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HEARING OF THE ENERGY SUBCOMMITTEE OF THE SENATE APPROPRIATIONS COMMITTEE SUBJECT: GLOBAL NUCLEAR ENERGY PARTNERSHIP CHAIRED BY: SENATOR PETE DOMENICI (R-NM) WITNESS: CLAY SELL, DEPUTY SECRETARY OF ENERGY LOCATION: 124 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C. TIME: 2:30 P.M. EST DATE: THURSDAY, MARCH 2, 2006(Federal News Service (Middle East) Via Thomson Dialog NewsEdge) SEN. DOMENICI: (Sounds gavel.) Hearing please come to order. Senator Reed has indicated that I should start. He may or may not be able to come, but we're going to proceed. Good morning to you, Mr. Secretary. First of all, as many of you may know, Clay is returning to this subcommittee where he served as clerk for four years. I'm not sure that he wanted me to brag or comment about that, but it's a reality, so we might as well say it. I'm very pleased to have you here today, and to have you where you are. I'm sure you're going to do an excellent job in this very difficult arena, and I compliment you on the subject matter that you're going to present to us today. This is one of many of the president's new programs to break America's dependence on foreign oil and build America's competitive edge, and DOE is the focal point for these initiatives. Good afternoon, Senator Craig. First, I commend the secretary and the deputy secretary for setting forth a comprehensive global nuclear strategy that promotes nuclear nonproliferation, the goals of that, and helps to resolve our nuclear waste issues at the same time. In the '70s the United States decided to abandon its leadership on nuclear recycling and let the rest of the world pass us by. With the creation of this new global nuclear energy program we are going to get back into the ballgame. Now it's not so easy to play catchup from such a far long distance behind. It means you've got a lot of hard work. It means you've got to have a big vision. It means you've got to be willing to put up some resources. And then you've got to decide that what you're trying to do is really worth it, that it is -- it has the potential for solving some big, big problems in the future. So based on the current projections, global energy demand is expected to double by the year 2050. We must act now to ensure that we have a reliable energy source without increasing air pollution and without increasing greenhouse gases. Passage of the energy bill last year created a new future for nuclear power in this country, and it's interesting to note that the rest of the world is aware of the same thing that we are aware of. We finally changed our policy, but they, the rest of the world, has finally decided to change their modus operandi, and they are also moving rather quickly into nuclear power reactors as sources of energy for their countries -- and that's China and many others, Larry, as we know. In the year 2006 energy outlook, the Energy Information Agency has included in its estimates, believe it or not, a growth in nuclear power as part of the domestic energy picture. Now that's a simple statement to make and, for many, it doesn't mean much. But when the Energy Information Agency looks out there and assesses what is going on, they usually come up with some pretty objective findings. And they have made a decision, a determination, that nuclear power is going to come on board in the United States by way of nuclear power plants. With the GNEP, we began to close the cycle on nuclear waste in ways that prevent proliferation and reduce both the volume and the toxicity of waste. By recycling the spent nuclear fuel, we can reuse the uranium, which is 96 percent of the spent fuel, and we can separate the most toxic radioactive material to be burned in advanced burner reactors. By reusing the fuel and burning the transuranic material, we can reduce the amount of waste that would be placed in a Yucca Mountain by 100 times. In other words, a Yucca Mountain will hold the waste from 100 times as many -- as much nuclear power as it will today putting the spent fuel rods in as we would put them in under current law and current policy. So I'm pleased that the president has focused on the importance of solving the energy needs. I don't want to lose sight of the importance of implementing the Energy Policy Act, which contains many important incentives that will support deployment of clean-coal technology, advanced nuclear power plants, biomass and other renewable products. Mr. Secretary, it is my pleasure to welcome you back. And then, after yielding to Senator Craig, I'd ask you to summarize your statements. Your statement, it'll be made a part of the record. Senator Craig. SEN. LARRY CRAIG (R-ID): Well, Mr. Chairman, thank you very much. Clay, welcome before the committee. I'm sitting here listening to you, Mr. Chairman, and saying, gee whiz, a year ago this time we didn't know if we were going to get an energy bill. There were no incentives for new nuclear plants -- no risk insurance, no tax credits, no loan guarantees. A year ago there were no real plans for any new nuclear plants to be built in the United States. A lot of need, a lot of concern, utility industry was looking in the out-years to base load, wanting to do nuclear. But today we believe there are 19 new reactors on the drawing boards of America's industries. So it is a phenomenal transition, Mr. Chairman, from where we were to where we are, and how we keep that going is going to be awfully important not only for the future of our country, but literally for the future of the world. The president, with his India nuclear deal of 14 reactors just in the last 24 hours, is a big deal. It's an important deal as it relates to proliferation and our ability to get our collective and the world's collective arms around spent fuels and all of that type of thing. And I applaud you, Clay, for the work you've done on GNEP, or the Global Nuclear Energy Partnership. It is a very important component in where we head as a world into resolving the waste stream issue, and a concern that may exist still by some, as there is legitimacy to it, of proliferation. As you know, I and others have worked awfully close on, and with you, on a new generation concept beyond GNEP, and we actually legislated it into the policy. And these are policies that fit well together, and should be looked at in that context I would hope. And I say that because clearly the technology is there not only for nuclear, but the president's initiative is a bold step, very early on the administration, to link hydrogen to the ability of the nuclear industry; led me this past week to go downtown to NEI R&D summit and challenge them and say, why don't you get outside this big new box you're in. It's an exciting box: building new reactors, building new base load, bringing in the efficiencies of clean non-emitting energy. At the same time you're still thinking of it in the context of nuclear generation alone. Maybe we ought to think beyond that, to not only nuclear generation but hydrogen production, not unlike what the folks in the coal industry are doing with FutureGen. And so it's not that I coin a phrase, but I said, why don't we talk about FreedomGen? Why don't we get this country up off its knees and start running? You know, I was one of those, and Pete and I -- the problem we've got in this committee is that we think we know so much about energy -- and we collectively do, thanks to people like you who used to be with us and other great staff people -- and when somebody says, you know, this nation could be energy independent, we all step back and say, whoa, whoa, whoa; I don't think we could ever get there. I think how exciting it is for this president -- and we almost got him there in the State of the Union -- to challenge this country to get well beyond where it ever thought it could go. It's those kinds of challenges that really have made this country great. It is not impossible from an electric standpoint with coal, new technology, nuclear, new technology, to be independent there, that's for sure, and then to start adding other components to it. The energy bill that we passed in July that was signed in August does just that. And because many of us were concerned about where we went with other world initiatives out there that related to climate change, we challenged this president. You all met the challenge. He went out and started talking about an Asia-Pacific initiative. It makes an awful lot of sense, and fits into the GNEP concept beautifully well. So there are an awful lot of exciting things happening out there, and I think this committee has done what oftentimes in Congress we really don't get done. We've actually created -- thanks to your leadership, Mr. Chairman -- a significant and powerful new national policy that is now moving and driving. And we need to strengthen it where we can; we need to add new to it where we will. Your leadership at the Department of Energy with this secretary will help us a great deal. So I'm anxious to hear your presentation as it relates to the Global Nuclear Energy Partnership, and then let's see how we can blend it with other initiatives under way to see if there is an economy of scale and a value that can be created by all of these things converging together into our budgets and into the technology and capability of America's mind-set. Thank you, Mr. Chairman. SEN. DOMENICI: Mr. Allard, first let me say -- (comes on mike) -- Mr. Allard, first let me say I'm very pleased that you're with us. You're not brand new; I didn't mean that. But you know, haven't had you around very long, and you're going to find this is a very fun subcommittee with lots of work to do, and some of the things that you have been working on are here, and you will have a lot opportunity to work on them because you fund them here. So if you'd like to make a few opening remarks, I will let you. SEN. WAYNE ALLARD (R-CO): Well, I'd love to, Mr. Chairman. SEN. DOMENICI: Make them as brief as you can because of the 3:00 o'clock vote. SEN. ALLARD: I'll do that, Mr. Chairman. First of all, I'm absolutely thrilled to be a part of this committee, and was glad I had the opportunity to serve on it, because you've been such a leader on meeting our energy needs of this country, and I want to join you in that effort. You know, there's no doubt in my mind that we need to have an ample source of energy to meet the security needs of this country, primarily but also just to meet consumer needs also, and for us to be competitive throughout the world. I have a couple of pages here of comments. I'm just going to ask that they be inserted into the record, in addition to what I've just stated. And I look forward to working with you, Secretary Sell, because I do want to give my colleagues an opportunity to say a few remarks also. Thank you, Mr. Chairman. SEN. DOMENICI: Before I call on Senator Murray, let me say to the senators that are here, I understand we have a 3:00 -- two votes at 3:00, and the energy committee, just the two of us, we have a 3:30 meeting. Senator Allard, is there any -- by any chance could you use part of your afternoon to wrap up these hearings if we have to? SEN. ALLARD: I believe I can, but let me check my schedule. Hang on. I'll get back to you in just a minute. SEN. DOMENICI: Would you, please? Senator Murray, would you like to make a few opening remarks? SEN. PATTY MURRAY (D-WA): I would, Mr. Chairman, thank you. And I understand the time limitations. But I did want to say, Secretary Sell, first, thank you and good afternoon. It's good to see you back on the Hill. I do have significant reservations, I have to say, about the department's GNEP. Energy security in our nation is a top priority for me like everyone, and we have to do to wean ourselves off foreign imports of energy sources and replace them with some secure domestic sources. But I strong question whether GNEP is the answer. I'm not opposed to nuclear energy. All sources of energy have to be explored and utilized if we're to find the best mix for the U.S. to achieve energy independence. That requires taking a very hard look at possible sources and considering several factors, including availability, technical feasibility, environmental impact, and the economics of developing that new resource. And we also have to look for solutions to our energy problems now in using those criteria. That's why I think this proposal falls short. From what I can tell it has not gone through the necessary peer review, it's without strong economic cost analysis, and it does nothing to address our energy needs in the near or mid-term. But before we go further, I have to point out that this proposal seems to gloss over the difficulty this country has in managing our nuclear waste. And I want revisit quickly another proposal on cleanup offered by DOE. Accelerated cleanup was sold as a plan to focus on one contaminated site, and once that site was cleaned up and focused, the funds would then be redirected to other sites to accelerate cleanup. The good news, of course, is Rocky Flats was closed this year. But the bad news is is the EM budget request is cut by 762 million (dollars) 2007. DOE broke that deal with the states and the Congress, and rather than addressing the nuclear waste legacy, DOE has shifted focus to other areas and left our communities holding the bag. I'm particularly disturbed by comments made by Undersecretary Garman when he spoke to the Energy Facility Contractors Group last month. He called for us to get honest about the cleanup projects left around the country. The context of those comments is the cleanup agreements between the government and the states. The government -- (audio break) -- back, and DOE officials are telling our states to get on it. DOE signed these agreements, and should be not -- not be looking to break them. It's another example of the mixed messages that DOE sends on its cleanup responsibilities. Last year I had to fight very hard for funding for the vit plant on the Hanford site. I was told by Secretary Bodman and by you that DOE stood behind the project. I found that hard to believe when the only DOE funds offered up for rescission was the 100 million (dollars) from the vit plant. In the president's 2007 budget proposal there is 690 million (dollars) for the vit plant, and I'm relieved the budget request is finally where it should be. But the funds for the tank farm activities are down by $52 million, which includes a zeroing out of both vit plant. That was proposed by the administration as the way to get the (tank waste ?) treated faster, and now the request is zero. So let's get honest: DOE has a poor record when it comes to managing nuclear waste. GNEP will add the waste inventory, while doing nothing in the near term to help achieve energy independence. Today there is no place to permanently store spent nuclear fuel. The request for GNEP is $250 million, while the request for EM funds is down. It's striking to me that DOE has proposed a project that will create the same type of waste that we are struggling to retrieve and treat at the Hanford tank farm. I have many concerns, and I am eager to hear your presentation and to address them during the appropriations cycle. Thank you, Mr. Chairman. SEN. DOMENICI: Thank you very much. Mr. Secretary, please proceed. MR. SELL: Thank you very much, Mr. -- SEN. DOMENICI: Don't worry about that. MR. SELL: Well, I don't want to lose my audience too quickly. (Laughs.) Mr. Chairman, Ranking Member Reed, Senator Craig, Senator Allard, Senator Murray, it is truly an honor and a great pleasure for me to have this opportunity to come back before this subcommittee to discuss the administration's proposed Global Nuclear Energy Partnership, or what we call GNEP. Thank you for allowing my written statement to go into the record, and I would like to make some summary comments. And I will try to do that in five or seven minutes. In many respects I believe it is appropriate that the first public hearing on GNEP occur here, before this subcommittee. From Chairman Domenici's 1997 Harvard speech, calling for a broad reconsideration of nuclear policy and reprocessing, to this committee's role in funding plutonium disposition, to this committee's role in funding a great breadth of nonproliferation initiatives, even to the creation of the Advanced Fuel Cycle Initiative under the chairmanship of then-Chairman Reed in 2002, this committee, along with your counterparts in the House, has always provided great bipartisan leadership on nuclear matters within our government. So it is a pleasure to be here today to discuss GNEP. I would like to tell you today why we are proposing GNEP. I'd like to elaborate on what it exactly is and how we propose, with the support of this subcommittee, to get started. The president has stated a policy goal of promoting a great expansion of nuclear power here in the United States and around the world. The reasons for this are obvious. As the chairman said, the Department of Energy projects that total world energy demand will increase -- will double by 2050. And looking only at electricity, projections indicate an increase of over 75 percent in the next 20 years -- 75 percent increase in electricity demand over the next 20 years. Nuclear power -- SEN. DOMENICI: That's worldwide? MR. SELL: That's worldwide. SEN. DOMENICI: Worldwide. MR. SELL: Nuclear power is the only mature technology of significant potential to provide large amounts of completely emissions-free base load power to meet this need. It will result in significant benefits for clean development around the globe, reduced world greenhouse gas intensities, pollution abatement, and the security that comes from greater energy diversity. But nuclear power, with all of its potential for mankind, carries with it two significant challenges. The first: What do we do with the nuclear waste? And the second one: How can we prevent the proliferation of fuel cycle technologies that lead to weaponization? GNEP seeks to address and minimize these two challenges by developing technologies to recycle the spent fuel in a proliferation- resistant manner, and support a reordering of the global nuclear enterprise to encourage the leasing of fuel from what we'll call fuel- cycle states in a way that presents strong commercial incentives against new states building their own enrichment and reprocessing capabilities. Regarding our own policy on spent nuclear fuel, the United States stopped the old form of reprocessing in the 1970s, principally because it could be used to produce plutonium. But the rest of the major nuclear economies -- in France, in Great Britain, in Russia, in Japan, and in others -- continued on without us. The world today has a buildup of over 250 metric tons of separated civilian plutonium. It has vast amounts of spent fuel, and we risk the continued spread of fuel-cycle technologies. If we look only for a moment at the United States, we are on the verge of a U.S. nuclear renaissance, in many respects due to the provisions enacted in the Energy Policy Act of 2005. New plants will be built. But if we want many built -- and we need them -- I believe the United States must rethink the wisdom of our once-through spent fuel policy. We must move to recycling. This administration remains confident that Yucca Mountain is the best location for the United -- for a permanent geologic repository. And getting that facility licensed and opens -- opened remains a top priority. Whether we recycle or not, we must have Yucca Mountain. But the capacity of Yucca Mountain as currently configured will be oversubscribed by 2010. If nuclear power remains only at 20 percent for the balance of the century, we will have to build the equivalent of nine Yucca Mountains to contain once-through spent fuel. The administration believes -- SEN. DOMENICI: Could you make that statement again? MR. SELL: If we continue to have nuclear generation at 20 percent for the balance of the century, because of our once-through spent fuel policy, we will have to build the equivalent of nine Yucca Mountains. The administration believes that the wiser course is to recycle the used fuel coming out of the reactors, reducing its quantity and its radiotoxicity, so that only one Yucca Mountain will be required by the balance of this century. So what exactly is, then, GNEP? GNEP really is -- SEN. DOMENICI: May I interrupt you? MR. SELL: Yes, sir. SEN. DOMENICI: And that one Yucca Mountain, under that scenario, would not be filled with the kind of waste we plan on putting in it now, right? MR. SELL: It would be filled. We still have a significant amount of defense waste in Senator Murray's home state and in Senator Craig's home state that will go to Yucca Mountain. SEN. DOMENICI: I'm speaking of the domestic side. MR. SELL: And on the commercial spent fuel, we believe that up to 90 percent of commercial spent fuel could be recycled before going to Yucca Mountain. SEN. DOMENICI: Which means it would be a different spent fuel. MR. SELL: It would be in a condition with a very low -- with a peak dose occurring in year 1,000 versus year 1 million. It would be in a stable glacious form, and it's the radiotoxicity of the waste which really drives capacity size. And by reducing the radiotoxicity you could fill Yucca Mountain with this glacious stable waste, and that would -- we think would be enough for this century. SEN. DOMENICI: Excuse me for interrupting. Thank you. MR. SELL: GNEP is really about identifying the policies, developing the technologies, and building the international regimes that would manage and promote such a growth in nuclear generation in a way that enhances -- in a way that enhances our waste management and nonproliferation objectives. The program in its full detail is laid out in my prepared statement, but I would like to focus on a few of the key engineering and development efforts that are key to GNEP's success. First, the Department of Energy seeks to greatly accelerate its work in the demonstration of advanced recycling. This effort builds on the advanced fuel cycle initiative initiated by this -- or by Congress, and specifically this committee, several years ago. We have developed in the laboratory recycling technology that does not separate plutonium like the current reprocessing technologies that are used around the globe. Rather, it keeps the actinides together, including plutonium, so that they can be made into fuel to be consumed in fast reactors that will also produce electricity. By not separating plutonium and building in the most advanced safeguard technologies, recycling can be done in a way that greatly reduces proliferation concerns. Another key objective of GNEP would be to demonstrate at engineering scale an advanced burner reactor that can be used to consume plutonium and other actinides, extracting energy potential out of recycled fuel, reducing the radiotoxicity of the waste in repeated cycles so that the waste that comes out of the reactor requires dramatically less geologic repository space. These technologies come together in the reliable fuel services framework. GNEP will build and strengthen a reliable international fuel-service consortium under which fuel supplier nations which choose to operate both nuclear power plants and fuel production and handling facilities, while providing reliable fuel services to user nations that choose to only operate nuclear power plants. This international consortium is a critical component of the nonproliferation benefits of the GNEP initiative. The notion is, in exchange -- as indicated on the first chart over here, in exchange for assured fuel supply on attractive commercial terms, user nations that are interested in bringing the benefits of nuclear power to their economies would suspend any investments in enrichment and recycling. Under the Non-Proliferation Treaty they have a right to do that. They have a sovereign right. And what we are trying to provide is attractive commercial incentives that would discourage them from acting on those rights. There are two other key elements of GNEP from a technology development standpoint. We would hope to work in partnership with other nations to develop small, proliferation-resistant, perhaps modular or factory-built reactors that are appropriate for the grids of the developing world. And in fact, many of the technologies, Senator Craig, being developed as part of the next generation nuclear plant are appropriate -- particular the gas reactor technology -- are appropriate candidates for these types of small-scale reactors. And in all cases we will work to develop and incorporate in the most advanced safeguards technologies, and ensure and emphasize best practices for handling of nuclear materials worldwide. So how do we hope to begin? In fiscal year 2006 and 2007, the department proposes to concentrate its efforts on technology development to support a 2008 decision on whether to proceed with these demonstrations. In general terms, our $250 million request for '07 funding is to initiate work on separations and advanced fuels technology development, transmutation engineering, systems analyses and planning functions to support the demonstration of a UREX plus recycling plant, and to support over a 10-year period the demonstration of an advanced burner reactor. In conclusion, we need to pursue all energy technologies to address the anticipated growth in demand for energy. But clearly the growth of nuclear energy is vitally important for the United States and for the world. Our country can choose to continue down the current path, or we can lead the transformation to a new, safer and secure approach to nuclear energy -- an approach that brings the benefits of nuclear energy to the world while reducing vulnerabilities from proliferation and from nuclear waste. We believe that we are in a stronger position to shape the future if we are part of it, and if we are leading it. And in many respects, as it relates to the fuel cycle, the United States has yielded our leadership position over the last 30 years. We think we need to reclaim it. Challenges remain in demonstrating the GNEP technologies. But without GNEP there will be plutonium throughout the world for generations to come. There will be spent fuel. There will be greater proliferation risk. There will be greenhouse gases emitted into the environment, and less energy here at home and abroad. The Global Nuclear Energy Partnership is not a silver bullet, but it is part of a broad strategy that, when combined with advancements in renewables, clean coal and other technology developments, can and will make a difference in the security, environmental and energy challenges that we face. I ask and I seek the committee's support for this initiative. I look forward to your questions, and I look forward to working with you as the year progresses. I'm pleased to take any questions you have. SEN. DOMENICI: Thank you very much, Mr. Secretary. That's a very succinct and understandable presentation. We're going to have to learn to use some words that I'm going to start with today and see if I can get them fixed in my own mind. Europe recycles or reprocesses now, do they not? MR. SELL: That's correct. SEN. DOMENICI: And they use a rather well-known process called PUREX? MR. SELL: They do. SEN. DOMENICI: Tell me -- let me ask. That process -- we're going to go one step further or one step better if our -- if this program is adopted and carried out because the PUREX process doesn't -- separates out plutonium in a liquid form as it proceeds through its process. Is that correct? MR. SELL: Yes, that is correct. SEN. DOMENICI: Therefore, it is -- go ahead and get some water -- MR. SELL: Thanks. SEN. DOMENICI: Therefore, it has some proliferation problems that are pretty obvious. Is that not correct? MR. SELL: That's correct. SEN. DOMENICI: Now, the president in his proposal has chosen to go to next technology, which is UREX-plus. I think you've stated to us the difference, but let me just put in the context of the difference between what's going on in the world now and what we would be doing. In our process, as it proceeded, what would come out when you run the spent fuel through would not be pure plutonium. It would never separate out. It would come out in a compound attached and never be liquid and never be separate. Is that correct? MR. SELL: That's correct. SEN. DOMENICI: And then that -- what you get as a result of that is reused -- is that correct? -- and re-burned, so that you make energy and use up the energy we were going to throw away when we were going to lock it up in Yucca Mountain? MR. SELL: The products streams out of the UREX-plus process produce uranium. They produced an actinide stream, which is plutonium bound with the other actinides, and then a fission product stream. The fission product stream would be disposed of, the actinides would be made into fuel that would burned in the advanced burner reactor, and the uranium could be either re-enriched or used in a light-water reactor or it could be disposed of as low-level waste. SEN. DOMENICI: Now, where are these processes at this point? And what will the $250-plus million that you're asking for of this committee be used for? MR. SELL: The UREX-plus technology has been demonstrated at a laboratory scale. SEN. DOMENICI: Where? MR. SELL: In Argonne National Lab. SEN. DOMENICI: Right. MR. SELL: And it is our intent, and we think it is important, to move to demonstrate that technology on an engineering scale. It is our hope and it our expectation in order for an approach like GNEP to work, that technologies need to be commercialized. But there is significant engineering and development work that needs to be done. And so a great majority of the amount of money that we are requesting for fiscal year '07 would be used to support the design work, the environmental work and other development work that needs to be done to support a decision to construct a demonstration facility in 2008. And if I could go back, you mentioned PUREX. You know, PUREX was actually developed here in the United States -- SEN. DOMENICI: Correct. MR. SELL: -- as part of our weapons program, so that we could produce plutonium for use in nuclear weapons. And it was -- we used it here in the United States on the commercial side, and it was in the mid-'70s that we decided for proliferation reasons -- and I think perhaps correctly -- we decided that we should stop doing that. We hoped when we made that decision -- when President Carter made that decision in 1977 -- that the rest of the world would follow, but they did not. And the rest of the world has deployed PUREX on a commercial scale, resulting 250 metric tons of plutonium that is now in commerce around the world today. And that presents, in our judgment, a significant generational proliferation concern. And we want to develop technologies that will stop the production of plutonium, and also technologies that can be used to burn down plutonium stockpiles, plutonium inventories, over the coming decades. SEN. DOMENICI: Thank you for that explanation. That -- I failed to mention that is our technology. We did do it, we did use it, and then it was commercialized. I'm going to yield now to Senator Craig. And the vote's not yet up, incidentally. SEN. CRAIG: Mr. Chairman, let me go for a few moments, but my guess is that we ought to get out of here in five, hadn't we, if we're going to catch that vote. SEN. DOMENICI: Is it up now, the vote? SEN. CRAIG: The vote is on now. SEN. DOMENICI: I'm very sorry. I didn't see it. Yes, we should. SEN. : Yeah, the vote is on now. SEN. DOMENICI: Senator, why don't you proceed and then, Senator Allard, you want to go vote and come back? SEN. ALLARD: Yeah, that's what I plan to do. SEN. : Well, we have two votes, Mr. Chairman. SEN. DOMENICI: Right, and we'll just remind the secretary to wait just a while while we have two votes. He's going to come back and complete the meeting. I'm going to wait until the last minute here. SEN. CRAIG: Okay. Secretary, in GNEP, the initial phase that you're talking about, the engineering scale demonstration phase, proliferation-resistant spent fuel processing, how long -- you said construction by '08. When do you think that plays out? And we're looking at a price tag for totality of upwards of -- MR. SELL: Just for the UREX-plus plus demonstration facility, we would anticipate, even though it would be sized somewhere probably in the 10 to 25 metric ton per year size -- so relatively small -- but on order, we would expect that facility -- our best estimates on the cost would be between 700 million (dollars) and one-and-a-half billion (dollars). And we would hope to begin construction in 2008 and have construction complete in four years thereafter to go into operations. SEN. CRAIG: And then the next phase is what, the advanced fuel cycle? MR. SELL: The next phase would be the -- within 10 years we would like to build a demonstration advanced burner reactor. SEN. CRAIG: Burner reactor, okay. MR. SELL: There are a number of potential technologies that could be used for that, and we want to do a substantial amount of work in conjunction with our international partners in determining the appropriate technology. But we would hope to build, to construct and operate that within 10 years. The key R&D challenge -- the biggest R&D challenge -- we've done UREX-plus in the lab. We've built certainly fast reactors can that be modified for a burner role. The biggest challenge is in developing and qualifying an actinide-based fuel. And so that will require significant laboratory work to develop that fuel. As today, we are doing small-scale actinide fuel tests in partnership with France and their fast reactor, as well as in partnership with Japan. But that's going to require a significant amount of development work over the next five to 10 years. SEN. CRAIG: And in this whole concept, the exportable modular reactor is the last phase. Is that where the effort to contain -- to offer up but contain? MR. SELL: That is -- Undersecretary Bob Joseph and I, we went to a number of capitals in the United Kingdom, France. We saw Dr. ElBaradei in Vienna, Moscow, Beijing and Tokyo to talk about this idea. And the ideas were well-received and the objectives of GNEP were well-received. But there was a tremendous amount of interest in not just those countries, but other countries -- South Korea and others, Canada perhaps -- joining together with us in developing advanced reactors for deployment in the developing world. And so that is something that we would seek to move in parallel with the other technology development efforts, and it is something that we would hope to have significant international participation in as well. SEN. CRAIG: Okay. I suspect, Mr. Chairman, we ought to -- SEN. DOMENICI: Could I just follow up on your last one and you wait on it? The one thing I keep hearing, and I want to stress it a little bit in the context of Larry's last question, we talk about the internalization of this issue and the partnershipping. I hope that as you talk about the costs for these various demonstrations and moving from a small one to the next level, that you are talking about the possibility or even the probability that we can get our partnership countries to come into that ballgame, too, of helping develop those kinds of experimental projects because they will be costly. I'm not sitting up here saying I'm against things of this type because they are costly. I'm excited that America might be considering a major new program of this type. This is what we used to be about, but we've gotten so fearful we won't do anything like this. So I'm on board. But it seems to me the benefits are not going to be just to us, right? MR. SELL: That's correct. There is -- when we think about it in the international context, I mean, on the first order, as I said earlier, in some ways we have yielded our leadership role in the fuel cycle. The French, the British, the Japanese and the Russians have gone on without us for 30 years, and they have significant capabilities, in some cases, that are better than ours. SEN. DOMENICI: Right. MR. SELL: And so we are seeking to work in partnership with them to accelerate -- to take advantage of the advances we have each made, to accelerate the development, the demonstration and the deployment of these technologies as quickly as possible. So they bring talent and expertise to the table. But one of the other things that has been quite encouraging is that they also seek full partnership, which means in-kind contributions and, we would expect, significant financial contributions. This is -- we really seek to pursue these technologies in partnership. And that has -- in addition to the benefits that I've laid out, we think it also has other significant benefits in that it will allow us to accelerate, working in partnership with these other countries, the phaseout of the current PUREX technologies that are used around the world today, and the phase in of advanced proliferation- resistant recycling technologies. SEN. DOMENICI: That's why I asked. It would seem to me that the benefits are for them, too. Indeed, the benefit to the world is that we might all be engaged in the most nonproliferation-active formulation of machinery, rather than what we've got now. And they ought to be beneficiaries and ought to help pay for it. MR. SELL: Mr. Chairman, we really believe that through these technological advancements, we can make it commercially attractive to recover the economic value of spent fuel. And once we can do that, then that allows a(n) international fuel-leasing regime to work. SEN. DOMENICI: I'm going to just close by saying, when we talk about the dollar numbers, we have never talked about how much value added there is going to be in this process. And that might be the subject matter of maybe your doing some research and submitting to us, if this works, what is all that extra energy that we're going to have for sale, what is its value going to be? Because it's going to be somewhere, isn't it? MR. SELL: There will be a tremendous value to the electricity produced, and a tremendous savings by avoiding the cost of building nine Yucca Mountains over the course of the century. And quite frankly, the engineering and the packaging required to dispose of hot spent fuel is much greater than that that would be required to dispose of the stable, glacious waste form. SEN. DOMENICI: We get a whole lot fuel to burn. MR. SELL: That's correct. SEN. DOMENICI: That's the kind of value added that this process is going to yield, right? MR. SELL: That's correct, and right now -- SEN. DOMENICI: It's going to be very, very large, huge amount. MR. SELL: It's a significant amount. Right now, spent fuel that is headed towards Yucca Mountain still has over 90 percent of its energy value. And by developing recycling technologies, we think we can recover a great portion of that energy value and produce electricity with it. SEN. DOMENICI: (Sounds gavel.) We're going to be in recess. The secretary is going to wait. Probably going to finish at 4:00 or a little after 4:00, if that's all right with you. But I won't be coming back, Mr. Secretary. The senator from Colorado will preside. Thank you very much. MR. SELL: Thank you. (Recess.) SEN. ALLARD: (Sounds gavel.) I call the committee to order. And just for the record, I'm Senator Allard that's now presiding at the request of the chairman, Senator Domenici. And I'd like to again welcome you, Mr. Secretary. And we were starting into the question part of the committee, and I left early to go down to vote, and have now returned to wrap up our deliberations here on the committee. I've had an opportunity to go and tour facilities in France, as well as in England, and what they do to reprocess nuclear fuel, which you indicated in your opening remarks, is that it is technology we had here in the United States, and then they adopted that technology. And frankly, I'm excited about the prospects of moving to UREX-plus instead of PUREX. They use the PUREX technology. Am I correct on that? MR. SELL: That's correct. SEN. ALLARD: And so I'm excited about the PUREX-plus (sic) policy. And it's my understanding also that with that now -- I just wanted to make that show on the record -- is that it does take away the proliferation risks with that completely if we process that, or is there still some proliferation risk? MR. SELL: I think from a public policy standpoint, Senator Allard, we must always be mindful of the proliferation risk anytime we are dealing with nuclear materials and nuclear technologies. And so I would be reluctant to suggest that any technology removes all risk. But we -- SEN. ALLARD: But this lessens the risk, then. Is that your understanding? MR. SELL: The UREX-plus technology prevents -- it increases substantially the proliferation resistance of the material to a point where this government should be quite comfortable. And we would also build in the most sophisticated safeguards technologies into the UREX-plus point plant. So not only do we have a much proliferation-resistant stream of material coming out, but it would be -- have the most advanced safeguards. And all of these plants would only be built under our conception in existing fuel-cycle states. So we think this is -- offers substantial nonproliferation benefits. And there are two other nonproliferation benefits. By developing and deploying advanced burner reactors, and developing and deploying UREX-plus, we can begin to slow the accumulation worldwide of inventories of separated civilian plutonium, and we can build the capability that allows us to burn down and dispose of that plutonium. And then, thirdly, we can develop, we believe, an international regime -- or we would seek to develop an international regime -- that would discourage the investment and construction of enrichment and recycling facilities in countries that do not have them today. So the -- SEN. ALLARD: Now -- go ahead. MR. SELL: So in sum, we think there are -- from a systems standpoint, there are substantial nonproliferation benefits and substantial nonproliferation enhancements that would flow from the GNEP proposal. SEN. ALLARD: And I understand that right now, under UREX-plus technology, we are working with two other countries, and that's France and Japan. Is that correct? MR. SELL: We have -- through existing relationships that the United States has, we have been conducting tests and experiments and development work through funding provided by this committee. And we would seek to broaden the work to also include Russia, the United Kingdom if they choose, Japan and China. Those are the nations were well in excess -- or around 70 percent of the world's nuclear reactors exist. Those are the nuclear economies of sufficient scale to justify significant investments in advanced fuel-cycle technologies, and we would look to work with those countries in developing these technologies on an accelerated time scale. SEN. ALLARD: Now Iran is on everyone's mind because they have decided to build and operate a uranium enrichment plant in direct violation, actually, of the nuclear proliferation treaty. And with this capability they could not only produce fuel for civilian purposes, but also weapons activity as well. And you have a plan that calls for a uranium fuel leasing plan that would provide fuel to countries interested in developing a civilian nuclear program. Do you believe that other countries -- we've already kind of -- it sounds like you've already begun to kind of form a coalition, but do you believe that these countries would be willing to contract for enrichment services instead of developing their own domestic capabilities? MR. SELL: We do, Senator Allard. And this is occurring now on a -- on a smaller scale around the globe. Many countries with significant nuclear power investments, like South Korea, have not made their own investments in enrichment and recycling. And the hope is -- I mean, really from a world energy supply standpoint and if we really want to address environmental concerns, pollution concerns, with nuclear power, the world is going to need a significant expansion of nuclear power, and that's going to occur in many countries. And we think we could -- a system could work where states that have already made, or have economies that would justify significant investments in enrichment and reprocessing technologies, that we could lease fuel -- so a country like the United States could lease fuel to a country and that fuel would then -- would be burned in a reactor, but then taken back to be recycled and disposed of in the fuel-cycle country. We think that can be offered on attractive -- we would propose that we could offer that on attractive commercial terms, so there is a real incentive for a country who is only interested in bringing the benefits of nuclear power to their economy of leasing the fuel. And only those countries that are really seeking to -- we would suggest that countries that choose not to go the economic route, and instead choose to make investments in their own enrichment or recycling or reprocessing capability, it would suggest that perhaps they have other motivations. SEN. ALLARD: And so that's basically your plan. You're going to try to incentivize them with some economic alternatives you hope that they will not be able to refuse because we would then have the original reprocessing plants constructed here. We'd do that for them at a reasonable price so that they'll use our facilities. MR. SELL: And it wouldn't just be here. It would also be in France or Japan or China or elsewhere. And it's -- that diversity of suppliers to potential consumer nations would also give them the security, which I think countries would seek, in having a diversity of enrichment services suppliers. SEN. ALLARD: And have you gotten any firm commitments from any of these countries willing to come on with this program at this point? Or are you aware of real strong support for that way? MR. SELL: A few weeks ago I, with Undersecretary Bob Joseph from the State Department, traveled to London and to Paris, to Moscow, Beijing, Tokyo, and we also stopped to see Dr. ElBaradei at the International Atomic Energy Agency in Vienna. And we laid out our ideas and sought their consultation. And there was broad agreement on the objectives that the world needed a dramatic increase in nuclear power; that we should work together to develop advanced recycling technologies that did not separate plutonium; that we should do this in international partnership; and that we should work to facilitate an international regime of fuel leasing so that we could discourage the proliferation of enrichment and reprocessing technologies. There was broad agreement on all of those issues, and a great interest expressed by those governments in continuing to discuss with us how we could further the partnership. SEN. ALLARD: Now the GNEP program is a very comprehensive research and development program that includes work on advanced reactor technology, fuel recycling, waste reduction and global nuclear fuel services, small reactors and enhanced nuclear safeguards. And when we look at the budget, it seems to focus on large-scale engineering demonstrations of fuel recycling capability with minimal involvement outside the Office of Nuclear Energy. And it's unclear, at least to me, from this budget, when the department will undertake research reliable fuel services, small scale reactors, the enhanced nuclear safeguards and basic research and development that could address a number of concerns related to our national security, particularly in the earlier phases of the program. My question is, why has the department elected to minimize the direct and immediate engagement of the NNSA and the Department of State at the onset of GNEP? MR. SELL: With the greatest level of respect, Senator Allard, I have to disagree with the premise of your question. The National Nuclear Security Administration has been heavily involved, as has the State Department, as have other elements of the interagency policy formulating bureaus within the administration. They -- so they have been involved. I think we have their -- I know for a fact we have their strong support in moving forward on this. There is an emphasis in our budget request for 2007 on moving forward on the first key demonstration facility, which is the demonstration of the UREX-plus. That has been demonstrated at a laboratory scale. We think it is important, as quickly as possible, to demonstrate it on an engineering scale. And so that is -- that does receive a significant portion of our -- of the $250 million budget request for fiscal year 2007. SEN. ALLARD: I'd like to move on to the MOX program. When I was chairman of the strategic subcommittee of Armed Services, we had some discussion with the MOX program, where we have the recycling facilities in Savannah, Georgia. And you know, it's -- like was mentioned earlier, it's basically American technology that's been modified some, perhaps, by both the French and the Germans. But it basically was originally American technology. I'm concerned about some reported overruns on the efforts down there. The AG did a report that said that cost increases may amount to 3.5 billion where we were planning on $1 billion in the budget. Can you address that? It seems to me we need to have somebody riding herd a little closer over the operation down there and I'm wondering if perhaps maybe you could give us some insight on what's happening with the MOX Facility in Savannah, Georgia. MR. SELL: Several years ago, after our country had made an agreement with the Russians to dispose of plutonium, we did make a decision to build facilities, MOX Fuel Fabrication Facilities as well as other processing facilities at the Savannah River site. And early on it was suggested at the time that the cost of those facilities would be in total of, I mean I have the numbers exactly right but in rough order, $2 billion. That was not a very good number obviously. And it is old, commodity prices have increased significantly since that estimate was made. There was a failure by the department and its contractor team to fully appreciate the cost that would be required to build that French MOX technology here in the United States. And there were other problems with the estimates. The department is working to correct those. I take seriously your counsel to keep a tighter reign on activities down there, but the Plutonium Disposition Program remains an important U.S. objective and we intend to move forward and accomplish that in as economically feasible way as possible. Mar 03, 2006 18:09 ET SEN. ALLARD: I do, I think that is very important and you know, I -- you indicated it was the cost of commodities was one of the factors in you know, what goes into the construction of it was one of the -- what other factors did we have that might have added to the cost of it and the rest of this question is did we have an incentive driven, do we have incentive driven contracts with the contractor down there? MR. SELL: We -- if I may, let me, I would like to give a complete answer on exactly what the contract provisions that we have. I believe as a general statement that the contract does have significant incentives in it for contractor performance, but I would like to answer, give you a complete answer on the record, if I may. SEN. ALLARD: Yeah, that'd be fine. ME. SELL: The other elements of the cost growth, and part of it was commodity, the increase price of commodities, part of it was simply that the $2 billion number was a 2000 year number, not a 2005 number. And there was also a failure quite frankly of the department and our contractors to fully appreciate how costly it would be to build the French technology plant here in the United States. We made assumptions that we shouldn't have made and those are costing us now. SEN. ALLARD: What, what specific assumptions -- how did you -- I mean, where were you wrong in your assumptions? I'm going to press you a little bit here. MR. SELL: I will -- I can't, unfortunately, I'm not prepared today or I don't have in my mind today, Senator Allard, the exact things that we missed on this. SEN. ALLARD: Maybe you can get a memo to the committee on that. MR. SELL: But we will follow-up -- SEN. ALLARD: Yeah. MR. SELL: -- in written detail on that issue, if I may do that. SEN. ALLARD: Yeah, we'd appreciate that so we fully understand the issues down there and I'm one that would like to see these things carried forward in a timely manner because I think when you start running into delay problems and accelerated costs, you tend to lose support within the Congress and this is an important program, I hate to lose that support. MR. SELL: The -- SEN. ALLARD: Go ahead. MR. SELL: The delays, you know, even though this, the agreement was made to do this many years ago, it has taken a number of years to get the appropriate agreements in place with the Russians. And when Secretary Bodman got to the department about a year ago and realized that we still did not have the agreements that we'd been trying to get with the Russians that would allow this project to move forward, he and Secretary Rice engaged the Russians and we were able to make significant progress on resolving issues as to liability, which had prevented, which had really left this project in a stall for several years. So we feel like we have finally made progress on that. The department broke ground finally on the facility last fall, and we look forward to moving forward with it, but it unfortunately will be at a higher cost. SEN. ALLARD: Let me move on to our transportation fuels. I think we're all quite aware of, that the transportation sector's a huge consumer of energy in this country and there's some concern about the high temperature reactors that are effecting and producing hydrogen for transportation. And where are we in the efforts by the department to produce these kinds of reactors that will allow for the production of hydrogen or is it just assuming that we're not far along on nuclear hydrogen research to, at this point in time to be funding it, you have dropped, reduced your '06 funding levels, and that's what's prompting this question. MR. SELL: It is our judgment at the department that over the long term, the president's hydrogen fuel initiative that he laid out in his State of the Union of three years ago offers significant promise for getting our transportation sector off of the internal combustion engine and on to electricity based fuel cells. And we are, we have a broad program to develop those technologies, the storage technologies, the fuel cell technologies, the automotive technologies, as well as the question of how will we produce all of this hydrogen. Today the only economical way to produce hydrogen or the principle economical way of producing it is through reforming natural gas. But we think in the future as hydrogen demands increase significantly, we can produce it with coal and we can, and other technologies, and we think hydrogen will be -- I mean, nuclear hydrogen will be -- nuclear power plants will be a significant technology for producing hydrogen. It is our judgment, I believe and I will leave my statement to be revised by the technical experts, that the most promising nuclear technology for producing hydrogen is a very high temperature gas reactor. And a technology such as that I believe was authorized in the Energy Policy Act Of 2005, it's referred to as the next generation nuclear plant, and we have requested $23 million as part of our Fiscal Year 2007 budget to continue developing that reactor so that it can be demonstrated, built and demonstrated on a timescale consistent with that called for by the Energy Policy Act. We think that technology can still be developed and is moving along consistently with other portions of the Hydrogen Fuel Initiative. SEN. ALLARD: So why was there a reduction in your funding level for '06? MR. SELL: If I may, that's another question I'll need to -- SEN. ALLARD: Okay. MR. SELL: -- take to the record. SEN. ALLARD: Very good. I don't have any other questions. I have another committee meeting I've got to get to, and so I'm going to request that the record remain open until close of business Friday for member statements and questions. And I also hope the department will respond to these questions that were left open in a timely manner. Most committees I've been a part of have asked to response within 10 days, if that's a balance of time period, if you can get your responses back to us within 10 days, we'd appreciate it -- MR. SELL: We will do so. SEN. ALLARD: -- so we can move forward with our deliberations. And without any questions, I now declare the committee in recess. |