNSA) 
science and research program through its people and facilities. Closing 
LANL would seriously damage the science and research for the Stockpile 
Stewardship Program.
    People can be encouraged to move but a move cannot be mandated. 
With the demographics of the designer community, it is likely that we 
would lose the majority of the remaining experienced designers. In 
addition, we will also loose experienced staff in other LANL areas of 
key technical expertise: weapons materials and chemistry support for 
the complex, nuclear physics, and computational science.
    Within the areas of defense science and research, LANL provides at 
least three major and unique elements required for Stockpile 
Stewardship: neutron cross-sections to reduce uncertainties in nuclear 
weapon performance calculations; radiography to assess implosion 
performance; and an integrated plutonium production and research 
facility. LANL's Los Alamos Neutron Science Center (LANSCE) is a multi-
purpose facility that supports materials research and hydrodynamics 
research through proton radiography and neutron scattering in a 
classified environment. This is unique in the complex and has supported 
Reliable Replacement Warhead (RRW) designs already, as well as 
supporting improved understanding and predictive capability for legacy 
as well as RRW designs. LANSCE also supports basic neutron science 
through the Lujan Center. The Dual Axis Radiographic Hydrodynamic Test 
(DARHT) Facility is a unique radiographic facility and, when the second 
axis becomes available with multi-pulse capability, DARHT will be 
unique in the world. The multi-axis and multi-pulse capabilities of 
DARHT will significantly enhance our understanding of the implosion 
phase of nuclear weapons, especially as we assess the legacy systems or 
implement improved safety and surety features without nuclear testing. 
The plutonium complex at LANL has an integrated research capability to 
support the pit manufacturing activities. Such capabilities could not 
be replicated somewhere else without a severe loss of capability and a 
decade gap in restarting the operations. Superblock, which NNSA is 
presently committed to move out from, does not have the capacity to 
take over all TA-55 functions.
    In addition, LANL has numerous smaller scale research and 
development (R&D) capabilities required for Stockpile Stewardship, 
responding to emerging threats, and advancing science broadly for 
national security. Among these are the capability for classified 
beryllium manufacturing R&D, plutonium-238, high explosives chemistry, 
actinide chemistry, uranium R&D, and tritium R&D. LANL is an 
international leader in criticality science and its applications in 
safety, materials transportation and detection. LANL makes significant 
contributions in astrophysics, climate analysis, biology and forensics. 
Shutting down LANL and reassigning people would have an immediate and 
possible irreparable impact on the nuclear weapons program and, to a 
lesser degree, the broad national security science infrastructure.

                      RELIABLE REPLACEMENT WARHEAD

    Question. As you know, I was hopeful that the New Mexico RRW design 
team would be named the lead design. However, that was not the case. 
You selected the Livermore design based on several criteria, but it was 
clear that avoiding underground testing was a key driver in your 
decision.
    As an original sponsor of the RRW design competition I continue to 
support the project as it is vital if we are to transform the stockpile 
to a significantly smaller stockpile that is cheaper and safer to 
maintain.
    Your budget provides $88 million for the RRW program. Can you 
please tell me how this funding will be spent and how this will support 
a Congressional decision to proceed with the engineering design 
authorization next year?
    Answer. The fiscal year 2008 request funds the Reliable Replacement 
Warhead (RRW) Phase 2A study. The National Nuclear Security 
Administration's (NNSA) intent is to develop high fidelity baseline 
schedules and cost estimates. The laboratories will further refine the 
concept design and work with the plants concurrently during the Phase 
2A study to support a sound planning effort. This activity will 
include: some revising and extending of the selected design, analyzing 
and scheduling the required development work, planning and executing 
any required peer reviews, developing the detail cost estimate. As and 
example the certification plan will be prepared in detail including 
identifying and scheduling the hydrodynamic experiments required and 
computational analyses necessary for certification. Some computations 
and potentially some technology tests will be performed during the 
study to assure that the project scope is correctly assessed. NNSA will 
return to Congress at the appropriate time to seek both authorization 
and appropriations to proceed into the engineering development phase, 
if the Nuclear Weapons Council decides to proceed with development of 
the RRW.
    Question. Can you tell me what role Los Alamos will play in the RRW 
design and how they will be integrated into the project?
    Answer. Los Alamos National Laboratory (LANL) will lead the 
independent peer review team for the Reliable Replacement Warhead (RRW) 
and participate in development of technologies and advanced science 
analysis for potential insertion in the future stockpile. Until a long-
term pit manufacturing capability is in place, the pit manufacturing 
facility at LANL will implement the manufacturing process for the RRW 
pits eventually manufacture them during Phase 3A.

                COMPLEX 2030--FACILITIES BEFORE SCIENCE

    Question. Mr. D'Agostino, I am deeply concerned about the funding 
profile for the Science and Technology accounts within the NNSA.
    It is clear from recent budget requests that the NNSA has put more 
emphasis on facilities and security than on supporting the science 
based stockpile stewardship activities.
    However, considering the fact that the Complex 2030 transformation 
is based around the Reliable Replacement Warhead, I believe this 
warrants more scientific research in order to develop the weapon system 
without underground testing.
    The JASONs study group, which is undertaking a review of the RRW 
design, found that, ``though we see no insurmountable obstacles to 
certification of the RRW at present, there are substantial scientific 
challenges to developing a new stockpile system . . .''
    Mr. D'Agostino, how can you meet all the life extension 
responsibilities for existing weapons systems and support the RRW 
program with declining science and technology budgets?
    Answer. The current Life Extension Programs for the B61 and W76 are 
either in the production phase or entering into the production phase at 
the end of this fiscal year. The research for these existing life 
extensions is largely complete. The National Nuclear Security 
Administration strategy provides that Nuclear Weapons Council (NWC) 
approved Life Extension Programs would continue as directed, but 
Reliable Replacement Warhead (RRW) programs would be developed to 
replace legacy Life Extension Program efforts. In the science and 
technology arena, we are committed to the work required to support the 
stockpile and to develop predictive capabilities. We are at a period 
where we are completing the construction of major science facilities, 
and the associated development and construction costs are decreasing. 
We are moving to exploit these new facilities to advance the science 
and technology base for the program. However, we believe that we can do 
more within the present planned budgets by integrating our science and 
technology efforts across the laboratories, for example: ensuring 
access to the premier facilities and computational capabilities and 
developing integrated science and technology roadmaps. The broader 
science and technology needed to support the health of our nuclear 
weapon design and production can be augmented via enhanced integration 
with other agencies, and broader interaction with the general 
scientific community. The Complex would then be operated in a more cost 
effective manner. The combination of these factors (replacing life 
extensions with RRW, reductions in construction costs, and integration 
of resources) should allow us to meet needs within decreased science 
and technology budgets.
    Question. Can you please provide for me in writing your science and 
engineering R&D plan for the next 5 years that will answer the 
technical questions surrounding the RRW program and show me where this 
plan is financed in our budget?
    Answer. Science and engineering research and development (R&D) 
necessary for fundamental support of Weapon Activities as well as 
direct support of the Reliable Replacement Warhead (RRW) program is 
programmed within Defense Programs' Campaign structure. The Science, 
Engineering, Inertial Confinement Fusion Ignition and High Yield, and 
Advanced Simulation and Computation Campaigns together comprise about 
$1.42 billion in the fiscal year 2008 budget, while an additional $0.44 
billion is requested for addressing manufacturing and production 
readiness in the Readiness and Pit Manufacturing and Certification 
Campaigns. The basic R&D activities within each Campaign are described 
in the fiscal year 2008 budget request, consistent with the Program 
Plans maintained for each of the six Campaigns. Collectively the R&D 
activities that the Campaigns undertake are described in the fiscal 
year 2007-2011 Stockpile Stewardship Plan. As a relevant technology 
becomes more mature and the technical questions more unique to the 
specific weapon, the effort shifts to Directed Stockpile Work and the 
RRW program.
    An integrated planning effort by the program efforts above, the 
predictive capability framework, is ongoing to ensure timely delivery 
of science and technology to the program. The end goal of a predictive 
capability for nuclear weapons should in of itself increase efficiency 
by ensuring validated models that can be applied to all systems to 
increase confidence and decrease the repeat work frequently done system 
by system. The predictive capability framework plan will be completed 
this fiscal year. Due to the complexity of these activities, some of 
the scientific advances cannot be completed in time for the first RRW 
certification process, but the first RRW is designed to have sufficient 
margin and tie to nuclear test history to offset the higher 
uncertainties.

                 INSUFFICIENT FUNDING FOR Z OPERATIONS

    Question. In the fiscal year 2007 NNSA budget, hearing last year 
Ambassador Brooks promised that I would be pleased with the funding 
provided for Z machine--I am not pleased. This budget continues to 
support past practice of providing everything and more for NIF, while 
providing insufficient funding for Z.
    This budget continues funding Z from three separate accounts and 
fails to fully fund operations at a full shift. This is in direct 
contrast with the priorities of the Office of Science budget, which 
makes operational runtime a top priority.
    (NNSA provided $26 million to High Average Power Laser R&D in 
fiscal year 2007, which NNSA admits has little to no bearing on the 
weapons program)
    Why does the Department continue to play games with the Z budget 
when it funds projects like the High Average Power Laser program that 
does not support the weapons program?
    Answer. The National Nuclear Security Administration (NNSA) has 
requested $63.9 million for operation and use of the Z Facility at 
Sandia National Laboratories (SNL) in fiscal year 2008. These funds are 
provided for activities in pulsed power fusion and other areas of high-
energy-density weapons physics. This amount of funding will enable a 
solid program of experiments which meets high priority NNSA 
requirements as defined in joint plans developed by the Science, 
Inertial confinement Fusion Ignition and High Yield, and Advanced 
Simulation and Computing Campaigns. Compared to the fiscal year 2007 
request, funding was shifted from other activities in fiscal year 2008 
to increase funding for Z activities to this level. Requested 
enhancements of the SNL pulsed power program beyond this level were 
carefully considered, but determined to be of insufficient priority for 
funding based on program requirements.
    NNSA allocated $26 million to Inertial Fusion Technology for these 
activities ($10 million for the Nike laser at the Naval Research 
Laboratory and $16 million for the High Average Power Laser (HAPL) 
program) in the fiscal year 2007 Operating Plan submitted to Congress 
on March 16, 2007. No funds are requested for the Nike or HAPL 
activities in the fiscal year 2008 budget request due to the need to 
fund higher priority activities.
    Question. Why does the Department continue to fund Z from 3 or more 
accounts, when NIF is funded from a single account (Inertial 
Confinement Fusion)?
    Answer. Funding for the Z facility at Sandia Laboratories is 
currently provided from three different accounts: Readiness in 
Technical Base and Facilities (RTBF), the Inertial Confinement Fusion 
(ICF) program, and the Science Campaign. Funding provided by the ICF 
program and the Science Campaign covers their areas of responsibility, 
namely, pulsed power fusion and non-ignition weapon physics, 
respectively. The Department is aware of the unintended confusion 
arising from these multiple categories. In the fiscal year 2009 budget 
submission, the National Nuclear Security Administration has proposed 
consolidating all operational funding for Z in the ICF Campaign in the 
same manner as currently done for Omega and the National Ignition 
Facility.

         CHEMISTRY AND METALLURGY RESEARCH FACILITY REPLACEMENT

    Question. The Departments commitment to long-term support of the 
CMR-Replacement facility seems to have changed substantially over the 
past 2 years.
    Mr. D'Agostino, when you attended the groundbreaking in Los Alamos, 
you declared this facility vital to the mission. The fiscal year 2006 
budget request proposed $160 million for fiscal year 2008 and now the 
fiscal year 2008 request has been reduced to $95 million. Your budget 
request now seems to reflect a wait and see attitude as it pertains to 
the CMR-Replacement.
    At the same time, the NNSA has provided $25 million to initiate 
design work on the Consolidated Plutonium Center as part of your 
Complex 2030 plan, despite the fact that the Defense Department has not 
provided you with a total pit requirement or justification for any 
additional pits beyond what can be already produced.
    With flat budgets, I do not believe the NNSA has the luxury of 
spending money on new facilities without a clear justification or need.
    Mr. Schoenbauer, do you recall when the House and Senate Energy and 
Water bill eliminated funding for the proposed Modern Pit Facility in 
fiscal year 2006?
    Answer. The termination of the Modern Pit Facility project did not 
eliminate the need to manufacture plutonium pits in sufficient 
quantities to support the nuclear weapons stockpile. In the year 2000, 
our plutonium strategy assumed two facilities to meet our long-term 
mission requirements. One facility would support plutonium research and 
development (R&D) and surveillance and a second would support pit 
manufacturing at a capacity greater than 50 net pits per year to the 
stockpile. The Chemistry and Metallurgy Research Replacement (CMRR) 
Facility and other buildings in the Los Alamos National Laboratory 
(LANL) TA-55 complex were to execute plutonium R&D mission. The Modern 
Pit Facility, as a separate facility at a site to be determined, was to 
execute the mission to manufacture pits in sufficient quantities to 
support the legacy stockpile.
    The events of September 11, 2001, evolving information on plutonium 
aging, current stockpile projections, and development of reliable 
replacement warhead concepts have changed our strategy from the year 
2000. Increasing physical security costs for special nuclear materials 
(SNM) are driving us to fewer sites with Category I/II quantities of 
SNM and increased reliance on hardened, engineered-security facilities. 
Thus, our Complex 2030 planning scenario assumes that we will have 
Category I/II quantities of plutonium at only one site (e.g., a 
consolidated plutonium center (CPC)) in the long-term for R&D, 
surveillance and manufacturing. Los Alamos is one of five sites under 
consideration for the plutonium mission.
    Our Complex 2030 planning scenario also assumed that we would rely 
on TA-55 at LANL, supported by a CMRR, for interim pit production until 
a CPC became available in 2022. Our business case analyses indicated 
this was an appropriate choice for a CMRR with a total project cost 
estimate in the range of $850 million. In late 2006, LANL completed an 
independent review of the planned CMRR and the revised the cost 
estimate for the Nuclear Facility (NF) approximately doubled. This 
greatly weakened the business case for CMRR-NF to only support interim 
pit production and would have required an unacceptable budget re-
alignment over the next 5 years to retain the original CMRR schedule. 
Thus, our revised CMRR approach to best manage risks includes: (1) 
completing the CMRR Radiological Laboratory and Utilities Office 
Building; (2) continuing with design of the CMRR-NF, and (3) deferring 
commitments to construct the CMRR-NF until completion of the Complex 
2030 Record of Decision in late 2008. In parallel with preparation of a 
Complex 2030 Supplement to the Stockpile Stewardship and Management 
Programmatic Environmental Impact Statement, we are evaluating business 
cases for all plutonium facility alternatives. These alternatives 
include several CMRR-NF options and long-term consolidation of all 
plutonium functions to Los Alamos.
    Question. What makes you think that by changing the name and 
doubling the request, we would be interested in funding a similar 
facility, just 2 years later?
    Answer. The consolidated plutonium center (CPC) is not a name 
change for the Modern Pit Facility. The CPC would be the one site in 
the nuclear weapons complex in long-term for all research and 
development, surveillance and manufacturing involving Category I/II 
quantities of plutonium. The CPC would represent a consolidation of 
many functions performed at Lawrence Livermore National Laboratory 
Building 332, and Los Alamos National Laboratory plutonium facilities. 
The fiscal year 2008 funds are requested to provide conceptual CPC 
design definition and alternative evaluations necessary to support 
upcoming plutonium facility decisions. These alternative evaluations 
include options for Los Alamos as a possible site for a CPC.

                        EXPERIMENTAL HYDRO TESTS

    Question. What impacts do you foresee on hydro testing as a result 
of funding reductions you have recommended within the Directed 
Stockpile Work Account?
    Answer. The total funding for the hydrodynamic experimental program 
in the Directed Stockpile Work (DSW) account is not changing. However, 
the total funding has been re-aligned from one line (Stockpile 
Services) to three lines: Stockpile Systems, Life Extension Programs, 
and Stockpile Services. The reason for this change was to fund 
activities more consistent with the scope of the newly established DSW 
Work Breakdown Structure.
    Question. What are the likely impacts to the Life Extension Program 
as a result of reductions in funding for hydro tests in fiscal year 
2008?
    Answer. No major impact. All major hydrodynamic experiments funded 
by the Directed Stockpile Work Hydrodynamic testing program scheduled 
to support current Life Extension Programs have been conducted.

                       HIGH PERFORMANCE COMPUTING

    Question. Mr. D'Agostino, as you know, the NNSA and its 
laboratories have developed the world's fastest computing architecture. 
This was developed in response to establishment of the stockpile 
stewardship program and the necessity to simulate weapons performance 
in order to maintain the existing underground testing moratorium.
    I am concerned that NNSA does not have a long term R&D strategy to 
keep the Nation at the forefront of High Performance Computing. It is 
my understanding that both NNSA and the DOE Office of Science are 
contributing less than $20 million to be a minority partner in a much 
larger DOD R&D program.
    Due to the rapid technological advance in this field, I believe the 
Department of Energy must establish a 10-year R&D roadmap for High 
Performance Computing by integrating the NNSA and Office of Science 
efforts.
    Why doesn't the NNSA and the DOE Office of Science work together on 
a joint engineering R&D program to develop the next computing 
breakthrough rather than take a minor stake in a DOD computing R&D 
program as provided in this request?
    Answer. The National Nuclear Security Administration (NNSA) has a 
proven track record of successful research and development (R&D). 
However, while computing R&D is important to providing the capabilities 
we will need to be successful, it is not our main driver. Our system 
investments are strongly influenced by NNSA mission need. We are 
investing in the Roadrunner architecture, which we took unilateral 
responsibility for developing, but are expanding to include a wider 
science community. We are also acquiring a capability to attack the 
problem of quantifying and aggregating uncertainties in our simulation 
tools with a system designated ``Sequoia,'' to be located at Lawrence 
Livermore National Laboratory. This too will be a unilateral effort to 
start, but will involve a larger community as it takes shape. We 
exercise strong control over Roadrunner and Sequoia as we expect those 
machines to make critical mission contributions to the NNSA.
    NNSA's advanced architecture investments include an important, co-
funded collaboration with the Office of Science for Blue Gene R&D to 
capitalize on the success of Blue Gene/L and produce future generations 
of high-performance, low-power systems.
    Our participation in the Department of Defense High Productivity 
Computing Systems (HPCS) program, which includes participation by other 
Government agencies, including the DOE Office of Science, is but one 
investment in our portfolio of advanced system developments. While we 
invest a small amount in HPCS compared to the source selection 
authority, we participate as an equal in technical debates. The Defense 
Advanced Research Projects Agency (DARPA) recognizes that much of the 
technical experience of designing and deploying supercomputers lies in 
other agencies. Consequently, our small investment belies our larger 
technical influence. The result is a win-win situation for both DARPA 
and NNSA.
    Currently NNSA is meeting other programmatic needs for computing 
R&D and contributing meaningfully to the Nation's overall computing 
R&D. All of these investments are captured in the Advanced Simulation 
and Computing (ASC) program 2020 Roadmap as well as the ASC Platform 
Acquisition Strategy.
    Question. Do you believe the NNSA labs could contribute to the 
development of a High Performance R&D program that would support 
research into advanced architectures, software and algorithm 
development?
    Answer. The National Nuclear Security Administration's (NNSA) 
laboratories could and they do make such contributions. The Advanced 
Simulation and Computing (ASC) program and the NNSA laboratories have 
historically been world leaders in these areas and continue to be so 
today. Our need to predict with confidence the performance of a nuclear 
weapons systems will drive us to exa-scale computing, 1,000 times peta-
scale, by 2018 as defined in our Roadmap. We are focused on and driven 
by that need for predictivity not only for Stockpile Stewardship, but 
also for broad national security issues. As a consequence, we are 
investing in advanced architectures, operating environments and 
algorithms that we believe are essential to meeting our mission 
responsibilities. We share our technology advances and should 
participate in any national program to advance architecture, software 
and algorithm development.
    Question. I find it a little disappointing that the Office of 
Science is expanding its purchase of high performance computers for DOE 
labs as part of the American Competitiveness Initiative, while NNSA is 
cutting the number of high-speed computers it supports from 3 to 2. Why 
is the Office of Science expanding, while NNSA is contracting?
    Answer. Funding for the Advanced Simulation and Computing (ASC) 
program has been declining since fiscal year 2005, while the American 
Competitiveness Initiative is infusing new money into basic science. 
With respect to ASC, the nuclear weapons complex has been challenged to 
reduce its footprint. One method being pursued is to reduce duplicate 
capabilities across the complex and computer operations is one area 
where such savings are possible. It should be noted that the National 
Nuclear Security Administration (NNSA) has drawn down by moving to two 
major facilities, one in New Mexico and one in California. The enabling 
technologies associated with secure distance computing make it possible 
for scientists at one site to compute seamlessly and effectively at any 
other of the Department's classified sites and thus the ability for 
computing to meet mission needs is not eroded. Our consolation was 
motivated by both budget constraints and NNSA's commitment to support 
the transformed ``Complex 2030.''
    The Office of Science has been explicitly funded to increase its 
capability at the high end of computing and simulation. While NNSA will 
be more challenged by budget tightening, our mission will force us to 
continue our long tradition of supporting American competitiveness. Our 
recent partnerships in bringing Red Storm and Blue Gene to market are 
stellar examples of improving our Nation's competitiveness while 
supporting our primary mission driver. NNSA's mission is national 
security and classified while the Office of Science's is general and 
open. The Department of Energy is well positioned for collaboration 
with all the elements of the American Competitiveness Initiative.
    Question. In your budget justification I can find no mention of the 
Roadrunner platform, but did see that the Department is ready to 
embrace a new system called Sequoia. What is the Department's strategy 
on deployment on new computing platforms?
    Answer. Both Roadrunner and Sequoia are included in the National 
Nuclear Security Administration's Platform Acquisition Strategy, and 
are key steps in achieving our long range strategic goal of predicting 
with confidence the performance of a nuclear weapon. The Roadrunner 
final delivery is scheduled for fiscal year 2008, pending a favorable 
technical review of this high-risk, high-reward system. Sequoia final 
system delivery is scheduled for fiscal year 2011, also pending 
favorable technical reviews, with delivery of a smaller-scale early 
technology system in late fiscal year 2008 on which to begin software 
porting and scaling in preparation for the final system. Both system 
delivery schedules are contingent on projected budget appropriations

          ESTABLISHMENT OF A JOINT HIGH ENERGY PLASMA PROGRAM

    Question. The fiscal year 2006 Conference Report and the fiscal 
year 2007 Senate E&W bill urged the Department to bring together the 
NNSA and the Office of Science to support a joint high energy density 
physics program to provide non-weapons scientists access to NNSA 
facilities such as Z machine. This would also expand the R&D 
possibilities for weapons programs as well. While it is still in its 
early stages, I want you to know I appreciate your efforts to enable 
this level of cooperation.
    However, I am disappointed to find out that this program, which 
supports research in high-energy physics consistent with the ICF 
program is largely funded out of the Science Campaign.
    Considering that the ICF campaign is flush with cash and has 
expanded every year, what is the justification for not funding this 
research out of this program?
    Answer. Both the National Nuclear Security Administration (NNSA) 
and the Office of Science recognize the importance of stewarding high 
energy density physics and have established a joint program in high 
energy density laboratory plasmas (HEDLP). The funding request for this 
program is more than $24 million, split almost equally between NNSA and 
the Office of Science. Due to the late date in the fiscal year 2008 
budget request preparation cycle when the joint program was 
established, the fiscal year 2008 request supports the joint program 
which represents primarily existing activities.
    In formulating the fiscal year 2008 submission, funding for 
university grants and centers in HEDLP were moved from the Inertial 
Confinement Fusion (ICF) Ignition and High Yield Campaign to the 
Science Campaign. This was done in order to simplify program execution 
by placing all university accounts in a single Budget & Reporting 
Classification code. Thus, the joint program has not placed additional 
financial burdens on the Science Campaign. Programmatic oversight of 
university activities will continue to be performed by the ICF Ignition 
and High Yield and Science Campaigns as it has in the past, and the ICF 
Ignition and High Yield Campaign will serve as the NNSA integration 
point for execution of the NNSA and Office of Science joint program.
    The President's request for the ICF Ignition and High Yield 
Campaign has decreased annually since 2005.
    Question. Can you identify other NNSA programs that are appropriate 
for similar collaboration? What about High Performance Computing?
    Answer. The Office of Defense Programs within the National Nuclear 
Security Administration (NNSA) and the Office of Science created the 
Defense Programs/Office of Science Strategic Council to appropriately 
integrate strategic planning on science of significant mutual interest. 
The goal is to assure senior planning leaders, including the Deputy 
Administrator for Defense Programs and the Under Secretary of Energy 
for Science, have awareness of each organization's plans and budgets to 
enable these program elements to leverage total value.
    The Council exchanges information at least two strategic times 
during the budget process: (1) as budgets are in final preparation for 
submission to the Office of Management and Budget and (2) after 
submission of the President's budget to Congress as staff briefings and 
testimony are being prepared. Such exchanges are deemed necessary to 
guarantee planning information is shared at these strategic planning 
phases.
    With respect to high performance computing, the NNSA requirement 
for classified computing is inconsistent with the Office of Science's 
mission to support open science. Consequently, the two offices do not 
share production computing systems. In addition, NNSA supercomputers 
are sized to meet mission needs and operate 24 hours per day performing 
weapons calculations.

                     RELIABLE REPLACEMENT WARHEAD-2

    Question. The Nuclear Weapons Council has directed the Department 
to proceed with a RRW-2 conceptual study. As part of this study, will 
the NNSA consider the reuse of existing pits as a priority? With the 
positive news on pit aging, it only makes sense to consider using pits 
that are already in the stockpile.
    How would pit reuse impact the administration's Complex 2030 
strategy? How many fewer pits would be required as a result of such a 
reuse decision?
    Answer. Pit reuse has the potential to relax near-term demand for 
quantities of new pits manufactured at the interim Los Alamos National 
Laboratory production facilities. This provides additional time to 
improve long-term pit manufacturing capacities. Long-term demand for 
new pits would not be significantly reduced unless we forego the safety 
and security advantages that can only be provided through newly-
manufactured Reliable Replacement Warhead (RRW) pits. If we want to 
achieve proposed RRW safety and security objectives without an 
underground nuclear test, the number of existing pits applicable for 
reuse in RRWs is limited to the hundreds, not thousands.
    Plutonium aging results should not be extrapolated to have a much 
broader meaning in predicting the life of legacy stockpile weapons than 
is technically justified. The plutonium aging study only addressed one 
particular aging phenomenon (intrinsic radiation damage) in one 
component (a pit) among dozens of nuclear explosive package components 
and thousands of other components in a typical nuclear weapon.

                       NATIONAL IGNITION FACILITY

    Question. It is my understanding that the NIF project is now in its 
final year of construction and will cost $3.5 billion, nearly $2.5 
billion over estimate and 7 years late. Now NNSA will proceed with the 
National Ignition Campaign, which is estimated to cost over $4 billion, 
and it is already experiencing programmatic and budget growth just as 
the construction project enjoyed. As an example of this lack of budget 
discipline, I understand the NIC program will now support direct drive 
experiments on what was billed as an indirect drive machine.
    What assurances does this subcommittee have that this program will 
stick to the programmatic and budget discipline we were promised when 
the program was re-baselined in 2005?
    Answer. The National Ignition Facility (NIF) Construction Project 
is now over 90 percent complete and has maintained the identical scope 
and essentially the same schedule and budget that were determined and 
agreed to when it was rebaselined in 2001. The only minor changes to 
the schedule and budget were in response to Congressional redirection 
in 2005.
    The National Ignition Campaign (NIC) was initiated in June 2005. It 
is being pursued under the discipline of Enhanced Management methods 
including earned value accounting. It has not experienced any scope or 
budget growth beyond the $1.6 billion that was specified in its 
original baseline (detailed in the NIC Execution Plan which was signed 
by all of the participating organizations: General Atomics, Lawrence 
Livermore National Laboratory, Los Alamos National Laboratory, Sandia 
National Laboratories and the Laboratory for Laser Energetics at the 
University of Rochester); in fact the fiscal year 2008 submission 
reduces the NIC approximately $8 million below the June 2005 baseline. 
The rigorous reporting required under Enhanced Management and a 
detailed milestone structure provides the basis for monitoring 
programmatic and budget discipline.
    The NIC involves preparation of the NIF for experimentation in 
conjunction with NIF Project completion, and is thus a highly facility 
intensive activity. NIF completion and the NIC are managed as an 
integrated activity using the same discipline and successful project 
management tools developed for the NIF Project. The execution of 
complex ignition experiments in late fiscal year 2010, only 1\1/2\ 
years after NIF Project completion, would not be possible without this 
discipline.
    Question. The National Ignition Campaign (NIC) goal is to conduct 
ignition experiments on NIF in 2010. The baseline approach is indirect 
drive with beryllium ablators. Please provide information and 
justification for all other elements within NIC that are NOT directly 
related to the baseline approach? For example, is it credible to 
believe that the direct drive approach--including the necessary 
targets--can be ready for experiments in the same time frame? What is 
the metric for switching ignition baselines in the NIC program?
    Answer. Direct drive both reduces risk for the indirect drive 
program and provides an additional ignition option, which is prudent 
given the unprecedented challenge of achieving ignition in the 
laboratory.
    Direct drive studies at Omega are currently examining physics and 
technology issues critical to the success of indirect drive. An 
important recent example is the University of Rochester achievement of 
record compressed densities in cryogenic deuterium-tritium capsules. 
This critically important result provided important new knowledge 
regarding capsule physics and the operation of cryogenic systems. This 
knowledge will directly benefit the indirect drive program.
    From its inception, the National Ignition campaign (NIC) has 
included direct drive as a backup risk mitigation strategy (contained 
in the approved NIC Execution Plan). A milestone in fiscal year 2009 
provides a decision point for moving forward with facilitization of 
polar direct drive on the National Ignition Facility (NIF). The 
mainline strategy remains indirect drive, and the bulk of NIF resources 
will be devoted to it. Only if major unforeseen problems arise with 
indirect drive will a change to direct drive be considered. No 
provision is being made to conduct direct-drive ignition experiments 
(with appropriate targets etc.) in the same time frame as indirect-
drive experiments. However, the direct drive concept will continue to 
be developed and tested on the Omega laser system at the University of 
Rochester as part of the NIC effort in order to minimize the delay in 
achieving ignition in the unlikely event that the indirect approach 
fails, and because the direct-drive approach may provide higher gain at 
lower energy than indirect-drive ignition, potentially providing 
additional capabilities for Stockpile Stewardship in the post-NIC time 
frame.
    Many of the key scientific and technical issues associated with 
ignition are common to both direct and indirect drive. Because of this 
commonality, the University of Rochester team provides scientific 
leadership for both direct drive and certain key aspects of indirect 
drive. It is thus appropriate to consider the University of Rochester 
program not as a ``backup'' but rather a critical intellectual 
component of the Inertial Confinement Fusion Ignition and High Yield 
Campaign and the NIC.

            SANDIA NATIONAL LABORATORIES ION BEAM LABORATORY

    Question. Mr. D'Agostino, I understand the Sandia has managed the 
MESA project in such a fashion that it will come in under budget and 
ahead of schedule. The lab has proposed to use the budget savings to 
support a small project known as the Ion Beam Lab, which has fallen 
into disrepair.
    Does NNSA support this project? When do you expect to provide 
approval for this funding transfer to occur?
    Answer. The National Nuclear Security Administration (NNSA) 
supports building a replacement Ion Beam Laboratory at Sandia National 
Laboratories in New Mexico. The project team has submitted a 
justifiable mission need for the project which is under review. NNSA 
has provided justifications in the President's fiscal year 2008 budget 
requesting Congress to authorize the project. Upon congressional 
authorization and completion of the Microsystems and Engineering 
Sciences Applications (MESA) facility, NNSA will request Congress to 
approve transferring the uncosted balance from MESA project to start 
the Ion Beam Laboratory in fiscal year 2009. MESA is scheduled to be 
completed at the end of fiscal year 2008 and we expect the cost under-
run to be sufficient to pay for the project capital costs. Additional 
expenditures from the operating expense funds will be required to 
complete the Ion Beam Laboratory.

                         HEAVY WATER INVENTORY

    Question. Mr. D'Agostino, it is my understanding that the 
Spallation Neutron Source located at the Oak Ridge National Laboratory 
is in need of heavy water to support experiments on that machine. I 
recall that the Savannah River Site is storing a large amount of such 
material that it might provide to this Office of Science laboratory. 
Can NNSA help the Oak Ridge Lab and provide sufficient quantities of 
heavy water to support the experiments on the SNS?
    Answer. The Savannah River Site does hold a large inventory of 
surplus heavy water, assigned to the Office of Environmental Management 
(EM) for disposition. The quality of this material is lower (more 
tritium contamination) than the material in the National Nuclear 
Security Administration (NNSA) reserve, but portions of this material 
may be adequate to meet Spallation Neutron Source (SNS) requirements. 
There is also a possibility the material may not meet the SNS 
requirements. In that case, this material could be used as barter to 
exchange for material meeting the SNS specification, from a commercial 
heavy water producer. There is material in the NNSA inventory that 
meets the SNS requirements, but it is critical that this material be 
retained to support planned Defense Programs activities. NNSA cannot 
replace the material from commercial sources due to use restrictions.
    The NNSA will work with EM and the Office of Science to identify 
suitable materials at Savannah River, and to have those materials 
transferred to SNS.

                  SECURITY GUARDS AT PANTEX ON STRIKE

    Question. Mr. D'Agostino, I understand the security guards at the 
Pantex Plant have been on strike since Sunday evening and you are 
operating the plant using security personnel from various sites around 
the complex.
    Can you please update us on the status of the negotiations and if 
you are optimistic this strike can be resolved in the near future?
    Answer. Negotiations have been ongoing since February 22, 2007. The 
Pantex Guards Union (PGU) voted to strike effective April 16, 2007, at 
0001 hours. BWXT and the PGU have continued to negotiate since then, 
although the Federal mediator and negotiating parties agreed to a week-
long ``cooling off '' period that ended May 2, 2007. The PGU has 
offered various reasons for maintaining the work stoppage but the most 
recent central issues appear to be wages, medical benefit cost shares, 
and the desire for two additional paid days off each year. We are 
optimistic that an agreement can be reached quickly if both sides 
continue to negotiate in good faith.
    Question. How long can the Department sustain it security readiness 
using this substitute guard force?
    Answer. Security of the Pantex Plant will not be degraded at any 
time during the strike, regardless of its duration. Contingency force 
planning assumptions called for up to 60 days of continuous security 
readiness while maintaining plant operations through the use of non-
union augmentation personnel from other sites and the Office of Secure 
Transportation. If the strike begins to approach the 60 day threshold, 
several additional alternatives will have to be considered, including 
but not limited to additional contingency force augmentation and a 
reduction of plant operations.

                              MOX PROGRAM

    Question. The Department recently produced the independent cost 
estimate and corrective action plan for the Mixed Oxide Fuel 
Fabrication Facility as required by the Defense Authorization Act for 
fiscal year 2007. The new project baseline is now $4.7 billion. In 
addition, you have agreed to the recommendations for the Inspector 
General to improve project oversight, establish achievable milestones, 
and include performance goals into future contract negotiations. With a 
new project baseline are you prepared to move forward with construction 
once the congressional moratorium expires in August?
    Answer. Yes, DOE is prepared to move forward with construction once 
the congressional moratorium expires in August.

                            MOX ALTERNATIVES

    Question. I noticed in the budget request that the Office of 
Environmental Management has decided to proceed with a $500 million 
vitrification plant for an estimated 13 tons of non-MOXable plutonium. 
This plant seems to confuse many people who believe this is an 
acceptable solution for the weapons grade material identified for 
destruction in the MOX facility. Can you please clarify the 
Department's position regarding its plutonium disposal strategy?
    Answer. The Department's proposed baseline approach for disposition 
of surplus weapons-usable plutonium consists of a MOX Fuel Fabrication 
Facility, a Pit Disassembly and Conversion Facility, and a Waste 
Solidification Building to dispose of at least 34 metric tons (MT) of 
weapon-grade plutonium, a proposed Plutonium Vitrification process to 
vitrify up to 13 MT of non-pit plutonium, and the operation of the H-
Canyon/HB-Line facilities to process approximately 2 MT of plutonium 
bearing materials. DOE is currently evaluating the cost and feasibility 
of reducing or eliminating the mission that is currently being 
considered for the small-scale plutonium vitrification process and 
fabricating more surplus plutonium into MOX fuel. If feasible, it could 
permit DOE to use the MOX Facility and H-Canyon/HB-Line facilities to 
dispose of approximately 43 MT of surplus plutonium.
    Question. Specifically, can the Department add the 34 tons of 
weapons grade material to the smaller vitrification plant? What impact 
would it have on the cost and schedule of this project? Are there any 
technical challenges that remain unanswered?
    Answer. No. The small-scale vitrification process cannot be scaled-
up to dispose of an additional 34 metric tons of weapon-grade 
plutonium. The radiation exposure from vitrifying plutonium in 
lanthanide borosilicate glass for up to 13 metric tons is manageable 
because the process will limit worker radiation exposure to levels well 
within acceptable limits. However, managing worker radiation exposure 
becomes problematic for much greater quantities of plutonium. 
Therefore, DOE would have to consider using ceramic immobilization 
instead. However, the amount of time needed to immobilize an additional 
34 metric tons of surplus plutonium with high level waste would extend 
beyond the planned operating life of the Defense Waste Processing 
Facility at the Savannah River Site, and an insufficient quantity of 
high-activity waste remains to be processed at the Defense Waste 
Processing Facility to immobilize all of the surplus plutonium. 
Moreover, immobilization of plutonium in a ceramic form has never been 
done before and would require significant research and development 
before the facility could be designed and constructed. This approach is 
likely to take an additional 12-14 years before operation could begin 
and would likely result in significant cost increases and schedule 
delays. There would also be legal, political, and environmental 
concerns with redirecting the disposition strategy at this point.

                              GNEP AND MOX

    Question. I have heard speculation that the MOX facility could be 
easily redesigned to process spent nuclear fuel and could serve as both 
a recycling facility and fuel fabrication facility. Has the Department 
looked at modifying this facility to serve as either a spent fuel 
recycling facility or as a fuel fabrication facility for advanced 
reactors? If so, what do you believe is the most promising option for 
expanding the mission of this facility? How will this impact the 
schedule and cost of this project?
    Answer. The MOX Facility is a fuel fabrication facility and does 
not have the capability to recycle spent nuclear fuel; a separate, 
dedicated recycling facility would be required. With regard to 
fabricating fuel for advanced reactors, the MOX Fuel Fabrication 
Facility may be capable of fabricating start-up fuel for fast reactors 
as part of the Global Nuclear Energy Partnership (GNEP), if an oxide 
fuel form is selected for that program. Currently, DOE is evaluating 
both metal and oxide fuel forms for the start-up fuel. A decision on 
the fuel form for fast reactors will be made at a future time. The MOX 
Facility would not be able to produce transmutation fuel loads for 
advanced fast reactors as envisioned by GNEP because that fuel would 
contain all the transuranic elements from the recycled light water 
reactor fuel.
    Given that the necessary GNEP fuel-related decisions are in the 
future, it is not reasonable to delay construction of the MOX facility 
to incorporate the potential GNEP required design and construction 
changes. Continued delays in MOX construction will result in increased 
costs and postpone the start of facility operations. DOE will continue 
to evaluate the option to use the MOX Facility in support of fast 
reactor start-up fuel as the requirements for GNEP are developed. In 
2008, the Secretary of Energy plans to determine a path forward for 
GNEP.
    In addition to the possibility of fabricating start-up fuel for 
GNEP advanced reactors, the MOX Facility could potentially provide the 
following capabilities:
  --Disposition of additional surplus impure plutonium (currently 
        planned for the proposed Plutonium Vitrification process at the 
        Savannah River Site), if the chemical and isotopic impurities 
        can be economically removed from the material; and
  --Disposition of additional weapons plutonium (beyond the 34 MT) that 
        is expected to be declared surplus as plutonium requirements 
        are reevaluated, in connection with transformation of the 
        nuclear weapons stockpile.

                        RUSSIA'S MOX COMMITMENT

    Question. It is my understanding that the Russians have proposed to 
fulfill their commitment under the Fissile Materials Agreement to burn 
the plutonium in the existing BN-600 reactors and add an additional 6 
reactors to burn MOX fuel. This will of course require the Russians to 
build a MOX fabrication facility. As far as I can tell, the Russians 
have yet to provide a firm commitment on their funding or schedule.
    In addition, Russia's financial outlook has changed substantially 
from when this program was initiated. Russia now enjoys a budget 
surplus and earned $315 billion in oil and gas revenue last year, an 
increase of 96 percent from 1999.
    Will U.S. negotiators demand to see a much larger contribution to 
the project costs from the Russians?
    Answer. Rosatom recently provided DOE with a proposed technical 
plutonium disposition plan that is consistent with Russia's future 
nuclear energy strategy. Under this plan, Russia would irradiate 
weapon-grade plutonium as MOX fuel in fast reactors. Although no 
agreement has been reached on specific cost sharing arrangements 
pending final Russian Government approval of its technical disposition 
program, senior Rosatom officials have indicated that Russia could 
provide significant funding. We are currently reviewing Russia's 
proposed disposition plan to ensure that it is technically and 
financially credible, and will be discussing it further with Russian 
officials in the near future.

                            EXPANSION OF MOX

    Question. When this program was first conceived back in 1998, the 
United States identified upwards of 50 tons of weapons-grade plutonium 
that was excess to the mission. Is this material still available and 
theoretically able to be used in producing Mixed Oxide Fuel?
    Answer. In 1995, the U.S. Government declared 52.5 metric tons (MT) 
of plutonium (both weapon-grade and non-weapon-grade) excess to 
national security needs. Of that quantity, approximately 4 MT have been 
retained for a non-military programmatic use, approximately 3 MT of 
scraps and residues have been disposed of at the Waste Isolation Pilot 
Plant, and approximately 7 MT in the form of spent fuel are designated 
for direct disposal in a high-level waste geologic repository. Of the 
remaining approximately 38.5 MT, a minimum of 25.6 MT is suitable for 
fabrication into MOX fuel, an additional approximately 4 MT is 
considered likely to be suitable for MOX fuel, and another 
approximately 5 MT might be suitable for MOX fuel after additional 
material analysis and characterization can be performed. To the extent 
the latter approximately 9 MT proves unsuitable for MOX, that material 
could be vitrified, and would be replaced in the 34 MT planned for 
disposition under the 2000 U.S.-Russian Plutonium Management and 
Disposition Agreement with future declarations of additional excess 
plutonium from weapons pits. The remaining approximately 4 MT (out of 
the approximately 38.5 MT) is considered unsuitable for use as MOX 
fuel, and would be disposed of either through vitrification or 
processing through Savannah River Site's H-Canyon/HB-Line facilities 
and subsequent disposal with the SRS waste stream. See chart below. 



    Question. Would the economics or design of the plant change 
significantly if a policy decision were made to increase the amount of 
plutonium to be processed through this plant?
    Answer. The MOX facility is nominally designed for a 40-year life. 
The 34 metric tons disposition mission will require approximately 13 
years. As a result, the MOX facility is capable of fabricating 
significant additional quantities of plutonium into MOX fuel. Once 
built, it will cost approximately $185 million per year to operate the 
MOX facility. Changes to the design of the facility are dependent on 
the specific characteristics of the plutonium to be fabricated into 
fuel in the future.

        NNSA'S PLUTONIUM CONSOLIDATION AND DISPOSITION STRATEGY

    Question. I am very concerned about the growing security budget and 
the financial impact it has on the defense and nonproliferation 
missions. Instead of waiting for a new multi billion dollar 
consolidated plutonium facility that is still years away from 
construction, I am more interested in taking steps now to consolidate 
and dispose of excess plutonium.
    Can you please provide me with a written explanation of the 
Department's overall plutonium disposition strategy that includes 
schedule, estimated cost and potential impact it might have on out-year 
security funding.
    Answer. The Department has prepared a ``Business Case, Proposed 
Baseline Approach for Disposing of Surplus Plutonium,'' dated April 
2007 (attached). The estimated cost, schedule, and future year funding 
requirements are contained in the Business Case.

 BUSINESS CASE--DEPARTMENT OF ENERGY'S PROPOSED BASELINE APPROACH FOR 
               DISPOSING OF SURPLUS PLUTONIUM, APRIL 2007

Executive Summary
    This report presents DOE's plan to dispose of inventories of 
surplus weapons-usable plutonium \1\ and includes a discounted cash 
flow analysis which takes into account the time value of money.\2\ Data 
contained in the analysis are based on information provided by the 
National Nuclear Security Administration and the offices of 
Environmental Management and Nuclear Energy with input provided by Dr. 
David Kosson, Chair of Civil and Environmental Engineering, Vanderbilt 
University; Dr. Ian Pegg, Professor of Physics and Associate Director 
of the Vitreous State Laboratory, Catholic University; and Dr. David 
Gallay, Program Director, LMI Government Consulting.
---------------------------------------------------------------------------
    \1\ This report addresses surplus weapons-usable plutonium covered 
by Public Law 107-107 and section 4306 of the Atomic Energy Defense 
Act, as amended. Surplus weapon-grade plutonium, as defined in the 
U.S.-Russia Plutonium Management and Disposition Agreement (less than 
10 percent Pu-240 and withdrawn from nuclear-weapons programs) is a 
subset of surplus weapon-usable fissile materials.
    U.S. national security and nonproliferation objectives include the 
disposition of 43 MT of surplus plutonium by rendering it unusable for 
nuclear weapons use and encouraging Russia to dispose of its surplus 
weapons plutonium. The 43 MT includes plutonium which has been declared 
surplus and some plutonium which may be declared surplus to national 
security defense needs in the future. This does not include surplus 
plutonium that already has a disposition pathway such as spent fuel, 
scraps, and residues. The analyses pursuant to the National 
Environmental Policy Act addressed the environmental impacts of 
disposition of up to 50 MT of such surplus weapons-usable plutonium, 
including plutonium that may be declared surplus in the future.
    \2\ This is consistent with the information used previously in 
DOE's 2006 report entitled, Disposition of Surplus U.S. Materials, 
Comparative Analysis of Alternative Approaches, and with DOE's 2007 
Business Case Analysis of the Current U.S. Mixed Oxide (MOX) Fuel 
Strategy for Dispositioning 34 Metric Tons of Surplus Weapon-Grade 
Plutonium, although those reports: (1) do not discount future cash 
flows, and (2) the earlier studies analyzed the combined plutonium and 
uranium storage costs in lieu of the plutonium storage cost as 
described in this study.
---------------------------------------------------------------------------
    DOE's proposed baseline approach is designed to accomplish the 
following three objectives:
  --Dispose of \3\ approximately 43 metric tons of surplus weapons-
        usable plutonium (both weapon and non-weapon grade) so that 
        this material is rendered inaccessible and unattractive for 
        weapons use while protecting human health and the environment. 
        This goal is consistent with long-standing United States 
        national security and nonproliferation policy with respect to 
        eliminating, where possible, the accumulation of stockpiles of 
        highly enriched uranium and plutonium;
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    \3\ The phrase ``dispose of '' is used in this paper, consistent 
with the phraseology appearing in the 2000 U.S.-Russia Plutonium 
Management and Disposition Agreement. This paper addresses the costs of 
disposition prior to ultimate disposal (of mixed oxide spent fuel and 
vitrified plutonium with high-level waste) in the planned geologic 
repository for spent fuel and high-level waste at Yucca Mountain, 
Nevada.
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  --Encourage Russia to dispose of 34 MT of its surplus weapons 
        plutonium consistent with the September 2000 U.S.-Russia 
        Plutonium Management and Disposition Agreement; and
  --Consolidate surplus non-pit plutonium currently stored throughout 
        the DOE Complex in order to reduce the risks associated with 
        storage of such materials at multiple sites and to help reduce 
        storage and safeguards and security costs for nuclear 
        materials.
    DOE's current proposed baseline approach \4\ for disposing of 
approximately 43 metric tons of surplus plutonium involves the 
following:
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    \4\ The proposed actions described in the following bullets are 
subject to appropriate review under the National Environmental Policy 
Act (NEPA), subsequent decisions, and compliance with other applicable 
law.
---------------------------------------------------------------------------
  --Construct and operate a Mixed Oxide (MOX) Fuel Fabrication 
        Facility, a Pit Disassembly and Conversion Facility (PDCF), and 
        a Waste Solidification Building (WSB) to dispose of at least 34 
        MT of weapon-grade plutonium;
  --Design, construct and operate a small-scale plutonium vitrification 
        process in the basement level of the K-Reactor Building to 
        vitrify up to 13 MT of non-pit plutonium \5\ with high level 
        waste; and
---------------------------------------------------------------------------
    \5\ This 13 MT includes approximately 2 MT of material currently 
proposed to be processed in the HB-Line, and vitrified in the Defense 
Waste Processing Facility and approximately 4 MT of material currently 
proposed to be fabricated into MOX fuel.
---------------------------------------------------------------------------
  --Operate the existing H-Canyon/HB-Line facilities to process 
        approximately 2 MT of plutonium-bearing materials for disposal 
        through the Savannah River Site radioactive waste system (for 
        vitrification with high level waste in the Defense Waste 
        Processing Facility) concurrent with the recovery of enriched 
        uranium for subsequent down-blending to low enriched uranium 
        and sale.
    Based on a recent review by outside experts (cited above), and an 
assessment by Shaw-AREVA MOX Services (MOX contractor) of what 
plutonium materials can likely be fabricated into MOX fuel, DOE is 
currently evaluating the cost and feasibility of reducing or 
eliminating the mission that is currently being considered for the 
proposed small-scale Plutonium Vitrification process. Preliminary 
indications are that this approach could result in cost savings of 
approximately $500 million (estimated total project cost in constant 
2006 dollars, excluding operating costs), although actual savings may 
change as the design of the small-scale Plutonium Vitrification process 
progresses. The Department is evaluating the feasibility of the 
following approach:
  --Construct and operate a Mixed Oxide (MOX) Fuel Fabrication 
        Facility, a Pit Disassembly and Conversion Facility (PDCF), and 
        a Waste Solidification Building (WSB) to dispose of at least 39 
        MT of weapon-grade plutonium;
  --Operate the existing H-Canyon/HB-Line facilities to process 
        approximately 4 MT of plutonium-bearing materials for disposal 
        through the Savannah River Site radioactive waste system (for 
        vitrification with high level waste in the Defense Waste 
        Processing Facility) concurrent with the recovery of enriched 
        uranium for subsequent down-blending to low enriched uranium 
        and sale.
    Constructing and operating a Mixed Oxide (MOX) Fuel Fabrication 
Facility at the Savannah River Site for disposing of surplus plutonium 
is in the U.S. national interest and consistent with national security 
and nonproliferation objectives. Doing so will convert plutonium into 
forms not readily usable for weapons, and will encourage Russia to 
dispose of 34 metric tons of its excess weapons plutonium in accordance 
with the 2000 U.S.-Russia Plutonium Management and Disposition 
Agreement. Proceeding with the U.S. MOX program will also help reduce 
storage costs for nuclear materials, reduce safeguards and security 
costs, and support the Department's efforts to consolidate nuclear 
materials throughout the DOE Complex. The Department of Energy believes 
that irradiating plutonium as MOX fuel in existing commercial reactors 
is a prudent and effective means for disposing of surplus plutonium 
compared to other less mature disposition technologies.
    MOX is a proven technology that has been in widespread use in 
Europe for over three decades. Moreover, the design of the U.S. MOX 
facility is 90 percent complete, the Nuclear Regulatory Commission 
(NRC) has issued a construction authorization, and DOE's contractor has 
submitted a license application to the NRC for operation of the MOX 
facility. In addition, MOX fuel lead assemblies, made from surplus 
weapons plutonium, are currently being successfully tested in a 
commercial reactor in South Carolina. Thus far, DOE has spent 
approximately $735 million on the MOX program for design, licensing, 
and site preparation activities as well as for the fabrication and 
irradiation of MOX fuel lead assemblies.\6\
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    \6\ The approximately $735 million in sunk costs are not included 
in this baseline financial analysis. Sunk costs were included in the 
calculation of life cycle costs provided to the House Committee on 
Appropriations in March 2007, in accordance with specific direction 
from that Committee.
---------------------------------------------------------------------------
    DOE's proposed baseline approach provides a disposition path for 
the currently identified surplus plutonium that is or will be declared 
surplus in the future. It enables the Department to consolidate special 
nuclear material (SNM), including the removal of all surplus plutonium 
from Hanford as well as reducing the inventory of surplus plutonium at 
the Lawrence Livermore National Laboratory (LLNL) and the Los Alamos 
National Laboratory (LANL) by 2009. This would result in a reduction of 
existing Category I special nuclear materials storage (CAT I) 
facilities, and ultimately would result in the fewest number of DOE CAT 
I storage facilities, at the earliest date in time. The proposed 
consolidation would also facilitate the Department's plan to achieve 
its ``Complex 2030'' objectives, a more modern, smaller and efficient 
weapons complex.
    As evidenced in the financial analysis, this proposed baseline 
approach would recover uranium and plutonium from the disposition of 
surplus fissile materials for energy production providing over $2 
billion in revenues \7\ (in constant 2006 dollars) to the U.S. 
Treasury. Included in this proposed baseline approach is approximately 
2 MT of plutonium-bearing materials to be processed through H-Canyon/
HB-Line at Savannah River. The net present value cost of this proposed 
approach (i.e. MOX, the proposed small-scale Vitrification, and H-
Canyon) over a 28-year period is approximately $11.1 billion.
---------------------------------------------------------------------------
    \7\ Revenue is comprised of approximately $1.5 billion from the 
sale of MOX fuel and $700 million from the sale of uranium from 
dismantled nuclear weapons pits. Both are based on the prevailing price 
of uranium, which has been extremely volatile in recent years The 
discounted cash flow analysis used in this Business Case conservatively 
assumes that uranium and enrichment market prices that prevailed in 
November 2006 will prevail throughout the period of interest when the 
fuel materials will enter the market.
---------------------------------------------------------------------------
    In addition to encouraging Russia to dispose of 34 metric tons of 
weapons plutonium, the capability to disassemble large numbers of 
nuclear weapons pits in the United States and fabricate the resulting 
plutonium into MOX fuel utilizes a mature technology and could 
potentially provide the following capabilities:
  --Disposition of additional weapons plutonium (beyond the 34 MT) that 
        is expected to be declared surplus as plutonium requirements 
        are reevaluated, in connection with transformation of the 
        nuclear weapons stockpile. While additional declarations would 
        have to be approved by the President based on advice from the 
        Secretaries of Defense and Energy, the MOX and PDCF facilities, 
        once constructed and operating, could readily be used for this 
        purpose. The Deputy Administrator for Defense Programs will 
        specifically raise this request with the Nuclear Weapons 
        Council.
  --Currently, DOE is evaluating both metal and oxide fuel forms for 
        use as the start-up fuel for fast reactors in support of the 
        Global Nuclear Energy Partnership (GNEP). A decision on the 
        fuel form for the fast reactors will be made at a future time. 
        Given that the necessary GNEP fuel-related decisions are in the 
        future, it is not reasonable to delay construction of the MOX 
        facility to incorporate the potential GNEP required design and 
        construction changes. Continued delays in MOX construction will 
        result in increased costs and postpone the start of facility 
        operations. DOE will continue to evaluate the option to use the 
        MOX facility in support of fast reactor start-up fuel as the 
        requirements for GNEP are developed. In 2008, the Secretary of 
        Energy plans to determine a path forward for GNEP.
  --Disposition of additional impure plutonium, e.g. plutonium 
        containing levels of chlorides, fluorides and Pu-240, currently 
        proposed to be dispositioned in DOE's proposed small-scale 
        Plutonium Vitrification process. The Department is evaluating 
        the cost and technical feasibility of maximizing the use of the 
        MOX facility and reducing the mission that is currently being 
        considered for the proposed small-scale Plutonium Vitrification 
        process.
    In conclusion, DOE's proposed baseline approach for disposing of 
surplus plutonium (MOX, the proposed small-scale Plutonium 
Vitrification process, and H-Canyon) would meet U.S. national security 
and nonproliferation objectives for disposing of 43 MT of surplus 
plutonium by rendering it unusable for nuclear weapons use, and 
encouraging Russia to dispose of its surplus weapons plutonium. In 
addition, the proposed baseline approach will help reduce storage costs 
for nuclear materials, reduce safeguards and security costs, and 
support the Department's efforts to consolidate nuclear materials 
within the DOE Complex.

                               BACKGROUND

    The end of the cold war left a legacy of surplus weapons-usable 
fissile materials both in the United States and the former Soviet 
Union, leaving substantial quantities of plutonium, no longer needed 
for defense purposes. The global stockpiles of weapons-usable fissile 
materials pose a danger to national and international security in the 
form of potential proliferation of nuclear weapons and the potential 
for environmental, safety, and health consequences if the materials are 
not properly safeguarded and managed. In September 1993, in response to 
these concerns, President Clinton issued a Nonproliferation and Export 
Control Policy which committed the United States to seek to eliminate, 
where possible, the accumulation of stockpiles of highly enriched 
uranium or plutonium, and to ensure that where these materials already 
exist, they are subject to the highest standards of safety, security, 
and international accountability.
    In early 1994, the U.S. National Academy of Sciences issued a 
report evaluating a number of plutonium disposition alternatives 
ranging from sending it into space to burying it under the ocean floor, 
before recommending two promising alternatives for further study: (1) 
fabrication and use as fuel, without reprocessing, in existing or 
modified nuclear reactors, or (2) immobilization in combination with 
high-level radioactive waste. To achieve a high degree of proliferation 
resistance, the National Academy of Sciences recommended that the 
national objective should be to make the surplus weapon-grade 
``plutonium roughly as inaccessible for weapons use as the much larger 
and growing quantity of plutonium that exists in spent fuel from 
commercial reactors,'' a state they defined as the spent fuel standard. 
This standard would require a form from which extraction and use in 
weapons of any residual plutonium and other fissile materials would be 
as difficult or unattractive as the recovery of residual plutonium from 
spent commercial fuel.
    On March 1, 1995, approximately 200 metric tons of U.S.-origin 
weapons-usable fissile materials were declared surplus to U.S. defense 
needs (38.2 MT of weapon-grade plutonium and 174.3 MT of highly 
enriched uranium). In addition, DOE announced that it had 14.3 metric 
tons of other than weapon-grade plutonium that would be included in the 
disposition program.
    Subsequently, the Department of Energy convened a team of 
laboratory, independent oversight and interagency experts to determine 
a range of reasonable disposition alternatives. Following a number of 
nationwide scoping meetings, the team released a screening report in 
March 1995 that pared 37 potential disposition options down to 11; 5 
for reactor, 4 for immobilization and 2 for direct geologic disposal 
(deep borehole). The screening process led the Department to conclude 
that going beyond the spent fuel standard using advanced technologies, 
such as fast reactors and accelerators, was not appropriate. Such 
advanced options were found to require substantial additional research 
and development, with related increased costs and time, in order to 
provide the same assurance of technical viability as other, more 
readily available technologies.
    At the April 1996 Moscow Nuclear Safety Summit, the leaders of the 
seven largest industrial countries and the Russian Federation issued a 
joint statement endorsing the need to render the surplus fissile 
materials (both highly enriched uranium and plutonium) in Russia and 
the United States to a high degree of proliferation resistance. 
Subsequently, former Russian President Yeltsin declared up to 50 metric 
tons of plutonium and 500 metric tons of highly enriched uranium as 
surplus to Russia's defense needs in September 1997.
    Following the preparation of a Programmatic Environmental Impact 
Statement which evaluated various storage and disposition options, DOE 
issued a Record of Decision (ROD). In the 1997 ROD, DOE decided that it 
would consolidate the storage of weapons-usable plutonium at upgraded 
and expanded existing and planned facilities at the Pantex Plant in 
Texas and the Savannah River Site (SRS) in South Carolina, and continue 
the storage of weapons-usable HEU in upgraded facilities at DOE's Y-12 
Plant at the Oak Ridge Reservation in Tennessee. After certain 
conditions were met, most plutonium stored at the Rocky Flats 
Environmental Technology Site in Colorado would be moved to Pantex and 
SRS. Plutonium stored at the Hanford Site, the Idaho National 
Engineering and Environmental Laboratory (INEEL), and the Los Alamos 
National Laboratory (LANL) would remain at those sites until 
disposition (or moved to storage prior to disposition). In accordance 
with the ROD, DOE would provide for disposition of surplus plutonium by 
pursuing a strategy that allowed: (1) immobilization of surplus 
plutonium for disposal in a repository pursuant to the Nuclear Waste 
Policy Act, and (2) fabrication of surplus plutonium into mixed oxide 
(MOX) fuel for use in existing domestic commercial light-water 
reactors.
    In July 1998, the Department issued a draft Surplus Plutonium 
Disposition Environmental Impact Statement (SPD EIS) which analyzed 
candidate sites for plutonium disposition. The environmental 
consequences of siting, constructing, operating, and ultimately 
decommissioning the facilities under consideration for the plutonium 
disposition mission at one or more of four DOE sites was described in 
the draft SPD EIS issued in July 1998. In addition to assessing the 
environmental consequences of the disposition alternatives, DOE 
analyzed the cost and schedule differences between alternatives, taking 
into account information obtained during site visits, similar nuclear/
industrial project costs, informal vendor quotations, previous 
estimates for similar equipment, parametric cost models, site-specific 
labor rates, and operational staffing requirements and salaries. A cost 
report was issued in July 1998 that focused on the differences in cost 
for siting the facilities at the different locations. In September 
1998, at the Clinton-Yeltsin Summit, the two leaders committed their 
countries to enter into a bilateral plutonium disposition agreement.
    In April 1999, DOE issued a Supplement to the draft SPD EIS, to 
address, among other things, impacts at the specific reactor sites 
which were identified pursuant to the contract with DOE's newly 
selected MOX contractor. In November 1999, DOE issued the Surplus 
Plutonium Disposition Final Environmental Impact Statement. This 
follow-on EIS evaluated the environmental impacts of conducting 
plutonium disposition activities at the following DOE locations: 
Hanford, Savannah River, Idaho National Engineering and Environmental 
Laboratory (INEEL) and the Pantex Plant. This was followed, in January 
2000, by a decision that: the Pit Disassembly and Conversion Facility, 
the Mixed Oxide Fuel Fabrication Facility, and the Plutonium 
Immobilization Facility would be located at SRS; up to 33 MT of 
plutonium would be fabricated as mixed oxide fuel at the Savannah River 
Site; and up to 17 MT of plutonium would be immobilized at the Savannah 
River Site.\8\ The Department reasoned that pursuing this approach 
provided the best opportunity for U.S. leadership in working with 
Russia to implement similar options for reducing Russia's excess 
plutonium. Further, it would send the strongest possible signal to the 
world of U.S. determination to reduce stockpiles of surplus weapons-
usable plutonium as quickly as possible and in an irreversible manner.
---------------------------------------------------------------------------
    \8\ About 4 MT of the 17 MT has been subsequently designated for 
programmatic use.
---------------------------------------------------------------------------
    Also in November 1999, DOE issued an additional cost report, 
Plutonium Disposition Life-Cycle Costs and Cost-Related Comment 
Resolution Document, which provided the full life-cycle costs for the 
Preferred Alternative as stated in the draft SPD EIS.
    Making good on a pledge made at a 1998 Summit, the United States 
and Russia entered into a Plutonium Management and Disposition 
Agreement in September 2000 that committed each country to dispose of 
34 metric tons of surplus weapon-grade plutonium.
    In 2001, DOE undertook a review of U.S. plutonium disposition 
cooperation with Russia so as to identify a more cost-effective 
approach. The review considered more than 40 approaches for plutonium 
disposition, with 12 distinct options selected for detailed analysis 
(six MOX-based reactor disposition options, two advanced reactor 
disposition options, and four non-reactor options (immobilization and 
long-term storage). This resulted in a refined approach under which the 
United States would rely on the irradiation of MOX fuel to dispose of 
surplus plutonium. After preparation of a Supplemental Analysis 
pursuant to the National Environmental Policy Act, the Department 
issued an amended Record of Decision which, among other things, 
cancelled immobilization. Under the new approach, 34 MT of surplus 
plutonium would be fabricated into MOX fuel, including approximately 
6.5 metric tons of impure plutonium previously destined for 
immobilization.
    In 2006, DOE again evaluated its strategy for disposing of 
currently identified surplus weapons-usable plutonium, plus 26 MT of 
surplus highly enriched uranium for which viable disposition paths had 
not been identified. DOE's 2006 report titled, Disposition of Surplus 
U.S. Materials, Comparative Analysis of Alternative Approaches showed 
that all of the ``going forward'' various alternatives were within a 
few percentages of each other (in constant 2006 dollars), illustrating 
that monetary cost was not a major discriminating factor. In the case 
of storage, DOE would still have to incur the cost of disposition at 
the conclusion of the storage mission.
    In March 2007, the Department also submitted to Congress a report 
titled, Business Case Analysis of the Current U.S. Mixed Oxide (MOX) 
Fuel Strategy for Dispositioning 34 Metric Tons of Surplus Weapon-Grade 
Plutonium, which included a business case rollup of going forward costs 
(in constant 2006 dollars) of various disposition alternatives. This 
report reconfirmed that the MOX approach was the most suitable 
disposition alternative and showed that continued storage was the most 
expensive alternative over time.

             DESCRIPTION OF DOE'S SURPLUS FISSILE MATERIALS

    In accordance with the U.S.-Russia Plutonium Management and 
Disposition Agreement, the MOX facility will fabricate at least 34 MT 
of surplus weapon-grade plutonium into MOX fuel for subsequent 
irradiation in existing commercial reactors. The majority of the 
material is comprised of surplus pits, clean plutonium metal, and clean 
oxide (approximately 25.6 MT). The remaining quantity of plutonium is 
comprised of weapon-grade oxides that are acceptable to the MOX process 
and from future weapons dismantlements. Some of the metal and oxides 
are impure, and until physical sampling, analysis and characterization 
can be performed on individual cans containing this material, the final 
quantities could vary. Based on currently available information, the 34 
MT of weapon-grade plutonium is comprised of the following:
  --25.6 MT of surplus plutonium pits, clean metal, and clean oxide;
  --Approximately 4 MT of other metal and oxide; and
  --Approximately 4.4 MT from future declarations of additional surplus 
        pits.
    In August 2006, DOE identified a small-scale plutonium 
vitrification process that could be used to dispose of up to 13 MT of 
plutonium. This 13 MT includes 4 MT of other metal and oxide that DOE 
currently believes are suitable for MOX and approximately 2 MT that is 
currently planned to be processed in the H-Canyon facility.
    Based on currently available information, the 13 MT of plutonium is 
proposed to be distributed among the three facilities (MOX, the 
proposed small-scale Plutonium Vitrification process, and H-Canyon) 
based on the following material characteristics:

------------------------------------------------------------------------
        Disposition Approach           Quantity      Characteristics
------------------------------------------------------------------------
MOX.................................       4 MT  Other Metal & Oxide:
                                                  Clean WG (Weapon-
                                                  Grade) (less than 10
                                                  percent Pu-240) Oxide
                                                  and Slightly Impure WG
                                                  Oxide.
Plutonium Vitrification Facility....   \1\ 5 MT  Impure Metal & Oxide:
                                                  Clean FG (Fuel-Grade)
                                                  (greater than 10
                                                  percent but less than
                                                  19 percent Pu-240)
                                                  Metal; Clean FG Oxide;
                                                  Impure Plutonium Oxide
                                                  with Chloride; Impure
                                                  Plutonium Metal with
                                                  Chloride.
                                       \2\ 2 MT  Impure Metal & Oxide:
                                                  Power-Grade Oxide (19+
                                                  percent Pu-240); Fast
                                                  Flux Test Facility
                                                  Green Fuel (70 percent
                                                  Uranium); Plutonium
                                                  Oxide with Fluoride;
                                                  Plutonium Oxide with
                                                  Beryllium (Be);
                                                  Plutonium Oxides and
                                                  Metal with Thorium.
H-Canyon............................       2 MT  Very Impure Materials:
                                                  Material from 3013
                                                  Container
                                                  Surveillances;
                                                  Plutonium-Beryllium
                                                  Metal; Plutonium-
                                                  Vanadium Metal; Pu-
                                                  Depleted Uranium
                                                  Metal; Plutonium-
                                                  Tantalum Metal; and
                                                  Oxide with High
                                                  Uranium Content.
------------------------------------------------------------------------
\1\ As discussed elsewhere in this analysis, some or all of this
  material may be fabricated into MOX fuel in the MOX facility.
\2\ As discussed elsewhere in this analysis, some of this material may
  be processed in H-Canyon.

    DOE will evaluate how to maximize the use of the MOX Facility for 
disposition of the non-pit plutonium currently being considered for the 
proposed small-scale Plutonium Vitrification process which is in the 
very early stages of design (less than 5 percent complete). DOE will 
continue to address technical and cost uncertainties as part of the 
Conceptual Design process and will arrive at a decision as to the need 
for the Plutonium Vitrification project as part of Critical Decision-1, 
planned for late 2007. The following is a graphical presentation 
showing the potential pathways for disposing of 52.5 MT of U.S. 
weapons-usable plutonium, which was declared surplus in 1995 (including 
spent fuel and fresh fuel retained for programmatic use), as well as 
plutonium which may be declared surplus in the future:


  FINANCIAL ANALYSIS OF DOE'S PROPOSED BASELINE PLUTONIUM DISPOSITION 
                                APPROACH

    DOE's proposed baseline approach includes a MOX Fuel Fabrication 
Facility, a Pit Disassembly and Conversion Facility (PDCF), and a Waste 
Solidification Building (WSB) to dispose of 34 MT of weapon-grade 
plutonium; a proposed Plutonium Vitrification process in the basement 
level of the K-Reactor Building to vitrify an expected 7 MT of non-pit 
plutonium (but potentially up to 13 MT of non-pit plutonium) currently 
unsuitable for fabrication into MOX fuel; and the H-Canyon/HB-Line 
facilities to process approximately 2 MT of plutonium bearing materials 
at the Savannah River Site to recover enriched uranium for subsequent 
down-blending and sale.
    DOE uses a discounted cash flow analysis (or DCF) as the basis for 
its Business Case which takes into account the time value of money. The 
DCF method determines the present value of future cash flows by 
discounting them to the present using the U.S. Government's appropriate 
discount rate, as prescribed by OMB. This is necessary because cash 
flows (project related cost outflows and revenue stream inflows from 
the sale of MOX fuel and down-blended low enriched uranium) occur in 
different time periods. This approach is consistent with the 
information used previously in DOE's 2006 report entitled, Disposition 
of Surplus U.S. Materials, Comparative Analysis of Alternative 
Approaches, and with DOE's 2007 Business Case Analysis of the Current 
U.S. Mixed Oxide (MOX) Fuel Strategy for Dispositioning 34 Metric Tons 
of Surplus Weapon-Grade Plutonium, although those reports do not 
discount future cash flows.
    The underlying conditions of the economic analysis are as follows:
  --The analysis is based on estimates published previously in DOE/NNSA 
        budget documentation (updated, where appropriate) and on the 
        approved, externally reviewed and validated MOX total project 
        cost baseline. The analysis did not independently develop or 
        verify any of those estimates.
  --Revenues from the sale of MOX reactor fuel and uranium from 
        dismantled pits are included, where applicable.
  --All cash flows represent relevant differences in expected current 
        and future costs and revenues among the alternatives. Previous 
        sunk costs are not considered.
  --The net present value costs are in discounted 2006 dollars.
  --The common time period is 2007 through 2034 and therefore includes 
        current year expenditures.
  --The discount rate (representing the Government's time value of 
        money) is 3 percent, as prescribed in OMB Circular A-94.
    The ``going forward'' cost, in net present value terms and 
excluding sunk costs, of DOE's proposed baseline approach is 
approximately $11.1 billion. A detailed analysis and assumptions 
follow:

 NET PRESENT VALUE COST TO DOE OVER A 28-YEAR PERIOD--MOX, VITRIFICATION
                         AND H-CANYON OPERATIONS
                        [In millions of dollars]
------------------------------------------------------------------------
                                                            Net Present
                      Cost Element                          Value Cost
------------------------------------------------------------------------
MOX.....................................................           3,402
PDCF....................................................           2,214
WSB.....................................................             544
Other Plutonium Disposition Costs \1\...................             333
Vitrification...........................................             797
H-Canyon................................................             340
Storage.................................................           3,426
                                                         ---------------
      Net Present Value.................................          11,056
------------------------------------------------------------------------
\1\ Includes estimated costs associated with reactor modifications,
  reactor irradiation services, procurement of uranium feed materials,
  and fuel qualification.

  
  
    Assumptions:
  --MOX construction begins August 1, 2007; the facility becomes 
        operational in 2016 and operates through 2029.
  --PDCF becomes operational in 2019 and operates through 2026.
  --WSB becomes operational in 2013 and operates through 2029.
  --Proposed Plutonium Vitrification process becomes operational in 
        2013 and operates through 2019.
  --For surplus non-pit plutonium, approximately 2 MT is processed 
        through H-Canyon/HB-Line, approximately 4 MT is processed 
        through the MOX facility, and the remaining 7 MT is vitrified 
        in the proposed Plutonium Vitrification process.
  --All cash flows are represented in 2006 (real) dollars.
  --Consolidation of surplus, non-pit plutonium to SRS begins in 2007 
        and is completed in 2009.
  --H-Canyon/HB-Line are maintained as a safeguards Category II 
        facility.
  --The primary mission for H-Canyon/HB-Line is to process aluminum 
        clad spent fuel and recover enriched uranium, which continues 
        through 2019. The costs associated with the ``with other 
        missions'' are the costs attributable to operating the facility 
        for processing plutonium whereas the costs associated with the 
        ``without other missions'' are the costs to operate the 
        facility if the plutonium mission carries the full costs of 
        facility operations. The numbers are derived from the actual 
        annual operating costs.
  --The MOX total project cost is based on the current approved project 
        baseline ($4.8 billion). Note: The Revised Continuing 
        Appropriations Resolution, 2007 (Public Law 110-5) provides 
        that the Secretary of Energy may not make available funds for 
        construction activities for the MOX facility until August 1, 
        2007. This delay results in an increase to the MOX total 
        project cost which is included in the net present value 
        calculations.
  --The project cost for PDCF and WSB is based on the project data 
        sheet in the fiscal year 2008 President's budget.
  --The project costs for Plutonium Vitrification are based on the pre-
        conceptual cost range approved at CD-0, and are the same as 
        those appearing in the fiscal year 2008 President's budget.
  --Costs for all storage facilities are based on actual operating 
        costs and/or those costs projected by each of the sites.
  --Storage costs for LLNL and LANL continue until programmatic 
        materials are removed consistent with Complex 2030 goals in the 
        years 2014 and 2022 respectively. Pantex storage costs continue 
        due to continued storage of programmatic material. Storage 
        costs are based on the total, actual operating costs of the 
        storage facilities for both surplus and non-surplus 
        programmatic materials. These costs include security costs and 
        the required staffing to operate and maintain a Category 1 
        Security facility. Such costs are incurred regardless of the 
        quantity of materials stored in the facility and would be 
        incurred so long as surplus or programmatic materials are 
        stored at the facilities. The facilities at Pantex, LLNL, and 
        LANL contain both programmatic and surplus materials and 
        accordingly, storage costs would be incurred until all of the 
        materials (surplus and programmatic) have been removed. For 
        these reasons, it is not appropriate to allocate incremental 
        storage costs for only surplus plutonium.
  --The estimated nearer-term plutonium storage costs of $3.4 billion 
        represent the storage costs to the Department until removal of 
        surplus plutonium from Hanford, LLNL, and LANL pursuant to 
        DOE's Complex 2030 and material consolidation goals. If 
        consolidation of the surplus plutonium does not proceed and the 
        materials continue to be stored at present locations, then an 
        incremental storage cost of approximately $6 billion would be 
        incurred, in addition to the future cost to dispose of the 
        materials at a later time. Storage (without disposition) would 
        be the most expensive option because the discounted (net 
        present value) storage costs are within 10 percent of the 
        proposed baseline approach and do not account for the 
        additional cost to dispose of the material.
  --The net present value costs are consistent with the information 
        used previously in DOE's 2006 report entitled, Disposition of 
        Surplus U.S. Materials, Comparative Analysis of Alternative 
        Approaches, and with DOE's 2007 Business Case Analysis of the 
        Current U.S. Mixed Oxide (MOX) Fuel Strategy for Dispositioning 
        34 Metric Tons of Surplus Weapon-Grade Plutonium, but differ in 
        that: (1) the earlier studies did not discount the costs, and 
        (2) the earlier studies analyzed the combined plutonium and 
        uranium storage costs in lieu of the plutonium storage cost as 
        described in this study. If DOE continues to store surplus 
        materials at Hanford, LANL, and LLNL, cost savings from 
        removing plutonium pursuant with Complex 2030 initiative and 
        materials consolidation would not be realized.
  --Costs are included for construction of six magazines to increase 
        storage efficiency for surplus pits in Zone 4 at Pantex.
  --Costs of operating H-Canyon/HB-Line without other missions 
        represent the total cost of operating H-Canyon/HB-Line and are 
        based on actual annual operating costs. This scenario would 
        occur if other planned missions do not take place and H-Canyon/
        HB-Line was operated solely for plutonium disposition.
  --Revenues from the sale of MOX fuel and the uranium from dismantled 
        pits are based on the price of uranium as of November 2006.
  --A terminal value is used to assign an equivalent financial value to 
        those activities assumed to continue indefinitely, such as 
        storage and surveillance and monitoring.

      EVALUATION OF ALTERNATIVE STORAGE AND DISPOSITION APPROACHES

    The following section compares the Department's proposed baseline 
approach with other storage and disposition approaches on the basis of 
nonproliferation aspects, institutional factors, technical maturity and 
technical uncertainty, and cost and schedule considerations. Plutonium 
disposition approaches are grouped into two distinct categories. Those 
approaches in the first category meet U.S. national security and 
nonproliferation objectives concerning the disposition of surplus 
plutonium by rendering it unusable for nuclear weapons, and encourage 
Russia to dispose of its surplus weapons plutonium. Specific approaches 
in this category include: DOE's proposed Baseline Approach (MOX, the 
proposed small-scale Plutonium Vitrification process and H-Canyon/HB-
Line) and Maximize Utilization of MOX and H-Canyon/HB-Line. The second 
category contains those approaches that fail to accomplish these 
objectives and include: large-scale (41 MT) Immobilization Facility and 
H-Canyon, Consolidate and Vitrify (13 MT) Non-Pit Plutonium at SRS 
While Continuing to Store Surplus Pits at Pantex, Consolidate the 
Storage of Non-Pit Plutonium (13 MT) at SRS and Store Surplus 
Plutonium (43 MT) In-Place at Current Locations.

   APPROACHES THAT MEET U.S. NATIONAL SECURITY AND NONPROLIFERATION 
                               OBJECTIVES

    Proposed Baseline Approach (MOX, Plutonium Vitrification and H-
Canyon).--The proposed baseline approach consists of: (1) construct and 
operate a MOX Fuel Fabrication Facility, a Pit Disassembly and 
Conversion Facility, and a Waste Solidification Building to dispose of 
34 MT of weapon-grade plutonium; (2) design, construct and operate a 
plutonium vitrification process in the basement level of the K-Reactor 
Building to vitrify up to 13 MT of non-pit plutonium; and (3) operate 
the existing H-Canyon/HB-Line facilities to process approximately 2 MT 
of very impure plutonium bearing materials at the Savannah River Site, 
along with the mission to recover enriched uranium for subsequent down 
blending and sale.
    DOE's proposed baseline approach for disposing of surplus plutonium 
meets all of the programmatic objectives. The detailed design of the 
MOX facility is about 90 percent complete, and the technology has been 
in use throughout Europe for three decades. The proposed Plutonium 
Vitrification process, on the other hand, is in the very early stages 
of design (less than 5 percent complete). As such, there remains 
uncertainty associated with the design and cost estimates and 
therefore, future cost growth is likely. DOE will continue to address 
technical and cost uncertainties as part of the Conceptual Design 
process. The MOX fuel fabrication facility, once operational, could 
potentially provide the following capabilities: disposition of 
additional plutonium from future weapons dismantlement, if declared 
surplus; possible fabrication of start-up fuel for GNEP fast reactors 
depending on fuel form selected and the 2008 determination of the GNEP 
path forward by the Secretary of Energy; and disposition of additional 
surplus impure plutonium (currently planned for Plutonium 
Vitrification), if the chemical and isotopic impurities can be 
economically removed from the material. This approach will incur 
additional costs if there is delay in pursuing the currently planned 
program.
    Maximize Utilization of MOX and Operate H-Canyon (MOX and H-
Canyon).--Construct and operate a MOX Fuel Fabrication Facility, a Pit 
Disassembly and Conversion Facility, and a Waste Solidification 
Building to dispose of approximately 39 MT of weapon-grade and fuel-
grade plutonium, and to operate the existing H-Canyon/HB-Line 
facilities to process approximately 4 MT of certain impure and very 
impure plutonium bearing materials at the Savannah River Site, together 
with the mission to recover enriched uranium for subsequent down 
blending and sale.
    As with the proposed baseline approach, this approach meets all of 
the programmatic objectives. Overall, it has the highest degree of 
technical maturity and is therefore likely to have the least unplanned 
programmatic cost growth. The proposed small-scale Plutonium 
Vitrification process is in the very early stages of design (less than 
5 percent complete). As such, there remains uncertainty associated with 
the design and cost estimates and therefore, future cost growth is 
likely. DOE will continue to address technical and cost uncertainties 
as part of the Conceptual Design process. Engineers are currently 
evaluating the cost and technical feasibility of maximizing the use of 
the MOX facility and reducing the mission that is currently proposed 
for the small-scale Plutonium Vitrification process. If feasible, it 
could permit DOE to use MOX and H-Canyon to dispose of the 
approximately 43 metric tons of surplus plutonium. Preliminary 
indications are that this approach may result in cost savings of 
approximately $500 million (estimated total project cost in constant 
2006 dollars, excluding operating costs) when compared to the proposed 
baseline approach, although actual savings may change as the design of 
the small-scale Vitrification process progresses. Moreover, this 
approach would require minor modifications to the H-Canyon. As 
mentioned above, the MOX fuel fabrication facility, once operational, 
could potentially provide the following capabilities: disposition of 
additional plutonium from future weapons dismantlement, if declared 
surplus; and possible fabrication of start-up fuel for GNEP fast 
reactors depending on a decision by the Secretary of Energy on the 
scope of the GNEP program scheduled for June 2008.

        APPROACHES THAT FAIL TO MEET U.S. NATIONAL SECURITY AND 
                      NONPROLIFERATION OBJECTIVES

    Immobilization Facility and H-Canyon.--Under this approach, DOE 
would design, construct, and operate a new, large-scale (approximately 
41 MT) stand-alone Plutonium Immobilization Plant (using ceramification 
technology, since immobilization of such a large amount of plutonium 
would not be feasible using vitrification in a borosilicate glass due 
to the high radiation levels produced). A Pit Disassembly and 
Conversion Facility would be needed to take apart nuclear weapons cores 
and convert the resulting plutonium metal to an oxide form for 
ceramification as would a Waste Solidification Building. Operation of 
the existing H-Canyon/HB-Line facilities would be used to process 
approximately 2 MT of plutonium bearing materials at the Savannah River 
Site, together with the mission to recover enriched uranium for 
subsequent down blending and sale.
    This approach is likely to be seen by Russia as being inconsistent 
with the U.S.-Russia Plutonium Management and Disposition Agreement and 
is unlikely to encourage Russia to dispose of its surplus weapon-grade 
plutonium. Russia continues to view immobilization as another form of 
storage because it does not degrade the isotopics of the weapon-grade 
plutonium as would irradiation in a nuclear reactor. Therefore, Russia 
continues to believe that weapon-grade plutonium from the immobilized 
waste form could be retrieved for use in new nuclear weapons. This 
approach does support the program objectives of consolidating and 
disposing surplus plutonium in support of Complex 2030 and related DOE 
goals. Plutonium immobilization maintains the commitment to U.S. 
nonproliferation goals by potentially dispositioning 43 MT of plutonium 
in an intrinsically theft resistant form. The ability to complete the 
41 MT immobilization mission with high level waste located at the 
Savannah River Site is not possible, however, because of an 
insufficient quantity of high level waste needed to fill the waste 
canisters, in order to provide an intrinsically self protecting theft-
resistant form. Immobilization \9\ of plutonium in a ceramic matrix 
also has a high degree of technical uncertainty because of the 
relatively low technical maturity associated with this technology. As a 
result, substantial future cost growth to accomplish plutonium 
immobilization is likely, and the overall programmatic cost is expected 
to be greater than DOE's current planned baseline program. In addition, 
significant program delays are likely because of the currently low 
technical maturity of this option, coupled with required new 
evaluations associated with such a major program change (e.g., 
extensive research and development, facility design and construction 
are likely to mean that an Immobilization Facility could not become 
operational for an additional 12-14 years).
---------------------------------------------------------------------------
    \9\ Immobilization of plutonium in a ceramic form has never been 
done before and designs for an immobilization facility do not exist. 
This approach would require extensive research and development followed 
by a detailed engineering effort to design an immobilization facility. 
This approach is likely to take between 10-12 years before construction 
can begin and result in significant cost increases and schedule delays.
---------------------------------------------------------------------------
    Consolidate and Vitrify Non-Pit Plutonium at SRS and Continue to 
Store Pits at Pantex.--Design, construct and operate a Plutonium 
Vitrification process in the basement level of the K-Reactor Building 
to vitrify up to 13 MT of non-pit plutonium; operate the existing H-
Canyon/HB-Line facilities to process approximately 2 MT (included in 
the preceding 13 MT) of plutonium bearing materials at the Savannah 
River Site, with the mission to recover enriched uranium for subsequent 
down blending and sale, and continue to store DOE's inventory of 
surplus pits at Pantex.
    This alternative approach would result in the disposition of 
approximately 13 MT of mostly non-weapon-grade plutonium but leaves 
thousands of surplus nuclear weapon pits in storage at Pantex. Thus, 
this approach does not meet U.S. national security and nonproliferation 
objectives with respect to rendering DOE's entire inventory of surplus 
plutonium unusable for future weapons use and does not encourage Russia 
to dispose of its surplus weapons plutonium. Upgrades would be needed 
at Pantex to continue to store the surplus nuclear weapons pits. As 
stated previously, the proposed small-scale Plutonium Vitrification 
process is in the very early stages of design (less than 5 percent 
complete). As such, there remains uncertainty associated with the 
design and cost estimates and therefore, future cost growth is likely.
    Consolidate the Storage of Non-Pit Plutonium at SRS.--Under this 
approach, DOE would: consolidate the storage of up to 13 MT of non-pit 
plutonium from Hanford, Los Alamos National Laboratory and Lawrence 
Livermore National Laboratory at SRS; continue to operate the existing 
H-Canyon/HB-Line facilities to process approximately 2 MT of plutonium 
bearing materials together with the mission to recover enriched uranium 
for subsequent down blending and sale; and continue to store 
indefinitely DOE's inventory of surplus nuclear weapons pits at Pantex.
    This alternative approach would not meet U.S. national security and 
nonproliferation objectives with regard to disposing of 43 MT of 
surplus plutonium by rendering it unusable for nuclear weapons use and 
would not encourage Russia to dispose of its surplus weapons plutonium. 
Since it would also fail to provide a disposition pathway out of the 
Savannah River Site for surplus plutonium brought there for 
disposition, existing law currently prohibits the further shipment of 
this plutonium to SRS under certain circumstances to achieve 
consolidation. This approach would not prevent the accumulation of 
stockpiles of surplus plutonium, deferring final disposition decisions 
and costs until the future. Upgrades would still be needed at Pantex to 
continue to store thousands of surplus nuclear weapons pits.
    Store Surplus Plutonium In-Place at Current Locations.--DOE would 
continue to store surplus plutonium at current locations, i.e., 
Savannah River Site, Pantex, Hanford, Los Alamos National Laboratory 
and Lawrence Livermore National Laboratory. Under this approach, the 
existing H-Canyon/HB-Line facilities would process approximately 2 MT 
of plutonium bearing materials already at the Savannah River Site, with 
the mission to recover enriched uranium for subsequent down blending 
and sale.
    This alternative approach would not meet U.S. national security and 
nonproliferation objectives. It would not meet U.S. obligations under 
the 2000 U.S.-Russia Plutonium Management and Disposition Agreement and 
would not encourage Russia to dispose of its surplus weapons plutonium. 
This approach would defer final disposition decisions and costs until 
some time in the future. Storage costs, discounted to the present, are 
within approximately 10 percent of DOE's planned baseline disposition 
costs, over the equivalent time period.\10\ At the conclusion of the 
storage period, DOE would still have to fund an expensive disposition 
program, or continue to pay storage costs.
---------------------------------------------------------------------------
    \10\ The 2007 Business Case Analysis of the Current U.S. Mixed 
Oxide (MOX) Fuel Strategy for Dispositioning 34 Metric Tons of Surplus 
Weapon-Grade Plutonium showed that storage costs in constant 2006 
dollars for 50 years of storage would be $15.45 billion and would 
exceed the base case costs.
---------------------------------------------------------------------------
                               CONCLUSION

    DOE's proposed baseline approach for disposing of surplus plutonium 
(MOX, proposed small scale Plutonium Vitrification process, and H-
Canyon) would meet U.S. national security and nonproliferation 
objectives for disposing of 43 MT of surplus plutonium by rendering it 
unusable for nuclear weapons use, and would provide the best chance of 
encouraging Russia to dispose of its surplus weapons plutonium. In 
addition, the proposed baseline approach would help reduce storage 
costs for nuclear materials, reduce safeguards and security costs, and 
support the Department's efforts to consolidate nuclear materials 
within the DOE Complex.
    The detailed design of the MOX facility, a key element of the 
baseline approach, is about 90 percent complete, and the technology has 
been in use throughout Europe for three decades. The Nuclear Regulatory 
Commission (NRC) has authorized construction and DOE's contractor has 
submitted a license application to the NRC for operation of the MOX 
facility. In addition, MOX fuel lead assemblies, containing surplus 
weapons plutonium, are currently being successfully tested in a 
commercial nuclear reactor in South Carolina and the irradiation of MOX 
fuel will generate electricity through which revenues are produced for 
the U.S. Treasury. Moreover, the MOX fuel fabrication facility, once 
operational, could potentially provide the following capabilities: 
disposition of additional plutonium from future weapons dismantlement, 
if declared surplus; possible fabrication of start-up fuel for GNEP 
fast reactors depending on a decision by the Secretary of Energy on the 
scope of the GNEP program scheduled for June 2008; and disposition of 
additional surplus impure plutonium (currently planned for Plutonium 
Vitrification), if the chemical and isotopic impurities can be 
economically removed from the material.

        CYBER SECURITY FUNDING--INSUFFICIENT TO ADDRESS THE RISK

    Question. It is clear that the cyber budgets have failed to keep 
pace with the enormous investment in physical security, despite the 
fact that every day of the year our classified network is attacked 
thousands of times by foreign entities looking for access to our 
national security secrets.
    Has the NNSA requested a risk analysis of the Department's massive 
physical security buildup vs. the limited investment it has made in 
cyber security?
    Answer. In December 2006, the NNSA Chief Information Officer (CIO) 
requested that a cyber security risk analysis be completed by each 
Site. The preliminary analyses were to be completed by February 2007, 
and the final analyses and reports are due to be completed in May 2007. 
After the NNSA CIO works with sites to identify and quantify the risks, 
the Administrator must review the risks of both cyber and physical and 
distribute the budget submission accordingly. In addition to the risk 
analysis, in 2007, the NNSA OCIO will publish a cyber security threat 
statement and risk assessment methodology to be used consistently 
across the NNSA complex.
    Question. Considering that our country is constantly under cyber 
attack, wouldn't you agree that an independent review of the investment 
over the past several years would be helpful to know if we accurately 
assessed the risks by making physical security our priority?
    Answer. Independent reviews of cyber and physical security are 
conducted annually by the Office of Independent Assessment (OA) and by 
the Office Inspector General (OIG). Cyber security has increasingly 
become a priority over the past several years, and budget requests 
reflect a change in the ``balancing'' of risks based on a 
revitalization of the cyber security program within DOE and NNSA.

        CYBER SECURITY FUNDING--INSUFFICIENT TO ADDRESS THE RISK

Loss of Personal Data
    Question. It greatly disturbs me that a subcontractor was able to 
walk out of Los Alamos lab with classified material last October, but I 
am equally frustrated with the numerous instances where the Federal 
Government has failed to protect personal information of employees. 
Last year, computer hackers were able to steal 1,500 names from NNSA's 
Albuquerque Service Center.
    What is the Department doing to encrypt and protect personal 
employee data to ensure that information has the same level of 
protection that applies to classified information?
    Answer. The Department's CIO published policy on the handling of 
Personally Identifiable Information (PII) in July 2006. The NNSA CIO 
further published implementing guidance in August 2006 that outlines 
the requirements for protection and reporting of PII and PII related 
information. These guidelines are in compliance with the OMB 
requirements for PII. In addition, the DOE and NNSA procured encryption 
software for use throughout the Department to facilitate the 
requirements implementation.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. This hearing is recessed.
    [Whereupon, at 4:04 p.m., Wednesday, April 18, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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