[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





      THE GLOBAL NUCLEAR REVIVAL AND U.S. NONPROLIFERATION POLICY

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2011

                               __________

                            Serial No. 112-7

                               __________

        Printed for the use of the Committee on Foreign Affairs




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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

                                 ______

                  U.S. GOVERNMENT PRINTING OFFICE
  65-302PDF               WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001





                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director












                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Olli Heinonen, senior fellow, Belfer Center for Science and 
  International Affairs (former Deputy Director General of the 
  International Atomic Energy Agency and head of its Department 
  of Safeguards).................................................    10
The Honorable William J. Perry, former Secretary of Defense, 
  senior fellow, Hoover Institution..............................    16
Mr. Henry Sokolski, executive director, Nonproliferation Policy 
  Education Center...............................................    21
Mr. Gene Aloise, director, Natural Resources and Environment 
  Team, U.S. Government Accountability Office....................    40

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Ileana Ros-Lehtinen, a Representative in Congress 
  from the State of Florida, and chairman, Committee on Foreign 
  Affairs: Prepared statement....................................     4
Mr. Olli Heinonen: Prepared statement............................    12
The Honorable William J. Perry: Prepared statement...............    18
Mr. Henry Sokolski: Prepared statement...........................    23
Mr. Gene Aloise: Prepared statement..............................    42

                                APPENDIX

Hearing notice...................................................    72
Hearing minutes..................................................    73
Questions submitted for the record by the Honorable Gus 
  Bilirakis, a Representative in Congress from the State of 
  Florida:
  Responses from Mr. Olli Heinonen...............................    75
  Responses from Mr. Henry Sokolski..............................    77
  Responses from Mr. Gene Aloise.................................    79

 
      THE GLOBAL NUCLEAR REVIVAL AND U.S. NONPROLIFERATION POLICY

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                  House of Representatives,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:48 a.m. in room 
2172, Rayburn House Office Building, Hon. Ileana Ros-Lehtinen 
(chairman of the committee) presiding.
    Chairman Ros-Lehtinen. The committee will come to order.
    After recognizing myself and my good friend, the ranking 
member, Mr. Berman, for 7 minutes each for our opening 
statements, I will recognize Mr. Royce and Mr. Sherman, the 
chairman and ranking member of the Subcommittee on Terrorism, 
Nonproliferation, and Trade, for 3 minutes each for their 
statements. We will then hear from our witnesses.
    I would ask that you please limit your prepared statements 
to 5 minutes each before we move to the questions and answers 
with members under the 5-minute rule.
    Without objection, your prepared statements will be made 
part of the record, and members may have 5 legislative days to 
insert statements and questions for the record subject to the 
limitations of length in the rules.
    And I will excuse ourselves. Mr. Berman and I very soon 
will have to go to the floor to debate a resolution that is in 
our committee. So you will excuse us when we leave and not take 
it personally, I hope.
    The Chair now recognizes herself for 7 minutes.
    The tragedy in Japan continues to dominate the news. The 
scale of the devastation and suffering is unimaginable. Even 
though we watch in safety from the other side of the planet, I 
believe I speak for all of our committee members in saying that 
our hearts and our thoughts and our prayers are with the people 
of Japan during this terrible crisis, especially those who have 
lost loved ones and those whose lives have been unexpectedly 
upended and filled with despair.
    The ongoing situation is of direct relevance to today's 
hearing. Many are already predicting that the global nuclear 
revival now under way will be stopped in its tracks by the 
images of exploding nuclear reactors, terrified refugees, and 
the prospect of huge areas rendered uninhabitable. These events 
have already begun to influence the debate over nuclear energy 
in the United States and in Europe.
    However, China and other countries--especially in the 
Middle East--are unlikely to be deterred from their nuclear 
ambitions, and it is in these countries that are pursuing 
nuclear power for political aims, many for destructive goals, 
that the risk of proliferation is the greatest. Rogue nations 
attempting to build a nuclear weapons program need a nuclear 
energy program to use as cover.
    We can be certain that the crisis in Japan will not 
persuade the Iranian regime to abandon its nuclear weapons 
program, nor should we expect North Korea to dismantle its 
recently revealed uranium enrichment program due to concerns 
that an accident could devastate the nearby population.
    But the nuclear menace we face is broader than simply that 
of traditional nuclear weapons. The crisis in Japan is a 
dramatic demonstration of the real-world threat resulting from 
nuclear material over which we have lost control.
    A radiological bomb that uses conventional explosives to 
disperse radioactive materials is a far more achievable goal 
for al Qaeda and other terrorist organizations than a nuclear 
device. We know that these groups are actively seeking these 
materials and have also targeted nuclear installations for 
destruction in the hope of spreading nuclear devastation. So 
the prospect of a sudden and widespread nuclear contamination 
in faraway Japan should remind us that we face an even greater 
threat from our self-proclaimed enemies who are even now 
planning to unleash it in the centers of our cities.
    The crisis in Japan also shows us that even a country at 
the highest level of development with massive resources and 
legions of technicians, scientists, and officials may be unable 
to prevent a catastrophe. Therefore, spreading nuclear 
facilities to unstable regimes throughout the Middle East and 
the Third World, which often have only limited resources and 
expertise, is laying the groundwork for potential disaster and 
a vast expansion of proliferation opportunities. Russia and 
France are the most irresponsible in this regard, with their 
most senior officials acting as salesmen for their state-owned 
nuclear cooperations. But we are not innocent ourselves. At a 
minimum, we should be not be contributing to the program with 
politically driven nuclear cooperation agreements.
    The Atomic Energy Act, which governs these agreements, was 
written in an era when safe, clean nuclear energy was the hope 
of the future and proliferation concerns were minimal. Over the 
years, tougher provisions have been written into the Act, but 
the situation remains far from satisfactory.
    A key problem is that Congress has little influence largely 
because these agreements automatically go into effect unless 
those seeking to stop them can secure veto-proof majorities in 
both Houses, a high hurdle indeed. But when writing the law 
Congress never intended for our long-term national security 
interests to be made subordinate to short-term political 
concerns. So Congress must act to fix this problem, especially 
by requiring that nuclear cooperation agreements receive an 
affirmative vote before going into effect.
    I plan to introduce legislation to give Congress that power 
and also to strengthen the nonproliferation provisions in all 
future nuclear cooperation agreements. Several other Members on 
both sides of the aisle are considering similar legislation, 
and I hope to work with them to craft a bipartisan bill that 
can be passed by this committee quickly, and hopefully 
unanimously.
    The crisis in Japan has also graphically demonstrated that 
the nuclear threat we face is far more than just simply an 
accident at electricity plants. We have enemies, non-state 
actors and rogue regimes, who are working to bring about an 
even greater disaster here, not as an act of God but, instead, 
of conscious design. Our laws and our policies must address 
this threat before it is too late.
    I am now pleased to recognize my friend, the ranking 
member, Mr. Berman, for his opening remarks.
    [The prepared statement of Chairman Ros-Lehtinen follows:]
    
    
    

    Mr. Berman. Well, thank you very much, Madam Chairman.
    Before I start my opening statement, I would like simply to 
apologize in the same sense that the chairman just did. We have 
a resolution on the floor that invokes the War Powers Act 
provisions. We will have to manage it. I cannot think of a 
hearing we will be holding that I more wanted to be present at 
for its entire time, but there are people other than us who 
scheduled these things, and we are stuck with living with the 
consequences of their scheduling.
    Madam Chairman, thank you very much for holding this 
hearing. For several years it has been an article of faith that 
the world is experiencing a nuclear renaissance or revival, a 
post-Chernobyl era in which civilian nuclear power is 
increasingly seen as a solution to energy challenges around the 
globe. That faith collided with a hard reality in Japan this 
week, and the frightening events in that country which are 
still unfolding today will undoubtedly force a rethinking both 
here and abroad about the expansion of civil nuclear power as 
well as a fundamental reexamination of the dangers that nuclear 
reactors must be able to withstand.
    The nuclear revival may ultimately be little more than a 
nuclear blip. However, for the time being, many countries, 
including the United States, are interested in nuclear power, 
in part due to its attractiveness as a carbon-neutral energy 
source. Given that over 50 new reactors are under construction 
worldwide, it is critical that we take steps to deal with the 
potential nonproliferation consequences of this expansion.
    More reactors require more nuclear fuel, which requires 
more capacity to enrich uranium. More reactors produce more 
nuclear waste, which means more opportunities to extract 
plutonium through reprocessing. Both mean more potential 
material for nuclear bombs. Therein lies the danger.
    The nuclear revival has a double meaning, a revival of 
civil nuclear energy and, as a consequence of more enrichment 
and reprocessing, the possible resurrection of the nightmare 
once voiced by President Kennedy, a world populated with dozens 
of nuclear-armed countries. And to that nightmare we can add 
one he didn't foresee, the age of the nuclear terrorist.
    Last week, I watched a very important documentary, ``The 
Nuclear Tipping Point,'' which I recommend to my colleagues and 
everyone during this hearing today. In this film, four of our 
most respected statesmen on national security--William Perry, 
who is with us today; George Schultz; Sam Nunn; and Henry 
Kissinger--discuss the terrifying prospect of terrorists 
obtaining nuclear material for a nuclear weapon or, as the 
chairman mentioned, for use in a radiological bomb.
    As the film points out, the knowledge required to make a 
crude nuclear weapon has proliferated over the last 10 or 15 
years. The material to fuel a nuclear explosive is spread all 
over the world, and it is clear that terrorist groups like al 
Qaeda are seeking this material and wish to make weapons.
    It has been estimated there are 1,600 tons of highly 
enriched uranium and 500 tons of separated plutonium in stocks 
worldwide. Most of these materials are in the U.S., Russia, 
China, U.K., France, and Japan. However, about seven tons of 
highly enriched uranium--enough for some 300 nuclear weapons--
reside in other countries.
    The Obama administration has made securing these stockpiles 
of nuclear materials a top priority. At last year's 
unprecedented Nuclear Security Summit, the U.S. got agreement 
from over 40 heads of state for our 4-year effort to secure 
nuclear material worldwide. So far, that has resulted in the 
removal of 120 kilograms of enriched uranium from other 
countries and agreements to remove 220 more.
    Another high priority should be negotiating a new agreement 
with Russia to eliminate all tactical nuclear weapons. These 
small but powerful weapons, of which Russia has thousands, are 
undoubtedly on the wish list of al Qaeda and other terrorist 
groups.
    In addition to securing nuclear materials and loose nukes, 
the Nuclear Nonproliferation Regime must be strengthened--and 
here I stand with the chairman--to better address the 
enrichment of uranium and the reprocessing of spent fuel. So 
far, efforts to limit the spread of these technologies have met 
with limited success. With Iran's and North Korea's development 
of these technologies, aided in large part by the A.Q. Khan 
network, they have become even more difficult to control. That 
is why the recent U.S.-UAE Nuclear Cooperation Agreement is so 
important.
    The UAE, on its own, decided to foreswear enrichment and 
reprocessing. When the U.S. asked them if they would formalize 
that in a legally binding commitment within the cooperation 
agreement, they readily agreed. And this applies not only to 
nuclear fuel and equipment provided by the United States but by 
any country.
    A State Department spokesman has since called this the gold 
standard for nuclear cooperation agreements, and I agree. The 
U.S. should seek its equivalent for every new nuclear 
cooperation agreement that it negotiates in the future. We 
should consider making this and a number of other items a 
statutory requirement in the Atomic Energy Act, along with the 
requirement that every country must adopt an Additional 
Protocol for safeguards to ensure that the IAEA has all the 
necessary authority to investigate any and all proliferation 
concerns.
    Finally, the administration will use all its influence to 
convince the other nuclear supplier states to adopt the same 
nonproliferation and security conditions in their agreements 
that we observe in ours, especially when those same suppliers 
are seeking nuclear business in the United States.
    And if I could just parenthetically add in my remaining 
time, yesterday we had a hearing on the whole issue of aid 
levels and the deficit, and there were a lot of differences 
between our parties on some of these issues. On the issue which 
the chairman talked about moving ahead on and the whole 
question of our approach to this tremendously important subject 
on proliferation, I believe the opportunity for close and 
bipartisan work exists, and I look forward to working with the 
chairman and the other members of the committee to move ahead 
on this issue.
    With that, I yield back the balance of my time.
    Chairman Ros-Lehtinen. Thank you, Mr. Chairman, I do look 
forward to that as well.
    Mr. Sherman, the ranking member of the pertinent 
subcommittee, is recognized for his opening statement.
    Mr. Sherman. Thank you, Madam Chairwoman.
    I want to echo your comments and those of others about our 
concern for our friends and allies in Japan. We hope Japanese 
authorities get the upper hand and resolve this crisis. The 
people of Japan are in our prayers. We should do whatever we 
can to help the people of northern Japan, especially to help 
contain the reactor problem.
    It is too early for a verdict on how this is going to 
affect nuclear power expansion. No doubt many countries will be 
reluctant, at least for a while, to move forward. But, given 
global warming, given the cost of energy, I suspect that within 
a few years countries will go forward with nuclear power.
    I commend the chairwoman for holding these hearings. We 
held hearings in the Terrorism, Nonproliferation, and Trade 
Subcommittee and the full committee last year on this very 
topic. We need to reform the Atomic Energy Act, and I commend 
the chairwoman for her decision to introduce legislation to do 
just that. I look forward to working with all of our colleagues 
here on this committee in that effort.
    The Atomic Energy Act should provide that, unless a nuclear 
cooperation agreement includes four particular provisions, it 
will require congressional approval by an act of Congress. The 
chairwoman explained how illusory Congress' involvement is 
under the present system, and this will give an incentive to 
our negotiators and to the other side to have these four 
provisions in the agreement.
    First, the other states should adopt the Additional 
Protocol. Second, the other states should agree to forego the 
supposed right to enrich and reprocess. Third, the partner 
countries should agree to control access to facilities in such 
a way that personnel from Iran, North Korea, Syria, and, 
depending upon developments in the next few weeks, Libya, are 
not invited to the facilities. And, finally, the partner nation 
should provide for a liability scheme that allows private 
companies, such as U.S. companies, to participate in the 
development of nuclear power.
    What is the point of us going forward with an agreement if 
the only companies that can participate--and we are seeing this 
problem in India--are those who can claim sovereign immunity, 
such as those from Russia, France, and perhaps in the future 
China?
    We are told that the UAE agreement is the gold standard. It 
contains only the first two of those provisions, so I would 
call it the ``bronze standard.'' Let's say that, unless an 
agreement meets the gold standard, it requires an act of 
Congress to put into effect.
    I yield back.
    Chairman Ros-Lehtinen. Thank you so much, Mr. Sherman; and 
now the chairman of the Nonproliferation Subcommittee, Mr. 
Royce, is recognized for 3 minutes.
    Mr. Royce. Thank you very much, Madam Chair.
    I think all of us feel and want to convey that our thoughts 
are with the Japanese people. We all understand that our ally 
has had to endure an earthquake, a tsunami and now a nuclear 
crisis. That crisis is growing, and certainly we have some 
lessons to learn.
    As members of this committee, a top task of this committee, 
something we should all be mindful of, is that one of our 
responsibilities is to help ensure that nuclear material is out 
of the hands of terrorists and also out of the hands of 
terrorist states. I think the global expansion of nuclear power 
has greatly complicated that task. There are nearly 550 nuclear 
power reactors under construction or planned or proposed around 
the world today; and, post-Japan, we will see how many of these 
on the drawing board survive in the coming months and the 
coming years. But, with rising populations and rising energy 
costs, nuclear power will remain attractive for many of these 
countries.
    Some of the countries that are looking at nuclear energy 
include Belarus and Kazakhstan and Vietnam. The technical and 
infrastructural sophistication of these countries pales in 
comparison to Japan. How able would they respond? How capable 
are they going to be to respond to disaster? The seemingly poor 
performance of the IAEA in response to Japan's crisis is what 
heightens our concerns.
    Of course, the central problem is that it can be a sprint 
from a civilian to a military nuclear program, certainly not a 
marathon. It is the enrichment and reprocessing aspects of the 
fuel cycle that puts nuclear weapons within reach. This is the 
key bomb-making technology.
    Notwithstanding its reported troubles, Iran continues to 
increase its supply of enriched uranium; and, last fall, North 
Korea unveiled a uranium enrichment plant, the sophistication 
of which took many of us by surprise. Experts estimate that 
these centrifuges are four times as powerful as those spinning 
at Natanz. And another piece of information, other North Korean 
sites are likely.
    To handle concerns about enrichment and reprocessing, the 
U.S. Nuclear Cooperation Agreement with the UAE included a 
commitment to forego those sensitive technologies and ratify 
the Additional Protocol. But other countries, including Jordan 
and Vietnam, are balking at accepting these conditions.
    The administration will soon have to decide whether it 
wants to advance the nonproliferation ball or not. And, Madam 
Chair, as you have argued, Congress should reclaim powers it 
surrendered to the executive branch long ago in a different 
era. We need to act so Congress positively, not passively, 
approves nuclear cooperation agreements.
    Thank you.
    Chairman Ros-Lehtinen. Amen. Thank you so much.
    And thank you to the excellent set of panelists that we 
have here before us this morning.
    Our first witness is Olli Heinonen. He is the former Deputy 
Director General of the International Atomic Energy Agency and 
head of its Department of Safeguards. He is currently a senior 
fellow at the Belfer Center for Science and International 
Affairs at the Kennedy School of Government at Harvard.
    In addition to his many years of responsibility at the IAEA 
regarding the nuclear program of Iran, the A.Q. Khan nuclear 
black market network, and other nonproliferation challenges, 
Mr. Heinonen lived and worked in Japan for many years and has 
direct experience with the crippled reactors now in the news.
    We thank you for appearing before us today. We look forward 
to your expert testimony.
    Next we have William Perry, who is well-known to all of us. 
From 1994 to 1997, Mr. Perry served as the Secretary of Defense 
in the Clinton administration. Currently, he is the Michael and 
Barbara Berberian professor emeritus at Stanford University. He 
is a senior fellow at the Institute for International Studies 
at Stanford and serves as co-director of the Nuclear Risk 
Reduction Initiative and the Preventative Defense Project.
    Mr. Perry, we are all aware of your long and distinguished 
record of public service, and we are fortunate to have you here 
with us today.
    Also appearing before us today is Henry Sokolski, who is 
the executive director of the Nonproliferation Policy Education 
Center. He currently serves as an adjunct professor at the 
Institute of World Politics in Washington, DC, and was a member 
of the Congressional Commission on the Prevention of Weapons of 
Mass Destruction, Proliferation and Terrorism. He previously 
served as Deputy for Nonproliferation Policy in the Department 
of Defense. Mr. Sokolski has been a valuable resource for this 
committee for many years, and we are pleased to have him with 
us again today.
    Finally, we welcome Gene Aloise. Mr. Aloise is the Director 
of the National Resources and Environment Team at the 
Government Accountability Office, where he is GAO's recognized 
expert in international nuclear nonproliferation and safety 
issues. Mr. Aloise is the lead author of the GAO's March, 2009, 
report on the extensive nuclear assistance being provided to 
Iran, Syria, Sudan, and Cuba by the IAEA Technical Cooperation 
Program. Our committee, as well as the rest of Congress, turns 
routinely to GAO for its expert investigation and analysis; and 
we thank you, Mr. Aloise, for taking the time to appear before 
us today.
    As I have stated, your written remarks will be made a part 
of the official record, and we would appreciate if you would 
summarize your testimony to 5 minutes.
    We will begin with Mr. Heinonen. Thank you.

 STATEMENT OF MR. OLLI HEINONEN, SENIOR FELLOW, BELFER CENTER 
 FOR SCIENCE AND INTERNATIONAL AFFAIRS (FORMER DEPUTY DIRECTOR 
 GENERAL OF THE INTERNATIONAL ATOMIC ENERGY AGENCY AND HEAD OF 
                 ITS DEPARTMENT OF SAFEGUARDS)

    Mr. Heinonen. Chairman Ros-Lehtinen, Mr. Berman, and 
distinguished members of the committee, thank you for inviting 
me to discuss the nuclear challenges posed by Iran, North 
Korea, and Syria.
    During those three decades which I served in the IAEA, 
global nuclear dangers have only become greater and more 
complex, while the policies to manage these threats have 
remained stagnant.
    The international community must pay greater attention to 
future cases of noncompliance with the Nuclear Non-
proliferation Treaty and other nonproliferation obligations, 
cases which, if not resolved in a timely manner, will erode the 
credibility of the whole verification system. We also need to 
be better prepared to deal with states that acquire nuclear 
technology as a member of the treaty and then may withdraw to 
pursue a military nuclear program.
    The cases of Iran, North Korea, and Syria highlight the 
fact that the international community has allowed too much 
stalling and obfuscation in resolving safeguards compliance 
issues and broader nuclear concerns. In my written statement I 
focus on those cases, so I won't here, but I will go straight 
to the recommendations which I have in my mind.
    So what can be done? There are actually several policy 
options which we could consider.
    First, whenever special arrangements are negotiated--
whether it is an agreed framework, whether it is P5 plus 1 
agreements with Iran, negotiators must draw red lines with 
clearly stated consequences when those lines are crossed.
    In addition, it should be made clear that punitive actions 
would be reversed when proliferators abide by the rules.
    Then there are a lot of proposals to make IAEA reporting 
more transparent, safeguards implementation report. Tackle the 
problem cases in the beginning, then it is much easier to solve 
them.
    Similarly, the IAEA should perhaps brief the United Nations 
Security Council in a frequent manner; and the IAEA has also to 
take care of its own Technical Cooperation Program. Every state 
who receives this report could be reviewed to ensure that the 
support will be provided only to states in good standing with 
their obligations, and those supports will be provided 
exclusively for the peaceful use of atomic energy.
    Additional protocols should be universalized. There are 
still close to 20 countries which have substantial nuclear 
programs without an Additional Protocol. We must work at making 
the Additional Protocol a precondition for future nuclear 
supply arrangements. In addition, we need to keep in mind that 
the IAEA should use vigorously all legal instruments in its 
use, including the provision for special inspections.
    With regard to the black market and covert trade networks, 
the IAEA is currently maintaining an Illicit Trafficking 
Database. This should be extended to include not only 
successful cases but the attempts to acquire nuclear materials 
and radioisotopes, and perhaps even to extend it to cover 
single-use items, dual-use items, et cetera. The IAEA should 
also have a mandate to investigate those cases, not just report 
only. And, most importantly, the IAEA has to have adequate 
financial and human resources to take care of these tasks.
    Those are just a snapshot of the recommendations which I 
make. Some of these challenges are technical in nature, others 
deal with resources and funding, and others are a question of 
political will. Whatever the scenario, we cannot be complacent 
about our concerns over the potential spread of nuclear weapon 
technologies and capabilities.
    It is also important to see nuclear safety, security, and 
safeguards--Triple S, as we call them--as an integral system to 
ensure that nuclear energy is used safely, securely, and 
peacefully, in particular in the states which are just 
embarking on their nuclear programs.
    Along with my colleagues, my past years at the IAEA have 
been dedicated to putting in place a strong and workable 
international safeguards system that was achievable, but the 
job is far from being done. Ultimately, the choice of pursuing 
nuclear power under a predicted nuclear renaissance cannot be a 
choice that results in endangering and unraveling efforts aimed 
at strengthening global nuclear governance.
    Thank you.
    [The prepared statement of Mr. Heinonen follows:]

    
    

    Mr. Royce [presiding]. Secretary Perry.

 STATEMENT OF THE HONORABLE WILLIAM J. PERRY, FORMER SECRETARY 
         OF DEFENSE, SENIOR FELLOW, HOOVER INSTITUTION

    Mr. Perry. I want to start off by commending this committee 
for taking on such a vitally important issue.
    The potential danger of nuclear power has been dramatically 
illustrated in Japan. Indeed, my heart goes out to my Japanese 
friends. I believe that the problem with reactors in Japan is 
going to get much worse before the situation finally is under 
control.
    Additionally, I have a concern about North Korea. Besides 
the uranium enrichment program already mentioned in North 
Korea, the North Koreans have taken to building their own light 
water reactor. One can only imagine the safety issues there are 
going to be with this homemade design they are pursuing.
    An even greater danger, however, is if nuclear weapons fall 
into the hands of a terror organization. This is a serious 
threat to the country for which the traditional forms of 
deterrence are simply not applicable. Preventing nuclear 
terrorism is closely tied to stopping the proliferation of 
nuclear weapons and the proliferation of fissile material, and 
recent developments in North Korea and Iran suggest that we may 
be at a tipping point in nuclear proliferation.
    While the programs that maintain our deterrence are 
national, the programs that prevent proliferation and safeguard 
weapons and fissile material are both national and 
international. Indeed, it is clear we cannot meet the goal of 
reducing the proliferation threat without substantial 
international cooperation. We cannot go it alone on this 
crucial issue. The nations whose cooperation is most critical 
are at risk of nuclear proliferation as much as we, so we 
should be able to get that cooperation.
    The international programs that are most effective in 
containing and rolling back proliferation can sometimes be in 
conflict with national programs designed to maintain 
deterrence. Therefore, a strategic posture for the United 
States that meets both of these security requirements will 
necessarily have to strike a balance that supports both of 
these needs.
    The need to strike such a balance has been recognized at 
least since the end of the Cold War. President Clinton's policy 
on nuclear posture spoke of the need to lead but hedge. That 
policy called for the United States to lead in the reduction of 
nuclear arms, to lead in programs that prevent proliferation, 
but hedge against adverse political developments.
    The leadership aspect of this policy was demonstrated most 
vividly by a cooperative program with Russia established under 
the Nunn-Lugar Act that dismantled about 4,000 nuclear weapons 
in Ukraine, Belarus, and Kazakhstan, a significant contribution 
to a safer world. U.S. leadership has also been demonstrated by 
three treaties: The Comprehensive Test Ban Treaty, the Moscow 
Treaty, and New START. I believe that the United States must 
continue to support programs that both lead and hedge, that is, 
programs that move in two parallel paths, one path that 
protects our security by maintaining deterrence and the other 
path which protects our security by reducing the danger of 
nuclear weapons.
    The first path of deterrence is spelled out in the Nuclear 
Posture Review, and I do not plan to discuss that further in 
this hearing. The second path, reducing the danger, does 
include the following components: First, re-energized efforts 
to reverse the nuclear proliferation in North Korea and prevent 
the nuclear proliferation in Iran. Secondly, negotiate further 
arms reduction treaties with Russia that make additional 
reductions in the nuclear stockpiles of Russia and the United 
States. Third, seek an international Fissile Material Cutoff 
Treaty and redouble domestic and international efforts to 
secure all stocks of fissile material. And, finally, strengthen 
the International Atomic Energy Agency. In particular, work 
with the IAEA to promote universal adoption of the Additional 
Protocol to the Nuclear Non-Proliferation Treaty.
    In sum, we should reject the vision of a future world 
defined by a collapse of the nonproliferation regime and work 
for a world of cooperation among the major powers. Thank you.
    [The prepared statement of Mr. Perry follows:]
    
    
    

    Mr. Royce. Thank you very much, Secretary Perry.
    We are going to hold everyone to 5 minutes here and go 
right to questions. As a matter of fact, I am going to make 
this suggestion: Why don't you make an opening statement, 
summarize your written statement in a couple of minutes, and we 
will come back to those points and give you a little more time 
to embellish on your opening points, simply because we are 
coming to this vote and I would like to have a few questions 
put before we get to it.
    Mr. Sokolski, go ahead.

     STATEMENT OF MR. HENRY SOKOLSKI, EXECUTIVE DIRECTOR, 
            NONPROLIFERATION POLICY EDUCATION CENTER

    Mr. Sokolski. Thank you, Mr. Chairman. I ask that not only 
my testimony but a two-page note on the policy implications of 
the accidents in Japan be entered into the record.
    Mr. Royce. Without objection.
    Mr. Sokolski. Your timing, sadly, is all too perfect for 
this hearing.
    Mr. Royce.  Well, Mr. Sokolski, the timing of your new book 
is all too perfect.
    Mr. Sokolski. Well, that is due to no planning at all. It 
is a year behind schedule. And that is the--I have to plug it, 
I guess--Nuclear Power's Global Expansion: Weighing Its Costs 
and Risks. That was not due to planning, I can assure you.
    In any case, sometimes it takes bad news and fearful 
emotions to get us to think. I think we have seen France, 
China, Germany, even India and a number of other countries, 
freeze their construction plans while they do a safety review. 
What is a little odd is we haven't yet done that. Instead, our 
State Department is signing an MOU in earthquake-prone Chile to 
do nuclear cooperation.
    We don't know where the Jordan and Saudi Arabia agreements 
or the Vietnam agreements are. They quietly went into the rear 
of the freezer with all of the demonstrations, but I don't 
think they are dead.
    The administration is moving ahead with loan guarantees 
beyond the $18 billion they already have, even though the head 
of the largest merchant nuclear utility in the world gave a 
speech last week at AEI saying they are not only not necessary, 
they are harmful; and that he doesn't think they need nuclear 
power plants and will not build them for one to two decades to 
meet the carbon goals. Not only that, a public poll has come 
out and said the favorite cut, when suggested, from the 
public's perspective is loan guarantees.
    In any case, whatever we do, review or not, it is pretty 
clear that comments of the committee are spot-on correct. You 
do not want to sell or cooperate or encourage countries that 
are really not up to snuff to take on building a reactor after 
the incidents that we have had in Japan. Nor after Iran do you 
want to do anything but toughen the nonproliferation conditions 
on nuclear cooperation, not just for the U.S. but for other 
nuclear suppliers.
    Now the chair, the ranking member, Mr. Sherman, Mr. Royce, 
Mr. Fortenberry, and Senator Akaka have already laid and tabled 
very, very good legislation; and I urge the committee to file 
that into any revision of the Atomic Energy Act. I certainly 
think the idea of forcing votes which focus debate on these 
agreements is a great idea, and I commend Mr. Sherman's 
recommendations to the committee as well.
    I think, in addition, however, if you are going to be 
serious about getting others to join in, you need to be a bit 
of a bad cop. I think requiring that no U.S. nuclear regulatory 
license, Federal contract, or loan guarantee can be approved 
for any foreign entity unless the President of the United 
States has first certified that the government of that entity 
has explicitly endorsed adopting the key nonproliferation 
provisions of the UAE agreement really needs to be put into 
place. If this committee does this, I believe that the 
administration will pay close attention; and with any luck much 
of what you do might be co-opted. I think that is the spirit in 
which you should operate.
    [The prepared statement of Mr. Sokolski follows:]
    
    
    
    Mr. Royce. Thank you, Mr. Sokolski.
    We will come back after the vote for some other comments, 
for you to finish that thought, and to go to Mr. Aloise. And 
Mr. Aloise, we will do that after the vote.
    I would like to go to some questions, and I would like to 
ask the ranking member to open with his questions at this 
point.
    Mr. Berman. Well, thank you very much, Mr. Chairman. I 
appreciate that, because I won't be able to come back because I 
will be on the floor.
    Mr. Sokolski has started down the path of answering this 
question that I wanted to ask the panel, but let me get it out 
there and see what he and other members of the panel and he 
might add.
    The issue of convincing other countries to place 
nonproliferation concerns in the forefront of their political 
and commercial interests in the development and exploitation of 
civil nuclear energy. Other supplier countries like to look the 
other way. They reason strong nonproliferation conditions of 
the kind we have been talking about would fatally undermine 
their business success. Developing countries are--or give the 
appearance of being--hypersensitive about the West denying them 
their rights to technology in general to keep them less 
developed and to sensitive technologies like enrichment and 
reprocessing.
    How do we forge a new consensus among all concerned to 
minimize the spread of these dangerous technologies that are 
unfortunately also necessary to supply fuel to nuclear power 
reactors? I would be interested in--again, Mr. Sokolski started 
to get into this. Any other thoughts about----
    Mr. Perry. Mr. Berman, I will make one comment about that.
    We can have a reasonably successful implementation of the 
goals you talk about if we can get the Nuclear Suppliers Group 
to agree on a set of principles. It is not enough for the 
United States to agree on it. We have to have the Nuclear 
Suppliers Group.
    One silver lining around this Japanese cloud is I think we 
might be able to go back to the NSG--which has been reluctant 
to make such agreements in the past--and try again. I would 
urge the United States to go back to the Nuclear Suppliers 
Group now, arguing for a very stiff set of standards dealing 
both with the safety issue and with the proliferation issues.
    Mr. Sokolski. I think what I have suggested dovetails 
perfectly with doing that. I think Dr. Perry is right. It 
shouldn't be an either/or.
    Keep in mind the country that is most keenly interested in 
getting loan guarantees, licenses, and DOE contracts happens to 
be one of the largest suppliers. It is France. However, if you 
can get them to turn around, you automatically get Germany, for 
a number of political reasons. And if you get Germany, you 
automatically lock in Russia. The reason why is the Russians 
are desperately eager to work with Siemens to develop the 
reactors for domestic and export purposes, and by law they 
cannot export them without the consent and approval of the 
Germans, and that consent is controlled by law.
    I have got to believe you can get Japan. And South Korea is 
very anxious to look good on nonproliferation, for a variety of 
reasons which this committee knows all too well. One of them is 
they want to reprocess or recycle. Second, they have the 
Nuclear Summit coming in 2012.
    This is a perfect time to work with countries, including 
the UAE, to parade the success. Your timing is good. And I 
think Mr. Perry is absolutely right, you should also parallel 
work with NSG. I wouldn't do one or the other. I would do both.
    Mr. Royce. Any other thoughts?
    Mr. Heinonen. Thank you.
    As I said in my written statement, I fully agree and 
support what Dr. Perry said. I think the NSG is the easiest and 
fastest way to achieve this goal.
    Mr. Berman. Since they operate by consensus, if we can 
persuade them--because we had spent a lot of time at the NSG, 
we have in the past, and not achieved some of the things we 
have wanted to get there.
    Mr. Perry. Had I been testifying here 2 weeks ago, I would 
have been reluctant to make that recommendation because I would 
not believe it could have been achieved. Now I think it is 
worth going back and trying again.
    Mr. Berman. Thank you very much, Mr. Chairman.
    Mr. Royce. Thank you, Mr. Berman.
    I think we are going to adjourn. We have got about 4 
minutes. We are going to stand in recess until the conclusion 
of this vote, at which time we will meet here again.
    [Recess.]
    Mr. Royce. The committee is going to reconvene, and we will 
go to Mr. Aloise for his testimony. You want to summarize for 
the record.

 STATEMENT OF MR. GENE ALOISE, DIRECTOR, NATURAL RESOURCES AND 
    ENVIRONMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Aloise. Mr. Chairman and members of the committee, I am 
pleased to be here today to discuss our concerns with IAEA's 
Technical Cooperation Program and the State Department and 
IAEA's actions to implement the recommendations from our March 
2009 report.
    As you know, a key mission of IAEA is to promote the 
peaceful uses of nuclear energy. Through its TC program, the 
agency provides nuclear equipment, training, fellowships, and 
other services to its member states. The U.S. is the largest 
contributor to the program, and in 2010 contributed over $31 
million.
    While the bulk of the TC projects have not involved the 
transfer of sensitive nuclear materials and technology, TC 
assistance can have dual-use implications and has been provided 
to countries of proliferation concern. As we reported in 2009, 
neither State nor IAEA seeks to limit or deny TC assistance to 
countries that the United States has designated as state 
sponsors of terrorism, including Cuba, Iran, Sudan, and Syria; 
are not party to the NPT, such as India, Israel, and Pakistan; 
and do not have comprehensive safeguard agreements. The former 
head of the TC program told us that all requests for TC 
assistance are based on technical merits and that there were no 
good countries or bad countries participating in the program.
    We also reported that IAEA officials told us that the 
agency did not limit TC assistance to Iran and Syria, even 
though they have been found or suspected of violating their 
safeguards commitments and may be engaged in undeclared nuclear 
activities.
    Our report noted that assessing proliferation concerns with 
TC projects was difficult because of the lack of sufficient and 
timely information on project proposals. For example, of the 
over 1,500 projects that DOE and its national laboratories 
reviewed between 1998 and 2006 for proliferation risk, 97 
percent of the proposals contained only project titles, which 
is not enough data to assess proliferation risk. In addition, 
DOE and its national laboratories did not have enough time to 
sufficiently review the projects.
    While IAEA's Safeguards Department reviews TC proposals, 
and ongoing projects, the results of these reviews are 
confidential and not shared with the United States or other 
governments, so we cannot assess the effectiveness of this 
internal IAEA review.
    From 1998 through 2006, DOE and its national laboratories 
identified 43 of the over 1,500 proposals as having some degree 
of proliferation concern or needing more data to determine such 
risk. IAEA approved 34 of the 43 projects, and it is unclear to 
us if State addressed DOE's concerns because in all but one 
case State did not document how it responded to these concerns.
    We also reported on shortcomings in State's monitoring of 
the TC fellowships' program. Over 1,000 TC program fellows have 
studied nuclear issues at universities and other institutions 
in the United States over a 10-year period. We found that 23 of 
them were from countries that did not sign the NPT and in one 
case was from a U.S.-designated state sponsor of terrorism, 
namely Syria. There were six fellows from Syria.
    In addition, the IAEA does not track the status, 
whereabouts, and activities of former TC fellows to verify that 
they are not involved in weapons-related research after they 
have completed their studies.
    Our 2009 report made several recommendations to State to 
correct these weaknesses in the management of the TC program, 
and some progress has been made in implementing our 
recommendations.
    It is important to note that State cannot require the IAEA 
to implement a recommendation, but as the largest financial 
contributor to the agency the U.S. does have leverage in making 
improvements to the program. According to State, the IAEA is 
now providing information on project proposals earlier in the 
approval process. However, according to DOE, the amount of 
information about each project is still limited and 
insufficient to assess proliferation risks.
    In addition, State appears to be doing a better job of 
tracking TC projects of proliferation concern and has developed 
new guidance regarding fellowships.
    Importantly, however, State still strongly disagrees with 
our suggestion to the Congress to consider requiring State to 
withhold a proportionate share of U.S. contributions to the TC 
fund for assistance to U.S.-designated state sponsors of 
terrorism. We continue to believe that Congress should 
seriously consider this matter, because there is precedent for 
such withholding, and such action would follow through a more 
consistent and cohesive U.S. policy toward nations that the 
United States has deemed inherently dangerous.
    Mr. Chairman, that concludes my remarks, and I would be 
happy to address any questions you or other members may have.
    [The prepared statement of Mr. Aloise follows:]

    
    
    
    Mr. Royce. We appreciate your testimony, Mr. Aloise.
    I think we will go first to Jean Schmidt for her questions.
    Mrs. Schmidt. Thank you so much, Mr. Chairman.
    Mr. Sokolski--did I say that right?
    Mr. Sokolski. Sokolski.
    Mrs. Schmidt. Sokolski. I apologize, sir. We are all Irish 
today. Are you Irish, sir? Well, Schmidt is an Irish name, too.
    Anyway, sir, a key element of U.S. policy related to the 
expansion of civilian nuclear energy overseas is providing 
ready access to a fuel supply, so that emerging nations, 
nuclear nations, do not have to build their own enrichment 
capabilities. This policy serves a major nonproliferation goal 
in that enrichment can be used both for peaceful purposes and 
for developing highly enriched uranium for weapons. However, in 
order for the U.S. to maintain a leadership position in this 
arena, it is necessary for a domestic U.S. enrichment capacity 
to be available to the world market. Sir, do you agree that it 
is in the policy interests of the United States to maintain a 
strong domestic enrichment industry?
    Mr. Sokolski. Let me answer that question by noting that I 
am an avid car buff. I actually do now own one American 
automobile. The rest are Japanese, made in the United States. 
They are better.
    We are now very strong in enrichment because of URENCO. I 
would say that is okay. In other words, I don't really think we 
are anything other than supplied well, and there are a lot of 
other suppliers besides those housed in the United States.
    I wish the supply of fuel was the major lever for 
nonproliferation that it might have been in the 1970s. I 
suspect, although you can't be against multinational fuel 
banks, or for that matter almost anything multinational, we 
have gone a bit too far in arguing everyone has an inalienable 
right to make fuel, which I don't read in the treaty and I have 
written extensively on, and many others have. I think we have 
overdone it.
    And the economics of making fuel, unfortunately, are not 
that much worse than boiling water, and these reactors are 
costing $4 billion to $10 billion. Making fuel under some 
circumstances can cost a fraction of that. I think we are in 
trouble for that reason, and I think it would be nice to think 
that we could be cast back into the 1960s when we made almost 
all the fuel and the Russians were the only others. Those days 
are, unfortunately, well behind us.
    And I would not be apprehensive about URENCO, which is 
owned by foreigners, but I think they are friends. They are 
very close friends. Mr. Domenici certainly was not upset about 
it, and I think he is a pretty good measure for what is okay 
when it comes to the nuclear industry. So I wouldn't be 
apprehensive about that.
    Mrs. Schmidt. Thank you.
    Mr. Heinonen, did I say that correctly?
    Mr. Heinonen. Yes.
    Mrs. Schmidt. Oh, good. Thank you, sir.
    Recently, Syria announced that on April 1st it will allow 
IAEA inspectors to visit an acid purification plant in the city 
of Homs. One of the byproducts of this plant is yellowcake and 
uranium concentrate. Commercial satellite photos recently 
released by the Institute for Science and International 
Security, however, may prove that Syria has been working to 
perfect atomic weapons since before Israel's military strike in 
2007. There may also be another two or three sites in Syria 
with nuclear facilities. If Syria chooses to revoke its 
permission to the IAEA to conduct the April 1st inspection, or, 
should it continue to refuse the IAEA inspection access to its 
other potentially nuclear sites, how should the IAEA respond?
    Mr. Heinonen. Thank you.
    First of all, I think that this step to allow the IAEA to 
visit this production plant in Syria is a very modest step. It 
doesn't solve this problem at all, in my view. It is important 
that the IAEA have full access to the destroyed reactor and 
facilities which might be related to that, and these are the 
locations which you just mentioned in your question. In order 
to solve this problem and to ensure that all nuclear material 
in Syria is placed under the IAEA safeguards. What needs to be 
done, if Syria doesn't heed to this IAEA request, in my 
personal view the IAEA would use all the powers which it has 
and then the next logical step is to do a special inspection.
    Thank you.
    Mrs. Schmidt. I yield back my time.
    Mr. Royce. Thank you.
    I am going to go to Mr. Sherman. He is the ranking member 
of the Terrorism, Nonproliferation, and Trade Subcommittee.
    Mr. Sherman. Thank you.
    First, I want to commend the chairwoman for moving forward 
with legislation. But, let's face it, the only bills the 
President is going to sign this year are appropriations bills 
and post offices. Everything else is a statement. If we are 
going to be able to have Congress play a role in this area we 
are going to have to take whatever bill this committee comes up 
with and insist that it be made part of the appropriations 
bill. If we are not able to do that, unwilling to do that, 
unwilling to cross party lines in order to demand it, it is not 
going to happen and service on this committee will be 
educational but otherwise irrelevant. As I said, if it is not 
in the appropriations bill, it is never going to become law; 
and the President is not going to want us to reinject Congress 
into the decision-making process.
    One thing I found is, whatever people believe when they are 
running for President, whatever party they are for, they are 
against Congress actually having any control of anything just 
as soon as they walk into the White House. Whether there is 
some sort of new form of Legionnaire's Disease inhabiting that 
building that skews one's view of the division of power and the 
balance of power, I don't know.
    I want to commend Mr. Sokolski for your comment that our 
Government has, in effect, given away the store by seeming to 
acknowledge that Article 4 of the NPT allows countries to 
enrich and get within striking distance of a nuclear weapon all 
while claiming to be in compliance with the NPT. I can 
understand why the Iranian Foreign Ministry takes that 
position. If you look at the text, your interpretation is just 
as valid and has the additional advantage of not leading to 
nuclear weapons in the hands of some of the most nefarious 
governments.
    I raised this question informally with some of your 
colleagues, so I will ask you, why is it that countries are 
reluctant to agree to a liability protocol that allows American 
companies to do business in their country when sovereign 
immunity grants that same liability protection automatically to 
French and Russian companies? And is there a way for these 
companies to simply agree that whatever defenses the relevant 
French or Russian company would have are also available to 
others building nuclear plants in their country?
    Mr. Sokolski. I want to make sure I understand the 
question, so I don't just talk.
    Mr. Sherman. It is my understanding nobody wants to build a 
nuclear plant if they can get sued for $20 trillion unless they 
have a damn good defense. The French company can claim 
sovereign immunity. I don't know exactly the French 
Government's involvement. The Russian company likewise. The 
American company goes in unless the laws of the host country 
provide for special liability treatment, and even the so-called 
gold standard agreement we reached with the UAE did not provide 
that.
    As you may have heard, some of my constituents are 
concerned about jobs, and what is the good of all these nuclear 
agreements if American companies are completely shut out of the 
process? So why are host countries reluctant to give our 
companies the same liability protection which they in effect 
give to the French, the Russians, and someday maybe the 
Chinese?
    Mr. Sokolski. Simple. It saves money. The product that they 
can buy from the Koreans, French, and if the Germans help the 
Russians, is pretty good. It costs less.
    Mr. Sherman. I am not asking why they buy the other 
product. I mean, you can lose a bid. Why do they shut us out of 
the bidding by not adopting the liability law?
    Mr. Sokolski. Well, because they have to spend--it is not 
just something you sign. You have to take money and put it into 
an account and create a pool of money to implement that CFC 
law, which is really what you are asking them to do.
    Mr. Sherman. No, what I am asking is simply to provide by 
law that a lawsuit against General Electric would be treated 
just the same as a lawsuit against a Russian company that 
happens to be government owned.
    Mr. Sokolski. You can change the law. If that is the 
character of the question, have at it.
    I think that the problem is just that, though. What we 
tried to do is use an international vehicle, and we created the 
CFC. I can sense the frustration with that because no one wants 
to sign up to it because it requires putting money aside. 
Effectively, you may very well have a point. But you have to 
understand you are then putting the U.S. Government in the 
position of assuming risk, and you are hoping----
    Mr. Sherman. Again, my question is just a simple one-
sentence statement in the liability law. I realize you----
    Mr. Sokolski. Well, I do think that the recourse--I guess 
the simple one-sentence answer is ``heads up.'' Our court 
system would take seriously suits in a way that people going to 
a French or Russian court would be very unlikely to get relief. 
So the Treasury is open for raiding if you do this, I think, if 
there is an accident.
    To give you an example, the Japanese did channel away the 
liability, so GE is not subject to suit.
    Mr. Sherman. I believe my time is expired.
    Mr. Royce. We are going to go to Mr. Jeff Duncan from South 
Carolina for his questions.
    Mr. Duncan. Thank you, Mr. Chairman; and I thank the 
panelists for being here today.
    The issues around the world and Japan are very concerning 
to me, because I have been to Japan and my heart goes out to 
the folks there. We are watching that issue very, very closely.
    And, Mr. Chairman, as you know, we have the Nation's most 
important site for nonproliferation in my district in South 
Carolina, and that is the Savannah River Site and Savannah 
River National Laboratory. The Savannah River Site handles the 
most sensitive nuclear materials and seeks to ensure that the 
legacy weapons materials once used in the nuclear weapons that 
kept our country safe are used in the future hopefully for 
energy production.
    In addition to these legacy materials, the Savannah River 
Site receives spent fuel from the countries that were involved 
in IAEA's Atoms for Peace programs dating back to the 1950s. 
This issue is of particular importance, as you can see, to my 
district, and I commend the chairwoman for holding the hearing 
today.
    But let me be clear, while we are proud of the ongoing 
missions and future missions at the Savannah River Site, 
especially the role that the Site plays in helping the Nation 
address energy independence, the Site is not--and I repeat 
not--suitable for long-term storage of legacy weapons 
materials, nor spent fuel from the Atoms for Peace countries.
    As we continue to pursue MOX reprocessing in this country, 
we need to also address the long-term stable and secure storage 
of these materials. I specifically point to Yucca Mountain and 
the billions of taxpayer dollars that have been spent there and 
ask this: With further and future nonproliferation agreements 
in place resulting in a future increase in legacy weapons 
materials, I would be interested in hearing your ideas for how 
these materials should be dealt with, specifically storage and 
the validity of Yucca Mountain. And I will address that to Mr. 
Sokolski first.
    Mr. Sokolski. First, you have got time. Don't get in a rush 
to get this wrong. I think there is a kind of imperative about 
solving these waste problems which does not parallel the 
reality of what is going on.
    Certainly with the civil fuel it is pretty clear. When 
environmentalists and utility managers are doing and thinking 
the same thing and storing it on-site in casks, and the 
National Research Council says that is a good, safe way and 
cheap way to do things, you should take yes for an answer. That 
will do, I was told by DOE. But that is only good, they said, 
for 500 to 1,000 years. I said, well, for government work, that 
is a start. Not bad. Last I checked, we haven't been around 
that long. So let that happen. Don't get in the way of that.
    Second, with regard to the military things--I think Dr. 
Perry may have ideas as well--I think it is very important, 
first, to make what you have secure, whatever form it is in. 
Moving stuff around, particularly moving stuff around in places 
like Russia, I don't know, I would be not too quick to do that 
unless you had to.
    With those two rules of thumb, you can get by for quite a 
while. And in government doing a pretty good job in getting by 
is a pretty high standard these days. Generally, we don't meet 
that standard. So I would shoot for that first.
    Mr. Duncan. Are you familiar with the processes that are 
being handled at H Canyon, Savannah River Site?
    Mr. Sokolski. A little, yes.
    Mr. Duncan. It is very concerning to me, Mr. Chairman and 
the panelists here, that we are seeing the Department of Energy 
reevaluate and I guess divert assets and revenues to 
environmental management, which is an important aspect going on 
at both Savannah River Site, Hanford, and all across the land.
    But it is concerning to us that they are taking resources 
from H Canyon, which has been up and running for 40 years, 
processing the nuclear material; and with the nonproliferation 
materials coming to Savannah River Site and the role that H 
Canyon would play in reprocessing that and a lot of other 
missions that are going on there, it is very, very concerning 
to me and the delegation from South Carolina that Secretary Chu 
and his staff have decided to take $100 million away from H 
Canyon. Because what is going to happen there is we are going 
to lose the valuable human resources that would seek employment 
in other areas, and we will lose those from Savannah River 
Site.
    And so as we move forward, as we talk about the 
nonproliferation and the legacy weapons materials, that we keep 
in mind that H Canyon plays a vital role in this country and 
has for 40 years. It doesn't need to be put in warm standby. It 
needs to be continuing to conduct the missions it was designed 
for.
    Thank you. I yield back.
    Mr. Royce. Mr. Faleomavaega from Guam.
    Mr. Faleomavaega. No, I am from American Samoa, Mr. 
Chairman.
    Mr. Royce. American Samoa, I stand corrected.
    Mr. Faleomavaega. Mr. Chairman, thank you; and thank our 
panel of witnesses for their expertise in also sharing with us 
the issue that we are discussing this morning.
    I have somewhat of a different perspective in terms of how 
we are to address the issue of nuclear technology and the 
problems that we are faced with right now, especially with the 
situation in Japan and the aftermath of the earthquake and the 
tsunami. I say that I take a different perspective because it 
is almost like a broken record now. We have been talking about 
nuclear proliferation, we talk about regulatory aspects and the 
importance of the strategic and military interests that we 
have. The number of nuclear weapons that are now in place--and 
correct me if I am wrong--that we now currently have the 
capacity with all the nuclear powers they have in their 
possession, these nuclear weapons, enough to blow this planet 
10 times over with its capacity and to say that madness that 
continues in terms of why we continue to have in our possession 
these nuclear weapons or weapons of mass destruction----
    I wanted to ask you gentlemen if you can help me. What 
country--my understanding is France currently depends--about 80 
percent of its energy resources come from nuclear technology. I 
wanted to ask in your opinion which country currently has the 
most advanced technology dealing with nuclear energy?
    It is quite obvious that, what, for the last 30 or 40 years 
Japan has revealed the fact that there is tremendous weakness 
in the capacity and ability of the Japanese Government to 
address the dangerous situation that we are now faced with with 
the four nuclear reactors that have dangerously come down to 
the problems of what is happening in the Fukushima nuclear 
reactor there in Japan.
    But I am curious, gentlemen, in your best judgment, which 
country currently has the best technology on nuclear technology 
for its use for peaceful purposes, for example, France being 
one of those countries?
    Mr. Sokolski. I will take a stab.
    Mr. Faleomavaega. Please.
    Mr. Sokolski. I think it is not fair to pick just one.
    Mr. Faleomavaega. Your microphone.
    Mr. Sokolski. I am sorry.
    I think that each country has some comparative strengths, 
and they are different. When it comes to design, the U.S. is 
pretty good. In advanced design, the U.S. advanced design is 
pretty good. When it comes to constructing something quickly 
and for a reasonable firm price, boy, I think the Koreans have 
a lot to offer. When it comes to large plants that are 
reasonably modern that can be built, France has something to 
offer. It doesn't come cheap. And if you want price, the price 
leader is Russia. By the way, reliability is a different 
problem. So it depends what you are looking for, and that is 
the reason why there is all these different firms.
    Now, I didn't mention China because they are not quite in 
the game yet, but they will come into the game because we gave 
them a lot of good reactor technology, and we really did give 
it to them. My guess is once they get into the mode of 
mastering that you will see them on the market, and their price 
will be low.
    Mr. Faleomavaega. Mr. Heinonen.
    Mr. Heinonen. Thank you.
    Well, I have a couple of remarks, though Mr. Sokolski I 
think summarized this pretty well.
    One can look at this from another angle, which is maybe 
important from the nonproliferation point of view. When we look 
at the risks of nuclear energy, it is not only the enrichment. 
We need also to look at what to do with the spent fuel and how 
to deal with the plutonium contained in the spent fuel with the 
longer term.
    And, therefore, when we look for solutions we should look 
to a leasing option for the nuclear fuel. So whoever sells you 
a reactor actually leases the fuel for the lifetime of the 
reactor by providing investment services and taking the fuel 
back and then disposing of it. This is the kind of solution we 
should look for at this point in time. As Henry said, I think 
that might be the widest nuclear fuel cycle support that can be 
provided today both by Russia and, to a certain degree, France. 
Many other countries have a lot of limitations to take back, 
for example, spent fuel to their own territory.
    Mr. Faleomavaega. Secretary Perry.
    Mr. Perry. I concur with what both the previous witnesses 
have said.
    Mr. Faleomavaega. My time is up. I appreciate it. Thank 
you, Mr. Chairman. I barely started.
    Mr. Royce. Thank you very much.
    We are going to go to Mr. Fortenberry from Nebraska.
    Mr. Fortenberry. Thank you, Mr. Chairman.
    Before I begin my questions, let me make an observation. As 
I look out here, we have got a group of young people here, and 
that is good. I am glad you are interested in the question. As 
I look over here, we have a few members of the press. We have a 
former Secretary of Defense, a high-ranking official, former 
official in the International Atomic Energy Agency 
nonproliferation experts. A few Members. What is at issue here 
is the future of civilization, but I guess no one has the time.
    This is a very, very real problem that has heightened 
awareness in this body, and I assume in other places, but is 
just not quite a priority. Now, maybe with the disasters in 
Japan, it will become more so. But this is not something that 
we can react to. This is something that we have to prevent, 
nonproliferation of this powerful technology that can be used 
for good or for devastating harm.
    And so, Mr. Chairman, I think those of us who care deeply 
about this--and I know others do, but it just doesn't get to be 
prioritized--have an important job to do here in heightening 
the awareness of a need to be focused constantly on how we 
think clearly and strategically as to reduce proliferation in 
our world or to increase nonproliferation objectives in our 
world.
    With that said, I think if I could summarize as succinctly 
as possible what you all are talking about, is in effect what 
we have to have, what we are looking for, what is very delicate 
to achieve for the objective of nonproliferation, is a global 
private-public partnership that effectively is enforced through 
a shared geopolitical strategy. And that is tricky. That sort 
of transcends the boundaries of treaties. It transcends the 
boundaries of trade. It sort of becomes a hybrid model of 
enforcement that is based upon good will, based upon a 
willingness to not cheat in terms of business agreements, and 
pressure by governments consistently to achieve the objective 
of nonproliferation.
    Now, the Nuclear Suppliers Group I guess approximates this 
entity or this kind of concept as much as possible. China is 
now apparently cheating, so there might be even cracks in what 
has worked to a degree in seeking nonproliferation objectives 
in a communal worldwide sense.
    So, with that said, let me ask you this. Mr. Sokolski, you 
had said earlier I don't think there is an inalienable right to 
make your own nuclear fuel. How did this paradigm come about? 
How can we shift and change that? I heard your earlier answer 
that perhaps it is foregone now. It is too late. This is 
related to the idea of how again do we strengthen the 
capabilities of the other entities that are out there.
    And this would be your question Mr.--is it pronounced 
Heinonen? The governor of Nebraska is named Heineman, by the 
way. Is the IAEA capable of achieving the objective of 
nonproliferation or is it constrained by--just tell me the 
constraints that are there that prevent the ultimate objective, 
what we are trying to achieve.
    Mr. Sokolski. In answer to your question, if you are on a 
bad, bad roll, it is very important--I know when you ski if you 
are making mistakes the first thing you are supposed to do is 
stop. You don't keep skiing and try to correct yourself. You 
stop, and then you rethink what you are doing. I think with 
regard to this argument about rights, it is a way of 
interpreting the treaty. But I think, as Mr. Sherman pointed 
out, it is corrosive to a lot more of the provisions of the 
treaty to interpret it that way than to say, Well, whatever it 
is has to be safe.
    Mr. Fortenberry. So why hasn't the paradigm shifted?
    Mr. Sokolski. Well, because we have chosen in this country, 
as well as encouraging other nuclear suppliers to follow our 
lead, to make our mistakes in this regard hereditary. What we 
have done is, well, because we said yes to Japan and yes to 
South Africa and yes to Brazil, we cannot stop and say maybe we 
need to rethink that. Maybe, at a minimum, we need to stop 
saying out loud, they clearly have the right. Maybe we need to 
start saying, you know, it is really not in the treaty. And 
maybe we have to make sure that, at a minimum, whatever 
activity it is, it is safeguardable and beneficial.
    Mr. Fortenberry. The right depends upon certain conditions.
    Mr. Sokolski. Right.
    Mr. Fortenberry. Now, in that regard, we put out an 
agreement with the UAE that was supposed to become a gold 
standard for nonproliferation objectives while pursuing civil 
nuclear technology.
    Mr. Sokolski. Right.
    Mr. Fortenberry. There is some problem there in that we 
don't have other countries who are willing to accept the same 
standards and therefore can outcompete us.
    Now, you were talking earlier about leverage. If you can 
get the French to go along with certain provisions by, I 
assume, leveraging our loan guarantees for their business in 
this country to accept that gold standard, then the Germans and 
the Russians potentially follow. Did I follow you correctly in 
that regard?
    Mr. Sokolski. Yes, roughly. There are other things the 
French want, too. It seems to me that the key advantage of the 
gold standard is that, in lieu of having an international 
organization that runs and owns everything, you are at least 
making a clear distinction between what is safe and dangerous. 
You have got to get everyone to go down that road. Keep in mind 
in 1945 we actually tried to do this.
    Mr. Fortenberry. How? What are the entities out there that 
can leverage this if you shift the paradigm and actually cause 
enforcement? Back to my earlier comment----
    Mr. Royce. If the gentleman would yield, shift the attitude 
in the Department of Energy.
    Mr. Sokolski. I was going to say charity starts at home. 
You have an opportunity to make it very clear what you think 
safe and dangerous is, that you like the gold standard. And I 
think this point about the Appropriations Committee is, 
unfortunately, right on point that Mr. Sherman made. Go talk 
amongst yourselves and see if anybody knows anybody on the 
Appropriations Committee. Believe you me, if you start moving 
down this road, you will probably leverage the most important 
group. They are over in the White House. And they will go, oh, 
my God, if they are going to do this, we need to preempt them. 
You might be able to get some of this done without necessarily 
getting the law passed if they think you are serious and it 
looks like you are really going to do it.
    Once you do it, the NSG has an opportunity that becomes 
riper because, oh, my God, they are really going to do this. 
Let's preempt it.
    You have a golden opportunity here, I think, to get the 
gold standard looked at more seriously by more countries. And I 
think, unfortunately, it has taken this accident and the 
reduced value of stocks in nuclear vendors, the lack of credit, 
the opportunity that has been afforded by natural gas not to 
have to go nuclear immediately. All of this is in your favor. 
If you don't act now, I think it is a mistake.
    Mr. Fortenberry. Thank you.
    Mr. Royce. If I could follow up on that observation or that 
point. Right now, we have the leverage. We have the President's 
statement in Prague in 2009 that we were going to face this new 
paradigm in civil nuclear cooperation in which all countries 
are going to be able to enjoy the benefits of nuclear power 
while avoiding the spread of nuclear weapons and technology.
    Well, we have a basis for that--or we had--the UAE 
agreement. If you look at a situation like the one that the 
administration is contemplating for Vietnam, which is what we 
are talking about now, I think what you called that was driving 
a stake through the heart of our efforts to stop the spread of 
nuclear fuel. I mean, once we back off of the position that you 
had to forego enrichment and reprocessing, we really are in a 
new paradigm.
    And so if we use the leverage we have now to get back to 
the agreements that will at least halt that spread, I don't 
think that the problem is as dire as my colleague would 
indicate in terms of the situation with the votes in either the 
House or the Senate. And certainly with a two-thirds override 
the administration would, I think, be confronted with the real 
politics of dealing with this issue. And I think it is very 
important that we deal with it quickly, especially when we have 
the leverage.
    So it is true we might be able to do it through the 
appropriations process, but we could also run legislation into 
the Senate and talk to Mr. Lugar and talk to Mr. Kerry and 
other members of the Senate.
    I do think--well, I will go to a question to you, Mr. 
Sokolski; and that is, one of the excuses for not following 
through with the type of agreement we had with the UAE vis-a-
vis Vietnam was, well, it is a different situation. In the 
Middle East, you are facing proliferation, but you don't have 
that problem in Asia. I think the quote was, ``It doesn't apply 
to Asia. The concerns about an arms race in the Middle East 
aren't the same concerns in Asia.''
    Well, I am not sure that that is the right premise. I think 
about North Korea: First plutonium and then uranium enrichment. 
We see the reactions to that in South Korea, Japan, and Taiwan. 
I think about the transfer from North Korea to Burma that we 
are all concerned about in terms of this capability, of the 
fact that China is looking to sell reactors to Pakistan. Isn't 
this just as combustible an area, potentially, as the Middle 
East, and shouldn't we apply the same standard? Isn't this an 
opportunity right now to leverage that standard?
    Mr. Sokolski. It is worse than you even have laid out. 
Privately, Jordanian officials were reported to have said, 
``Why in the world would we in the Middle East agree to a 
standard if you are not willing to inflict it on Vietnam? Why 
are we different?'' So you do--it is kind of like the house 
divided speech that Lincoln gave. Now, that was a more odious 
topic, it was slavery and whether or not you could divide the 
good States from the bad States and you would have slavery in 
the South but not the North. And he said, ``This is not 
tenable. You will either have the country entirely free or 
entirely enslaved.'' I think this is just such a proposition, 
and it is clear enough for any other foreign official to 
figure. It should be clear enough for anyone here to figure as 
well.
    Mr. Royce. Then why is that unclear to these spokesmen? Why 
is it unclear to the U.S. Department of Energy? What is the 
impetus for going off of the gold standard and going onto this 
slippery slope that will get away from us with Vietnam?
    Mr. Sokolski. I think Dr. Perry can perhaps address this as 
well as anyone. But my own personal experience working in the 
Pentagon is it is very hard to think about the long run and 
what might be important if what is urgent is just getting 
people happy who are right in front of you and you have a 
current country that you want to please. So it is really the 
reason why we have--I hate to say it--division of power and why 
there is oversight.
    Mr. Royce. Thank you.
    Secretary Perry, your observations on this point.
    Mr. Perry. I would just add to what Mr. Sokolski said that 
the danger in Asia is at least as great as the danger in the 
Middle East.
    Mr. Royce. All right. Well, that counters pretty 
effectively the quote.
    Mr. Heinonen, your thoughts.
    Mr. Heinonen. Yes, thank you.
    Actually, I agree with what the both witnesses said. And I 
would say that we have also to look forward. And what we are 
here testing is the credibility of the regime. You cannot have 
two standards in the same regime. And then also I think that it 
is important to think that times may change, and there is also 
a threat also in Asia.
    Mr. Royce. Yes, yes. Thank you, Mr. Heinonen.
    Mr. Aloise.
    Mr. Aloise. I would just add we have addressed this overall 
problem in light of our nonproliferation work and that is 
sending mixed messages. I think we should be as careful as we 
can in making sure in all the different realms of 
nonproliferation that we send the same message and that we are 
serious about it. What is good for one nonproliferation regime 
in one country should be the same in another.
    Mr. Royce. Thank you, Mr. Aloise.
    I think this is a critical issue that we are dealing with, 
and one of the things I just want to convey is our appreciation 
for having you witnesses with your expertise join us today and 
lay out your views. We have your written testimony as well for 
the record, and let me express our deep appreciation to you for 
being here for this hearing today.
    The hearing will now stand adjourned. Thank you.
    [Whereupon, at 11:50 a.m., the committee was adjourned.]
                                     

                                     

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record



                               __________
                               
                               __________
    [Responses from Mr. Olli Heinonen, senior fellow, Belfer Center for 
Science and International Affairs:]





                               __________
    [Responses from Mr. Henry Sokolski, executive director, 
Nonproliferation Policy Education Center:]



                               __________
    [Responses from Mr. Gene Aloise, director, Natural Resources and 
Environment Team, U.S. Government Accountability Office:]



                               __________
    [Note: Responses from the Honorable William J. Perry, former 
Secretary of Defense, senior fellow, Hoover Institution, to Mr. 
Bilirakis' questions were not submitted to the committee prior to 
printing.]

                                 
