[Senate Hearing 116-34]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 116-34

 ADVANCED NUCLEAR TECHNOLOGY: PROTECTING U.S. LEADERSHIP AND EXPANDING 
      OPPORTUNITIES FOR LICENSING NEW NUCLEAR ENERGY TECHNOLOGIES

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON CLEAN AIR 
                           AND NUCLEAR SAFETY

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION
                               __________

                              JUNE 4, 2019
                               __________

  Printed for the use of the Committee on Environment and Public Works
  
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Available via the World Wide Web: http://www.govinfo.gov
        
                              ___________

                   U.S. GOVERNMENT PUBLISHING OFFICE
                    
36-934 PDF                WASHINGTON : 2019          
        
        

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED SIXTEENTH CONGRESS
                             FIRST SESSION

                    JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma            THOMAS R. CARPER, Delaware, 
SHELLEY MOORE CAPITO, West Virginia      Ranking Member
KEVIN CRAMER, North Dakota           BENJAMIN L. CARDIN, Maryland
MIKE BRAUN, Indiana                  BERNARD SANDERS, Vermont
MIKE ROUNDS, South Dakota            SHELDON WHITEHOUSE, Rhode Island
DAN SULLIVAN, Alaska                 JEFF MERKLEY, Oregon
JOHN BOOZMAN, Arkansas               KIRSTEN GILLIBRAND, New York
ROGER WICKER, Mississippi            CORY A. BOOKER, New Jersey
RICHARD SHELBY, Alabama              EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa                     TAMMY DUCKWORTH, Illinois
                                     CHRIS VAN HOLLEN, Maryland

              Richard M. Russell, Majority Staff Director
              Mary Frances Repko, Minority Staff Director
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

                     MIKE BRAUN, Indiana, Chairman
JAMES M. INHOFE, Oklahoma            SHELDON WHITEHOUSE, Rhode Island, 
SHELLEY MOORE CAPITO, West Virginia      Ranking Member
KEVIN CRAMER, North Dakota           BENJAMIN L. CARDIN, Maryland
MIKE ROUNDS, South Dakota            BERNARD SANDERS, Vermont
DAN SULLIVAN, Alaska                 JEFF MERKLEY, Oregon
JOHN BOOZMAN, Arkansas               KIRSTEN GILLIBRAND, New York
ROGER WICKER, Mississippi            CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
JOHN BARRASSO, Wyoming (ex officio)  TAMMY DUCKWORTH, Illinois
                                     THOMAS R. CARPER, Delaware (ex 
                                         officio)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                              JUNE 4, 2019
                           OPENING STATEMENTS

Braun, Hon. Mike, U.S. Senator from the State of Indiana.........     1
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................     2

                               WITNESSES

Magwood, Hon. William D., Director-General, Organization for 
  Economic Co-Operation and Development Nuclear Energy Agency....     7
    Prepared statement...........................................    10
    Responses to additional questions from:
        Senator Barrasso.........................................    21
        Senator Braun............................................    23
Levesque, Chris, President and Chief Executive Officer, 
  Terrapower.....................................................    27
    Prepared statement...........................................    29
    Responses to additional questions from:
        Senator Barrasso.........................................    36
        Senator Braun............................................    38
Perciasepe, Hon. Bob, President, Center for Climate and Energy 
  Solutions......................................................    40
    Prepared statement...........................................    42
    Responses to additional questions from Senator Braun.........    52

 
 ADVANCED NUCLEAR TECHNOLOGY: PROTECTING U.S. LEADERSHIP AND EXPANDING 
      OPPORTUNITIES FOR LICENSING NEW NUCLEAR ENERGY TECHNOLOGIES

                              ----------                              


                         TUESDAY, JUNE 4, 2019

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 11:33 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Mike Braun 
(Chairman of the Subcommittee) presiding.
    Present: Senators Braun, Whitehouse, Capito, Ernst, Carper.

             OPENING STATEMENT OF HON. MIKE BRAUN, 
             U.S. SENATOR FROM THE STATE OF INDIANA

    Senator Braun. Good morning. We are going to call this 
hearing to order. Thanks to everyone for being here today.
    This hearing of the Clean Air and Nuclear Safety 
Subcommittee is called to order officially. The purpose of our 
meeting today is to examine the international and domestic 
outlook for advanced nuclear technologies. We look forward to 
using this information to help us inform the Nuclear Regulatory 
Commission's licensing and regulatory process for these new 
technologies. You will also help us consider the importance of 
maintaining American leadership in nuclear energy development 
and regulation.
    I will begin by recognizing myself for a brief opening 
statement before turning the floor over to Ranking Member 
Whitehouse for 5 minutes. The last 70 years, the U.S. has been 
the global leader in civilian uses of nuclear technology. This 
leadership has offered great opportunities to our Country. A 
clean, reliable source of baseload electrical power, a strong 
domestic supply chain, able to develop and supply the world's 
largest and most powerful nuclear navy, ownership of the 
world's best nuclear technology, allowing the United States to 
lead the world in setting international non-proliferation 
standards, and the knowledge and experience needed to create a 
nuclear regulatory regime and a Nuclear Regulatory Commission.
    The NRC's leadership not only assures nuclear energy is 
safe and secure, but is recognized around the world as the gold 
standard of nuclear regulation. But today, America's nuclear 
leadership is at risk. China and Russia are using nuclear 
energy to advance their geostrategic interests. In turn, our 
domestic civilian industry is losing its competitive edge.
    While the U.S. struggles to complete the first two new 
nuclear reactors in a generation, China has set a national 
target to build 58 gigawatts of nuclear power capacity by 2020, 
bringing four new reactors online just last year.
    While nuclear charges ahead in countries like Russia, and 
China, in the U.S., our industry risks being caught in a 
downward spiral. America's supply chain, nuclear scientists, 
engineers, and regulatory standards, may be overtaken by our 
international competition. It is alarming. A recently released 
Atlantic Council report identifies the threats and consequences 
if the U.S. is no longer the nuclear energy leader. Senator 
Crap and our ranking member, Senator Whitehouse, were the 
honorary co-chairmen of the report.
    The report states the growing dominance of Russia and China 
in current nuclear construction and export, with Russia's far 
greater international presence and China's growing ambition, is 
an immediate concern from a geopolitical standpoint as well as 
a safety and security perspective. Congress has already taken 
action to ensure that the Nuclear Regulatory Commission has the 
tools it needs to facilitate the development of this new 
reactor technology .
    But what else can we do? Today, this subcommittee will 
examine the international and domestic outlook of advanced 
nuclear technologies to help inform the NRC's licensing and 
regulatory processes. The witnesses before us today will 
provide an important opportunity to consider the future of U.S. 
leadership in nuclear energy development and regulation.
    I in particular am interested in hearing which technologies 
other countries are trying and how their regulatory 
environments may facilitate the development of advanced nuclear 
technology abroad. We may learn from their experiences and 
benefit by facilitating such development on U.S. soil. 
Additionally, I look forward to hearing how we can enable 
American nuclear innovators to export our own home-grown 
technology abroad.
    Today's hearing is of the utmost importance. Without new 
reactors coming online, aided by the development of advanced 
reactors, the entire U.S. nuclear fleet could be idled within 
20 years. Instead, with the right investments in these new 
technologies, and the regulatory apparatus to keep Americans 
safe, advanced nuclear could help power the American economy 
for the next 70 years.
    Now, I would like to recognize Ranking Member Senator 
Whitehouse for his opening statement.

         OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Whitehouse. Thank you, Chairman. I appreciate that 
we are having this hearing, and I am grateful to the terrific 
witnesses that we have here.
    We are clearly witnessing a transition in the United States 
toward clean energy, despite some what I consider to be 
reprehensible behavior by the fossil fuel industry to interfere 
with that. Renewables and advanced nuclear technologies are 
leading this transition.
    Renewables now provide nearly 19 percent of our energy, and 
the trajectory of their growth is steeply upward. Renewable 
energy capacity in the U.S. has more than tripled since 2008. 
In 2019, renewables will lead new additions to our energy grid.
    Energy storage is a big part of the renewable story. The 
Federal Energy Regulatory Commission recently finalized its 
rule for battery storage on the electric grid. FERC's storage 
rule is projected to spur 50,000 megawatts of additional energy 
storage across the U.S. To its credit, FERC, led by Chairman 
Chatterjee, has rebuffed efforts to weaken the rule, setting a 
good precedent for the pending distributed generation rule.
    Advanced nuclear technologies are the topic of today's 
hearing. The next-gen nuclear reactors can do two key things. 
One, help us reduce emissions as we move toward a clean energy 
economy; and two, potentially transform our existing nuclear 
waste stockpiles from liabilities into assets. I would like to 
offer, Mr. Chairman, for the record, an op-ed with our 
colleague, Senator Crapo, that he and I wrote entitled The U.S. 
Must Reassert Global Leadership in Nuclear Energy or lose out 
to Russia and China.
    Senator Braun. Without objection, so ordered.
    [The referenced information follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Whitehouse. Thank you, sir.
    Nuclear plants close because they get no compensation for 
being emissions-free. That is a big step backward for emission 
reductions, for climate change, and for the nuclear power 
industry. That is one reason why it is so important to factor 
the cost of carbon emissions into the energy market. That way, 
the compensation is built right in.
    Our op-ed also discussed the partnership we have with 
Chairman Barrasso and Ranking Member Carper to pass two recent 
bills: the Nuclear Energy Innovation Capabilities Act, which 
will foster and accelerate development of advanced reactors 
through collaboration among our national labs, private 
industry, and academic institutions; and the Nuclear Energy 
Innovation and Modernization Act, which requires the Nuclear 
Regulatory Commission to develop a regulatory framework for 
licensing these new advanced reactor concepts.
    These bills give a glimmer of hope that Republicans and 
Democrats can work together effectively on clean energy issues 
in bipartisan, legislative fashion. Sadly, however, I don't see 
a whole lot of regulatory bipartisanship in the NRC's new rule 
for U.S. nuclear power plants to prepare for or deal with the 
effects of climate change and sea level rise. With neither 
warning nor evidentiary support, Republican NRC members made 
this rule voluntary. Senator Carper and I are trying to 
understand why Republican commissioners would weaken the rule, 
when no public comments requested it, and NRC career staff 
advised against it.
    The Fourth National Climate Assessment found that extreme 
rain events and more intense hurricanes are likely to occur 
over the next century, making the recent flooding events in 
Nebraska, Maryland, and Texas more normal. Now is the time to 
harden our nuclear facilities to deal with rising seas and more 
intense storms due to climate change, not to weaken them.
    I still intend to understand why this happened, to make 
sure that nothing ex parte took place, and to keep pressure on 
the NRC to ensure that safety remains at the forefront of its 
decisionmaking. I hope that all my colleagues will join me and 
the Ranking Member in this oversight.
    The Nuclear Regulatory Commission is known internationally 
as the gold standard of safety, and it should stay that way. 
Where our often-divided committee can find a way to set an 
example of bipartisanship, the NRC has no business injecting 
its own regulatory partisanship into the same question.
    I look forward to hearing from our witnesses, and Mr. 
Chairman, I thank you.
    Senator Braun. Thank you, Senator.
    I am pleased that we have a great panel here today. We met 
you before the hearing started. Our witnesses bring decades of 
experience in the development, execution, and regulation of not 
only light water reactors, but also the next generation of 
advanced reactors. Our first witness, William Magwood, is the 
Director General of the Nuclear Energy Agency at the 
Organization for Economic Co-operation and Development. He has 
served in this position since 2014, and brings to this 
committee extensive experience in both the regulatory and 
developmental aspects of nuclear energy.
    Prior to his service to the OECD, Mr. Magwood served as one 
of the five commissioners on the U.S. Nuclear Regulatory 
Commission. Mr. Magwood has also served at the U.S. Department 
of Energy, where he was Director of Nuclear Energy. During his 
tenure, he launched several important initiatives, including 
the U.S. Nuclear Power 2010 Program, and the Generation IV 
International Forum. Mr. Magwood holds bachelor's degrees in 
Physics and English from Carnegie Mellon University, and a 
Master of fine arts from the University of Pittsburgh.
    Our next witness is Chris Levesque. Mr. Levesque is the 
President and CEO of TerraPower, an innovative American company 
working to bring advanced nuclear technologies to market. He 
brings over 25 years of experience in the nuclear industry, 
including senior leadership roles for two large new-build 
reactor projects in Finland and South Carolina. I learned about 
that latter last week. Prior to joining TerraPower, Mr. 
Levesque served as a vice president at Westinghouse Electric 
Company, where he directed a project for one of America's first 
new reactor construction efforts in several decades.
    Mr. Levesque began his career as a nuclear submarine 
officer. He qualified as a chief engineering on the U.S.S. 
Boise. He holds a Bachelor of Science in mechanical engineering 
from Rensselaer Polytechnic Institute, and a Master of Science 
in mechanical engineering and Naval Engineer degree from MIT.
    Our last witness today is Bob Perciasepe, the President of 
the Center for Climate and Energy Solutions. Prior to his 
current role, Mr. Perciasepe was Deputy Administrator at the 
Environmental Protection Agency, where he served as a respected 
expert on environmental stewardship, natural resource 
management and public policy.
    In 2002, he joined the National Audubon Society, one of the 
Nation's oldest conservation organizations, as its Senior VP 
for Public Policy. He served as the group's chief operating 
officer from 2004 to 2009, where he worked to protect wetlands 
and expand environmental education, especially in urban areas.
    He has also held top positions in State and municipal 
government, as Secretary of the Environment for the State of 
Maryland from 1990 to 1993, and as a senior planning official 
for the city of Baltimore, where he managed the city's capital 
budget. Mr. Perciasepe holds a master's degree in Planning and 
Public Administration from Syracuse University, and a Bachelor 
of Science degree in Natural Resources from Cornell University.
    I want to remind the witnesses that your full written 
testimony will be made part of the official hearing record. 
Please keep your statements to 5 minutes, so that we may have 
time for questions.
    I look forward to hearing your testimony, beginning with 
Mr. Magwood. Mr. Magwood, please proceed.

    STATEMENT OF HON. WILLIAM D. MAGWOOD, DIRECTOR-GENERAL, 
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT NUCLEAR 
                         ENERGY AGENCY

    Mr. Magwood. Thank you, Chairman, and good morning. Good 
morning to you and to Ranking Member Whitehouse and members of 
the subcommittee.
    I am Bill Magwood, I am Director-General of the Nuclear 
Energy Agency, and I thank you for the opportunity to provide 
my perspectives on the future outlook for nuclear energy. As 
you noted, I have a written statement that I ask be included in 
the hearing record.
    The Nuclear Energy Agency is an intergovernmental agency 
operating within the framework of the OECD, the Organization 
for Economic Co-operation and Development. As you may know, the 
United States help found the OECD as part of the Marshall Plan 
to help prevent wars and give countries a common purpose to 
improve their citizens' living standards.
    The NEA has 33 member countries. Those countries are those 
with the deepest experience in nuclear technology, policy, and 
regulation. Our purpose for more than 60 years has been to 
facilitate cooperation among our members to address challenging 
issues associated with the use of civilian nuclear technology.
    The United States is our largest member country, and each 
year dozens of Americans lead and participate in the many 
cooperative activities, including research projects and working 
parties underway within the context of the NEA. As the first 
American to lead the NEA since 1980, it is my particular 
pleasure to share observations based on the work of our agency, 
its expert staff, and the contributions of our members.
    I will note that as I engage member countries around the 
world, I find that essentially every country with which we 
work, there is a very large level of uncertainty regarding the 
future of energy. This is particularly true in the case of 
nuclear. Existing plants around the world are faced with 
premature closure and few new plants are being built.
    We have analyzed the reasons for these trends, and they are 
very, very complex. In OECD countries, first and foremost, I 
think the electricity markets have become dysfunctional in many 
areas. It is not unusual to see market prices for electricity 
zero or even negative during parts of the day.
    We believe electricity markets require significant reform. 
Whatever goals countries have for the future, today's markets 
are not serving those objectives. For those who are concerned 
about emissions of carbon, the trends are particularly 
alarming. In the face of heavy investments in renewable energy 
sources, emissions are rising steeply, and last year, reached 
an all-time high.
    You would think that this would provide an opportunity for 
nuclear. But the nuclear industry in many OECD countries has 
damaged reputations as a reliable supplier of plant and 
equipment. Cost overruns, schedule completion misses by 
decades, failed projects and very, very high cost estimates for 
new builds do not build confidence.
    The fact is that the capacity to build nuclear power plants 
in countries that led to development in past decades has 
deteriorated. Skilled project leadership, supply chains for 
critical nuclear quality components and trained work force 
needed for effective construction simply have not been 
available to support projects in many OECD countries.
    After not building nuclear plants for decades, they are 
like the overweight man who never exercises but decides to 
clear his driveway of snow in a Washington winter. Not a pretty 
sight.
    Many government and industry leaders hope to leapfrog these 
difficulties by shifting from light water-based Generation III 
designs to small, modular reactors and Gen IV technologies that 
seek to shift old paradigms. About 30 companies around the 
world are vying to develop game-changing technologies, most of 
them working on Gen IV concepts. While there is great hope and 
enthusiasm in each of these companies, it is important to note 
that the developing of new light water technology, and 
shepherding it through regulatory approval, cost at least a 
billion and a half. Generation IV technologies will cost 
substantially more. And this is before billions are spent on 
demonstration facilities.
    A typical company working to develop an innovative nuclear 
technology today has perhaps a dozen engineers and scientists 
devoted to the technology efforts and access to tens of 
millions of dollars. In comparison, I recently visited the 
Shanghai Institute of Applied Physics, which is developed a 
molten salt reactor technology. Molten salt reactors are a Gen 
IV technology that is high interest to several private sector 
companies. Because it represents a path of extraordinarily safe 
and efficient nuclear reactors, they have the potential to 
consume waste rather than generate it. The project in China has 
currently over 400 scientists and engineers hard at work 
developing this technology, with plans to build a demonstration 
reactor in the next decade.
    Finally, with regard to nuclear regulation, we are not 
particularly concerned about the availability of regulators, 
given sufficient time to react to new technologies. I believe 
that the bigger challenge will be to find ways to avoid forcing 
companies to resolve technical and regulatory questions about 
nuclear technologies multiple times as they seek to introduce 
their technologies in multiple countries. For light water 
technologies, it takes about 4 years and nearly half a billion 
dollars to navigate approval processes. It is extraordinarily 
costly and inefficient if this is done in each country for each 
technology.
    Moreover, if regulators can reach common positions on key 
aspects of technology, such as requirements for autonomous 
operation and the nature of emerging preparedness requirements, 
companies can deploy their technologies around the world, 
applying the same rules. For small reactors in particular, 
which these would benefit from access to large markets, this is 
a vital issue. We at the NEA are working with many member 
countries to explore how this issue might be resolved.
    With that, Mr. Chairman, I will conclude my comments and be 
happy to answer any questions.
    [The prepared statement of Mr. Magwood follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Braun. Thank you, Mr. Magwood.
    Mr. Levesque.

   OPENING STATEMENT OF CHRIS LEVESQUE, PRESIDENT AND CHIEF 
                 EXECUTIVE OFFICER, TERRAPOWER

    Mr. Levesque. Thank you, Chairman Braun, Ranking Member 
Whitehouse, and members of the subcommittee, for this 
opportunity to testify. My name is Chris Levesque, and I am the 
Chief Executive officer of TerraPower, an advanced nuclear 
technology company based in Bellevue, Washington.
    In 2006, our company's founders, Bill Gates and Nathan 
Myhrvold, began looking for a technological solution to the 
dual challenges of the growing global demand for energy and the 
threat of climate change. They discovered the answer is 
advanced nuclear technology.
    My remarks reflect my role as TerraPower's CEO, but also as 
an engineer, a nuclear navy submarine veteran, and an American 
who has spent my career working in nuclear energy. From my 
perspective, it is clear that our Country will lose our 
leadership in nuclear energy if we fail to innovate and 
demonstrate the next generation of advanced reactors in the 
United States.
    TerraPower's mission is to approve nuclear energy 
technology, because it provides reliable, zero-carbon, cost-
effective electric and thermal energy. In addition, nuclear 
power is resilient and can be deployed in the United States and 
abroad without requiring a natural gas pipeline or a coal train 
to operate.
    Advanced reactors offer next generation safety benefits. In 
the event of a failure, no human or mechanical intervention is 
necessary to shut the reactor down. If you were to put these 
reactors through the Fukushima test, there would be no 
accident. A fast reactor would shut itself down independently, 
requiring no human operator action to keep the plant in a safe 
condition indefinitely.
    Advanced nuclear will meet a number of global market needs. 
Our potential export markets rely on other countries for energy 
commodities like coal and gas, and all have signed on to the 
Paris Climate Agreement. The U.N. projects that the demand for 
nuclear power across the globe could increase as much as five 
times current levels.
    As such, it is not surprising that countries like China and 
Russia are actively supporting the development of advanced 
reactors with direct investment by their governments. Some 
State supported companies sell their reactors and provide fuel, 
operations and maintenance services and waste services, 
bringing a multi-decade strategic partnership between the 
country selling the nuclear reactors and the country purchasing 
them.
    Demonstrating new nuclear technologies is the most 
important step to jump start an advanced U.S. nuclear industry 
and compete globally. No company can commercialize advanced 
nuclear technology until it is demonstrated. Federal support of 
demonstration efforts has driven down costs for technologies 
like solar, wind, and hydraulic fracturing. We need a similarly 
ambitious effort to demonstrate a portfolio of advanced nuclear 
reactors. This will take increased public-private cooperation, 
and we need to start this now.
    TerraPower appreciates the work of this committee and the 
Nuclear Regulatory Commission to prepare to license advanced 
nuclear technology. The enactment of the Nuclear Energy 
Innovation and Modernization Act, NEIMA, will provide 
significant help, and we are grateful for your leadership on 
this legislation.
    The recently introduced Nuclear Energy Leadership Act, 
NELA, provides a robust and important framework. In particular, 
NELA focuses on the need for public-private partnerships to 
demonstrate advanced nuclear technologies. We strongly support 
NELA and hope Congress will move to pass it expeditiously. We 
want to thank the members of this committee who have co-
sponsored it.
    However, even without NELA, Congress, through 
appropriations, can direct the government to develop and fund 
more coordinated and expedient demonstration activities. We 
hope to work with you on both to advance demonstration as 
quickly as possible.
    The country that owns advanced nuclear will be a leader in 
the global nuclear market. Our Country led the world in 
developing civilian nuclear power, and has decades of R&D 
experience on a wide range of reactor concepts. Having 
personally worked on nuclear projects in Europe and Asia, I can 
attest to how the world looks to the U.S. nuclear industry for 
our leadership. American deserves to reap the economic and 
national security benefits created by our innovation and our 
expertise. With the right public-private partnership and 
investment, I know we can succeed.
    Once again, thank you for the opportunity to testify. I am 
happy to answer any questions.
    [The prepared statement of Mr. Levesque follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Braun. Thank you, Mr. Levesque.
    Mr. Perciasepe.

OPENING STATEMENT OF HON. BOB PERCIASEPE, PRESIDENT, CENTER FOR 
                  CLIMATE AND ENERGY SOLUTIONS

    Mr. Perciasepe. Thank you, Mr. Chairman and Ranking Member, 
and Mr. Ranking Member of the full committee.
    I am honored to be here with all of you. It has been a 
while since I have been in this room. I have great memories of 
confirmation hearings.
    This is a pretty important subject, and I think the opening 
comments by the members were right on target, really important 
issues. You had mentioned my experiences in the past. I am 
currently the President of the Center for Climate and Energy 
Solutions, which is an organization that looks at global 
climate, and we are recognized and trusted as a pragmatic and 
wise counsel on technologies and on technology-inclusive 
approaches.
    The climate change challenge is another one of the 
important contexts for this conversation. Decarbonizing U.S. 
energy is a pretty significant task. We need to get to at least 
80 percent by the middle of the century, and we are currently 
about 11 percent less than we were in 2005. Current nuclear 
power is at 50 percent of that zero-emitting electricity.
    Decarbonizing electricity is on the critical path for 
decarbonizing our economy and for meeting our mid-century goals 
for climate change. Virtually all the analysis that has been 
done in the Intergovernmental Panel on Climate Change, the U.S. 
Climate Assessment, all of them show that the long-term need 
for zero-emitting energy is looking at all the different 
technologies together, as the least technically challenging, 
but also the least-cost path to decarbonization. The value of 
the existing nuclear fleet is pretty important. It is 20 
percent of our total electricity, but it is also 50 percent of 
our clean electricity. Emissions will increase if the existing 
nuclear fleet retires prematurely.
    The other important part of the existing nuclear fleet, 
they are the foundation and the technical capacity for many of 
the issues that the previous witnesses discussed. And keeping 
the existing facilities going will also buy time needed for the 
additional innovation for advanced nuclear, deployment of 
advanced renewable technologies and innovation with carbon 
capture.
    There is a simple math here that we have pointed out in a 
number of our publications, that, if you need to get to 80 
percent and your current situation is, you have about 10 
percent from renewable--I am rounding the numbers here, so 
these are not precise--and 20 percent from nuclear, that is 30 
percent of our electricity coming from clean and non-emitting 
sources. But if you triple those renewable sources over the 
next 15 to 20 years, and you lose the nuclear, you are back at 
30 percent, 20 years down the road, on that.
    I want to commend the committee for the work they have done 
on NEIMA and the work they are doing on NELA. These are really 
important pieces of legislation. They are sending really 
important signals to people like Chris. Our view is there are 
over 50 companies out there that are working on advanced 
nuclear strategies, and also probably close to a billion 
dollars in private capital somehow involved with that.
    Some of the actions that have been taken to preserve the 
existing nuclear, and I want to be clear, preserving the 
existing nuclear preserves our intellectual capacity, which 
sends the right signal to the advanced nuclear industry, which 
sometimes are interspersed. So Senator Whitehouse mentioned the 
market failures of these facilities not being compensated for 
their zero emissions. Several States, and I will mention New 
York, New Jersey, Hawaii, Connecticut, are States who have 
moved ahead to put together zero emissions credits to provide 
compensation for the zero-emission work. And it sends signals 
to the innovators. That has changed the trajectory of eight 
different plants, and has saved us 33 million metric tons of 
carbon.
    There are Federal approaches also, including the work that 
you all have done on NEIMA, and the work that you continue to 
do. Market signals for zero emissions is always good, carbon 
fees, capital investments by the Federal Government, clarity on 
new paths for permitting, for new technologies, clarity on 
extending licensing on existing facilities.
    And an even bigger picture I want to mention, which has 
already been mentioned, I also served on the task force for 
nuclear energy leadership at the Atlantic Council. Really, 
maintaining the existing fleet, catalyzing innovation and being 
a nuclear power exporter is really in the strategic interests 
of the United States. Being on that task force enabled me to 
look at both of these climate issues, but also the global 
strategic issues that are involved.
    So I will stop there. Sorry, I went over a few minutes.
    [The prepared statement of Mr. Perciasepe follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Braun. Thank you. Thank you for your testimony.
    The committee is scheduled to meet through 1 o'clock, and I 
intend to keep it open that long, unless we just run out of 
questions. I don't think that is going to happen. So I would 
ask fellow members to keep the questions to 5 minutes, so we 
can keep churning through everyone getting a chance to do a 
second or third round. And we will have others join as well.
    I still start it off by making this general statement. I 
had the pleasure of seeing a nuclear facility, the Cook 
Facility, in Michigan. I was overwhelmed by how well it was 
run, the redundancy with the emphasis on safety. It was harder 
to get in and out of that facility than I think of any building 
I have tried to get in and out of here, even once they know you 
are a Senator. So that was very impressive.
    I think what we are talking about here, for any of us that 
are worried about the climate, and to eliminate carbon 
emissions, this is the only bird in the hand that I can see 
that is scalable. There is another thing in economics called 
sunk costs. We have sunk a ton of costs into nuclear energy. 
And the fact that we are talking about shutting down plants, 
some plants having trouble, whether they want to do the 
extensions that are out there that they can pursue, I think it 
would be a travesty if we don't find a way to navigate into the 
future. You can see our geopolitical competitors look at it 
otherwise.
    So for the sake of myself, other members here, and folks 
out there listening, I want to start off with Mr. Levesque. 
Advanced nuclear technology, give us a little description of 
how that is different. Use megawatts in terms of, we heard it 
is safe, and that it could never create a catastrophe. I think 
that would be the heartburn that anybody has with nuclear 
energy. Tell me about that.
    Then also tell me about the industry's appetite to scale to 
into where it would even be more important as a percentage of 
our electric generation, as opposed to something that we pursue 
timidly. Contrast that to the plants that are online, and I 
would also like you to comment, Russia and China, are they 
building advanced nuclear facilities only? Or are they doing 
more of what we have come to know as the status quo?
    Mr. Levesque. Thank you for your question, Senator Braun. 
Speaking for the advanced nuclear energy, there are many new 
advanced nuclear technologies that have appeared over the last 
10 years. That is why you have seen many new companies, 
companies like Mr. Magwood brought up. I would say a major 
enabler to these advanced nuclear technologies coming into 
focus is, advanced computer modeling.
    We have 98 Generation II reactor plants in the U.S. that 
have been operating safely for decades. Those are pressurized 
water reactors, light water reactors as we call them. It is a 
very safe technology. It is the result of U.S. Government 
development efforts that go back to the 1950's, when we built 
plants like Shipping port, and when the nuclear navy made 
technology decisions.
    So these hundred or so plants that are operating today are 
the result of significant U.S. Government sponsorship that goes 
back decades, and we are still reaping the benefits of those 
decisions and that support going all the way back to the 
1950's.
    So again, those plants have been operating very safely 
today. If we go back and look at the 1960's and 1970's, there 
were also U.S. Government efforts to look at non-light water 
reactor technologies. Examples of those technologies were the 
molten salt reactor experiment at Oak Ridge National Labs, and 
the experimental breeder reactor at Idaho National Labs. The 
EBR, experimental breeder reactor, was a sodium cooled, and 
given by its name, the molten salt reactor experiment at Oak 
Ridge was salt cooled.
    So even though the U.S. did not decide to pursue those 
technologies and commercialize them at that time, the U.S. 
Government did prove that those technologies were viable, and 
that the basic engines of those plants could be built and 
operated safely. So the idea of sodium cooled or liquid cooled, 
liquid salt cooled reactor is nothing new.
    But what we have had happen in the last 10 to 15 years is 
really due to the advent of very high-fidelity computer 
modeling, where we are obviously, 20 years ago, the computing 
power simply did not exist to make these designs. That is why 
we have all this attention now on advanced nuclear. That has a 
lot to do with the founding of TerraPower. Twelve years ago, 
Bill Gates and Nathan Myhrvold, and our other founders were 
together, and they were looking at, hey, how can we create a 
new source of scalable, clean energy. At this time, they had 
physicists with them from Lawrence Livermore National Labs, and 
they said, hey, we think we can go back to these old designs--
go ahead, Senator Braun.
    Senator Braun. To honor the 5-minute rule, we will come 
back and get the rest of that long set of questions I had.
    Mr. Levesque. OK, sure.
    Senator Braun. I am going to turn it over to Senator 
Whitehouse now.
    Mr. Levesque. OK, thank you.
    Senator Whitehouse. Thanks very much. I want to start by 
reading something from the exhibit to Mr. Magwood's testimony. 
It asks the question, on page 11, it is the appendix. What 
should policymakers do? And then it answers the question as 
follows: implement carbon pricing as the most efficient 
approach for decarbonizing the electricity supply. This 
approach would increase the cost of high carbon generation 
technologies, reduce greenhouse gases and enhance the 
competitiveness of low carbon technologies, such as nuclear and 
VRE. Carbon pricing will produce an overall gain for society.
    However, it will also produce losses for some stakeholders, 
in particular, fossil fuel producers and their customers. 
Appropriate policies to facilitate a ``fair transition'' for 
the affected businesses and households, particularly those in 
vulnerable regions and communities, will be needed. No one can 
be left behind.
    I just want to go on the record as somebody who has a 
carbon price bill, who is an ardent advocate for a price on 
carbon, in offering my personal commitment to my colleagues 
that we will work with them to make sure that standard of no 
one left behind gets met. We can't be in a situation where the 
whole U.S. Senate is held hostage in order to take care of 
people in a way that ignores the coming disaster when, by 
addressing the coming disaster and remediating and preventing 
the coming disaster, we can actually take better care of those 
same people.
    I am willing to do all the pensions of everybody who ever 
swung a pick in a coal mine or drove a piece of equipment in a 
coal mine, fill them up, a lot of them are broke. Make all 
those pensions solid, let people retire now, if they want to. 
Fill up the health and welfare plans, make sure they have 
health care for themselves and their families for the rest of 
their lives. I would support a GI bill for the men and women 
who have worked in our energy sector who are having a 
transition concern, for them and for their children.
    There are ways that we can make this a fair transition. The 
bill that I have proposed raises $2.3 trillion over 10 years. 
We can make every miner a king.
    Senator Carper. Or a queen.
    Senator Whitehouse. Or a queen, out of those revenues, and 
still leave plenty to make sure that this is done in a way that 
helps jet the economy forward the way almost every economist 
who has looked at this suggests. And I would suggest that the 
economists who come to a different conclusion, you can trace 
that back to fossil fuel industry influence.
    So I just want to go on record saying that I am eager to 
make sure that the, what I will call the Magwood standard of no 
one left behind, but a carbon price being essential, is met.
    Mr. Perciasepe says the fooling in his testimony: ``Nuclear 
power has been providing a significant environmental benefit 
for decades. Society and markets in most instances are not 
valuing that.'' Bob, that is what you just said. You go on to 
say, ``Modeling to date clearly shows that we need nuclear 
power, renewables, carbon capture and improved energy 
efficiency to achieve large-scale economy-wide emission 
reductions.''
    Describe for me what the difference is between no carbon 
price and an economically effective, robust carbon price with 
respect to the opportunities for nuclear power, renewables, 
carbon capture and improved energy efficiency.
    Mr. Perciasepe. Thank you, Senator. The driving force 
behind the concept of a carbon tax or a carbon fee or tax 
incentives that provide those differentials is to use the power 
of the economy, the market, to drive the change, to drive the 
movement of private capital into the needed investments. So it 
is not only on the backs of the Federal Government to do it, 
but it moves the capital into the technologies that are going 
to be the technologies of the future.
    Senator Whitehouse. So all four of those technologies?
    Mr. Perciasepe. All four of those technologies, including 
not only energy efficiency, existing nuclear, more incentives 
for investment by the private sector and advanced nuclear, 
because there will be a turnover during this century. The 
advanced renewable technologies and batteries and electric 
vehicle technologies and infrastructure, as well as renewable 
energy, straight-up.
    Senator Whitehouse. In the second round, I will pursue that 
further, specific to carbon capture. But time in this round has 
expired, so let me yield to Senator Carper.
    Senator Braun. Mr. Carper.
    Senator Carper. Thanks, Mr. Chairman, and to our ranking 
member, thank you so much for calling this hearing. I could be 
in a number of other places right now, but I wanted to be here. 
It is good to see you again, Mr. Magwood, thank you for your 
service in the NRC and the Navy salutes Navy. I spent a lot of 
years of my life tracking Soviet nuclear submarines from Navy 
P-3 airplanes. I am very grateful for your service in that 
regard, and for being here today.
    For our neighbor, Bob, it is great to see you again, and 
thanks for your years of service in so many different roles.
    I especially want to thank Sheldon Whitehouse for his 
terrific leadership on this, and for trying to find common 
ground on these issues. He and I are joined at the hip in the 
idea that we can cleanup our air, cleanup our water, try to 
address climate change, create jobs. I think that is something 
that ties us all together. For me, that is the holy grail for 
where I want to go and where we need to go.
    Nuclear power serves our Nation's largest source of 
reliable carbon-free energy, and several of you have alluded to 
that already, which can help combat the negative impacts of 
climate change and at the same time, foster economic 
opportunities for a lot of Americans. If we are smart, we are 
going to replace our aging nuclear reactors with new 
technology, hopefully, in this Country, that is safer and 
produces less spent fuel and is cheaper to build and to 
operate.
    I would ask each of you just to take a moment and share 
with us one thing, each of you share with us just one thing, 
that the Federal Government is doing right in this regard, and 
one area where we could do a better job in order to support the 
development and deployment of advanced nuclear power. And I 
would ask Mr. Perciasepe to just lead us off. Again, the 
question is, share with us one thing with the committee, one 
thing the Federal Government is doing right and one thing the 
Federal Government could do a lot better to support the 
development and deployment of advanced nuclear power. Bob?
    Mr. Perciasepe. I think getting the proper incentives in 
place, particularly whether it is carbon pricing or other tax 
incentives, other forms of tax incentives, those signals are 
going to drive capital to help invest. So you put that on top 
of putting the full force of the Federal, intelligent lab 
facilities behind this, I think would be the best thing the 
Federal Government could do.
    Senator Carper. OK. Chris?
    Mr. Levesque. One thing the government, and specifically 
this committee, has done very right, I think, is the passage of 
NEIMA. That really empowers our safety regulator to entertain 
these advanced reactor designs. So thank you for that support.
    One area where improvement is needed, I think, and the 
committee is already focusing on this, is with NELA, the 
Nuclear Energy Leadership Act, we really need a demonstration 
project, we need multiple demonstration projects in the U.S. 
where we actually design, build and demonstrate advanced 
technologies. Otherwise, this will all be talk and we won't 
realize this new technology in the United States.
    Senator Carper. All right, thank you. Mr. Magwood, please, 
two questions, just briefly.
    Mr. Magwood. Thank you, Senator. I think I would agree with 
what both my colleagues on the panel have said. But I would 
emphasize that more than anything else, what the government is 
doing right is just bringing attention to this issue of 
innovation in advanced nuclear technologies.
    This is probably, in the time that I have been in, well, I 
am not really in Washington at the moment, but since I have 
been around in Washington, I don't think the interest in 
advanced nuclear technology has been higher than it is today. I 
think there is a lot of excitement and enthusiasm, both in the 
government sector and in the private sector, toward this 
subject.
    But I do think that moving from that excitement to 
implementation is something we really have to give a lot of 
focus on. It is going to be difficult, expensive work that I 
think the government will have to play a large role in. That 
is, I think, the next step in this conversation.
    So I agree with what Chris was just saying, that building 
demonstration facilities, don't underestimate how difficult 
this is and how much it will cost. We are really talking about 
large amounts of money. But that is what is happening in other 
countries. And if it doesn't happen here, then the 
opportunities will go overseas.
    Senator Carper. All right, thanks. I don't have time to ask 
and receive your answers from all of you on this next question. 
I am just going to just State the question, if I can, and I 
will ask you to respond to it for the record.
    I think there at least six different advanced reactor 
technologies that could be pursuing a license from the NRC in 
the near future. The question I will ask you for the record, 
you don't have to write it down, you will get it from us 
subsequently, do you believe there are critical skill gaps at 
the NRC that affect how the agency is able to review and 
consider applications for the use of technologies? That is one.
    The second half of the question that I will submit for the 
record is, if so, has Congress done enough, has the 
Administration done enough to address those skill gaps? I would 
just ask when you get those questions, please respond to us in 
a timely manner. Thank you so much, and again, my thanks to our 
chair and ranking member for scheduling this and for all of you 
joining us. This is a hugely important issue, and we are 
grateful.
    Senator Braun. Thank you, Senator Carper. We are going to 
start another round of 5-minute questions. Chris, I will start, 
and we will maybe have some other members maybe come in here, 
we will get with them.
    We were at the point of, I want to know about our 
competition. So what are China and Russia building, what kind 
of plant technology? Talk about how many megawatts of 
generation, because that is what I understand here, that is 
kind of the basic measurement on electric generation.
    And then contrast the present capabilities to what you 
think will be the advanced technology that is going to be 
scalable, and talk about its features, elaborate a little bit 
in terms of fuel storage, safety. You hit on a little bit of 
that, it sounded like, it took a lot of those issues out of 
place.
    So first start with China and Russia, what are they doing? 
Because they seem to be really energetic with nuclear energy. 
What kind of plants are they building?
    Mr. Levesque. China and Russia are each moving forward with 
dozens of new bills, both in their own countries and in export 
markets as well. Most of these gigawatt level plants are 
Generation II technology, like the 98 plants we have in the 
U.S. Some are moving to Generation III, which was also largely 
based on U.S. technology.
    They really have their eye, though, on these advanced 
nuclear technologies. There are several demonstration plants 
around the world now. People are really looking to these U.S. 
precedents. The things we did in the 1960's and 1970's combined 
with what all the advanced reactor companies in the U.S. are 
now doing with computer modeling and the materials 
advancements.
    Senator Braun. You mentioned computer modeling as a 
difference. Give me some other differences, so I can easily 
understand what Generation I and II is, and then what this 
miracle might be, if we ever see it.
    Mr. Levesque. So this is leading to some of the benefits of 
advanced reactors, and this applies to many of the 
technologies. These are now low-pressure systems. They are 
systems that have inherent safety, meaning we don't need a lot 
of extra mechanical and electrical systems.
    Senator Braun. Can you store fuel onsite when it is spent?
    Mr. Levesque. They do require onsite fuel storage, and some 
of them require a future geological repository, which the U.S. 
Government is working on. But many of these technologies, like 
TerraPower's, also because of the computer modeling, they add 
very advanced physics to the core that generate much lower 
waste at the end of the fuel cycle, up to an 80 percent 
reduction in that waste.
    That is why China and Russia, even though they are building 
plants that are much like what we developed in the U.S. They 
have their eyes on these advanced reactor designs, and really, 
the U.S., because of our national lab complex, and our legacy 
from those plants I mentioned----
    Senator Braun. But not developed yet, still in 
developmental stage?
    Mr. Levesque. Right. But we are really the best poised, the 
U.S. has a leadership opportunity here that, if we don't take 
it, China and Russia will. But we are best situated today to 
take leadership on advanced reactors. If we don't, China and 
Russia will in a very short period of time. The time to act is 
now, as in this year. We need to begin work on demonstration of 
advanced reactors.
    The Generation II facilities, what are the megawatts of 
generation capability? Roughly, on the larger ones.
    Mr. Levesque. Generation II facilities, we usually refer to 
as gigawatt level, 1,000 megawatts electric on each plant. 
Sometimes slightly larger or smaller. Each enough to power 1 
million homes.
    Senator Braun. What would the forecast be on the advanced 
technology approach? It is less, isn't it?
    Mr. Levesque. Some. Because TerraPower wants to attack the 
huge increase in global electricity demand and fight climate 
change, our company is going after these same gigawatt level 
plants. In certain niche areas, we can build smaller plants. 
But I would say advanced nuclear offers the flexibility for 
anything from a microreactor to gigawatt scale. Advanced 
reactors doesn't necessarily mean you go big or small.
    Senator Braun. It will be a complete difference in 
technology that has flexibility and much better safety 
features.
    Mr. Levesque. Absolutely. It will have inherent safety, it 
will be a lower pressure system, it should have a much smaller 
emergency planning zone. And then another major, major benefit 
is, these advanced reactors will run at higher temperatures, 
which will make them more efficient and also more able to 
supply industrial processes.
    Senator Braun. Thank you. Senator Whitehouse.
    Senator Whitehouse. Thanks, Chairman.
    Just to confirm something that I think is probably the 
case, from the testimony and from the body language from my 
last question, do each of you support a price on carbon? 
Director Magwood.
    Mr. Magwood. As I mentioned in my oral remarks, and in the 
written statement, our view is that the markets need to be 
reformed and restructured entirely. Depending on what the 
objectives of the particular country that is reforming its 
markets have in mind, you can shape those markets to accomplish 
those markets what you want. You mentioned economists. This 
particular view of our economists, there is no better way, if 
your objective is to reduce CO2 emissions, there is no better 
way than introducing a cost on carbon.
    Senator Whitehouse. And there are ways to do it fairly, 
that you would want to do?
    Mr. Magwood. Yes.
    Mr. Levesque. We think a broad range of incentives are 
needed, beginning with serious government R&D investment, but 
also including carbon incentives.
    Senator Whitehouse. Including a price on carbon, of some 
kind.
    Mr. Levesque. Correct.
    Mr. Perciasepe. Yes, is the simple answer. It will 
stimulate all the different technologies we need, from carbon 
capture on fossil sources to----
    Senator Whitehouse. We ended with carbon capture. Let me 
focus specifically on that. With respect to carbon capture, in 
a world with a carbon price and a world without a carbon price, 
what is the difference for a carbon capture innovator with 
regard to what they are looking at as a revenue proposition?
    Mr. Perciasepe. Say that again.
    Senator Whitehouse. You have two identical worlds. You have 
the same innovator; you have the same carbon capture 
technology. In one world, there is a carbon price and, in 
another world, there is not. What does that mean for that 
innovator to have or not have a carbon price with respect to 
their prospects for having a revenue proposition? If it is free 
to emit carbon----
    Mr. Perciasepe. Right. That is generally currently free, to 
emit carbon, with some nuances, like what they use in 
California. But what to do with the carbon when you capture it, 
there is a cost of capturing it. Although those technologies 
are evolving quickly, I want to----
    Senator Whitehouse. The point I am trying to ask you about 
is, whether it helps this, in carbon capture innovation, if you 
have a carbon price. Because the existence of the carbon price 
gives an incentive for people to pay for that innovation, which 
gives the innovator a revenue proposition for their business 
plan. Otherwise, you are standing next to the smokestack with 
the carbon going up into the air for free, and you are saying, 
who is going to pay me to take that out of the air, when it is 
free to pollute? Why would that make any sense?
    Mr. Perciasepe. Whatever you are going to do with the 
carbon, if you are, if there is a financial incentive to 
capture it and do something with it, you are going to do it. 
And that is going to stimulate those carbon capture 
technologies to go even faster and innovate and become cheaper.
    Senator Whitehouse. Totally a real success on.
    Mr. Perciasepe. Yes, and it has had, as you know, 
bipartisan support.
    Senator Whitehouse. Yes, with our chairman on this 
committee, on the full committee.
    Mr. Levesque, one of my earliest exposure to TerraPower 
involved a proposition that the technology had the promise of 
allowing us to go back through the currently just sitting there 
nuclear waste stockpiles that we have, for which we no plan, 
and actually be able to utilize that and repurpose it as fuel, 
and turn, as I said in my opening remarks, a liability into an 
asset.
    Is that still a focus of TerraPower? Will it remain a focus 
of TerraPower? Is it a focus of the industry? What can we do to 
help make sure it remains a focus of the next gen, or Gen IV 
industry?
    Mr. Levesque. Senator, you point to a very major capability 
of advanced reactors. Today's reactors only use about 5 percent 
of the fissile material before the reactor has to be shut down 
and the fuel is removed. It is just the way the physics work. 
The advanced reactors, including TerraPower's design, much more 
completely use that fuel.
    Now, TerraPower's designs today plan on using depleted 
uranium, which is the waste product of the enrichment process. 
We can use either depleted uranium or natural uranium to fuel 
the traveling wave reactor.
    However, this entire new family of advanced reactors does 
offer the potential to go and look at spent fuel. Of course, we 
are waiting for the U.S. to develop a geologic repository for 
spent fuel. But advanced nuclear technologies do allow you the 
opportunity to go look at what amount of fissile material is 
remaining in that spent fuel, and is there a way to utilize 
more of it. So that is yet another benefit of advanced 
reactors.
    Senator Whitehouse. If I may make a comment, Mr. Chairman.
    Senator Braun. You may.
    Senator Whitehouse. I know that you come from a very strong 
business background. If we were running United States, 
Incorporated, the liability of all that nuclear waste we have 
stockpiled all around the Country in dozens of sites would show 
up when your auditors came. And when you did your financial 
reporting to your shareholders, they would say, here on the 
debit side of the column is this liability that you have for 
having to deal with this nuclear waste at some point. And if it 
was a $500 million liability, you would have an incentive to 
spend up to $499 million to clean it up.
    But because we are the United States of America, not the 
United States, Incorporated, there is no place where it shows 
up in our balance sheet. So we really don't have that 
persistent economic incentive that a corporation would have to 
deal with it as a national issue.
    There is a bit of a carbon price flavor to the point I am 
trying to make, but this is like the reverse of it. There is 
this liability, and there is no way in which, as I can see it, 
that a TerraPower or somebody else can say, OK, there is a $500 
million problem, that means I can come up with a $200 million 
solution and then we can split the difference, and I will make 
$150 million and my business sense gets motivated, my 
innovation juices start to flow, to solve that problem. 
Instead, it just sits there, and the stuff has sat there for 
decades, and we are waiting for the magic solution to go put it 
into Yucca Mountain or some place. But I don't see that 
happening without a revolt from Nevada.
    So we need, I think there is an economic solution here as 
well. If this was a pure business proposition, there would be a 
lot more energy in solving it. Because there would be this 
account that was dragging on our balance sheet saying, fix me, 
fix me, fix me.
    Senator Braun. Now that there are basically two of us left, 
we are going to go, I think, back and forth with the dialog 
like this. I think that is healthy. So I am going to jump in as 
a business guy.
    You would never--you have a contingent liability, one that 
might occur, this is a liability sitting on the pads. It was 
there at Cook nuclear facility. And how we are going to resolve 
that, I don't know. That discussion has been going on for a lot 
longer than the short time I have been here. That still is 
going to be an issue regardless of what happens with advanced 
technologies.
    So I think that whether you price carbon, what you do with 
that liability that is a real one, both are issues that cloud 
what is going to happen with nuclear energy. The thing that I 
have heard that I like most is that there is new technology 
that is going to address all the inherent disadvantage of 
nuclear. You have processes now that you are able to use 
technology to run them better. You mentioned that. Safety is 
less of a concern, because it is not inherently risky, like the 
old process.
    It begs the question for me, because I think that is valid. 
We have to address it.
    How much of the current cost per kilowatt is built in with 
safety and regulations currently that, now that we know so much 
more now than what we used to know, how much does TerraPower or 
any other business utility that generates electricity through a 
nuclear source, how much per kilowatt is that costing? Does 
that put you inherently less competitive than, say, for 
instance, now, natural gas, which is adding to our carbon 
footprint? Can you tell us roughly what that amounts to?
    Mr. Levesque. I would say that I think many of those 
savings that you are talking about have been realized in the 
last 20 years with our operating plants that have worked on 
power operates, they worked on regulatory reform. As a result, 
what you have seen is the dollars per megawatt hours for the 
plants in the U.S. have decreased from something like 40 plus 
dollars per megawatt hour down to the low 30's.
    So I think many of these benefits have now been realized. 
There is probably not much more potential there to go and get 
savings. I would say the big opportunity, or the mandate now, 
is to move to new technology. There is new technology available 
that we have to go get.
    Senator Braun. What has been forecast to be? How much 
additional savings per megawatt hour? Is that part of the 
equation?
    Mr. Levesque. Absolutely. In general, we believe those 
reactors should be at least 20 percent cheaper than existing 
reactors on operating costs. That is going to vary.
    Senator Braun. Taking it down about four bucks per 
megawatt. Where is natural gas in the other stuff down there?
    Mr. Levesque. Natural gas today is making it very hard for 
any nuclear power plant to compete at a profit, unless it is--
--
    Senator Braun. Unless you are taking it all around carbon.
    Mr. Levesque. Right.
    Senator Braun. Because it is emitting it. So defer to that 
line of question, with all that you need to know in terms of 
certainty and running any business, do you think, now, you are 
in a market, and obviously the least expensive, cleanest fuel 
will run in the long run. Do you think that with what it would 
take to invest in even advanced technologies that you would do 
that as a company, with natural gas out there, being at a lot 
less megawatt hour?
    Mr. Levesque. Yes, absolutely we would. We believe the U.S. 
Government should think strategically about its energy supply 
and natural gas is cheap today. But we need to think decades 
ahead. We think that you absolutely need nuclear and advanced 
nuclear in the mix. We think the economic potential of advanced 
reactors should make nuclear energy even more affordable. And 
some of those technology enablers I mentioned to you, having 
lower pressure systems, having less mechanical and electrical 
systems because they are inherently safe, there is all of these 
technology enablers that should make advanced reactors cheaper 
than today's plants.
    We are just really at a time when we have extracted most of 
the savings that we can get out of the current technology. It 
is time to move to a new technology that is available. And it 
is a new technology that the U.S. is, because of our national 
labs, because of the work we did in the 1960's and 1970's that 
we kind of set aside, the U.S. is really the most well-
positioned country in the world to be the leader in advanced 
nuclear.
    Mr. Perciasepe. Just to add to this business balance, most 
of the industry that works in the natural gas arena has it on 
their mind and in their future planning that there will be more 
cost to them to capture the carbon that comes out of those 
generators. Also of tightening up their system, so methane 
isn't leaking out into the air. So right now, that is not 
priced into the price that is going to me in my house.
    But most of the companies thinking of the future, just like 
the liability issue we were talking about, can advanced 
reactors be part of the solution to spent fuel, most of the 
companies looking ahead at their prices, not so much of getting 
the gas, like has become so efficient with directional drilling 
and hydraulic fracturing, but the other issues that they are 
not currently having to have an expense on.
    So I think that there is where you have to look at, where 
is that business going to be in the future and how they will 
match up with each other, and what incentives the Federal 
Government should be putting in place to make sure they all get 
to the right place, so the consumers are advantaged.
    Mr. Levesque. If I might add, Senator, we look at the 
nuclear industry, we are thinking globally. Natural gas is not 
available at the low cost and at the volumes that we enjoy in 
the U.S. So we are talking about developing advanced reactors 
in the U.S., we are talking about demonstrations of advanced 
nuclear technology that we can prove out in the U.S. and then 
deploy to many other countries that have growing energy demand, 
and that have higher prices on natural gas.
    So we can be very competitive overseas. There will be 
tremendous demand for electricity and industrial heat overseas, 
and advanced nuclear will compete very, very favorably with 
fossil sources.
    Senator Braun. I am going to followup with one more 
question and then let Senator Whitehouse ask the final round 
here. Do you think we can survive, due to the fact that natural 
gas and other competing fuels have higher costs per megawatt 
hour? Can the U.S. industry, since it is a different technology 
that can be exported along the lines of what you are talking 
about? I know that is not ideal, but do you think that is a way 
we can hang in the game while we are trying to get through all 
the issues that currently beset the U.S. nuclear industry? Mr. 
Magwood?
    Mr. Magwood. Senator, I think that as we look through our 
analysis on where nuclear competes and where nuclear doesn't 
compete, the single effect that seems to overwhelm everything 
else is actually the cost of building a nuclear power plant. 
There is no other factor that seems to be affecting nuclear in 
most markets. You can talk about safety, you can talk about 
waste, you can talk about a lot of these other things. But the 
actual cost of building a plan has become a huge barrier, both 
for current generation and I think is going to be a barrier for 
future generations.
    So I think one of the things we have highlighted is that 
there has to be a more cost-effective way to build nuclear 
power plants. I think that the days of expecting ratepayers and 
taxpayers to support facilities that cost ten plus billion 
dollars, those days may very well be over. When I talk to 
utility CEOs, they tell me they don't see big plants being 
built any more. They are emphasizing small plants.
    I think the reason they emphasize the small plants is, this 
doesn't quite fit the TerraPower framework, but I think there 
is a desire to move away from the traditional approach of 
building plants and move to a manufacturing approach, to where 
nuclear power plants look more like jet airliners. We know how 
to do that. The 787s come off the assembly line by the 
hundreds. It is cost-effective to get an economy scale from 
that. That is where I think industry, in large part, would like 
to move toward.
    If you can do that, become more cost-effective, I think 
there is a chance for nuclear to compete in a broader range of 
markets. As it is right now, it just simply costs too much. I 
will relate what I heard from a minister of an eastern European 
country, who told me that it doesn't really matter how good the 
technology is, if I can't afford to build it.
    Senator Braun. Senator Whitehouse.
    Senator Whitehouse. Thanks, Chairman.
    Director Magwood, in my opening comments I mentioned the 
NRC's behavior around what they called the mitigation of 
beyond-design basis events rule to address earthquake, flood, 
things like that. As I recall, you were a commissioner when 
this was first brought up.
    It seems peculiar to Ranking Member Carper and myself, as 
our letter reflects, that without any comments in the 
regulatory process supporting these rules being merely 
voluntary, and without a staff recommendation that the rules 
should be voluntary, without testimony that the rules should be 
voluntary, it seems like there was full agreement, everybody on 
course, for the rule to be a mandatory rule, which also makes 
sense, to me, anyway, when you are considering the risks 
involved.
    So it came as kind of a stunning surprise that there was a 
partisan opinion that emerged out of the NRC on this issue, and 
it is particularly disturbing to me when you are seeing this 
happen on a topic where we have managed to achieve 
bipartisanship here in the EPW committee and here in the 
Senate. I mean, for Pete's sake, if there's any body that is 
supposed to be partisan, it is us, not a bunch of nuclear 
regulatory commissioners.
    So when we can solve our problems and make progress with 
these two nuclear innovation bills and get them passed, and 
then we see the commission divided along partisan lines and 
doing something that, to me, from a regulatory process point of 
view, makes no sense, it just seems odd. I wonder if you, I 
know you weren't there when it ended, but you were there when 
it began. Does your experience as a commissioner give you any 
insight into what we should be looking for or what was up with 
that?
    Mr. Magwood. Let me share this thought. And I am aware of 
the discussion about the mitigating strategies rule, as you 
mentioned. A lot of this got started when I was on the 
commission. I think it is important to emphasize that the 
orders that were issued by the NRC in the years after the 
accident in Japan put in place a framework of safety to make 
sure that plants had been brought up the standards the 
commission saw as necessary to protect safety across the 
Country. So I don't think that there is a safety issue at play 
as we stand today.
    The process with rules is such that, and I can tell you, 
there were certainly cases where the staff made recommendations 
to the commission and some commissioners just simply didn't 
agree. That is what commissioners are there for. That is why 
they go through the process of confirmation, because you are 
looking for their expertise and their judgment. Sometimes we 
don't agree with the staff.
    I can tell you there are cases where, in the post-Fukushima 
environment, I will give you a very specific example that left 
a lot of hard feelings with people, and that was the discussion 
about whether we should require filtered venting on Mark II 
reactors. This was a big debate on the commission. The staff 
recommended it, three commissioners just didn't believe it was 
necessary, two did. And it was a big debate about that.
    When I was on the commission, we just did not look at this 
in a partisan way. Sometimes it came out that way, and I think 
regulatory philosophy reflects that. But in large respect, the 
discussions that I have had on the commission never really 
broke down along those lines. It is unfortunate that this 
particular issue seems to have gotten that kind of play in the 
press.
    But my view is that there is an honest debate that takes 
place on a commission. There is voting that takes place. And if 
three commissioners agree, that is the direction it goes. 
Whether it is three commissioners who are Republicans or three 
commissioners who are Democrats, that is the way the process 
works. I think that is a healthy process, because that debate, 
often you learn things from even the colleagues you disagree 
with that ends up in the final package.
    So I know the commissioners, I think they are all people 
who are trying to do the right thing. I have met all of them 
and I have talked with all of them. We don't often agree on 
things, that is part of the process. But I think they are all 
people who care about safety and are trying to do what is best 
for the American people.
    Senator Whitehouse. OK. Thank you for sharing that.
    Mr. Chairman, I have nothing further. Thank you for this 
hearing.
    Senator Braun. Thank you for testifying. It was a good, 
robust conversation, and I think we all want to make sure what 
we have invested in nuclear energy up to this point is not 
lost. We don't want our world competitors to outpace us at this 
moment in time. We do want to decarbonize electric generation.
    So hopefully we will have more discussions like it, and 
thank you again for coming. Any member that would want to add 
to it can submit followup questions for the record. The record 
will be open for 2 weeks.
    Thanks again for coming. This hearing is adjourned.
    [Whereupon at 12:50 p.m., the hearing was adjourned.]

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