[Congressional Record (Bound Edition), Volume 148 (2002), Part 8]
[Senate]
[Page 11013]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       RUSSIAN URANIUM AGREEMENT

  Mr. BINGAMAN. Mr. President, both the Department of Energy and the 
Department of State have made important announcements this week 
relating to the so-called ``Russian HEU Agreement.'' This agreement is 
not widely known, but it is enormously important to our national 
security, and I would like to take this opportunity to call it to the 
attention of the Senate.
  Under the HEU Agreement, the Russian Federation is converting 500 
metric tons of highly enriched uranium from dismantled nuclear weapons 
into low-enriched uranium fuel for nuclear power plants. The United 
States then buys the low-enriched uranium for nuclear power plants in 
this country to use to generate electricity.
  The benefits of this program, which is sometimes called the 
``megatons to megawatts program,'' are obvious. Nuclear weapons 
scrapped under the program can never be used against us. Weapons-grade 
uranium blended down and consumed in power plants can never fall into 
the hands of terrorists or rogue states.
  The United States and Russia entered into the HEU Agreement in 1993. 
The program will neutralize the equivalent of 20,000 nuclear warheads 
over its 20-year life. More than 150 metric tons of highly enriched 
uranium, the equivalent of nearly 6,000 nuclear warheads, have already 
been converted into low-enriched reactor fuel. Another 350 metric tons, 
the equivalent of 14,000 more warheads, are slated to be converted over 
the remaining 12 years.
  Although the Russian HEU Agreement is a government-to-government 
agreement, it is being implemented for the Russian Federation by Tenex 
and for the United States by USEC Inc. USEC was originally established 
by the Energy Policy Act of 1992 to run the Department of Energy's 
uranium enrichment plants as a business. When the Russian HEU Agreement 
was first executed, USEC was wholly owned by the United States 
Government and it was tapped to implement the agreement as the 
Government's ``executive agent.'' In 1998, the Government sold USEC to 
private investors pursuant to the USEC Privatization Act, but retained 
the private company as its executive agent for the Russian HEU program.
  Remarkably, USEC is able to conduct the Russian HEU program without 
cost to the Government. USEC pays the Russians for the uranium, and 
recovers its costs when it resells the uranium to nuclear utilities. 
The price paid by USEC was originally set in the HEU Agreement and has 
since been subject to negotiation between the parties.
  Some time ago, USEC and Tenex reached an agreement on a new market-
based mechanism for determining the price USEC will pay Russia for 
future deliveries. Yesterday, the State Department announced that the 
Governments of the United States and the Russian Federation have 
approved the new pricing mechanism.
  The new pricing mechanism puts the program on a more commercial 
basis. It does away with the need for the two governments to 
renegotiate the price periodically. By basing the price on market 
conditions, the new mechanism provides a more stable and predictable 
procedure for determining future prices and should help ensure the 
long-term success of the program.
  In addition, this past Tuesday, the Department of Energy announced 
that it had signed an agreement with USEC that resolves a number of 
issues between them. Earlier, there had been talk of the Government 
replacing USEC as its executive agent under the Russian HEU deal or 
appointing multiple agents. Under the accord announced on Tuesday, the 
Department of Energy agreed to recommend that USEC continue to serve as 
the Government's sole executive agent, and USEC committed to meeting 
the annual delivery schedules in the Russian HEU agreement over the 
remaining years of the agreement.
  The Russian HEU Agreement serves us well. Each Russian warhead that 
is dismantled and each ton of weapons-grade uranium that is converted 
to commercial reactor fuel reduces the risk of nuclear proliferation 
and enhances our security. USEC has made great progress implementing 
the program over the past 8 years. The two announcements made this week 
give us hope for further progress in the years ahead.

                          ____________________