U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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

41–798PS 2008

OPPORTUNITIES AND CHALLENGES

FOR NUCLEAR POWER

HEARING

BEFORE THE

COMMITTEE ON SCIENCE AND

TECHNOLOGY

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

APRIL 23, 2008

Serial No. 110–94

Printed for the use of the Committee on Science and Technology

(

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

(II)

COMMITTEE ON SCIENCE AND TECHNOLOGY

HON. BART GORDON, Tennessee, Chairman

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

LYNN C. WOOLSEY, California

MARK UDALL, Colorado

DAVID WU, Oregon

BRIAN BAIRD, Washington

BRAD MILLER, North Carolina

DANIEL LIPINSKI, Illinois

NICK LAMPSON, Texas

GABRIELLE GIFFORDS, Arizona

JERRY MCNERNEY, California

LAURA RICHARDSON, California

PAUL KANJORSKI, Pennsylvania

DARLENE HOOLEY, Oregon

STEVEN R. ROTHMAN, New Jersey

JIM MATHESON, Utah

MIKE ROSS, Arkansas

BEN CHANDLER, Kentucky

RUSS CARNAHAN, Missouri

CHARLIE MELANCON, Louisiana

BARON P. HILL, Indiana

HARRY E. MITCHELL, Arizona

CHARLES A. WILSON, Ohio

RALPH M. HALL, Texas

F. JAMES SENSENBRENNER JR.,

Wisconsin

LAMAR S. SMITH, Texas

DANA ROHRABACHER, California

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

FRANK D. LUCAS, Oklahoma

JUDY BIGGERT, Illinois

W. TODD AKIN, Missouri

TOM FEENEY, Florida

RANDY NEUGEBAUER, Texas

BOB INGLIS, South Carolina

DAVID G. REICHERT, Washington

MICHAEL T. MCCAUL, Texas

MARIO DIAZ-BALART, Florida

PHIL GINGREY, Georgia

BRIAN P. BILBRAY, California

ADRIAN SMITH, Nebraska

PAUL C. BROUN, Georgia

VACANCY

(III)

C O N T E N T S

April 23, 2008

Page

Witness List ............................................................................................................. 2

Hearing Charter ...................................................................................................... 3

Opening Statements

Statement by Representative Bart Gordon, Chairman, Committee on Science

and Technology, U.S. House of Representatives ............................................... 6

Written Statement ............................................................................................ 7

Prepared Statement by Representative Ralph M. Hall, Minority Ranking

Member, Committee on Science and Technology, U.S. House of Representatives ....................................................................................................................... 9

Prepared Statement by Representative Jerry F. Costello, Member, Committee

on Science and Technology, U.S. House of Representatives ............................. 10

Prepared Statement by Representative Eddie Bernice Johnson, Member, Committee on Science and Technology, U.S. House of Representatives ................. 10

Prepared Statement by Representative Laura Richardson, Member, Committee on Science and Technology, U.S. House of Representatives ................. 11

Prepared Statement by Representative Russ Carnahan, Member, Committee

on Science and Technology, U.S. House of Representatives ............................. 11

Prepared Statement by Representative Harry E. Mitchell, Member, Committee on Science and Technology, U.S. House of Representatives ................. 11

Statement by Representative Brian P. Bilbray, Member, Committee on

Science and Technology, U.S. House of Representatives .................................. 7

Written Statement ............................................................................................ 8

Prepared Statement by Representative Adrian Smith, Member, Committee

on Science and Technology, U.S. House of Representatives ............................. 12

Witnesses:

Ms. Marilyn C. Kray, Vice President, Exelon Nuclear; President, NuStart

Energy Development

Oral Statement ................................................................................................. 13

Written Statement ............................................................................................ 15

Biography .......................................................................................................... 19

Mr. Robert Van Namen, Senior Vice President, Uranium Enrichment, United

States Enrichment Corporation Inc.

Oral Statement ................................................................................................. 20

Written Statement ............................................................................................ 22

Biography .......................................................................................................... 24

Mr. James K. Asselstine, Managing Director (Retired), Lehman Brothers;

Former Commissioner, Nuclear Regulatory Commission

Oral Statement ................................................................................................. 25

Written Statement ............................................................................................ 27

Biography .......................................................................................................... 30

Dr. Thomas B. Cochran, Senior Scientist, Nuclear Program, National Resources Defense Council, Inc.

Oral Statement ................................................................................................. 30

Written Statement ............................................................................................ 32

Biography .......................................................................................................... 41

Page

IV

Mr. Robert W. Fri, Visiting Scholar, Resources for the Future; Chair, Committee on Review of DOE’s Nuclear Energy Research and Development

Program, Board on Energy and Environmental Systems, National Research

Council

Oral Statement ................................................................................................. 42

Written Statement ............................................................................................ 43

Biography .......................................................................................................... 48

Vice Admiral John J. Grossenbacher, Director, Idaho National Laboratory,

U.S. Department of Energy

Oral Statement ................................................................................................. 48

Written Statement ............................................................................................ 50

Biography .......................................................................................................... 54

Discussion

The Global/Nuclear Energy Partnership (GNEP) ............................................. 54

Environmental Challenges .................................................................................. 57

Economics of Nuclear Power ............................................................................... 59

Nuclear Waste, Safety and Training .................................................................. 61

Low Public Confidence in Nuclear Energy ........................................................ 62

Reprocessing Spent Nuclear Fuel ....................................................................... 64

The Role of Federal Subsidies ............................................................................. 66

Yucca Mountain and Waste Storage .................................................................. 68

Making Nuclear Cost-Competitive ...................................................................... 70

Domestic Uranium Supplies ................................................................................ 71

On-site Waste Storage ......................................................................................... 71

High Temperature Gas-Cooled Reactors ............................................................ 73

The Future of Nuclear Technology ..................................................................... 76

Regulation and Investment ................................................................................. 78

More on High Temperature Gas-Cooled Reactors ............................................. 79

Appendix: Answers to Post-Hearing Questions

Ms. Marilyn C. Kray, Vice President, Exelon Nuclear; President, NuStart

Energy Development ............................................................................................ 84

Mr. Robert Van Namen, Senior Vice President, Uranium Enrichment, United

States Enrichment Corporation Inc. ................................................................... 86

Mr. James K. Asselstine, Managing Director (Retired), Lehman Brothers;

Former Commissioner, Nuclear Regulatory Commission ................................. 90

Dr. Thomas B. Cochran, Senior Scientist, Nuclear Program, National Resources Defense Council, Inc. .............................................................................. 93

Mr. Robert W. Fri, Visiting Scholar, Resources for the Future; Chair, Committee on Review of DOE’s Nuclear Energy Research and Development

Program, Board on Energy and Environmental Systems, National Research

Council .................................................................................................................. 96

Vice Admiral John J. Grossenbacher, Director, Idaho National Laboratory,

U.S. Department of Energy ................................................................................. 104

(1)

OPPORTUNITIES AND CHALLENGES FOR

NUCLEAR POWER

WEDNESDAY, APRIL 23, 2008

HOUSE OF REPRESENTATIVES,

COMMITTEE ON SCIENCE AND TECHNOLOGY,

Washington, DC.

The Committee met, pursuant to call, at 10:05 a.m., in Room

2318, Rayburn House Office Building, Hon. Bart Gordon [Chairman of the Committee] presiding.

2

3

HEARING CHARTER

COMMITTEE ON SCIENCE AND TECHNOLOGY

U.S. HOUSE OF REPRESENTATIVES

Opportunities and Challenges

for Nuclear Power

WEDNESDAY, APRIL 23, 2008

10:00 A.M.–12:00 P.M.

2318 RAYBURN HOUSE OFFICE BUILDING

Purpose

On Wednesday, April 23, 2008 the House Committee on Science & Technology will

hold a hearing entitled ‘‘Opportunities and Challenges for Nuclear Power.’’

The Committee’s hearing will explore the potential for nuclear power to provide

an increased proportion of electric generating capacity in the U.S. Nuclear power

generation offers the opportunity for increasing electricity generation without associated increases in greenhouse gas emissions, however, challenges to this expansion

remain including high costs, waste disposal, and concerns about nuclear proliferation issues. The hearing will also examine the Department of Energy’s programs to

support and advance nuclear technologies and their potential to address the challenges associated with expansion of nuclear power generation.

Witnesses

• Mr. Robert Fri is a Visiting Scholar at Resources for the Future, and the

Chair of a recent study conducted by the National Academies on the Department of Energy’s nuclear research and development program. Mr. Fri will testify on the findings of this report.

• Mr. Jim Asselstine is a recently retired Managing Director at Lehman

Brothers, and a former Commissioner of the Nuclear Regulatory Commission.

Mr. Asselstine will testify on the current overall state of financing for new

nuclear power plants.

• Dr. Thomas Cochran is a Senior Scientist in the Nuclear Program at the

National Resources Defense Council (NRDC). Dr. Cochran will explain

NRDC’s position on whether nuclear power merits additional federal support

in comparison to other sources of energy.

• Mr. Robert Van Namen is the Senior Vice President of Uranium Enrichment at USEC. Mr. Van Namen will describe the current status of the domestic uranium enrichment industry, and provide background on advancement of

uranium enrichment technologies.

• Ms. Marilyn Kray is the President of NuStart Energy, and also the Vice

President of Project Development at Exelon Nuclear. Ms. Kray will provide

the perspective of utilities on the ability for nuclear power to significantly increase its share of electric generating capacity in the U.S.

• Vice Admiral John Grossenbacher is the Director of Idaho National Laboratory. Mr. Grossenbacher will testify on DOE’s programs to support and advance nuclear energy.

Background

Nuclear power is derived from energy that is released when relatively large atoms

are split in a series of controlled nuclear reactions. The resulting heat is used to

boil water which drives a steam turbine to generate electricity. The process of splitting an atom is known as nuclear fission. Nuclear power represents approximately

20 percent of the total electric generating capacity in the U.S. with 104 nuclear

plants currently operating. Because they are a low-carbon emitting source of energy

in comparison to fossil fuels, increased use of nuclear power is being proposed by

the Administration and several electric utilities as a way to mitigate climate change

while meeting the Nation’s growing energy needs.

4

Nuclear Waste Storage

There are, however, several drawbacks to the expanded use of nuclear power. Disposal of radioactive waste produced in nuclear power plants has been a significant

issue for decades. While on-site storage has become a default interim solution, the

Nuclear Waste Policy Act of 1982 (NWPA) called for disposal of spent nuclear fuel

in a deep, underground geologic repository. In 1987, amendments to the NWPA restricted DOE’s repository site studies to Yucca Mountain in Nevada. Technical and

legal challenges have since delayed its use until at least 2017. All operating nuclear

power reactors are storing spent fuel in Nuclear Regulatory Commission (NRC)-licensed on-site spent fuel pools. Most reactors were not designed to store the full

amount of the spent fuel generated during their operational life. Currently, there

is over 50,000 metric tons of spent fuel stored in the United States. Earlier this

year, the Administration proposed draft nuclear waste legislation repealing the

70,000 metric ton limit on the amount of waste that can be stored at the repository

at Yucca Mountain. It is expected that the 70,000 metric ton limit would be exceeded by the waste generated from the nuclear plants currently operating in the U.S.

Waste Reprocessing

Reprocessing spent fuel could also eventually be necessary to meet nuclear fuel

demands if worldwide growth meets projected targets. The Administration has proposed a multi-billion dollar federal program called the Global Nuclear Energy Partnership (GNEP) to foster the expansion of nuclear power internationally by having

a select set of nations reprocess nuclear fuel for the rest of the world. GNEP expands upon the Department of Energy’s Advanced Fuel Cycle Initiative, which has

conducted a program of research and development in spent fuel reprocessing since

2002. A second objective of the GNEP program is to reduce the amount of radioactive waste requiring disposal in a geologic repository.

Technologies required to achieve the goals of the GNEP program are not yet fully

developed and tested. Therefore further research is required before the facilities necessary to accomplish the intended goals of the program can be constructed and operated. GNEP includes the design and construction of advanced facilities for fuel

treatment, fabrication, and an advanced reactor which raises concerns about the financial risks associated with the program. In addition, reprocessing spent fuel

raises concerns about the potential for proliferation of weapons-grade nuclear materials because existing reprocessing technologies separate plutonium from the spent

fuel. While the plutonium can be recycled into a new fuel for use in nuclear reactors,

as is done in France, it can also be used to make nuclear weapons. DOE has yet

to identify a proliferation-resistant method to achieve this goal.

Nuclear Fuel Supply

The nuclear fuel cycle begins with mining uranium ore, but naturally occurring

uranium does not have enough fissionable uranium to make nuclear fuel for commercial light-water reactors. Therefore, the uranium is first converted to uranium

hexafluoride before it is put through an enrichment process to increase the concentration of the fissionable uranium. Finally, the enriched uranium is fabricated

into fuel appropriate for use in commercial light-water reactors.

The United States’ primary uranium reserves are located in Arizona, Colorado,

Nebraska, New Mexico, Texas, Utah, Washington and Wyoming. According to the

Energy Information Administration, five underground mines and five in-situ mines

were operating in the U.S. in 2006. Much of the world’s uranium supply comes from

Canada and Australia. While the security of uranium supplies is a policy concern,

over-production in the industry’s early years and the United States’ maintenance of

military and civilian stockpiles of uranium have helped to provide confidence that

uranium resources can meet projected demand for multiple decades.

There is one conversion facility operating in the United States in Metropolis, IL.

The expansion of the facility is expected to be completed this year.

The United States Enrichment Corporation (USEC) operates the only uranium enrichment facility in the United States. Commercial enrichment services are also

available in Europe, Russia, and Japan. Recently, four companies announced plans

to develop enrichment capabilities in the U.S. According to March 5, 2008 testimony

in the Senate Energy and Natural Resources Committee by the President of the

Louisiana Energy Services, it is more than a year into construction of an advanced

uranium enrichment plant in New Mexico. In addition, USEC is undertaking the

development of advanced enrichment technology through the American Centrifuge

Plant, which is U.S. technology originally developed by the Department of Energy.

There is an ongoing debate about the ability of the United States to ensure we

maintain a reliable, domestic source of nuclear fuel. A major element of that debate

5

is whether or not an agreement between Russia and the U.S., which limits Russian

fuel imports, will be enforceable. If not, there is concern that Russian fuel would

be imported without limit, potentially jeopardizing the domestic enrichment industry.

Federal Programs to Support Nuclear Energy

Another important issue with nuclear power is cost. The 2003 MIT report The Future of Nuclear Power discusses nuclear power as an energy source which is not economically competitive because nuclear power requires significant government involvement to ensure that safety, proliferation, and waste management challenges

meet policy objectives and regulatory requirements. In addition, the success of nuclear power depends on its ability to compete with other energy production technologies. However, the MIT report points out: ‘‘Nuclear does become more competitive by comparison if the social cost of carbon emissions is internalized, for example

through a carbon tax or equivalent ‘cap and trade’ system.’’

While high oil and gas prices are helping to revive interest in nuclear power and

improve its economic viability, another factor adding to the interest in nuclear

power is the improved performance of existing reactors. However, there is little

doubt that the federal incentives included in the Energy Policy Act of 2005 for the

nuclear power industry make the economics more attractive.

The last order for a new nuclear plant came in 1973, and many in the industry

have expressed that strong federal incentives are necessary to build new plants.

Such incentives authorized within the last three years include: $18.5 billion in loan

guarantee authority for new nuclear plants and $2 billion for uranium enrichment

plants; cost-overrun support of up to $2 billion total for the first six new plants; a

production tax credit of up to $125 million total per year, estimated at 1.8 cents/

kWh during the first eight years of operation for the first six GW of generating capacity; and Nuclear Power 2010, a joint government-industry cost-shared program

to help utilities prepare for a new licensing process.

It is expected that currently authorized loan guarantees will only cover the first

four to six new plants, depending on their size, and utilities will advocate for more

federal loan guarantee authority before building additional plants. In all, nearly 30

applications for new plants are expected to be submitted to the Nuclear Regulatory

Commission by the end of 2009 in order to meet the eligibility criteria for the production tax credit in addition to the other incentives.

The Federal Government provides other indirect financial support for the nuclear

industry as well. While costs to develop the Yucca Mountain site are primarily covered by a fee on nuclear-generated electricity paid into the Nuclear Waste Fund, the

government takes full responsibility for waste storage. Because the project is decades behind schedule, DOE estimates that the U.S. Government has incurred a liability of approximately $7 billion for the department’s failure to begin accepting

spent nuclear fuel from existing commercial plants. The nuclear industry is also

given Price-Anderson liability protection for any accident involving operating reactors. This establishes a no fault insurance-type system in which the first $10 billion

is industry-funded, and any claims above that level would be covered by the Federal

Government. Furthermore, any accelerated development of reprocessing technology,

such as GNEP, may cost the government tens of billions of dollars.

Nuclear Workforce

As advanced technologies transform the energy industry there will be an increased demand for an appropriately skilled workforce to meet its needs. As the energy sector of our economy changes and grows, the nuclear industry faces increasing

competition for engineering talent. In addition to greater demand, the Nuclear Energy Institute’s 2007 nuclear workforce survey estimates that 39 percent of nuclear

utility maintenance workers, 34 percent of radiation protection workers and 27 percent of operations staff may reach retirement eligibility within five years. There is

a general concern that a revival in the nuclear power industry could be hampered

by the availability of the necessary skilled, technical workforce. November 2007 testimony by the Assistant Secretary of Labor underscores the need for creative workforce solutions because energy industry workers are difficult to replace as training

programs were reduced during the downturn of the industry in the late 1980s and

early 1990s. She goes on to state that training programs have not expanded at the

same rate at which the industry is rebounding. The MIT report The Future of Nuclear Power punctuates concerns about workforce development acknowledging that

the nuclear workforce has been aging for more than a decade ‘‘due to lack of new

plant orders and decline of industrial activity.’’

6

Chairman GORDON. This hearing will come to order. Good morning everyone and welcome to today’s hearing on the opportunities

and challenges related to the expansion of our nuclear power industry.

As usual, we have a lot going on this morning, so we will have

Members coming in from their other meetings. Also, you know, this

is being televised, so we have staff and other interested people

watching, so your words will go out broadly, and we are glad you

are here for this very good discussion.

And I would like to welcome our expert panelists, who will share

with us their views about the role of the Federal Government to

advance electricity production from nuclear power and its ability to

help address the pressing problems of climate change. There is no

doubt we are witnessing a renewed interest in nuclear power production overseas and here in the U.S.

Controls of greenhouse gas emissions, federal incentives authorized in the Energy Policy Act of 2005, and higher fossil fuel prices

are all motivating this renewed interest. The Nuclear Regulatory

Commission is anticipating over 30 U.S. applications for new reactors through 2009, and another 150 are planned or proposed globally. Existing nuclear power plants provide approximately 20 percent of our nation’s electricity, and they do so as a carbon, or a low

carbon emitter.

Improvements in performance at our nuclear facilities over the

years have made them a reliable source of baseload electricity.

However, expanded use of nuclear power won’t come without some

major costs. Construction of new nuclear power plants is expensive.

In addition to other issues that need to be considered are the risks

of nuclear weapons proliferation, management of radioactive waste

generated by the nuclear power, and the cost to taxpayers of possible additional federal subsidies to the industry.

The technical challenges of expanded nuclear power production

should be met with an aggressive research and development program. The Administration has been a strong advocate of expanded

financial support for the industry. In my view, support for research

and development to address the challenges associated with expanded nuclear power production is equally important.

I believe that we must maintain a diverse and robust energy production portfolio in the United States. We need reliable and affordable electricity generation to maintain our quality of life, and ensure we remain globally competitive. We must have a strategy that

maintains our economic viability, without turning a blind eye to

the tremendous challenge of climate change. The details of a national climate change program are not very clear, but I believe it

is critical that we have a comprehensive and meaningful technology strategy to ensure we can meet targeted reductions of greenhouse gas emissions in a rapid timeframe.

I look forward to a lively discussion this morning about the potential for nuclear power to provide more of our electricity in the

United States and abroad, and at this time, I would like to yield

to my friend, the distinguished colleague from California, and our,

today’s Ranking Member, for his opening statement.

[The prepared statement of Chairman Gordon follows:]

7

PREPARED STATEMENT OF CHAIRMAN BART GORDON

Good morning and welcome to today’s hearing on the opportunities and challenges

related to expansion of our nuclear power industry.

I would like to welcome our expert panelists who will share with us their views

about the role of the Federal Government to advance electricity production from nuclear power and its ability to help address the pressing problem of climate change.

There is no doubt we are witnessing a renewed interest in nuclear power production overseas and here in the U.S. Controls on greenhouse gas emissions, federal

incentives authorized in the Energy Policy Act of 2005, and higher fossil fuel prices

all are motivating this renewed interest.

The Nuclear Regulatory Commission is anticipating over 30 U.S. applications for

new reactors through 2009 and another 150 are planned or proposed globally.

Existing nuclear power plants provide approximately 20 percent of our nation’s

electricity, and they do so as a low-carbon emitter. Improvements in performance

at our nuclear facilities over the years have made them a reliable source of baseload

electricity.

However, expanded use of nuclear power wouldn’t come without some major costs.

Construction of new nuclear power plants is expensive. In addition, other issues

that need to be considered are the risk of nuclear weapons proliferation, management of radioactive waste generated by nuclear power, and the cost to taxpayers of

possible additional federal subsidies for the industry.

The technical challenges of expanded nuclear power production should be met

with an aggressive research and development program. The Administration has

been a strong advocate of expanded financial support for the industry. In my view,

support for research and development to address the challenges associated with expanded nuclear power production is equally important.

I believe that we must maintain a diverse and robust energy production portfolio

in the United States. We need reliable and affordable electricity generation to maintain our quality of life and ensure we remain globally competitive. We must have

a strategy that maintains our economic viability without turning a blind eye to the

tremendous challenge of climate change.

The details of a national climate change program are not yet clear, but I believe

it is critical that we have a comprehensive and meaningful technology strategy to

ensure we can meet targeted reductions of greenhouse gas emissions in a rapid

timeframe.

Nuclear power may very well play an important part of the climate change solution.

I look forward to a lively discussion this morning about the potential for nuclear

power to provide more of our electricity in the United States and abroad.

Thank you.

Mr. BILBRAY. Thank you, Mr. Chairman. I appreciate this hearing today, and I think that this issue is one that has been waiting

for a long time to have a frank and open discussion about.

Mr. Chairman, nearly a billion people around the world celebrated Earth Day yesterday, or earlier this week, and frankly, you

heard a lot of communication and talk about countless alternatives

for energy. We talked about alternative energy sources such as

wind and the use of hydroelectric, and you can go down the whole

thing. But what is interesting is if you listen to all of the talk,

there was nothing mentioned about nuclear power, as if it was a

black hole that was not allowed to be discussed.

And I think that when we confront the issue that, over the next

25 years, we are going to be confronted with a 30 percent increase

in electricity demand, at a time that is going to potentially increase

CO emissions by 16 percent, when we need to be reducing those

numbers by a dramatic number within the next 30 years.

The fact is, is that if we go down and talk about solar, we talk

about different items on this, the politically correct concept that we

are not allowed to say the N word has to be thrown away. This is

not a dogma. If we want to be truly protective of the environment

and the economy, we have to approach this from a scientific base.

8

This is not a theology. Our global strategy for climate change control has been backed by numerous world leaders and scientific experts. The Executive Secretary of the United Nations Framework

Convention on Climate Change noted, and he said they have never

seen a credible scenario for reducing greenhouse gas emissions that

did not include nuclear power.

Now, we can go back and say that the Intergovernmental Panel

on Climate Change (IPCC), which won the 2007 Nobel Peace Prize,

along with Vice President Gore, noted in their report the need for

nuclear energy. And the IPCC’s Report on Climate Change, the

Fourth Assessment Report of Intergovernmental Panel on Climate

Change, the Panel identified nuclear energy as being a key technology in addressing global change, and in fact, the IPCC reported

that the robust mix of energy sources, including nuclear, are almost certainly to be required if we are going to reach our demands.

So, I just think we need to start off with this right out front, that

let us be willing to say what needs to be said. I just had a meeting

with a colleague that you may remember, Mary Nichols, who used

to be at the EPA, and as a former member of the Air Resources

Board, she is now the Chair of the Air Resources Board for California. California is confronted with the reality that their blanket

abolition against nuclear power has to be revisited, and if they

truly want to address the climate issue, they have got to be brave

enough to step up and address this issue up front. So, I appreciate

the fact that you have been able to have this hearing today.

The United States has not built a new nuclear power plant in 20

years, and this has really been harmful. With all of the concerns

about nuclear, the alternatives are not acceptable, and so, I appreciate the fact that we are able to have this discussion, and hopefully, Mr. Chairman, this will be the beginning of a bipartisan approach. Let us say not how do we abandon a technology that is essential for our future, but how do we work together to make it

work, so that we can save the climate and leave our children and

grandchildren a prosperous future.

And I yield back, Mr. Chairman.

[The prepared statement of Mr. Bilbray follows:]

PREPARED STATEMENT OF REPRESENTATIVE BRIAN P. BILBRAY

Chairman Gordon and Ranking Member Hall, thank you very much for holding

this timely and important hearing on the Opportunities and Challenges for Nuclear

Power. As our nation grapples with an increasing energy demand and the need to

combat global warming, nuclear power must be an option to address these issues.

Mr. Chairman, yesterday nearly a billion people around the world celebrated

Earth Day. All across the television, the Internet, radio and other means of communications we were told of the countless opportunities that alternative energy sources

would have to combating global climate change. There were stories on solar, wind,

hydroelectric and even vegetable oil. But nothing on nuclear power’s promises. Why?

Last month, the Energy Information Agency (EIA) released its outlook for 2008.

EIA indicated that U.S. electricity demand would grow 30 percent between 2006 and

2030. Likewise CO2 emissions are predicted to increase 16 percent from 2006 levels

at a time when it will be essential to decrease them.

While the pain here at home is bad, the worldwide problems associated with increased population growth and energy consumption in developing nations will be

catastrophic. EIA notes that ‘‘total electricity demand in the non-OECD nations is

expected to grow from 2004 to 2030 at an annual rate that is nearly triple the rate

of growth for electricity demand in the OECD.’’ This increased energy demand will

most likely result in increased greenhouse gas emissions and widespread global

warming damage.

9

If we are to combat this looming crisis we will need a mixed bag of solutions.

These will need to include command and control techniques including the use of renewable fuels such as wind and solar power, sequestration of fossil fuels, and most

importantly the use of nuclear technology.

Nuclear energy has all the properties and benefits our world needs to successfully

combat global climate change and meet our energy needs. Nuclear energy is one of

the cleanest energy sources known to mankind. Nuclear energy accounts for 73 percent of the Nation’s clean air generation. In 2005, U.S. nuclear power plants reduced

emissions of nitrogen oxides and sulfur dioxide-pollutants controlled under the

Clean Air Act—by 1.1 million short tons and 3.3 million short tons respectively. The

amount of nitrogen oxide emissions that nuclear plants prevent annually is the

equivalent of taking nearly 55 million passenger cars off the road. Even more striking is in that same year, U.S. nuclear power plants prevented the discharge of 682

million metric tons of carbon dioxide into the atmosphere. This is nearly as much

carbon dioxide as is released from all U.S. passenger cars.

A global strategy of climate change control has been backed by numerous world

leaders and scientific experts. Yvo de Boer, Executive Secretary of the United Nation’s framework Convention on Climate Change noted that he had never seen a

credible scenario for reducing greenhouse gas emissions that did not include nuclear

power. Likewise, the United Nation’s Intergovernmental Panel on Climate Change

(IPCC), which won a 2007 Nobel Prize along with Vice President Al Gore, noted in

their report the need for nuclear energy. In the IPCC’s Fourth Assessment Report,

the panel identifies nuclear energy as a key technology in addressing global climate

change. The report states that a ‘‘robust mix’’ of energy sources, including nuclear

energy, ‘‘will almost certainly be required to meet the growing demand for energy

services, particularly in developing countries.’’

The United States has not built a new nuclear power plant in nearly 20 years.

If we are to truly harness this great technology and solve our environmental problems, we must make a commitment to nuclear research and development as well

as the production of new nuclear facilities.

Chairman GORDON. Thank you, Mr. Bilbray. I hope, as this hearing goes forward, you will let us know how you really feel about

nuclear power.

I ask unanimous consent that all additional opening statements

submitted by Committee Members be included in the record. Without objection.

[The prepared statement of Mr. Hall follows:]

PREPARED STATEMENT OF REPRESENTATIVE RALPH M. HALL

Mr. Chairman, I thank you for holding this hearing today on the very important

issue of nuclear energy. I have always been a supporter of nuclear energy and I am

buoyed by the activity from the utility companies who have submitted applications

to the Nuclear Regulatory Commission to build 33 nuclear plants. I hope that this

truly is the start of the nuclear renaissance in our country.

We are faced as a nation and as citizens of the world with the responsibility of

reducing our carbon dioxide emissions while at the same time providing affordable,

reliable electricity to support our growing cities. There are very few options available to our electricity providers when it comes to emissions-free, reliable base load

power, and in my opinion, nuclear power is at the top of that list if not the only

energy source on that list until coal plants begin using carbon capture and sequestration technology.

I don’t want my words to be misinterpreted to mean that I’m not a supporter of

renewable energy because I am. I believe they definitely have a place in our energy

mix, but I do not believe that they can produce the same amount of energy as reliably and as efficiently as nuclear energy. As an example, it would take 3,000 onemegawatt wind turbines on 150,000 acres of land to provide the same amount of

electricity from one nuclear plant—and that’s if the wind is blowing. The bottom

line is that I think there’s a place for all forms of energy in our current mix and

that nuclear holds a secure place in that line-up.

[The prepared statement of Mr. Costello follows:]

10

PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO

Mr. Chairman, I am pleased that the Committee is pursuing this issue, as the

issue of energy sustainability is one of the most pressing public policy issues on our

agenda.

I believe we need to consider all of the energy resources and technologies available in constructing a comprehensive energy policy that satisfies our energy needs,

reduces our dependence on foreign oil and protects our economy. The debate surrounding nuclear power remains—is it a safe and reliable source of domestic fuel?

The Federal Government’s lack of investment in nuclear technology over the past

decades has changed recently with the Bush Administration’s Global Nuclear Energy Partnership (GNEP) program. I am pleased that the Committee has chosen to

further examine this issue and hear testimony on the merits of federal support in

comparison to other sources of energy.

As we have recently recognized Earth Day, thank you, Mr. Chairman for the timeliness of this hearing. I appreciate the Committee’s efforts to explore the merits of

the array of resources and technologies that can comprise our nation’s energy policy.

I believe the best solution will come from utilizing our domestic resources and investing in technology that will ensure a clean, efficient and diverse energy policy

for our future.

[The prepared statement of Ms. Johnson follows:]

PREPARED STATEMENT OF REPRESENTATIVE EDDIE BERNICE JOHNSON

Thank you, Mr. Chairman. As our nation grapples with major questions regarding

our energy supply, the Science Committee is tasked with major responsibilities.

This committee has the authority to drive federal investments in research and development.

Although it is good to let market forces determine the best practices, when it

comes to energy, federal investments are often needed to spur beginning-stage technologies to market.

According to the Energy Information Administration, in 2004, Texas energy came

primarily from coal.

Forty-eight percent of Texas energy came from natural gas; 39 percent came from

coal; 11 percent came from nuclear; and three percent came from other sources.

In Texas, there are two nuclear facilities: Comanche Peak and South Texas nuclear plants.

My sense is that it is good to approach the energy problem from multiple angles.

Wind, solar and other renewable energy sources are not viable for storage of energy

the way fossil fuel sources are.

However, since Texas has the greatest potential for wind energy, I would like to

see greater investment in that arena.

Nuclear energy is becoming a more economically viable, as the price of oil rises.

Reprocessing research, infrastructure and spent fuel storage issues will be costly to

address.

Most nuclear reactors were not designed to store the full amount of the spent fuel

generated during their operational life. Currently, there is over 50,000 metric tons

of spent fuel stored in this nation.

Another international issue is that reprocessing spent fuel raises concerns about

the potential for proliferation of weapons-grade nuclear materials because existing

reprocessing technologies separate plutonium from the spent fuel.

The high cost of reprocessing technology may cost the government tens of billions

of dollars.

While the plutonium can be recycled into new fuel for use in nuclear reactors, it

can also be used to make nuclear weapons.

The Department of Energy has yet to identify a proliferation-resistant method to

achieve this goal.

On top of all of these factors, I still have safety concerns. Our technical workforce

will need to be trained appropriately.

In summary, I believe that nuclear is a viable option to explore. In France, 100

percent of their energy is derived from nuclear plants.

Let us learn from others’ experiences and invest appropriately to move toward

cleaner and less expensive energy.

Thank you, Mr. Chairman. I yield back.

[The prepared statement of Ms. Richardson follows:]

11

PREPARED STATEMENT OF REPRESENTATIVE LAURA RICHARDSON

Thank you Chairman Gordon for holding this important hearing today, and our

witnesses for your attendance.

There is no doubt in my mind that nuclear energy provides a critical opportunity

for the United States to lessen its dependence on foreign oil. In any city in this

country it is evident, the rising cost of gas is harming the livelihood of everyday

Americans who have to commute to work, and shuttle their children to and from

school. The high price of gasoline is something that we have been dealing with in

my home State of California for some time now. In 2001 the average price of regular

gasoline in California was $1.44 per gallon. Today the average price of gasoline in

my home State of California is $3.82 per gallon. That is an increase of 165 percent.

Unfortunately while the price of gas, and the profit margins of big oil companies

have increased the income of average Americans has not. For reasons that are not

clear to me, this 110th Congress and the current Administration has not been able

to rein in the price of gas. Some argue that it is simply a matter of increased demand from developing nations like India and China. Whatever the reasons may be,

it is obvious to me that the time to explore alternate sources of energy is now.

Therefore I welcome this discussion about the opportunities and challenges for nuclear power. The American people do not want another Three Mile Island type of

incident to occur and expect industry preeminence. Despite the fact that there were

no immediate deaths or injuries to plant workers or members of the nearby community which can be attributed to the accident, the public reaction probably killed the

prospects for nuclear energy for decades to come.

Likewise in a post 9/11 world we must be concerned with the proliferation of enriched uranium, a major component in the step towards developing nuclear weapons. We certainly can not allow our sworn enemies to acquire this technology. With

the likelihood that more facilities will be built, there has to be some assurance that

not only is the facility safe, but the personnel working in these facilities are closely

monitored to prevent the transfer of technologies.

Finally any discussion about nuclear energy/power must address this issue of

what to do with the waste.

I look forward to the testimony of our witnesses, and I hope we can build on this

discussion in order to develop a bipartisan policy approach to nuclear energy.

Mr. Chairman I yield back my time.

[The prepared statement of Mr. Carnahan follows:]

PREPARED STATEMENT OF REPRESENTATIVE RUSS CARNAHAN

Mr. Chairman, thank you for hosting this important hearing on the potential for

nuclear power as a viable energy source. As our country continues to see the consequences of high energy prices, investigating alternative sources may provide a solution.

As consumers continue to face escalating gas prices at the pump, growing heating

and air conditioning bills, and increasing food costs, it is our responsibility as Members of Congress to seek ways in which we can ease these financial burdens. After

personally visiting nuclear power plants in France and witnessing the possibilities

this alternative presents, I believe nuclear power is worth investigating further. The

long-term effects of storing radio-active waste and other possible negative consequences demand that research include attention to these environmental and safety concerns. I look forward to hearing more on the benefits and possible problems

with nuclear power.

Mr. Asselstine and Dr. Cochran, I am interested to hear about the Federal Government’s role in financing new nuclear power plants and whether or not, in your

opinion, this is sufficient. Additionally, I look forward to hearing Mr.

Grossenbacher’s testimony on the Department of Energy’s programs to support and

advance nuclear energy.

I would like to thank today’s witnesses, Mr. Fri, Mr. Asselstine, Dr. Cochran, Mr.

Van Namen, Ms. Kray, and Mr. Grossenbacher, for taking the time to appear before

us. I look forward to hearing your testimonies.

[The prepared statement of Mr. Mitchell follows:]

PREPARED STATEMENT OF REPRESENTATIVE HARRY E. MITCHELL

Thank you, Mr. Chairman.

Yesterday, as we celebrated Earth Day, we were reminded of the importance of

protecting our planet from harmful greenhouse gas emissions.

12

I strongly believe that we must refocus our energy priorities to the production of

alternative sources of energy, like solar power, that will not be harmful to our environment.

Nuclear power generation also has the potential of generating electricity without

increasing greenhouse gas emissions.

However, there are still many obstacles to the expansion of nuclear power generation including high costs, waste disposal, and concerns about nuclear proliferation.

I look forward to hearing from our witnesses on how the Department of Energy’s

nuclear technology programs could address these challenges.

I yield back.

[The prepared statement of Mr. Smith follows:]

PREPARED STATEMENT OF REPRESENTATIVE ADRIAN SMITH

Thank you, Mr. Chairman. The people of Nebraska are ready for expanded energy

options, which includes nuclear power. Nuclear power has been an important energy

generation tool for decades and it is a key component of our future portfolio for energy independence.

I was excited to learn from the written testimony submitted by Mr. Grossenbacher

about one of the next generation nuclear technologies, the High Temperature Gas

Reactor (HTGR) system. The heat generated by HTGR can be coupled with processes to hydrolyze water to produce hydrogen and oxygen, used in fertilizer, chemical, and coal gasification plants. These clean technologies will decrease our dependence on foreign oil and will definitely be beneficial to Nebraska’s rural and agricultural economies.

I am encouraged to learn from the written testimony of several of our witnesses

that recent legislation has reduced regulatory barriers and streamlined the process

for new nuclear plants. There is still room for improvement. Investors must be assured their financial investments will not be destroyed by long delays beyond their

control, such as litigation or regulatory concerns.

I am concerned that several of you mentioned the aging workforce in nuclear

power and the lack of qualified replacements trained in nuclear technologies. We

need to encourage young people to pursue education and careers not just in nuclear

power technologies, but in science, technology, engineering, and mathematics fields

in general. We need more visionary scientists, engineers, entrepreneurs, and investors in a variety of energy generation, storage, and transmission technologies.

I look forward to hearing the testimony of our witnesses.

Thank you, Mr. Chairman, and I look forward to working with you as we look

to the bright future of energy technologies in the United States.

Chairman GORDON. It is now my pleasure to introduce our witnesses this morning. First, Ms. Marilyn Kray is the President of

NuStart Energy, and also, the Vice President of Project Development at Exelon Nuclear. Welcome.

Dr. Robert Van Namen is Senior Vice President of Uranium Enrichment at the United States Enrichment Corporation. Welcome to

you.

Dr. Jim Asselstine is the recently retired Managing Director at

Lehman Brothers, and a former Commissioner of the Nuclear Regulatory Commission. We welcome you.

And Dr. Thomas B. Cochran is the Senior Scientist in the Nuclear Program at the Natural Resources Defense Council. Welcome.

And Dr. Robert Fri is a Visiting Scholar at Resources for the Future, and a Chair of a recent study conducted by the National

Academies on the Department of Energy Nuclear Research and Development Program.

And finally, Dr. Admiral—or Vice Admiral John Grossenbacher

is the Director of the Idaho National Laboratory. I want to compliment our Minority and Majority staff for pulling together an outstanding panel to, I think with diverse views, that will help us

start this process of better understanding the role of nuclear power,

as we move forward.

13

And I would say to the witnesses, you each will have five minutes of your spoken testimony. We want to try to be crisp with

that, but we are not going to cut you off if you have more good

things to say. Your written testimony will be included in the record

for the hearing, and when you complete your testimony, we will

begin the questions. Each Member will have five minutes to question the panel.

So, Ms. Kray, you may begin.

STATEMENT OF MS. MARILYN C. KRAY, VICE PRESIDENT,

EXELON NUCLEAR; PRESIDENT, NUSTART ENERGY DEVELOPMENT

Ms. KRAY. Good morning, Chairman Gordon, Congressman

Bilbray, and Members of the Committee. As mentioned, I am the

Vice President with Exelon Nuclear. Exelon is the largest operator

of nuclear plants in the United States.

I am here today in my role, also, as President of NuStart Energy

Development. The NuStart consortium is comprised of 10 power

companies and two reactor vendors. The consortium was formed in

2004, based on a shared vision, as well as a shared sense of responsibility.

The shared vision was that the nuclear industry would be called

upon at some point in the future to provide additional baseload capacity, and the shared responsibility is that it was our job to take

actions in order to make us ready for that.

The need for nuclear plants arises from a platform of change that

has brought about by both the electricity demand, as well as mentioned, the environmental awareness. You may know the EIA

projects electricity demand to increase by 30 percent by the year

2030. With respect to environmental awareness, nuclear power accounts for 73 percent of the carbon free generation. To put it in

perspective also, the volume of greenhouse gas avoided by the production with nuclear power is approximately equal to 96 percent of

the passenger cars that are on the road today.

Mr. Chairman, I stress that the consideration of additional nuclear is not to the exclusion of any other baseload generation, in

particular, renewable, but rather, it is our attempt to uphold the

current 20 percent contribution that nuclear is making, given the

expected growth in demand. As the title of this hearing suggests,

the opportunities for nuclear plants must be considered along with

the challenges.

My testimony outlines a number of challenges, but in response

to your invitation letter, I would like to address a few of those, including licensing, cost, and also, workforce development. Demonstrating the licensing process is one of the objectives of the

NuStart consortium. To date, there have been nine combined construction and operating license applications submitted to the NRC.

Six of these nine were submitted by NuStart members. NuStart

members plan to submit an additional four applications by the end

of the calendar year.

My observations to date of the licensing process is that it is going

well. However, I caution that we are only a few months into a

multi-year review. There are two aspects of the process, however,

that I believe have yielded the success to date, but more imporVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
14

tantly, will continue in the ongoing success of the process. They

are, first, the commitment to design standardization for the new

fleet of plants, and also, the communication between the NRC staff

and the industry.

You may know one of the components of an application is the

Final Safety Analysis Report. For the two selected technologies by

NuStart, those are the Westinghouse Advanced Passive 100 reactor, and the GE/Hitachi Economic Simplified Boiling Water Reactor, the FSAR is approximately 75 to 80 percent identical for all

applicants of that technology. And although the premise of plant

standardization is operational safety and efficiency, it will greatly

facilitate the NRC’s design-centered review approach, and that is

where the NRC needs to review an issue only one time. That

yields, of course, the regulatory efficiency, and NuStart remains

the optimum forum for this industry coordination.

The other cornerstone of the licensing process is the communication, as I mentioned. Over a year and a half ago, the NRC began

to conduct public workshops, wherein they conveyed their expectations with respect to content of applications. Also during this presubmittal phase, there were numerous public visits by the NRC

staff to the various sites, and also public meetings, again, wherein

we could get ongoing feedback regarding the development of our

application. This continued throughout the sufficiency review, and

we expect that it will continue through the intense safety environmental reviews.

On the next challenge of cost, I offer you my utility perspective,

and that is that any investment in a new plant will only be made

if it is in the best interest to both our shareholders, as well as our

customers. We are not predisposed to nuclear generation. Whether

it is a Board of Directors decision, or that of a state Public Utilities

Commission, a nuclear investment must be proven to be superior

to the other energy alternatives. We are concerned not only with

the initial cost of the plant, but the long-term stability of electricity

rates over the life of the plant. Contrary to what you may hear

from my fellow panelists, I believe government incentives are needed to address our energy investment crisis, and these incentives

must be, must equitably treat each component of the diverse portfolio.

The third area of workforce development, while it is a challenge

to new nuclear plants, it is a tremendous opportunity for students,

workers, and businesses. The nuclear industry needs a wealth of

engineering expertise and skilled labor to design, construct, and operate the next fleet of plants. The industry is taking aggressive action to develop its future workforce. Some of these actions include

outreach efforts with professional societies, developing training programs and partnerships through high schools, unions, apprenticeship programs, community colleges, and universities. Success in

these areas is needed to not only staff the existing fleet, but also,

the fleets of the future.

Lastly, I want to leave you with my outlook for the expansion of

nuclear power, and again, speaking from my utility perspective, I

would characterize it at this point as cautiously optimistic. A few

years ago, the nuclear strategy was to keep the option open, but

now, based on conservative and phased decision-making, we have

15

1Power companies include: DTE Energy, Duke Energy, EDF International North America,

Entergy Nuclear, Exelon Generation, Florida Power and Light, Progress Energy , SCANA,

Southern Company and Tennessee Valley Authority. Reactor vendors include General ElectricHitachi and Westinghouse.

seen the optimism grow, as evidenced by the number of utilities

that have either submitted or declared their intent to submit a license application, the placement of orders for long lead equipment,

and most recently, the actual signing of an engineering procurement and construction agreement.

We thank Congress for its vision, through the Energy Policy Act,

in establishing the framework through which we accomplished

many of these milestones, and I thank the Committee for the interest in the expansion of nuclear power, and the opportunity to appear before you today.

Thank you.

[The prepared statement of Ms. Kray follows:]

PREPARED STATEMENT OF MARILYN C. KRAY

Chairman Gordon, Congressman Hall, Members of the Committee:

Thank you for the opportunity to appear before you today to discuss opportunities

and challenges for nuclear power and to highlight NuStart Energy Development’s

activities to spur new reactor development in the United States. I am Marilyn Kray,

Vice President of Project Development for Exelon Nuclear and President of NuStart

Energy Development.

Exelon Nuclear is the largest owner and operator of commercial nuclear power

plants in the United States. We have 17 reactors at 10 sites in Illinois, Pennsylvania and New Jersey, and we are developing a Combined Construction and Operating License (COL) application for two reactors in Victoria County, Texas.

NuStart is a consortium of 10 power companies and two reactor vendors1 that was

formed in 2004 with two purposes: first, to demonstrate the Nuclear Regulatory

Commission’s never-before-used licensing process to obtain a Combined Construction

and Operating License (COL) for an advanced nuclear power plant; and second, to

complete the design engineering for two advanced reactor technologies, General

Electric’s Economic Simplified Boiling Water Reactor (ESBWR) and Westinghouse’s

Advanced Passive AP–1000. NuStart activities are being funded by the Department

of Energy on a 50/50 cost sharing arrangement under the Nuclear Power 2010 Program.

America’s 104 nuclear power plants generate about 20 percent of our electricity.

In 2007, the nuclear industry generated more electricity than ever before, and we

did it more safely than ever before as evidenced by data on unplanned reactor shutdowns and the industrial safety rate. Bureau of Labor Statistics data show that it

is safer to work in a nuclear plant than to work in the real estate or financial sectors.

Demonstrating the NRC licensing process and completing the engineering for new

reactor designs are critical first steps toward the construction of a new generation

of reactors in the United States. To date, individual NuStart member companies

have submitted six COL applications to the NRC for their review and another four

are planned for submittal by the end of 2008. We anticipate that the Commission

will complete its review of certain applications as early as 2011, allowing a company

or consortium of companies to begin construction of a new reactor with the hope of

having a plant begin operation by 2017.

Opportunities

As power producers strike to maintain a reliable supply of clean, safe and economic electricity to sustain our economy, there are three primary trends that create

opportunities for nuclear power to play an increasing role in meeting our nation’s

energy needs: first, increasing demand for baseload electric generation; second, increasing fuel costs for conventional sources of electricity; and third, the likelihood

of limits on greenhouse gas emissions from power plants.

16

Increased Demand for Electricity

Even with aggressive efforts to increase energy efficiency and conservation, demand for baseload electricity both in the United States and around the world is expected to increase significantly over the next two decades.

The Energy Information Administration’s Annual Energy Outlook for 2008

projects that electricity demand will increase by 30 percent by 2030. EIA’s International Energy Outlook for 2007 predicts even higher growth worldwide. Much of

the increased demand in the U.S. will be for base load power and will occur in regions of the country currently served by companies with nuclear experience.

To help meet this anticipated demand, nine companies, including the six NuStart

members mentioned earlier, have submitted applications for combined operating licenses with the Nuclear Regulatory Commission for 15 units. As many as 10 additional applications for 16 or more new units are possible at the NRC this year.

Increasing Fuel Prices

Increased worldwide demand has led to steep rises in fuel costs for power plants

since 2000, with coal prices increasing over 250 percent; natural gas prices rising

over 300 percent; oil prices growing over 400 percent; and uranium prices up nearly

1,000 percent from their all-time low. Although nuclear fuel prices have risen more

than other fuels, the price of uranium remains relatively low, and nuclear fuel accounts for a small portion of operating and maintenance costs compared to fossilfired plants. As a result, these fuel price increased have made nuclear more attractive.

The volatility of fuel prices also makes nuclear energy more attractive than fossilfired plants. In approving FPL’s recent proposal for two nuclear reactors at the Turkey Point site, the Florida Public Service Commission found that building nuclear

plants instead of natural gas plants would save Florida utility customers over $94

billion in fuel costs alone over the life of the plants.

Limits on Greenhouse Gas Emissions

While some may disagree about the science of climate change, we at Exelon are

convinced that there is a need to take action now to slow, stop and then reduce

human-caused greenhouse gas emissions to address climate change. If policy-makers

take action to reduce greenhouse gas emissions, nuclear power will play a critical

role in helping meet that policy objective.

Nuclear power has played a vital role in reducing greenhouse gas emissions. Nationally, nuclear power plants account for 73 percent of all carbon-free generation.

In 2006, the volume of greenhouse gas emissions prevented by nuclear plants was

the equivalent of taking 96 percent of all passenger cars off the road. During the

last year alone, Exelon Nuclear prevented 121 million metric tons of carbon dioxide

by eliminating the need for an equivalent amount of coal-based generation.

While nuclear power will not serve as a ‘‘silver bullet’’ solution to the climate

issue, policy-makers are increasingly recognizing that it will be exceedingly difficult—if not impossible—to reduce emissions without nuclear power. New York

Mayor Michael Bloomberg’s PlaNYC, the Regional Greenhouse Gas Initiative, and

most recently the State of New Jersey’s Energy Master Plan have all recognized

that nuclear plants must continue to operate if their environmental objectives are

to be met.

Challenges

In addition to a demonstrated need for new base load power, the nuclear industry

has identified six preconditions to the construction of new nuclear plants:

• a demonstrated regulatory process

• completion of reactor designs for passive technologies

• confidence in a long-term solution for used fuel disposal

• public confidence in nuclear power

• a sound nuclear power infrastructure

• acceptable financial returns

I would like to touch briefly on each of these issues.

Demonstration of Regulatory Process

As noted above, one of NuStart’s primary objectives is to demonstrate the Nuclear

Regulatory Commission’s never-before-used licensing process to obtain a Combined

Construction and Operating License (COL) for an advanced nuclear power plant.

17

Obtaining a COL is a critical step in a potential renaissance of the nuclear power

industry in the United States. By achieving this, NuStart hopes to demonstrate that

the COL can be obtained on schedule and within budget, and that advanced plant

designs can be approved.

Further, NuStart’s efforts will provide a realistic time and cost estimate for building and operating a new nuclear plant in today’s environment.

During the 1980s, nuclear plants were plagued with significant cost overruns due

in large part to the regulatory uncertainty inherent in the NRC licensing process.

Many major issues were argued and litigated only after plants had been constructed, in some cases delaying plant operations for years.

Congress took an important step to reform the licensing process as part of the Energy Policy Act of 1992 with the codification of the NRC’s combined Construction

and Operating License regulations under 10 CFR Part 52. The COL process is designed to provide all parties with an opportunity to raise issues related to siting and

plant design before a license is granted. Once a plant is built, the only question before the Commission is whether the licensee has constructed the plant in conformance with its license. On paper the process appears to be sound; however, investor

confidence will not be established until the process is demonstrated, as proposed

under the NuStart project.

The new licensing process also gives potential licensees an opportunity to have

sites pre-approved by the Commission. The Early Site Permit (ESP) process allows

a potential licensee to apply to the Commission for approval of a site for a new nuclear plant. Companies provide the NRC with extensive data on the proposed site,

as well as information about the reactor design that could be built on the site. If

a site is approved, a company can ‘‘bank’’ the site for as long as 20 years.

Also under the Department of Energy’s Nuclear Power 2010 program, three companies received matching funds to develop and submit Early Site Permit applications to the NRC: Dominion’s North Anna site in Virginia, Entergy’s Grand Gulf site

in Mississippi, and Exelon’s Clinton Power Station in Illinois.

NuStart’s experience with the licensing process has been positive to date. Much

of the success to date is attributable to the communication between the NRC staff

and the industry. The communication examples include the numerous workshops

conducted by the staff to convey their expectations regarding COLA content, the frequent pre-application visits and meetings and the frequent interaction during the

sufficiency reviews of the applications. Also of note is the implementation of the design-centered working group concept whereby each applicant consistently presents

the standard design for a particular technology in their respective COLA allowing

for efficiency in the NRC review process. The NuStart consortium serves as an optimum forum for such industry coordination, both before and during the NRC review

process.

Completion of Reactor Designs for Passive Technologies

Another aspect of the revised NRC licensing regulations allows reactor vendors

to submit designs to the NRC for Design Certification. This process allows the NRC

to evaluate potential designs and allows for public participation in the certification

process. Once a design is certified by the Commission, it can be paired with an

Early Site Permit and used in the submission of a Construction and Operating License.

NuStart plans to complete the design engineering for two advanced reactor technologies, General Electric’s ESBWR and Westinghouse’s AP–1000. NuStart selected

these technologies because they represent the optimization of operational confidence

and innovation. They are natural evolutions of the designs currently in operation,

yet both of these technologies adopt simplified design features and technology improvements that rely on inherent, passive safety systems. In this context, ‘‘passive’’

refers to design principles wherein laws of nature such as gravity feed, convective

heat transfer and natural circulation are used in place of complex systems comprised of numerous pumps, valves and actuation devices. The result is an enhancement to safety because there is less reliance on equipment performance and operator action, and a reduction in cost because there is less equipment to construct and

maintain.

NuStart’s work with the reactor vendors to complete the one-time generic engineering work necessary for the standardized plant designs will position these technologies for deployment when needed, thereby significantly reducing the time to

market for a new nuclear plant.

18

A Long-Term Solution for Used Fuel Disposal

While nuclear energy has a proven track record in the United States as a clean,

economic and reliable source of energy, used fuel from nuclear plants must be managed to permanently isolate it from the environment.

Before new plants can be built, energy companies, investors and the public must

be confident that there is a long-term solution for the disposal of used nuclear fuel.

While individual companies may have different views on what constitutes an acceptable solution, it is essential that the Federal Government continue to make progress

on meeting its statutory and contractual obligation to begin removing used fuel from

reactor sites.

In 1982, the Federal Government codified its obligation to assure for the permanent disposal of high-level radioactive waste and used nuclear fuel. In 2002, Congress upheld President George W. Bush’s designation of Yucca Mountain, Nevada,

as the site for the Nation’s permanent, deep geologic repository. While the Yucca

Mountain project faces a number of challenges, the industry, policy-makers and regulators have recognized that used fuel can be safely stored on-site for 100 years or

more. Given the uncertainties surrounding the Yucca Mountain program and the fact

that used fuel can be safely stored at reactors sites for several decades, policy-makers are examining the possibility of recycling the fuel to harvest the vast quantities

of usable material that remain in the fuel and to minimize the volume of the waste

product that must be permanently isolated from the environment.

Public Confidence in Nuclear Power

New nuclear power plants cannot be built without a high degree of public confidence in the safety of the technology, the competence and commitment of reactor

operators, and the dedication of regulators. The industry recognizes that public confidence is based on the performance of our current fleet of plants. We must remain

ever vigilant to the safety responsibility entrusted to us.

Public awareness of nuclear energy’s positive contribution to energy independence,

clean air, and a reliable, low-cost energy supply, has led to greater support in recent

years. The nuclear industry’s commitment to safe operations and its proven track

record over the last 25 years have also reinforced public support for nuclear technology.

The nuclear industry’s continued strong operating record has led to increased public confidence. In 2007, the industry’s median unit capability factor was 91.5 percent, the eighth consecutive year that capability factors have exceeded 90 percent.

A related metric, capacity factor, a measure of total power generated as a percentage of design production, was a record high 91.8 percent in 2007. The Nuclear Energy Institute reported that this record capacity factor, along with other sector-leading nuclear industry indicators, led to U.S. nuclear power plants producing a recordhigh 806 billion kilowatt-hours (kwh) of electricity in 2007.

A nationwide poll conducted earlier this month for the Nuclear Energy Institute

found 63 percent of those surveyed favor nuclear energy. While 59 percent agreed

that the country should definitely build new plants, 71 percent believe that plants

are safe and secure.

Nuclear Power Infrastructure

A critical challenge for the nuclear industry is the continued presence of a strong

nuclear power infrastructure. This infrastructure includes the engineering expertise

and skilled labor to design, construct, and operate plants; the existence of a strong

educational network at the Nation’s colleges and universities; and the presence of

knowledgeable and dedicated personnel to staff the Nuclear Regulatory Commission.

The lull in the construction of new nuclear power plants in the 1990s led to a decrease in the number of nuclear engineering students in American universities. As

with many other businesses, the nuclear industry faces an aging workforce. If the

commercial nuclear power industry in the United States is to expand, it is imperative that the Nation has a skilled workforce that is ready to construct, operate, and

support new plants.

The limited availability of a skilled workforce is not unique to the nuclear industry. It affects the entire energy sector as well as the manufacturing sector. The commercial nuclear industry is taking aggressive action to develop its future work force.

The industry has been pursuing a variety of initiatives to increase career awareness

through direct outreach efforts with professional societies and through the Internet

and other media.

The industry has also developed training programs and partnerships through high

schools, union apprenticeship programs, skills centers, community colleges and uniVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
19

versities, and we provide financial support and scholarships to students and is actively developing and engaging regional and state-based work force development

partnerships.

To help American workers prepare for careers in the nuclear industry, we are taking steps to raise awareness of the impending skilled craft labor shortage and its

impact on the energy sector; elevate the image, status and prestige of skilled craft

careers; attract, recruit and train workers, particularly from untapped and underrepresented labor pools; align investments and work force development initiatives

to ensure collaboration and coordination of government, industry and labor efforts

in the develop the energy skilled trades work force; build partnerships between industry, government, organized labor and the education community that promote talent and economic development; and implement performance-based education and

training programs for skilled craft workers through vocational and technical education programs in secondary and post-secondary educational environments (including high schools, pre-apprentice, apprenticeship, and community college programs).

Acceptable Financial Returns

As a final prerequisite for new plant construction, companies will have to be confident that they can provide their shareholders with an acceptable financial return

on their investment and that they can provide to their customers affordable and reliable electricity. Any investment in nuclear power must look attractive not only on

an absolute basis, but superior to other fuel alternatives.

While the industry is optimistic that nuclear generation can be competitive to the

other alternatives, it does expect that the ‘‘first mover’’ investors will face significant

hurdles unique to a nuclear investment. Accordingly, financial incentives such as

those provided for in the Energy Policy Act of 2005 are both necessary and appreciated.

The Energy Policy Act established three incentives for new nuclear plant deployment: a production tax credit for up to 6,000 MW of new plant capacity, standby

insurance in the event of regulatory delay for the first six units, and the Title XVII

loan guarantee that allows support for any advanced energy technology that ‘‘avoid,

reduce, or sequester’’ greenhouse gas emissions.

These incentives are necessary for the first series of plants built employing advanced technologies under a never-before used licensing process. The new regulatory

process must be proven before investors will have the confidence necessary to invest

in these new technologies. Such a cooperative industry/government financing program for the first plants is a necessary and appropriate investment in U.S. energy

security.

Conclusion

Trends in worldwide energy use, increases in fossil fuel costs, and the need to

limit greenhouse gas emissions present the nuclear industry with the opportunity

to play an increasing role in meeting our increasing need for electricity. While there

are a number of challenges to realizing the full potential of nuclear power, I am confident that those challenges can be successfully managed.

Thank you for the opportunity to appear before you today.

BIOGRAPHY FOR MARILYN C. KRAY

Marilyn C. Kray is the Vice President, Project Development for Exelon Nuclear.

In this capacity, she is responsible for generic licensing and engineering activities

related to advanced nuclear reactors. She also serves as President of NuStart Energy Development, LLC an industry consortium formed to pursue a Combined Operating License for a new nuclear plant in the U.S.

Prior to this assignment, Mrs. Kray was the Vice President of Nuclear Acquisition

Support and Integration. In this role, she pioneered the internal processes for due

diligence and plant transitions by successfully completing the purchases of three nuclear plants: Three Mile Island, Clinton and Oyster Creek. Mrs. Kray served a twoyear rotational assignment in the Customer Service organization where she was the

department’s lead for the development of the deregulation pilot program to implement customer choice. She began her career with Exelon in the licensing organization for Peach Bottom Atomic Power Station. Prior to that, she was a Reactor Engineer and a Project Manager for the U.S. Nuclear Regulatory Commission (USNRC).

Mrs. Kray is a graduate of Carnegie-Mellon University, with a Bachelor of Science

degree in Chemical Engineering. Through completion of extensive simulator and

training courses, she was certified by the USNRC to perform power operations inspections at nuclear reactor facilities. She has served in leadership roles as the

20

Company representative to various industry groups including the Nuclear Energy

Institute and the Electric Power Research Institute. She is the 2005 recipient of the

World Nuclear Association award for ‘‘Distinguished Contribution to the Peaceful

Use of Nuclear Technology,’’ and in 2007 received the American Nuclear Society’s

Utility Leadership Award. She is an active volunteer in community organizations,

including serving as President of the Home and School association and referee for

the Phoenixville YMCA basketball program.

Chairman GORDON. Thank you. And Mr. Van Namen.

STATEMENT OF MR. ROBERT VAN NAMEN, SENIOR VICE

PRESIDENT, URANIUM ENRICHMENT, UNITED STATES ENRICHMENT CORPORATION INC.

Mr. VAN NAMEN. Good morning. My name is Robert Van Namen,

and I am the Senior Vice President, Uranium Enrichment, for

USEC Inc., a leading supplier of nuclear fuel for commercial nuclear power plants. Thank you, Chairman Gordon, Congressman

Bilbray, and Members of the Committee, for inviting me to testify.

Today’s nuclear fuel supply is in transition. While in better

shape than a decade ago, much remains to be done to support the

expansion of nuclear power. Domestic companies constructing new

facilities face stiff competition in a market dominated by foreign,

vertically integrated firms.

As we increase our capacity, U.S. companies need the assurance

that their investment of resources will receive the support necessary to revive the industry to a self-sustaining position. Unless

we take steps now, we will lose our ability to affect nuclear’s future

expansion and use.

Let us start with mining and milling of natural uranium. Since

1994, domestic sources have provided about 18 percent of the uranium purchased by U.S. reactors. Since 2003, the price of uranium

has risen from $10 a pound to more than $95 a pound for long-term

contracts. At this price, domestic miners have begun to expand or

restart existing mines. While it is unlikely we would ever be able

to supply all of our needs with domestic production, the countries

with the greatest uranium reserves are close allies. The Department of Energy also maintains a large inventory of uranium in various forms.

The second step of the fuel cycle is conversion of natural uranium to uranium hexafluoride. The lone U.S. supplier of conversion, the Converdyn plant in Illinois, has recently expanded, and

can now meet about 80 percent of U.S. demand.

After conversion, the uranium must be enriched to raise the concentration of the fissionable isotope, Uranium-235. The United

States has one operating uranium enrichment plant, the Paducah

Gaseous Diffusion Plant in Kentucky, which USEC operates under

lease from DOE.

Domestic supplies come from three major sources, the Paducah

plant, about 12 percent, the Megatons to Megawatts program,

where USEC supplies about 43 percent of the market from LEU,

blended down from Russian nuclear warhead material, and European producers make up the rest of the market needs from their

overseas production.

The enrichment industry is transitioning to production based almost solely on gas centrifuge. One advantage of gas centrifuge is

modularity. As contracts are signed, a plant could be expanded in

21

increments. As we see new reactors constructed, we have the ability to expand in order to meet the demand. In the United States,

USEC and another company are each building a gas centrifuge

plant. Others are contemplating building here. If all are constructed, it could supply the U.S. needs, and be expanded as needed to meet growth in the market. If required, the Paducah Gaseous

Diffusion Plant could also run past its planned shutdown in 2012.

I would like to speak for a moment about the American Centrifuge Plant. The ACP is the only plant to use U.S. centrifuge

technology. Owned and operated by a U.S. company, it is the only

technology that can be used to meet national security needs, but

at the same time, does not benefit from foreign government ownership and support, as does its competitors. USEC’s development and

manufacturing work is based in Oak Ridge, Tennessee. Manufacturing of machine components will also take place in several other

states. We are at a critical juncture as we enter in the process of

deploying the plant, and are looking to have it at capacity by 2012

to meet market demand.

The final portion of the fuel cycle, fuel fabrication, is served by

several plants in the United States. Currently, the market has

much more supply than demand. If new reactors are built, existing

fabrication facilities should have enough capacity to meet demand.

Several threats to nuclear expansion exist. One is timely and

adequate financing for construction in light of current credit market conditions and uncertainty regarding the timing of any loan

guarantees from the Department of Energy. The companies building here also need to be able to compete on a level playing field.

The potential for Russia to dump low enriched uranium on the U.S.

market is indeed a threat.

I would like to close by discussing the role that the U.S. Government can play in solidifying the U.S. based fuel supply. Despite actions by Congress to encourage the expansion of nuclear power, the

implementation of legislative directives at the agency level has

lagged behind market needs. Delays in implementing the loan

guarantee program is one example.

Domestic producers need legislative support to ensure that the

U.S. Government can effectively enforce the Russian Suspension

Agreement. Additionally, support for the Paducah plant with a contract to enrich the Department of Energy’s high assay tails would

help meet market needs for both uranium and enrichment. DOE

needs to complete its plan for managing and selling its uranium inventory to provide market clarity on how DOE’s inventories will affect supply.

Our mutual goals should be the expansion of nuclear power. The

domestic fuel industry is working to ensure that the fuel for nuclear reactors will be available when they come online. At USEC,

we firmly believe that increasing our use of nuclear power will help

our nation tackle the challenges we face, from international energy

security, to the adverse effects of burning fossil fuels.

Thank you for your time, and I look forward to the questions.

[The prepared statement of Mr. Van Namen follows:]

22

PREPARED STATEMENT OF ROBERT VAN NAMEN

Good morning. My name is Robert Van Namen, and I am Senior Vice President,

Uranium Enrichment at USEC Inc., a leading supplier of low enriched uranium for

commercial nuclear power plants. Thank you Chairman Gordon, Ranking Member

Hall and Members of the Committee for inviting me to testify on the current status

of America’s supply of uranium and nuclear fuel and the industry’s ability to meet

additional demand for fuel as the country prepares to increase its use of nuclear

power.

Today’s U.S. nuclear fuel supply industry is in transition. While it is in better

shape than it was a decade ago, much work remains to be done and substantial investments need to be made before it can fully support the expansion of nuclear

power in our country. Domestic fuel companies constructing new facilities face stiff

competition in a market dominated by foreign, vertically integrated firms, many of

which benefit from the financial and political support of their governments. As we

work to increase our domestic fuel supply capacity, U.S. companies supplying the

nuclear fuel cycle need the assurance that their investment of resources will receive

the support necessary to revive the industry to a long-term, self-sustaining position.

We must rebuild and expand our domestic fuel cycle infrastructure to put us in a

position of self reliance for the future.

While America still leads the world in the amount of electricity produced by nuclear power, we long ago gave up our industry leading position on nuclear technology. Unless we take steps now to reclaim a leadership position, we will lose our

ability to affect nuclear’s future expansion and use worldwide or even in our own

country. Now is the time for the U.S. Government to encourage the efforts of our

domestic companies to rejuvenate the U.S. nuclear fuel cycle so it can meet the demand of an expanded nuclear power generating capacity in the decades to come.

U.S. Uranium Supply

Let me start with the beginning of the fuel cycle, the mining and milling of natural uranium. Since 1994, domestic sources have provided an average of about 18

percent of the natural uranium purchased by U.S. reactor operators. Our production

of uranium began to decline in the mid-1990s as a flood of government inventories

and material from countries in the former Soviet Union depressed prices to levels

that made it uneconomical to produce the material domestically. The dimming prospects for future nuclear reactors being constructed also dampened prices and the

prospects for future demand growth.

But today the situation has changed somewhat for the better. Since 2003, the

price of uranium has risen from about $10 a pound up to more than $95 for longterm contracts. At this price, domestic miners have begun the process to expand or

restart existing mines. NRC expects applications for 20 new mines to be filed by

2011. Concurrently, production has increased to about five million pounds a year at

existing mines.

However, even if domestic production of uranium expands immensely, it is unlikely that we would ever be able to supply all our needs with domestic production.

Fortunately, the countries with the greatest uranium reserves, Canada and Australia, are close allies of the United States, reducing chances of supply disruptions.

Additionally, the U.S. Department of Energy maintains an enormous inventory of

uranium in various commercial and non-commercial forms. This inventory can supply limited regular demand as well as serving as a strategic reserve in case of supply disruptions. The department is working on the details of a long-term policy for

handling its inventory, which would bring much needed clarity to the role of these

sales in the market.

U.S. Conversion Supply

The second step in the fuel cycle is the conversion of natural uranium to uranium

hexafluoride. Unlike uranium mining, the lone U.S. supplier of conversion services

can meet the majority of U.S. demand. The Converdyn plant in Illinois has recently

expanded and can now meet about 80 percent of annual U.S. demand. Historically,

conversion plants have been able to expand in step with increased demand, and the

world has an overcapacity of conversion services available at facilities in Canada,

the United Kingdom, France and Russia. Additionally, companies have expressed

some interest in building more plants or adding onto their existing capacity at conversion facilities in these countries. A secondary source of conversion lies in the

large quantity of uranium in inventories such as DOE’s that have already been converted to uranium hexafluoride.

23

U.S. Low Enriched Uranium Supply

After conversion, uranium must be enriched to raise the concentration of the fissionable isotope U235 from its natural state of less than one percent to the four to

five percent required for commercial nuclear reactors. The United States has one operating uranium enrichment plant, the Paducah Gaseous Diffusion Plant in Paducah, Kentucky, which USEC operates under lease from DOE. In 2008, we expect to

produce approximately six million SWU at the plant. A SWU, or separative work

unit, is the industry unit of enrichment. The annual fuel requirements of a typical

reactor require about 100,000 SWU and 900,000 pounds of uranium. Annual U.S.

demand ranges between 12 to 14 million SWU a year. USEC shut down Paducah’s

sister plant in Piketon, Ohio, in 2001 in the face of dumping of foreign commercial

LEU and to accommodate increased supply of LEU from down-blended Russian nuclear warheads through the Megatons to Megawatts program.

U.S. reactors currently depend upon foreign sources for the majority of their LEU.

The supply comes from three major sources: LEU from the Paducah plant, about

12 percent, the Megatons program, about 43 percent, and from European producers,

about 43 percent. But that is about to change.

Worldwide, the enrichment industry is transitioning from production based on a

mix of gaseous diffusion and gas centrifuge technologies to one based almost solely

on gas centrifuge over the next ten years. In the United States, USEC and a subsidiary of Urenco, a European enrichment company, are each building gas centrifuge

plants as I speak. Combined, these plants will have an initial capacity of just under

seven million SWU.

Other companies, such as GE–Hitachi and the French conglomerate Areva, are

also contemplating building plants here, although neither has applied for a license,

selected a site, or made any other definitive commitment to build yet. If all four

plants are constructed, it would provide enough LEU capacity for current and potential increases in U.S. demand. Additionally, based on current SWU prices, the Paducah GDP can run past its planned shutdown in 2012 to fill any supply gaps should

the market require the additional supply.

I would like to speak for a moment about our American Centrifuge Plant. The

ACP is the only plant to use U.S. centrifuge technology. USEC’s centrifuge machine,

the AC100, is based on a design by DOE from the 1980s, but with vast improvements in performance, materials and manufacturing processes. Because the ACP

will be owned and operated by a U.S. company, it does not face the restrictions imposed on the foreign centrifuge and laser enrichment technologies that will be used

in the other plants. USEC’s development and manufacturing work is based in Oak

Ridge, Tennessee, where we have been working since 2001 to resurrect the U.S.

technology. Manufacturing of machine components will also take place in West Virginia, Indiana, Ohio and other states. Constructing the plant increases domestic capacity while also rebuilding an American industrial base for manufacturing a highly

advanced nuclear technology.

One major advantage of gas centrifuge over gaseous diffusion is its modularity.

As new contracts for LEU are signed with utilities, a plant can be expanded to meet

demand in increments. So while our initial planned capacity for the American Centrifuge Plant is 3.8 million SWU, our Environmental Impact Statement approved as

part of our NRC license covers the potential expansion of the plant to approximately

double this size. If nuclear power grows as some predict, we could eventually expand

the plant to four times its original size based on the available land at the site. So

if we see a number of new reactors licensed and constructed, we believe we will

have the ability to expand the plant in order to meet the emerging demand.

However, several threats to the expansion of the U.S. LEU capacity exist. One

major issue is the availability of timely and adequate financing for construction in

light of current credit market conditions and uncertainty regarding the timing of

any loan guarantees from DOE. In particular, USEC would like to utilize DOE’s

loan guarantee program to assist with debt financing for the American Centrifuge

Plant. DOE needs to move quickly to award guarantees once applications are received. Given the current credit crisis, such guarantees may be necessary to receive

financing that makes the plant economical for investors.

The companies building here also need to be able to compete on a level playing

field, shielded from uncontrolled dumping of foreign imports of uranium and LEU.

The potential for Russia to dump LEU on the U.S. market is particularly on the

minds of those of us investing here, as witnessed by the Senate hearing on the matter last month.

Other threats include the increasing costs for material and labor, the costs for recreating a manufacturing base in the U.S. to make centrifuge machines and plant

components, and the need to develop a skilled labor pool to build and operate the

24

facilities. Utilities considering building new reactors face many of these same challenges.

So if conditions permit, we may see a large and diverse domestic enrichment industry within five to ten years, one that could support the expansion of our nuclear

fleet.

U.S. Fuel Fabrication

The final portion of the fuel cycle, fuel fabrication, is served by several plants in

the United States, only one of which is owned by a U.S. company, and currently

the market has much more supply than demand. While each reactor vendor used

to be the sole source for fuel assemblies for the reactors they built for customers,

today each vendor’s plant can make fuel assemblies for reactors designed by competitors, leading to the current glut. If new reactors are built here, the existing fabrication facilities should have enough capacity to meet any new demand.

The Role of the U.S. Government in Expanding the Use of Nuclear Power

I would like to close by discussing the role that the U.S. Government can and

should play in expanding the use of nuclear power domestically, specifically in assisting the expansion of our domestic fuel supply.

First, a few of the positives that have gotten us to this point are worth mentioning. Congress has enacted legislation, such as the Energy Policy Act of 2005,

that has spurred utilities to consider building the first new plants in 30 years. In

addition, the regulatory uncertainty of the NRC licensing process has been simplified and tested. For instance, USEC and Urenco’s subsidiary LES have both successfully applied for and received construction and operating licenses for new enrichment facilities. These are the first new nuclear facility licenses issued by NRC

in several decades. NRC has also worked vigorously to increase its staff in order

to handle the tens of applications for new nuclear plants, fuel cycle facilities and

uranium mines that is has received and expects to receive during the next decade.

Those are some of the positives, but the need for government action remains. Despite legislation passed by Congress to encourage the expansion of nuclear power,

the implementation of legislative directives at the agency level has often been out

of step with real-world timeframes. The delay in implementing the Loan Guarantee

program, for instance, may prevent new nuclear facilities from coming online as

soon as possible because companies may have to delay or cancel their projects. The

NRC also faces a funding shortfall from its budget request that may force it to defer

or delay the review of applications for new projects.

Specifically in nuclear fuel, domestic producers need legislative support to backup

the Russian Suspension Agreement Amendment to ensure that the U.S. Government can enforce recently agreed terms that allow measured Russian access to the

U.S. market while permitting our domestic industry time to secure contracts needed

to secure financing for new mines and production facilities. Additionally, near- and

medium-term support for the Paducah plant with a contract to enrich DOE’s highassay tails would ensure that it remains available to meet the needs of domestic

utilities past 2012, a period when the new centrifuge facilities will be starting up

operations. As mentioned before, DOE needs to complete its plan for managing and

selling its uranium inventories to provide the market, and specifically miners and

enrichers, clarity on how DOE’s inventory will affect supply and demand during the

next decade. Finally, any assistance with education, job development, and infrastructure improvements in the next few years will go a long way to assisting us with

creating a stable, long-term nuclear fuel industry in the United States.

Our mutual goal in all of these activities should be to see the renewed expansion

of nuclear power, America’s primary source of clean, reliable emissions-free electricity. The domestic fuel industry has spent the past several years working to ensure that the fuel for new reactors will be available when they come online so that

our nuclear plants can continue to provide us energy security and diversity. At

USEC, we firmly believe that increasing our use of nuclear power will help our nation tackle the severe challenges we face from international energy security to the

adverse effects of electricity generated by burning fossil fuels. Thank you for your

time and I look forward to your questions.

BIOGRAPHY FOR ROBERT VAN NAMEN

Robert (Bob) Van Namen is Senior Vice President of Uranium Enrichment at

USEC Inc. He heads the Company’s marketing and sales department as well as operations at the Paducah and Portsmouth sites. He is also the lead USEC officer responsible for overseeing NAC International, USEC’s wholly-owned subsidiary based

25

in Norcross, GA. He previously served five years as USEC’s Vice President of Marketing and Sales.

Prior to joining USEC in January 1999, Mr. Van Namen was head of nuclear fuel

management for Duke Energy. His career at Duke also included seven years in nuclear design and safety analysis.

Mr. Van Namen is a nuclear engineer with 22 years of experience in nuclear

power. He has served in a variety of leadership roles in industry and professional

organizations including the Nuclear Energy Institute. He currently serves on the

board of management of the World Nuclear Association.

Mr. Van Namen earned his Bachelor of Science and Master of Science degrees at

the University of Virginia. He is a registered professional engineer in the State of

North Carolina.

USEC Inc. (NYSE: USU), a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.

Chairman GORDON. Thank you. And Mr. Asselstine, you are recognized.

STATEMENT OF MR. JAMES K. ASSELSTINE, MANAGING DIRECTOR (RETIRED), LEHMAN BROTHERS; FORMER COMMISSIONER, NUCLEAR REGULATORY COMMISSION

Mr. ASSELSTINE. Mr. Chairman, Congressman Bilbray, Members

of the Committee, thank you for the opportunity to appear before

you today.

My testimony will provide a financial community perspective on

the major issues of financial institutions regarding investment in

new nuclear plants. In addition, I will discuss the role of the federal financial support in private sector decisions to invest in nuclear power.

As the companies and their investors evaluate a potential new

nuclear plant project, I believe that they will need to consider several factors. First, the companies and investors are mindful of the

experience with construction delays, cost increases, and licensing

and litigation delays for many of the existing plants that entered

commercial operation in the 1980s and 1990s. They will want to be

satisfied that the causes for these past problems have been addressed for any new project.

Second, given the construction complexity and large capital investment for a new nuclear project, the companies and investors

will want to be confident that a new project can be completed on

budget and on schedule. Third, the companies and investors will

want assurance that technology risk for the project is relatively

low, because all of the new plant projects being contemplated use

technology that is similar to the light water reactor designs of the

existing plants, and because those plants have established a consistent track record of safe and reliable operation, I don’t believe

that technology risk is a significant factor.

Fourth, the companies and their investors will want assurance

that the risk of cost increases due to new regulatory requirements,

and licensing and litigation delays, is acceptably low. The existing

light water reactor technology in use today is much more mature

than it was when many of the existing plants were licensed, and

we now have an extensive base of successful operating experience

with the existing plants. In addition, a number of issues, such as

the post-Three Mile Island changes, fire protection, equipment reliability, material condition, and metallurgy, and maintenance

26

issues, have been addressed satisfactorily by the industry and the

NRC.

Further, over the past decade, we have had a period of regulatory stability with the NRC that has contributed to the successful

operation of the existing plants. Thus, although there is the potential for additional regulatory requirements to address issues such

as plant security and material condition, as the existing plants

grow older, the risk of costly and disruptive new regulatory requirements for new plants appears to be relatively low. Similarly,

the adoption of a new licensing process by the NRC for future nuclear plants, that is intended to address the causes of delays and

cost increases in the past, is encouraging, but until licensing decisions have been completed for a group of initial new plants, that

new licensing process remains untested, and some uncertainty remains as to whether the process will function as it is intended.

Fifth, the companies and investors will require assurance that

the price of power to be generated by a new nuclear plant will be

competitive with other alternatives, including coal and gas-fired

generation, and renewable energy resources. This may pose a special challenge for the initial group of new nuclear plants, because

it is likely that the industry will incur $300 to $500 million in first

of a kind engineering costs for each new nuclear plant design, in

order to develop the detailed engineering design information required to satisfy the NRC’s design certification process. Depending

upon how these costs are allocated, this could significantly increase

the cost of the initial new plants.

And finally, as is the case with any new proposed generating

project, the companies and investors will need confidence that the

power from the new plant is needed, and that the company will be

able to recover its capital investment in the plant and earn a fair

return on that investment.

Mr. Chairman, I believe that a number of these factors can be

addressed by the industry through the contractual arrangements

for construction and risk-sharing among the parties involved in designing, building, owning, and operating a new nuclear plant, but

some factors, such as the magnitude, complexity, and large initial

capital investment, including the engineering design costs that I

mentioned, of a new nuclear project, and residual uncertainties associated with the new, but as yet untested NRC licensing process,

will likely require federal financial support, to allow the companies

and investors to move forward with new nuclear plant commitments.

Mr. Chairman, I believe the financial support provisions in the

Energy Policy Act of 2005, if properly implemented, can provide a

sufficient basis to support the development and financing of new

nuclear plants in this country. As you mentioned in your opening

statement, there is clear evidence, from the level of activity within

the industry since the Energy Policy Act was enacted, that these

provisions in the Act are having their intended effect of facilitating

and encouraging new nuclear plant development.

Continued successful implementation of all three of the key financial support components in the Energy Policy Act of 2005 will

be essential if this industry activity is to be converted into firm orders for new plants.

27

Final implementing regulations are now in effect by the Department of Energy for the standby delay risk insurance provision, and

the federal loan guarantee program. In addition, final regulations

are now in effect by the Internal Revenue Service for the production tax credit provision. In general, I believe that these regulations provide a workable framework for implementing the three financial support provisions in the Energy Policy Act.

In particular, though, considerable work remains to be done regarding the federal loan guarantee program, and that is the area

that I believe will require some additional ongoing Congressional

oversight and involvement. Again, thank you for the opportunity to

testify today, and that completes my testimony.

[The prepared statement of Mr. Asselstine follows:]

PREPARED STATEMENT OF JAMES K. ASSELSTINE

Mr. Chairman and Members of the Committee, thank you for the opportunity to

appear before you today.

My name is Jim Asselstine. Before my retirement last year, I served as a Managing Director at Lehman Brothers, where I was the senior fixed income research

analyst responsible for covering the electric utility and power sector. In that capacity, I provided fixed income research coverage for more than 100 U.S. electric utility

companies, power generators, and power projects. I also worked closely with the

large institutional investors who have traditionally been a principal source of debt

financing for the power industry. In addition, I served as a member of the U.S. Nuclear Regulatory Commission from 1982 to 1987, a period during which many of our

existing nuclear units received their operating licenses.

Mr. Chairman, I appreciate your invitation to testify at today’s hearing to explore

the potential for nuclear power to provide an increased proportion of electric generating capacity in the United States. My testimony will provide a financial community perspective on the major considerations of financial institutions regarding investment in new nuclear power plants. In addition, I will discuss the role of federal

financial support in private sector decisions to invest in nuclear power.

The process of planning, developing, licensing, building, and financing a new nuclear plant is likely to be one of the most complex endeavors facing an electric utility or power generation company today. As currently envisioned, this process will

require a preliminary planning period of about two years, a period of three to four

years to complete the process to obtain a combined construction and operating license (COL) from the U.S. Nuclear Regulatory Commission (NRC), and a construction period of from four to five years. Thus, more than a decade will be required

to plan, license, build, and bring a new nuclear unit into commercial operation. A

new nuclear unit will also be a large, very complex, and capital intensive construction project. In terms of its cost and construction complexity, building a new nuclear

unit is likely to be similar to building a large new coal-fired generation unit. This

cost and construction complexity will also be much greater than that for the gasfired generating capacity that has represented the bulk of new power generation

built in this country over the past two decades. Because the cost of a new nuclear

unit can represent a substantial portion of the market value of a utility or power

generation company, the decision to proceed with a new nuclear project is likely to

be one of the more significant decisions facing the company’s management and investors.

Further, unlike any other power generation alternative, a new nuclear unit is subject to the NRC’s licensing process and regulatory oversight. This exposes a new nuclear plant project to the potential for changing regulatory requirements, and for licensing and litigation delays. Changing regulatory requirements, and licensing or

litigation delays could increase the cost of a new nuclear unit, delay the recovery

of the company’s financial investment, and in extreme cases, prevent a completed

plant from entering commercial operation. A number of our existing nuclear units

experienced cost increases as a result of changing regulatory requirements, and licensing and litigation delays in the 1980s and 1990s, and one completed plant ultimately failed to enter commercial operation as a result of these factors. Since that

time, the Congress and the NRC have established a new licensing process for nuclear plant applications that is intended to achieve final licensing decisions as early

as possible in the process in order to minimize the risk of delay or disruption after

the company has made a substantial capital investment in the plant. This new liVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00031 Fmt 6633 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
28

censing process, including the use of a combined license (COL) that would authorize

both construction and operation of the plant, holds great promise, but has yet to be

tested to verify that it will work as intended.

As the companies and their investors evaluate a potential new nuclear plant

project, I believe that they will need to consider several factors. First, the companies

and investors are mindful of the experience with construction delays, cost increases,

and licensing and litigation delays for many of the existing plants that entered commercial operation in the 1980s and 1990s. They will want to be satisfied that the

causes for these past problems have been addressed for any new project. Second,

given the construction complexity and large capital investment for a new nuclear

project, the companies and investors will want to be confident that a new project

can be completed on budget and on schedule. Third, the companies and investors

will want assurance that technology risk for the project is relatively low. Because

all of the new plant projects being contemplated use technology that is similar to

the light water reactor designs of the existing plants, and because those plants have

established a consistent track record of safe and reliable operation, I do not believe

that technology risk is a significant factor.

Fourth, the companies and their investors will want assurance that the risk of

cost increases due to new regulatory requirements, and licensing and litigation

delays is acceptably low. The existing light water reactor technology in use today

is much more mature than it was when many of the existing plants were licensed,

and we now have an extensive base of successful operating experience with the existing plants. In addition, a number of issues such as the post-Three Mile Island

issues, fire protection, equipment reliability, material condition issues and metallurgy, and maintenance issues have been addressed satisfactorily by the industry

and the NRC. Further, over the past decade, we have had a period of regulatory

stability with the NRC that has contributed to the successful operation of the existing plants. Thus, although there is the potential for additional regulatory requirements to address issues such as plant security and material condition as the existing plants grow older, the risk of costly and disruptive new regulatory requirements

for new plants appears to be relatively low. Similarly, as I discussed previously in

my testimony, the adoption of a new licensing process by the NRC for future nuclear

plants that is intended to address the causes of delays and cost increases in the past

is encouraging. But, until licensing decisions have been completed for a group of initial new plants, that new licensing process remains untested, and some uncertainty

remains as to whether the process will function as it is intended.

Fifth, the companies and investors will require assurance that the price of power

to be generated by a new nuclear plant will be competitive with other alternatives,

including coal and gas-fired generation, and renewable energy resources. This may

pose a special challenge for the initial group of new nuclear plants because it is likely that the industry will incur $300–$500 million in first-of-a-kind engineering costs

for each new nuclear plant design in order to develop the detailed engineering design information required to satisfy the NRC’s design certification process. Depending upon how these engineering design costs are allocated, this could significantly

increase the cost of the initial new plants. Finally, as is the case with any new proposed generating project, the companies and investors will need confidence that the

power from the new plant is needed, and that the company will be able to recover

its capital investment in the plant and earn a fair return on that investment. In

the case of a regulated electric utility, this confidence will depend upon the state

rate-setting arrangements that are in place for the new plant. In the case of an unregulated, or merchant, generation company, this confidence will depend upon any

contractual arrangements to sell the output of the plant, and upon studies of power

market conditions in the region in which the plant will be located.

Mr. Chairman, I believe that a number of these factors can be addressed by the

industry through the contractual arrangements for construction and risk-sharing

among the parties involved in designing, building, owning, and operating a new nuclear plant. But some factors such as the magnitude, complexity, and large initial

capital investment, including engineering design costs, of a new nuclear project, and

residual uncertainties associated with the new, but as yet untested NRC licensing

process, will likely require federal financial support to allow the companies and investors to move forward with new nuclear plant commitments.

The Energy Policy Act of 2005 contained four provisions that were intended to facilitate and encourage industry commitments to build and operate new nuclear

plants. First, the Act included a 20-year extension of the Price-Anderson Act, which

provides insurance protection to the public in the event of a nuclear reactor accident. With the previous expiration of the Price-Anderson Act, insurance coverage for

the public remained in place for the existing 104 operating nuclear units, but that

29

coverage would not have been available for new plants. The 20-year extension of the

Price-Anderson Act corrected this problem.

Second, the Act provided a production tax credit of 1.8 cents per kilowatt-hour for

up to 6,000 megawatts of generating capacity from new nuclear power plants for the

first eight years of commercial operation. This production tax credit is subject to an

annual cap of $125 million for each 1,000 megawatts of generating capacity. A similar production tax credit was provided, and has historically been available, for certain renewable energy resources.

Third, the Act provided standby support or risk insurance for a new nuclear

project’s sponsors and investors against the financial impacts, including financing

costs, of delays beyond the industry’s control that may be caused by delays in the

NRC’s licensing process or by litigation. This standby risk insurance for regulatory

and litigation delays provides protection for the first six new nuclear units built. Up

to $500 million in protection is provided for the first two new units, and 50 percent

of the cost of delays up to $250 million, with a six-month deductible, is provided

for units three through six.

Finally, the Act provided for federal loans and loan guarantees for up to 80 percent of the project’s cost. These federal loan guarantees were not limited to new nuclear plants, but instead were made available to support the development of innovative energy technologies, including advanced nuclear power plants, that avoid or reduce certain air pollutants and greenhouse gas emissions.

Mr. Chairman, I believe that these financial support provisions in the Energy Policy Act of 2005, if properly implemented, can provide a sufficient basis to support

the development and financing of new nuclear plants in this country. Although no

company has yet placed a firm order for a new nuclear unit, there is clear evidence

from the level of activity within the industry since the Energy Policy Act was en- acted that these provisions in the Act are having their intended effect of facilitating

and encouraging new plant development. To date, the NRC has certified two new

reactor designs for use, and reviews of two additional designs are currently underway. Thus, it appears likely that the industry will be able to select from at least

four new NRC-certified plant designs. Further, according to the Nuclear Energy Institute, as of April 8, 2008, at least 23 companies or consortia have stated their intention to file applications with the NRC for a combined license for at least 27 new

nuclear units in this country. Of these, applications for COLs for 15 units have now

been filed with the NRC, and that number could grow to about 20 units by the end

of this year. In addition, a number of companies are pursuing Early Site Permit applications with the NRC in order to resolve site environmental issues in advance

of the COL proceeding.

Mr. Chairman, I believe that continued successful implementation of all three of

the financial support components in the Energy Policy Act of 2005 will be essential

if this industry activity is to be converted into firm orders for new plants. These

financial support provisions are complementary; collectively, they have the potential

to reduce the residual uncertainties, risks, and costs associated with a new nuclear

plant to levels that are likely to be comparable to other base load generating alternatives. The standby risk insurance provides valuable protection against licensing

and litigation delay costs for the initial six units to be built, although there would

be no protection for what may be a number of additional units working their way

through the NRC licensing process at about the same time. The production tax credit provides a valuable financial benefit for new plants over their initial eight years

of operation. This benefit can offset the somewhat higher cost of the initial plants;

however, this benefit only becomes available when the unit begins operation, and

the exact amount of the available production tax credit for each plant will not be

known for some time. The available tax credit benefit will be spread among all of

the eligible plants, and initial eligibility will be determined by the number and size

of the plants for which COL applications are filed with the NRC by the end of this

year. The federal loan guarantee can help to facilitate the availability of debt financing for up to 80 percent of the total cost of the plant. Given the magnitude of a new

nuclear plant investment, this can be a substantial benefit for all the companies,

including the regulated utilities that are considering a new nuclear project. But the

loan guarantee may be essential to facilitate debt financing for the unregulated,

merchant generation companies that may have somewhat less financial flexibility

than the regulated utility companies. This is especially the case if the company

seeks to use a non-recourse project finance structure similar to the financing structures used for many gas-fired power plant projects in the 1990s.

Final implementing regulations are now in effect by the Department of Energy

for the standby delay risk insurance provision and the federal loan guarantee program. In addition, final regulations are now in effect by the Internal Revenue Service for the production tax credit provision. In general, I believe that these regulaVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
30

tions provide a workable framework for implementing the three financial support

provisions in the Energy Policy Act. In particular, though, considerable work remains to be done regarding the federal loan guarantee program. The Department

of Energy has done an effective job in staffing its Loan Guarantee Program Office,

and in my view, now has the in-house technical expertise to evaluate loan guarantee

applications. Once the Administration and Appropriations Committee review process

for the Department’s loan guarantee implementation program is completed, the Department will solicit loan guarantee applications and begin an extensive due diligence process and the negotiation of financial term sheets. It appears this process

will continue well into 2009. Further, the calculation of credit subsidies, which will

determine the cost of the loan guarantee to the individual company, has yet to be

finalized. Thus, the terms and cost of the loan guarantee may not be defined for

some time. Finally, the currently approved funding of $18.5 billion for loan guarantees for new nuclear projects may not be sufficient to cover all those who apply. Continued Congressional oversight of the Department’s loan guarantee program and the

available funding for that program may be needed to ensure that the loan guarantee

financial support component is successful.

Mr. Chairman, again, thank you for the opportunity to testify today, and this completes my testimony.

BIOGRAPHY FOR JAMES K. ASSELSTINE

Mr. Asselstine recently retired from his position as a Managing Director with Lehman Brothers, Inc. During his more than 18 years with Lehman Brothers, Mr.

Asselstine was a senior fixed income research analyst covering the electric power

industry. Mr. Asselstine was also a member of the firm’s Investment Banking Division Commitment and Bridge Loan Committees, and was the global head of high

grade credit research for six years. As one of five senior members on the firm’s Commitment and Bridge Loan Committees, Mr. Asselstine was responsible for reviewing, approving, and monitoring all of the firm’s equity, fixed income, and structured

products capital commitments and bridge loan commitments. As head of high grade

credit research, Mr. Asselstine directed a team of 55 research analysts covering investment grade-rated industrial, financial, and utility issuers of fixed income securities in the United States, Europe, and Asia.

Mr. Asselstine served as a Commissioner on the U.S. Nuclear Regulatory Commission from 1982 to 1987. From 1978 to 1982, he served as Associate Counsel for the

U.S. Senate Committee on Environment and Public Works. While on the staff of the

committee, Mr. Asselstine also served as a Co-Director of the Committee’s investigation of the Three Mile Island nuclear power plant accident.

From 1977 to 1978 and from 1973 to 1975, Mr. Asselstine served as a Staff Attorney with the U.S. Nuclear Regulatory Commission, and from 1975 to 1977, he

served as Assistant Counsel for the Joint Committee on Atomic Energy of the U.S.

Congress.

Mr. Asselstine holds a B.A. degree in Political Science from Virginia Polytechnic

Institute, and a J.D. degree from the University of Virginia.

Chairman GORDON. Thank you. And Dr. Cochran, you are recognized for five minutes.

STATEMENT OF DR. THOMAS B. COCHRAN, SENIOR SCIENTIST,

NUCLEAR PROGRAM, NATIONAL RESOURCES DEFENSE

COUNCIL, INC.

Dr. COCHRAN. Mr. Chairman, thank you for providing the Natural Resources Defense Council with the opportunity to testify

today.

I have provided, in my testimony, a summary of recommendations for the Congress. The highest priority, I believe, is to pass a

climate bill that puts stringent limits on CO2 emissions and other

greenhouse gas emissions. This is not only the best and most economically efficient way to mitigate climate change, but it is the single policy that would provide the greatest benefit for the domestic

nuclear power industry.

Secondly, the Congress should stop subsidizing the construction

of new nuclear power plants, and reject further subsidies for new

31

nuclear plants in climate mitigation legislation. The economically

inefficient way to mitigate climate change is to continue to subsidize new nuclear plants. This will penalize and slow investments

in improved energy efficiency and energy supply technologies that

can mitigate climate change in less time with less cost and risk.

Third, you should terminate the Department of Energy’s misguided 100-plus year effort to close the nuclear fuel cycle and introduce fast burner reactors into the United States, and terminate

funding for research on advanced nuclear fuel reprocessing. You

should establish an unbiased outside commission to report on ways

to improve the Nuclear Regulatory Commission’s safety culture.

The biggest barrier to significant improvement of U.S. nuclear

plant safety is the poor safety culture of the Nuclear Regulatory

Commission.

Finally, you should initiate a search, or have the Department of

Energy initiate a search, for a second geologic repository for the

disposal of spent fuel.

Nuclear power has both benefits and costs. On the benefits side,

it is a low carbon emitter. It is a reliable generator of electricity.

It provides low cost electricity from existing plants. It has a reliable and plentiful supply of fuel, and low health impacts from routine plant emissions.

On the other side of the ledger, it increases the risk of nuclear

weapons proliferation. You run the risk of another catastrophic nuclear accident. It has significant, unresolved waste disposal problems. It has significant, unresolved health and environmental problems associated with uranium mining. And new nuclear plants will

not be economical in the United States until competing fossil generation is required to pay significant financial penalty for its carbon emissions. Polluters should pay, and the efficient way to deal

with that issue is to cap carbon emissions.

I have provided an analysis of the projections of nuclear power

globally based on the World Nuclear Association’s databases, and

it is a snapshot of all the reactors in operation, under construction,

planned, and proposed. And if you look at this future set of reactors, this snapshot, and ask what is the climate mitigation offset—

the carbon emission avoided—you see it is about—over and above

what it would be today if you maintained the current global level

of nuclear power—six percent of what is needed to address this climate change problem.

Now, that number is very uncertain. It could certainly be twice

that, because that number does not include nuclear plants from the

2030 to 2050 period, because that is beyond the horizon for companies to propose new plants. Nuclear has made a contribution to climate mitigation. It will continue to make a contribution to climate

mitigation.

The issue for the Congress and for us is not whether you are for

or against nuclear power. The climate issue, in terms of domestic

policy, is whether Congress, the Federal Government, should continue to subsidize new nuclear plant construction. And in our view,

the Congress should not. I stated earlier why I think that would

actually slow the process down, by curtailing investments in technologies that can get us there sooner and at less risk.

32

I believe, additional subsidies are not needed. Hearing Marilyn

Kray, who is the President of NuStart. The NuStart participants,

the 10 utilities, own or operate two thirds of the nuclear power

plants in this country. They have combined assets of—I don’t know

the precise figure—but I would say on the order of $400 billion.

The General Electric company, which is also a participant, the second largest corporation in the world, has assets of $400 billion

alone. You do not need to subsidize these people. They can provide

the risk insurance for their own investments by collaborating, as

they have done, in NuStart.

Chairman GORDON. Dr. Cochran, if you could, we are trying to

be generous with the time, but if you might bring it to a close, then

we can explore the suggestions and the questions.

Dr. COCHRAN. Well, let me just say the greatest concern I have

about the global expansion of nuclear power is the proliferation

risk. The international safeguards regime, the Non-Proliferation

Treaty, the IAEA safeguards, and other elements, not adequate

today to safeguard many of the fuel cycle facilities that are used

by the nuclear power industry globally, and we see that being

played out in Iran and North Korea.

And it is unfortunate, but all of the big problems with nuclear

are being foisted over onto the Federal Government for various reasons. Proliferation—that is a government problem. Safety of catastrophic accidents—the government assumes the risk of catastrophic accidents. The waste is so toxic, and it contains plutonium

that can be used for weapons—that is a government problem. The

government is not solving these problems. These problems are endemic, and they remain.

And you have got to address these fundamental problems before

we expand nuclear power significantly on a global basis.

[The prepared statement of Dr. Cochran follows:]

PREPARED STATEMENT OF THOMAS B. COCHRAN

Introduction

Mr. Chairman and Members of the Committee, thank you for providing the Natural Resources Defense Council (NRDC) the opportunity to present its views on the

‘‘Opportunities and Challenges for Nuclear Power’’ and its role in mitigating climate

change. NRDC is a national, non-profit organization of scientists, lawyers, and environmental specialists, dedicated to protecting public health and the environment.

Founded in 1970, NRDC serves more than 1.2 million members and supporters with

offices in New York, Washington, Los Angeles, San Francisco, Chicago and Beijing.

Summary of recommendations

Congress should:

• Pass a climate bill that puts stringent limits on CO2 and other greenhouse

gas emissions—‘‘cap carbon.’’ This is not only the best and most economically

efficient way to mitigate climate change, but it is the single policy that would

provide the greatest benefit to the domestic nuclear power industry.

• Stop subsidizing the construction of new nuclear power plants, and reject further subsidies for new nuclear plants in climate mitigation legislation. The

economically inefficient way to mitigate climate change is to continue to subsidize new nuclear power plants. This will penalize and slow investment in

improved energy efficiency and energy supply technologies that can mitigate

climate change in less time, with less cost and risk.

• Terminate DOE’s misguided 100+ year effort to close the nuclear fuel cycle

and introduce fast burner reactors in the United States, and stop funding research on advanced nuclear fuel reprocessing.

33

• Establish an unbiased outside commission to report on ways to improve the

NRC’s safety culture. The biggest barrier to significant improvement of U.S.

nuclear plant safety is the poor safety culture of the NRC.

• Initiate a search for a second geologic repository for disposal of spent fuel.

Nuclear power has both benefits and costs

On the benefit side, nuclear power:

• is a low-carbon emitter,

• is a reliable generator of electricity,

• provides low cost electricity from existing power plants,

• has a reliable and plentiful supply of fuel, and

• has low health impacts from routine power plant emissions.

On the other side of the ledger, nuclear power:

• increases the risk of nuclear weapons proliferation,

• runs the risk of another catastrophic nuclear reactor accident,

• has significant unresolved waste disposal problems,

• has significant unresolved health and environmental problems associated

with uranium mining, and

• new nuclear plants will not be economical in the United States until competing fossil generation is required to pay a significant financial penalty for

its carbon emissions, on the order of $40 to $60 per ton of CO2.

Commercial nuclear power has unique risks and the liability for these risks has

been transferred to the government:

• Nuclear is the only existing energy technology that requires special international safeguards and export control regimes to prevent countries from

making nuclear weapons from fuel cycle facilities and materials.

• In the United States and some other countries nuclear is the only energy

technology where the government has to assume the liability for catastrophic

accidents.

• Nuclear power is the only energy technology whose waste is so dangerous

that the government has to assume responsibility for its disposal.

The Contribution of Nuclear Power To Climate Change Mitigation

Nuclear power plants worldwide will continue to make a modest contribution to

climate change mitigation. Based on data in the World Nuclear Association data

(www.world-nuclear.org/info/reactors.html), in Figure 1 we show a potential for

worldwide growth in nuclear capacity out to about 2030.

34

This is a snapshot based on current plans—not a highly accurate projection of the

future. While it is adequate for the purposes of this hearing, the Subcommittee

should understand that there are uncertainties in the projected data in Figure 1.

Most of the operating reactors are assumed to have 60 year lifetimes. Actual lifetimes could be longer or shorter. Commercial operation dates for some reactors in

the ‘‘under construction’’ and ‘‘planned’’ categories will surely slip. The plants in the

‘‘proposed’’ category do not have associated dates for the start of commercial operations, so we have assumed these plants may come on line between the years 2016

and 2032. Assuredly, some of these reactors will never be built, and others, not yet

proposed, will be built in the future. And while we have extended the projection for

50 years, it is important to note that industry planning horizons do not stretch beyond about 20–25 years, so the shape of the ‘‘proposed’ plant category cannot reasonably be calculated beyond about 2030. Nevertheless, this snapshot is probably

more realistic that projections based on country specific and regional economic models.

In Figure 2, NRDC estimates the projected carbon emissions avoided by these

same projected nuclear power plants displayed in Figure 1.

35

These projections are summarized in the following table:

The percentage of needed carbon emission is based on an assumption that approximately 175 GtC of reductions over a fifty year period would be necessary to

stabilize global atmospheric CO2 concentrations, where stabilization is defined as a

reduction of atmospheric concentrations of carbon dioxide to two times the pre-industrial level. (Pacala and Socolow, ‘‘Stabilization Wedges: Solving the Climate

Problem for the Next 50 Years with Current Technologies,’’ Science, 13 August 2004,

Vol. 305, No. 5686, pp. 968–972.)

What conclusions does NRDC draw from these projections? First, statements such

as, ‘‘nuclear must be part of the mix,’’ ‘‘I don’t see how we can mitigate climate

change without nuclear,’’ ‘‘I support [or do not support] nuclear power,’’ are largely

irrelevant. Nuclear is part of the current mix of power generation, and it will continue to be part of the mix for the foreseeable future. Existing nuclear power plants

are contributing to climate change mitigation and will continue to do so.

The real issue for the Congress is not whether one is for or against nuclear power

per se. The crucial question for Congress is whether to continue, curtail, or increase

36

federal taxpayer subsidies to a mature, polluting industry in order to spur building

new U.S. nuclear plants. As NRDC demonstrates below, the answer to this question

is a resounding ‘‘no.’’

Why Congress should cease subsidizing the construction of new nuclear

power plants.

1. New-build nuclear power plants are not economical in the absence of

strong carbon controls, and even with such controls they may not compete

effectively against electricity supplied by renewable sources and energy efficiency programs.

Existing nuclear plants that have been largely or fully depreciated, or that acquired a new cost basis via a change in ownership at a deep discount to their original cost, are now economical to operate. The forward cost (fuel and operating and

maintenance costs) average less than two cents per kilowatt-hour (c/kWh), and thus

these plants produce some of the lowest cost electricity.

In strong contrast to existing plants, new plants are uneconomical due to their

high cost of construction. In late-2003, the MIT study, ‘‘The Future of Nuclear

Power’’ estimated that the cost of electricity generated by a new merchant nuclear

plant would be some 60 percent higher than the cost of energy generated by a fossilfueled plant. See MIT, ‘‘The Future of Nuclear Power,’’ 2003, Table 5.1, p. 42. Since

that report was published in 2003, the cost of fossil fuels and the capital cost of electricity generating plants have both increased significantly. In June 2007, the joint

industry and non-profit Keystone Center report found that the levelized cost of electricity from new nuclear power plants was estimated to be in the range 8.3–11.1

c/kwh, up from the 6.7 to 7.0 c/kwh estimate in the 2003 MIT study. See the Keystone Report, ‘‘Nuclear Power Joint Fact-Finding,’’ at 11.

Based on more recent data supplied by utilities and energy generating companies

pursuing new nuclear plants, the low end of the Keystone estimate is no longer

valid. Current cost estimates for several new reactors are in the range of 14 to 18

c/kwh (in 2007 dollars).

Electricity from new nuclear power plants in this cost range is not competitive

with fossil-fueled baseload generation in today’s marketplace, nor even with electricity supplied by waste heat co-generation, wind turbines, or freed-up by continuing pursuit of end-use efficiency programs. By the time the earliest of these new

nuclear plants begin delivering power to the grid, several forms of solar power are

also likely to be cheaper on a retail delivered-cost basis, and concentrating solar

thermal plants will likely be competitive in the wholesale power market as well.

Implementation of a carbon cap that internalizes the true cost of burning fossil

fuels is the single policy that would most benefit the nuclear industry, not because

new-build nuclear power will necessarily be cheaper than other sources, but rather

because it will make polluting fossil-fueled power more expensive. EPA has modeled

the effect of the current version of the Lieberman-Warner climate bill to predict CO2

prices using two different models. One model forecasts prices starting at $22/ton

CO2 in 2015, rising to $28 in 2020 and $46 in 2030 and continuing up from there; the other model’s prices start at $35/ton in 2015 and hit $45 and $73/ton in 2020

and 2030 respectively. See http://www.epa.gov/climatechange/economics/

economicanalyses.html. In short, enacting a carbon cap could increase the value of

generating electricity from nuclear plants by 2.2–3.4 c/kwh in the near-term and

more in later years.

Subsidizing new nuclear plants through direct federal cost sharing, a production

tax credit, and tens of billions in federally subsidized and guaranteed debt will not

remove new-build nuclear’s cost disadvantage vis-a`-vis other energy sources. Rather

it will tend to disguise and even prolong these cost disadvantages, thereby penalizing and slowing investments in less costly demand—side energy management programs energy efficiency, and an array of electricity supply options that can provide

carbon offsets more quickly, cheaply and safely than nuclear power. Unlike the wind

and solar industries, after fifty years of operations, the nuclear reactor industry displays no consistent trend toward lower unit costs in manufacturing and construction, so it seems unlikely that further subsidies at this late date will serve to catalyze major cost reductions.

Given their high capital costs, and all the other non-carbon environmental liabilities and risks that attend reliance on the nuclear fuel cycle, new nuclear plants are

obviously not the first, second, or even third option this body should turn to stem

the buildup of carbon dioxide in the atmosphere. Put bluntly, anyone or any organization pushing for more taxpayer-funded largess for nuclear power plants in a climate bill is either seeking inappropriate windfalls for their clients, or is pursuing

a poison pill strategy to protect carbon polluters by trying to kill the bill.

37

2. International safeguards are inadequate.

As evidenced by events in Iran and North Korea, the current international safeguards regime has major vulnerabilities. Under the Treaty on the Non-Proliferation

of Nuclear Weapons (NPT), International Atomic Energy Agency (IAEA) safeguards

agreements, and other elements, a non-weapon state can develop sensitive dual-purpose technologies, such as gas centrifuge enrichment plants, bring them within days

or weeks of producing nuclear weapons.

Moreover, ‘‘[T]he objective of safeguards is the timely detection of diversion of

significant quantities of nuclear material from peaceful activities to the manufacture of nuclear weapons or of other explosive devices or for purposes unknown,

and deterrence of such diversion by the risk of early detection.’’ (IAEA), INFCIRC/

153; emphasis added).

In non-nuclear weapon states today, this objective cannot be met at several types

of facilities used by the nuclear power industry, including commercial gas centrifuge

plants, nuclear fuel reprocessing plants, mixed-oxide fuel fabrication plants, and

storage facilities for separated plutonium and highly-enriched uranium. The ‘‘timely

warning criteria’’—detecting a diversion in time to bring diplomatic pressure to reverse the course of action—simply cannot be met if these plants are located in nonweapon states such as Iran or North Korea.

There are a number of reasons for this, including for example, IAEA ‘‘Significant

Quantities’’ for direct use nuclear materials are technically erroneous, and in the

case of plutonium are too large by roughly a factor of eight. Also, at large commercial-size bulk handling facilities—e.g., uranium enrichment plants, reprocessing

plants and plutonium fuel fabrication plants (MOX plants)—inventory differences

exceed the amount of material required for a nuclear explosive device.

Countries that have recently announced their intent to build large nuclear power

reactors include:

Israel already has nuclear weapons, but is not a signatory of the Treaty on the

Non-Proliferation of Nuclear Weapons (NPT). Presumably, most of the remaining

countries, should they build nuclear plants, will do so without harboring an explicit

contemporaneous objective of obtaining a nuclear weapon capability. Nevertheless,

there is a significant risk that one or more of these countries will represent a future

proliferation threat as Iran does today.

3. The Administration’s current program for a ‘‘Global Nuclear Energy

Partnership’’ (GNEP), built around the reprocessing and the international

recycling of spent nuclear fuel, would be a disaster for international security and a multinational economic boondoggle of staggering proportions.

Even if by some miracle in thirty years GNEP’s development managed to succeed

on a technical level—an outcome that we do not believe is at all likely—it would

still drain vital capital away from more timely and practical clean energy investments that are desperately needed now to avert pollution and foster human development around the world.

The Administration originally proposed GNEP to allegedly reduce the proliferation risk posed by the future spread of conventional methods of reprocessing, and

to reduce the amount of waste required for disposal by closing the nuclear fuel cycle.

The center piece of the GNEP vision is an elaborate scheme involving as yet

unproven techniques for spent fuel reprocessing and fabricating new types of transuranic fuels, and the ‘‘transmutation’’ of the long-lived transuranic isotopes in this

fuel using a new class of costly fast reactors.

38

Of course, a simpler and cheaper way to avert the proliferation risks posed by reprocessing is not to engage in it, and strongly discourage others from doing so.

GNEP is a far more elaborate scheme than the approach currently used by France

, which involves reprocessing using the conventional PUREX process and burning

the recovered plutonium only once in existing thermal reactors. The French approach is already a bad idea. Implementing the grandiose GNEP vision would require a century long multinational state enterprise that would cost US and foreign

taxpayers hundreds of billions of dollars, and result in the importation of thousands

of tons of foreign nuclear waste into the United States. By mid-century, when the

best available science says we must have stabilized global CO2 levels at no more

than twice their pre-industrial levels—we would just be wrapping up the GNEP

pilot projects, having already misallocated precious tens of billions of dollars merely

to get GNEP to the starting line.

In reality, the whole concept is flawed technically, economically, and politically:

the proposed mixture of transuranic isotopes in the transmutation fuel would still

be usable in nuclear weapons; the resulting fuel cycle would not be remotely costcompetitive with conventional nuclear power, much less other modes of electric

power generation; and the rest of the world is highly unlikely to sanction another

shared nuclear monopoly over the civil nuclear fuel cycle to match the one currently

controlled by the select group of nuclear weapon-states under the Nuclear Nonproliferation Treaty.

Both the current French and proposed GNEP approaches to closing the fuel cycle

increase nuclear proliferation risks relative to—and neither is preferable to—the

‘‘once-through’’ fuel cycle currently used in the United States.

Compared to the once-through fuel cycle, the French fuel cycle costs more, has

greater associated nuclear proliferation risks when replicated in non-weapon states,

results in larger inventories of separated weapon-usable plutonium, is less safe, results in greater releases of routine radioactive emissions, produces greater quantities of radioactive waste when low-level and intermediate-level waste is included,

provides no significant benefits in interim spent fuel and HLW storage requirements, and does not reduce the geologic repository requirements.

As noted in the recent Keystone Center report:

No commercial reprocessing of nuclear fuel is currently undertaken in the U.S.

The NJFF [Nuclear Joint Fact Finding] group agrees that while reprocessing

of commercial spent fuel has been pursued for several decades in Europe, overall fuel cycle economics have not supported a change in the

U.S. from a ‘‘once through’’ fuel cycle. Furthermore, the long-term availability of uranium at reasonable cost suggests reprocessing of spent fuel will not

be cost-effective in the foreseeable future. A closed fuel cycle with any type of

separations program will still require a geologic repository for long-term management of waste streams. (The Keystone Center, ‘‘Nuclear Power Joint FactFinding,’’ June 2007, emphasis added.)

GNEP represents the marriage of two failed technologies—reprocessing and fast

reactors. Reprocessing and closed fuel cycles have resulted in the accumulation of

about 250 tons of separated plutonium in civil nuclear programs in Europe, Japan,

Russia and India. In theory the GNEP vision reduces geologic repository requirements by substituting costly reprocessing plants and costly MOX fabrication plants

for costly geologic repositories.

For the GNEP vision to work an estimated 40 to 75 gigawatts (GW) of fast reactor

capacity would be required for every 100 GW of thermal reactor capacity. But we

already know from decades of experience with fast reactors and failed efforts to develop commercial fast breeder reactors that fast reactors are uneconomical and unreliable—far more costly and far less reliable than existing thermal reactors. No energy company is going to order a fast reactor when it can purchase a less-costly,

more-reliable light water reactor. GNEP is a recipe for further federalizing and increasing the cost of the nuclear fuel cycle.

Despite decades of research costing many tens of billions of dollars, the effort to

develop fast breeder reactors has been a failure in the United States, France, United

Kingdom, Germany, Italy, Japan and the Soviet Union. The flagship fast reactors

in each these countries have been failures. The effort to develop fast reactors for

naval propulsion was a failure in the United States and the Soviet Union, the only

two navies that tried to introduce fast reactors into their respective submarine

fleets. After investing tens of billions and decades of effort in fast breeder R&D, the

Congress should ask itself why there is only one commercial-size fast reactor operating in the world today—one out of approximately 440 reactors. NRDC knows why.

Fast reactors are uneconomical and unreliable.

39

The history of fast reactors was best summed up by the ‘‘father’’ of the Nation’s

Nuclear Navy, Admiral Hyman Rickover, when he decided in 1956 to abandon the

sodium-cooled fast reactor and replace it by a pressurized water reactor in the USS

Seawolf (SSN 575). ‘‘In Rickover’s words they were ‘expensive to build, complex to

operate, susceptible to prolonged shutdown as a result of even minor malfunctions,

and difficult and time-consuming to repair.’ ’’ (Richard G. Hewlett and Francis Duncan, Nuclear Navy: 1946–1962, (Chicago and London: The University of Chicago

Press, 1974), pp. 272–273.) A 1995 sodium coolant leak and fire in Japan’s Monju

prototype fast breeder reactor has kept the facility shut-down for the last twelve

years.

To our dismay and despite the decades of evidence to the contrary, the DOE is

actively signing up countries to the GNEP vision and promoting GNEP research and

development worldwide. But as the Keystone Center report noted, ‘‘The GNEP program could encourage the development of hot cells and reprocessing R&D centers

in non-weapon states, as well as the training of cadres of experts in plutonium

chemistry and metallurgy, all of which pose a grave proliferation risk.’’ (The Keystone Center, ‘‘Nuclear Power Joint Fact-Finding,’’ June 2007, p. 91.) ‘‘Could encourage’’ can now be changed to ‘‘is encouraging’’ as we are already witnessing the promotion under GNEP of closed fuel cycle R&D in South Korea.

Professor Frank von Hippel, in the most recent issue of Scientific American, has

summarized the reasons ‘‘it makes no sense to rush into [this] expensive and potentially catastrophic undertaking.’’ (Frank N. von Hippel, ‘‘Rethinking Nuclear Fuel

Recycling,’’ Scientific American, May 2008, pp. 88–93.)

In sum, Congress should pull the plug on DOE’s effort to close the close the fuel

cycle and stop funding research on advanced nuclear fuel reprocessing.

4. Reactor safety is a significant concern and, to a degree not matched by

any other power source, continued nuclear power generation is hostage to

its worst practitioners.

The most important factor affecting the safety of nuclear power plants is the safety culture at the plant. In the United States and some OECD countries the safety

culture at operating plants has improved over the past two decades. While new reactor designs have improved safety and security features, over the next two to three

decades, the safety and security of nuclear plants in the United States and the rest

of the world will largely be determined by the safety and security of existing reactors. Several countries that already have nuclear plants, e.g., Russia, Ukraine,

China, India, and Bulgaria, have notably weaker safety cultures than the nuclear

enterprise merits. This is not a situation that the United States Government as a

whole or this Congress can control or resolve.

Compounding the problem, expansion of nuclear power is projected to occur primarily in countries that currently have significant weaknesses in legal structure

(rule of law), construction practice, operating safety and security cultures, and regulatory oversight, e.g., China and India. Securing commercial sales and ‘‘nuclear renaissance’’ exuberance have taken precedence over nuclear safety and non-proliferation concerns. This is evidenced by the fact that since his election in May 2007,

President Nicolas Sarkozy has offered French reactors to such authoritarian, unaccountable, nontransparent, and corrupt governments as Georgia, Libya, the UAE,

Saudi Arabia, Egypt, Morocco, and Algeria (Nucleonics Week, Vol.49. No. 7, Feb. 14,

2008). Consequently, if another catastrophic nuclear reactor accident occurs during

the next couple of decades, it is more likely to occur in Russia, Ukraine, China,

India, or another country with a poor safety culture, than in the United States. Several countries recently expressing an interest in acquiring nuclear reactors also have

very high indices of industrial accidents and official corruption.

We concur with the findings and recommendations in the excellent report by the

Union of Concerned Scientists (UCS), ‘‘Nuclear Power in a Warming World’’ (December 2007). As noted by UCS, ‘‘The United States has strong nuclear power safety

standards, but serious safety problems continue to arise at U.S. nuclear power

plants because the Nuclear Regulatory Commission (NRC) is not adequately enforcing the existing standards.’’ (p. 3) Since the United States will continue to rely on

nuclear power for substantial base load electricity generation into the foreseeable

future, it is essential that the safety of U.S. nuclear plants be improved.

The biggest barrier to significant improvement of U.S. nuclear plant safety is the

poor safety culture of the NRC. The Congress should establish an unbiased outside

commission, similar to the Kemeny Commission, to report on ways to improve the

NRC’s safety culture. This commission should investigate failures to enforce regulations, staff deferral of safety inspections and upgrades so as not to impinge upon

reactor operating schedules, pro-nuclear bias in the selection of Commissioners, senior NRC staff management and advisory committee members, the revolving door

40

practice of NRC staff being hired from the industry it regulates and industry hiring

of NRC staff, the curtailment of public’s ability to engage in discovery and crossexamination during reactor licensing hearings, and other issues identified in the

UCS report.

5. After more than fifty years of nuclear power use there is no operational

spent fuel or high-level waste disposal facility anywhere in the world.

The proposed Yucca Mountain geologic repository site selection process has been

severely damaged by its premature politicized designation as the sole site for detailed investigation. This error has been compounded by unsupportable manipulation of the licensing criteria for the site, and the credibility of the technical site investigation has been seriously undermined by charges of fraudulent data. In light

of this record, the project either should be terminated, or the amount of wastes destined to the facility should be severely restricted, for example, by limiting its use

to the disposal of defense high-level waste and R&D on spent fuel disposal. In either

case, Congress should initiate a search for a second repository.

For fifty years, since the National Academy of Sciences first addressed this issue,

the scientific consensus has been that high-level nuclear waste, and by implication

spent fuel, should be permanently sequestered in deep underground geologic repositories, and by implication the primary barrier to prevent the release of the radioactivity into the biosphere should be the geology of the site. In this regard, some

amount of spent fuel can be disposed of safely in Yucca Mountain. At this time we

do not know whether this is greater or smaller than the statutory limit of 70,000

tonnes of spent fuel and high-level nuclear waste, and for reasons highlighted below,

we may never know because the site selection process and the criteria for judging

its long-term safety have been thoroughly corrupted.

In a separate paper I have reviewed how the Federal Government has thoroughly

corrupted the geologic repository site selection and site licensing processes (See

http://docs.nrdc.org/nuclear/nuc¥08010701A.pdf). Here I will focus on a few points.

The Environmental Protection Agency (EPA) has the statutory responsibility to

establish criteria for judging the adequacy of the proposed Yucca Mountain repository. The objective of these criteria of course is to protect future generations from

potential releases of radioactive materials. The criteria are based on three key considerations: 1) what is the highest radiation exposure dose that will be permitted

to the maximally exposed individual; 2) where will this dose limit be imposed, i.e.,

where will the maximally exposed individual be assumed to reside; and 3) over what

period of time is the dose limit imposed. The licensing criteria being established

EPA (in collusion with the NRC and the DOE through secret White House reviews

overseen by the Office of Management and Budget) are far from being adequately

protective of future generations. In developing the licensing criteria for Yucca Mountain it appears that the highest priority has been to ensure the licensability of the

Yucca Mountain site.

First, EPA ‘‘gerrymandered’’ the control boundary, extending it from five to 18 kilometers in the direction that the radioactive materials is projected to leak from the

repository. EPA also cut off the time period for compliance at 10,000 years. When

a Federal Court ruled that the 10,000 year cut-off was unlawful because it was inconsistent with the recommendations of the National Academy of Sciences as required by law, EPA proposed to eviscerate the Court ruling by proposing a twotiered dose limit—retaining the pre-10,000 year mean dose limit of 25 mrem and

proposing a post-10,000 year median dose limit of 350 mrem. The mean dose is projected to be approximately three times higher than the median dose. Thus, EPA has

proposed to allow the estimated mean exposure to the maximally exposed individual

during the peak exposure period to be on the order of one rem per year. According

to cancer risk estimates in the National Research Council’s BEIR VII report, a lifetime exposure at this dose rate today would result in one in 12 such exposed persons getting cancer from this exposure with half of the cancers being fatal.

Some would argue that 10,000 year is a sufficient compliance period. It should

be noted, however, that extending the compliance period beyond the projected life

of the engineered spent fuel canisters is one way to ensure that the geology of the

site will be the primary barrier preventing the release of the radioactivity into the

biosphere.

DOE is required to submit its Yucca Mountain license application to the NRC. In

its attempt to demonstrate that the repository will meet the EPA criteria, DOE

plans to run a series of calculations to predict the release and transport of radioactivity from the site. The computer code that DOE plans to use for this purpose is

so large that NRC will not be able to independently run it, and neither will any

potential intervenor in the licensing process. Consequently, the NRC will be unable

to confirm the validity of the DOE calculations. Instead, NRC plans to run its own

41

transport code, but only for the purpose of developing a set of questions to be answered by DOE.

The Yucca Mountain project has repeatedly failed to meet its schedule and there

is a possibility that the project will be terminated by Congress. If this occurs it

would represent the third failed attempt by the Federal Government to solve the

high-level waste/spent fuel disposal problem—the first failure being the salt vault

project at Lyons, Kansas followed by the failed Retrievable Surface Storage Facility

(RSSF).

So where does all this leave us. We have a proposed geologic repository for spent

fuel and high-level waste that was selected through a corrupted site selection process, that cannot meet the original site selection criteria, that will be judged against

thoroughly corrupted licensing criteria developed in collusion with DOE, the licensee, and judged with the aid of a computer simulation model that cannot be independently checked or run by the regulators or outside experts.

The Congress should require that DOE resume a search for a second repository

site. Aged spent fuel can be stored safely in dry casks until a safe geologic disposal

site is identified and licensed for use. However, it has been a policy of the Federal

Government that we should not rely on administrative controls for more than 100

years for the management and disposal of nuclear wastes.

The Congress also should approve consolidation of spent fuel from shut down reactors, but should not support consolidation of spent fuel from operational reactors

since these sites will require the on-site management of spent fuel in any case.

BIOGRAPHY FOR THOMAS B. COCHRAN

Dr. Thomas B. Cochran is a senior scientist in the nuclear program and holds the

Wade Greene Chair for Nuclear Policy at NRDC. He served as director of the nuclear program until 2007. He initiated NRDC’s Nuclear Weapons Databook project.

He also initiated a series of joint nuclear weapons verification projects with the Soviet Academy of Sciences. These include the Nuclear Test Ban Verification Project,

which demonstrated the feasibility of utilizing seismic monitoring to verify a lowthreshold test ban, and the Black Sea Experiment, which examined the utility of

passive radiation detectors for verifying limits on sea-launched cruise missiles. He

has served as a consultant to numerous government and non-government agencies

on energy, nuclear nonproliferation and nuclear reactor matters. He is a member

of the Department of Energy’s Nuclear Energy Research Advisory Committee. Previously he served as a member of DOE’s Environmental Management Advisory

Board, Fusion Energy Sciences Advisory Board, and Energy Research Advisory

Board; the Nuclear Regulatory Commission’s Advisory Committee on the Cleanup

of Three Mile Island; and the TMI Public Health Advisory Board.

Dr. Cochran is the author of The Liquid Metal Fast Breeder Reactor: An Environmental and Economic Critique (Washington, D.C.: Resources for the Future, 1974)

and co-editor/author of the Nuclear Weapons Databook, Volume I: U.S. Nuclear

Forces and Capabilities (Cambridge, Massachusetts: Ballinger Press, 1984); Volume

II: U.S. Nuclear Warhead Production (1987); Volume III: U.S. Nuclear Warhead Facility Profiles (1987); Volume IV: Soviet Nuclear Weapons (1989); and Making the

Russian Bomb: From Stalin to Yeltsin (Boulder, Colorado: Westview Press, 1995).

In addition, he has published numerous articles and working papers, including

those in SIPRI Yearbook chapters, Arms Control Today, and the Bulletin of the

Atomic Scientists. He has co-authored (with Dr. Robert S. Norris) the article ‘‘Nuclear Weapons’’ in the 1990 printing of The New Encyclopedia Britannica (15th edition).

Dr. Cochran received his Ph.D. in physics from Vanderbilt University in 1967. He

was Assistant Professor of Physics at the Naval Postgraduate School, Monterey,

California, from 1967 to 1969; modeling and simulation group supervisor of the Litton Mellonics Division, Scientific Support Laboratory, Fort Ord, California, from

1969 to 1971; and, from 1971 to 1973, a senior research associate at Resources for

the Future. Dr. Cochran has been with NRDC since 1973. He is the recipient of the

American Physical Society’s Szilard Award and the Federation of American Scientists’ Public Service Award, both in 1987. As a consequence of his work, NRDC

received the 1989 Scientific Freedom and Responsibility Award by the American Association for the Advancement of Science (AAAS). Dr. Cochran is a Fellow of the

American Physical Society and the AAAS.

Chairman GORDON. Thank you, Dr. Cochran. And Mr. Fri, you

are recognized.

42

STATEMENT OF MR. ROBERT W. FRI, VISITING SCHOLAR, RESOURCES FOR THE FUTURE; CHAIR, COMMITTEE ON REVIEW OF DOE’S NUCLEAR ENERGY RESEARCH AND DEVELOPMENT PROGRAM, BOARD ON ENERGY AND ENVIRONMENTAL SYSTEMS, NATIONAL RESEARCH COUNCIL

Mr. FRI. Thank you, Mr. Chairman, and Mr. Bilbray, and Members of the Committee. I am here today representing the National

Research Council, where I served as Chair of a committee to review

DOE’s nuclear energy R&D program. We submitted our report last

October, and I would like to just touch on some of the highlights

from it.

We examined four major R&D programs, the funding for which

is on the order of $300 to $400 million per year, that are managed

by the Office of Nuclear Energy in the Department of Energy. Now,

they were what is called Nuclear Power (NP) 2010, which is a program cost-shared with industry to assist in the licensing of the first

nuclear plants in the U.S. in over 30 years, and three real research

programs, one, the Generation IV class of nuclear reactors, secondly, the Nuclear Hydrogen Initiative, and finally, the Advanced

Fuel Cycle Initiative, which is a program aimed to develop technologies to close the back end of the nuclear fuel cycle.

The committee recommended that the Department give the highest priority to NP 2010. If nuclear power is to play a major role

in the Nation’s energy picture, it is simply essential to license,

build, and operate the first of the next generation of reactors, and

given the long lead times and construction periods involved, it is

important to do it now. The committee also noted that the human

and intellectual infrastructure needed to support this effort has

been aging, and therefore, we specifically recommended first, continued support of university programs in nuclear science and engineering, and secondly, consideration of the appropriate research

support for the nuclear industry, for example, through the provision of national user facilities, such as the Advanced Test Reactor

at the Idaho National Laboratory.

Now, the same sense of urgency, however, did not attend the

other programs we examined. There are acceptable methods of storing spent nuclear fuel safely for decades without reprocessing and

fuel recycling. There doesn’t seem to be a serious shortage of uranium for reactor fuel, and certainly not one that is going to emerge

for many years. And moreover, we concluded that it will take considerable time for the information to be developed to change these

judgments.

Now, this is not to say that research in new reactor design or hydrogen production or closing the fuel cycle should not go on. Indeed, our committee recommended that it should. However, the research program should be designed to lay the basis for deployment

of these technologies some time in the future, when circumstances

warrant. To this end, funding at a sustainable level over time is

more important, it would seem to us, than speed, and we strongly

urge the development of an independent oversight function that

would help ensure that the advanced research programs stay on

track over an extended period of time, and continue to be responsive to the changing external environment.

43

We also concluded that the development of large scale facilities

for closing the nuclear fuel cycle would be inconsistent with our assessment of priorities. For this reason, and because of the very

large technical risks involved in an overly aggressive construction

program, we recommended against the funding of such facilities in

the near-term.

Thank you, Mr. Chairman, and I look forward to your questions.

[The prepared statement of Mr. Fri follows:]

PREPARED STATEMENT OF ROBERT W. FRI

Abstract

There has been a substantial resurgence of interest in nuclear power in the

United States over the past few years. One consequence has been a rapid growth

in the research budget of DOE’s Office of Nuclear Energy (NE). In light of this

growth, the Office of Management and Budget included within the FY 2006 budget

request a study by the National Academy of Sciences to review the NE research programs and recommend priorities among those programs. The programs to be evaluated were: Nuclear Power 2010 (NP 2010), Generation IV (GEN IV), the Nuclear

Hydrogen Initiative (NHI), the Global Nuclear Energy Partnership (GNEP)/Advanced Fuel Cycle Initiative (AFCI), and the Idaho National Laboratory (INL) facilities. This testimony summarizes the conclusions and recommendations of the National Academies review and its report, Review of DOE’s Nuclear Energy Research

and Development Program.

Mr. Chairman and Members of the Committee:

My name is Robert Fri. I am a Visiting Scholar at Resources for the Future, an

organization dedicated to improving environmental and natural resource policymaking through objective social science research of the highest caliber. Today, however, I am representing the National Research Council as Chair of its Committee

on Review of DOE’s Nuclear Energy Research and Development Program, which

produced the report, Review of DOE’s Nuclear Energy Research and Development

Program.

The FY 2006 President’s Budget Request asked for funds to be set aside for the

National Academy of Sciences to review the Office of Nuclear Energy (NE) research

programs and budget and to recommend priorities for those programs given the likelihood of constrained budget levels in the future. The programs to be evaluated were

Nuclear Power 2010, the Generation IV reactor development program, the Nuclear

Hydrogen Initiative, the Global Nuclear Energy Partnership (GNEP)/Advanced Fuel

Cycle Initiative (AFCI) and the Idaho National Laboratory facilities program. Our

Committee began its work in August, 2006, and completed its report in October,

2007.

In the balance of this statement, I summarize the results of our work. To avoid

covering too many topics, I have not included our recommendations on the Idaho

National Laboratory. However, that laboratory is intended to be the Department’s

center for nuclear energy research and as such plays an essential supporting role

in many DOE programs.

BACKGROUND

Growing energy demands, emerging concerns about the emissions of carbon dioxide from fossil fuel combustion, the increasing and volatile price for natural gas, and

a sustained period of successful operation of the existing fleet of nuclear power

plants have resulted in a renewal of interest in nuclear power in the United States.

One consequence of the renewed interest in nuclear power for the DOE mission has

been rapid growth in the DOE research budget: it grew by nearly 70 percent from

the $193 million appropriated in FY 2003 to $320 million in FY 2006.

Despite these changes in program and budget experienced by the NE research

program, there are some constant features that set the context for the committee’s

evaluation approach. In this regard, two observations have influenced the committee’s approach to this project.

Stable Major Goals: One is that while the details of the NE program have shifted

considerably, its high-level goals have changed little if at all. While stated in somewhat different words in various reports, the committee believes that a reasonable

summary of the goals for technology development in support of the NE mission is:

44

• Assist the nuclear industry in providing for the safe, secure, and effective operation of nuclear power plants already in service, the anticipated growth in

the next generation of light water reactors, and associated fuel cycle facilities.

• Provide for nuclear power at a cost that is competitive with other energy

sources over time.

• Support a safe and publicly acceptable domestic waste management system,

including options for long-term disposal and the related waste forms.

• Provide for effective proliferation resistance and physical protection of nuclear

energy systems, both domestically and in support of international non-proliferation and nuclear security regimes.

• Create economical and environmentally acceptable nuclear power options for

assuring long-term non-nuclear energy supplies while displacing insecure and

polluting energy sources; such options include electricity production, hydrogen

production, process heat, and water desalinization.

Uncertain Future Development: A second observation is that predicting the course

of nuclear technology development over the next several decades entails substantial

uncertainties. Indeed, the committee heard presentations from several respected analysts about how this development might take place. Their views of the technological future differed in important ways. A major reason for this divergence is that

the development of new nuclear technology requires a planning horizon measured

in decades, in no small part because of the capital intensity of the commercial nuclear energy sector. Over such a time period, the committee believes that the success

of various candidate technologies will depend on policy and other forces outside the

control of any NE technology development program. For example:

• Waste management options and associated regulatory regimes and their likely acceptance by the public range from long-term storage at reactor sites or

centralized interim storage, to direct disposal of all spent fuel in geologic repositories and the reduced waste forms envisioned by GNEP.

• Environmental policy, especially regarding climate change, not yet formulated

could have decisive impacts on the attractiveness of nuclear power.

• Opinion on the cost and availability of natural uranium and associated enrichment capacity varies widely.

• Non-proliferation and physical protection regimes are in flux, especially as

international agreements continue to evolve.

• The rate of near-term expansion of nuclear power plants matters, both domestically and internationally, since this rate drives the timing and need for advanced reactors and fuel cycle technology.

NP 2010

The Nuclear Power 2010 (NP 2010) program was established by DOE in 2002 to

support the near-term deployment of new nuclear plants. NP 2010 is a joint government/industry 50/50 cost-shared effort with the following objectives:

• Identify sites for new near-term nuclear power plants and obtain early site

permits.

• Complete detailed, first-of-a-kind design engineering on two advanced light

water reactor (ALWR) plants and confirm the safety of the designs by obtaining design certifications.

• Obtain combined construction and operating licenses in keeping with the

Standardization Policy of the U.S. Nuclear Regulatory Commission.

• Develop an effective inspection, testing, analyses, and acceptance criteria

(ITAAC) process to assure licensing compliance during construction.

• Implement the Energy Policy Act of 2005 standby support provisions for the

construction of new nuclear plants.

• Estimate the capital costs and operation and maintenance costs, construction

time, and levelized cost of electricity for the two plants.

• Evaluate the business case for building new nuclear power plants and pave

the way for an industry decision to build new ALWR nuclear plants in the

United States. Construction would begin early in the next decade.

NP 2010 and selected commercial research projects should be fully funded as a

matter of highest priority. Unless the commercial fleet of light water reactors

(LWRs) grows, nuclear power will be a diminishing energy resource for the United

States and there will be little need for all of DOE’s longer-term research programs.

45

Although increases in the NP 2010 budget are likely, they do not account for a large

fraction of the total NE funding. The NP 2010 requirements should be fully supported.

In addition, DOE should augment this program to ensure timely and cost-effective

deployment of the first new reactor plants. Of particular importance is the need to

address industrial and human resource infrastructure issues. Specifically, DOE

should support:

• Research in support of the commercial fleet. The committee does not recommend a large federal research program, because most of this research

should be industry-supported. However, some specific projects have sufficient

public benefit to warrant federal funding, for which DOE should share about

20 percent of the costs and support user facilities at incremental cost. These

elements of the program should be fully funded when the NP 2010 licensing

and design completion efforts come to an end.

• University infrastructure. A sizable buildup in nuclear energy production, research, and development necessitates strengthening university capabilities to

educate a growing number of young professionals and scientists in the relevant areas. DOE should include this program in its budget at the levels authorized by the Energy Policy Act of 2005.

ADVANCED FUEL CYCLE INITIATIVE/GLOBAL NUCLEAR ENERGY

PARTNERSHIP

Since 2002, the United States has been conducting a program for reprocessing

spent fuel under the Advanced Fuel Cycle Initiative (AFCI). Then, in February

2006, it announced a change in its nuclear energy programs. Recycling would be developed under a new effort, GNEP, which would incorporate AFCI as one of its activities. If the recycling R&D program is successful and leads to deployment, GNEP

would eventually require the United States to be an active participant in the community of nations that recycle fuel, because one aspect of the partnership is that

some nations recycle nuclear fuel for other user nations.

At the time of our report, GNEP has two key stated technical objectives:

• Develop, demonstrate, and deploy advanced technologies for recycling spent

nuclear fuel that do not separate plutonium, with the goal over time of ceasing separation of plutonium and eventually eliminating excess stocks of civilian plutonium and drawing down existing stocks of civilian spent fuel. Such

advanced fuel cycle technologies would substantially reduce nuclear waste,

simplify its disposition, and help to ensure the need for only one geologic repository in the United States through the end of this century.

• Develop, demonstrate, and deploy advanced reactors that consume transuranic elements from recycled spent fuel.

Three facilities were key components of the GNEP program as then planned: (1)

a nuclear fuel recycling center, or centralized fuel treatment center (2) an advanced

sodium-cooled burner reactor—a fast-neutron reactor; and (3) an advanced fuel cycle

facility. At the time of the writing of this report, the latest information the committee had was that the baseline separation process was UREX+1a, although some

other comparable separation technology, most notably pyroprocessing, may be adopted at a later stage.

The GNEP program is premised on an accelerated deployment strategy that will

create significant technical and financial risks by prematurely narrowing technical

options. Specifically:

• The domestic need for waste management, security, and fuel supply is not

great enough to justify early deployment of commercial-scale reprocessing and

fast reactor facilities. In particular, the near-term need for deployment of advanced fuel cycle infrastructure to avoid a second repository for spent fuel is

far from clear. Even if a second repository were to be required in the nearterm, the committee does not believe that GNEP would provide short-term

answers.

• The state of knowledge surrounding the technologies required for achieving

the goals of GNEP is still at an early stage, at best a stage where one can

justify beginning to work at an engineering scale. However, it seems to the

committee that DOE has given more weight to schedule than to conservative

economics and technology. The committee concludes that the case presented

by the promoters of GNEP for an accelerated schedule for commercial construction is unwise. In general, it believes that the schedule should be guided

by technical progress in the R&D program.

46

1 A majority of the committee favors fuel cycle and fast reactor research, as was being conducted under AFCI; however, two committee members recommend against such research.

• The cost of the GNEP program is acknowledged by DOE not to be commercially competitive under present circumstances. There is no economic justification for going forward with this program at anything approaching a commercial scale. DOE claims that the GNEP is being implemented to save the

United States nearly a decade in time and a substantial amount of money.

In view of the technical challenges involved, the committee believes that just

the opposite is likely to be true.

• Several fuel cycles could meet the eventual goal of creating a justifiable recycling system. However none of the cycles proposed, including UREX+ and the

sodium fast reactor, is at a stage of reliability and understanding that would

justify commercial-scale construction at this time. Significant technical problems remain to be solved.

• The qualification of multiply-recycled transuranic fuel is far from reaching a

stage of demonstrated reliability. Because of the time required to test the fuel

through repeated refabrication cycles, achieving a qualified fuel will take

many years.

The committee believes that a research program similar to the original AFCI is

worth pursuing.1 Such a program should be paced by national needs, taking into

account economics, technological readiness, national security, energy security, and

other considerations. However, considerable uncertainty surrounds the technology

and policy options that will ultimately satisfy these needs. For this reason, the committee believes that the program described below should be sufficiently robust to

provide useful technology options for a wide range of possible outcomes. On the

other hand, the program should not commit to the construction of a major demonstration or facility unless there is a clear economic, national security, or environmental policy reason for doing so. Because of these complexities, the committee recommends DOE obtain much more external input than it so far has—in particular,

an independent, thorough peer review of the program.

GENERATION IV REACTORS

DOE has engaged other governments in a wide-ranging effort to develop advanced

next-generation nuclear energy systems, known as Generation IV, with the goal of

widening the applications and enhancing the economics, safety, and physical protection of the reactors and improving fuel cycle waste management and proliferation

resistance in the coming decades. Six nuclear reactor technology concepts were identified in the DOE-initiated, international Generation IV Technology Roadmap completed in 2002. Each of the six technologies, as well as several areas of crosscutting

research, is now being pursued by a consortium of countries as part of the Generation IV International Forum. Three concepts are thermal neutron spectrum systems—very-high-temperature reactors, molten salt reactors, and supercritical-watercooled reactors—with coolants and temperatures that enable hydrogen or electricity

production with high efficiency. In addition, three are fast neutron spectrum systems—gas-cooled fast reactors, lead-cooled fast reactors, and sodium-cooled fast reactors (SFRs)—that will enable better fuel use and more effective management of

actinides by recycling most components in the discharged fuel.

From 2002 to 2005, the primary goal of the U.S. Generation IV program was to

develop the Next Generation Nuclear Plant (NGNP), focusing on high-temperature

process heat (850°C–1000°C) and innovative approaches to making energy products,

such as hydrogen, that might benefit the transportation industry or the chemical

industry. At the end of 2005, DOE shifted the fundamental emphasis of the overall

Generation IV program, making spent fuel management using a closed fuel cycle the

main goal of the program. This new GNEP priority led to reduced funding for the

NGNP programs; phasing out of the other programs, and refocusing of the SFR concept to near-term demonstration. With these changes, NGNP’s very high temperature gas reactor (VHTR) remains the only major reactor concept that is not integrated into the GNEP program.

Economic benefits of early commercialization of high-temperature reactors (HTRs)

and VHTRs based on NGNP technology could be realized in four market segments

where HTRs could make products at a lower cost than competing technologies: baseload electricity, combined heat and power, high-temperature process heat, and hydrogen. A long-term goal for the NGNP is to demonstrate hydrogen production as

an energy carrier for a hydrogen economy. However, in each of those four segments,

there are specific applications where HTRs will have near-term advantages. By diVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
47

recting NGNP and the Nuclear Hydrogen Initiative (NHI) R&D toward those specific applications, stronger near-term industry interest and investment is more likely, which in turn will support continued R&D investments for subsequent expansion

of HTR technology into additional market segments and, in the longer-term, support

the transition to a hydrogen economy.

The NGNP program has well-established goals, decision points, and technical alternatives. A key decision point is the nuclear licensing approach. However, little

planning has been done on how the fuel for the NGNP would be supplied. There

is a particle fuel R&D program, but it will take up to two decades to complete the

development and testing of this new fuel. To keep to the apparently preferred schedule, which has a FY 2017 plant start-up date, some of the technical decisions must

be made quickly, so that detailed design, component and system testing, and licensing can be initiated. However, it is unlikely that the plant can begin operation by

2017 owing to the significant funding gaps that developed in FY 2006 and FY 2007

and affected the scope and schedule for testing fuel and structural materials as well

as the heat transport equipment. A schedule that coordinates the elements required

for public-private partnership, design evolution, defined regulatory approach, and

R&D results should be articulated to enhance the potential for program success.

The main risk associated with NGNP is that the current business plan calls for

the private sector to match the government (DOE) funding. So far, however, not a

single program has been articulated that coordinates all the elements required to

successfully commission the NGNP. The current disconnect between the base NGNP

program plan and the complementary public/private partnership initiative must be

resolved. DOE should decide whether to pursue a different demonstration with a

smaller contribution from industry or, alternatively, a more basic technology approach for the VHTR.

NE should sustain a balanced R&D portfolio in advanced reactor development.

The program requires predictable and steady funding, but its goals can be more

modest and its timetables stretched. A revised program can be conducted within levels recently appropriated for Generation IV and for SFR-related R&D under GNEP.

NUCLEAR HYDROGEN INITIATIVE

NHI is DOE’s research program for developing technologies to produce hydrogen

and oxygen from water feedstock using nuclear energy. The program includes a

small effort supporting advanced low-temperature electrolysis, but its primary focus

is three methods that use high-temperature process heat to achieve greater efficiency. The high-temperature methods could realize 60–80 percent greater efficiency

than conventional electrolysis. These methods involve challenging high-temperature

materials problems, which are being addressed with laboratory-scale research at

this time. Key technology down selections to allow testing at the pilot and engineering scales are scheduled for 2011 and 2015. The NHI program is tightly tied to the

NGNP program to develop a reactor capable of producing high-temperature process

heat. NHI activities are coordinated with the larger DOE hydrogen program, led by

the Office of Energy Efficiency and Renewable Energy, as well as with NGNP.

NHI is well formulated to identify and develop workable technologies, but the

schedules and budgets need to be adjusted to assure appropriate coupling to the

larger NGNP program. DOE should expand NHI program interactions with industrial and international research organizations experienced in chemical processes and

operating temperatures similar to those in thermochemical water splitting. NE

should also broaden the hydrogen production system performance metrics beyond economics—for example, it could use the Generation IV performance metric of economics, safety, and sustainability.

BALANCE AND OVERSIGHT

The AFCI, GEN IV, and NHI programs require steady progress and should evolve

over a reasonable time. Given this need, and as a counterbalance to the short-term

nature of the federal budget process, NE should adopt an oversight process for evaluating the adequacy of program plans, evaluating progress against these plans and

adjusting resource allocations as planned decision points are reached.

The senior advisory body for NE has been the Nuclear Energy Research Advisory

Committee (NERAC). A modified NERAC seems the obvious starting point for reestablishing oversight of the NE programs. In the committee’s opinion, the key will

be to ensure its independence, transparency, and focus on the most important strategic issues. The committee has not attempted to design a specific oversight capability, but the following characteristics would be appropriate for the body it has in

mind:

48

• Encourage objectivity by recognizing that knowledgeable persons have different points of view and that balance is therefore best achieved by diversifying the membership of the oversight body.

• Avoid conflicts of interest by requiring public disclosure of members’ connections with study sponsors or organizations likely to be affected by study results. Persons directly funded by sponsors are rarely appointed to such bodies.

• Ensure transparency by requiring that both the statement of task and the

final report for each project are routinely made public in a timely fashion.

BIOGRAPHY FOR ROBERT W. FRI

Robert W. Fri is a visiting scholar and senior fellow emeritus at Resources for the

Future, where he served as President from 1986 to 1995. From 1996 to 2001 he

served as Director of the National Museum of Natural History at the Smithsonian

Institution. Before joining the Smithsonian, Mr. Fri served in both the public and

private sectors, specializing in energy and environmental issues. In 1971 he became

the first Deputy Administrator of the U.S. Environmental Protection Agency (EPA).

In 1975, President Ford appointed him as the Deputy Administrator of the Energy

Research and Development Administration. He served as Acting Administrator of

both agencies for extended periods. From 1978 to 1986, Fri headed his own company, Energy Transition Corporation. He began his career with McKinsey & Company, where he was elected a principal. Mr. Fri is a senior advisor to private, public,

and nonprofit organizations. He is a Director of the American Electric Power Company and a trustee of Science Service, Inc. (publisher of Science News and organizer

of the Intel Science Talent Search and International Science and Engineering Fair).

He is a member of the National Petroleum Council, the Advisory Council of the

Electric Power Research Institute, the Advisory Council of the Marian E. Koshland

Science Museum, and the steering committee of the Energy Future Coalition. In

past years, he has been a member of the President’s Commission on Environmental

Quality, the Secretary of Energy Advisory Board, and the University of Chicago

board of governors for Argonne National Laboratory. He has chaired advisory committees of the National Research Council (NRC), including the recent Committee on

Review of DOE’s Nuclear Energy Research and Development Program, the Carnegie

Commission on Science, Technology and Government, EPRI, and the Office of Technology Assessment (OTA). From 1978 to 1995 he was a Director of Transco Energy

Company, where he served as Chair of the Audit, Compensation, and Chief Executive Search Committees. He is a member of Phi Beta Kappa and Sigma Xi and a

national associate of the National Academy of Sciences. He received a B.A. in Physics from Rice University and an M.B.A. (with distinction) from Harvard University.

Chairman GORDON. Oh, it was good timing, then. Very good timing. Okay. Dr., or rather, Admiral Grossenbacher.

STATEMENT OF VICE ADMIRAL JOHN J. GROSSENBACHER, DIRECTOR, IDAHO NATIONAL LABORATORY, U.S. DEPARTMENT

OF ENERGY

Vice Admiral GROSSENBACHER. Mr. Chairman, Congressman

Bilbray, and Members of the Committee, good morning, and thank

you for providing me the opportunity to speak with you on a subject of great importance to our country, nuclear power and the opportunities and challenges associated with it.

It is a privilege for me to represent the 3,800 scientists, engineers, skilled technicians, and support staff of the Idaho National

Laboratory. At the dawn of the Nuclear Age, the Idaho National

Laboratory was our nation’s reactor laboratory, developing and

demonstrating a range of technologies, from boiling water reactors

to breeder reactors, gas cooled reactors, reactors cooled by organic

coolants, over 52 different reactors.

As we consider the role of nuclear energy in our nation’s and the

world’s energy portfolio, people of the Idaho National Laboratory

are eager to collaborate with university colleagues, nationally and

internationally experienced industry technical leaders, and the sysVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00052 Fmt 6633 Sfmt 6601 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
49

tem of laboratories and their unique capabilities within the Department of Energy. We are eager to collaborate to answer the difficult

questions that should guide our nation’s and the world’s choice of

our future energy portfolio.

Technology provides the means to an end. We humans have chosen an energy dense existence as an end, with attendant benefits,

enormous benefits, costs, and risks associated with the means. Our

choices, as we modify that end and adjust those means, should be

informed by discipline, technically sound research, development,

and demonstration that illuminates our choices. DOE’s Nuclear Energy Program attempts to do just that. Nuclear Power 2010, Light

Water Reactor R&D, the Advanced Fuel Cycle Initiative, Generation IV nuclear energy systems development, and investments in

our human capital, very importantly at our universities, are the

elements of DOE’s Nuclear Energy Program.

As has been mentioned, Nuclear Power 2010 is a public/private

initiative that reduces technical, institutional, and regulatory barriers to new plant development. Light Water Reactor R&D intends

to bring the enormous technical capabilities of the Department of

Energy’s laboratories to bear on current and future light water reactor performance issues, in partnership with industry, and engaging the creativity of our universities.

The Advanced Fuel Cycle Initiative is the domestic technology

development and deployment component of GNEP, the Global Nuclear Energy Partnership, a significant policy initiative intended to

develop and demonstrate advanced fuel cycle technologies that will

increase the efficiency with which we use nuclear fuel, and decrease the waste burden of the nuclear fuel cycle. GNEP is intended to also provide a nuclear materials management system

that addresses proliferation risks, and all in an environment that

is relevant in a world where the use of nuclear energy is expanding

and expanding rapidly.

Generation IV nuclear energy systems development is intended

to enhance the economics, safety, physical protection, improved

waste management, and reduced proliferation risk of reactors and

fuel cycles beyond the Light Water Reactor technologies we use

today.

The NGNP, the Next Generation Nuclear Plant, is a significant

element of this program, intended to develop and demonstrate a reactor after next technology, that can expand the use of nuclear energy beyond electricity generation, to the provision of industrial

process heat.

DOE’s Nuclear Energy Program engages the next generation of

nuclear scientists, engineers, and technicians through its university

and intern programs. It is also looking to the future, in addressing

how we sustain our nuclear science and technology infrastructures,

both inside and outside the Department of Energy.

In conclusion, Mr. Chairman, the Department of Energy’s Nuclear Energy Program is intended to provide us with informed

choice and opportunities for the use of nuclear energy in our current and future energy portfolio. We at the Idaho National Laboratory are proud, as the Nation’s nuclear energy laboratory, to have

a leadership role in this very important work.

Thank you very much.

50

[The prepared statement of Vice Admiral Grossenbacher follows:]

PREPARED STATEMENT OF VICE ADMIRAL JOHN J. GROSSENBACHER

Mr. Chairman and distinguished Members of the Committee, good morning and

thank you for providing me the opportunity to speak with you on a subject of such

great importance to our nation—nuclear power, and the opportunities and challenges associated with it.

As Director of Idaho National Laboratory—the Nation’s nuclear energy laboratory—and as former commander of the U.S. Naval Submarine Forces, I’ve committed most of my adult life to the safe application of advanced nuclear energy systems. Needless to say, I feel personally responsible for helping chart a prudent

course toward a secure and sustainable energy future for this nation—a future enabled by a richly diverse energy portfolio that can maintain and even expands nuclear power’s significant contributions.

I’ll highlight the Department of Energy’s major nuclear energy programs—from

my vantage as INL Director—with an eye toward how they address the challenges

of cost, waste management and proliferation as cited in your letter of invitation. I’ll

also discuss the role of the national laboratories in supporting nuclear energy research and development, what is being done to support education and work force

development for the nuclear power industry, and challenges that national laboratories face in sustaining our nuclear science and technology infrastructure.

Mr. Chairman, before I get to the core of my remarks today, I’d like to ask you

to consider how they conform to the spirit and intent of what you said in your news

release of two weeks ago. In acknowledging the 50th anniversary of the Defense Advanced Research Projects Agency—DARPA—you stated, ‘‘Given the geopolitical instabilities that threaten global energy supplies, the skyrocketing costs of energy to

consumers, the looming threat of global climate change, and the resulting costs from

the likely regulation of carbon dioxide emissions, there is a critical need for groundbreaking science-based energy solutions that can be deployed in the marketplace.’’

The Department of Energy and its network of national labs could not agree with

you more. That’s precisely why we have the following programs.

NUCLEAR POWER 2010

The U.S. Energy Information Administration projects that U.S. electricity consumption will increase 30 percent by 2030. This means our nation will need hundreds of new plants to provide electricity. Rising demand for energy and electricity,

pressure to reduce carbon emissions along with fair consideration of the outstanding

performance and economics associated with operating U.S. nuclear power plants

have spurred a nuclear energy renaissance in the U.S.

Recognizing that all sources of energy will be needed to meet energy demand, the

Department of Energy launched the Nuclear Power 2010 program in 2002 as a joint

government-industry cost-shared program to identify sites for new nuclear power

plants, develop and bring to market advanced nuclear plant technologies, and evaluate the business case for building new nuclear power plants by demonstrating untested regulatory processes. Together with incentives enacted through the Energy

Policy Act of 2005—federal loan guarantees for low emission energy technologies,

federal risk insurance and production tax credits—government and industry are

working together to address the last barriers associated with building new plants:

the financial and regulatory risks. These federal tools will allow first movers to address and manage the risks associated with building the first few new nuclear

power plants. This year’s budget request seeks to significantly increase the government’s share in the NP 2010 program and to extend the period during which companies can seek loan guarantees by two years. Industry has stated that loan guarantees are essential to ensuring the first new nuclear plants are ordered and built.

Industry has responded with 17 companies and consortia pursuing licenses for

more than 30 nuclear power plants in states represented by 20 members of this

committee. Nuclear Regulatory Commission review of the first wave of applications

has already begun and industry indicates it expects to submit 11 to 15 more applications this year. At the same time, orders are starting to be placed for long-lead

items such as forgings. The signing earlier this month of a contract between Georgia

Power and Westinghouse for two AP–1000 units is yet another signal that the nuclear energy renaissance has begun.

LIGHT WATER REACTOR RESEARCH AND DEVELOPMENT

The combination of low operating and fuel costs which keep electricity prices

down, an excellent record of performance, and clean energy benefits means that nuVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00054 Fmt 6633 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
51

clear energy will remain an important source of energy for our nation’s future. The

design features of the Generation III and Generation III+ nuclear power plants,

which include redundant systems, automatic shutdown systems and multiple layers

of protection, combined with a strong safety culture and an excellent regulator

means that nuclear power will continue to be a safe and reliable source of energy.

The increased electricity from existing nuclear power plants since 1990 is enough

to power 29 cities the size of Atlanta or Boston each year. The outstanding performance of the existing fleet and the prospects that market pull will demand a ramping

up in new nuclear plant build projects has prompted consideration of a new government-industry cost-shared initiative in FY 2009 within the Generation IV program

for light water reactor research and development. This research and development

would be aimed at supporting efficient construction and operation of the dozens of

new plant projects anticipated over the next decade and at maximizing the contribution of the existing fleet by further extending the licenses beyond 60 years.

In February, the Electric Power Research Institute and Idaho National Laboratory issued a joint Nuclear Power Strategic Plan for Light Water Reactor Research

and Development that sets forth 10 objectives, six of which are considered to be of

highest priority for this initiative. These high priority objectives include:

• Transitioning to state of the art digital instrumentation and controls

• Making further advances in nuclear fuel reliability and lifetime

• Implementing broad-spectrum workforce development

• Implementing broad-spectrum infrastructure improvements for design and

sustainability

• Addressing electricity infrastructure-wide problems

• Sustaining the high performance of nuclear plant materials.

This LWR strategic R&D plan presents a framework for how industry and government should work together on research and development and is the first step in

identifying the specific research to be pursued. DOE’s budget request includes $10M

to support LWR R&D, representing the government’s share in FY 2009. Both Nuclear Power 2010 and the LWR R&D initiative will enable the Nation to do much

to meet near-term domestic power needs, while continuing to avoid generation of the

massive amounts of greenhouse gases that would be produced if our nuclear fleet

were to be replaced with fossil-fuel plants.

ADVANCED FUEL CYCLE INITIATIVE

In much the same way that Congress has determined that it is in the best interest of our nation to boost the fuel economy of our cars, trucks, vans and SUVs—

so, too, has DOE and the global nuclear industry determined that we need to raise

the fuel efficiency of nuclear power, while reducing the toxicity and volume of waste

that requires disposal. The Department and its system of national laboratories—

working in partnership with industry and academia—are pursuing this essential

goal through the Advanced Fuel Cycle Initiative.

The once-through fuel cycle used by our nation’s 104 nuclear power plants is only

able to extract less than five percent of the available energy from their nuclear fuel

rods before they have to be replaced. By eventually closing the fuel cycle as envisioned by AFCI, much more of the available energy in nuclear fuel would be extracted, and more easily managed high-level waste would result. Admittedly, significant technology development must occur before AFCI’s complete vision is realized,

and additional cost analyses should be done to further understand the economics.

But waiting until someone determines the economics are right to begin investing in

alternate and advanced technologies tends to produce the kind of crises the world

faces today with oil prices at well over $100 a barrel.

Over the near-term, the AFCI program is conducting research and demonstrating

technologies that have a high probability of reducing the volume, heat generation

and radiotoxicity of used nuclear fuel materials requiring repository disposal. The

AFCI program is developing advanced separations processes for the treatment of

used nuclear fuel from current light water reactor and advanced light water reactor

systems. While plutonium burning and transmutation of some of the other transuranic elements that impact repository performance can be accomplished in thermal

reactors, more complete transmutation of transuranic elements is achievable in fast

reactors with a much larger reduction in decay heat and radiotoxicity per unit energy produced in a nuclear power plant. This translates into a reduction in the

source term per unit energy produced and hence, more effective utilization of a geologic repository. The AFCI program is conducting R&D aimed at addressing the economics of fast reactor technology and developing the advanced fuels and associated

52

reprocessing technologies for sodium-cooled fast reactors to enable more of the energy value of used nuclear fuel to be recovered, while destroying, and extracting energy from the transuranics.

AFCI is the first DOE Office of Nuclear Energy program to implement a Technical

Integration Office model to effectively and efficiently coordinate the research and development across the DOE national laboratory complex, including with universities

and international research partners. Research supporting AFCI has been organized

into seven campaigns and two cross-cutting functions. The seven campaigns include

advanced separations technologies, advanced fuel development, systems analysis,

safeguard systems development, advanced reactor design, waste form development,

and grid-appropriate reactor development. The two cross-cutting functions are modeling and simulation and nuclear safety and regulatory activities. World-recognized

experts at DOE’s national laboratories have been assigned to lead each of the campaigns, with much of the research conducted at the Science labs.

AFCI is the domestic R&D component of the Global Nuclear Energy Partnership.

GNEP is an international initiative that seeks to enable global expansion of nuclear

energy in a safe and secure manner, enabling countries to enjoy the benefits of nuclear power without having to invest in expensive and sensitive enrichment and reprocessing technologies. Although GNEP is a relatively new initiative, 21 nations

have formally joined the partnership and four teams comprised of some of the most

capable and respected nuclear industry firms have offered approaches to DOE on

how best to implement a closed fuel cycle with advanced fuel cycle technologies. In

addition, industry has told DOE that meaningful steps can be taken in the nearterm to close the fuel cycle by 2020 to 2025, suggesting that government take a

fresh look at nuclear waste management through an integrated approach including

recycling and repositories.

The bottom line is—GNEP comes at a crucial time in the global expansion of nuclear power, and is an important initiative for addressing challenges associated with

nuclear waste management. It’s a comprehensive proposal to close the nuclear fuel

cycle in the U.S., and engage the global community to minimize proliferation risks—

while providing the mechanism for international synergy in policy formation, technical support and technology and infrastructure development.

GENERATION IV NUCLEAR ENERGY SYSTEMS

For the long-term future, the Department is working on the next generation of

nuclear energy systems, technologies that represent enhancements in economics,

sustainability, reduced waste intensity and proliferation-resistance over today’s

technologies through the Generation IV nuclear energy systems program. Additionally, the U.S. is part of the Generation IV International Forum or GIF, a multinational effort to work collaboratively on Generation IV technologies. GIF nations

are exploring six advanced systems of interest. Overall, the investment of 10 nations

in collaborative R&D on Generation IV technologies is over $100M per year on the

first two systems.

U.S. Generation IV research is focused on reactor systems that operate at higher

temperatures than today’s reactors to both improve efficiency and provide a process

heat source for a wide range of energy-intensive co-located industrial processes. A

mid-term version of the Generation IV Very High Temperature Reactor concept, the

High Temperature Gas Reactor (HTGR) nuclear system is being pursued in the U.S.

through the Next Generation Nuclear Plant (NGNP) demonstration, authorized by

the Energy Policy Act of 2005. The HTGR is an advanced nuclear technology that

can provide high-temperature heat for industrial processes at temperatures up to

950°C. Coupled with developmental high temperature electrolytic or thermo-chemical technologies, this advanced HTGR technology can also be used in the production

of hydrogen and oxygen from water for existing markets such as refinery upgrading

of petroleum crude, chemical and fertilizer plants, as well as in processes such as

coal-to-synthetic fuels and hydrocarbon feedstocks. Using the HTGR nuclear heat

source will reduce dependence for producing process heat using fossil fuels such as

natural gas and oil, for which the long-term prices are increasing and the availability is uncertain. This is achieved without carbon emissions, thus reducing the

carbon footprint of these industrial processes.

As currently conceived, the commercialized HTGR will be inherently safe by design and more flexible in application than any commercial nuclear plant in history.

The commercialized HTGR will secure a major role for nuclear energy for the longterm future and also provide the U.S. with a practical path toward replacing imported oil and gas with domestically produced clean and economic process heat, hydrogen and oxygen.

As with Nuclear Power 2010, the Advanced Fuel Cycle Initiative and GNEP, the

Generation IV program in general and the Next Generation Nuclear Plant project

53

in particular are built on a public-private partnership foundation. DOE has recently

issued a Request for Information and Request for Expression of Interest seeking

input from interested parties on how best to achieve the goals and meet the requirements of the NGNP demonstration project at Idaho National Laboratory.

Idaho National Laboratory, Oak Ridge National Laboratory and The Babcock and

Wilcox Company are developing TRISO-coated fuel and conducting other HTGR research. The research to improve performance of the coated particle fuel recently met

an important milestone by reaching a burn-up of nine percent without any fuel failure, demonstrating that the U.S. can produce high-quality gas reactor fuel. Already,

significant success has been achieved with the Department’s Nuclear Hydrogen Initiative with the development and testing of high-temperature electrolysis cells that

take advantage of NGNP’s high process heat output to efficiently produce hydrogen

and customizable carbon-neutral fuels.

NUCLEAR SCIENCE AND ENGINEERING EDUCATION AND FACILITY INFRASTRUCTURE

While all of the programs I’ve highlighted for you individually and collectively do

much to advance the state-of-the-art in nuclear science and technology, and enable

the continued global expansion of nuclear power, there is a great area of challenge

confronting nuclear energy’s future. As with most other technologically intensive

U.S. industries—it has to do with human capital and sustaining critical science and

technology infrastructure.

My laboratory, its fellow labs and the commercial nuclear power sector all face

a troubling reality—a significant portion of our work force is nearing retirement age

and the pipeline of qualified potential replacements is not sufficiently full.

Since I’m well aware of this committee’s interests in science education, I’d like to

update you on what the Department and its labs are doing to inspire our next generation of nuclear scientists, engineers and technicians. Fundamentally, the Office

of Nuclear Energy has made the decision to invite direct university partnership in

the shared execution of all its R&D programs and will set aside a significant

amount of its funds for that purpose. Already, nuclear science and engineering programs at U.S. universities are involved in the Office of Nuclear Energy’s R&D, but

this move will enable and encourage even greater participation in DOE’s nuclear

R&D programs.

In addition, all NE-supported labs annually bring hundreds of our nation’s best

and brightest undergraduate and graduate students on as interns or through other

mechanisms to conduct real research. For example, at INL we offer internships, fellowships, joint faculty appointments and summer workshops that focus on specific

research topics or issues that pertain to maintaining a qualified workforce. This

year, we are offering a fuels and materials workshop for researchers and a 10-week

training course for engineers interested in the field of reactor operations. Last year,

DOE designated INL’s Advanced Test Reactor as a national scientific user facility,

enabling us to open the facility to greater use by universities and industry and to

supporting more educational opportunities. ATR is a unique test reactor that offers

the ability to test fuels and materials in nine different prototypic environments operated simultaneously. With this initiative, we join other national labs such as Argonne National Laboratory and Oak Ridge National Laboratory in offering nuclear

science and engineering assets to universities, industry and the broader nuclear energy research community.

Finally, national laboratories face their own set of challenges in sustaining nuclear science and technology infrastructure—the test reactors, hot cells, accelerators,

laboratories and other research facilities that were developed largely in support of

prior missions. To obtain a more complete understanding of the status of these assets, the Office of Nuclear Energy commissioned a review by Battelle to examine

the nuclear science and technology infrastructure at the national laboratories and

report back later this year on findings and recommendations on a strategy for future

resource allocation that will enable a balanced, yet sufficient approach to future investment in infrastructure.

CONCLUSION

All of the programs I’ve cited today—Nuclear Power-2010, the Advanced Fuel

Cycle Initiative, GNEP, Generation IV, Nuclear Hydrogen Initiative—ultimately

seek to make nuclear power better and safer. Realistically, we as a nation have no

silver bullets that in the near- or mid-term can replace nuclear power as a reliable,

24/7 producer of massive amounts of cost-effective and carbon-emission-free baseload electric power and process heat for industrial processes to displace burning of

natural gas and oil.

54

The challenges frequently associated with nuclear power—high costs, waste disposal and proliferation risks—can all, from a technological perspective, be managed.

The high cost concerns actually have little to do with the fuel used in a nuclear reactor—they’re more related to the rising costs of concrete, steel, copper, and project

capital on large, lengthy projects like a nuclear power plant. Many of these same

cost concerns apply to virtually every means of generating electricity we have. Nuclear Power 2010 and the other incentives available to first movers of new nuclear

plants can effectively address these financial and regulatory challenges.

The waste stream from a nuclear reactor is hazardous and must be isolated - but

we know how to handle it safely and we know the pathways we can take to reduce

and manage it. The Nuclear Regulatory Commission has concluded that used fuel

can be safely stored on-site for 100 years. An integrated approach to used fuel management offers the possibility of recycling the usable components, greater utilization

of our uranium resources, and reduced toxicity and/or volume of used fuel requiring

geologic disposal.

Finally, proliferation. The fact is that nuclear materials can be redirected for nonpeaceful purposes. President Eisenhower acknowledged that a half century ago in

his Atoms for Peace address. But the nuclear genie is out of the bottle. Over 430

nuclear reactors are already in operation around the world, and dozens more are

under construction or in the planning process. Do we in this country wish to disengage from the global nuclear renaissance and hope for the best—or do we want

to help guide the world toward the best nuclear fuel cycle possible?

These programs maintain the viability of today’s nuclear reactor fleet and prepare

the way for the safe, sustainable future for this large and immediately available

global power source. They address the challenges facing nuclear energy, and leverage the best minds in our national laboratories, universities and industry.

As the Director of Idaho National Laboratory, I’m proud of the role my 3,800

Idaho colleagues play in carrying out these national priority programs and related

efforts that contribute to our nation’s energy security.

Thank you.

BIOGRAPHY FOR JOHN J. GROSSENBACHER

Mr. Grossenbacher is the Director of the Idaho National Laboratory and President

of Battelle Energy Alliance, LLC (BEA). His credentials and experience include leadership and management of large institutions with substantial efforts focused on

technology research and development. Before joining Battelle, Mr. Grossenbacher

had a distinguished career with the U.S. Navy, achieving the rank of Vice Admiral

and Commander of the U.S. Naval Submarine Forces. He earned a Bachelor of

Science degree in Chemistry from the U.S. Naval Academy, and he holds a Master

of Arts degree in International Relations from the Johns Hopkins University. In addition, he completed the Harvard University Graduate School of Business Administration Program for Management Development. He is a leader with a refined sense

of strategy, an in-depth technical knowledge and a focus on delivering results. He

is one of only a handful of officers in U.S. Navy history to be awarded both the

Stockdale and David Lloyd Awards for Leadership Excellence. As Commander of the

U.S. Naval Submarine Forces, Vice Admiral Grossenbacher led the integration and

consolidation of the U.S. Navy’s Atlantic and Pacific submarine forces. He is noted

for his ability to build and lead multi-disciplinary teams, to meet complex science

and technology challenges, and to achieve success in developing and sustaining collaborative relationships with multiple stakeholders.

DISCUSSION

THE GLOBAL/NUCLEAR ENERGY PARTNERSHIP (GNEP)

Chairman GORDON. All right. At this point, we will open our first

round of questions, and the Chair recognizes himself for five minutes.

I have heard a variety of concerns about the implementation of

the GNEP program, so I want to better understand that, and I

would like for, I have some questions for Admiral Grossenbacher

and Mr. Fri.

First, can either of you provide me with a cost estimate? Are we

talking hundreds of millions, billions, or tens of billions of dollars?

55

Mr. FRI. The report uses tens of billions, although, at the time

we did the report, we didn’t have a really definitive process.

Vice Admiral GROSSENBACHER. I agree with that. For the longterm implementation of the technology, it is a significant investment over a long period of time.

Chairman GORDON. Well, that is a very huge investment of taxpayer dollars, and with that understanding, I would like to clarify

that the Department aims to deploy commercial scale facilities at

some point to accomplish two main goals: waste reduction and nonproliferation of weapons-grade materials. Has a process for recycling spent fuel that meets those goals, or the goals I stated and

identified, and if so, is it ready for commercial deployment?

Mr. FRI. I think that the Committee’s view, the short answer to

that is not, certainly not ready for commercial deployment. There

are several processes that could be examined, and what we recommended was that the Department systematically sort through

those to determine the one that looks the most promising in light

of what else is going on in the world—that commercial sphere.

Chairman GORDON. Do you concur with that, Admiral?

Vice Admiral GROSSENBACHER. Mr. Chairman, the only thing I

want to add is that the waste reduction, that is true, and the other

intention is resource utilization, remembering that the current once

through fuel cycle only uses a very small percentage of the uranium.

Chairman GORDON. But in terms of recycling the fuel, that process is not ready for commercialization. Is that correct? Would you

concur with Mr. Fri’s——

Vice Admiral GROSSENBACHER. Not as envisioned in GNEP. Certainly, there are recycling technologies that are industrialized

today, but not——

Chairman GORDON. Well, that is what I was trying to get to

GNEP for——

Vice Admiral GROSSENBACHER. Yes.

Chairman GORDON. Okay, Admiral, so spending billions of taxpayer dollars on commercial scale facilities before the necessary research and development has been conducted, it is a little hard for

me to understand. It has been reported that the Department is

moving away from that strategy. Can you confirm that for me?

Vice Admiral GROSSENBACHER. The short answer is no, I can’t—

I don’t know the precise details of the current discussion about

GNEP. I feel—it is important to remind you that this is meant to

be a development and demonstration program that is evolutionary,

and that you have to start somewhere.

Chairman GORDON. Well, don’t you start with research, rather

than with moving forward——

Vice Admiral GROSSENBACHER. Well, sure you do the research,

Chairman.

Chairman GORDON.—on a full scale, tens of billions of dollar

commercialization? And with all the needs here, I mean, is this—

I guess what I am trying to, with the limited dollars.

Vice Admiral GROSSENBACHER. Right.

Chairman GORDON. Is, you know, is this the best way to spend

those dollars, and is this a focused way, and you know, quite frankly, there has been concern in many areas that there wasn’t a lot

56

of collaboration, that this doesn’t really, it was a sort of everything

for everybody, and I am concerned, again, if we are going to make

this investment, I want to make it in the best possible way.

Vice Admiral GROSSENBACHER. Yes, sir. I think that is a valid

point. The only thing I want to point out is, if you look at the goals

of GNEP, which from a technology point of view, are ambitious, the

key question is what is the timeframe, and when do you go to a

full-scale industrial demonstration of that technology, what technology do you choose, and that has to be informed by both an R&D

process, and the involvement of the industry. The laboratories, the

scientists and engineers don’t build and operate these large scale

industrial facilities, so I think the issue is what is the timeframe

that——

Chairman GORDON. Well, part of that issue, also, is having a

broad enough buy-in, that you can keep a flow of taxpayer dollars

going to—so, just real quickly, Dr. Cochran, or Mr. Fri, do you

want to comment on this issue?

Mr. FRI. Well, only to say that our report, we said, while we don’t

see the virtue in spending a lot of money right now for the commercial facilities, it is a long-term program, the quid pro quo is, it is

a long-term program, and therefore, sustained commitment and

sustained funding is really important to the success of that program, and that kind of stability is not something that the nuclear

R&D budget has experienced over the last several years, and it is

something that I hope that the Congress will be able to do, at a

reasonable level, over a long enough period of time, to incorporate

outside advice, so that we can get the job done.

Chairman GORDON. Quickly, what is the appropriate outside advice, and who would that be? Or not what is it, but who is the vehicle for that?

Mr. FRI. We recommended that the Department set up an outside advisory committee, that is independent, objective, and has a

strategic focus. What we have in mind, the technology that may be

familiar to you, something like the Science Advisory Committees at

the Department of Energy, which has a, which is composed of people of the community, but as you know, they are perfectly willing

to tell the Department when they are wrong, and that is what——

Chairman GORDON. I think that is important. I don’t want to

abuse my time, and I know Dr. Cochran is probably squirming in

his seat, so why don’t you have a closing statement on this topic.

Dr. COCHRAN. Mr. Chairman, the GNEP program is doomed to

failure. The vision requires that roughly, for every 100 gigawatts

of thermal reactor capacity, the type of reactors we have today, you

would need roughly 40 to 75 gigawatts of fast reactor capacity, and

fast reactors have been under development in this country and

around the world since 1946.

The programs to develop fast breeder reactors were failures in

the United States, in France, in the United Kingdom, in Germany,

in Italy, in Japan, and I would also argue, in Russia. The flagships

of these programs were all failures. Monju had an accident, and

was shut down in 1995, and hasn’t restarted. Super-phoenix, in

France, had a lifetime capacity factor of between six and seven percent. The Clinch River Reactor was canceled. We have left the

FFTF sitting around in the State of Washington, and folded that

57

program back into very small EBR–1 reactor, EBR–2 reactor at

Idaho. The German reactor, SN–300, was canceled before it was

fueled, and it has been turned into a hotel and amusement park,

and is probably the only fast reactor that has ever made money.

The British fast reactor program was canceled. The Italian one

never got off the ground. The Russians never put plutonium in

their fast reactors.

Chairman GORDON. Well, Dr. Cochran, I don’t want to abuse my

time. I think the short answer there is that, clearly, this needs to

be rethought, to make sure that we are, with this past history, that

we are spending those limited dollars wisely.

Dr. COCHRAN. One more point.

Chairman GORDON. Okay.

Dr. COCHRAN. Because this program is doomed to failure, because these fast reactors are unreliable—I didn’t mention, by the

way, it was a failure in two Navies, the United States Navy, Admiral Rickover jerked it out of the Seawolf, and in the Soviet Navy.

But what is going to happen is the R&D is going to go forward, and

the Department of Energy is promoting this R&D not only in weapon states, but in non-weapon states, and what we are doing is

training people in actinide chemistry and plutonium metallurgy,

and the proliferation risks are going to increase from the R&D programs, and they will never decrease from the deployment of the

program.

Chairman GORDON. Thank you, and Mr. Bilbray is recognized for

five minutes.

ENVIRONMENTAL CHALLENGES

Mr. BILBRAY. Thank you very much, Mr. Chairman. Dr. Cochran,

I am looking at the concerns about the environmental challenges

of nuclear. The Natural Resource Defense Council basically, does it

support more emphasis on hydroelectric, wind, geothermal, and

solar?

Dr. COCHRAN. Our highest priority is to mitigate the climate effects of global warming, and that means that our highest priority

is to get a climate bill through the Congress, and that means, since

it is the single policy that will do the nuclear industry the most

good, we are in a situation where the Natural Resources Defense

Council is an advocate for the single policy that would do the U.S.

nuclear industry the most good.

Mr. BILBRAY. Well, that is a great attitude to have. I appreciate

that. I think we have talked about hydroelectric, and we realize the

environmental problems of dam, and the construction and whatever, and I want to make sure that, you know, your group identifies the environmental challenges of all the options.

Dr. COCHRAN. We do, and we have programs across the board to

internalize the externalities associated with all of these energy

technologies.

Mr. BILBRAY. When you do——

Dr. COCHRAN. Coal, nuclear——

Mr. BILBRAY. Wind, solar, and geothermal seem to appear to be

a small environmental footprint, wouldn’t you agree, in at least

first appearances?

Dr. COCHRAN. Yes.

58

Mr. BILBRAY. And do you articulate at all the unseen environmental impacts of those three choices?

Dr. COCHRAN. Well, I, you know, the primary problems associated with wind today are not environmental problems, I mean,

other than aesthetics, some people think it looks good, some people

think it is an eyesore. But the primary problems with wind relate

to its cost, and the fact that the wind doesn’t blow 100 percent of

the time, so the average capacity factor of a wind farm would be

like 25 to 30 percent, rather than the 90 percent of the capacity

of a U.S. nuclear plants, and—today. Solar, I think solar can, the

main problems have to do with cost, but the environmental problems are quite small. They are not zero. I think we need to internalize the environmental costs of all of the technologies.

Mr. BILBRAY. Doctor, I have to apologize to you, because I have

sort of got an inside track here. As you know, California has tried

to lead on a lot of this, and one of the things that has hit my district with these supposedly very environmentally friendly technologies, is the horrendous impact, that is unseen, by the fact that

most of what is perceived as being non-polluting, environmentally

friendly technology, is sited a long distance from the source of the

power to the receiver, which means massive amounts of transmission capability, which has horrendous environmental impact.

The greatest, probably the biggest environmental uproar right

now in my county is the fact of bringing in geothermal and solar

through a state park, through habitat areas, and everything else.

And I only want to raise that, because when we talk about one

technology, we sort of overlook the other technologies’ major environmental footprint. And so, it is one of those things that I am

looking at, that what would be the environmental impact of expanding facilities that already are on, in San Diego County, as opposed to so-called environmentally, the most environmentally

friendly technologies, that have to be trucked in. In fact, I think

you are looking at wind generation, and the whole center of the

Nation being proposed, but the transmission lines are not being

considered in the environmental footprint.

Do you agree that is something that we haven’t addressed

enough of this thing?

Dr. COCHRAN. You know, you mentioned, for example, transmission lines. That is also a problem for nuclear plants. It is a

problem for importing electricity from the Palo Verdes——

Mr. BILBRAY. But you do agree that nuclear has the capability

of being sited where plants are already sited, and using existing facilities, as opposed to wind, solar, and geothermal are really sitespecific, and limited to certain locations, that have to be sited at

those places, and thus, the transmission lines tend to be new, and

easements being increased.

Dr. COCHRAN. I more or less agree with you, certainly the reason

new nuclear plants are going to be sited at existing sites is because

it is cheaper to do it there.

Mr. BILBRAY. Well, and it is environmentally, usually, it reduces

the environmental footprint.

Dr. COCHRAN. Sure.

Mr. BILBRAY. Admiral, 20, you know, 1978, I was a 27 year old

mayor down in, down along the border, and the whole issue of the

59

U.S. nuclear industry shifted right out from under our feet. Could

you explain what has happened with that industry in the last 30

years, and is it currently in a good shape?

Vice Admiral GROSSENBACHER. Well, there are certainly people

at the table that can address this more directly than I can, but I

will tell you what I see from my vantage point, and I see a much

more mature industry, that has learned from, learned how to deal

with the complexities and challenges associated with its technology, a regulatory regime that has developed and matured, and

so it operates, you know, very, very well. I think last year, and

Marilyn Kray can correct me, but I think the capacity factor of the

nuclear plants in the U.S. was 91.7 percent. From the point of U.S.

safety, any industrial technology has hazards and risks associated

with it, tragically, and we killed more people this year in refining

sugar in this country than we did in operating nuclear power

plants for 40 years. So, all risks have to be discussed, I think, in

context and in a relative manner, but my perspective on it is that

the nuclear industry is a mature industry that operates very well.

It needs to be a mature industry. It needs to be extremely diligent,

given the nature of the technologies.

And the only other point I will add, if I may, is in, just the previous discussion. The other thing to remember about comparisons

of energy sources is the density. You know, nuclear energy provides

baseload power, so it is a large, concentrated energy source, with

hazards and risks associated with it. Distributed energy sources

have other issues, including the complexity, including the

scalability, and there is no free lunch. If we want large amounts

of energy, there are going to be costs, risks, benefits associated

with them, and we have to look at all of them, and do that type

of comparison, I think, to make the best choices.

Mr. BILBRAY. Thank you, Mr. Chairman.

Mr. LIPINSKI. [Presiding] Mr. Bilbray. The Chair now recognizes

Representative McNerney.

ECONOMICS OF NUCLEAR POWER

Mr. MCNERNEY. Thank you, Mr. Chairman.

One of my big concerns about nuclear power is the economics of

the game. Now, it is very hard to get your hands around a good

economic estimate for nuclear power, for a lot of reasons. One of

the reasons, I understand, is that it is easy to build a cheap nuclear power plant that has low safety consideration, and then, the

more safety you add on, the more expensive it gets, and so on. But

I still don’t understand why it is so difficult. I mean, there is going

to be an initial capital cost, there is going to be a fuel cost. There

is going to be maintenance costs, and there is going to be disposal

costs.

Mr. Asselstine, perhaps you could address that, what the difficulty is, and where I could find good information on that that is

easy to understand.

Mr. ASSELSTINE. Sure, Congressman. Let me start with the existing plants first, and operating costs. I think there, we have got a

very good handle on that, as one of the previous speakers just

pointed out. If you look at the existing fleet of 104 operating plants

today in the United States, those plants are operating highly reliVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00063 Fmt 6633 Sfmt 6601 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
60

ably, with capacity factors in excess of 90 percent, and if you think

about the need for refueling outages, that means those plants are

operating just about as efficiently as they possibly can.

We also know that fuel, operating and maintenance costs, waste

disposal fees, and taxes add up to about, say $0.025 per kilowatthour, in that range, which again, is very comparable to what we

see for large, efficient, coal-fired power plants.

Mr. MCNERNEY. So, that is your operating costs.

Mr. ASSELSTINE. Those are operating costs. That is exactly right.

So, then, the real question becomes, as you look at new nuclear

plants, what is the capital cost of the plant going to be——

Mr. MCNERNEY. Right.

Mr. ASSELSTINE. How confident are we that the plant will actually be built for that cost, and will enter commercial operation

when it is expected to, and the variables there are first, commodity

prices? We are seeing significant increases in prices for things like

steel. There are, in some instances, very limited international suppliers for some of the components that are necessary for nuclear

power plants. A good example is very heavy steel forgings, which

are necessary for the reactor pressure vessels, steam generators,

there is only one supplier in the world for that, those components

today. And they control the market, and prices have been moving

up as well.

Second, it has been 20 years since we have built a new nuclear

power plant in this country. Many of the suppliers that supplied

the existing plants are no longer available. If you went to most of

the existing nuclear plants in this country, when those plants were

built, virtually all of the equipment and components in those plants

came from the United States. For the new nuclear plants that will

be built around the world, including in the United States, if there

are, if plants go forward, most of the components and equipment

and supplies will come from international sources. So——

Mr. MCNERNEY. What I am basically hearing you saying is that

the costs, the capital costs can be a determining factor, and it is

going to be possibly high, and there is a lot of risk associated with

this, so——

Mr. ASSELSTINE. Exactly.

Mr. MCNERNEY.—the lenders are going to want to take their

part out of that risk.

Mr. ASSELSTINE. And the same thing is true, quite frankly, for

large new coal plants, especially clean coal, using clean coal technology. You have the same risks and uncertainties. Marilyn can

probably talk about how the industry and the companies are trying

to get their arms around what those costs will be.

When we get to the point where companies are signing firm orders to purchase a new nuclear power plant, which will be, in most

instances, probably a few years from now, we will have a better fix

on exactly what those capital costs will be. The financing costs also,

then, need to be determined, and for the purpose of investors, investors will look at that investment, and they will say how safe or

how risky is this investment, compared to building another type of

generating plant within this industry, and what is the risk premium that needs to be built in for the capital costs.

61

I believe that all of those costs can be dealt with, and you can

end up with costs that are pretty comparable to what you would

see for coal-fired generation, taking into account the financial support that the Congress provided in the Energy Policy Act, but we

will know with greater definition exactly what those costs are,

probably, in a couple of years.

Mr. MCNERNEY. I wanted to talk a little bit about disposal, too.

I worked on disposal calculations as a graduate student, at the

New Mexico Waste Isolation Pilot Project. Any idea where we are

with regard to credibility of geologic disposal? Mr. Fri.

Mr. FRI. The credibility, in terms, the technical credibility is, I

think, pretty high. I mean, the National Academy of Sciences has

said that that is ultimately to dispose of nuclear waste fuel.

The actual mechanism by which that is going to happen, and the

costs incident thereto are still pretty much up in the air. Yucca

Mountain is an ongoing project, and the number of alternatives to

storing the spent fuel, perhaps on-site, and I don’t think good studies have been done of all of the array of options that are possible,

or their costs.

Mr. MCNERNEY. All right. Thank you, Mr. Fri.

Mr. LIPINSKI. Thank you, Dr. McNerney. Dr. Ehlers is recognized

for five minutes.

NUCLEAR WASTE, SAFETY AND TRAINING

Mr. EHLERS. Thank you, Mr. Chairman. Thank you for holding

the hearing on a very important topic. Something most people don’t

realize the crisis we are facing. Everyone is complaining about the

increase in gasoline prices, but that is going to have a direct impact

on electricity consumption and production, because more and more

people will do as I have done, buy a hybrid, and very shortly, we

will have plug-in hybrids. They will be all the rage, because it

takes less gasoline, but they do take electricity. That is just one example that we are going to face increased demand for electricity.

Well, back when all the fuss started about whether nuclear reactors were safe or not, I did my own study on the issue, comparing

coal to nuclear, and frankly, and as you know, I am an environmentalist, I decided they were equally bad for the environment, but

nuclear had a distinct advantage. The two biggest environmental

problems, I felt, were the greenhouse gas production from the fossil

fuel-fired plants, whether coal, oil, natural gas, and the biggest

problem with the nuclear was the nuclear waste.

To me, it was an easy decision as to which was best, because

when you are discharging gases in the atmosphere, it is awfully

hard to get them back, and collect them, and deal with the problem. Whereas, with the nuclear waste, it is a relatively small solid,

liquid, and theoretically, should be easier to deal with, if you can

get rid of the paranoia in society about nuclear waste. And I think

there are ways of doing that.

I have also, incidentally, I never talk about disposal of nuclear

waste. We are kidding ourselves if we use that word. I served on

a county commission, and we had, it was the Kent County Disposal

System, which is a landfill, and I proposed officially that we should

change it to the Kent County Waste Storage Facility, because all

we are doing is storing it underground, and that is what we are

62

talking about doing at Yucca Mountain, too. But if the Congress

had written the bill, that this is going to be retrievable, monitored

storage, I think we would have had far less difficulty selling it.

People would still object, but it wouldn’t be as bad as it is now.

But putting the requirements on, say, we have to make it safe

for 10,000 years is just totally unrealistic, what we can scientifically prove, then. So, thank you for letting me vent just a little bit,

but it seems to me we have a huge amount of work ahead of us.

You have just heard that from the testimony, what we have to do

to get construction going again, obtaining parts, et cetera, but there

is another important aspect, and I fought during my first years

here, to prevent the killing of the program that funded training for

nuclear engineers. I lost the battle, the funding was killed, and the

universities dropped the programs, and that whole system has to

be started up again. We have to develop a whole new fleet of nuclear engineers, and I think it is very, very important that we have

properly trained personnel.

Although I said that the problem with Three Mile Island was

that, at that time, there was a surplus of physicists in the country.

I said the problem was Three Mile Island was being run by taxicab

drivers, and taxicabs were being driven by physicists, which is kind

of a backward way to solve a problem.

So, I think we have to set up good training programs, make sure

we have an ample supply of nuclear engineers, who can design,

build, and operate nuclear reactors safely. The safety record, I

think, is phenomenal, for all but the Soviet Union. We have reasons why that happened there, governmental as well as training.

I, Mr. Chairman, all I am saying here is we have to get going.

We can’t just depend on the industry to get started itself. The investments required are phenomenal. The security that will be provided if we don’t step in and provide the assurance that things will

work, there is not going to be enough security there for the industry, for the financiers, to put the money in to get it going. So, I

think we ought to face up to our responsibility here, as well as

making sure that industry assumes their fair share of the responsibility, and that is the only way it is going to happen, but it has

to happen. We are literally running out of fossil fuels in the petroleum and natural gas area, got plenty of coal, but frankly, as I said

earlier, I would much rather have nuclear power than coal-fired

plants, in terms of the environment, not just the greenhouse gases,

but the mercury, and all the other factors.

Pardon? And the nuclear, that is right. So, at any rate, that is

the end of my sermon, and I hope we can unite on some positive

action here.

Thank you.

Mr. LIPINSKI. Thank you, Dr. Ehlers. I, we always are very much

enlightened by your sermons here, so if we just all followed, then

we would solve a lot of problems.

But we will now, the Chair will now recognize Mr. Chandler for

five minutes.

LOW PUBLIC CONFIDENCE IN NUCLEAR ENERGY

Mr. CHANDLER. Thank you, Mr. Chairman. It seems to me, in listening to all of this, and following what I have been following over

63

the years, in regard to this issue, that we have, as much as anything, a public confidence problem, a significant public confidence

problem which, of course, impacts the willingness of investors to be

involved significantly.

Do you all have any ideas about how the industry can assist in

building public confidence. The storage issue, of course, disposal

issue is, I am sure, one that has to be addressed in particular in

that regard, but could you give me some ideas about what could be

done to bring the public into a position where they feel more confident about moving forward with nuclear energy?

Ms. KRAY. Mr. Vice Chairman, I will volunteer a response to

that. The industry admits that we do not do a good job, and we are

not boastful, and that comes to our detriment when you look at

public confidence. I think in the investor community, and Mr.

Asselstine will correct me if I am wrong, those who explore it, I

think yield a more positive view.

Through the Nuclear Energy Institute, we do conduct surveys,

and for those surveyed around the plants themselves, we have a

very high support rate for nuclear power. What we do see, however,

when we survey the more broader population, is that there is a

misunderstanding, in particular, in the environmental area, and

most people do not equate nuclear power with being carbon-free,

with respect to greenhouse gas emissions. So, we have taken that

on as one of the issues that we do need to do.

Also, there are a number of other organizations. One of our more

successful one is the Young Generation Nuclear Group, which is

some of the new students coming out of the universities, working

into the industry, to help communicate that. I would also say that,

in addition to the industry, the NRC has integrated public interaction very much into the licensing process. And even before any

of the applications were submitted, the NRC, by process, would

conduct a number of town meetings, so as to educate people about

that. So, that is an opportunity, at that point, also, for the industry

to share the safety record, to share the process going forward.

But—so I do acknowledge that the advertising and self promotion

is probably something that, as an industry, we have not made a

priority, but need to, going forward.

Mr. CHANDLER. Maybe Mr. Asselstine and possibly, Dr. Cochran,

too, on this, if you don’t mind, if you have any ideas.

Mr. ASSELSTINE. First, I would say, from the perspective of somebody in the financial community, I think the industry has actually

done a fairly effective job over the past couple of years, in beginning to lay the groundwork to build support for new plant commitments, and obviously, this process is going to be ongoing over the

next several years. And I start with the performance of the existing

plants. That has been consistently strong over the past decade, and

that was a very important foundation, because without that, then

the prospect of new commitments just wouldn’t happen. So, continued strong performance in the existing plants, from a safety standpoint, from a regulatory standpoint, and economically, is a critical

initial ingredient.

But what the industry has done fairly effectively, I think, over

the past couple of years, is begin to talk about the cost, potential

cost of a new nuclear plant, the approach that they will use in

64

making a decision whether to go forward or not, in order to really

educate the financial community and investors, about how that

process will unfold, well in advance of when they come to investors

and say, now, we want to borrow several billions of dollars to build

this. I think they need to continue to follow that approach going

forward.

Dr. COCHRAN. Well, in my view, the best way to get public support is to be truthful and transparent about all the risks and benefits of the technology. And looking at the industry’s potential public

relations problems going forward, a concern I would have is that

if you look at the safety of plants, nuclear plants in the United

States are safer today than they were two decades ago.

But if you are going forward, most of the plants, new plants that

are going to be introduced in the world, are going into countries

that do not have good safety cultures, and when one of these plants

runs into a problem, as it has in the past, the good plants will suffer along with the bad ones, and so, I think some attention needs

to be given, by the United States Government, to the development

of an improved safety culture in other countries that are getting

into this business.

It is the safety culture at the plant that is the most significant,

most important factor that affects the overall safety. It is the culture at the plant, and we have improved the culture at U.S. plants,

but we have not addressed that problem on a global basis going forward.

Mr. CHANDLER. All right. Mr. Fri, do you have something quickly

to add?

Mr. FRI. One thing that might be worth looking into is the legislative and regulatory structure we have for spent fuel. Dr. Ehlers

is exactly right, it seems to me—the structure we have requires

you to prove that this stuff is going to be safe for a million years.

I have chaired the committee for the National Academies that came

up with that brilliant suggestion, and it is really hard to do, and

it is very hard to convince the public that you can do it. And so,

it might not be a bad idea to take another look at that structure.

Mr. LIPINSKI. Thank you, Mr. Chandler. The Chair will now recognize, for five minutes, Ms. Biggert.

REPROCESSING SPENT NUCLEAR FUEL

Ms. BIGGERT. Thank you, Mr. Chairman. I have to say that,

maybe I am going to start venting, too. I hope not. But I, when I

came to Congress almost 10 years ago, the first thing that happened, and I—Argonne National Laboratory is in my district—was

that the President cut the EMT, the Electro-Metallurgical Program,

by $20 million, and I was hysterical. This was in the first month

that I was here, and I needed to get that funding back, because I

really do believe in, and have long been an advocate in the recycling and reprocessing of spent nuclear fuel. Well, I did get the

money back, and the program continued to conclusion, and I know

that there are different processes, the PUREX, the UREX, the

UREX+, some have mixed actinides, and so the—to cut down on

the proliferation, but I think the three issues, or the two really,

that—pure plutonium and the, and what to do with the waste, are

key issues.

65

But to me, I think we should be moving much, much quicker

than we are, and as—when I was the Chairman of this, of the Energy Subcommittee in the 108th and the 109th Congress, we really

worked on GNEP, and trying to develop that. There was one sticking point, and that was that we asked the Department of Energy

to do a comprehensive systems analysis, rather than move right to

what we thought was commercialization. And there was a disconnect there, and I think that that really, it slowed down the process, but I think we would be a lot further along right now, if we

really had turned to the systems analysis, rather than the construction of a commercial scale facility.

And the problem was, then, that the funding was cut until that

systems analysis, or trying to get that. Of which I was not an appropriator, so I was not involved in that, but the Appropriations

Committee felt the same way.

So, I would like to know from Admiral Grossman, where are we

now, as far as moving ahead. You know, Congress, the GAO, and

the National Academies, I think, would be more accepting of the,

what you are trying to do to close the fuel cycle, and I think this

is the most important issue that we are facing is, you know, finding

alternative energies, and it has to be nuclear. I guess I come from

a state that 50 percent of our electricity is nuclear, so we are used

to it, and I really wanted to see what goes on, but I just think that

we are spinning our wheels again. We are just sitting around waiting to say we will do it in the future. The costs only go up. The

lack of nuclear energy is only going to hurt our country. We see all

over the world all this building of nuclear plants, and we are sitting. And reprocessing plants, and—we have one in Illinois that

was built and then shut down by Jimmy Carter. There is at least

five others that were built at that time.

Vice Admiral GROSSENBACHER. Well, Congresswoman, I take

your points, and I think they are very good ones. The reasons to

reprocess are, in my opinion, twofold. One is to get additional energy out of the uranium that you dug out of the ground. I mean,

uranium and the other fissionable natural materials, thorium, are

limited resources. So, if we look ahead, if we say nuclear energy is

going to be an important element of our energy portfolio for the

next 100, 200 years, then I think if you put it in that context, then,

resource utilization, not just the current market price of uranium,

is an important consideration.

In addition to that, the technologies involved, in reprocessing at

industrial scale, are difficult. You take highly radioactive material,

and the first thing you do is dissolve it in hot nitric acid. That

being said, resource utilization, the other is with increased resource

utilization comes a waste disposal problem at the end of the cycle

that is easier to manage. The waste is less toxic, less radioactive

for a long period of time, so those are really the goals of reprocessing and then recycling. And GNEP, of course, has proposed a separation of used fuel into its components, and burning the particularly difficult ones, the long lasting, highly radioactive ones, in a

fast reactor kind of technology.

The systems analysis that you talk about to support that is ongoing. It is, I think, frankly, limited by the number of uncertainties

in what does it look like at a commercial scale. What are the ecoVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00069 Fmt 6633 Sfmt 6601 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
66

nomics going to be, so to move forward, what we have to do is both

the research and development, and involve the industry along the

way.

Ms. BIGGERT. If I might, though, if we are going to have to deal

with the waste, if we put what, the waste that we have now, that

has already accumulated, we would actually fill Yucca Mountain.

If we were to, be able to do the reprocessing, and if we would be

able to burn and re-burn that waste, we could have a facility that

would last for over a century, and I think we just have to make

that, you know, we can go ahead and build these plants, and have

more waste, but at some point, we are going to have to decide when

we can’t use Yucca Mountain.

Vice Admiral GROSSENBACHER. Yes, ma’am. Those are the gains,

that we can reduce the need for a geological repository, reduce the

waste burden, and the costs of the development of the industrial

scale reprocessing technology, the resolution of the uncertainties.

The principal uncertainty is you know, we know, at a laboratory

scale, we can do the kinds of separations we want. We can parse

the fuel. Can you do that at an industrial scale, because it really

does change?

And then, the other uncertainty is can you make fuel that you

want to burn the particularly, what I will call the bad actors, can

you make the fuel, and can you recycle it efficiently? And there are

just a lot of, you know, technology unknowns in that, but the only

way to resolve them is to do the research and development, involve

the industrial components at the right pace, at the right level, because this is not just the business of laboratory scientists. It is the

business of industrial operators.

And then we will know. Then we will know whether or not we

want to do it.

Chairman GORDON. Thank you, Admiral, and thank you, Ms.

Biggert. I am having to deal with an issue collateral to this. I am

sorry to be coming and going. Mr. Baird is recognized both to question and to chair.

THE ROLE OF FEDERAL SUBSIDIES

Mr. BAIRD. [Presiding] I thank the Chairman. I will move to the

chair, and ask a couple of questions.

I appreciate the testimony of the witnesses, and very much in

line with some of the points made by Mr. Ehlers, and however, I

should also say that I come from a state, the State of Washington.

I am down-river from the Hanford Nuclear Reservation, which is

not clean by a darn sight. Obviously, it was not a nuclear power

issue initially, but nevertheless, there is a substantial nuclear

waste issue today. And we are also from the state that had the

WPPSS, the Washington Public Power Supply System debacle, the

largest bond default, I think, in the history of the country up to

that point.

And it is not, just, seems to be, I have two questions. One, can

somebody give us a handle of the total net federal subsidies, thus

far, that have gone into nuclear energy, and that would include development, design, indemnification, et cetera, et cetera.

And then, the second question is, what can we do if we spent it

on not coal, not nuclear, but something else, and take, for example,

67

more fuel efficient heat sources, et cetera, et cetera. What are the

returns on investment, and the relative risks and costs of those,

more efficient heat pumps, in-ground heat pumps, in line with Mr.

Bilbray’s question, don’t require any new generation, or any new

generation or transmission capacity.

So, two questions. What about subsidies, and what about alternatives? And the final one would be, if any of you want to volunteer whether or not you have asked the Administration to increase

funding to clean up Hanford. We would certainly welcome that, if

you are asking for new money for new power plants, to clean up

your mess beforehand would be great.

So, anybody want to take any three of those? Dr. Cochran.

Dr. COCHRAN. I think it is difficult getting a handle on the total

federal subsidies to nuclear power in the United States. I have seen

numbers on the order of $150 billion, which probably includes direct and indirect subsidies.

Mr. BAIRD. A total over the lifespan of the industry?

Dr. COCHRAN. Total, yes. I mean, you know, the industry was

built on the back of the submarine program—the naval nuclear

propulsion program. It had enormous subsidies in its early career.

We spent tens of billions on the fast breeder reactor and other nuclear technologies that didn’t come to fruition.

It is a mature industry now. It is a 50-year-old industry in the

United States, and the subsidies that are being provided today are

not going to change the underlying economics between fossil fuels

and nuclear baseload energy generation.

Mr. BAIRD. And yet——

Dr. COCHRAN. They are basically subsidies to build a few new nuclear plants, and the only way you can change the really underlying economic differential is to internalize the true cost to society

of emitting carbon. Regarding federal subsidies, I would look to

where the Wall Street money is going, in terms of these energy

technologies, where is the high risk money going out in the Palo

Alto area, and it is going towards solar, new solar technologies.

And a number of other renewable energy areas.

Mr. BAIRD. Mr. Asselstine.

Mr. ASSELSTINE. I would agree with Tom. I think it is very difficult to quantify past support.

Mr. BAIRD. Some costs anyway——

Mr. ASSELSTINE. That is right. But it is much easier to look at

the financial support that is now being provided for the next generation of plants, and if you look at the Energy Policy Act, you can

work through the numbers fairly easily.

There is a production tax credit of $0.018 per kilowatt-hour for

up to 6,000 megawatts of new generation, very similar to the production tax credit that is provided for renewable energy resources,

as well. So, if you took that 6,000 megawatts over eight years, with

the cap of $125 million per 1,000 megawatts per year for nuclear,

that is $6 billion over the eight-year time period.

Mr. BAIRD. But is that not somewhat specious, because there is

not waste disposal problems of the same magnitude? I mean, so

you have got a production tax credit, which is a direct subsidy, but

what about waste disposal issues, transportation——

68

Mr. ASSELSTINE. Well, waste disposal, the Nuclear Waste Policy

Act did impose a mandatory charge for utilities for nuclear generation that has been in effect since the mid-1980s, where the utilities

have paid one mill per kilowatt-hour for every kilowatt-hour of

electricity generated by nuclear power plants in the country. That

money has gone to the Treasury to fund the waste disposal program, and if anything, what we have seen over that time period is

the Federal Government failed to meet its obligation to take the

waste, and if anything, courts have now been returning some of

that money, or compensating utilities for their ongoing storage

costs.

So, I would argue, on the waste side, the utilities were pay-asyou-go from the mid-1980s, and continue that way today, and the

assumption is, if you have new nuclear power plants going forward,

those plants will also be assessed for their waste disposal costs

down the road.

You can also look at the stand-by risk insurance, which provides

protection against licensing and litigation delays for six units, if

that risk insurance is actually needed and used, that would be

about $2 billion, and the Congress has appropriated about $18.5

billion in funding for loan guarantees for the nuclear plants. Add all of those up, it is about $26 billion, and as the Chairman

pointed out in his opening comments, we now have applications or

statements from the utilities that they intend to apply for licenses

for 25 to 30 new units. So, the tradeoff would be about $26 billion

in federal support to help ensure that we might get 25 to 30 new

nuclear power plants over, say, the next 20 years or so. Those 25

to 30 new plants would mean that nuclear, taking into account the

Energy Information Agency’s projection about growth in electricity

demand, would keep nuclear at about 20 percent of our generating

mix going forward.

My own personal view is that is a reasonable, the Congress made

a reasonable decision to provide that support to get about 25 to 30

new plants, to keep nuclear at 20 percent of our generating mix.

And why is that beneficial? It makes the challenges of dealing with

carbon, with the coal-fired generation, easier to deal with. It makes

dealing with price volatility for natural gas somewhat easier to

deal with, and it keeps nuclear in the balance of its current contributions to our generating mix.

My own view is that is a reasonable tradeoff, and reasonable

value for the federal support going forward.

Mr. BAIRD. Appreciate it. I would like to let others testify, or

speak, but I have exceeded my own time, and I try not to abuse

that as the Chair.

No one offered that they want to increase funding for clean-up,

and we have answered, but we would sure welcome that at some

point.

Dr. Gingrey is recognized.

YUCCA MOUNTAIN AND WASTE STORAGE

Mr. GINGREY. Mr. Chairman, thank you. Dr. Cochran, in your

testimony, you recommended that Congress should require that the

Department of Energy resume a search for a second site to complement Yucca Mountain as a nuclear waste repository.

69

You went on and criticized the Department of Energy, and I

think you said corrupting the site selection for Yucca Mountain.

Since the idea of utilizing Yucca Mountain has seen delay after

delay, due in, I think, in large part because of one Senate Majority

Leader, it has hampered further usage of nuclear power because of

the question of what do we do with the waste? So, therefore, until

we finally open Yucca Mountain as the national repository for nuclear waste, I think it will inevitably prevent the Federal Government from adequately finding a secondary source.

That being said, if you feel that the site selection of, on Yucca

Mountain has been corrupted, what do you believe will occur if any

secondary site is selected, and additionally, where do you recommend we look for a secondary location for a nuclear waste repository?

Dr. COCHRAN. Very interesting questions.

Mr. GINGREY. Well, you have had some very interesting comments.

Dr. COCHRAN. I don’t know that I have the answers, but let me

make the following observations. Beginning in the Carter Administration, there was a genuine, bipartisan effort to solve the waste

problem, and set up an interagency review to address this issue.

And they came up with, and Congress passed, what looked like a

very good proposal. One agency, the Department of Energy, was

tasked with going out and systematically finding the best site. A

second agency, the Environmental Protection Agency, was tasked

with developing criteria for assessing whether that site should be

licensed. And a third agency, the Nuclear Regulatory Commission,

was tasked with making the judgment as to whether the site would

meet those criteria.

Now, in the decades since, that has gotten all botched. I mean,

the site selection process was botched, and knowing how the Federal Government works, they would probably botch it again. The

development of the criteria was totally corrupted. EPA is not an

independent agency, making these decisions. Before decisions come

out of EPA, they go into secret meetings at OMB, where EPA and

NRC and OMB and Justice all get together and decide what the

Administration’s position is. So, EPA really isn’t independent of

DOE. And here we are, 20 years later, and we have no final EPA

criteria to begin with.

Mr. GINGREY. So, Dr. Cochran, excuse me for interrupting, because I have a shortage of time here, but some of us on this side

feel that maybe the process was corrupted politically more than it

was by the Administration or——

Dr. COCHRAN. That also.

Mr. GINGREY. I want to address a question to Mr. Fri. I don’t disagree with Dr. Cochran’s concerns about the nuclear proliferation

potential of spent fuel, and obviously, when you talk to the Germans, you know, that is always their big concern, and you can’t ignore it, but where are we in regard to mitigating those concerns,

in regard to reprocessing and, indeed, getting some of this spent

fuel that is, in these storage pools at the 101 current reactors in

our country, into a final depository?

If you could address that for the Committee, I think it would

maybe allay some concerns that exist over this nuclear proliferaVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00073 Fmt 6633 Sfmt 6601 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
70

tion issue, because I firmly believe that the nuclear power, we need

to go forward with it, but I don’t—I am taking too much time. You

go ahead and respond to that.

Mr. FRI. Let me respond to it this way, Congressman. First of all,

it—we are probably on the order of decades away from having a reprocessing and recycling operation on a commercial scale to begin

to deal with the nuclear waste in the form that has been proposed,

for example, by the energy, in which you separate plutonium, you

burn up the actinides, and so forth, a lot of which can go into Yucca

Mountain.

But behind the question is, in the intervening time, a proliferation danger—to worry about. And basically, in terms of spent fuel,

there are a lot of proliferation issues, but one in spent fuel, as I

understand it, is not very high, because spent fuel, sitting at a reactor site, or in an interim storage facility, is not separated plutonium. It is very hot, and it is just not a really good source of material for a weapon.

So, I don’t think, and the Nuclear Regulatory Commission has

been storing this stuff, first in a pool, and then, in a dry cask, over

a period of decades, and it is perfectly safe. So, I don’t think that

there is the large proliferation risk in taking our time to get the

job done right on recycling and reprocessing.

Mr. BAIRD. Mr. Melancon was next, but he is absent right now.

Ms. Richardson. Mr. Smith is next.

MAKING NUCLEAR COST-COMPETITIVE

Mr. SMITH. Thank you, Mr. Chairman and witnesses.

Dr. Cochran, I appreciate your testimony. Would you generally

give a thumbs-up or thumbs-down to nuclear power?

Dr. COCHRAN. Excuse me. Nuclear power is in the mix. It is a

mature industry, and when it can compete with the other technologies on a level playing field, it ought to be, you know, we

should permit it to compete. Setting aside the separate issue of

whether you should reprocess the fuel. I think that is a terrible

mistake.

But the problem today is, new nuclear plants are not economical.

These guys are coming up to the Hill to get subsidies for a few new

nuclear plants. It won’t change the underlying economic problem

they have. You need to cap carbon if you want to change the underlying economics. It is also the right thing to do, and then, if nuclear

can compete, let it compete, but it is going to have to compete with

a lot of new technologies that are going to be coming down the line,

and it is going to be a difficult road for them.

Mr. SMITH. So, you mention capping carbon. Is that through cap

and trade policies?

Dr. COCHRAN. Yes.

Mr. SMITH. And what do you think the impact would be to electricity rate payers, as an example, on cap and trade?

Dr. COCHRAN. I think it would increase the cost of fossil fuels by,

initially, a few cents (¢), and then, further out, more, but I think

that could be offset by a higher investment in improved energy efficiency in the near-term, particularly, which has a benefit in lowering the cost of electricity.

71

And so, the net effect, over the long-term, I don’t think would effect the economy—I don’t think it would, should be significant.

Mr. SMITH. Okay. Thank you.

DOMESTIC URANIUM SUPPLIES

Ms. Kray, if you wouldn’t mind responding, how much of our current electricity use in the United States could be generated by nuclear power, using only domestic uranium?

Ms. KRAY. Only domestic uranium? I might have to actually

defer that to my USEC friend here.

Mr. VAN NAMEN. Given the rise in the prices that we have seen

over the last several years, I think you are seeing resurgence in

siting uranium mines, and licensing new uranium mines. I don’t

think, again, you would ever have a substantial portion funded, or

fueled by domestic mines. I think you would still look to partners

such as Canada and Australia to supply much of the uranium, but

our ability to do, maybe in 20, 15 to 20 percent, is very reasonable.

Mr. SMITH. Okay. Thank you very much. Thank you, Mr. Chairman.

Chairman GORDON. Thank you. Mr. Rohrabacher is recognized

for five minutes.

Mr. ROHRABACHER. Thank you very much.

Chairman GORDON. Excuse me, Mr. Rohrabacher. I didn’t—is

Mr. Matheson—if you are teed up, and Mr. Matheson——

Mr. MATHESON. I am teed up.

Chairman GORDON.—is recognized for five minutes. And then, we

will follow by Mr. Rohrabacher.

ON-SITE WASTE STORAGE

Mr. MATHESON. Thanks, Mr. Chairman. I had a few questions I

wanted to ask the panel, relative to the waste issues. I think the

waste issue really is one that we need to move to some point of resolution if nuclear power is going to have a better opportunity.

During the debate in Congress over the last few years, on moving

waste to Yucca Mountain, a number of Members of Congress would

get up during the debate, and they would say, gee, I have got all

these nuclear power plants right in my backyard, and I want to

give this waste away. We have got millions of people living next

door to this.

Is it not true that as long as there is an operating power plant,

there will be waste on-site, even if you had an off-site storage disposal site someplace else, and there would be a reasonable amount

of waste there, that has to stay there for a few years before it can

be moved?

Is that a fair statement?

Ms. KRAY. I can answer that, Mr. Chairman.

By design, once the reactor fuel is removed from the core itself,

it is placed into wet storage, and that is to accommodate the heat

load that is still present then. But ideally, the original design of

the plants was that once that time had expired, that it would be

moved to dry cask storage, not for on-site storage, but rather, to

the ultimate repository. So, if the repository were available, there

72

would be a very short period of time while the fuel is in wet storage.

But I would also add that, while it was not the plan, having the

dry cask storage on these facilities does not pose an undue risk. It

is just outside of what the original mission was.

Mr. MATHESON. I am glad to hear that, because that leads to my

next line of questioning. But I wanted to, first of all, address what

I think a number of Members of Congress have inappropriately assumed: that they wouldn’t have nuclear waste in their backyard

with an operating power plant. They will. They will, whether Yucca

Mountain happens or not. It may not be the same amount or volume, but it will be there.

Secondly, you mentioned that the benefit of going to dry cask

storage, back in 1982, I think, when Congress passed the Nuclear

Waste Policy Act, I don’t think dry cask storage was necessarily on

the table at that point. That is where technology has taken us now.

What do people think about the opportunity, in terms of trying

to resolve this complicated issue, of looking at interim on-site storage, where we put the waste in dry cask storage, we leave it onsite, the government takes title to the waste. That may address

some of the concerns of the power plant owners.

And from a cost basis, and from an effort at trying to bring some

medium-term resolution to this issue, it is not the million year resolution, but maybe it is a 100-year resolution. How does the panel

react to that type of proposal, to try to move beyond the dynamic

we are in now, in terms of waste storage? I would ask anyone on

the panel.

Ms. KRAY. Yeah, and I would offer right now, the industry, as

well as with the Department of Energy, is considering a number

of alternatives. Included, I believe what you are suggesting, is interim storage, not necessarily at the site at which it was generated,

but perhaps, multiple but more centralized dry cask storage facilities.

Also, revisiting the idea of closing the fuel cycle, and I think, contrary to Dr. Cochran, what the intent of it is, is to develop the process by which you would not increase proliferation risks, so this interim storage would, therefore, avail the fuel for future reprocessing, just as was said earlier, to extract from it the energy that still

remains in it.

So, I think all of those, whether it be the interim on-site storage,

the more centralized dry cask storage, the reprocessing, but ultimately, there will be a byproduct that is needed for Yucca Mountain, but in much lower volume, and also, a much, significantly

lower heat load.

Mr. MATHESON. Well, this line of questioning is motivated, and

I want to hear from some other folks on the panel, but this line

of questioning is motivated, I have introduced legislation that calls

for interim on-site storage, and the Federal Government taking

title to the waste. And I think it represents at least some level of

looking at a practical step forward on this issue, as opposed to

where we have been with substantial amounts of money being

spent on Yucca, questions about the scientific analysis. Time is

dragging on. We haven’t met deadlines. We have spent a lot of

money, and I think that there may very well be both an economic

73

argument and a practical argument, in terms of making progress

on this issue, as a medium-term solution, that we look at interim,

on-site storage, with the Federal Government taking title to the

dry casks. What other people have reactions to that?

Mr. VAN NAMEN. Congressman, what you are doing is asking

what I think is a very good question, and that is, let us ask ourselves what is the safest and smartest thing to do with this stuff

for the next 100 years, while we figure out what the safest and

smartest thing is in the very long-term.

Mr. ASSELSTINE. I would just add from my perspective within the

financial community, I think from investors, particularly as I have

talked to them about potential commitments for new nuclear power

plants, the waste issue virtually always comes up.

The NRC has always been able to determine that on-site storage

or extended dry cask storage does not pose a safety hazard or a

safety risk. There is a cost associated with it that would need to

be dealt with, but I suspect that from an investor perspective, and

probably from the perspective of the companies themselves within

the industry, some movement or progress toward an extended storage solution will be necessary before you see large scale new plant

commitments, because people will want to know what is going to

be done with the waste. That is also probably true from the standpoint of state rate regulators, economic regulators, as well. They

are probably just as upset about the delays and the problems in

waste disposal as the utilities are, as well.

So, if Yucca Mountain is not going to move forward, some alternative to provide an extended storage solution for the waste, probably is necessary, before we see substantial new plant commitment.

Mr. MATHESON. Thanks, Mr. Chairman. I would just offer again,

I think it may be a more cost effective method, too, and if I can

just add one point. A lot of people are still questioning the transportation risk of moving all this waste to Yucca Mountain. The Interim On-site Storage Bill would address that problem as well.

Mr. Chairman, I will yield back.

Chairman GORDON. Thank you, Mr. Matheson. I think that we

could have a very interesting hearing just on this topic, and thanks

for raising it. And the patient Mr. Rohrabacher is now recognized

for five minutes.

HIGH TEMPERATURE GAS-COOLED REACTORS

Mr. ROHRABACHER. Thank you very much, Mr. Chairman. Let me

just note, and this is a side issue, but just again, Mr. Cochran or

Dr. Cochran, global warming is not the basis for making decisions

like this. Even in your testimony, it has gone from climate change

to global warming, and the fact that it has been—in fact it is getting colder for these last seven years has now taken the global

warming people, so now, they are saying it is global climate

change, and that is so, that is such a mishmash, I think that reasonable people have got to frankly look at other issues, rather than

climate change for such incredible decisions as we are making

today.

However, with that said, I think you made some very good points

about nuclear energy that need to be addressed, other than whether it is going to change the climate of the planet or not. I asked,

74

I made sure my staff asked the panel beforehand, and gave them

some indication that I would be asking them about the High Temperature Gas-Cooled Reactor. Have any of you been to Japan, and

seen the High Temperature Gas-Cooled Reactor that they have in

operation there? I went to Japan a month ago, and went to that

reactor.

This reactor, from what I understand, after questioning the scientists there, as well as questioned various scientists, is lower in

construction costs, lower in operation costs, has no risk of meltdown, has no risk of radioactive discharge, has no proliferation

danger, and the, and a major reduction in leftover nuclear waste.

Now, what I want to know, with—first of all, that is what I understand. I am not a scientist, you know, there are protons, neutrons,

electrons, and morons in this universe. And I would have to say

that I am closer to the latter than the former.

Maybe, am I wrong in seeing that there is a great potential in

the High Temperature Gas-Cooled Reactor that is just being ignored? Go right ahead.

Ms. KRAY. I can offer a perspective on that. The High Temperature Gas-Cooled Reactor design, sometimes referred to as Generation IV, they offer a promising option in the future, primarily because of the potential to divert that high process heat, whether it

be for enhanced oil recovery in tar sands, or even hydrogen production.

However, I would differ from your perspective when you say,

about the costs. There are a number of issues right now, as far as

implementing them in the U.S., where they are significantly behind

what is referred to as the Generation III plus, looking at what we

want to implement next. It is, primarily, it is the licensing piece

of it. They are not yet design certified by the NRC or the other——

Mr. ROHRABACHER. So, in other words, it is the bureaucratic

costs, not the technology costs.

Ms. KRAY. Not yet. I would also add the size of them.

Mr. ROHRABACHER. Yes.

Ms. KRAY. And there is, in order for them to be commercially deployed, there is the licensing aspect of it, and along with that, some

safety implications, the NRC has indicated the need for advanced

fuel performance and characterization, as well as the selection of

materials, again, because they operate at such a high temperature,

which is to their benefit, but also, a challenge.

So, with the cost, I would say any estimates of implementing

them in the U.S. right now would be aspirational at best, and that

is because of the lack of the maturity of them at this time. Intuitively, I would think that they will be more costly than the light

water reactors, only because of their per-kilowatt output, or their

size, and they don’t have the economies of scale.

Mr. ROHRABACHER. Well, actually, you can, if you have got smaller reactors, you can actually place them in different places, maybe

closer to the consumers, perhaps.

Ms. KRAY. We have looked at that, I know, with the Pebble Bed

Modular Reactor, and in the U.S. grid system, it still suggests that

from an economic perspective, you would actually want to bundle

at least four or six of those together. However, in——

Mr. ROHRABACHER. Which you could do.

75

Ms. KRAY. You could do, but then, again, so that deployment, or

that distributed generation, which that is, doesn’t necessarily win

so much over here. But again, there is a strong future and outlook

for those.

Mr. ROHRABACHER. Why is it, I guess what you are telling me,

of all over, what we have got now, this water-based reactors that

we have now, this is 56-year-old technology. These were things

somebody designed 60 years ago, that now, there have been incremental improvements on, but it is the fundamental concept of,

frankly, people who were raised and educated before World War II,

and what I don’t understand is, that why there doesn’t seem to be,

I mean, listen, I went over and talked to those engineers. The Japanese engineers were not just Japanese engineers that had made

their life on the High Temperature Gas-Cooled Reactor. These were

engineers that had a long history, a long history of their involvement in the nuclear energy field, all of them suggested that just

the technology of it had all of these great benefits that I just suggested, especially the fact that there is no plutonium left over,

which as I say, Dr. Cochran’s concern for that is very well—I disagree with him on global warming, but I totally agree with him on

some of the points he raised that have to be concerns, like proliferation and the leftover waste material, as well as potential accidents.

Were they lying to me when they said that there is no possibility

of a melt-down or a radioactive discharge, as compared to light

water reactors?

Ms. KRAY. There is definitely a benefit with the High Temperature Gas-Cooled Reactors, because the fuel type is ceramic in nature, it can withstand higher temperature, and there is less likely

to melt. However, I would say as far as the technology looking to

be deployed next, that is being designed as we speak, so it is not

archaic technology, but rather, we see it from an operational perspective, as the optimum balance between the innovation, using the

path of approach to technology, but at the same time, the wealth

of experience that we do have on light water reactors. Because

again, as we go through, while the financial issues have dominated

a lot of the discussions, at the end of the day, for us investing and

operating, it is the safety aspect of it.

Mr. ROHRABACHER. Well, the safety operation, you are trying to

tell me that light water reactors are going to be, just a safety comparison to what this High Temperature Gas-Cooled Reactor offers,

that there is a better safety potential for the water reactor, with

all of the leftover plutonium?

Ms. KRAY. I think it is unknown at this point—well, I don’t think

that the plutonium issue is as much of a differentiator.

Mr. ROHRABACHER. Okay. Okay, what about the melt-down

issue? What about the discharge of radioactivity issue? I mean,

these Japanese scientists are, were very specific with me about

this. They had all worked on the light water reactors before, and

said there is just no comparison as to the actual safety of these two

operations.

Ms. KRAY. I would, again, argue that there is a potential, and

there are safety benefits associated with the High Temperature

Gas Reactors, but at the same time, there are unknowns, again, in

76

the area of fuel, and also, with the materials, which have implications, obviously, to the safety.

But, so I think that the High Temperature Gas Reactors need to

be on the horizon, but I think the bridging technology, to get from

where we are to that is to implement the next evolution, not revolution, of technology, to sustain the infrastructure, to allow us to

implement the Gen IV reactors.

Mr. ROHRABACHER. Well, it sounds like——

Chairman GORDON. The gentleman’s time has expired, but Admiral, it looks like you—are you trying to get into this? Do you want

to say something quickly?

Vice Admiral GROSSENBACHER. Yes, sir, I just wanted to add, and

you know, we are, certainly my laboratory believes that, yes, High

Temperature Gas Reactor technology has a lot of potential. I don’t

think the Japanese engineers lied to you. I think they implied a degree of maturity in the technology that is not there yet. It holds

a lot of promise. The issue is, you got to finish developing the technology. You got to show that you can make this fuel, and make it

reliably, and billions and billions of times. The other is the market

for these machines, these reactors. They, big, light water reactors

are very good at generating electricity, and they are very inexpensive in the U.S. context. These reactors, the High Temperature Gas

Reactors, are really focused in a different market, which is the high

temperature process heat applications, including how you make hydrogen.

In point of fact, a market that doesn’t exist yet. So, you know,

we are committed, and the Department of Energy is committed to

developing that technology, and resolving those issues, and this is

what we call reactor after next technology. It is not as mature, I

guess.

Chairman GORDON. Thank you. We will have a second round.

And Mr. Rohrabacher, for your information, Mr. Bilbray had asked

unanimous consent that your self-commission be concurred, but I

would not consent to that, so—but I will recognize him for a second

round.

THE FUTURE OF NUCLEAR TECHNOLOGY

Mr. BILBRAY. Always willing to support my fellow surfer down

there, whatever his motion is.

Admiral, you know, do you believe that there is going to be a resurgence of the nuclear use and technology in the world?

Vice Admiral GROSSENBACHER. Yes, sir, I do, and if I can just

make one point. When we discuss other choices for energy, you

have to consider the density of the source, and if you are providing

energy for a large, industrial activity over a large population center, certainly, we want to do everything we can with efficiency, because the cleanest megawatt is the one that is never used. We certainly want to do everything we can with renewables and distributed sources, but as I mentioned in my opening remarks, we have

chosen a very energy dense path. Today, we satisfy the high concentration needs with hydro, with fossil fuel, and nuclear, and

there are challenges associated with all those, all three, when I add

up the pluses and minuses, I think there is an important future for

nuclear energy.

77

Mr. BILBRAY. Do you agree that it is important, and in fact, it

is almost echoing what Dr. Cochran said about the fact that other

countries getting into nuke without the kind of oversight we have

in this country, do you believe it is not only essential for us as

Americans to be involved in this, but also, in the issue of being involved in what technology and how this technology is being used

around the world?

Vice Admiral GROSSENBACHER. Yes, I do. We need to be leaders

in those processes.

Dr. COCHRAN. I will speak to that. I agree with that conclusion.

However, our leadership is misdirected towards closing the fuel

cycle, and developing a technology that simply has been demonstrated to be unreliable, and far more costly than even the light

water reactors.

Mr. BILBRAY. Well, I understand that, Dr. Cochran. Admiral,

there was discussion about the Federal Government’s involvement

in this industry. In the last 20 years, who has been the major purchaser of reactors within the United States?

Vice Admiral GROSSENBACHER. In the last 20 years? No one.

Mr. BILBRAY. Except the United States Navy, right?

Vice Admiral GROSSENBACHER. Yes, sir.

Mr. BILBRAY. Okay. I just want to say that while we have sort

of pointed fingers over at industry on one side, we have been the

major consumer of reactors, as the United States Government, and

then, we wonder why is the Federal Government getting involved

in this issue, when we have been the biggest consumer, the consumer for domestic sources.

That being said, is, when we—you know, and one of the things,

I guess, that we need to point out, that I think there is sort of a,

this concentration of energy being needed to be sited at a certain

location, with the zero emission potential, is not just an issue for

electricity. Hydrogen production, if we are ever going to go there,

either has to depend on using natural gas, which is, in my opinion,

it is going to be an essential transition fuel for global sources, or

we are going to need to go to some way we can concentrate the energy for hydrogen and, for those of us in California, desalinization,

which we are already seeing.

I don’t know what other technology not only provides that option,

but I think the one bum rap that I keep hearing is that when you

look at the life cycle, the true costs, not the regulatory or legal

costs, but the true costs, hydro where you can do it, wind generation where God has put it, and then nuclear. Overall, you compare

that to the other costs life cycle, they, I don’t think this is one of

those issues where we have got to choose between the economy and

the environment.

But my concern is this. We need to start shutting down major

emitters of greenhouse gases now. We can’t wait 20 years, 30

years. How do we shut down coal plants across this country without going to some kind of technology that is able to concentrate it

down the line? So, let me just say this. We were looking at the cost.

Ms. Kray, what percent, you know, how much effect does government regulation and litigation and tort exposure have to do with

the overall costs, and I would only, and then, I would turn around

and say, Dr. Cochran, one of my concerns is my state has outlawed

78

one of the options that has been pointed out by the UN Council on

Climate Change, has outlawed that technology. At the same time

in California, we are talking about taking a lead on.

REGULATION AND INVESTMENT

So, let us talk about the regulatory, and I guess let me go back

and say from the investment point of view, is it the regulatory and

the tort issues that are the dark clouds on the horizon when you

are talking to investors?

Ms. KRAY. And I, so the NuStart consortium was formed to address that. The, I mean, you can use the word—and recognize the

failure of that investment process. So, that is what is on the minds

of investors going forward.

And part of the changes in the licensing process that the NRC

invoked was to address that, and to essentially pull forward all of

that litigation risk before the tremendous capital investments are

made, and that was not the case when the current fleet was built,

where, in effect, you were pouring in your capital investment at the

same time you were at the mercy of the regulatory process. So, that

huge uncertainty still is in the minds of investors, whether it is

from the utilities side, or from the financial community itself.

So, our belief is that with the revised Part 52 process, that that

will improve that, but nevertheless, our objective is to demonstrate

that by getting a license in hand, again, prior to making those huge

investments, and to avoid the situation you are referring to.

Mr. ASSELSTINE. You are exactly right, Congressman. That concern is foremost in the minds of the investment community. We

have a new process. I personally believe that process will work effectively. If you have essentially completed designs that the NRC

has reviewed and signed off on at the outset, if you have an opportunity to go through, literally, all of the environmental and safety

issues around the plant before you start construction, then the risk

of a problem or a surprise down the road, particularly after the

capital investment in the plant has been made, ought to be relatively low.

The problem is that we have got the new process, and it hasn’t

been tested, and until we get several plants through that process,

and it performs as everyone intends, the financial community will

look at that, and say there is a risk and an uncertainty here. What

sets nuclear apart from every other alternative form of generation,

is the requirement to go through the NRC licensing process. And

so, that is the difference, and until we have a track record of successful performance from the new system, that uncertainty will be

there.

Mr. BILBRAY. Now, I served on two environmental regulatory

agencies, some of the best in the world, I think we would agree,

and I have been proud to serve on those groups, California Coastal

Commission and the Air Resources Board for California.

But getting back to the Admiral’s statement about, we are talking about a concentration of energy generation, what we have seen

here is also a concentration of capital and deep pockets that attracts the type of vultures who swoop down and are looking to take

their pound of flesh, and becomes a huge target to be able to generate great revenue through regulatory obstructionism and legal

79

proceedings. And we need to address that thing, Mr. Chairman. I

guess what it really comes down to, is this attitude of just back off

and let the system work, is the fact that we basically have, you

know, tied this industry down, and then, based on the fact that

they can’t move, and then say why haven’t they done more.

And I think there is a real challenge, that we have got to be

more proactive on this, and as I stated before, don’t think the other

industries right now, or the fair-haired groups, aren’t going to have

litigation, and come to San Diego County, and take a look at the

litigation against the links that are going to solar, wind, and geothermal. It is a huge uproar in a community that is very environmentally sensitive, so all of these things, in the long run, you are

going to have a lot of baggage, and we need to be proactive, rather

than reactive on it.

Thank you very much, Mr. Chairman.

Chairman GORDON. Thank you, Mr. Bilbray, and Mr. Rohrabacher is recognized for our final question.

MORE ON HIGH TEMPERATURE GAS-COOLED REACTORS

Mr. ROHRABACHER. Well, thank you very much. You know, I have

been listening very closely here, and I just, it seems to me that

what we have got here in the United States is a corporate mentality that is only interested in trying to make more money off the

current status quo, and only a very short-term vision, and any vision that they have for the future is based, it is not being based

on something new being in the picture. It is all based on status quo

technology, and again, nuclear energy isn’t all that new. We are

talking about something, the fundamentals that were set down by

what we are talking about, something that was designed by people

who were educated before World War II. And it is basically 50-

year-old technology that has been incrementally improved.

I think the idea of having, focusing our research on reprocessing

plants that can help solve part of the problem is a good idea, but

I would like to know, if we can’t rely on corporate America to come,

for innovations, on the other hand, rely on government policy, how

much money has been going into research and development, federal

dollars, in terms of developing this High Temperature Gas-Cooled

Reactor concept, as compared to just incrementally improving this,

the light water reactor concept?

Vice Admiral GROSSENBACHER. I can speak to, from the standpoint of the improvement of light water reactor technologies, there

has been very little Federal Government investment in research

and development. There is an ongoing effort for a cost-shared program with, between government and industry, so that the research

tools of government can do what industry can’t do, or doesn’t have

the capabilities to do to ensure the extension of that technology.

In terms of the High Temperature Gas Reactor, in the United

States, the project that needs to deliver that capability is the Next

Generation Nuclear Plant. There is an ongoing program to develop

and demonstrate that technology, at a scale that will, then, convince commercial interests that this is something that they want

to buy.

Mr. ROHRABACHER. Well, why is it that the Japanese have one

of these working, and we don’t?

80

Vice Admiral GROSSENBACHER. Well, they have a test reactor.

Mr. ROHRABACHER. That is correct.

Vice Admiral GROSSENBACHER. It is not industrial scale.

Mr. ROHRABACHER. It is a big reactor. I went there, and I went

through the reactor myself.

Vice Admiral GROSSENBACHER. South Africa has an aggressive

developmental program in this area, and again, we think, and I

speak just from the standpoint of reactor technology, and our perspective at the Idaho National Lab, this is a very important future

technology. It is also complicated. You have got to prove the fuel

performance. You have got to prove that you can manufacture the

fuel, and the fact that you can do it once in a test reactor, and not

stress it, or demonstrate it at industrial scale, there is lots of uncertainties that have to be resolved. So, that refers to my comment,

is perhaps the folks you talked to were a little bit aggressive in

terms of their estimates of the maturity of the technology.

Having said that, Congressman, I am with you. I think this is

an important technology, but reactors are not simple things.

Mr. ROHRABACHER. I believe, first of all, that the, as I say, the

criticisms of the current system is justified. We have plutonium left

over, and we have got waste problems, and we have got risks associated with it. I am dismayed that we have a situation where we

have a potential alternative nuclear option that is not being fully

looked at, that the Japanese and the Russians, of all people, are

engaged in actually moving forward on this technology at a much

faster pace than we are, and that we will be left behind, because

of corporations’ inability to basically, to look forward and have

long-term strategies, and our government, which seems to be unfortunately, too tied to the hip to major U.S. corporations, that we are

being dragged back, and not being able to make these investments

in future technologies.

So, I think this is a great risk. I think we could wake up, look,

I am the benefit, Mr. Chairman, we are the benefit of that World

War II generation. My father helped develop the things that right

now, and his generation, that are now solving the problems that we

face today. But there are future problems, and unless we are the

ones that are open to new ideas, rather than totally focused only

on incremental improvements in the status quo, we will be left behind a generation from now, and our kids will not be the leaders

of the future, as Americans have been for the last 30 and 40 years,

based on the work of our parents.

So, I would hope that we live up to the Great Generation’s challenge to us, and remain the world’s leader, and energy is so important, and I believe that the High Temperature Gas-Cooled Reactor

is an example of something that we should be putting maximum

attention on, and instead, it is being pushed to the side and out

of the picture. So, thank you——

Ms. KRAY. If I could comment on that.

Mr. ROHRABACHER. Sure.

Ms. KRAY. I would agree that the U.S. has fallen behind in its

leadership of the nuclear industry.

Mr. ROHRABACHER. Right.

Ms. KRAY. But at the same time, I think we have a very similar

view of the High Temperature Gas-Cooled Reactor, as does the

81

Asian market, particularly Japan. I think we both see it as prototype, somewhat developmental in nature, through Admiral

Grossenbacher’s theory is we need to look at the fuel characterization and the materials issues, but if you look at what Japan is

building and purchasing now, it is not High Temperature Gas Reactors. They are building the light water advanced reactors.

Mr. ROHRABACHER. Yeah, they have got the same problems with

their corporations that we do.

Ms. KRAY. Well, and I think, and again, when we put out a request for proposal for additional baseload power, we are, we do not

limit it to anything. We will get coal, any renewable and nuclear,

and within the nuclear family, whoever responds, the answer is

there was no response of the High Temperature Gas-Cooled Reactor, and that is because it is not yet ready for the commercial deployment. But we are hopeful that, as we sustain this infrastructure, there will be deployment of HTGRs, whether it is for electricity production, or some of the other benefits that it can provide.

Mr. ROHRABACHER. Well, I will be going to Russia to look at their

operation, and some of the issues that you have brought up, and

I think this really deserves the attention of the Committee, and I

thank you very much for giving me this time.

Chairman GORDON. The gentleman’s time has expired. I know,

Dr. Cochran, you would like to continue, but let me say this. You

have been an excellent panel. We have not closed the record. This

is not the extent of this dialogue. This is one that we want to continue. It needs to, we need to continue. There are not easy answers

here. We are all going to have to talk about it in a collaborative

way. And we will continue on this committee to do that.

So, under the rules of the Committee, the record will be held

open for two weeks for Members to submit additional statements

and any additional questions they might have for the witnesses.

And the hearing, but not the subject, is adjourned.

[Whereupon, at 12:25 p.m., the Committee was adjourned.]

(83)

Appendix:

ANSWERS TO POST-HEARING QUESTIONS

84

ANSWERS TO POST-HEARING QUESTIONS

Responses by Marilyn C. Kray, Vice President, Exelon Nuclear; President, NuStart

Energy Development

Questions submitted by Representative Ralph M. Hall

Q1. Ms. Kray, have NuStart’s members seen any NIMBY opposition or environmental opposition to their proposed nuclear plants?

A1. While some opposition has emerged, it has not been significant. In fact, NuStart

members have uniformly seen strong support from State and local stakeholders surrounding potential new plant sites.

Positive relations with the community surrounding a nuclear plant is a primary

goal of Exelon as well as of other NuStart member utilities. For Exelon, we strive

to be a valued member of the community through our charitable contributions as

well as through the contributions of our employees who serve on boards, coach

sports teams and are active in other service areas.

The nuclear industry routinely polls the public regarding its opinion on nuclear

energy. The April 2008 survey conducted by Bisconti Research, Inc. reported that

63 percent of those polled favor the use of nuclear energy, while 33 percent oppose.

This percentage is approximately the same as a survey conducted in October 2007

but down from a peak of 70 percent favorable in 2005.

In selecting a site for a potential new plant, community support is one of many

factors that are considered. When NuStart selected its sites for the DOE Nuclear

Power 2010 Program, we received positive feedback from the communities of all six

of the finalist sites. Similarly, Exelon has been welcomed by the local community

of its selected site in Victoria County, TX. To date, resolutions in favor of a new

plant have been passed by the City of Victoria, the Guadalupe-Blanco River Authority, the Victoria Chamber of Commerce, the African American Chamber of Commerce of Victoria, the Victoria Economic Development Corporation and the Victoria

County Commissioners’ Court.

Support for a new plant is clearly not unanimous. The ‘‘not in my backyard’’

(NIMBY) sentiment is expected in each of the planned licensing proceedings. The

NRC licensing process, however, is keenly focused on soliciting public opinion and

offering ample opportunities for public involvement. These opportunities include

public meetings that are held at various stages of the licensing process, starting

even before an actual application for a new plant has been submitted. The NRC licensing process also includes the opportunity for formal intervention in the hearing

proceedings. To date, the two lead Combined Construction and Operating License

Applications (COLAs), TVA’s Bellefonte COLA and Dominion’s North Anna COLA,

have each received petitions to intervene.

Q2. Ms. Kray, how long has the industry been engaged in programs to attract a

skilled workforce? Has it been a success?

A2. Since the industry’s inception, nuclear utilities have been conducting programs

to attract and retain a skilled workforce. These efforts have been accelerated recently in anticipation of the potential addition of new nuclear plants to the U.S.

fleet and have led to an increased focus on identifying, recruiting, and training

workers to meet a variety of needs related to plant design, construction, engineering, and operations.

The issue of workforce development is of particular interest to the nuclear utility

industry given that the median worker age in the nuclear utility industry is over

48 years which is higher than that of the national average. Further, as much as

35 percent of the incumbent nuclear utility workforce may be eligible to retire within five years.

Today, the typical nuclear plant employs 400 to 700 people, and jobs at these

plants pay substantially more than average salaries in the local area. For example,

the median salary for an electrical technician at a nuclear power plant is $67,517;

for a mechanical technician, $66,581; and for a reactor operator, $77,782.

Utilities have been working together through the Nuclear Energy Institute (NEI)

and have sponsored individual initiatives and programs in their local areas of interest. Through NEI, the industry is working with organized labor, government, educational institutions and nonprofit organizations.

On a company level, Exelon has taken a number of actions to address the workforce issue. These range from direct financial contributions to targeted engineering

institutions to working with a local community college to develop a two-year program to prepare students for employment opportunities in power generating faciliVerDate 11-MAY-2000 21:32 Sep 28, 2008 Jkt 041798 PO 00000 Frm 00088 Fmt 6601 Sfmt 6621 C:\WORKD\FULL08\042308\41798 SCIENCE1 PsN: SCIENCE1
85

ties. To address our potential need in Texas, the site of our proposed new plant,

Exelon is involved in outreach efforts at the local high schools to encourage students

to pursue careers in the nuclear power industry.

While the challenge remains, preliminary results are positive. An industry survey

conducted in 2007 found a 34 percent increase in the number of young engineers

18 to 27 years of age working in the utility workforce from 2005 to 2007. During

the same period, operations personnel 18 to 27 year of age increased 33 percent.

Question submitted by Representative Adrian Smith

Q1. Could you please address challenges associated with nuclear waste transport

and any reform needed to streamline the process or improve its safety?

A1. Allow me to address the question of safety first. While accidents can and do

happen, the safety record of transport of used nuclear fuel in the United States and

throughout the world is excellent. Nearly 3,000 shipments of used fuel have been

transported in the United States since the early 1960s. Overseas, more than 650

shipments are made each year in Britain and France alone. Several minor vehicle

accidents have occurred involving these shipments, but none has resulted in the release of radioactivity to the environment.

The Nuclear Regulatory Commission (NRC) is responsible for licensing the shipping packages used in the United States and for the security of used fuel transport.

The Department of Transportation (DOT) oversees package labeling, manifest and

content. State and local authorities provide escort and inspection services as required. Coordination of these entities is generally performed at the state level with

the involvement of state police troops and state governmental agencies.

From a safety standpoint, Exelon believes satisfactory controls are in place at the

federal, state and local levels to ensure that transport of used nuclear fuel can be

accomplished safely. Continuing dialogue between the states—under the auspices of

the Council of State Governments and the Department of Energy (DOE)—is helping

to communicate the State and local responsibilities and to prepare emergency response organizations.

Regarding streamlining the process, Exelon believes there are a number of issues

presenting bottlenecks to used fuel transport. One simple logistics example is that

individual states have the option of designating ‘‘preferred routes’’ and entrance/

egress inspection requirements for the transport of used nuclear fuel. Unfortunately,

‘‘preferred routes’’ may not be contiguous between bordering states, and State/local

inspection requirements may unnecessarily delay transport and potentially create

security risks. Reforms at the federal level may be able to reduce this bottleneck

and potential security risk.

86

ANSWERS TO POST-HEARING QUESTIONS

Responses by Robert Van Namen, Senior Vice President, Uranium Enrichment,

United States Enrichment Corporation Inc.

Questions submitted by Representative Ralph M. Hall

Q1. Mr. Van Namen, in Dr. Cochran’s testimony he said that one of the negatives

of nuclear power is that it ‘‘has significant unresolved health and environmental

problems associated with uranium mining.’’ Do you have any thoughts on that

statement?

A1. As with any conventional energy source, the feedstock for nuclear fuel must be

obtained by extracting it from a country’s natural resources. During the past several

decades, U.S. uranium miners have progressed substantially in their responsible

stewardship of the mines while decreasing the negative effects of their operations

on local communities.

Today’s mines are highly regulated by the U.S. Environmental Protection Agency,

the U.S. Nuclear Regulatory Commission (or the equivalent state agency in Agreement States), the U.S. Department of the Interior’s Bureau of Land Management,

and the U.S. Department of Labor’s Mine Safety and Health Administration. Mining

of uranium and other natural resources in the United States is also regulated at

the State level.

The benefits gained by extracting this powerful natural resource through conventional and leach mining techniques greatly outweigh the minimal health and environmental effects caused by today’s uranium mining practices. In fact, most mines

in operation today, or that will come online in the future, will be required to return

the mine site as close as possible to its original condition and to remove or remediate any remaining byproduct material.

What Dr. Cochran is probably referring to are the effects of the legacy wastes left

over from U.S. Government mining operations during World War II and the Cold

War at abandoned mines in the western part of the United States, when national

security needs were a high priority. Today, the highest priority of our nation’s commercial uranium industry is safety, as well as environmental and health protection

that has reduced concerns in these areas.

Q2. Mr. Van Namen, will you tell us about the supply of uranium and if there are

any foreseen supply problems for the projected worldwide nuclear plants? Do you

think reprocessing is necessary from a uranium supply standpoint?

A2. The increase in price for natural uranium has spurred the rapid prospecting for

and development of new uranium mines around the world. Mining companies in the

United States, Australia, Canada, Kazakhstan and several African nations have

begun preparing for new production to meet an anticipated need for additional natural uranium. Most market participants expect that existing mines, new mines and

legacy supplies, such as those held by the U.S. Department of Energy, will be able

to meet any growth in demand for the foreseeable future.

The majority of the new uranium production expected to come on line in the next

several years will come from expansions to existing operations or re-opening mines

that were put into standby mode during a period of low prices. The permitting and

development process for a new mine can take as much as 10 years to bring a deposit

into production.

Uranium reprocessing is not necessary to meet the needs of the existing or

planned nuclear plants over their lifetimes based on known available resources of

uranium. However, given the potential long-term economic and environmental benefits of recycling nuclear fuel once it has gone through the reactor, reprocessing nuclear fuel is clearly a technology that should be pursued. Reprocessing allows for the

recapture of approximately 90 percent of the original energy content in the nuclear

fuel that has been used in a nuclear reactor. Clearly, the opportunity to capture that

energy potential with a corresponding reduction in the quantity of spent fuel is attractive. The key is that we must invest now to develop the best possible reprocessing technologies that meet non-proliferation, environmental and economic objectives.

Q3. Mr. Van Namen, how many mines are there in the U.S.? You mentioned in your

testimony that domestic mines supply 18 percent of the natural uranium purchased by U.S. reactor operators. Are there more uranium supplies that could

be mined? Are there any barriers towards mining in new locations? What is our

country’s uranium supply in terms of years of use?

87

A3. As the accompanying chart indicates, the Energy Information Agency of the Department of Energy reports that there are currently 12 sources of uranium currently

in operation in the United States producing about 4.5 million pounds of U308. Other

sources of U.S. produced uranium include government stockpiles, industry inventories, and processing of uranium tails at the enrichment plants.

There are many known sources of uranium in the U.S. that can be mined, and

there has also been a sharp increase in exploration activity in search of new resources. Known domestic reserves of uranium, as reported by the EIA, are estimated

at 890 million pounds U308, enough to supply the current reactor fleet for 18 years.

The OECD/IAEA ‘‘red book’’ reports prognosticated resources for the U.S. at about

four times the estimated reserve level (note that reserves are estimated at $50/lb

cost for U308, and would be higher at higher market prices).

The primary barrier to uranium production is obtaining the numerous permits required to bring a discovery to production. There is at least one State, Virginia,

which currently does not allow uranium mining. One of the largest high quality uranium deposits in the North America is located in South-Central Virginia, North of

Danville. At present, development of this project is on hold pending efforts to change

Virginia’s statues to allow this project to proceed to the regulatory phase.

Q4. Mr. Van Namen, what step of the fuel cycle needs the most help or the most protection from the U.S. Government?

88

A4. Two parts of the fuel cycle need U.S. Government assistance.

First, a comprehensive solution for managing the long-term storage of existing

and future used fuel from commercial reactors needs to be implemented. The U.S.

Government, specifically Congress, needs to come to agreement and take action

about the best way forward towards achieving a responsible, sustainable storage solution. The lack of a viable solution may eventually prevent the expansion of nuclear

power in the country as utilities may be reluctant to increase their use of nuclear

power until they know that the used fuel generated by their current and future

plants will have a disposition path.

Second, the domestic uranium enrichment industry needs protection from unfairly

priced enriched uranium supplies that could be dumped onto the U.S. market by

the government-backed Russian nuclear fuel conglomerate. In addition, the U.S.

Government’s Title XVII loan guarantee initiative for innovative technologies includes a provision for $2 billion in guarantees for U.S. fuel cycle facilities. Timely

implementation of this initiative is a critical action to support deployment of advanced uranium enrichment technologies to meet the fuel needs of the current reactor fleet over their remaining lifetimes and the new reactors currently in development.

Questions submitted by Representative Daniel Lipinksi

Q1. You mention in your testimony that the U.S. gave up our industry leading position on nuclear technology long ago. Can you elaborate on this and explain in

what ways other countries have taken the lead? As leaders in the field, what advantages have these countries gained?

A1. While the United States brought the commercial use of nuclear energy to the

world, our leadership role has slowly eroded since the 1980s. This decline reflects

a complicated interplay of several factors including economics, politics, activist positions of environmentalists and the industry’s own lack of assertiveness in correcting

many of the misconceptions that grew from the accident at Three Mile Island and

the subsequent cancellation of orders for nuclear reactors in the following decade.

With little domestic industry growth to support U.S. nuclear companies, many

closed, shifted focus from development and construction to maintenance services, or

were sold to foreign firms who utilized American expertise and technologies to capture a dominant role in the world market as other countries continued their expansion of the technology. This decline was accompanied by a loss of jobs spanning a

range of skills.

As America plans to build new reactors, U.S. utilities must turn to foreign vendors for a majority of the necessary components, manufacturing and project expertise because no American company has built a reactor in almost three decades. This

reliance adds costs and risks to our attempt to increase our sole emissions-free baseload electricity source at a time when our economy is increasingly driven by information technology and service industries.

Without the indigenous capacity to build a nuclear plant, we can no longer direct

our own path to a reduced-carbon future. It is time for the United States to take

back its leadership role by promoting the use of nuclear energy through the actual

construction of new plants and fuel cycle facilities, by advancing the use of U.S.

technologies around the world and by continuing to innovate and commercialize advanced nuclear technologies such as advanced reactor designs and reprocessing technologies.

Our American Centrifuge uranium enrichment plant is a perfect example of this

new path. Based on U.S. gas centrifuge technology that USEC has substantially improved during the past six years, the American Centrifuge machine will be almost

five times more productive than the next best machine commercially deployed in the

world today. The last U.S. enrichment plant was constructed more than 50 years

ago and today we pay the price of relying on an outdated, energy-intensive process

that most of the world abandoned decades ago. By utilizing U.S. technology, manufacturers, and the labor force, USEC’s project has taken the first steps towards reasserting America’s leadership role in the worldwide nuclear industry.

Similar efforts should be championed at other American companies if we are to

again be the world’s leader in this vital sector that will power the low-carbon world

of the future.

Q2. You mention that the Converdyn plant in Illinois recently expanded to allow it

to meet about 80 percent of annual U.S. demand. Where does the other 20 percent come from? And are any plans underway to meet this remaining demand

domestically?

89

A2. U.S. demand for conversion is currently met by sources from around the world,

primarily the Metropolis, Illinois plant whose product is marketed by Converdyn

and by a plant in Canada operated by Cameco. While it would probably be feasible

for the Illinois facility to be expanded again (it was recently expanded to its current

capacity), it is unlikely that this will be the case until more demand develops in

the United States.

The President of Converdyn has indicated publicly in recent months that the company may instead consider building a new facility in Europe or Australia in order

to balance conversion supply geographically with enrichment or in large uranium

production centers such as Australia. However, any number of nuclear companies

could also consider building a new conversion facility in the United States using

similar technology if the demand, typically aligned with enrichment capacity, is

present. Conversion capacity, as well as centrifuge based enrichment capacity, can

be built in a shorter timeframe than the nuclear power plants that they would support which significantly reduces the risk of a supply shortfall resulting from expanding the nuclear fleet.

90

ANSWERS TO POST-HEARING QUESTIONS

Responses by James K. Asselstine, Managing Director (Retired), Lehman Brothers;

Former Commissioner, Nuclear Regulatory Commission

Questions submitted by Chairman Bart Gordon

Q1. In your testimony, you describe current federal incentives for nuclear power as

essential to enabling utilities to build new plants in the U.S. If you were still

with Lehman Brothers today, would you recommend that the company use its

resources to finance a new nuclear plant which takes advantage of the current

incentives over a standard natural gas or coal plant? If similar applicable incentives were offered to comparable-scale renewable projects, such as large-scale

wind farms in the Northeast or solar thermal plants in the Southwest, what recommendation would you make? If all incentives were removed and a strong carbon cap-and-trade system were implemented, would your recommendation

change?

A1. I believe that the package of incentives for nuclear power contained in the Energy Policy Act of 2005, if properly implemented, effectively offsets the risks and uncertainties associated with building an initial group of new nuclear power plants in

the United States. Taken together, these incentives, along with appropriate contractual arrangements between the plant’s owners and the plant vendors, should help

to make a new nuclear power plant competitive economically with other forms of

generation, including coal and gas-fired power plants and renewable energy resources. Accordingly, were I still with Lehman Brothers, I would recommend that

the firm support the financing of a new nuclear plant. As a full service investment

bank, Lehman Brothers works with its corporate clients to execute their equity and

debt financing needs in the capital markets, advises its institutional investor clients

as they consider alternatives for their equity and debt investments, and uses the

firm’s own capital to make direct investments where the firm sees attractive opportunities. I would recommend that the firm consider supporting a new nuclear plant

investment in this country through some or all of these financing roles.

In my view, the growing consensus on the effects of greenhouse gas emissions dictates that in the electricity sector we aggressively pursue a strategy of energy conservation and enhanced diversity in our electric generation mix. Conservation measures offer the promise of reducing the growth in electricity demand, and may provide the lowest cost alternative for reducing greenhouse gas emissions. Several

states are providing or developing incentives through the rate-setting process for

utilities to reduce electricity demand, and these initiatives should be encouraged.

Nevertheless, although added conservation measures can reduce the growth in electricity demand, I doubt that they can eliminate the need for additional generation

resources, at least for the foreseeable future.

Nuclear power and renewable energy resources both provide the opportunity to

add new generating capacity to the system without adding to greenhouse gas emissions. As I discussed above, I believe that the existing federal incentives, if properly

implemented, will make a new nuclear plant economically competitive with other

available generating alternatives. Like gas and coal-fired power plants, nuclear

plants are baseload generating facilities, and therefore are available to operate essentially all the time except for relatively brief refueling outage periods. In general,

the U.S. generating mix is becoming short of baseload generating capacity, and

there is a need to add more baseload facilities. The principal drawback of nuclear

is the large initial capital cost of the plant and the long lead time for planning, licensing, building, and commissioning the plant. Given the size of the U.S. utility

industry and the relative size of the individual companies, I believe that a target

of adding 25–30 new nuclear plants over about the next 20 years is realistic and

achievable. This would effectively maintain nuclear power’s share of our generating

mix at about the current level of 20 percent and provide some additional greenhouse

gas-free baseload generating capacity. In my view, new renewable energy resources

such as wind, solar, and geothermal, should also be encouraged and supported. More

than half of the states now require that the utilities obtain a growing percentage

of their electricity requirements from renewable energy resources, and these requirements will lead to further renewable energy resource development. Like the

initial new nuclear units, renewables tend to have somewhat higher economic costs

than fossil-fired generation. Accordingly, renewables may require continued economic incentives such as production tax credits and federal loan guarantees to remain competitive at least for the near-term. This is particularly true for wind and

solar plants, which operate at lower capacity factors than baseload plants, and

91

therefore are not available to operate all of the time. A strong carbon cap-and-trade

system will likely have a positive effect on the economics of nuclear power and renewable energy resources. Depending upon how the system is structured and how

emissions credits are allocated, the economic benefits of a carbon cap-and-trade system could reduce the need for financial incentives for nuclear and renewables at

some point in the future, but until the detailed elements of a cap-and-trade system

are adopted, in my view, it is too soon to tell whether such a system can replace

the economic incentives for nuclear power and renewables.

Like nuclear, coal provides a reliable and low cost (in terms of fuel and operating

costs) source of baseload generation, and this country benefits from abundant coal

resources. But, conventional coal plants are a major contributor to greenhouse gas

emissions. I believe that plants using clean coal technology to reduce greenhouse gas

emissions should be encouraged, as should research and development of carbon sequestration technologies. Because of differences in views within the industry concerning the reliability of commercial scale clean coal technology, and because initial

plant costs are likely to be comparable to the initial nuclear units, financial incentives will likely be needed for the first group of clean coal plant projects as well.

These incentives were provided in the Energy Policy Act of 2005 and, if properly implemented, should encourage the development of clean coal technology. These

plants, together with a group of new nuclear units, can provide needed new baseload

generating capacity and help replace some of the older coal units in this country

that are among the largest current emitters of greenhouse gases. Like nuclear and

renewables, clean coal technology could also benefit from a strong carbon cap-andtrade system.

Finally, natural gas is likely to provide a growing contribution to our electric generating mix in the future, and the more efficient combined cycle plants can function

as baseload generating facilities. Although gas-fired plants contribute to greenhouse

gas emissions, their emissions are considerably lower than those from conventional

coal-fired plants. Further, due to their low initial capital cost and short construction

periods, new gas plants can be financed using conventional means without the need

for federal incentives. But, as we have seen in recent years, actual production costs

for gas-fired generation can vary widely due to severe price fluctuations in natural

gas prices brought about by supply and demand considerations. Because new gasfired plants can be built relatively quickly and cheaply, they are likely to become

the utilities’ primary choice to fill the short-term gap between electricity supply and

demand after taking into consideration the benefits of conservation, and the contributions from renewables, new nuclear and clean coal baseload units.

Questions submitted by Representative Ralph M. Hall

Q1. Mr. Asselstine, in Dr. Cochran’s testimony he quotes a report by the Union of

Concerned Scientists that says ‘‘the NRC is not adequately enforcing the existing

standards.’’ He goes on to state in his testimony that ‘‘the biggest barrier to significant improvement of U.S. nuclear plant safety is the poor safety culture of

the NRC.’’ As a former NRC Commissioner, do you agree with those statements?

A1. No, I do not. In general, I believe that the NRC is appropriately focused on ensuring the adequate protection of the public health and safety, and security. I believe that the NRC’s safety culture is sound, and that the agency does an effective

job in enforcing its existing safety standards. In my view, the steady and significant

improvement in the regulatory and reliability performance of our 104 operating nuclear units over the past decade is evidence of the effectiveness both of the industry’s operation of the plants and the NRC’s regulatory performance. From time to

time, operating experience at the plants has disclosed the need for additional operating initiatives by the industry and additional regulatory oversight by the NRC.

This was the case a few years ago with the reactor vessel head inspection and material condition issues identified at the Davis-Besse plant. In this and other cases, I

believe that the industry and the NRC have responded effectively to the need for

additional safety and regulatory improvements.

Q2. Mr. Asselstine, in your testimony you mention the loan guarantee program established under Title XVII of the EPAct 2005. In your opinion do DOE’s implementing regulations for the loan guarantee program provide lenders the assurance they need to offer loans for the first wave of plants?

A2. Yes, I believe that in general, DOE’s implementing regulations provide an adequate basis for lenders to participate in the loan guarantee program for a new nuclear plant. Nevertheless, a number of significant additional actions by DOE are

needed to implement the new loan guarantee regulations, and the outcome of these

92

actions will determine the workability and attractiveness of the loan guarantee component of the federal incentives for new nuclear plant development. In my view, the

review by the DOE Loan Guarantee Program Office of individual loan guarantee applications, as well as DOE determinations of the subsidy cost for providing a loan

guarantee, should provide us with additional insights on the cost and workability

of the loan guarantee program.

Q3. Mr. Asselstine, in your testimony you point out that continued successful implementation of all three financial support components in EPAct 2005 is essential

for firm orders for new plants. It is my understanding the applications for new

plants must be filed before the close of 2008 for qualification of the production

tax credits. Due to this deadline are additional tax credits or incentives needed

for continued participation by the investing and lending communities?

A3. I do not believe that additional tax credits or incentives are needed at this time

for continued participation by the investing and lending communities. Your understanding is correct that in order to be eligible to receive a production tax credit for

a new nuclear plant, the sponsor of the proposed plant must have submitted an application for a combined construction and operating license (COL) for the plant with

the NRC by the end of 2008. A number of companies have either already submitted

their COL license applications or stated their intention to submit their applications

by the end of this year. Thus, by the end of this year, I suspect that a substantial

number, and perhaps most, of the new proposed nuclear units will have established

their initial eligibility to receive the production tax credit, and it will be possible

to calculate the minimum amount of the production tax credit that each plant would

be eligible to receive. (The plant’s sponsor will need to achieve certain other milestones over time to maintain the plant’s eligibility for the production tax credit.) A

sponsor for a new nuclear plant need not have placed a firm order—that is, entered

into a contract to purchase the plant—at the time that the NRC license application

is filed. These orders for new plants in most cases, will probably be placed at some

point during the NRC licensing process when the project sponsors and their investors have gained some experience with the licensing process and as developments

progress on the other financial incentives.

Q4. Mr. Asselstine, in EPAct 2005 we provided what you refer to as three complimentary financial support provisions (tax credit, stand by support, and loan

guarantees). Are there improvements to these provisions or additional provisions

that would improve the likelihood of success?

A4. I continue to believe that the package of financial incentives provided in the

EPAct 2005, if properly implemented, are sufficient to bring about the development

of a new group of nuclear power plants in this country. Accordingly, I do not see

the need for additional statutory provisions or improvements to the existing provisions at this time. If the development of new nuclear plants is to be successful, it

will depend upon the industry’s performance in negotiating reasonable contracts for

the plants, the NRC’s performance in executing the licensing process for the new

plant applications, and DOE’s performance in implementing the financial incentive

provisions. This is especially the case with the loan guarantee program, where key

steps and actions are yet to be completed by DOE. Additionally, as we gain some

experience with DOE’s implementation of the loan guarantee program over the next

one to two years, it should be possible to determine whether there is a need for additional funding authorizations and appropriations beyond those now in place for

loan guarantees for renewables, clean coal technology, and new nuclear plants.

93

ANSWERS TO POST-HEARING QUESTIONS

Responses by Thomas B. Cochran, Senior Scientist, Nuclear Program, National Resources Defense Council, Inc.

Questions submitted by Representative Ralph M. Hall

Q1. Dr. Cochran, you mention MIT’s nuclear study in your testimony and that it estimated that the cost of electricity generated by a new merchant nuclear plant

would be 60 percent higher than that of a fossil fuel plant. Do you know what

the comparison would be if the fossil fuel plants had CCS technology installed?

A1. In December 2006 IEA estimated ‘‘typical cost of CCS [carbon capture and storage] in power plants ranges from U.S. $30 to 90/tCO2 or even more, depending on

technology, CO2 purity and site . . .. Assuming reasonable technology advances,

projected CCS cost by 2030 is around $25/tCO2 . . .. CO2 separation cost from natural gas wells may be as low as $5–15/tCO2.’’ (http://www.iea.org/textbase/techno/

essentials1.pdf). CCS costs can also be reduced when done in conjunction with enhanced oil recovery.

In the MIT study, based on modeling performed in 2003, new nuclear merchant

plants were estimated to become competitive with coal and gas (assuming high gas

prices) at carbon emission costs of about $100/tonne of C ($27/tonne of CO2). (MIT,

Future of Nuclear Power, 2003, p. 7.) This would be near the low end of IEA estimates of the cost of CCS. Since 2003 the estimated cost of new nuclear plants has

doubled and is still climbing, and the cost of fossil fuels has similarly increased. It

is more important to get federal energy policy right than it is to try to predict future

winners in a changing energy market. With regard to getting the policy right Congress should: a) internalize the societal cost of greenhouse gas emissions primarily

by limiting CO2 and other greenhouse gas, b) support demonstration of CSS options,

and c) cease subsidizing new nuclear power plants. Nuclear power is a mature electricity generating technology. The federal subsidies going to new nuclear plants are

not going to bring down their costs and are penalizing alternative technologies that

can provide climate change mitigation more quickly, safely, at less cost, and with

fewer environmental harms than building new nuclear power plants.

Q2. Dr. Cochran, you state in your testimony that new nuclear plants would not be

cost competitive with electricity from wind or solar. Is this comparison done with

or without the production tax credit given to renewable forms of energy?

A2. The comparison is without the production tax credit (PTC). Solar thermal is a

promising near-term cost competitor to nuclear, following behind energy efficiency,

wind, geothermal, biomass, and high-efficiency gas.

There are two kinds of solar cost projections: 1) current costs with and without

federal PTCs and State incentives, and 2) solar cell manufacturing cost projections

based on bringing the industry to scale. Rooftop photovoltaic (PV) solar in California, including federal and State incentives, is now competitive with grid-delivered

peak electricity at 13.5 cents per kWh (this was for a recently completed SunEdison

project in Southern California). Thus, with current incentives, rooftop PV solar is

competitive now with peak delivered electricity rates in a few parts of the country

with supportive policies, such as California and New Jersey.

With respect to unsubsidized future solar costs that would compete with nuclear

electricity in the 2015–2020 timeframe, a number of thin film and concentrating PV

manufacturers, and independent industry analysts, are projecting solar cell costs of

$1 to $5 per peak watt, which would clearly make rooftop solar competitive without

subsidies with the current delivered retail costs of nuclear electricity. However, getting to these low costs requires scaling up production and installation capacity, and

hence a PTC or some other type of investment tax credit (ITC) to help bridge the

gap between current and projected costs. Since non-renewable and costly nuclear already has an eight-year PTC for the first 6,000 MWe of new capacity, there is absolutely no logic or merit in denying the same treatment to renewable solar technologies.

For solar thermal plants, which are more directly comparable to nuclear plants,

the industry is projecting a decline from 15 cents today to about 10 cents per kilowatt hour at the busbar (including 6–12 hours of energy storage) between now and

2015 if production capacity can be scaled up. Several such plants are now under

construction around the world, and most observers feel the technology has immense

near-term potential. In the U.S. the concentrating solar thermal power (CSP) industry currently has access to a $10 billion pool of DOE administered federal loan guarantees for renewable energy and transmission projects—less than half the current

94

$20.5 billion pool for nuclear reactor and enrichment technology projects—and it can

negotiate long-term power supply contracts with utilities and other large customers

that make the economics quite transparent and workable. A PTC will make these

projects more attractive from an investment perspective and hasten the scale-up of

the industry, but this might be needed for only five years or so. Thus, it is reasonable to assume that at 15 cents per kWh CSP plants are competitive now with some

of the higher projections of nuclear power busbar costs, and CSP costs are projected

to come down as industry manufacturing capacity is increased to around 10 cents

per kWh at the busbar within five to seven years. This would make CSP cheaper

than most projections of the cost of electricity from new-build nuclear plants.

Of course, since it is centered in the desert Southwest, the CSP resource is a good

substitute for nuclear (and coal) in that region, and in neighboring markets where

the power can be economically and efficiently transmitted, such as to California, the

Rocky Mountain West, and Texas. Obviously, CSP technology, which relies on direct

solar radiation, is not an answer for cloudier regions of the country, such as the

Northeast, Midwest and Southeast. Photovoltaic technology is appropriate in these

regions, along with wind, electrical end-use efficiency, wave and tidal energy, industrial waste-heat cogeneration—a large underutilized resource—and biogas. If the

cost of low-carbon electricity using each of these sources is less than new nuclear

plants, we should exploit them for carbon mitigation to their fullest extent before

turning to new-build nuclear plants. Increased end-use efficiency alone can free-up

more additional megawatts than all of the nuclear power plants currently proposed

to be in operation by 2020, and at far less cost (less than five cents per kWh), so

that is where we should turn first before throwing tens of billions of dollars at newbuild nuclear power plants. Under a carbon cap and trade scheme, their time as an

economically preferred option may eventually come as fossil-fueled baseload power

options increase in cost and the nuclear industry figures out a way to standardize

components and major subsystems and apply modern assembly line techniques to

reactor production. But renewable energy technologies will also be improving and

reducing costs as well. Congress should not seek to dictate a place for new-build nuclear by subsidizing its way back into the marketplace.

Q3. Dr. Cochran, do you think the Federal Government should be spending any

money on nuclear programs or nuclear R&D?

A3. Yes. There is an appropriate role for federal funding of energy technologies, including but not limited to: a) R&D on technologies that are in the national interest,

but whose development is too risky financially, or where the time to commercialization is too long to interest the private sector in funding the needed R&D, and b)

subsidizing deployment of worthy technologies in order to scale up production capacity for the purpose of reducing unit costs, e.g., subsidies discussed in the response

to Question 2 above.

I support: a) R&D and qualification of a high-burnup uranium-seed, thorium-blanket fuel for use in light water reactor (LWR) operating on a once-through fuel cycle,

b) development of a smaller standardized transportable modular reactor LWR design of around 300–500 MWe that could be flexibly deployed and retrieved, c) construction of the very high-temperature gas-cooled reactor demonstration plant, the

so-called New Generation Nuclear Plant (NGNP), and d) R&D on advanced safeguards technologies.

A crude nuclear device constructed with highly enriched uranium (HEU) poses the

greatest risk of mass destruction by terrorists. Current Radiation Portal Monitors

(RPMs) installed at ports and border crossings and the next generation Advanced

Spectroscopic Portals (ASPs) cannot reliably detect HEU. (See, Thomas B. Cochran

and Matthew G. McKinzie, ‘‘Detecting Nuclear Smuggling,’’ Scientific American,

April 2008, pp. 98–104.) Thus, the Federal Government should place a much higher

policy priority, and in some cases spend more funds, on securing and eliminating

HEU sources worldwide. In this regard it should increase greatly the priority given

to the development and deployment of alternative low-enriched uranium (LEU) fuel

for the few remaining U.S. research reactors and the larger number of foreign research reactors now using HEU fuel. The Federal Government also should support

the construction a domestic capability to make medical isotopes with LEU targets.

Logically, this capability should be located at the University of Missouri, which currently makes medical isotopes in the University of Missouri Research Reactor

(UMRR).

Finally, the Federal Government should support university-based nuclear physics,

chemistry and engineering programs, not only to educate and train people going into

the field of nuclear power generation, but to meet nuclear-related national and

homeland security, nuclear medicine, nuclear waste management and disposal, and

nuclear regulatory needs.

95

This is not an exhaustive list of nuclear energy R&D worth of federal support,

but an even more comprehensive list would not include the Department of Energy’s

proposed research on advanced reprocessing and fast reactors as set forth in its

Global Nuclear Energy Partnership (GNEP) vision.

96

ANSWERS TO POST-HEARING QUESTIONS

Responses by Robert W. Fri, Visiting Scholar, Resources for the Future; Chair, Committee on Review of DOE’s Nuclear Energy Research and Development Program,

Board on Energy and Environmental Systems, National Research Council

Questions submitted by Chairman Bart Gordon

Q1. Secretary Bodman took issue with the level of urgency the recent National Research Council review placed on closing the fuel cycle. He stated that it is paramount that leaders in this country seek to solve the issues that inhibit the expansion of nuclear power, including providing a durable and credible nuclear waste

disposition path.

To what extent does dry-cask storage of spent nuclear fuel—an option the National Research Council report seems to support—represent a credible waste disposition path to support the expansion of nuclear power that the Department of

Energy (DOE) seeks?

A1. The report states that ‘‘There is general agreement and approval by the

USNRC that such a scheme [dry cask storage] would provide safe, secure, storage

for at least 100 years.’’ As such, this option is available to support the expansion

of nuclear power. Indeed, it is available now, unlike both the Yucca Mountain

project and a major recycling program.

Q2. According to DOE, the findings of the recent National Research Council review

as they relate to GNEP are based on faulty premises. In particular, Assistant

Secretary Spurgeon stated the review incorrectly assumed that DOE had pre-selected technologies and the scale at which to build recycling facilities. He went

on to state that fast reactor recycling will take many decades to implement and

that any near-term deployment of commercial-scale facilities would likely rely on

technologies similar to those that are commercially available for recycling in

current generation reactors.

A2. As general background to this question, a letter from Dr. Ralph Cicerone, President of the National Academy of Sciences, to Secretary Bodman is attached. It summarizes the committee’s arguments for recommending against a large demonstration or commercial facilities program, only one of which was based on the premature

selection of technology.

Q2a. What is your view of the proposal to rely initially on commercially available

technologies, presumably MOX, while continuing to develop technologies for

fast reactor recycling?

A2a. The committee concluded that the technical risk of skipping the engineering

scale facilities was unacceptably high for a broad range of technologies. In addition,

the committee concluded that there is neither an economic reason nor domestic policy need to proceed with recycling now. Dr. Cicerone’s letter discusses these issues

in more detail.

Q2b. Assuming the long-term goal is to close the nuclear fuel cycle, are we more likely to succeed through the phased approach DOE seems to be advocating, or by

waiting until R&D on the more advanced technologies is at a point to get directly to the end goal of fast reactor recycling?

A2b. The committee recommended following the general plan of the Advanced Fuel

Cycle Initiative, which is a phased approach to the development of fast reactor recycling. In the view of the committee, this plan is the most likely to result in a tested,

acceptable technology.

Q3. In your written testimony, you note that the study committee you chaired did

‘‘not recommend a large federal research program, because most of this research

should be industry-supported.’’

What would you describe as reasonable goals for a research program and what

actions would DOE need to take to help achieve those goals? Would new research and development facilities need to be built? If so, how would you recommend those costs for new facilities are shared between industry and DOE?

A3. This question appears to refer to research associated with the current fleet of

nuclear power plants. The federal role in such a program would be to support research that the private sector cannot support. The most obvious example would be

for DOE to provide specialized user facilities, such as the Advanced Test Reactor

97

at INL. This facility could be used, for example, to test the design of high burn-up

fuels developed in the private sector. Such facilities should be operated along the

same lines as user facilities at other national laboratories, importantly including a

policy of charging commercial users only incremental costs. For a more complete

study of possible collaborative efforts, please contact INL or the Electric Power Research Institute for the results of a study they jointly conducted several years ago.

Questions submitted by Representative Daniel Lipinski

Q1. You mention that DOE should strengthen university capabilities to educate

young professionals and scientists to allow for a sizable buildup in nuclear energy production, research, and development. What is currently done at U.S. universities in relation to nuclear energy, and what do you recommend be done to

expand and improve upon this work?

A1. Although university-based nuclear science and engineering (NSE) education

programs receive financial support from a wide range of federal agencies as well as

industry, core NSE research thrusts are generally not funded by the other federal

research funding agencies because they are viewed as the exclusive jurisdiction of

DOE, as set forth in the Atomic Energy Act. Therefore, DOE plays a crucial role in

maintaining the core research programs and student support needed to sustain university NSE programs. The past DOE Nuclear Energy University Program was comprehensive in scope, providing fuel services for research reactors, basic research

grants, support for industry matching grants (dollar-for-dollar match from industries), infrastructure support for university research infrastructure, as well as scholarships for undergraduate students and fellowships for graduate students, and partnerships to share reactors with other universities and industries and includes minority serving institutions.

To ensure that DOE continues to play this role, the committee recommended that

there be a separate line item for university programs in the Energy and Water appropriations for DOE to implement the NSE program outlined in EPAct05. The committee also endorsed the report of the American Nuclear Society, Nuclear’s Human

Element: A Report of the ANS Special Committee on Federal Investment in Nuclear

Education (2006), which contains detailed recommendations for the design of the

NSE program.

Q2. What is the status of DOE’s Nuclear Hydrogen Initiative with regard to the new

technologies under development? Is the Program on track to deploying new light

water reactor and fuel cycle technologies by 2015, and next-generation advanced

reactors and fuel cycles by 2025?

A2. The committee’s recommendations on the issues raised in this question are:

• The Nuclear Hydrogen Initiative is well-designed, but its goals and schedule

need to be coupled more closely to the goals and schedules for the Next Generation Nuclear Plant (NGNP). As noted below, these schedules may slip.

• The NP 2010 program is on track to support the deployment of new light

water technology at the rate determined by private sector investment. This

could be as early as 2015.

• The NGNP program is not likely to meet its schedules unless the public/private partnership on which the schedule depends comes into being. DOE

should decide whether to pursue a different demonstration program with a

smaller industry contribution or a more basic technology development program.

• The committee did not estimate when fuel cycle facilities could be in place,

but did suggest that there is little economic or domestic policy reason to accelerate their construction.

Questions submitted by Representative Ralph M. Hall

Q1. Mr. Fri, in your testimony regarding the Nuclear Power 2010 (NP 2010) Program you state that augmenting the program to ensure timely and cost-effective

deployment of the first new reactor plants is necessary but that the Committee

does not recommend a large federal research program, because most of this research should be industry supported. Could you provide us with examples of the

research areas you believe should be industry supported that would augment the

NP 2010 Program?

A1. Please see the answer to Question #3 asked by Chairman Gordon.

98

Q2. Mr. Fri, also in regard to the Nuclear Power 2010 Program (NP 2010) you mention the need for strengthening university capabilities to educate a growing number of young professionals and scientists in relevant areas. Did we assist this

strengthening in the America COMPETES Act?

A2. Although the committee did not address this question, I understand that Section 5004 of the America COMPETES Act was intended to bolster academic infrastructure for nuclear education. A committee members who are familiar with this

legislation (and who is speaking for himself, not the committee) believes this program is ‘‘perfectly positioned to facilitate the creation and expansion of academic

programs, not only in nuclear engineering, but in other fields, such as nuclear chemistry, radiochemistry, health physics, and material sciences, that are critical to the

long-term sustainability of nuclear energy.’’

Q3. Mr. Fri, you mention the Committee believes a research program similar to Advanced Fuel Cycle Initiative (AFCI) is worth pursuing and that DOE obtain

more external input such as an independent through peer review of the program.

What insights does the Committee expect such a review would provide DOE

when crafting such a program?

A3. The committee recommended that DOE establish an outside review capability

for all of its nuclear R&D programs. We suggested three criteria for an outside review—that it be strategic, independent, and transparent. In the case of the AFCI

program, a strategic review would address the major technical choices to be made

over the long duration of the program. It would do so with outside advice that

avoids conflict of interest and a collective bias for any one choice. Finally, the work

of the advisory committee would be open to comment by the entire nuclear R&D

community, both to ensure technical accuracy and to build support in the community for DOE’s decisions.

Question submitted by Representative Adrian Smith

Q1. Could you please address challenges associated with nuclear waste transport

and any reform needed to streamline the process or improve its safety?

A1. The committee did not address issues of transportation of spent fuel. However,

the Nuclear and Radiation Studies Board of the National Research Council has published a report entitled Going the Distance? The Safe Transportation of Spent Nuclear Fuel and High-Level Radioactive Waste in the United States (2006) which may

be of some help in addressing this question.

99

100

101

102

103

104

ANSWERS TO POST-HEARING QUESTIONS

Responses by Vice Admiral John J. Grossenbacher, Director, Idaho National Laboratory, U.S. Department of Energy

Questions submitted by Representative Ralph M. Hall

LWR SUSTAINABILITY

Q1. Mr. Grossenbacher, with the increased efficiency of the existing fleet resulting in

a significant amount of additional baseload power generation, how much longer

do you believe the existing fleet can take up the slack to offset other baseload

sources? Will new construction be required to continue this offsetting?

A1. Through improvements and up-rates to the current fleet, nuclear generation

has increased significantly over the last 20 years. However, by 2030, electricity demand is expected to grow to a level 30 percent higher than today. New plants must

be built to meet demand, but it is estimated that the supply chain required for the

construction of new nuclear power plants currently limits the construction of nuclear power plants to about four plants per year. With life extension, the current

fleet would begin to retire in 2030. However, operating these plants to up to 80

years, with capital investment to upgrade existing components and modernize systems, could emerge as a sound business decision and an effective means to lock in

to non-emitting capacity.

Q2. If we are to extend the licenses of the existing fleet beyond 60 years how will,

for example, the Nuclear Power Strategic Plan with EPRI, address the gap before new nuclear power plants come online? Will this program for example examine the performance of nuclear plant materials beyond 60 years of service?

A2. The Nuclear Power Strategic Plan is aimed at conducting the research and development necessary to support the extended safe and reliable operation of the Nation’s fleet of nuclear power plants. Extending operation of existing plants and

building new plants will be necessary to meet growing demand of electricity in the

U.S. Based on this strategic plan, the Department of Energy proposes to increase

funding in Fiscal Year 2009 to conduct research and development on technical

issues related to extended performance of nuclear plant materials, transition to digital instrumentation and control; new techniques for in-service inspection, including

diagnostic, maintenance, and repair techniques; enhanced fuel reliability and performance; and new higher burn-up fuels.

AFCI

Q3. Realizing the Advanced Fuel Cycle Initiative (AFCI) will take time, is there

something in the interim that could be done prior to the Advanced Fuel Cycle

Initiative is completed?

A3. Yes. The U.S. nuclear industry is prepared to make substantial investments in

new reactors, but needs consistency from government regarding support for nuclear

energy. On the research front this includes funding for operations, maintenance,

and needed upgrades of domestic research facilities, as well as support for cooperative agreements with Japan, France and other countries for joint use of unique facilities. The Advanced Fuel Cycle Facility is a much-needed laboratory that will support both laboratory and engineering scale research on advanced nuclear fuel recycling, including advanced separations and transmutation fuel development for consumption of transuranics. Support for accelerating the development of this laboratory is urged. Given the projected need for energy from non-carbon emitting sources,

research on extending current reactor life is also needed, as is research on higher

burn-up fuels.

On the regulatory front development is also needed. Recycling will result in significantly different waste streams with much lower long-term hazards, but current

language in the Nuclear Waste Policy Act does not account for these differences.

While most radioactive waste is regulated based on content and the hazard associated with that content, current law regulating ‘‘high level waste’’ is based solely on

the source of the material and not the actual hazard present. Continued support for

opening of the federal geologic repository is also urged. While the hazard present

in waste from advanced recycling will be much lower per unit of energy produced

than that from used fuel disposed as waste, there will still be a need for deep geologic isolation of a portion of the waste.

105

ADVANCED FUEL CYCLE INITIATIVE

Q4. Along with the additional research that will take place as part of AFCI’s longerterm goals, are there benefits to developing or redeveloping nuclear fuel reprocessing capabilities now using existing technology?

A4. Yes. Establishing the policy and regulatory framework of nuclear fuel recycling

will serve as a catalyst for industry participation domestically and U.S. leadership

internationally. The Nuclear Regulatory Commission has already received applications for 15 new reactors and expects that number to rise to 27 by year-end. Returning to a policy of recycling will not only address the waste confidence issue for new

reactors, but also encourage industry participation in the development of the fuel

recycling infrastructure. Transitioning to advanced recycling technologies will be

easier with an operating infrastructure, including an established transportation network. Recovered fissile materials will also reduce the need for additional uranium

mining and enrichment. Also, by joining the countries currently recycling used nuclear fuel, the U.S. will be in a better position to move the rest of the world forward

in adopting advanced technologies that will end the direct separation of pure plutonium and recycle all the transuranic elements.

Question submitted by Representative Adrian Smith

NUCLEAR WASTE TRANSPORTATION

Q1. Could you please address challenges associated with nuclear waste transport

and any reform needed to streamline the process or improve its safety?

A1. The U.S. has safely conducted more than 3,000 spent nuclear fuel (SNF) shipments over the last 40-plus years without any releases harmful to the public or the

environment. The National Academy of Sciences concluded in a study of SNF shipments [February 9, 2006] that there are no technical challenges to conducting these

shipments safely under the current regulations. There are financial challenges associated with building the infrastructure and addressing the social and institutional

concerns associated with shipments to Yucca Mountain. Adequate funding to train

emergency responders along transportation corridors and to develop the fleet of

transport casks, rail cars and the railroad to Yucca Mountain are the biggest challenges. No legislative reforms are needed to either streamline or improve the safety

of these shipments.

Questions submitted by Representative Bob Inglis

U.S. NUCLEAR INFRASTRUCTURE

Q1. Would you give your assessment of the state of the U.S.-owned nuclear technology and supply industries?

A1. The state of the U.S.-owned nuclear technology industries is poor. The supply

of adequate equipment, materials, and personnel to support expansion of the nuclear industry in the U.S. will be problematic. As an example, ultra-heavy forged

reactor pressure vessels are currently available from only one factory in Japan. It

is imperative that the U.S. domestic nuclear infrastructure be expanded to accommodate future needs.

NUCLEAR INFRASTRUCTURE

Q2. How many predominantly U.S.-owned reactor vendors were there in the 1970’s?

How many are there now? What happened?

A2. Four major U.S.-owned companies served as reactor suppliers in the 1970s:

Babcock & Wilcox, Combustion Engineering, General Electric and Westinghouse.

Since that time, however, foreign companies have either acquired or bought into

each of these U.S. firms.

The French firm Framatome (now Areva) purchased a half interest in Babcock &

Wilcox’s nuclear services division in 1989. Combustion Engineering became a wholly-owned subsidiary of Asea Brown Boveri, a Swiss-Swedish multi-national conglomerate in 1990. Asea Brown Boveri was subsequently acquired by British Nuclear

Fuels in 2000. British Nuclear Fuels acquired Westinghouse Electric Company in

1999. In 2006, Toshiba signed an agreement with British Nuclear Fuels USA Group

and Westinghouse Electric UK Limited to acquire 100 percent of Westinghouse.

Hitachi and General Electric combined their nuclear power divisions in 2006. GE–

106

Hitachi is owned 60 percent by GE and 40 percent Hitachi, and is currently the only

U.S.-owned reactor vendor.

Q3. Why is the state of the U.S.-owned nuclear technology and supply so poor?

A3. The U.S. pioneered nuclear technology and dominated nuclear energy leadership in the 1970s. Nuclear development in the U.S. suffered a major setback, however, because of delays caused by a cumbersome and lengthy licensing process, the

oil embargo of 1973 that led to high interest rates and low economic growth, and

with the 1979 Three Mile Island accident. Not a single new nuclear power plant was

ordered after 1973, causing a major downturn in supply and business of U.S.-owned

nuclear technology.

Historically, the U.S. policy on nuclear energy stands in stark contrast to the policies in France and Japan. France now claims a substantial level of energy independence and almost the lowest electricity cost in Europe. France also has an extremely

low level of CO2 emissions per capita from electricity generation. Japan has also embraced the peaceful use of nuclear technology to provide a substantial portion of its

electricity. Today, nuclear energy accounts for about 30 percent of Japan’s total electricity production.

Æ