SPEAKERS CONTENTS INSERTS Tables
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[H.A.S.C. No. 10615]
THE DEPARTMENT OF ENERGY DEFENSE ACTIVITIES BUDGET REQUEST FOR FISCAL YEAR 2000 AND RELATED MATTERS
MILITARY PROCUREMENT SUBCOMMITTEE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
MARCH 4, 1999
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MILITARY PROCUREMENT SUBCOMMITTEE
DUNCAN HUNTER, California, Chairman
FLOYD D. SPENCE, South Carolina
BOB STUMP, Arizona
JAMES V. HANSEN, Utah
JIM SAXTON, New Jersey
JAMES TALENT, Missouri
TERRY EVERETT, Alabama
J.C. WATTS, Jr., Oklahoma
MAC THORNBERRY, Texas
LINDSEY GRAHAM, South Carolina
JIM RYUN, Kansas
JIM GIBBONS, Nevada
MARY BONO, California
JOSEPH R. PITTS, Pennsylvania
ROBIN HAYES, North Carolina
NORMAN SISISKY, Virginia
IKE SKELTON, Missouri
Page 3 PREV PAGE TOP OF DOCJOHN M. SPRATT, Jr., South Carolina
LANE EVANS, Illinois
ROD R. BLAGOJEVICH, Illinois
TOM ALLEN, Maine
JIM TURNER, Texas
ADAM SMITH, Washington
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
CYNTHIA A. McKINNEY, Georgia
ELLEN O. TAUSCHER, California
ROBERT A. BRADY, Pennsylvania
Peter J. Berry, Professional Staff Member
Peggy Cosseboom, Staff Assistant
C O N T E N T S
CHRONOLOGICAL LIST OF HEARINGS
Thursday, March 4, 1999, The Department of Energy Defense Activities Budget Request for Fiscal Year 2000 and Related Matters
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Thursday, March 4, 1999
THURSDAY, MARCH 4, 1999
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Hunter, Hon. Duncan, a Representative from California, Chairman, Military Procurement Subcommittee
Sisisky, Hon. Norman, a Representative from Virginia, Ranking Member, Military Procurement Subcommittee
Spence, Hon. Floyd D., a Representative from South Carolina, Chairman, Committee on Armed Services
Mark, Dr. Hans, Director, Defense Research and Engineering, Department of Defense
Poneman, Daniel B. Esq., Hogan & Hartson, L.L.P.
Richardson, Hon. Bill, Secretary, Department of Energy; Accompanied by James Owendoff, Acting Secretary for Environmental Affairs; Rose Gottemoeller, Director, Office of National Security & Nonproliferation; Victor H. Reis, Assistant Secretary for Defense Programs; and Joan Rohlfing, Senior Policy Advisor to The Secretary
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Rowberg, Dr. Richard, Congressional Research Service
Browne, John C.
Clegg, Karen K.
Gottemoeller, Rose E.
Gustavson, F. P.
Owendoff, James M.
Poneman, Daniel B.
Reis, Victor H.
Robinson, C. Paul
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Tarter, C. Bruce
Weinreich, William A.
DOCUMENTS SUBMITTED FOR THE RECORD:
NIS Scientists and Engineers Working on IPP Projects, submitted by Secretary Bill Richardson
Materials, Protection, Control and Accounting (MPC&A) program, submitted by Secretary Bill Richardson
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:
THE DEPARTMENT OF ENERGY DEFENSE ACTIVITIES BUDGET REQUEST FOR FISCAL YEAR 2000 AND RELATED MATTERS
Page 7 PREV PAGE TOP OF DOCHouse of Representatives,
Committee on Armed Services,
Military Procurement Subcommittee,
Washington, DC, Thursday, March 4, 1999.
The subcommittee met, pursuant to notice, at 1:00 p.m., the Honorable Duncan Hunter (chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. DUNCAN HUNTER, A REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, MILITARY PROCUREMENT SUBCOMMITTEE
Mr. HUNTER. The subcommittee will come to order.
The subcommittee meets today to consider the Department of Energy's budget request for defense-related activities. While the general public may think of the Department of Energy only in terms of petroleum exploration technologies and alternative energy sources, this subcommittee has a much different perspective.
We recognize the Department is responsible for a critical element of our national security, maintaining the safety, security and reliability of the nation's nuclear weapons stockpile. This committee has oversight and authorization responsibility for roughly two-thirds of the Department of Energy's annual budget, and I think I speak for members on both sides of the aisle when I say we do not take this responsibility lightly.
Page 8 PREV PAGE TOP OF DOC It is no secret that I have disagreed in the past and continue to be very concerned with the Administration's decision to embrace the Comprehensive Test Ban Treaty. However, I recognize that the Department right now has no choice but to pursue a science-based stockpile stewardship and management program, but when I talk privately to many experts they tell me that the science in this program is top-notch, but they also confide in me that the only certain way to assure the safety and reliability of our nuclear weapons is to test them.
According to the Department, five years from now if all goes according to schedule, our experts will finally have the complete set of tools they say they need to confidently mitigate the loss of underground nuclear weapons testing. By that time, however, half of our entire stockpile will be beyond its designed life and we won't have tested a nuclear weapon for 12 years. This strikes me as a very high risk approach to an absolutely critical facet of our national security.
Something that also greatly concerns me, along with the loss of the capability to test nuclear weapons, is the loss of scientists and technicians who have conducted underground nuclear tests. The DOE nuclear laboratories tell us that the community of scientists with actual test experience is thinning at a distressing rate. As these scientists age and leave the workforce, they can't be replaced. Hopefully this community of test experienced scientists will not run out before DOE has all the hardware and software in place to conduct the so-called science-based stockpile stewardship.
While the extremely high tech tools that we are procuring under the Stockpile Stewardship Program are probably an alternative enticement, an attractive enticement for new scientific talent, it seems that our test experienced scientists are a resource that we should attempt to preserve. The new scientists may some day have a super-computer that will perform a hundred trillion operations per second. However, I would feel better if the advanced mathematical models being performed on these computers are developed under the guidance of scientists who have actually monitored nuclear tests.
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I am aware that late last year Secretary Richardson and Secretary Cohen certified that the nuclear stockpile is safe and reliable and there was not a need to resume underground nuclear testing. I welcome the Secretary's testimony on whether science-based stockpile stewardship will be able to provide confidence in the stockpile into the indefinite future or is there an identifiable timeframe in which this approach to stockpile stewardship ought to be reassessed. We talked about that with Dr. Reis at some length at the hearing we had.
I further welcome the Secretary's testimony on whether DOE has made progress in this effort to develop a clear set of identifiable criteria that would allow the Department to declare failure of the science-based program and, therefore, trigger a recommendation to resume underground testing. In other words, how will DOE know if and when the science-based approach isn't providing sufficient confidence in the safety and reliability of the stockpile.
Along with stockpile stewardship a robust program of stockpile maintenance is critical to preserving a credible nuclear deterrent. Stockpile maintenance involves surveillance, normal and corrective maintenance and refurbishment of our nuclear stockpile. The stockpile maintenance program is also charged with providing an adequate supply of tritium. Tritium is a radioactive isotope of hydrogen necessary for the proper functioning of our nuclear weapons. Tritium decays at a rate of about 5 percent a year and needs to be replenished periodically.
The U.S. has not produced tritium since 1988 and a new source of tritium could, and likely will, be needed by 2005. Last December Secretary Richardson selected a commercial lightwater reactor option to be the Department's primary means for future tritium production. Our second panel of witnesses will discuss that decision.
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One of this committee's priorities over the last few years has been the development of a ballistic missile defense. The mission of these systems is very technically complex and unfortunately the Department of Defense and its contractors have had a difficult time meeting these technical challenges. The subcommittee knows that the scientific capabilities of the DOE laboratories are unmatched. That is why we have sought the assistance of these laboratories in the Government's ballistic missile defense efforts, and I would like Secretary Richardson to address this issue in his testimonyin particular, can the Secretary make a commitment that the Departmentmeaning DOEwill assist DOD in this national effort.
A large portion of the DOE budget is consumed by environmental management. The Department has begun a new effort to privatize some of its remediation projects. Under the concept of privatization, the contractors will build cleanup facilities using private funds. They are not paid by the Government until they actually begin treating nuclear waste successfully. Since no privatization projects are yet mature enough to prove the concept, it remains to be seen whether privatization will result in cleanup or nuclear waste sites at a reduced cost to the Government.
I understand that the Department's fiscal year 2000 budget contains a request for four years of advanced appropriations to the tune of $600 million per year for the largest of these privatization programs, the Hanford Tank Waste Remediation System. I would like the Secretary to explain why DOE believes it is necessary to lock in appropriations for this project for the next four years in light of that very substantial amount of money.
Finally, I would like to thank the Secretary for meeting with us a couple of weeks ago to discuss implementation of the Department's new counterintelligence program and, Mr. Secretary, I think you know that the subcommittee is very serious about maintaining information security at our national laboratories. I thought you gave us a very reassuring description of the new remediations that are going into place, and along with the description of the actions that you are taking, I think that your assessment and introduction of the personnel who are going to be involved in your program was also very reassuring, so we appreciate the time that you spent in that briefing with the subcommittee.
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We look forward to continue to work with you in this area, obviously a very important area for us.
With us today to discuss the Department of Energy budget request and other topics are the Secretary of Energy, the Honorable Bill Richardsonan old friend from the House for many of usand we want to welcome you, Mr. Secretary, and thank you for being with us today. And also with us to discuss the tritium decision who will appear on the panel following the Secretary are the Honorable Hans Mark, Director, Defense Research and Engineering, Department of Defense; Mr. Richard Rowberg, Senior Specialist for Science and Technology, Congressional Research Service; Mr. Dan Poneman, former Special Assistant to the President of the National Security Council and currently a partner of Hogan & Hartson. Before we begin I would like to call on Norm Sisisky, my distinguishing ranking member on the subcommittee, for any remarks he might wish to make, and I understand also the distinguished Chairman of the full committee has a statement he would like to make, so we will take those statements and then turn the floor over to you, Mr. Secretary. Norm?
STATEMENT OF HON. NORMAN SISISKY, A REPRESENTATIVE FROM VIRGINIA, RANKING MEMBER, MILITARY PROCUREMENT SUBCOMMITTEE
Mr. SISISKY. Thank you, Mr. Chairman.
I join Chairman Hunter in welcoming our witnesses and especially my very good friend, the Honorable Bill Richardson, to this hearing today. It is my understanding that the motivation for this hearing is for us to get a better understanding of the issues and funding levels contained in the Department's defense activities budget submission.
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Mr. Secretary, there are few if any agencies in the Government with the size, diversity, scope and mission responsibilities that we find in the Department of Energy. Management of such a complex enterprise has to be mind-boggling and I am thankful for your presence at the helm. Now, while I do not want to take up too much time with the opening remarks, I do want to share with you some of my concerns.
I will not readdress concerns about the tritium production decision you recently made or the goodness of your decision to delay a decision to consolidate the production facilities. Neither will I spend time discussing concerns about the strategic computing program or the protection of critical security information within the DOE complex. They are not forgotten but I am sure they will be addressed before this hearing is over.
However, I do want to share some of my concerns with you and my colleagues. I have noted some of your announced management reforms and implore you to keep the momentum going. There is plenty of room for employment and I have been speaking to you about this since 1983, I believe. The Department has a history of not successfully completing large projects on time and within budget. It has been excessively resistant to change when the need for change was evident.
Contract management has not been a strong asset. There is a perception in some quarters here on the Hill that the Department lacks discipline in its budget development and execution. Additionally, the Department is plagued with the problems of agingI repeatof aging workforce and faces the challenge of being able to recruit and retain the quality personnel needed to meet mission essential technical and management challenges.
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Any one of these concerns mentioned represents, an awesome challenge in any organization, but for a Department that has the mission to ensure the reliability of our critical strategic nuclear forces, these challenges take on more significance.
I look forward to hearing your assurances that my concerns are being addressed, and with those brief remarks, Mr. Chairman, I thank you for your indulgence and return the rest of my time.
Mr. HUNTER. I thank the gentleman and I thank him for his partnership on this subcommittee, and now I turn to the distinguished Chairman of the full Committee, Mr. Spence.
STATEMENT OF HON. FLOYD D. SPENCE, A REPRESENTATIVE FROM SOUTH CAROLINA, CHAIRMAN, COMMITTEE ON ARMED SERVICES
Mr. SPENCE. Thank you, Mr. Chairman, and Mr. Secretary, a good friend and former colleague, welcome again today. I think we are setting a record for a Secretary to come before a subcommittee twice in less than a month. I don't know whether to congratulate you or give you my condolences but we appreciate your being here today.
Reference has been made to the tritium problem. Of course we discussed this thing over a long period of time. Everyone knows the issues involved and all the risk but the decision has been made and I am still concerned about the fact that the signal that this decision sends could send other nations around the world the wrong signal.
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We are trying to persuade them not to use the byproducts of commercial nuclear reactors for military purposes. Although tritium is not considered a special nuclear material by the Atomic Energy Act, the decision to own tritium could have far-reaching effects and detrimental effects on any implication of our nation's counter-proliferation efforts.
Back in the '80s we were, at least I was here thenI think you were toothe Department of Energy weapons program manager proposed to use plutonium produced from commercial spent fuel for nuclear weapons. The result of this controversial proposal, as I recall it, was an amendment to the Atomic Energy Act prohibiting such use of commercially produced plutonium. Consistent with the debate over plutonium, last year Mr. Graham and Mr. Markey sponsored an amendment to the Defense Authorization Bill that prohibited the use of tritium produced in commercial reactors for military purposes.
In the face of a potential Presidential veto, the amendment was modified so as not to preclude you from making your decision last year. I do not believe that this decision surprised anyone. It is the lowest cost option and in the eyes of most people that is the most serious consideration, but that is not the only consideration.
Starting today, the Administration is going to have to convince a skeptical Congress that your decision does not raise serious proliferation concerns.
Mr. Secretary, in conclusion I know you convened an interagency working group to examine these proliferation issues and the conclusion was that the proliferation risk associated with the use of commercially produced tritium for weapons purposes were, quote, ''manageable''of course, by definition describing the risk as manageable means that your decision does entail some risk.
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I hope you and the panel following will address this risk this afternoon as part of your discussion and I appreciate again your being here and helping us with all these problems. Thank you.
Mr. HUNTER. I thank the gentleman and again, Mr. Secretary, we all welcome you and thank you for the focus that you put on a number of our issues in the last several months, and the floor is yours.
STATEMENT OF THE HONORABLE BILL RICHARDSON, SECT., DEPARTMENT OF ENERGY; ACCOMPANIED BY JAMES OWENDOFF, ACTING SECT. FOR ENVIRONMENTAL AFFAIRS; ROSE GOTTEMDELLER, DIR., OFFICE OF NATIONAL SECURITY & NONPROLIFERATION; VICTOR H. REIS, ASST. SECT. FOR DEFENSE PROGRAMS; AND JOAN ROHLFING, SENIOR POLICY ADVISOR TO THE SECRETARY
Secretary RICHARDSON. Thank you, Mr. Chairman, members of the subcommittee. Thank you for your gracious remarks.
We are requesting today $12.184 billion for the Department's national security missions. Today the Department is meeting the priorities outlined in these missions. As you said, we maintain a safe and reliable nuclear weapons stockpile that doesn't require nuclear testing and we ensure an adequate supply of tritium.
We are working towards ratification of the Comprehensive Test Ban Treaty. This is one of the President's top priorities. We will continue to work with you and the Senate to answer questions and obtain advice and consent to the Treaty.
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We look to lessen the global nuclear peril by aggressively practicing nuclear nonproliferation programs, eliminating excess weapons grade materials and adhering to international arms control treaties.
We join hands with Russia to ensure that both materials and workers from its sprawling nuclear weapons complex are secure. We are working to convert Russian plutonium reactors so they can't produce weapons grade material. We are involved in boosting the safety of Soviet designed reactors, which remain across Russia and the newly-independent states.
We are developing aggressive programs to fend off emerging terrorist threats of a biological, chemical or cyber nature.
We are continuing to provide for the safe and reliable operation of America's naval reactors and the continued development of next generation reactors to meet the Navy's requirements.
We are also working to clean up our former nuclear weapons sites and are actively addressing how to dispose of nuclear waste and we continue to assist workers who are affected by site closure or downsizing, developing both job and economic development programs to reinvigorate these communities.
First, Mr. Chairman, let me turn to our Stockpile Stewardship Program, and I know how involved your committee is with thisand Vic Reis, our very able Assistant Secretary, is here today with me, as are all of my national security Assistant Secretaries.
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As you said, in December the Secretary of Defense and I certified to the Presidentthis is the third consecutive year that we did sothat there isn't a need to conduct underground nuclear tests at this time. We believe that stockpile stewardship is working now. We believe that we have to enter into the comprehensive test ban treaty which will, in the President's words, ''help us prevent the development of advanced new weapons types and make it more difficult for non-nuclear states to build them.''
We continue to dismantle nuclear weapons excess to the stockpile and that is a total of 11,000 weapons disassembled since 1991. Today, under the accelerated Strategic Computing Initiative, we are employing computers which are a thousand times more powerful than those available in our laboratories just six years ago. This program in cooperation with industry is on track to design and build supercomputers reaching 100 trillion operations per second by the year 2004. These supercomputers are needed to complete the shift from nuclear test based methods to science based methods and to assess and certify the safety, security and reliability of the stockpile without conducting nuclear testing.
I am happy to report that after a thorough check for FY 2000 computer problems, we have confirmed our nuclear deterrent is not susceptible to this computer flaw.
Now I want to address one of your decisionsone of our decisionsthat I know is of great interest to you and especially the Chairman, our decision on tritium production. As you know, in December of '98 I announced a decision to use TVA, the Tennessee Valley Authority's reactors as the prime resource of tritium production. At that time I designated TVA's Watts Bar and Sequoyah rectors as the preferred facilities. The linear accelerator was designated as the backup technology and we will therefore complete only its engineering development and demonstration program in preliminary design.
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The use of TVA reactors was preferred for the following reasons. One, they offer the nation a proven technology. Two, they offer the best deal for taxpayers. Three, they offer the most flexibility for meeting our present and future tritium requirements. I am pleased to announce, Mr. Chairman, that we have come to an agreement with TVA on price. We only have a few more technical details to resolve before we sign our interagency agreement with TVA. We expect to resolve these issues shortly. Once again, this is a great deal for the taxpayers, it is a fair deal for TVA ratepayers and it is the cheapest and most flexible option for tritium production by any measure.
Specifically, Mr. Chairman, the savings of the Watts Bar proposal compared to the accelerator right now with our new figures is $2.831 billion. The savings consistent with Bellefonte is $1.198 billion. This is if you assume our negotiation, our costs for Watts Bar being $566 million and the accelerator option being $3.3 billion, and the Bellefonte option being $1.7, so we have made, I believe a major cost breakthrough in this very good deal.
These components form a consistent comprehensive response to our national arms reduction goals. Secretary Cohen has publicly endorsed the Department's decision on tritium and Nuclear Regulatory Commission Chairwoman Jackson has made a commitment to expeditiously review requests for regulatory approvals.
Progress on the National Ignition Facility continues on schedule and within its $1.2 billion budget. The NIF will be the world's largest laser and will provide a window into weapons physics, temperatures and densities close to those occurring in actual nuclear weapons detonation, and pit production capability is being re-established at Los Alamos, a capability the Department has not had since the 1989 closure of Rocky Flats. The first pit for stockpile use will be produced by 2001.
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In the area of nonproliferation, we are making progress. Our efforts to secure nuclear materials in the former Soviet Union and newly-independent states are more urgent than ever in the wake of the Russian economic collapse in August of last year. We are working in all facets of the Russian nuclear complex including naval and military sites, civilian plants, transportation with Department of Energy projects now active in 55 sites throughout the former Soviet Union.
In the past few weeks a good deal has been said and written about our nuclear cities initiative and our initiatives for proliferation prevention. On this point I want to be exceedingly clearthe initiatives for proliferation prevention, or the IPP Program, is successful at its primary goalthat is, keeping Russian weapons scientists at home and helping prevent them from aiding weapons programs in other countries.
I have taken a close look at the recent report by the GAO. My Department cooperated extensively in the preparation of this account and I found that it contains a number of important and valuable recommendations. I have already begun implementing several of these proposals including a review to improve the outlook for commercialization, tightened review procedures to ensure against any potential benefits for Russian military activities, and an effort to refocus available funds so that more money reaches Russian scientists, and I know that Congresswoman Tauscher just returned from Russia.
We have already temporarily employed thousands of scientists at about 170 institutes and organizations throughout Russia and the newly-independent states. The New York Times in an editorial last Friday said Washington should press ahead in its efforts to re-employ Russian weapons scientists in civilian work, that it is critical to continue these programs. I fully agree.
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In addition, we are continuing our efforts to bring alternative employment to the 10 formerly closed nuclear cities in Russia. This process will be increasingly important if the Russian economy continues to falter and as the Russian nuclear infrastructure continues to downsize, and it will continue our vital assistance to improve the safety and security to Soviet designed reactors and prevent the recurrence of disasters like Chernobyl.
In May I will travel to the Ukraine to review our work there. I look forward to speaking with you further on this critical issue.
Mr. Chairman, we are also making progress in harnessing the expertise of the national labs to foil the emerging threats of chemical and biological terrorism. Mr. Chairman, let me also say that my opening statement is not interminable. It will be complete in about seven minutes. I know some worried looks as a former member, so I promise I will read rapidly.
As was displayed yesterday in this very building by expert William Patrick, biological agents like anthrax are insidious weapons. They can be delivered anonymously and by simple means such as the vial Mr. Patrick brought into the building yesterday when he testified before Chairman Porter Goss and I know Mr. Sisisky is a member of this committee.
For our national security we must be vigilant in detecting these agents. We are working towards this capability. On Tuesday I announced a new initiative mobilizing the Department of Energy and its labs in a comprehensive and coordinated initiative to counter these emerging threats. The Department is boosting funding to provide technology and expertise to address a pressing security need and providing it where no one else is.
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We continue our progress in plutonium disposition. At the Moscow Summit in September of '88 the President and President Yeltsin signed a statement committing our two countries to conclude a bilateral plutonium disposition agreement as soon as possible. Negotiations have begun and I expect we will be able to conclude this agreement by the end of the year. We are also taking aggressive steps, as you mentioned, thankfully, to strengthen our counter-intelligence posture. It has been one of my top priorities since I came to the Department to create a top-notch counter-intelligence program to protect the Department and our labs.
I am proud to say that much has been done already and by 2000 the Department's counter-intelligence program will be as good as the best in Government. I have pushed aggressively to create a strong plan built on the most advanced principles and crafted in close coordination with the FBI and CIA. The current Department of Energy counter-intelligence plan answers to our need and as part of my commitment to ensure we get the maximum horsepower behind this effort we have twice doubled the budget on counter-intelligence. We have hired counter-intelligence professionals to be based at the weapons labs, increased the budget for counter-intelligence at the labs, changed the screening and approval process for foreign scientists seeking access to Department labs and instituted more extensive security reviews for Department scientists working in sensitive programs.
I have pushed for aggressive implementation of stronger counter-intelligence measures including, Mr. Chairman, polygraphs. I have called in the Department Directors to discuss action on the counter-intelligence plan and I hired a CIA veteran to be the new Director of the Office of Intelligence. These and other components comprise an aggressive, wide-ranging plan.
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Mr. Chairman, I know you have got a time problem. Why don't I just end it right there and take your questions.
[The prepared statement of Secretary Richardson, Secretary Owendoff, Ms. Gottemoeller, and Dr. Reis can be found in the appendix on page ?.]
Mr. HUNTER. Mr. Sisisky was enjoying this presentation and
Secretary RICHARDSON. Was he?
Mr. HUNTER.as we all were.
Mr. SISISKY. You have left this outnow I have got to read it.
Mr. HUNTER. Any questions? Mr. Spratt.
Mr. SPRATT. Well, Mr. Secretary, there are lots of things to talk about. Some years ago when we saw the end of nuclear production and the downsizing of your facilities we put some provisions in the authorization bill that help you with worker and community transition. As we have done out in time the program gets questioned from year to year because it has been in effect for some time.
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I can attest to the fact that it has been successful in South Carolina. I can point to several successful anecdotal cases that are significantEFCO Corporation making window systems and SKF making bearings on the periphery of the Savannah River site. It has been a success so far. I think it has paid off for the country. It has paid off for those immediate localities. It has paid off for the workers making the transition.
Do you see a continuing role and are you still supportive of it?
Secretary RICHARDSON. Congressman Spratt, I fully support this program. It is very important. I would be very opposed to dismantling the Worker and Community Transition Office. This has been an office that has given a substantial savings to taxpayers. It treats workers and communities fairly. It is very important if we are going to continue to meet your goals and our goals to close a number of sites, consolidate major activities, and implement more efficient contracting measures.
As I mentioned before you came, the DOE workforce has gone down 25 percent over the last four years, contracting by a third, yielding annual savings of $3.3 billion. This is a very important program and I would hope the committee reconsiders the language in last year's bill to redistribute the functions of this very important program.
Mr. SPRATT. Thank you very much. You mentioned negotiations, bilateral negotiations with Russia about plutonium disposition. Do you expect that to result in an agreement by both countries to take weapons grade plutonium and convert it into reactor grade fuel?
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Secretary RICHARDSON. Yes. We hope that this agreement will be ready by the end of the year, maybe even sooner. We started negotiations with the Russians in February and, as you know, the focus was how do we dispose of 50 tons of plutonium.
Where we are nowis we are working to deal with the Russians. We are still working with the Russians on MOX, pit conversion, reactor modification. We have an R&D group that was just signed by our Undersecretary to assist these efforts.
The agreement that we are looking for, Congressman Spratt, is an agreement to specify the technological approaches, the facilities to be constructed in Russia, commitments regarding international technical and financial assistance that the Russians will do. The Russians need to do a little more here. They need to come to the table, be more specific. We are awaiting that.
I have Laura Hogate who runs our office if you want any more specific
Mr. SPRATT. Do they expect us to pay for their fuel, for their MOX fuel facility?
Secretary RICHARDSON. That is an item that we are negotiating right now.
Mr. SPRATT. A pretty big item.
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Secretary RICHARDSON. It's a slight negotiating issue but right now we are trying, along with the potential highly enriched uranium agreement, to have progress on that one for the Gore-Primakof meetings that are going to take place next month.
On the plutonium stocks, the fissile material disposition activities I think we are talking before the end of the year.
Mr. SPRATT. With respect to the accelerator, you said that you are keeping a research program going so that that is a backup alternative to the tritium production in a commercial reactor. What level of effort is committed to that and what do you anticipate as an end result?
Secretary RICHARDSON. Well, we are going to keep this backup plan. I have made that commitment. The law requires us to have a backup plan and as you know Savannah and Los Alamos have a very good backup effort. We are going to keep the funding necessary.
Let me just say in terms of the cost, how long it will take, what it is that we will do, the estimated cost to complete the APT as a backup is $172 million of which $88 million is included in the fiscal year 2000 budget. We will complete this in the fiscal year 2002 and we think that to be a viable backup this
Mr. SPRATT. What is that though? Is it a conceptual design?
Page 26 PREV PAGE TOP OF DOC Secretary RICHARDSON. Preliminary design.
Mr. SPRATT. Preliminary design?
Secretary RICHARDSON. But we think that to be a viable backup the APT is going to have to develop and demonstrate key components of the linear accelerator and target a number of technologies but we anticipate a preliminary design of the APT. In other words, this backup has to be there. We are committed to it. We are moving ahead on it. We have funds in the budget for it. The APT, Mr. Spratt, it was a good project. It was a good proposal. I had to look at the cost. I had to look at the flexibility, arms control, proliferation issues, and I felt that Watts Bar-Sequoyah would be better, but I have to commend the folks at Savannah who put a very good proposal together on the accelerator.
Mr. SPRATT. Will the program you are talking about include exploring this for use as a production tool for medical isotopes and possibly waste transmutation as well as tritium?
Secretary RICHARDSON. God, you know everything.
Mr. SPRATT. Well, we spent a lot of money. I just want to know if we get a little bit of extras to go with it.
Secretary RICHARDSON. The medical isotopes, we are trying to find the proper role, the proper mix between Government and the private sector. We are looking at that.
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The transmutation issue, the bill that you passed mandates that we spend $4 million in transmutation of waste, so we are looking at that too.
Mr. SPRATT. All right. Thank you very much for your testimony.
Mr. HUNTER. Mr. Thornberry.
Mr. THORNBERRY. Thank you, Mr. Chairman.
Mr. Secretary, you have received a fair number of nice comments so far today, which I think are appropriate. I guess I want to say though that you have some first-rate professionals sitting in the row behind you and I certainly have appreciated working with them. Maybe that shows your good sense to have good people working with you but I thought we ought to add that in there as well.
I am a little concerned that in your oral statement and in your written statement there wasn't much if anything said about stockpile management, and I realize you have got tough budgetary problems that you face every year, but as you well know, the weapons that are in our stockpile are getting older and older. In about five years 70 percent will have exceeded their design life. Part of what we have to do is replace parts and try to keep them safe and reliable and yet the money is going down for that.
In other words, the requirements are going up but what we are asking of the facilities and the people who work there is going up, but their money is going down. Of course, I am most familiar with the situation at Pantex, where next year they have new missions and expanded requirements on the order of $22 million, and yet their budget is going down about that much.
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Some cynics would say that the Department intentionally low-balls stockpile management budget requests when they come to the Hill because Congress always puts more money in it. I hope that is not part of a game that is going on. Can you tell me why the money for management goes down when the requirements and what we are asking of these people goes up?
Secretary RICHARDSON. Congressman, do you mind if Dr. Reis joins me as I try to answer this question?
Mr. THORNBERRY. Sure.
Secretary RICHARDSON. Let me say that, first, I am very proud of the budget that we are presenting on stockpile stewardship, period. It is $4.5 billion and entailed quite a strong bureaucratic effort but we believe that this is a budget that on stockpile stewardship, maintenance, personnel does the work.
In terms of your concern about stockpile maintenance as I understand it, our budget request for fiscal year 2000 includes about $233 million for infrastructure activities at plants and labs that support stockpile management. This is a decrease of $98 million from last year's level, but the decrease is partially driven by the completion of the highly enriched uranium resumption activities at our Y12 plant.
I want to stress to you that we consider management just as important as the stewardship issue. Management also means people, ensuring that we take care of the people in the workforce there, and if I could ask Dr. Reis to amplify my statement.
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Dr. REIS. Thank you. You know, Congressman Thornberry, every year we have got to go through and basically balance the program, the requirements in terms of certification, maintaining itself. It is not an easy job and I think we were at, just to amplify a bit, we went through the Senate Armed Service Committee hearings last Friday and one of the questions that Senator Smith asked was for each of the labs and plants, do they have enough funds to basically accomplish the mission, and, you know, not surprisingly each of them felt that they could do a better, a more complete job if they had more funds.
I must tell you though very specifically that we do not plan on the Congress adding more money into the plants as opposed to the laboratories. We make a good faith continued effort to try to balance the best program we have given the very, very difficult challenge that we face across the board.
Mr. THORNBERRY. Well, I just want to reiterate that the requirements are going up, that what you ask is going up, and yet the money goes down and that is a difficult thing to understand.
If I can switch real quick, because I have got several things, Mr. Secretary, as you know, as a result of this committee's action in 1997 the Institute for Defense Analysis conducted a study of the management of the Department of Energy and had a number of criticisms. Those criticisms have been repeated in GAO reports and lists of studies about a foot high or more. All of that of course predates your period, but can you tell me what is going on now as far as management reform, trying to streamline, put accountability and have some common sense in the way that the weapons partI am interested in the weapons part of the Department of Energyis managed.
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Secretary RICHARDSON. Well, first, I think Dr. Reis has a very good proposal on the table that I want to look at and I put off the decision one year because I think we neededand specifically I am talking about a megacontractone contract to fit all our defense operations.
I didn't feel if we implemented right away that this would be the management structure at our Department to support it, so we have put off the decision for a year but with a goal of attaining that megacontract. I think that would be a very important step.
Second, I do think, and I think you may agree with me, that the current way that the Department and the field report to each other is not the most effective and sensible way. We are going to change that. I have a management review going. We are also looking at ways to add to our critical skills.
We have declined this Department in terms of people 25 percent over the last four years. I think it has reached the point where we are cut to the bone and we need some critical skills, especially in the area that you mentioned in aging workforce.
Let me also say that we are looking at ways that the labs can integrate themselves better. We are looking at ways that there can be better coordination in our research and development programs. We are looking at better people, management people. We have got some good people at the Department, but somehow perhaps we need some new blood. We need to get some of my people confirmed in the Senate. That is not your problem but I have a whole bunch of my key personnel who are hanging out there without being confirmed. We are trying also to find ways to look at our whole contracting system.
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My philosophy is the more you compete the better you are, except in specific national security cases where you have overwhelming reasons, but we are trying to do what you are suggesting.
Mr. THORNBERRY. So we think there may be some reforms even before the year
Secretary RICHARDSON. Yes, absolutely.
Mr. THORNBERRY.and the single integrated contract issue gets resolved?
Secretary RICHARDSON. Absolutely, and I think that is essential.
Mr. THORNBERRY. That is encouraging. That's good.
Let me turn if I can to our cooperative efforts with the former Soviet Union. Those are some efforts that I have supported as strongly certainly as any member on this side of the aisle. There is a substantial increase this year over last year's budget. I guess I don't quite understand why there was not a bigger increase in the materials control part of the Department's efforts.
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It seems to me that is the easiest part for us to justify to our colleagues, if you are putting better security around our fissile materials, as opposed to the IPP and the nuclear cities, where the results are much more amorphous and more difficult to prove, harder to justify, and I understand that we continue to find new material in the former Soviet Union that needs this security, that the stuff we are putting in there lasts a short amount of time, five to seven years, that there is a big need for more of this material control sort of thing as opposed to some of the other efforts.
Why don't we have more money there?
Secretary RICHARDSON. Well, I am delighted with your question, because we do need more money and if you look at the budget request when we submitted our request to you, the Russian Government has had more economic problems. There is more of a need to invest in this area.
We have almost every Russian facility converted now. We have a well-managed program. If I could ask Rose Gottemoeller, the Assistant Secretary who handles this, to amplify on my question, is that okay?
Mr. THORNBERRY. It's great with me, sir.
Ms. GOTTEMOELLER. Thank you.
Mr. THORNBERRY. Rose, why not more for NPCNA versus some of these other things?
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Ms. GOTTEMOELLER. Thank you, Congressman Thornberry, Mr. Chairman.
The NPCNA program has really made great strides in the last five years that allow us really to look at the possibility of expanding the program off in some new directions. The Russians are pushing open new doors for us. When we are at sites where we have worked together very closely with them, the level of confidence and trust has built up where they are really letting us into new facilities, so there are new opportunities in that regard.
Furthermore, they have come to us with some important new ideas, particularly with regard to the consolidation of material, bringing materials together into smaller numbers of sites so that we can really get more bang for the buck, so to speak, with regard to our NPCNA program so I think that in fact the program is quite ripe for further funding and resources and I think that it is a program that has great potential in terms of enhancing the overall security profile in the Russian nuclear establishment.
Mr. THORNBERRY. So you could use more money if it were to be available in that particular program?
Ms. GOTTEMOELLER. I think the program, as I said is ripe.
Mr. THORNBERRY. Thank you. Thank you. Mr. Secretary, let me ask you briefly one other question.
Page 34 PREV PAGE TOP OF DOC Mr. Spratt was asking about pit disassembly and MOX and you talked about the agreements with the Russians. Is it our policy not to get out in front of the Russians? In other words we are going to walk hand-in-hand through this process and do things at the same time or is there some possibility we will get out in front and do something before they do it?
Secretary RICHARDSON. We are tryingby going ahead I would say we are trying to push them in constructive ways and let them catch up to us. It has been difficult because of their economic situation, other stability problems there, the continued economic conditions are bad. We are not for instance going to construct any new facilities. I think that is what you are getting at for disposing of surplus U.S. plutonium unless the Russians respond to us on plutonium disposition. We don't want to get too far ahead. We have had some actions contingent on them having the Duma take certain initiatives. That hasn't happened.
One area, the national security area, the tax that foreign assistance pays, the Duma passed it but it was vetoed by the PresidentI am talking about in Russiaso we don't want to get too far ahead and we want to see rewards for results. We want to see this partnership, which is a good one, and I believe that when the Vice President meets with Prime Minister Primakof next month, on the security front, on the DOE front, on the plutonium issue, on the uranium issue, on the materials disposition and the fissile materials, NPCNA there will be substantial progress.
Mr. THORNBERRY. Thank you. I appreciate, Mr. Chairman, your indulgence and my colleagues. I guess I would like to ask one more question if I might because I think, Mr. Secretary, you are kind of uniquely situated to address this question.
Page 35 PREV PAGE TOP OF DOC It deals with really the larger national security responsibilities of this committee, rather than just the subcommittee in some ways. The current policy with Iraq and its Oil for Food Program and the limit on how much they can produce means they can produce all the oil their facilities can produce. There are some people who believe that that production from Iraq is what is driving down the price of oil and amounts basically to economic warfare that Iraq is conducting against its Arab neighbors because as the price goes down it has tremendous consequences for the countries in the region, as you know.
Do you think that is what is happening? Is Iraq conducting economic warfare and does that not undermine our policy in that region of the world?
Secretary RICHARDSON. Well, as much as I would like to castigate Iraq for their actions, I have to say that our objective has been to contain Iraq. Now the Oil for Food Programfirst of all, the caps as reported in sum on Iraq's production have to be a UN decision. It is not a decision we can make unilaterally. In my judgment they have not gone up that much.
We have said that the Oil for Food Program, it's objective is humanitarian. Iraq sells its oil but they can only use the proceeds for food and medicine, occasionally to improve their oil infrastructure.
We think that this development has not altered oil prices. I was just in Saudi Arabia. I was just in the Gulf. There is not that much concern about this now. It would be different if Iraq had unlimited ability to sell its oil. That is not going to happen because we are going to keep our sanctions on them, but we have to watch developments closely there. The Iraqi government has even rejected the Oil for Food Program, saying that in fact to use it as a political lever they are not even willing to help their own people, so this is a situation that we want to watch very closely.
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Mr. THORNBERRY. Mr. Chairman, I would just note that Iraq has become our fifth largest supplier of imported oil in the United States. It has tremendous consequences and I think it ought to be something that concerns us all.
I thank you for your patience I have another two or three questions I would like to submit for the record.
[The information referred to can be found in the appendix on page ?.]
Mr. HUNTER. Absolutely, and I thank the gentleman for his questions. Mr. Smith.
Mr. SMITH. Thank you, Mr. Chairman, and thank you, Mr. Secretary, for your testimony.
My focus of attention is on DOE Richland and the Hanford site and cleanup out there. I have a couple areas of questions but the bottom line is there's two major problems out at Hanford, the tank waste and the K Basins. Basically with tank wastes, we have a lot of tanks that are leaking into the groundwater, as it turns out, and we don't have a particularly good way apparently of measuring that leakage because when I was first elected two years ago I discussed this issue. There were many assurances from many experts that it was way away from the groundwater. It wasn't even going to get thereand a few months later we found out that it was, so the tank waste is a major problem.
Page 37 PREV PAGE TOP OF DOC We have well over 100 tanks out there. Most of them are single shell tanks that are leaking and basically the sooner we can get that out of there so that it is not leaking into the groundwater, the better we are going to be. It is a real environmental catastrophe waiting to happen.
The K Basins are not as large a problem in the sense that they are not actively leaking into anything at the moment. It is just that they are sitting right on the edge of the river and the potential for a disaster is massive, so basically we want to get those two things taken care of.
I do not pretend to be an expert on how to do that. I understand it is complicated, but the two areas I wanted to ask about that, first of all, is the privatization plan for the tank waste, the vitrification process, pretty much down to one company that is in a position to do that, and that is BNFL, I gather, and the concern that we have, and it is a concern that the Chairman is very familiar with when I come begging for budget authority money to try to make that project work, is the folks at BNFL tell us you need a certain amount of money guaranteed budget authority for the future in order for them to be able to get the investors necessary to make this work. They need to see this budget authority to have confidence that this risky project is going to work.
What I have been told is that in fiscal year 2001, and I know the Chairman would disagree with this number, disagree with allowing it anyway, we are going to need some $600 million more in budget authority in order to give BNFL that confidence to go forward. That seems highly unlikely. I know how hard I fought just a year ago for a much smaller sum of money.
Page 38 PREV PAGE TOP OF DOC Basically, there are concerns about the privatization plan. How confident are you that this can still work and second, isn't it time maybe to consider some other alternatives to that vitrification process? If the Government was directly involved, for instance, the cost of getting that money would be substantially reduced so where are you at at that whole process at the moment?
Secretary RICHARDSON. Well, let me try to answer your question and then I am going to ask Mr. Owendoff from our cleanup department.
First, your specific question about the tank privatizationthe reason that we broke the contract into phases was to determine if this BNFL proposal was viable. That was the real reason. Now during this two year design phase we are going to clearly define what BNFL is going to propose and what it is going to do including financing, and we are going to look at alternative financing ways to deal with this.
Second, on the whole tank problem, as you know, I signed an agreement with the Governor and Attorney General my second month in office where we committed to a consent decree that dealt with our very sorry performance on tanks and I believe that we are keeping to that. We are going to be on schedule and I believe that at the same time we need to be held accountable.
On the K Basin
A new schedule has been developed that would begin spent fuel removal in November of 2000 and complete the entire project by 2007.
Page 39 PREV PAGE TOP OF DOC As you know, moving anything from the Columbia River is difficult, but we have to do it and we have to do better.
Right now, Fluor and Duke are working hard. I think they're going to meet these milestones. I believe we can. Some good news here is some of the canister work that we've been doing, the canister storage building effort has gone faster than we had anticipated.
If I could have Mr. Owendoff just amplify anything that I've said.
Mr. OWENDOFF. Congressman Smith, as far as the financing, that'sthe next two years, we have two main efforts. One is to get the design so we have a 35 percent design completion, and then the second thing is to look at alternatives of financing.
Our basic concept is that we want the contractor to have a sufficient amount of their own equity into the project, and in our report that we sent up last year, we had indicated between $200 and $500 million of their own equity into the project so that they would have the incentive to complete the project and to treat the waste.
But we're going to be looking at a whole series of options. Do we make progress payments, do we wait until the plant is complete, do we have them finance it. So I think we'll certainly work with the Congress on those alternatives before we make a decision.
Mr. SMITH. Okay. And the other areaMr. Secretary, you touched on it a little bitthat is just the general efficiency of the cleanup, and I know there was the threat a year ago this time of a lawsuit from the Attorney General and the Governor because we were not meeting the agreementthe tri-party agreementthat was signed I think back in 1989, if memory serves me correctly. We were behind, consistently behind schedule. I've done some work on that as well.
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One of the things we were trying to do and did in last year's environmental budget out of this committee was try to set up some method for measuring expenses and making sure that the money is going towards cleanup, because that's the ultimate goal, to get that stuff out of there so it's not leaking into the groundwater, and we don't want tobecause this is such a new thing, no one has done this before, so it's kind of hard to track. I understand the difficulties, but also there's the massive potential there for money to just sort of disappear, and we were concerned that that was happening, and I'm wondering how are you progressing on giving us fixed goals for overhead costs?
Secretary RICHARDSON. Well, let me deal with the tank issue because our consent decreewe avoided a lawsuit. We were about to get sued and the Governor and Attorney General. We had some very intensive negotiations, reached an agreement.
Right now, 119 out of 149 single shell tanks have been pumped into 28 double shell tanks, and our consent decree basically says that there has to be, with a state, a court-enforceable schedule for the pumping of 29 of the remaining single shell tanks based on the agreements at our October signing. We're going to fund for this action, and we've agreed to pump the tanks that pose the highest risk first.
Let me say that we have set these overhead targets for our contractor, and I understand that significant progress has been made, and I'm very conscious of the provision that you put in the national defense bill, Section 3138.
Jim, is that
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Mr. OWENDOFF. Yes, sir. And as the Secretary mentioned, Congressman Smith, the amount of overheads were really driving down and incentivizing Fluor, the contractor, to drive those down and to look at what are appropriate levels so that more money can go into the actual cleanup.
Mr. SMITH. Okay. Just a couple more areas.
On the FFTF facility, which was sort of down-selected out of the tritium issue, and now there's the issue of further plutonium production, and I'm just curious what the Department's vision is for the FFTF and whether or not it would be involved in that further plutonium production?
Secretary RICHARDSON. Well, we've had, Congressman, a team headed by Bill Magwood, our nuclear man, out of Hanford to talk about the options, and I am to make a decision by Aprilin fact, I want to make it by April 1ston the issue what would be the role of the FFTF. Do we keep it going or does it have a medical isotope or some other function.
It's out for tritium because we selected Watts Bar, and we didn't think, for arms control reasons, it justified continuing it.
I've seen the facility and I would welcome your thoughts. I've heard from some members of your delegation, but it's a decision that will intensify as we reach April and my team, who was just out there, presents some recommendations to me. They haven't done so yet.
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Mr. SMITH. Okay. So it's a work in progress. It's a work in progress in my mind as well.
The last thing, just quickly, I know you met with my colleague, Congressman Dicks, and discussed a little company in our neck of the woods called Aramgen, which is developing a new turbine engine. I went out and actually saw the one that they've got up and running now just last week, and I think it is just really exciting what it can do for the energy crisis that we will certainly face in the future in this country, and they're trying to set it up.
For my colleagues' benefit, it's a new way of generating power, and the main advantage of it is it burns natural gas, a wide variety of natural gas. It does not take as high a quality. Specifically, it has the ability to use methane that comes off both landfills, but also off of coal plants. And we are interested in getting DOE involved in helping them set up a test facility for setting up one of these things to try to capture the methane gas from a coal mining operation, which has, of course, two benefits: one, you can generate power, which is very much needed, but second, methane is just horrible for the environment, and if we could capture it instead of having to send it out in the atmosphere, it would be great. We'll be talking with your office further about that, and I know if I've got Norm working on it, we're probably well represented, but I'll offer my little voice down here as well.
Secretary RICHARDSON. No, you explained it extremely well. And we had a meeting with representatives from your company last week and we're going to look at the proposal very carefully, and they're part of our solicitation effort, so they're plugged in and we're learning more about it, although I must say you explained it a lot better than Norm did.
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Secretary RICHARDSON. Just don't tell him I said that.
Mr. SMITH. No, don't tell him that, and I won't. Thank you very much, Mr. Secretary.
Mr. HUNTER. I thank the gentleman.
The gentlelady from California, Mrs. Tauscher.
Mrs. TAUSCHER. Thank you, Mr. Chairman.
Welcome, Mr. Secretary. How are you?
Secretary RICHARDSON. Fine, thank you.
Mrs. TAUSCHER. As you mentioned, I was in Russia with the DOE about ten days ago, and it was a grueling, long trip but very illuminating, and I want to thank you for the opportunity to go review the IPP program and the nuclear cities initiatives. I met with people and officials from Manadam, and the Duma and local elected officials, and I'm struck because I, as you know, spent 14 years on Wall Street when I was a very small child, and I just find that the opportunities are fantastic, but the problems are staggering over there. It's not like they have everyone agreeing that democracy and capitalism are the way they want to go. We still have the 45-day access problem, which makes it very difficult for us to visit the nuclear cities and makes it even more difficult for us to attract businesses to those places.
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I applaud your comments about the GAO report and I do think those recommendations are important for us to facilitate and to move forward on, and hopefully we can help tone down the rhetoric about the opportunities that we had in Russia, because I think it is not about whether we do it or not; I think it's how we do it and how quickly we can do it and make sure that we're investing American taxpayer dollars in an accountable, responsible way.
What I want to do is offer my help to you as someone who has been in business for a long time and has signed both sides of a paycheck. I see the opportunity specifically in the nuclear cities program to be a great opportunity for us, because in most of the big metropolitan areas of Russia, specifically, you've got tremendous corruption and a system that's not only upside down, but almost is fighting against you. The nuclear cities are virgin territory. They, for the same reasons why they were nuclear cities, are isolated and remote and don't have a lot of the bad things going on there that you see in a lot of Russia.
I'm hoping that we can create a coalitionin a bipartisan way, on both sides of the aisleof people who are interested in finding ways to help commercialize those scientists and technicians, but keeping in mind that it's been difficult for us to commercialize a lot of the activities in our own national labs.
It takes a lot longer than we hope, it takes a lot longer than we expect, and I think we have to have a rational plan to do this.
But I want to help as much a I can. I was very, very impressed by the people you have working for you, and the opportunity, and when you look at the people in Russia, even Minister Reobuf from Minadem, you look him in the eye, he looks like we do, and they deserve a chance to have peace and prosperity for their families, and I think this is something we need to work for.
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So I ask the Chairman to make this something that we will continue to talk about, and I offer my help to you.
Secretary RICHARDSON. Congresswoman, I really appreciate what you said. Your trip was very important. I hope you persuaded the astute Chairman to go what you to Russia to see firsthand what you said, and that is that there is a dire need for this program, and that it's working well.
We have spent a lot of time on making this program work. We're increasing the commercialization. I think there's $38 million invested. We are moving ahead with some of those GAO recommendations that were good, that said we should spend more in Russia, less in the labs, although the labs provide the expertise, where now our goal is around 50 percent.
But the importance of what you said is that we have to keep those Russian scientists from going elsewhere.
Mrs. TAUSCHER. Right.
Secretary RICHARDSON. And there are 30 to 50,000 Russian scientists, and we've done about 4,000.
Mrs. TAUSCHER. Four thousand.
Secretary RICHARDSON. And so this is critically important. We need to do more, we need to pay them directly. There's some dispute over the tax. We don't believe there's a tax, but we have to negotiate it, and if we can get that money to the scientists instead of to the institutes more directly, I think that's better.
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But your trip was very important. It sent great reverberations, and you have the background and because of your presence in this committee, I just hope that you can persuade members of Congress of the importance of this program.
Mrs. TAUSCHER. Well, I'll invite the Chairman the next time I go. Thank you.
Mr. HUNTER. Listen, I'll be happy to go, and I want to take some of those U.S. scientists who are getting the 63 percent of that money. They may want to go over there and follow their money.
Mr. GRAHAM. Thank you, Mr. Chairman.
Hello. Welcome to the ultimate niche market here, the Department of Energy facility, Mr. Secretary. I really admire what you do, trying to juggle all of our interests, and I think you do a pretty good job of it. I just want to say that.
Secretary RICHARDSON. Thank you.
Mr. GRAHAM. We all have sites that do a lot for our community and the competition for new missions is intense, as you probably well know. But I just want to talk to you a bit about MOX fuel, then we'll get into the tritium decision and some other things.
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What effort is being made, or is there an effort being made, to get the world community involved with some of the funding problems the Russian's face, because I think this is a good investment for the world, not just the two countries involved. Is there any effort to get other people involved?
Secretary RICHARDSON. Well, you're absolutely right, Congressman, we need to do better there. We have tried to get mainly our NATO allies involved. We are getting more involvement but not as much as we've hoped for.
What we have tried, and I try whenever I travel, is suggest that certain countries help us with some of the plutonium disposition. We haven't had as much success as we should, but what we want to do is, this springthe president recently announced his expanded threat reduction initiative. This is going to be a major initiative.
But I have to be honest with you, you pointed to the need to internationalize this problem. We can't do it all ourselves. We're going to be increasing our request for support from the private sector, as I said from other countries, the international community. Hopefully Germany and France can do more than they have. We had a little progress with Great Britain. But we need to do better.
Mr. GRAHAM. I think a marketing strategy when you understand the benefit to the world at large is a pretty good sale, and let us know what we can do from our side of the aisle, because I'll gladly tell my fellow colleagues that this is a good return on investment. If you can take a former enemy and get their nuclear bullets stockpile downgraded in scope and effect, that's really a unique opportunity, and for 40 or 50 years we never thought we would have a chance to deplete these stockpiles. So let's definitely go forward.
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Now, within the budgetary problems that you face, do you see, if the Russians do come on line any time soon, that the budget plans of the Department are going to be realistic and that we can actually start constructing these facilities when the political arrangements are made?
Secretary RICHARDSON. As you know, we got $200 million to jump start this program late in the budget negotiations that weren't on the budget. That helped us enormously because it jump started this program.
We want the Russians to start constructing some of their facilities. They need to more, too. But we will come back to you with budget requests. We see at the end of the year a concluded negotiation, and then we'll be able to come back to you and say, these are the resources we need. But we do appreciate your support, especially from your facility or the Savannah River that is so involved in every aspect of weapons development and disposition and disassembly.
Mr. GRAHAM. Okay. Thank you.
Now, to tritium. My Chairman did a very good job, I think, highlighting some issues that we're going to have to deal with.
One, the tritium issue, my number one goal is to produce the tritium products we need to maintain our freedom; and the decision that you had to make was a difficult decision, and what site to use and what technology to use is always difficult. I know that my colleague to my left here, about MOX fuel, we're all competing for some of the same missions.
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But in the area of tritium, do you buy at all that there has been a major policy shift in the United States by using the TVA reactor?
Secretary RICHARDSON. No, I don't think so, and if you allow me, I can give some new data on the tritium decision, because we just finished the negotiation with TVA, and we have saved from the accelerator $2.8 billion with the Watts Bar option, and from the Bellefonte, $1.2 billion from that option.
We think that the tritium decision, Congressman, has given us the flexibility we need to achieve further arms reductions. The option I've selected uses government reactors. TVA reactors are wholly-owned by the government and TVA has a national security mission. It's in its charter.
We want to have this activity on tritium, this TVA effort, as open and as transparent as possible. If the AIA, the Atomic International Agency, wants to inspect it, we're ready to do that.
We recognize that the practice in the United States of separating military and civilian uses of nuclear power hasn't been absolute. We can point to other exceptions. Another reason is tritium is not a special nuclear material like plutonium.
What I'm trying to say is if you add all the reasons, arms control reasons, flexibility, cost, the fact that the reactor is already there, the fact that the Secretary of Defense supported our decision, that the Chairman of the Nuclear Regulatory Commission will work with us to license this facility as rapidly as possible, the fact that we have flexibility in our financial commitment, I think it's the best option. And the question that you asked, is it that much of a precedent, negative precedent, the answer is no, there is no legal or international agreement that prohibits our use of a commercial reactor for tritium production. Added to that is the fact that TVAthis is a government operation, this is a government reactor.
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Mr. GRAHAM. Well, let's go down those one by one, if we might, just for a moment.
Is it your testimony that the TVA reactor is not primarily in existence for the production of commercial power? Isn't that why it was built?
Secretary RICHARDSON. Yes. It serves its region. But in my judgmentit is a government reactor, but it has a national security mission in its charter.
Let me also say to you, Congressman, that I could have elected under existing law to literally have TVA at cost produce this tritium because of the Navy requisitioning authorities that the government would have.
Mr. GRAHAM. Okay. So it's basically your belief that the TVA reactor has a government connection
Secretary RICHARDSON. Yes.
Mr. GRAHAM. [Different Than Other Commercial Reactors in This Country?]
Secretary RICHARDSON. Yes.
Mr. GRAHAM. All right. And would itif deregulation goes into effect in the nuclear industry or the power industry or the utility industry as a whole, would TVA be affected?
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Secretary RICHARDSON. You know, we're debating that at this very moment. We are going to be submitting our electricity restructuring bill, and, you know, there's a view that TVA should be in a competitive situation; there are others that say because it's a government chartered entity with Presidential appointees, that it shouldn't be regulated by somebody like FERC. This debate is going on right now.
My view is that all entities, public and privatewe're trying to bring some competition in, but this debate has not been settled yet.
Mr. GRAHAM. In countries such as North Korea or other countries that present a potential threat to the United States, if the government took a reactor that was built for the purpose of producing power to bring that country into the next century and initiated a policy of taking that reactor, irradiating tritium, would we object?
Secretary RICHARDSON. Yes. Yes. And we are very concerned with the situation in North Korea now because there is the possibility that underground, they are building some materials that would violate what we have with North Korea, and that's an agreed framework agreement thatwhere they in essence agreed to freeze their nuclear development.
We are trying to determine if, in effect, these facilities do violate the agreed framework, we're trying to get access to these facilities, and negotiations with the North Koreans are taking place now and, hopefully, we will get access to ensure that this is not happening.
Page 52 PREV PAGE TOP OF DOC But I would agree with the premise of your question.
Mr. GRAHAM. Mr. Secretary, I don't want to keep you long. You've got lots to do, But can you provide me with a list of examples of where situations similar to the use of the TVA reactor to produce tritium exists in other areas of the military industrial complex and in the private sector?
Secretary RICHARDSON. Yes, sir, I will.
Mr. GRAHAM. Thank you.
Now, the tritium supply needs change as the treaties change, and I'm all for making wise decisions economically. What is the prospect of serious litigation being had over the use of the Watts Bar reactor in terms of the prior proliferation stands of the United States? Do you see a long legal battle on the horizon?
Secretary RICHARDSON. I don't think so, Congressman. You know, some arms control and environmental groups have supported my decision. Some arms proliferation groupsI think one or two have opposed it. But I think there is a general view that this is a solid decision made on good arms control grounds.
I would like to, if I could, Congressman, my national security advisor, Joan Rohlfing, who is here, perhaps canis that agreeable to you?
Mr. GRAHAM. Absolutely.
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Mr. Chairman, I'll wrap it up here soon. I don't mean to take too much time.
Ms. ROHLFING. Yes, Mr. Congressman, as the Secretaryhi.
Mr. GRAHAM. Have you gotten Ed Markey on board?
Ms. ROHLFING. We're working on it.
Mr. GRAHAM. Call me when you do.
Ms. ROHLFING. As the Secretary mentioned, we had a fairly extensive dialogue with a broad range of non-governmental organizations in trying to assess the views with respect to the non-proliferation implications of using the Tennessee Valley Authority reactors, and we were presently surprised to discover that many of them, though they were not happy that we had to produce tritium at all, would have preferred or did prefer that the Department use existing facilitiesthat is, Tennessee Valley Authority reactorsas opposed to investing significant funds in constructing a major new weapons production facility. On balance, I would say the majority of those who we met with preferred the TVA option over others.
Mr. GRAHAM. Now, would it be fair to say that the folks you met with, if they had it their way, we wouldn't produce anything new, and they like this idea?
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Ms. ROHLFING. Sure, I think some of them would prefer that
Mr. GRAHAM. I wonder why they like this idea?
Ms. ROHLFING.disarmament continue, but they recognize that the Department does not have that option, and therefore they believe that the TVA option was preferable to the construction of an accelerator.
Mr. GRAHAM. Do you think they might believe this is an option that will never get off the ground?
Ms. ROHLFING. I think some of them hope that, but I think the majority of them recognize that this is the most prudent way to proceed.
Mr. GRAHAM. Would you agree with this statement: Of all the options available, this has the largest legal and political risk and is least likely to produce tritium?
Secretary RICHARDSON. No.
Mr. GRAHAM. Okay.
Secretary RICHARDSON. No. But let me say, Congressman, I had to make this tritium decision by law before the end of the year, as you know, and in your amendment, we can't implement it until you see fit to approve it.
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Mr. GRAHAM. Right. Losing the competition based on money is, you know, understandable and all this other stuff. The problem I've got is, are the numbers real, is it likely to produce tritium, is this a major change in policy that's going to lead to nowhere, go down a nowhere road for tritium? I'm really concerned about that, and time will tell, and I'll work with you the best we can. But you will probably hear more rather than less about this, and we will do the best we can.
Let's move on to DWPF, okay?
Secretary RICHARDSON. Okay.
Mr. GRAHAM. How do you rate DWPF at Savannah River in terms of success?
Secretary RICHARDSON. Oh, it's a good facility. It's been very successful.
Mr. GRAHAM. Why did we take $27 million out of it?
Secretary RICHARDSON. Jim?
Mr. OWENDOFF. Congressman Graham, our challenge is with the other requirements that we have there. What we looked at with the DWPF is would there be ways, considering we have to find an alternative to the in-tank precipitation problem, would there be ways that we could better utilize the funds waiting on that in-tank precipitation problem and the production of canisters. But as you may know, Westinghouse has just looked at an alternative, even within the funding available, to see if there are ways to keep the canister production up.
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This is along with Congressman Smith's move for us to be more efficient and more effective, and Westinghouse looked at alternatives to be able to keep that canister production going.
Mr. GRAHAM. Thank you.
One comment. I think DWPF has been a tremendous success by the Department of Energy. It has produced a clean-up program that's been outstanding. I think additional funds into the program saves millions and billions later on, and I want to work with you to make sure that we get the full and best use of DWPF.
Having said all these things that I disagree with you about, I believe you do a hell of a job, Mr. Secretary, you've got smart people, you've got a lot of hard decisions that are very much in niche markets in the Congress but affect people more than they realize. And as the year unfolds, I look forward to working with you, and thanks for coming today.
Secretary RICHARDSON. Thank you, Congressman. Thank you.
Mr. HUNTER. I thank the gentleman from South Carolina.
Mr. PITTS. Mr. Secretary, concerning the initiative for proliferation prevention, the funds appropriated to keep Russian nuclear weapons scientists from selling expertise to other countries, how effective has this program been?
Page 57 PREV PAGE TOP OF DOC Secretary RICHARDSON. Congressman, it's been very effective in my judgment and also in the GAO's judgment. We believe that, number one, this is probably among the top national security threats this country has. We believe that the program is working. The GAO has certified this, they have identified some management problems that we're dealing with, and one is that we move towards more rapid commercialization. I would point out there's $38 million in private sector investment.
I think Chairman Hunter alluded to the effort that we need to make to have more money spent in Russia rather than in the United States, although I will say that we want the national labs to be deeply involved because they have the expertise, but our objective is to move towards say 50 percent, 51 percent shortly instead of the 30 to 60 percent in the GAO report.
In the area of dual use, I think we can make progress. In the area that involved the value-added tax that is of concern to many in the Congress and in the Administration, we're negotiating with the Russians to ensure that this tax is eliminated, that if we're providing loans and assistance, that you don't have to have a third party. We want to make sure, for instance, that these scientists are paid directly rather than some of their funds be administered through an institute where they're employed.
We need to manage the program better, but it's a good program and it's working.
Mr. PITTS. How many scientists are on salary or how many have you been able to engage in this program?
Page 58 PREV PAGE TOP OF DOC Secretary RICHARDSON. About 4,000.
Mr. PITTS. At present 4,000?
Secretary RICHARDSON. At present, 4,000.
Mr. PITTS. Now is the
Secretary RICHARDSON. Rosie, come up here, help me.
Congressman, Rose Gottemoeller spends every day on this program.
Ms. GOTTEMOELLER. Congressman, over the life of the IPP program, 4,500 scientists have been involved in it.
Mr. PITTS. How about today, how many?
Ms. GOTTEMOELLER. Today the activity is very actively ongoing. I would have to get you the figure of who is involved today in the program, what number.
[The information referred to can be found in the appendix on page ?.]
Mr. PITTS. And you mentioned the taxation problem. Have you run into other major problems with this program?
Page 59 PREV PAGE TOP OF DOC Ms. GOTTEMOELLER. Some of the biggest problems have been with regard to the taxation. We have found that the Russian Government is very supportive of our efforts to gain full tax exemption for all our assistance programs including the IPP program, but we are finding that because there is uncertainty about the tax legislation it hasn't cleared the Russian Duma yet. This is the taxation of assistance legislation.
The Secretary referred to it earlier, that President Yeltsin had vetoed it. It had gone back to the Duma. It is now, we understand, very close to clearing the conciliation process and going back to President Yeltsin's desk, so we are very hopeful that the overall tax situation will be clarified considerably very, very soon but I would say that that has been the major problem for the program in terms of getting it implemented.
Mr. PITTS. Now does the Nuclear Cities Initiative face the same kind of taxation problem?
Ms. GOTTEMOELLER. Sir, the Nuclear Cities Initiative resides under the umbrella of a government to government agreement that Secretary Richardson signed with his counterpart, Minister Adamof, in September, and that contains an article that clearly states projects under the program should be free from taxation.
Mr. PITTS. Could you explain the difference, a little bit of the difference between the Nuclear Cities Initiative and the IPP?
Ms. GOTTEMOELLER. Yes, sir. The IPP program is about five years old now. From its inception it was directed at the elite of the Russian scientific community, the top scientists working in the laboratories, and it was really focused on ensuring that those scientists remained at their lab benches and did not head off for Iran or North Korea or other countries of proliferation concern.
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More recently that program has become very much focused on getting those scientists working increasingly on projects that have the potential for commercialization because we see that as the greatest long-term benefit for the scientific community there, having jobs that will last over time.
The Nuclear Cities Initiative grew out of the Russian Government's decision to proceed with overall restructuring and downsizing of their nuclear complex, so it is for scientists and nuclear complex workers who are actually being shed out of the complex. They will no longer be working in the nuclear complex but will be basically seeking new jobs in the civilian sector, and so the Nuclear Cities Initiative is meant to facilitate and work with the Russian Government on the downsizing of their complex and help to create jobs for workers and scientists who are being shed out of the nuclear complex.
Mr. PITTS. You mentioned 4,500 scientists having been on salary. Do we know how many have escaped that we have missed who have gone outside the country?
Ms. GOTTEMOELLER. No, sir. I don't have any figures on that.
Mr. PITTS. That's all I have, Mr. Chairman.
Mr. HUNTER. I thank the gentleman, and, Rose, it is good that you are up there because I think this is a good point to make a few comments and ask a few questions on, because it is kind of the issue of the dayalso an important issue to us because it has criticality with respect to the hemorrhage of people who may have value in somebody else's nuclear complex.
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As I understand it, let me kind of go over the bidding here and I have got the GAO report in front of me. For every dollar that's spent on this, 63 cents remains in the United States, and I presume that goes to the laboratories in terms of their overhead and preparation and analysis of how we could use this money once it goes tohow we can best get it to the Russian scientists we want to keep.
Then 37 cents goes to Russia out of that dollar. Out of that 37 cents, over half of it, about 18 cents or 19 cents, is taken off the top by the Russian bureaucracy53 percent of it. That leaves 17 cents of that dollar actually going to Russian scientists and it is a little bit analogous, as Bill is a veteran of our wars on Capitol Hill where Republicans would take a Government program and rail that for every dollar that was appropriated in Washington, D.C. you ended up with 15 cents or 20 cents actually getting down to the user of the particular program, it looks to me, and I want to quote the GAO report here, it says with respect to the impact of the program on U.S. proliferation, they say whether or not we are reaching that goal or having a positive effect is uncertain.
They say, and I am quoting them, ''Although in general the program is employing weapons scientists on a part-time basis, it has not achieved its broader nonproliferation goal of long-term employment through the commercialization of projects. The lack of investment capital in markets and the inadequate training of scientists in business skills are factors impeding the program's commercial success. GAO reviewed 79 projects and determined that none was a commercial success, although several showed commercial potential including projects dealing with solar panels, metals recycling, and technology to eradicate insects in lumber.''
Page 62 PREV PAGE TOP OF DOC So it looks to me like what we have done to some degree is we built a Small Business Administration. We built this into kind of an SBA program where we are not simply paying a company that exists and has some independence and some self-sustenance to hire people. What we are doing is we are trying to create companies, business ventures if you will, that are successful, and so far we have been unsuccessful in doing that, to the effect that to create a $17,000 job or $17,000 worth of employment for a Russian scientist we are spending $83,000.
So a couple of things that I think we need to look at, Mr. Secretary, very seriously, is first how much are we paying per scientist, and I think the committee would like to have this information.
Second, do we have an adequate monitoring system to determine which scientists if any are leaving the system?
The GAO reported that they simply talked to the Russians at the sites and the Russians said, gee, we don't know anybody who has gone off to work for Iraqhaven't heard of anybut this is a very serious thing and I think we need to have a monitoring capability.
Third, have we inadvertently been investing inand you mentioned, Mr. Secretary, in dual use technology. That is, supplementing the resources for the Russians to pursue dual use technology that has in fact a military component to it. Are we subsidizing the military base in Russia and particularly the nuclear weapons directed efforts, and you might put as a subset of that is there a hemorrhage of American technology in critical areas as a result of this because I would think that the smart people in the Russian intelligence agencies would be talking to their people who are part of this program, seeking to derive as much information in terms of making weapons from our side as possible.
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We are talking about the very smart people who we engage over there and hopefully we have come up with some alternative employment for them. But I am sure they are also dealing with very smart people from our laboratories and the other areas of discussion with respect to the laboratories, so that at times we have lost information, critical information, as a result of those connections.
So are those connections in any way accruing to our detriment? I think that is a good area of exploration.
I think we need answers to those questions, not that we are against the goals of employing Russian scientists and keeping them from running off to work for a country that could become an adversary, but how we are doing it is questionable and you might find that we will have a higher retention rate if, instead of delivering that $17,000 worth of employment to a Russian scientist after everybody has taken their cut to the tune of 83 grand, of perhaps simply employing a successful manufacturing operation, moving for example a manufacturing operation, incentivizing a U.S. contractor who is having things produced in China, for example, to have them produced in Russia and have these scientists doing something that is more mundane, perhaps less scientific or less weapons related but doing what everybody likes and that is giving them more money.
Apparently we could pay that $17,000 a year scientist or less, we could double his money or even triple his money and we would still be saving 50 percent, so I think we could perhaps be spending our dollars more effectively.
Page 64 PREV PAGE TOP OF DOC I think the GAO makes two reports. One, we could spend our dollars more effectively and two, there is not an adequate monitoring system in place. I think we need that.
Secretary RICHARDSON. Mr. Chairman, your requests are very reasonable and we will make sure that we implement these recommendations by the GAO. They are good recommendations.
I will also plead a bit forI am not for an inordinate amount of time but I think as Congresswoman Tauscher mentioned, nothing in Russia is easy.
Mr. HUNTER. We understand.
Secretary RICHARDSON. And I would hope the committee is a little patient. At the same time I can assure you that this is not money going for Russia's military and weapons activities.
I think I can also assure you that the tax issue is unsettled. That amount that the GAO had in there we disagree with. We think there is too much not going directly to the scientists and we need to improve that whether it goes to an institute or income tax or paying the Russian scientists social security.
On the lab issue, because I know you like to point that out, you do agree with me we have to have the labs involved. We want our nuclear scientists working on this program. I wouldn't want to send a philosophy professor to do this. I want to send somebody who has had long experience in weapons and it costs money to have lab people travel to Russia, stay there, work their expertise.
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We will try to eliminate some of the overhead that perhaps is there too much.
Mr. HUNTER. But I think the other question here is could we spend less money and hire these people in less technical positions that require thisin other words the labs are building these jobs and building these projects and spending a lot of time and a lot of technical expertise putting together good technical jobs for technicians in Russia. Questionif you save some of that money and triple the Russian technician's pay, who are able to do it still for 50 percent of the dollarsif he is only getting 17 cents out of every dollar anyway, could you have him making television sets for example and still retain him in that job rather than have them leave for another country to work in the nuclear complex?
If he has got a wife who talks to him at the breakfast table, I think you probably could. I think you'd probably want them to stay and make three times the money that they were making working the technical project
Mr. HUNTER. I understand there is a little value derived also from the engagement for our people, so we are not foreclosing that, but I think we need to look at it and look at what we get.
Mrs. TAUSCHER. Mr. Chairman, that's why I am very anxious for you to go to Russia soon and see this.
I had the same sentiments that you have and the same questions, and what I observed isand why I made the comment about why it is so hard over therethere is no standardized business practices in the former Soviet Union. There's no protection of intellectual property rights. There is no contracts. There is no contract law. There is no judicial system. There is no way to adjudicate any kind of contract dispute. If you got a settlement and they wanted to pay you, it would be in cans of tomato soup, not money, so this is really hard.
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Because of all these reasons, it is virtually impossible to attract investment capital and so unless we figure out how to find the ultimate philanthropist who is going to have no return on his investment and no way to track it and wait 45 days to go to a nuclear city to visit the plant, it is going to be very hard for us to commercialize anything, and that is why it is important that we have a relationship with the Duma and that we really help them move forward on these different issues. And that is why I think it is very important for you to come.
Mr. HUNTER. Okay. Let me ask
Ms. GOTTEMOELLER. Mr. Chairman, may II'm sorry
Mr. HUNTER. Certainly, and please, if you could address also, Rose, the question of the monitoring. Is GAO being too broad-brushed where they say that there is not a monitoring system in place?
Ms. GOTTEMOELLER. Yes, sir, I would be happy to do so.
If I may start with the question of the technology mix for the kinds of projects and jobs we see there, I think you make a very, very good point. I think there is the potential for a real mix of both high technology jobs emerging and we actually have seen interest for example in, you know, U.S. software companies becoming involved in the cities, so I think there is a mix because there is a recognition out there that there is talent, a good talent base. These are world-class scientists, and we need to work with them on developing that talent base in a high tech industry but there is also a recognition that they also need to develop more low tech jobs and more production and manufacturing jobs and service jobs in these cities because the cities themselves are not developed in terms of their service sector, so I think that the answer to your question is we need to look at a judicious mix of both the high tech and other kinds of jobs.
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On the second point, with regard to monitoring, we are looking extremely seriously at the GAO's recommendations. I want to underscore for you, sir, and for this committee that we are taking those recommendations very seriously and working actively to implement them, but at the same time I do believe that we have done some good work on monitoring overall. One of the reasons why there is such an intimate relationship between the labs in the United States and the labs in Russia is that we have lab scientists as the principal investigators for many of these projects and so that helps with the oversight and monitoring of the projects.
We are assured, for example that these scientists are not just recycling old work that they have done and kept in their lab notebooks over the years, but are actually producing new and valuable work under IPP projects. So there's room for improvement but we have been taking this problem of monitoring seriously in the past.
Mr. HUNTER. Do you have a way of knowing when people are leaving? Have you been able to keep a count, so to speak?
Ms. GOTTEMOELLER. Sir, in answer to your question and in reference to Mr. Pitts' earlier question, we actually know quite a bit in anecdotal terms about a scientist being approached for travel to countries of proliferation concern. In terms of what the actual count is since the breakup of the Soviet Union, at this point I am not able to give you those kinds of numbers but we certainly have had information coming in over the years that they have and we have heard, I have heard directly from Russian scientists that they have been approached about travelling in that way.
Page 68 PREV PAGE TOP OF DOC Mr. HUNTER. Well, there's a way to invoke the assistance of the Russian Government with respect to do they have any handle on when people leave and where they go.
Ms. GOTTEMOELLER. We have been hearing from them, increasingly in fact, that they are concerned because their visa arrangements now with neighboring countries are not as stringent as they have been in the past and there have been concerns expressed recently that people are able to travel more freely and they don't always know where they are going.
Mr. HUNTER. Well, I guess the question that has got to come to everybody's mind is if you are paying a moderate salary at the end after everybody has taken their cut and 17 cents of this dollar gets down to the scientist, and he is approached by somebody who will give him 10 times that much, are we having the sought-for deterrent effect? If you don't have a way of keeping count but you know some anecdotes about people being approached, how can you tell that you are having an effect?
Do you see what I am saying in my question?
Ms. GOTTEMOELLER. Yes, sir.
Mr. HUNTER. I think we need to try to come up with a system for actually monitoring this, if we have a hemorrhage of scientists going out to other countries.
Ms. GOTTEMOELLER. If I may, sir, on the question of how much of the funds Russian scientists actually receive, the IPP policy is precisely the same as that of the ISTC programthat is, that individual scientists under the project should be paid $600 a month. That is the established amount.
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Mr. HUNTER. But my point is, and I am sure you have thought about this too, if they get an offer from another country to come to work for $5,000 a month or more, are you having a deterrent effect on those people who are offered fairly large sums of money? I think we need to spend some time and undertake an effort to try to understand whether or not there is a deterrent or whether we are kidding ourselves with respect to success.
I think there is enough money spent here, it is critical enough to us that we shouldn't have to evaluate it in anecdotal terms but we should be able to evaluate it from some fairly precise terms, so let's spend some time and try to do that and we will work with you on that.
Secretary RICHARDSON. Mr. Chairman, I think you have made some very good points and we commit to you that we will work closely with you on that, especially the monitoring point.
Mr. HUNTER. Okay. Let me go to just a couple other points.
I think it is important that we have and that you provide for the committee at some pointI am worried about the hemorrhage of materials also, if you could have a site inventory, Russian site inventory where we have programs and the present status, security status, of that site and our completed and proposed actions so we can go down the thing and any questions we canyou may have already provided that, but I think site by site we need to look at that pretty carefully. If we could do that, that is important.
Page 70 PREV PAGE TOP OF DOC [The information referred to can be found in the appendix on page ?.]
Mr. HUNTER. Mr. Secretary, our national labs have the greatest physicists in the world. I mean those are the people who developed incredible weapons systems and you mentioned that we are now working in the labs, there are programs to work the challenge of weapons of mass destruction, chem-bio, but here is what I would ask you.
The biggest challenge that we have now I think was manifested by this recent successful flight that the North Koreans made of their Tiepadong I missile, three stage, that could if the flight was extrapolated, it gives them a range that reaches the United States. We live in an age of missiles. The Administration has just announced they are going to be putting money in their programs for the deployment of a national missile defense, and yet everybody laments our inability to be successful in the physics sense, that is to hit a bullet with a bullet, whether we are doing theater missile defense, which is critical to our troops in theaterthe largest number of troops we have lost in recent times, as you know, is in Desert Storm to the Model-T of missiles, which was the Scud, and yet the labs generally aren't known for having great biologists, great chemists to meet the chem-bio threat.
There are lots of people who do that, but they do have great physicists, and for us to not be employing this enormous capability is, I think, going to be looked on in a historic sense as totally illogical.
We have this massive resource with simulation capability, with range capability, with incredible talent, and great resources and yet even in the theater area where there is absolutely no debate between Democrats and Republicans as to whether we should deploy our troops in Koreawe just had our Korean Commander express to us the need for theater missile defense now to protect his young men and women against incoming ballistic missiles.
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We have no political debate over whether we need this. We have not employed the national labs and, as you know, coming out of the Senate last year there was a prohibition, which I thought was just amazing, a prohibition on spending a cent of DOE money above and beyond what would be given to them by DOD on the biggest threat to our national defense, which is ballistic missiles.
So I would ask you, Mr. Secretary, to consider that the one thing that I think the labs can deliver to us most effectively is not people to look at, is not necessarily folks who will analyze the chem-bio threat and meet that threat in terms of the system, the weapons system that is delivered ultimately to American troop concentrations or our population, but their real capability manifested in the labs is our ability to do physics, and that is to stop the delivery vehicleand that is the ballistic missileand the idea that those great ranges, those great simulation capabilities, those great computer capabilities and that enormous talent is sitting on the sidelines while our potential adversaries are getting closer and closer to having ICBM capability and, in some cases, have now achieved it, does not make any sense. So I would hope that you would work with this committee and with the Senate and with the full House this year and let's put together a partnership.
I have tried to build some initiatives. My first initiative was where the labs wouldso they wouldn't threaten the contractors and threaten DOD would be a problem-solver, a physics problem solver where you could hand off to Los Alamos or Livermore or Sandia a problem that you have, say with the guidance capability on THAAD or another ATBM system and they could solve the problem, deliver it back to the contractor, not threaten them and not take his money, and we had that funded by DOE money. Well, of course that threatened the labs and one of them rushed off to complain to the Senate and we ended up with a ban on using a dime of DOE money to solve our nation's most pressing defense problem.
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I will just tell you, I am a small part of this money deliver system that we call Capitol Hill but, in my estimation, if the laboratories are not going to come forth and help us meet this critical national emergency which is closely related to what they have done over the years but instead are going to try to find other things to do, I think we ought to cut their funds. And I know that the issue of stockpile stewardship is an important one, but I think we can have a very effective stockpile stewardship program that doesn't require as robust labs as when the labs were not only maintaining the stockpile but were designing new weapons and testing them, which was their initial charter. So please work with us on this very important challenge, Mr. Secretary.
Secretary RICHARDSON. I will. I will, Mr. Chairman.
Mr. HUNTER. Okay. Thank you, and Norm, do you have any follow-ups here?
Mr. SISISKY. No. I thought you would be long gone by now. I do have some questions.
Mr. HUNTER. What if you had read your whole statement, Bill? Because without objection that will be inserted into the record, incidentally.
Mr. SISISKY. I may submit, for the record I just need to see how many questions have already been asked. I don't want to be redundant but I thank you for being here, Mr. Secretary.
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Secretary RICHARDSON. Thank you.
Mr. HUNTER. Does anybody else have any last shots they would like to take at the Secretary here, last questions?
Mr. HUNTER. Mr. Secretary, thank you for working with us and making yourself available today. We look forward to the second panel, and we will work with you to solve some of these problems.
Secretary RICHARDSON. Mr. Chairman, I will work with you on that ballistic missile defense. You know, we do do some work
Mr. HUNTER. I know.
Secretary RICHARDSON.but I got your message.
Mr. HUNTER. Thank you very much. We will fire up again in 10 minutes. So, There will be a 10 minute break, folks.
Mr. THORNBERRY [PRESIDING]. The subcommittee will resume its questioning and we will take the testimony of the second panel. With us to discuss tritium are the Honorable Hans Mark, Director, Defense Research and Engineering, Department of Defense, with distinguished past connections with the University of Texas which is always a good thing; Mr. Dan Poneman, former Special Assistant to the President, National Security Council and currently a partner at Hogan & Hartson; and third, Mr. Richard Rowberg, Senior Specialist for Science and Technology at the Congressional Research Service. We thank you, gentlemen, for being here, and Dr. Mark, please proceed.
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STATEMENT OF THE HON. HANS MARK, DIRECTOR OF DEFENSE RESEARCH AND ENGINEERING, DEPARTMENT OF DEFENSE
Dr. MARK. Mr. Chairman, thank you for inviting us to speak here about the important issue of tritium. Before I start, I would like to beg your indulgence. I have only been in town for six months and I am coming straight out of the laboratory, so I have been there recently, and I brought a present for your Chairman that I would like to deliver. This is a book that I co-edited some years ago, and probably not many of you know that Chairman Hunter has two brothers who are distinguished scientists. I worked with his older brother, because he wrote one of the chapters in this book, and his younger brother did his Ph.D. thesis on a piece of equipment that we now have in Texas, this light gas gun here, and I thought I would leave that with him, too. So if you could fix it so the Chairman can get these gifts, I would much appreciate it.
Mr. THORNBERRY. We will be certain that he gets them. Sometimes I think Mr. Hunter is a scientist, too.
Dr. MARK. I think that may be the case, yes.
Oh, Mr. Chairman
Mr. HUNTER [PRESIDING]. Are you talking about the smart Hunters?
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Dr. MARK. The two smart Hunters.
Mr. HUNTER. Okay. We will let me get that.
Dr. MARK. I worked with Robert, he wrote a chapter for this book, and then John did his Ph.D. thesis on a light gas gun, which we now have in Texas, so I brought this for you, too.
Mr. HUNTER. John is ready to launch.
Dr. MARK. I know that.
Mr. SISISKY. What happened to you, Mr. Chairman?
Mr. HUNTER. I got into politics.
Dr. MARK. Mr. Chairman, I am here to support the decision of Secretary Richardson on the tritium production matter. I have a prepared statement which I would like to submit for the record. In the interest of time, I will just summarize it very briefly so that we get on to the questions.
I have some charts also which I have attached to the statements. I am not going to show them either.
Page 76 PREV PAGE TOP OF DOC Tritium is a heavy isotope of hydrogen. It is unstable, it decays away. It has a half-life of 12 years, which means that half the atoms are gone in 12 years, and that is really the cause of the problem, because we have to have a continuing supply of this material if we want to maintain the nuclear stockpile that we currently have.
Tritium can be produced in any nuclear reactor. There are two nuclear reactions that permit you to do that. And, as you know, we have shut down our production facility for tritium in 1988, the one that we had, and, so, since then we have not produced any tritium. And, of course, that is why we are here and why I think we need to have this discussion.
The first question really has to do with how much tritium do we need to maintain the stockpiles that we have and when do we need it, what are the time scales here? The amount of tritium is driven by arms control agreements that we have. The START I stockpile that we currently are holding would require starting in the year 2005 a production capability of tritium of about 3 kilograms per year. If START II were to be ratified, then that number would go down to 11/2 kilograms per year, roughly, and we would not have to have it until the year 2011, so that is a rough statement of the requirement.
The Department of Defense, of course, is concerned that we meet these requirements, and we chartered a committee of the Defense Science Board to take a look at this problem last year. The committee was chaired by a former Chief of Staff of the Air Force, General Larry Welch, and the Welch Report analyzed for us the four options that Secretary Richardson talked about, the option of using existing civilian power reactors; the option of completing a reactor that the TVA has partially completed, the Bellefonte facility in Alabama; the reopening, if you will, of the Fast Flux Test Facility at Hanford; and, finally, the construction of an accelerator to produce the neutrons to make the tritium.
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The decision that was made by Secretary Richardson was made in consultation with our Nuclear Weapons Council, which, as you know, is a joint operation, and the Welch Report, although it doesn't make a recommendation, the Welch Report was used when the Nuclear Weapons Council met to consider this situation, and we support the choice made by Secretary Richardson.
Let me quickly outline the reasons for that. The option of using the Watts Bar and Sequoyah reactors for the production of tritium has the lowest risk, which, from a national security point of view, is important. It also has the least cost, the lowest technical risk, also the lowest risk in terms of actually getting this job done. The TVA, as you know, does have a national security charter and that was important in our view.
The completion of the Bellefonte facility has some attractive features, but the real problem is that there is an element of risk associated with it that has to do with the cost of the facility, the cost estimates. We haven't built a nuclear reactor in 20 years in this country, and that is a problem, and so we put that on a lower level of priority.
The Fast Flux Test Facility that is at Hanford cannot really meet the START I requirement. The maximum production rate there would probably meet the START II requirement but not the START I requirement. And, of course, the accelerator has the problem that it is the most expensive of the options, and we felt that we would support Secretary Richardson on the cost issue on this matter.
There is a concern about the use of civilian reactors for the production of tritium. That has to do with the policies we have regarding the proliferation of nuclear weapons and nuclear materials. As you know, there is a law which forbids the use of civilian reactors to produce nuclear materials, special nuclear materials is the term-of-art, for weapons purposes. What is meant by this is plutonium and highly enriched uranium, it means the reprocessing of the fuel elements from these reactors. Tritium is not mentioned in that law, tritium is not a nuclear material. From a technical point of view, you cannot build a nuclear weapon with tritium alone, what you can do is to improve the performance of existing ones, of ones that you have already made.
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My reason for believing that using the TVA reactors to produce tritium is not a problem with respect to proliferation is because anybody in the world who would use a reactor to produce tritium would already have the other nuclear materials to make a bomb, and all he would do with the tritium is to make it a little bit better than it would have been otherwise. And, so, I really don't think there is a proliferation risk here at all in the sense that the production of plutonium and uranium by civil reactors would be a proliferation risk. We have stopped doing that to discourage other people from doing it, and, to some extent, that has been successful. Tritium does not fall in the same category from a technical viewpoint.
Mr. Chairman, I believe that this ends my formal statement, and I would be happy to answer any questions that you and the other members might have.
[The prepared statement of Dr. Mark can be found in the appendix on page ?.]
Mr. THORNBERRY. Thank you, sir.
STATEMENT OF DANIEL B. PONEMAN, ESQ., HOGAN & HARTSON, L.L.P.
Mr. PONEMAN. Good afternoon, Mr. Chairman, members of the committee. I want to thank the Chairman and the subcommittee for their invitation to appear before you today to discuss this issue. For the record, and as I indicated when initially approached by committee staff, I am an advisor to two of the members of one of the options being pursued, Burns & Rowe Enterprises and General Atomics. I have, however, spent many years on the issue of non-proliferation in academic and government circles, and the views that I will express reflect that experience.
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I will follow the admirable example of Dr. Mark and merely summarize my comments so that we may get more quickly to questions and ask that my statement be submitted for the record with your permission.
Mr. THORNBERRY. All statements will be included in the record. You can proceed.
Mr. PONEMAN. Okay. Mr. Chairman, my views of this issue are informed by two overriding objectives. First, I believe that it is absolutely critical that we meet our national security requirements. And, second, I believe it is equally critical that we minimize the risk of nuclear weapons proliferation. Indeed, this is a set of objectives that have joined Administrations dating back to Harry Truman, that have joined both parties, and I think they are admirable objectives and we should continue to embrace them.
In reviewing the options being pursued for the production of tritium, I am therefore guided by those two objectives and, in my view, the accelerator based approach is preferable and better protects both of those critical national security objectives.
Let me take a moment to explain why. On the national security side, I do share some of the concerns that have been expressed by others, that the regulatory risk that could be encountered in the licensing process under the Nuclear Regulatory Commission that would be pursued for commercial lightwater reactor based production of tritium, I am concerned that that could present a mission risk to the ability of the United States to have the tritium it needs, when it needs it. That is a view that, in a way, is independent of all others, and reflects the fact that, with all the best will of the world involved, organizations and entities, including the Nuclear Regulatory Commission, there are questions of possible litigation, there are questions of possible intervenors that make highly unpredictable the outcome and, more specifically, the timing of that process.
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On the non-proliferation side, I do believe that the United States has gained substantial benefit over decades and, indeed, has invested enormous diplomatic capital, as well as enormous financial resources in building and maintaining a separate nuclear weapons production complex that is divorced from and kept on the other side of a wall from our civilian activities.
This is something that goes back decades, and it is reflected in the Energy Reorganization Act of 1974. It is reflected in the decisions that have, in many instances, gone beyond the mere letter of international agreements and statute where the United States has taken policy decisions, for example, not to extract plutonium from spent fuel generated in civilian power reactors, decisions made both by President Bush and President Clinton not to produce additional quantities of highly enriched uranium and plutonium for use in nuclear weapons, and I believe it is a principle worth preserving.
I would note that it is true that a number of arguments have been adduced to suggest that the risks presented in altering this approach are manageable, as has been said. I would simply make a brief comment that I have concerns about the specifics of those arguments, and I will simply summarize them very briefly.
First, it is suggested that the use of commercial light water reactors to produce tritium is not illegal. I would suggest that that is perhaps not the only or the optimal test for whether or not we should pursue this option. For me the question is not is it legal but is it wise.
Page 81 PREV PAGE TOP OF DOC My concern, as was suggested by an earlier question by Mr. Graham, is that if we begin to go down the road of harvesting materials that can be used in a nuclear explosive device from commercial nuclear facilities, that it will complicate our efforts to persuade other governments not to follow the same course. And while I certainly acknowledge the point Dr. Mark has made and am far too modest to challenge him on anything technical that tritium is not in and of itself a sufficient component for a nuclear explosive device, to me as a matter of national security I would not be indifferent to whether a country of proliferation concern merely had a basic fission device or a boosted fission device or a thermonuclear device, and to the degree that tritium could enhance that capability and was a critical component to a nuclear explosive device in a country like Iran, Iraq, or wherever you might cite, I would find that a matter of national security concern.
Second, it has been suggested that there are a number of exceptions to the general precedent that there be a separation between civilian and military nuclear activities. The examples that I have seen to that effect have all been in the direction of using nuclear weapons facilities for potential civilian spinoff benefits. In other words, these have all been examples of taking swords and changing them into plowshares. I am concerned about reversing that role and moving to a situation of taking plowshares and shifting them into swords, and I find that a source of concern.
Finally, the point that TVA is a Government-owned facility that has a national security charter I do find a source of concern from a proliferation perspective in that I do believe we would derive little comfort from knowing that a country of proliferation concern was harvesting nuclear explosive materials or materials for a nuclear weapon out of a reactor so long as it was owned by the government with a national security charter.
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So for that cluster of reasons, Mr. Chairman, I believe that this is a question that requires further review. While I certainly acknowledge that cost is a relevant consideration, we have deemed fit over a number of years to invest substantially in national security not purely on the basis of cost, and I would hope that those costs be very carefully analyzed before the committee and the Congress make a final decision.
[The prepared statement of Mr. Poneman can be found in the appendix on page ?.]
Mr. THORNBERRY. Thank you.
STATEMENT OF DR. RICHARD ROWBERG, CONGRESSIONAL RESEARCH SERVICE
Dr. ROWBERG. Thank you, Mr. Chairman.
Thank you for the opportunity to testify today about the DOE selection. Accompanying me are Carl Behrens, Zack Davis, and Mark Holt of CRS who have helped me prepare this testimony. I too will summarize my remarks.
Page 83 PREV PAGE TOP OF DOC During the last 3 years DOE's process defining a long-term source for tritium production was a dual-track strategy concentrating on two options, the commercial light water reactor, or CLWR option, and the accelerator production of tritium, or APT. A number of issues emerged during that stage that have not yet been completely resolved in their considerations helpful in evaluating the DOE selection. I am going to review just a few of those issues.
The first concerns the technological readiness of the two options. A technology for producing tritium in a CLWR appears relatively straightforwardtarget assemblies containing lithium are inserted in the reactor core and excess neutrons from the chain reaction transform the lithium to tritium. One consequence for reactor operations is likely to be the production of more spent fuel than would happen without the lithium targets. Also, to retain an 18-month refueling cycle, which is currently the case for Watts Bar, a second reactor would be required if START I tritium production levels are to be met.
In the APT option, helium-3 targets are bombarded with neutrons produced by energetic protons from the accelerator. The helium-3 is transformed into tritium. Accelerator production of tritium has not yet been demonstrated on a scale that would be required for either START I or START II levels. All the technologies that would be used in such an accelerator are known, however, and some of the key ones have been operating in other large DOE facilities.
Both options offer some technological risk, but that does not appear to be substantial. There is probably a little more uncertainty with the APT option because of the large scaleup of existing technology required for a production facility.
Page 84 PREV PAGE TOP OF DOC The second issue concerns the cost of the two options. As Secretary Richardson noted, DOE and TVA are nearing an agreement on the cost of using the Watts Bar and Sequoyah reactors as a long-term source of tritium. The cost differences between the two options that he announced appear substantial. Other estimates, including those from the Congressional Budget Office, have also concluded a large difference between the two options, even when using APT cost estimates developed by its supporters. Therefore, the CLWR option appears to have a cost advantage over the APT option.
There are some uncertainties, however, that may affect this observation. One is the remaining life of the Watts Bar and Sequoyah reactors. According to TVA, they are scheduled to end their service well short of the 40 years sought by DOE because of expiration of their operating license. Life extension including license renewal, however, might be possible. Nevertheless, it is possible that DOE might be facing additional costs for this option. For the APT option, offsetting revenues might be possible for medical isotope production. That market, however, is uncertain and heavily dependent on favorable biomedical research outcomes.
The last issue I will discuss concerns the possible nuclear proliferation consequences of the two options. Concern has been expressed that the production of tritium for defense purposes in a commercial reactor would violate longstanding policy directing the separation of commercial nuclear power production and weapons production. While such separation has been traditional in this country, that policy has developed over time and the separation has not always been complete. Furthermore, as has been pointed out by DOE review of nonproliferation issues on this panel, the Atomic Energy Act does not prohibit such production because tritium is not a special nuclear material. Nuclear weapons cannot be made from tritium alone.
Page 85 PREV PAGE TOP OF DOC The DOE review also concluded that a number of mitigating factors exist to reduce any proliferation danger, including TVA being a Government corporation and the absence of any highly enriched uranium-235 in the TVA reactors. Nevertheless, concern remains, principally use of the CLWR for tritium production might set a bad precedent. Other nations might believe that the United States was not serious about nuclear nonproliferation and begin to use their own commercial facilities for weapons purposes. Furthermore, objections to just such actions have marked recent U.S. interactions with China and Russia. Opponents of the DOE choice argue that such objections in the future will lose force if the United States does not follow the same separation policy.
The DOE review also concluded that the APT facility would not pose any proliferation risk. No special nuclear materials would be produced or used by the accelerator. Because the accelerator would have technology capable of producing such materials, however, export controls would probably be in effect. In addition, the APT would be a dedicated defense facility under the control of DOE and should not present any concerns about combining civilian and weapons implications. If the accelerator were also used for civilian purposes, however, such as medical isotope production, that concern could surface.
Thank you. This concludes my testimony. I would be happy to address any questions.
[The prepared statement of Dr. Rowberg can be found in the appendix on page ?.]
Mr. THORNBERRY. Thank you, sir.
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Mr. SISISKY. No questions.
Mr. THORNBERRY. Mr. Graham.
Mr. GRAHAM. Thank you, sir.
About the cost issue, can we kind of focus on that for a second?
Dr. ROWBERG. I'm sorry?
Mr. GRAHAM. The cost issue.
Dr. ROWBERG. Oh. There have been a lot of estimates of the costs. I am not sure what the estimate that Secretary Richardson announced includes. He was comparing a cost figure of $556 million to the capital costs of the APT and the Bellefonte option. So I do not know whether or not that $556 million includes operating costs or just what it includes.
But in terms of the other estimates, they have ranged anywhere from about $1.8 billion made by the Congressional Budget Office for irradiation services to the original proposal or the November 1998 proposal of TVA that would have ran out to close to $4 billion over 40 years, assuming that the reactors would have operated that long.
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The estimates of the APT option run anywhere from $7.5 to almost $10 billion for the START I capable facility, and that includes both construction and operating cost. The START II capable facility, which would be a smaller accelerator, those estimates would be on the order of $6 to $6.5 billion. And that does not include any potential offsetting revenues. Offsetting revenues from the sale of medical isotopes were estimated by CBO to be about $15 million a year, which would have amounted to about $600 million over the 40 years, whereas Los Alamos estimated offsetting revenues of about $150 million a year, which would have essentially offset all operating costs.
Mr. GRAHAM. Thank you. Are you familiar with a study that DOE initiated I think it was a year or two ago, maybe as long as a couple years ago, when they were looking at the cost of the multipurpose reactor, the accelerator, and a commercial light water reactor?
Dr. ROWBERG. Yes, I am, although my memory of the cost estimates in that has faded because it was about 3 or 4 years ago. So I can't tell you what the triple-play reactor costs are at this point.
Mr. GRAHAM. Well, the concern I have, and I would like to introduce that into the record, if I may, Mr. Chairman.
Mr. THORNBERRY. Without objection.
Mr. GRAHAM. Is that these costs seem to change as the political dynamic changes. Have you noticed a trend there?
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Dr. ROWBERG. Well, there has certainly been a substantial trend in cost over the years. The one thing that has always been is that because of the large electricity cost of the accelerator there has still been a substantial difference in operating costs, and that has been the one thing that the accelerator people have had to overcome and what their attempts with offsetting revenues has been. The capital cost trends have varied, yes.
Mr. GRAHAM. Well, let me give you an example of that. I am a big believer that we ought to build a reactor at Savannah River, but if we do not build it there, let us build it somewhere else, and let it be on a military-type reservation, DOE reservation, clearly built for the purpose of producing tritium, and have it Government-owned and have a byproduct of maybe commercial power to offset some of the cost. That was the whole idea of the multipurpose reactor.
Then I ran into the proliferation arguments there, and I ran into the idea that that was very expensive and the accelerator was the way to go because you had no proliferation concerns, you had no nuclear waste problem concerns, and it was a lot cheaper.
Now it seems to be the argument moves that the commercial light water reactor which was also an option back then also had these proliferation concerns. Do you know why all those changes?
Dr. ROWBERG. In terms of cost?
Mr. GRAHAM. Why did the policy and cost initiative change?
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Dr. ROWBERG. Well, I am not quite sure of this, I am trying to speculate on this, but my guess is that the changes over time have been as people have learned more about the options. The cost figures have firmed up and in addition there have been some new features come in in terms of the irradiation services, the option that currently was selected, and I don't think anybody reallyI didn't see anything at least that really talked about the application of, say, the Economy Act in selecting those services.
Mr. GRAHAM. Would you agree with this statement, that the cost component of all these designs can be easily manipulated if one desires to do so.
Dr. ROWBERG. Well, you can do some manipulation because you haven't built an accelerator and nobody knows exactly how much the cost of the Bellefonte option will be. The cost of the irradiation services is probably the firmest but there are still some uncertainties there.
Mr. GRAHAM. Would you agree with me that one of the best ways to determine the cost of a product is see what the private sector would
Dr. ROWBERG. In terms of a reactor I would say so.
I don't think the private sector
Mr. GRAHAM. Do you know what Southern Company estimated the cost of completion of the Bellefonte reactor is?
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Dr. ROWBERG. Yes, it was somewhere in the range of $2.5 to $4.5 billion.
Mr. GRAHAM. Sizeable difference between the TVA suggestion?
Dr. ROWBERG. Yes. It was different than the TVA estimate.
It was close to the TVA original estimate of about $2 billion.
Mr. GRAHAM. The point of this exercise is that one has to be wary about numbers here.
Now let us get over into the proliferation aspect of it.
If North Korea started producing tritium in a reactor that was built primarily or exclusively for the production of commercial power, Dr.I don't want to mispronounce your name.
Mr. PONEMAN. Poneman.
Mr. GRAHAM. Would that concern you even though tritium is a non-fissile material?
Mr. PONEMAN. I would certainly oppose any production of tritium out of lightwater reactors built in North Korea, yes, sir.
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Mr. GRAHAM. What about you, Dr. Mark?
Dr. MARK. I would oppose it but the question is whether I could do anything about it.
Look, the issue is this. Mr. Poneman said that the production of tritium by someone else is clearly a national security concern. He is right. It is.
The question is whether it is a proliferation concern. If someone uses a reactor to produce tritium for nuclear weapons purposes, that means that individual has already produced plutonium or uranium with a reactor and therefore has already proliferated. In other words, in such an event the proliferation policies that you are supporting have failed, and so the question of whether this individual now goes ahead and produces tritium is not terribly important.
He'll make better weapons, which is bad. It is a national security concern, but not a proliferation concern.
Mr. GRAHAM. Is there a difference between a .410 shotgun and the 12 gauge shotgun?
Dr. MARK. From the point of view of a rabbit or
Page 92 PREV PAGE TOP OF DOC Dr. MARK.or from
Mr. GRAHAM. If you are on the receiving end of it, there is a big difference, right?
Dr. MARK. You can kill a rabbit with both.
Mr. GRAHAM. Right, yes, but if I had to be shot at I guess I would rather pick the .410. I would prefer not to be shot at, but the point I am trying to make, that the upgrading of nuclear weapons capacity ought to be a tremendous concern to this country and the policies we engage in ,in the area of uranium and plutonium should not be drastically different than the policies we engage in tritium. And that is about what we are about to do, because we are about to make a major deviation from the policy of the last 50 years in the area of tritium while we have not made such a deviation in the policy approach to proliferation for plutonium and uranium, and that concerns me greatly.
Dr. MARK. Well, Mr. Graham, as I have said, it concerns me as a matter of national security because the difference between a thermonuclear and a fission bomb is important for national security purposes. However, the question is not national security. The question is proliferation and the issue there is that if someone has already got the uranium or the plutonium to make a bomb, the proliferation has already occurred.
Mr. GRAHAM. The proliferation has not occurred to the extent that tritium can yield a much more deadly weapon against the United States, and that is the point I am trying to make. To me that is a concern. Doctor
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Mr. PONEMAN. First of all, I suppose for the record I should note that I am only a doctor if you consider a lawyer a doctor.
Mr. GRAHAM. Okay. Well, I am a lawyer and I don't consider one a doctor.
Mr. PONEMAN. But I would make the following comment. I think of nonproliferation as national security and national security as nonproliferation. I only care about nonproliferation not as some ephemeral or esoteric subject but as it directly relates to our national security.
I do not believe that the United States as a matter of policy has been indifferent to the issue of the enhancement of nuclear weapons capabilities in a country once it crosses the initial threshold. If we were, we would have packed up our bags and stopped worrying about India and Pakistan last May, and the fact of the matter is I believe that the national security implications extend up the escalation of the nuclear ladder and I would prefer not to see anybody get any further up that road than they had to.
Mr. GRAHAM. Thank you, Mr. Chairman. I yield back the time I don't have.
Mr. THORNBERRY. Let me ask just a couple of questions.
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Mr. Poneman, I look at this proliferation issue I guess a little bit differently. To me, the issue is whether weon this proliferation is leading by example. In other words, if we begin to break down some barrier between commercial and military facilities then others might do the same.
Is that your understanding of what it kind of boils down to?
Mr. PONEMAN. Yes, sir. In fact, I think my statement reflects that. I may have been too brief.
Mr. THORNBERRY. It is not immediately obvious to me when we are talking about a nation with nuclear weapons and a nation without nuclear weaponswe already are on such a different level that it makes that much difference. In other words, if North Korea wants to get nuclear weapons, they are going to get them regardless and our leading bythe moral example of our leading by example is not going to count much, it seems to me. They are going to do whatever they can do and anything else seems to me to be just messing at the fringes.
Mr. PONEMAN. Well, I would make a couple of remarks, sir.
In the area of nonproliferation or a country's efforts to obtain nuclear weapons, there are a variety of paths that a country can take. A country may, as the United States did and the declared nuclear powers by and large did, have a dedicated military program and if a government is bent on that approach, as you suggest, no amount of example setting will sway them. that is absolutely correct.
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That said, the whole warp and woof of U.S. nonproliferation policy going back to President Eisenhower's Atoms for Peace proposal has been to try to secure and establish an international consensus in favor of the peaceful uses of atomic energy in exchange for commitments not to divert those peaceful applications to military purposes, and in that respect I do believe, sir, that examples count and I would note for example, to make this concrete, under the Atoms for Peace proposal, the United States had provided assistance to India and some of that assistance included heavy water and heavy water ended up in the Cirrus reactor, which produced plutonium, which they used to detonate a nuclear device in 1974.
To my way of thinking, that is not something we should be indifferent to. We should try to avert those kinds of diversions.
Mr. THORNBERRY. I guess my thought is that it is not the example that was the problem.
It was the substantive action of supplying them with heavy water that caused the difficulty, but Dr. Mark, let me ask you. My only interest really in this is that the United States has what it has when it needs to have it. I mean personally that is what I care about, and there seems to me to be a tremendous amount of uncertainty because of START I primarily on what we will need and when we will need it.
To what extent does that uncertainty and the need to be able to have tritium when we need it, whether that is 2005 or 2011, play into the Defense Department's view of this decision?
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Dr. MARK. Mr. Chairman, I would argue that the uncertainty that exists has to do with the costs that Mr. Graham was talking about. The dates when we need it are pretty clearly set by the physics of the decay of tritium and the quantities we need are set by that.
If you have a stockpile that is determined by the numbers in the START I treaty then the 3 kilogram per year production that the lightwater reactor option and the Bellefonte option and the accelerator option would give you all meet that requirement, and the time is 2005 because of the decay constant of tritium.
If you go down to the START II levels, which are smaller than the START I levels, then you don't need the tritium as soon because we still have a reserve, and so at that point you only need one and a half kilograms a year and you don't need it as soon, so you need it at 2011, so from the point of view of those numbers there is no confusion I think.
Mr. THORNBERRY. Let me ask you this, for an opinion on this. My understanding, as I recall in a previous defense authorization bill, is that we forced the Secretary to make a decision by the end of last year, 1998. Did we force a decision too early, Dr. Mark?
Dr. MARK. I don't think so.
Mr. THORNBERRY. It was time to makethe decision was ripe for making at the end of 1998?
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Dr. MARK. Yes, sir. Absolutely.
Mr. THORNBERRY. And we did not interfere?
Dr. MARK. I think the decision was correct and I think it was made in a timely manner at the right time.
Mr. THORNBERRY. Okay. Does anybody have a different opinion on that, that we forced the decision too early?
Mr. PONEMAN. Congressman, I don't care to comment because I don't have a sense of the dynamic from inside the Congress.
Mr. THORNBERRY. Okay. Any additional questions?
Mr. GRAHAM. To follow-up, yes. I don't believe we did either. I think that was a good question.
Dr. ROWBERG. Yes?
Page 98 PREV PAGE TOP OF DOC Mr. GRAHAM. Are there any projections of the legal cost of implementing the commercial lightwater reactor option?
Dr. ROWBERG. I haven't seen any but I suspect there will be.
Mr. GRAHAM. Okay. Assurance of supplyis there any concern by any of the panel members that the Nuclear Regulatory Commission or other agency that may have oversight power over this commercial reactor, that their actions could interrupt the assurance of the tritium supply?
Dr. MARK. Mr. Graham, I can give you a piece of personal experience that has to do with licensing nuclear reactors. I went through the process of, you know, applying for a reactor license and getting a reactor facility license at the University of California, and I know some of the questions you are asked. I know the processes. I know how this thing works.
Given what I know about this, I would say that the licensing of an existing reactor that already has an operating license to have a small change made, which means that you put the Lithium 6 containing rods into the reactor core and then extract them periodically, which is really all you are doing to the reactor, I believe that licensing process is very, very easy.
I don't think that is nearly as difficult as the process for example that I had to go through to get the reactor license, so again let me repeat what I said earlier. We are not licensing a new reactor. We are licensing a small change in an existing process.
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Mr. GRAHAM. Let me ask you this follow-on question. One thing we would be doing differently, the five reactors that were at Savannah River that produced tritium in the past for this country, the NRC would have the ability if they saw fit, as I understand it, to close this reactor down for safety concerns or otherwise. Is that true?
Dr. MARK. The NRC has the authority to close any reactor down for safety concerns.
Mr. GRAHAM. Including the ones that were at the Savannah River during the height of the Cold War?
Dr. MARK. Any reactor.
Mr. GRAHAM. Okay. So, there is no difference here?
Dr. MARK. No, wait a minute. Excuse me. The Savannah River reactors, I believe, were government facilities. Is that correct?
Mr. GRAHAM. Yes.
Dr. MARK. So, they were not licensed by the Nuclear Regulatory Commission.
Mr. GRAHAM. That's the point. So, the assurance of supply in this scenario is definitely a different dynamic than it has been in the past.
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Dr. MARK. It is a different dynamic, but the risk based on my own experience in licensing a nuclear reactor from the startwe built it, we got the construction license, we got the operating licensemy own experience tells me that this is a very small risk.
Mr. GRAHAM. I can bring thousands of people in here who have had different experiences about that, okay?
Mr. PONEMAN. Again, I would not purport to compete for experience, but I think some of this, Congressman, depends on the definition of scope.
If it is defined as a very small and narrow technical amendment, it might make it easier to license but my experience as a observer of these issues is that, if the scope is defined more broadly and if the issue is presented as one of a substantial shift in U.S. policy, that it might be difficult to control and that could produce substantial delays.
Mr. GRAHAM. Thank you, Mr. Chairman.
Mr. THORNBERRY. Thank you.
If there are no other questions, I'd like to thank the witnesses, and let me just mention that our chairman of the subcommittee, Mr. Hunter, and the full committee chairman, Mr. Spence, are currently meeting with the speaker about the total amount of funding for national security.
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It is certainly not for lack of interest in these important issues, and I know they would like to be here except for that conflict, but let me thank the witnesses for their testimony, and the subcommittee stands adjourned.
[Whereupon, at 3:50 p.m., the subcommittee adjourned.]
A P P E N D I X
March 4, 1999
March 4, 1999
[The prepared statements submitted for the record can be found in the hard copy.]
Page 102 PREV PAGE TOP OF DOCDOCUMENTS SUBMITTED FOR THE RECORD
March 4, 1999
[The documents submitted for the record can be found in the hard copy.]
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
March 4, 1999
QUESTIONS SUBMITTED BY MR. HUNTER
Stockpile Stewardship and Management Issues
Mr. HUNTER. What is the rationale for increasing Stockpile Stewardship by over six percent while reducing Stockpile Management by about four percent? Is one activity clearly more important than the other?
Secretary RICHARDSON. We continue to have a closely integrated program that balances near and longer term needs of the stockpile. The increases in the Stockpile Stewardship program are primarily driven by the planned growth in the Accelerated Strategic Computing Initiative program itself, and increases to support its integration into the ongoing science and engineering programs. This integration will allow these programs to more effectively support the long-term needs of the stockpile, both at the labs and at the plants, particularly through support to the Stockpile Life Extension Program, the Enhanced Surveillance Program, and the Advanced Manufacturing Design and Production Technologies initiatives. The reduction in the Stockpile Management program reflects deferrals of dismantlement workload; completion of one time costs associated with the restart of enriched uranium operations at Y12; and completion of congressionally directed infrastructure improvements at the plants.
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The budget must balance many legitimate, but competing requirements, within a finite resource envelope. I believe that the budget request submitted to Congress reflects the appropriate balancing of priorities. Ongoing maintenance and evaluation of the current stockpile ensures the near-term viability of the stockpile, while investments in science today will provide the technologies and tools necessary to conduct maintenance and evaluation of the enduring, long-term stockpile.
Laboratory Directed Research and Development
Mr. HUNTER. The committee has expressed concern in the past with the apparent lack of relevance in some DOE Laboratory Directed Research and Development (LDRD) projects, including some on automotive technology, global warming, quasars, radiation therapy, genetic expression and super novas. One proposal to encourage relevance is to eliminate the LDRD six percent tax and to fund basic research in a separate budget line. Is this proposal sound?
Secretary RICHARDSON. The Department examined many approaches to ensure the nurturing and development of the highest quality science and technology skills needed to support the weapons complex. Based on the results of these reviews, the Department believes that the LDRD program, as constituted today, represents a ''best practice'' to: (1) foster creativity and stimulate exploration of forefront science and technology; (2) support high-risk, potentially high-value R&D; (3) serve as a proving ground for new research; (4) enhance the laboratories' ability to address future missions; and, (5) maintain scientific and technical vitality of the laboratories. Funding the program as a budget line item will not achieve more ''mission relevance'' than presently exists under the current LDRD funding process.
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The current funding mechanism yielded $198 million for LDRD in FY 1998. Of this amount, $139 million (71 percent of the total) was provided by national security programs and non-national security programs provided the remaining 29 percent. Nonetheless, the FY 1998 Annual Report to Congress shows that $192 million of the total LDRD funds (97 percent) was spent on projects that support the national security mission of the DOE. Similar results were reported in the FY 1996 and FY 1997.
START I/II Funding Levels
Mr. HUNTER. How much funding is in the DOE budget to support activities specifically tied to a START I force level? If START II is ratified by Russia, does the Department have a plan to reallocate those funds needed to support DOE activities that assume a START I force level?
Secretary RICHARDSON. The FY 2000 request includes $170 million for the development of a primary tritium production source by about FY 2005, which is about the date tritium is needed to support START I. The FY 2000 request also includes $20.3 million within the Core Stockpile Management to continue efforts initiated in FY 1999 that expand production capacity of limited life components at Los Alamos National Laboratory, Sandia National Laboratories, and Kansas City to support START I. This includes $11.7 million in line item construction funding and $8.6 million in operating funding.
If START II is ratified by Russia and the President directs the United States nuclear weapon stockpile to START II levels, there will be no appreciable cost savings because we are committed to support the Department of Defense ''Hedge'' Strategy of being able to return to START I warhead levels.
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Mr. HUNTER. What efforts is DOE making to improve the level of technical expertise in its management?
Secretary RICHARDSON. In the Spring of 1998, the Secretary formed the Federal Technical capability Panel, a group of senior federal line managers representing Headquarters and all field sites with oversight responsibility for nuclear facilities, reporting directly to the deputy Secretary. The Panel oversees Departmental commitments made to the Defense Nuclear Facilities Safety Board concerning technical expertise of the federal workforce at defense nuclear facilities. The Panel has sponsored a major revision of the Technical Qualification Program that defines qualification requirements for over 1500 federal technical personnel, including team leaders and mid-level managers. Qualification Standards have been developed that establish competency requirements in 24 technical area. Over 250 positions have been identified as Senior Technical Safety Manager (STSM) positions. The Panel has reviewed the qualifications of incumbents in those positions and monitors changes to the STSM positions. The Panel and the Federal Technical Capability Program were formalized in a policy statement, DOE Policy 420.1, Federal Technical Capability Policy for Defense Nuclear Facilities, signed by the Secretary in December 1998.
The Under Secretary recently established a panel, similar in nature to the Federal Technical Capability Panel, to address concerns of the Research and Development (R&D) community regarding technical the expertise of R&D Program Managers and actions needed to counteract the effects of hiring restrictions and downsizing in the last several years on R&D program management technical capabilities.
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Mr. HUNTER. What reforms is the Department implementing to solve the problems identified by IDA and the GAO?
Secretary RICHARDSON I directed a broad Department-wide management review that considered findings and recommendations from IDA's 120 day study report and other reports recently summarized by GAO. On April 21, 1999, the Secretary issued a memorandum to all Departmental elements describing the results of the management review and announcing changes to the Departmental management structure. The memorandum: defined line management accountability for programs and operations; adopted a Lead Program Secretarial Officer concept for field reporting that has each operations or field office reporting to a Headquarters program office, which is responsible for its effective integration and institutional health; clarified line and staff functions in Headquarters; and established a Field Management Council to ensure overall corporate integration of the Department's activities and to resolve cross-cutting issues that may arise. He assigned responsibility for implementation of the changes to the Deputy Secretary as Chief Operating Officer.
Defense Programs (DP), which was the primary focus of the 120-day study, has adopted several changes in its management structure and processes that deal with this and other problems highlighted by the IDA report. DP is on track to fully implement integrated Safety Management at all of its sites by next year, which was IDA's principal recommendation, as well as a Department-wide goal. This will help ensure clear line management accountability for safety of operations. DP has also clarified its line and staff roles in Headquarters, and the roles of its supporting operations offices and area/site offices. Technical personnel in staff positions are to be involved in field operations only at the request of line managers in Headquarters and the field.
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Consistent with the IDA management principle that functions should be moved to as close to where the work is performed as practicable, DP has shifted primary responsibility for management and execution of environment, safety and health and other aspects of facility operations to the area/site offices, with limited by Headquarters and the operations offices.
To eliminate the perception that there are two Headquarters organizations for Stockpile Management as noted by IDA, the Deputy Assistant Secretary for Stockpile Management and Military Applications established the Stockpile Management Integration Council that develops unified direction to all implementors and includes all line managers in Headquarters and the field.
Finally, IDA was concerned about the level of technical expertise and limited pipeline of talent supporting the DP federal staff. DP has recently identified critical technical positions for new hires, is restarting its technical intern program, and has established the Defense Programs Analysis Group (DPAG) to provide line managers with expert analysis and information for complex-wide execution of the Stockpile Stewardship Plan. The DPAG, which consists of senior experts from DP's laboratory and plant contractors, and Department of Defense experts, is helping to fill the gap in experience and technical expertise that formed in the federal staff after the Cold War ended and the most experienced people began retiring.
Mr. HUNTER. Is DOE's underlying method of doing businesshiring an M&O contractor to run a government-owned facilitystill sound?
Page 108 PREV PAGE TOP OF DOC Secretary RICHARDSON. Yes, for certain types of operations and missions. However, as DOE missions have evolved, particularly in the environmental cleanup area, we have shifted to other contractual methods that offer advantages in these new and evolving area. Since its inception, the Department of Energy, as well as its predecessor agencies, have relied on the private sector's management and technical expertise for the operation of the Department's weapons facilities and we believe the approach is still sound. The objective of the management and operating (M&O) contract concept is to bring management expertise and commercial operational practices to bear in the operation of our scientific, engineering, and production facilities. This approach enables the Department to attract the highly specialized scientific and engineering talent from both academia and the private sector that was not otherwise available to the Government.
While we continue to use M&O contracting, we have significantly revised our approach to M&O contracts since 1994 with emphasis on performance-based management and other techniques to drive improved performance and cost efficiencies. We also continually review our M&O contracts to determine if this mechanism is still the appropriate approach for meeting our mission. As a result, several sites have been converted to non-M&O forms of performance-based management contracts, such as Environmental Management's closure sites.
Mr. HUNTER. What is the status of DOE's efforts to clarify roles and responsibilities among itself, its M&O contractors, and the architecture/engineering (AE) firms that perform the design and construction work?
Page 109 PREV PAGE TOP OF DOC Secretary RICHARDSON. As part of the Department's Project Management Improvement Initiative, DOE program offices are working to clarify project roles and responsibilities. In general, DOE offices have streamlined project management by identifying a single individual at each of the three management levels - HQ program, federal oversight in the Field, and contractor Project Manager, to be responsible and accountable for project management activities. Within these new roles, the contractor is responsible for line management with HQ and Field Offices providing programmatic requirements, funding, and oversight.
In addition, DOE is taking actions to strengthen the project evaluation process, improve project baselines, better incentivize contractor and federal project management staff, and develop a Project Management Manual that clarifies minimum project management requirements. We recognize that clarifying roles and responsibilities within DOE, and strengthening project management throughout the Department are essential elements of improving project management. We will continue to work to ensure all federal and contractor project management staff understand their roles and responsibilities associated with accomplishing these objectives.
Mr. HUNTER. How will DOE attempt to make its oversight of construction projects more efficient, business-like, and effective?
Secretary RICHARDSON. The DOE strategy for improving oversight of construction projects includes several elements, such as clear lines of authority and roles and responsibilities, a means for objective assessment of project status, and a commitment to corrective actions where needed and tracking those actions to completion. Lines of authority have been clarified for DOE HQ program offices, DOE field offices, and contractors, which will streamline the process of construction project management and make contractor oversight more effective. DOE has taken actions to strengthen its project evaluation process, which will provide a means to objectively evaluate progress and readiness at key points in project evolution and to identify and track all necessary corrective actions. In addition, the Department is conducting independent external reviews of its projects consistent with Congressional direction and believes this is a key tool to ensure mission and cost issues are properly addressed before committing resources to a project.
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In addition, DOE is working to make its construction and other projects more cost effective by establishing the proper performance metrics in the contracts and ensuring that contractors are incentivized to achieve cost and schedule goals for the project. This includes competing construction contracts in appropriate situations to reduce costs. For example, at the Savannah River Site, competition for construction contracts has reduced AE costs by about 30 percent.
Mr. HUNTER. How does the Department intend to incentivize its contractors to perform better? What steps will the Department take to penalize contractors who perform poorly? What steps will be taken to control scope and requirements creep?
Secretary RICHARDSON. As part of the Departmental initiative to improve project management, DOE is participating in an effort to identify a better means of incentivizing contractors, as well as federal project management staff. To that end, DOE will propose that a percentage of fee on fee-type contracts be set aside to incentivize project management commensurate with the scope, cost, and risk involved in projects. The Headquarters Office will work with the operations offices that manage these contracts to establish performance metrics and initiatives, and to ensure effective evaluation of results. The initiative to improve incentivization includes both positive and negative incentives. Steps are being taken within DOE to control scope and requirements creep by strengthening baseline requirements, improving project evaluation to ensure that the baselines are appropriate and accurate, and ensuring baseline change control is in place.
In addition, as part of the Department's contract reform effort, the DOE has been moving to more performance-based contracting as a means of driving contractors to achieve the desired results within set budgets and schedules. In essence, we are managing for resultsproviding incentives for good performance and penalties for failure to perform. The DOE program is beginning to see very good results from this contracting approach. For example, at Rocky Flats, performance-based incentives in the contract have resulted in innovation that produced an overwhelming increase in decontamination of glove boxes from three a year in 1995 to three a week in 1999. In other efforts to achieve cost savings, contractors are encouraged to submit innovative changes to operational activities and take steps to use innovative technologies to reduce operational costs. Contractors are permitted to share in the cost savings realized. In other initiatives, the contractors are provided financial incentives to reduce current year costs and use these cost savings to accelerate future work scope. In some of these program, contractor employees share directly in the earnings and recognition for cost reductions, providing further incentive for the contractor to identify additional cost savings.
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Commission on Sustaining United States Nuclear Weapons Expertise
Mr. HUNTER. Are there serious deficiencies in technical personnel which must be addressed immediately? What steps are being taken to do so?
Secretary RICHARDSON. Today, sufficient personnel exist within the DOE nuclear weapons complex to perform the required stockpile stewardship tasks, and the Chiles' Commission reported on page 7 that ''The nuclear weapons program is not in crisis, but additional steps are needed now.'' As a first step to address this issue, the Department has requested from each site in the nuclear weapons complex, a midyear FY 1999 report of the number of critical skills and the number of personnel recruited to date during this fiscal year. After reviewing these reports, we will determine if additional steps are required.
Mr. HUNTER. How is the Department addressing morale problems at the plants as they downsize, cut costs, and restructure?
Secretary RICHARDSON. As the Department downsizes the nuclear weapons complex and reduces staff levels, morale at all our contractor facilities becomes an increasing concern. However, we continue to emphasize the national importance of our mission and stress that the nuclear weapons program is ongoing, where most of the workforce can plan a full and challenging career in stockpile stewardship. We support the Chiles Commission recommendation for an unequivocal, clear and periodically reinforced national commitment to the mission.
A key objective in the DOE's Stockpile Stewardship Program is the maintenance of a trained, qualified, and motivated workforce. A provision that the contractors will develop and deploy the infrastructure and technical workforce necessary to successfully accomplish the work in a safe, secure, environmentally sound and cost-effective manner is included within the Department's incentive-based contracts. Some of the incentive plans requires that the contractors ensure that all key technical competencies are maintained, while other contracts address the issue through skill mix performance measures. In addition, we are expediting the Stockpile Life extension Program to try to balance workloads in the near and out years so the plants will be able to better project their workloads and adjust staffing more uniformly without resorting to severe measures, such as workforce reductions.
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Mr. HUNTER. What personnel initiatives is DOE contemplating to assure that the department has access to young technical talent it will need in the future?
Secretary RICHARDSON. The DOE will encourage its contractors to reestablish their positive visibility at universities and technical institutes. By maintaining a presence on these campuses, we will improve our access to recent graduates. For example, Defense Programs and the national laboratories will provide funding to universities for scientific research that provides a foundation in areas critical to our mission. In those critical areas no longer taught at universities, the laboratories have developed special programs such as the Actinide Sciences Summer School associated with the Seaborg Institute. In addition, literally thousands of students are engaged at the laboratories each year within a variety of programs: summer jobs, workshops, research semesters, undergraduate and graduate work/research programs, graduate research associates, and graduate and postdoctoral fellowships. Many of the new hires at the laboratories come from among students who have participated in one or more of these programs. Exciting capabilities such as the National Ignition Facility and the fastest supercomputers in the world are special attractions to young, high caliber technical talent.
Mr. HUNTER. How active has the DOE/DOD Nuclear Weapons Council been over the past two years, and is the NWC an effective body for providing DOE with insight into DOD nuclear weapons requirements and interests?
Secretary RICHARDSON. As you know, the Nuclear Weapons Council was established by P.L. 99661 (as amended), in 1986, to be the coordination point between DOD and DOE for nuclear weapon matters. This interface has been very active over the past two years and is vital to our successful relationship with DOD and it continues to work well.
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I believe the Council effectively provides the DOE valuable insight into DOD weapons requirements and interests that impact the reliability, security, and safety of our Nation's nuclear deterrence. The Council's sub-venues, the Nuclear Weapons Council Standing and Safety Committee and the Nuclear Weapons Council Requirements Working Group, conduct monthly working level meetings, which provide an effective basis for interagency communications and resolution of critical nuclear stockpile issues. One product developed by these sub-venues and essential to the Department for planning weapons production activities is the Nuclear Weapons Stockpile Memorandum (NWSM), which the President has mandated be submitted to him annually. Among other important items, the NWSM captures the DOD's requirement for nuclear warhead quantities for the next six years. The sub-venues also review and comment on the Defense Programs Stockpile Stewardship Plan (Green Book) development, which describes our strategy to meet the nuclear weapons stockpile management requirements and ensure high confidence in the safety and reliability of the nuclear weapons stockpile, and which must be consistent with the programmatic and technical requirements of the most recent Nuclear Weapons Stockpile Memorandum.
Mr. HUNTER. Is laboratory cooperation and coordination effective? is the dual validation of nuclear weapons safety, reliability, and efffectiveness working well?
Secretary RICHARDSON. Dual revalidation has been a pioneering effort within the Stockpile Stewardship Program. The laboratories have provided a tremendous amount of effective, first class work to firmly establish the credibility of the reliability and safety of nuclear weapons and I believe the program is working well. Assembling twenty-five year old archived data into a fully integrated data package useful to another laboratory was far more complex and time consuming than envisioned. By adjusting the program, we plan to streamline the process while maintaining the quality of the assessment with the full involvement of all weapon laboratories.
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Mr. HUNTER. How would you assess the risk of the SBSSas low, medium, or high? Why? What are the key risk area?
Secretary RICHARDSON. The risk associated with the stockpile Stewardship Program (SSP), referred to as SBSS, is currently categorized as acceptable to both DOE and DOD. We have completed the third annual certification to the President that confirms the Stockpile is safe and reliable and does not require nuclear testing at this time. We have also published the third, Administrative approved, annual Stockpile Stewardship Plan. These confirm that the SSP is on an acceptable risk-based path.
Key risk areas within SSP are an aging cadre of nuclear weapons designers and the need or complex computer modeling activities to allow us to evaluate our weapons as they age. SSP must be able to attract the next generation of scientists, engineers, and technicians, and impart to them the knowledge and expertise of the current experienced staff. Closely associated with this effort is the need to develop and validate computer codes and models that will support this next generation of staff. Code validation will require a multitude of data from new nonuclear experimental facilities to provide insight into physical processes that were only understood empirically during underground nuclear testing. With SSP, we are addressing these risks and the largest riskthe ability to sustain adequate funding during this transition period so competent staff and validated tools will be in place when needed.
Mr. HUNTER. Can SBSS provide confidence in the safety and reliability into the indefinite future, or is there an indentifiable timeframe in which SBSS ought to be reassessed even if the initial effort is deemed a success?
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Secretary RICHARDSON. While it is impossible to predict the issues that may affect the safety and reliability in the future, the goal of the Stockpile Stewardship Program (SSP) is to sustain high confidence in the safety and reliability of the US nuclear stockpile without nuclear testing. This confidence will be achieved by maintaining a cadre of knowledgeable scientists, engineers, and technicians working on relevant problems with state-of-the-art tools. When fully implemented, SSP will provide the tools required to address stockpile issues in the future without underground nuclear testing. The completion of the annual certification process provides a means to measure the success of SSP.
Mr. HUNTER. Has DOE made progress in its effort to develop a clear set of identifiable criteria that would allow you to ''declare failure'' in the SBSS program and trigger a recommendation to resume underground testing? How will DOE ''know'' if and when SBSS isn't providing sufficient confidence in the safety and reliability of the stockpile?
Secretary RICHARDSON. In compliance with Section 3158 of the Strom Thurmond National Defense Authorization Act for FY 1999, DOE will prepare a report describing the process to establish that the stockpile is safe and reliable, and the relationship of the Stockpile Stewardship Program to the certification process. The report is due to Congress March 1, 2000. The report will codify the certification process, but the best judgment of the nuclear weapon laboratory directors, supported by their weapon designers and engineers, will continue to be the basis for certifying the safety, and reliability of a weapon and to alert DOE and the national leadership that confidence is not sufficient and that a nuclear test is required.
Ballistic Missile Defense
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Mr. HUNTER. Does the Department agree that DOE expertise is relevant to BMDO research?
Secretary RICHARDSON. Yes. The Department entered into a Memorandum Of Understanding with the Ballistic Missile Defense Office of March 12, 1998, to make DOE expertise available.
Mr. HUNTER. Does the Department agree that DOE research on BMDO technologies would contribute to expertise needed to fulfill DOE national security requirements?
Secretary RICHARDSON. Yes A key feature of the Memorandum Of Understanding is that DOE efforts be consistent with, and complimentary to, DOE's mission and the mission of DOE facilities that are utilized.
Mr. HUNTER. What technical areas does DOE believe hold the most promise of advancing BMDO technology and enhancing required areas of DOE technical expertise?
Secretary RICHARDSON. The DOE areas of technical expertise, which the Defense Programs Laboratories and the Ballistic Missile Defense Office (BMDO) agreed at an April 1998 workshop held the most promise of advancing Ballistic Missile Defense technology, include advanced computing, modeling, simulation, and concept and systems architecture development. These technical areas will support BMDO's efforts to reduce technical risk and build a strong ground test capability. In turn, the complexity of the Ballistic Missile Defense Office projects will enhance DOE's technical expertise in these areas that are important to DP's mission.
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Mr. HUNTER. What funding mechanism would the Department support so that it can more fully support BMDO R&D?
Secretary RICHARDSON. The Department supports funding through the Work For Others Mechanism as is provided in the Memorandum Of Understanding and commonly accepted in inter-agency operations.
Accelerated Strategic Computing Initiative
Mr. HUNTER. A 1997 DOE report suggested that the development of software needed for a three dimensional ''full physics'' simulation code was a high risk area. How do you assess the progress of the software development, and what kind of assurance can you give us that the software progress will keep pace with the hardware development?
Secretary RICHARDSON. Substantial progress is being made toward ensuring that ASCI software and hardware developments are in pace with one another. Our confidence in the program's ability to deliver on software and hardware commitments has greatly increased through the implementation of several elements which have enabled the program to reduce software development efforts, and to create better and more advanced software. Progress towards obtaining the software base necessary to utilize the advanced hardware architectures is being made through forged alliances with industry and academia.
Risks to the progress of software development have been reduced by conducting similar, parallel activities across the DOE laboratories and by establishing critical program deliverables for these activities. ASCI's first major deliverable, a primary burn code, is on schedule for completion later this year. In addition, a well-defined verification and validation process is also in place to ensure both the accuracy and quality of the simulation results.
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To further mitigate risk, ASCI developed a computing platform strategy to create vastly more powerful computers by integrating very large collections of standard commercial microprocessor components. This is complimented by the ASCI Pathforward program, which focuses on advanced enabling technologies, so that leading-edge computing hardward and software developments can be integrated into the higher performance platforms demanded by later phases of the program.
Mr. HUNTER. How does DOE assess the overall program risk for ASCI?
Secretary RICHARDSON. The assessment and reduction of risk have been important parts of developing and executing the ASCI program since its inception. Program risks are continually being evaluated and addressed as part of DOE's oversight process. DOE uses technical advisors at the laboratories with specialized ASCI knowledge to augment its federal expertise. In addition, experts from academia and industry conduct periodic reviews, such as the recent blue ribbon panel evaluation.
Critical paths of program components, such as full physics simulations, were identified early and plans were developed, whereby Livermore and Los Alamos laboratories would pursue risk alternatives in parallel. These partnerships build upon the nation's strong computer industry and distribute potential risks among several manufacturers. Despite the complexity of this important mission, overall risk to the ASCI program is not high.
Mr. HUNTER. Are the Department's Stockpile Stewardship and Stockpile Management programs appropriately balanced? Does the Department intend to rebalance these programs as the science based tools for stewardship and management mature?
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Secretary RICHARDSON. The budget must balance many legitimate but competing requirements within a finite resource envelope. I believe that the budget request submitted to Congress reflects the appropriate consideration and balancing of priorities.
Mr. HUNTER. Does the Department agree that the plant workloads are increasing?
Secretary HUNTER. Yes, in general the directed workloads for the plants are increasing. These increases are being driven by the ramp up to steady state production for the W87 Life Extension Program, the increased requirements for lab and flight test units for the W76, W87, and the W88, and doubling of B61 testing to meet schedule requirements. Partial funding for workload increases was offset by completion of infrastructure improvements.
Mr. HUNTER. Can the plants absorb an increased workload through greater efficiencies?
Secretary RICHARDSON. The plants will not be able to entirely absorb this increased direct workload through greater efficiencies. Increased efficiencies will be responsible for accomplishing some of the increased workload, but some will be accommodated by additional funding. Funding for stockpile maintenance and stockpile evaluation has been increased by over $29 million dollars from FY 1999.
Page 120 PREV PAGE TOP OF DOCPit Production
Mr. HUNTER. Is a 50 per year plutonium pit production rate adequate?
Secretary RICHARDSON. The exact pit production rate necessary to support the nuclear weapons stockpile for the long term cannot be determined at this time because we have limited information about the effects of aging on plutonium, which will determine when pits need to be replaced. The Department is studying the impact of aging plutonium on pit performance within its Enhanced Surveillance Program. Initial information is expected by the end of FY 2003, from which an assessment of long-term manufacturing capacity can be made. The Department of Energy has established a long-term planning goal of 50 pits per year until more definitive information is available. The Department of Defense and Department of Energy have agreed upon a step-by-step approach to reconstituting pit manufacturing within the Department of Energy's production complex, which puts in place an interim capacity of 20 pits per year by FY 2007. This capacity is sufficient to support replacements for the current pit surveillance program.
Mr. HUNTER. Does DOE need to plan for a second pit production facility to accommodate a larger production rate?
Secretary RICHARDSON. At the present time, current stockpile requirements do not require that DOE develop a detailed plan for a second pit production facility to accommodate a pit production rate larger than 50 pits per year. However, DOE is evaluating the impact of aging on pit performance within its Enhanced Surveillance Program, and by the end of FY 2003, based on initial information about the functional lifetime of a pit, we can assess whether a larger pit production rate is necessary. If so, we would assess whether to build a second facility or modify the existing facility, TA55, and its current operations.
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Mr. HUNTER. Can the TA55 Los Alamos facility be modified to achieve a higher production rate?
Secretary RICHARDSON. Yes. To increase the production rate from 20 pits per year to 50 pits per year, certain operations within the facility would need to be adjusted. It would be necessary to relocate personnel and equipment currently occupying this facility to another, as yet undetermined, facility at Los Alamos. The programs affected by such a move include pit surveillance, plutonium research and development, and special recovery activities. It would also be necessary to increase the production shifts from one to two, which would require additional personnel and production equipment. To increase the production rate larger than 50 pits per year would require even further changes, such as displacing and relocating the remaining personnel and equipment from other programs, such as radioisotope- thermoelectric-generator development, support to certification testing, and research and development support to non-defense program work, to another, as yet undetermined, nuclear facility.
Other options to accommodate an increase to pit production are to add an additional structure onto TA55 to house additional production equipment and people, or to build a second nuclear facility. If necessary, these options will be assessed later when the need for a pit production rate of larger than 20 per year becomes known.
Nuclear Weapons Industrial Complex
Mr. HUNTER. When will you make a final determination concerning contract consolidation?
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Secretary RICHARDSON. On December 21, 1998, I announced that I would defer a decision on contract consolidation until a review of the management structure throughout the Department is completed. Based on work by the Office of Defense Programs and input from industry and other interested groups, I concluded that we would not achieve the optimum benefits of consolidation without first clarifying federal roles and responsibilities. The management review is underway. I will make a final decision on contract consolidation by March 2000.
Mr. HUNTER. What are the personnel implications for the potentially affected sites if the Department proceeds with contract consolidation? How would DOE personnel be impacted?
Secretary RICHARDSON. Since any decision on contract consolidation will depend on unknown potential changes to the management structure, it is too speculative to address this question now.
What are the projected cost savings of consolidation? On what basis are these made, and how firm are they?
Secretary RICHARDSON. It is too speculative to address potential cost savings from consolidation at this time.
Page 123 PREV PAGE TOP OF DOC Mr. HUNTER. The Department has requested over 2.4 billion in advanced appropriations for FY 2001FY 2004 equating to almost one-tenth of the entire Environmental Management (EM) budget to fund the TWRS project. The total EM privatization budget request for FY 2000 is only $228 million and FY 2001 funding needs are projected to be over $600 million for TWRS alone. Since the EM budget has remained at about $5.7 billion over the last couple of years, how do you expect this funding level to be achieved? What will the impact be on the other EM programs? What is your alternative plan if advanced
appropriations are not approved for the FY 2000 budget?
Secretary RICHARDSON. The Administration's FY 2000 budget request includes a request for advance appropriations for the TWRS privatization project in the years FY 2001 through FY 2004. The request is sufficient to cover the new budget authority required to support the TWRS privatization project in those years in the unlikely event that the contract is terminated for the convenience of the government.
Separate from the privatization account, the Department has received appropriations for the Environmental Management program of approximately $5.7 billion for the past several years. We recognize that current budget constraints and realities will make any increases above the current level of funding for EM difficult, should that become necessary.
Should advanced appropriations requested for FY 2001 through FY 2004 not be approved, there would be no impacts in FY 2000 as long as the $106 million request in FY 2000 for the project is provided. However, we have requested an advance appropriation for the TWRS project as part of our efforts to demonstrate the government's commitment to this project. In particular, this should help the contractor obtain financing at favorable rates for the next phase of the projectwhich, if the contract is extended, would cover final design, and the construction and operation of waste treatment facilities. We are concerned that, without a sufficiently certain funding stream, the cost of capital may increase, or the contractor may not be able to secure sufficient private sector funds.
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If at any point in the project sufficient funds were not provided, the Department would have several options, depending on the magnitude of any funding shortfalls and the potential for additional funding shortfalls. First, we could renegotiate the terms of the privatization contract with the contractor. However, because the current funding targets represent the optimal schedule for the project, an extension of the contract schedule due to the unavailability of sufficient funds would lead to increased project costs.
Alternatively, the Department could abandon the privatization approach and proceed with a traditional level-of-effort or cost-reimbursement type contracting approach. Either of these approaches would present less risk to the contractor in a budgetary environment where project funding fluctuates from year to year and the government is unable to provide certainty to the contractor regarding future funding levels. These approaches again put the burden on the government for project risks and cost growth. Thus, these options could increase total project costs significantly.
The Department is working with the State of Washington and the U.S. Environmental Protection Agency to re-negotiate milestones in the Tri-Party Agreement for removing and treating the high-level waste from the Hanford tanks to align with the current privatization schedules. Once the Department makes a decision to proceed with the privatization approach and becomes subject to milestones consistent with that approach, a renegotiation of the contract schedule, or the abandonment of the privatization approach and the re-establishment of a traditional contracting approach could subject the Department to fines and penalties for non-compliance with TPA milestones.
Page 125 PREV PAGE TOP OF DOC It is important to note that requirements for the out-years will not be reduced if advance appropriations are not provided. We expect that our budget request for the TWRS privatization project in FY 2001 will include a request for the same amount of funds that we are now requesting as advance funding for that year. If the Department determines that the contractor should be authorized to proceed with the contract, these funds will be necessary to allow the contractor to proceed with the project according to the contract.
The Department believes that authorizing and fully funding the privatization approach will provide the most cost-effective option for successfully meeting the government's obligation to remove the high-level liquid wastes from the Hanford tanks.
Defense Facilities Closure Projects
Mr. HUNTER. Please explain the importance of the site closure to the overall EM program.
Secretary RICHARDSON The Department's strategy is to seek significant opportunities to accelerate cleanup, without sacrificing the safety of workers, communities or the environment. The importance of site closure to the EM program is primarily two-fold. First, in accelerating cleanup and site closure schedules, EM will be able to reduce health and environmental risks sooner while making sites available for community re-use earlier.
Second, in accelerating cleanup and site closure schedules, EM will be able to lower the estimated life-cycle costs for the program. For example, EM closure sites typically have carrying costs for ''support'' activities, such as general maintenance; provision of utilities, and other infrastructure; ensuring adequate safeguards and security of hazardous and radioactive materials; environmental monitoring; health and occupational-safety monitoring for employees; and other activities not directly associated with cleanup. The life-cycle costs at closure sitessuch as Rocky Flats in Colorado, and the Mound and Fernald sites in Ohiocan therefore be greatly reduced by accelerating cleanup. At Rocky Flats, for example, closure by the Department's goal of 2006 could reduce the cost of cleanup by as much as $1.3 billion over estimates that assume closure in 2010. Consequently, as site cleanup activities are completed, EM can focus additional resources to the remaining sites.
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Mr. HUNTER. Congress has provided additional funds to the Rocky Flats site during the past two years in order to facilitate its accelerated closure. What is the status of the closure activity at Rocky Flats? How have these additional funds contributed to accelerating the efficient closure of the site?
Secretary RICHARDSON The closure of Rocky Flats is on schedule with the current baseline (schedule, budget, and technical plan) being used by Rocky Flats, DOE, and contractor staff, which would result in cleanup and closure by 2010. However, a revised baseline is being prepared to reflect the accelerated closure goal of 2006. The site contractor delivered a 2006 baseline to the Rocky Flats Field Office in May 1999. This baseline will be subjected to an assessment by a DOE team and by an independent management consulting/accounting firm and is expected to be validated by November 1999.
The additional funds provided in Fiscal Years 1998 and 1999 have been used to fund acceleration of critical path, or near-critical path, activities. These include installation of additional process and packaging lines for accelerated off-site shipment of plutonium residues, activities associated with the accelerated packaging and off-site shipment of plutonium metals and oxides, and the accelerated decontamination and decommissioning of the Building 779 cluster.
We greatly appreciate the Congressional support for these accelerated closure efforts at Rocky Flats. The resulting extra cleanup has not only reduced risks at the site, but has provided a valuable investment in reducing long-term cleanup cost.
Page 127 PREV PAGE TOP OF DOC Mr. HUNTER. The Department and Rocky Flats have committed themselves to achieve accelerated site closure by 2006 at a savings of $1.3 billion. A critical path of work activities that support accelerated closure, as well at the cleanup of sites across the DOE complex, include shipments of transuranic waste to the Waste Isolation Pilot Project (WlPP) in Carlsbad, New Mexico, beginning in FY 1999. Both WIPP and the permanent storage facility at Yucca Mountain, Nevada, have yet to open to receive waste shipments. What is the status of opening both WIPP and Yucca Mountain? How will continued delays in opening WIPP impact the growing waste inventory at other EM sites? How will the FY 1999 and FY 2000 funds for WIPP activities and shipments be spent if WIPP fails to open?
Secretary RICHARDSON We are pleased to report that WIPP began disposal operations in March 1999. On March 22, 1999, Judge John Garrett Penn concluded that the permanent injunction he issued in 1992 does not prevent the shipment of waste to WIPP for disposal, and that WIPP has interim status under the Resource Conservation and Recovery Act (RCRA). The first shipment of non-mixed waste from Los Alamos occurred on March 26, 1999. DOE made its first shipment of waste from the Idaho National Engineering and Environmental Laboratory to WIPP on April 27, 1999, and plans to begin shipments from the Rocky Flats Environmental Technology Site in June 1999. The Department is working with the State of New Mexico, the Environmental Protection Agency, and others to increase shipments to WIPP prior to issuance of a final Resource Conservation and Recovery Act (RCRA) permit for this facility later this year.
In FY 1998, the Department completed the Viability Assessment of a Repository at Yucca Mountain. This assessment provides Congress, the President, and the public with information on the progress of the Yucca Mountain Site Characterization Project. Based on the results of the viability assessment, the Department believes that the work at the site should proceed. However, this does not constitute a decision that the site is suitable for a repository. Rather, the viability assessment identifies key issues that must be resolved before the Secretary can determine whether to recommend the site to the President for development as a repository. That decision is currently scheduled for 2001.
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Hiring of Senior Managers
Mr. HUNTER. The Assistant Secretary of Energy for Environmental Restoration and Waste Management and most of the senior managers within the EM program are in an acting capacity. In addition, there are a number of DOE facilities throughout the country that have acting managers. What are your plans to fill these vacancies in a prompt manner? What are the qualifications you are looking for in selecting new site managers? Does the selection criteria include experience in management of large technical projects?
Secretary RICHARDSON. DOE has chosen highly qualified individuals with strong program management skills to fill its openings in senior management positions. The Department recognizes the importance of appointing managers who can bring to bear the highest degree of leadership, managerial skills, experience, and sensitivity to stakeholder and local government issues to meet its technical, safety, and management challenges. The following new managers have been chosen and will be working actively in their respective positions within the next two months:
Richard Glass, Manager, Albuquerque Operations Office.
Dr. Ines Triay, Manager, Carlsbad Area Office.
Beverly Cook, Manager, Idaho Operations Office.
Gerald Johnson, Manager, Nevada Operations Office.
Leah Dever, Manager, Oak Ridge Operations Office.
Susan Brechbill, Manager, Ohio Field Office.
Keith Klein, Manager, Richland Operations Office.
Page 129 PREV PAGE TOP OF DOC On January 6, 1999 the President nominated Dr. Carolyn Huntoon to be Assistant Secretary for Environmental Management. In addition, The Department is currency recruiting a Deputy Manager for the Rocky Flats Field Office.
STATUS OF DR. HUNTOON'S NOMINATION
Mr. HUNTER. Can you update the Committee on the status of the nomination for Assistant Secretary for Environmental Management?
Secretary RICHARDSON. Dr. Carolyn Huntoon's nomination for Assistant Secretary for Environmental Management was jointly referred to both the Senate Energy and Natural Resources Committee and the Senate Armed Services Committee. On March 25, Dr. Huntoon's nomination was reported out of the Senate Energy and Natural Resources Committee by a vote of 173. The nominee testified before the Senate Armed Services Committee on April 27, 1999, and on May 4, 1999.
Mr. HUNTER. What is the status of the selection of senior managers to direct the new Office of River Protection which was authorized by the FY 1999 National Defense Authorization Act?
Secretary RICHARDSON. The Manager of the new Office of River Protection at the Richland Operations Office, Richard French, was selected and began work on March 22, 1999. The position of Assistant Manager for Tank Waste Storage and Retrieval also has been filled. The vacancy announcement for the position of Assistant Manager for Waste Processing closed on March 29, 1999, after the vacancy was re-advertised. The selection process for this position is currently underway. In addition to these positions, there are two other senior level positions. One, the Financial Advisor position, was filled with an Excepted Service appointment on March 31, 1999. The vacancy announce for the other senior position - Financial Modeler - closed on April 19, 1999. That position will also be filled through an Excepted Service appointment.
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The Department regards these management positions as extremely important for making progress and increasing the cost effectiveness of the high-level waste tank operations at Hanford. We are seeking to fill these positions as quickly as possible.
Fissle Materials Disposition
Mr. HUNTER. How much of the $200 million requested for FY 2000 for the Office of Fissile Materials Disposition is dependent on reaching an accord with Russia on their method and timetable for plutonium disposition? What new DOE facilities will be dependent on such an accord? How much will be spent through this fiscal year, and how much is planned to be spent in FY 2000 on these facilities?
Secretary RICHARDSON. Nothing in the Fiscal Year 2000 budget request of $200 million for fissile materials disposition program activities is dependent on reaching a bilateral agreement on plutonium disposition with Russia. This request will allow the Department to continue detailed design of the Pit Disassembly and Conversion Facility and the MOX Fuel Fabrication Facility as well as begin design of the Immobilization and Processing Facilitykey elements in the United States' hybrid plutonium disposition strategy involving immobilization and burning mixed oxide (MOX) fuel in existing, domestic reactors. The United States, however, will not begin construction of any of these facilities unless there is significant progress on plans for plutonium disposition in Russia; funds for construction will not be requested until FY 2001. Moreover, obligation of the $200 million appropriated by Congress as part of the FY 1999 emergency supplemental appropriation to help implement plutonium disposition in Russia requires that such an agreement be in place. Negotiations on this agreement are ongoing, and the United States hopes to conclude this agreement in the fall.
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It is expected that $48 million will be obligated in FY 1999 for design of the Pit Disassembly and Conversion Facility and the MOX Fuel Fabrication Facility. Sixty three million dollars is requested in FY 2000 to continue design of the Pit Disassembly and Conversion Facility and the MOX Fuel Fabrication Facility and begin design of the Immobilization and Processing Facility. In addition, operating funds are requested for activities in support of these facilities, such as research and development, National Environmental Policy Act reviews, and licensing and design reviews.
Mr. HUNTER. When will you begin building the FY 2001 DOE budget? If the plutonium disposition accord has not yet been signed at the time you draw up your budget, will you continue to request funds for disposition activities? If an accord with Russia is not reached, does the administration intend to seek a change of U.S. policy to pursue a unilateral approach to disposition of plutonium?
Secretary RICHARDSON. DOE is currently preparing the Fiscal Year 2001 internal budget for fissile materials storage and disposition activities. It is expected that the Department's budget will seek funds to begin construction of the Pit Disassembly and Conversion Facility under the assumption that a bilateral plutonium disposition agreement with Russia will be signed in the fall. In the unlikely event that an agreement with Russian on plutonium disposition cannot be reached, the Department will not begin construction of U.S. plutonium disposition facilities. The United States will not unilaterally dispose of its surplus weapons grade plutonium.
Mr HUNTER. Has the Russian government expressed a preference toward vitrification of plutonium or turning plutonium into MOX for commercial reactors? What is the preferred route from a nonproliferation standpoint? What might be the U.S. budgetary implications if Russia chooses one or the other of these two routes?
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Secretary RICHARDSON. Russian officials have repeatedly expressed a preference for burning surplus weapons plutonium in reactors in order to utilize its energy value. It should be noted that some Russian officials are not enthusiastic about near-term plutonium disposition using MOX fuel in existing reactors, preferring long-term storage and ultimate use in a closed fuel cycle based on advanced reactors. Russian officials accept, however, that Western assistance is only available for near-term disposition approaches, and are willing to negotiate on that basis, at least for an initial 34 metric tons.
From a nonproliferation standpoint, both immobilization and burning MOX fuel in existing reactors meet the ''spent fuel standard'' in which the surplus plutonium is made as inaccessible and unattractive for retrieval and weapons use as the plutonium remaining in spent fuel from commercial reactors. The United States would be comfortable with Russia disposing of its surplus plutonium utilizing either approach.
The estimated cost of facilities in Russia to fabricate MOX fuel as well as the modification of existing Russian nuclear reactors to accept the MOX fuel is over $1 billion. The portion of this estimate associated with the design and construction of a full-scale plutonium conversion facility, with a 2 metric ton/year capacity, is approximately $100 million. It is expected that Russia will contribute industrial facilities, infrastructure, existing technologies, specialists, electrical power, transportation and other services towards this effort. However, given Russia's worsening economic condition, it is unlikely that it will be able to fully fund the disposition of surplus Russian plutonium. Because of Russia's strong preference for a MOX infrastructure, coupled with the lack of an available high level waste vitrification facility such as currently exists at Savannah River, no cost estimates are available for an immobilization-only approach to disposition surplus plutonium in Russia.
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The $200 million recently appropriated by the Congress in the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 will help jump start the ongoing negotiations with Russia but, ultimately, more funding will be needed to create the necessary infrastructure in Russia to dispose of approximately 50 tons of surplus Russian plutonium. The Administration has held a number of senior level discussions with other countries, and plans to continue to seek support for this program from the international community, both the private and public sector. As part of the Administration's Expanded Threat Reduction initiative, the United States is strongly encouraging other nations and international financing institutions to increase their support for Russian nonproliferation activities, including plutonium disposition.
INITIATIVES FOR PROLIFERATION PREVENTION
Mr. HUNTER. For over a year the Department of Energy has claimed that the taxation issue is being worked out with the Russian authorities. What is the current status of attempts to get tax exemption for the IPP program?
Secretary RICHARDSON. In April 1999, agreement was reached by U.S. and Russian negotiators on language for tax exemption of U.S. assistance in Russia. This agreement will be signed for the U.S. by Ambassador Collins. The Russian side is still going through an internal process for approval of the language and designation of a signatory. The agreement exempts all U.S. assistance from value added tax, profits tax, property tax, customs duties, and road tax.
Page 134 PREV PAGE TOP OF DOC In an effort to minimize any potential for taxation, IPP has authorized the national laboratory participants to use the U.S. Civilian Research and Development Foundation as a means of making tax free payments to Russian scientists and engineers.
Mr. HUNTER. Another DOE program is the Nuclear Cities Initiative. Would you explain the difference between IPP and the Nuclear Cities Initiative? Will the Nuclear Cities Initiative face the same Russian taxation problem?
Secretary RICHARDSON. Both the Nuclear Cities Initiative (NCI) and the Initiatives for Proliferation Prevention (IPP) are nonproliferation programs which seek to keep weapons scientists employed in their home countries. The focus of NCI is on the ten closed cities of the Russian nuclear weapons complex, while the IPP focus includes the four nuclear weapons inheritor states of the Soviet Union (Russian Federation, Belarus, Ukraine, Kazakhstan) as well as chemical and biological weapons facilities. NCI, which is covered by a Government-to Government Agreement, works cooperatively with the Russian Government to create jobs for soon to be displaced scientists and technologists with nuclear weapons-related expertise. NCI has the policy goal of assisting in the downsizing of the Russian nuclear complex. IPP, which does not currently have a program-specific Government-to Government Agreement, seeks to stabilize the institutes in the nuclear inheritor states by providing challenging employment for scientists and technologists with knowledge of nuclear, biological or chemical weapons. NCI will create jobs across a broad spectrum including low to medium technology jobs in the open part of the cities while IPP stresses the commercialization of high technology within the institute in cooperation with U.S. industry. The NCI agreement specifically addresses the issue of taxation on U.S. Government assistance, and we do not anticipate the NCI program will face the same taxation issues as experienced by IPP.
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OFFICE OF COUNTERINTELLIGENCE
Mr. Hunter. Will the FY2000 budget request be sufficient to meet the requirements of PDD61? Why was the budget constructed to require lab contribution of $12 million instead of directly requesting $12 million more for the Office of Counterintelligence?
Secretary RICHARDSON. The FY2000 budget request of $31.2 million will be sufficient to meet the requirements of PDD61, with the exception of the following areas:
The Counterintelligence (CI)Cyber portion of the Department's Counterintelligence Program. The President has submitted a budget amendment for an additional $8 million for its CICyber Program, the mission of which is to gather information and conduct activities to protect against the cyber dimensions of espionage and other intelligence activities conducted on behalf of foreign powers, organizations or persons, or international terrorist activities that target or threaten DOE, its associated institutions, or the critical infrastructures of the U.S. Energy Sector. A primary focus of the CICyber Program is to bring the Department in line with its U.S. Intelligence Community partners who are advancing a National CICyber Strategy.
The CI Evaluation Board/Personnel Security Program. This Program will require an additional $1 million for measures to protect against the ''insider threat'' at DOE facilities. This and other personnel security measures are aimed at those DOE employees in ''high-risk'' categories, i.e., those having access to and/or knowledge of special nuclear materials information. Specifically, approximately $500,000 of the $1 million is for continuation and expansion of the OCI Polygraph Program, and the other $500,000 is for the funding of analysts with the financial expertise necessary to conduct forensic financial investigations.
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At the time of the FY2000 budget submission, only $18.6 million was available for direct program funding. The remainder, $12.6 million, will come from the Atomic Energy Defense Accounts, which include the national laboratories.
Mr. HUNTER. We note that DOE intends to increase their use of polygraphs as a counterintelligence tool. Does DOE need any further statutory authority to accomplish this?
Secretary RICHARDSON. The Department of Energy approved and promulgated a Notice in March of this year regarding the Department's CIScope Polygraph Program, allowing the Department to test federal employees. As the Department proceeds with a Notice and comment rulemaking to extend the requirement to contractor employees, it will continue testing its own CI Officers and other federal personnel. Although DOE has the authority to test its federal personnel, and will soon have the authority to test contractor personnel, OCI believes that legislation codifying this authority would facilitate implementation of DOE's CIScope Polygraph Program.
Mr. HUNTER. Nuclear plants that have come on line since the early 1980's have taken 1525 years to complete. Major parts of those delays have been due to a protracted licensing process involving intervenors and similar litigants, which no one seemed able to control. Louisiana Energy Services abandoned its attempt to get an NRC license for its proposed uranium enrichment plant after 7 years of effort. The attempt to license the Shoreham Nuclear Plant was finally abandoned after the plant was built and $5 billion had been expended. All of these plants were purely commercial in character - none involved the production of material for weapons purposes.
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In light of this history, coupled with the fact that neither the DOE nor the NRC nor the Administration nor this Congress controls the process, how can the Congress be assured that the NRC license modifications required to produce tritium in Sequoyah and Watts Bar will be obtained timely, if ever?
Secretary RICHARDSON. The approval of an initial construction permit or operating license for a new facility is much different from the issuance of a license amendment for an operating facility, particularly in this case, when the subject of the license amendment in question has already received significant previous NRC review. In assessing the likely complexity of the NRC
review for license amendments for Watts Bar and Sequoyah, one must consider the fact that the NRC has already conducted three separate technical reviews associated with the use of tritium-producing burnable absorber rods in commercial reactors. In doing so, no significant safety issues have been identified, and many of the technical questions associated with the use of these burnable absorber rods have been raised and resolved. Based upon this prior experience, we expect that the reactor-specific questions to be addressed during the upcoming license amendment reviews will also be resolved
With regard to your concerns about uncontrollable delays in the regulatory process, the Chairman of the NRC has committed that her agency will conduct an expeditious review of the license amendment applications when received. The license amendment applications will be submitted in mid-calendar year 2000. This provides ample time for the NRC to review the applications and resolve any questions that may be raised, either by NRC reviewers or those outside the agency, prior to the first scheduled irradiation cycle in late 2005.
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Mr. HUNTER. What contingency plan does DOE have in the event the proposed TVA license modifications meet the same fate as Shoreham?
Secretary RICHARDSON. As indicated previously, the Shoreham licensing proceeding, involving the construction and operation of a new facility on Long Island, cannot be compared to the technically straightforward review of a license amendment application for an operating nuclear facility. In addition, in the case of Watts Bar and Sequoyah, the State of Tennessee has been most supportive of the operation of TVA reactors in that state, as well as decades of operation of DOE facilities at Oak Ridge associated with the nuclear weapons program. However, if circumstances arose that caused the Department to conclude that the issues involving the use of tritium-producing burnable absorber rods could not be resolved satisfactorily, the back up option for producing tritium would be exercised, building the Accelerator Production of Tritium.
Mr. HUNTER. Part of DOE's rationale for concluding that the proliferation issues associated with using TVA reactors are ''manageable'' is that TVA is an instrumentality of the U.S. government. Since we are looking for a tritium supply that begins in 2005 and continues to 2045, is it the DOE's conclusion that TVA will remain an instrumentality of the U.S. Government for the next 50 yearsdespite the electricity deregulation activities currently underway in this Congress?
Secretary RICHARDSON. While the fact that the reactors are government owned, that TVA is a federal entity, and that TVA has a national defense purpose in its charter is certainly beneficial, it is not essential. Reactors owned and operated by the private sector could also be used for tritium production.
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Mr. HUNTER. If TVA is privatized, does DOE propose to acquire these reactors?
Secretary RICHARDSON. DOE would have to review the circumstances existing at the time and make a determination regarding the costs and benefits of such a course of action. Contracts with TVA and/or with other utility companies for irradiation services would also be options.
Mr. HUNTER. What would be the impact of this action on the life cycle costs - including the impact of the fact the DOE, under current law, cannot sell electricity?
Secretary RICHARDSON. As indicated above, an assumption that the Department would purchase reactors in the future under any circumstances is speculative and cannot be meaningfully addressed at this time. Even if such a purchase were assumed to be made, the impact on life-cycle cost would depend on a host of issues that could only be settled at the time of negotiations on such a contract. The conditions under which electricity would be sold from such a facility is only one of these issues. In this regard, it should be noted that the N-Reactor, a plutonium production facility on the Hanford Reservation, sold steam to a commercial utility for the production of electricity for many years, and for many years sold this steam even though no weapons materials production was taking place. This was done pursuant to Section 44 of the Atomic Energy Act, which permits the sale of energy that is produced incident to the operation of an Atomic Energy Commission (now DOE) production facility.
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QUESTIONS SUBMITTED BY MR. GRAHAM
Mr. GRAHAM. As part of the Department's tritium production decision you selected the Accelerator Production of Tritium as the backup technology. What level of funding does the Department anticipate applying to the APT project in each of the next five fiscal years? What work do you anticipate will be completed with those funds? Please specifically address tritium production, waste transmutation, and medical isotope research in your answer.
Secretary RICHARDSON. The current funding profile (pending completion of a detailed re-planning) for the Accelerator Production of Tritium during the next five fiscal years is shown in the table below. During this period, DOE will complete development and demonstration work and the preliminary design of the accelerator plant. The project will provide a final report to the Department with all of the technical information and a preliminary design that will allow the Department to finish the design and build a plant should that ever be required. These efforts are expected to be completed in FY 2002. This scope does not include any activity related to actual tritium production, waste transmutation, or medical isotope research.
At the direction of Congress, the Department is evaluating the potential for accelerator transmutation of waste. The Department's Office of Civilian Radioactive Waste Management is spending $4 million in fiscal year 1999 to develop a roadmap for continued research and development in this area. None of these funds are being provided through the accelerator project.
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Mr. GRAHAM. What impact would deregulation of the commercial electricity market and the subsequent removal of federal subsidies for TVA's power production activities have on the Department's plan to utilize TVA reactors to produce tritium?
Secretary RICHARDSON. The Department does not believe that deregulation would have any impact on tritium production.
Mr. GRAHAM. Can you provide me with a list of examples of where situations similar to the use of the TVA reactor to produce tritium exists in other areas of the military industrial complex and in the private sector?
Secretary RICHARDSON. Yes, sir, I will.
(attachment can be found in the hard copy)
Mr. GRAHAM. The DWPF is unequivocally the most successful cleanup program currently working within the Department of Energy. Why would the Department reduce the funding for this successful program? Follow-up: If the Department were to receive an additional $27 million for DWPF would it maintain the FY 1999 production level for DWPF?
Page 142 PREV PAGE TOP OF DOC Secretary RICHARDSON. The overall funding for the High-level Waste Program at Savannah River has not been reduced. The activities that are necessary to produce canisters of vitrified waste include the accumulation and storage of high-level waste in storage tanks, the removal of the waste from the tanks and the preparation of the sludge batches to be fed to the vitrification facility, the vitrification of the waste in the Defense Waste Processing Facility (DWPF), the storage of the glass-filled canisters, the treatment of the effluents from the production process, and the development of an alternative salt waste material for processing. Together, these projects constitute the entire high-level waste system that supports canister production. The funding for these activities is spread among several different high-level waste-related projects.
The added scope of work to support the necessary research and development of the high-level waste salt pre-treatment alternative required in FY 1999 and 2000 was initially planned to be absorbed within the high-level waste program, and would have resulted in a reduction in other waste removal/pretreatment activities, including DWPF operations. Subsequent to the FY 2000 budget submission, however, and based on senior level discussions and consideration of all the factors involved, the Savannah River Site has committed to maximizing canister production (about 200 canisters per year) in FY 1999 and FY 2000. This will be accomplished through the curtailment of some infrastructure activities and other efficiencies.
If the Department were to receive an additional $27 million specifically for DWPF, the infrastructure activities that have been scheduled to be further deferred would be restored, and increased activities to support enhanced development of a salt alternative would be possible within the high-level waste program.
Page 143 PREV PAGE TOP OF DOCUSE OF COMMERCIAL FACILITY TO PRODUCE NUCLEAR MATERIALS
Mr. GRAHAM. Has the Department of Energy ever used a commercial facility to produce, not destroy or disassemble, nuclear weapons materials?
Secretary Richardson. Yes. The predecessor of the Department, the Atomic Energy Commission, purchased plutonium from commercial reactors that went into its defense inventory under authority provided in Section 56 of the Atomic Energy Act. One and one-half metric tons of plutonium from 28 civilian reactors was purchased under the Plutonium Credit Activity and other U.S. civilian acquisitions. This plutonium could be used for nuclear weapons activities and was entered into the Department's defense plutonium inventories; however, most of the material was eventually used for reactor programs. Purchasing ceased in 1983 due to the Hart-Simpson amendment [Article 57(e)] of the Atomic Energy Act, which prohibited the use of special nuclear material, i.e., plutonium, produced in licensed civilian reactors from being used for military purposes. Tritium is not a special material. In addition, about half of all the materials and components of most modern nuclear weapons were routinely procured from the private sector.
Mr. GRAHAM. Does the department anticipate the need for defense funding for the high level nuclear waste repository?
Secretary RICHARDSON. Yes. Section 302(b)(4) of the Nuclear Waste Policy Act, as amended, in 1987, states: ''No high-level radioactive waste or spent nuclear fuel generated or owned by any department of the United States referred to its Section 101 or 102 of title 5, United States Code [5 U.S.C 101 or 102], may be disposed of by the Secretary in any repository constructed under this Act [42 U.S.C. 10101 et seq.] unless such department transfers to the Secretary, for deposit in the Nuclear Waste Fund, amounts equivalent to the fee that would be paid to the Secretary under the contracts referred to in this section if such waste or spent fuel were generated by any other person.''
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Congress established the Defense Nuclear Waste Disposal Appropriations in 1993 to ensure that their cost for disposing high-level radioactive waste and spent nuclear fuel from defense activities be fully paid for. Currently, the defense portion of the total cost are $10.8 billion based on our Total Systems Life Cycle Cost estimates. To date, the Defense Nuclear Waste appropriations have contributed approximately $1.1 billion into the Nuclear Waste Fund. Since the establishment of the Defense Nuclear Waste Disposal appropriations, it has represented approximately 18 percent of our total funding under the department budgetary ceilings.
MEDICAL ISOTOPE RESEARCH
Mr. GRAHAM. What programs is the Department pursuing in the area of medical isotope research? What does the Department consider to be the future of this research in terms of its practical medical application?
Secretary Richardson. Since the inception of the Atomic Energy Commission, the Department has had a long and rich history in the area of medical isotope research. This research is based on the Department's its technical capabilities, unique facilities, and experience in nuclear technology. The development and application of radioisotopes for medical applications requires knowledge of nuclear physics and chemistry and specialized handing capabilities that reside within the Department.
The Department supports research in molecular nuclear medicine, medical imaging, and the development of radiopharmaceuticals for diagnosis and therapy for a broad variety of medical applications. The Department also supports the production of a wide variety of isotopes for medical research. Since many medical applications require the use of radioisotopes that decay quickly, the Department has facilities that allow researchers from National Laboratories and universities to work in close proximity to the isotope production sources.
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The Department is proposing to launch the Advanced Nuclear Medicine Initiative in fiscal year 2000 as part of the Isotope Program. This will support research into the development of new medical isotope technologies for diagnostics and therapy. In particular, the Department proposes to develop technologies that use the Department's large inventory of alpha-emitting isotopes.
Practical medical applications have resulted from this research and new applications are anticipated. The Nuclear Energy Research Advisory Committee, an independent Federal advisory committee, recently issued a report that projects that demand for medical isotopes will increase between 7 and 14 percent per year over the next 20 years. Today, one in every three people treated at a hospital makes use of a radioisotope in their laboratory tests, diagnoses, or therapy. Each day, over 40,000 patients benefit from isotope-based medical imaging technologies. Each year, over 13 million nuclear medicine procedures are performed in more than 4000 nuclear medicine facilities in the United States. Nuclear medicine diagnostic tools enable physicians to assess not only the physical condition of a patient, but also provide immediate non-invasive assessments of an organ's function. Future research will improve this already impressive imaging capability by developing new pharmaceuticals and imaging techniques.
Medical isotope therapy is growing rapidly. Treatment using medical isotopes causes the patient far less discomfort than conventional therapies. Many of these therapies can be provided on an outpatient basis, saving substantial sums of money. An example of an emerging treatment is cancer radioimmunotherapy using alpha-emitting isotopes. Early human clinical trials are encouraging. If successful, approximately 30,00050,000 patients per year could be treated using the Department's inventory of these isotopes.
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Mr. GRAHAM. What concerns if any does the Department have with regard to the proposed sale of Westinghouse's nuclear division to the Morrison Knudsen consortium?
Secretary RICHARDSON. The Department, in consultation with the Department of Defense and other agencies. has concluded Security Control Agreements that would govern performance of national security contract work under existing Westinghouse contracts. Therefore the Department does not have any current national security concerns about this acquisition by the Morrison Knudsen consortium. On June 15, 1999, the Department completed negotiations and executed the Novation Agreement for the Department's contracts with Westinghouse covering the Savannah River Site and West Valley Nuclear Services as a result of the sale of Westinghouse by CBS Corporation to Morrison Knudsen and British Nuclear Fuels Ltd.
Mr. GRAHAM. What effort is the Department making to ensure that we have an adequate supply of the proper isotope of plutonium to conduct ''subcritical'' nuclear tests as a part of the Stockpile Stewardship program?
Secretary RICHARDSON. There is an adequate supply of plutonium for subcritical tests being conducted at the Nevada Test Site. The Department has undertaken a study to determine the options available for extending or increasing the usable inventory of the proper plutonium isotope required for other experiments. A preliminary study has been performed to determine the scope of a more detailed effort. Further development of the detailed study is currently awaiting the resolution of several supply issues, as well as a definition of testing requirements from the Stockpile Stewardship planning process. A draft report is expected by the end of this calendar year.
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LOW EMISSION BOILER SYSTEM
Mr. GRAHAM. I am interested in the status of the Low Emission Boiler System. In last year's Omnibus Appropriations bill, the State of Illinois was to provide $25 million in matching funds for the project. It is my understanding that this money has not been appropriated by Illinois. The alternative site chosen by the contractor, DB Riley chose the Savannah River Site as the backup site for the proof of concept facility. We are eager to support the Department with this program. I would appreciate you making a report available as soon as possible to the committee with regard to the status and progress of this program.
Secretary RICHARDSON. The subject report was issued March 4, 1999. A copy is attached.
(attachment can be found in the hard copy)
QUESTIONS SUBMITTED BY MR. WATTS.
DOMESTIC OIL PRODUCTION
Mr. WATTS. From 1981 to 1996, total employment in the domestic oil production industry decreased by 500,000 employees - from 1.9 million to 1.4 million. In the first three quarters of 1998, it is estimated that nearly 11,000 jobs were lost -and that did not include the devastating fourth quarter. Chairman Houghton, House Ways and Means Committee Oversight Subcommittee, said the current crisis almost claimed 12,000 jobs last month alone. This is a serious issue. In Oklahoma alone, between 25 and 35 percent of the 80,000 plus wells have been idled or shut-in, resulting in the loss of 2,000 to 5,000 jobs. As you are well aware, this crisis in the oil industry is not isolated to the industry and its employees, but it has significant long-term national security implications as well.
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So, I want to ask you, Mr. Secretary, what kind of support can we expect from the Department of Energy to help out our oil producers now, before they are out of work and before the wells are shut-in, and secure the availability of this natural resource vital to our long-term national security?
Secretary RICHARDSON. I fully share your concern about the financial health of our domestic petroleum industry. This industry is not only vital to the economic and energy security of this nation, it also has the high-wage, high-tech jobs we need to keep for our workers. This issue is a high priority for me at the Department of Energy.
I would note that world oil prices have increased recently to $18 per barrel. This is an improvement over past months and should provide some relief for domestic producers. But, this is not enough. We must do all we can to help this industry get through the current cycle of low prices, and to be better prepared to weather future low price cycles if, and when, they occur.
I would like to note that this Administration has been working hard for the last six years to make changes to help the industry maintain and improve its position in the highly competitive world oil markets. It has supported financial incentives, such as royalty relief for deepwater projects and marginal and heavy oil wells. The Energy Policy Act of 1992 amended the Federal tax code by making the net income limitations on the use of percentage depletion allowances less restrictive and reducing preference items for alternative minimum tax calculations, and the Tax Payers Relief Act of 1997 eliminated the alternative minimum tax for small companies. The Administration is working to streamline and clarify regulations governing petroleum operations on Federal lands to help reduce costs of operations at the same time it helps protect the environment. The Department of Energy has an active research and development program for oil and gas production technologies to help small operators deploy the technologies needed to stay competitive in world oil markets.
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In response to the recent cycle of low prices I announced a series of actions to be undertaken by DOE (some in concert with other agencies) to enhance the nation's energy security, preserve our domestic oil and gas production capacity, lower costs of production, and improve government decision making. Some of the specific steps we are taking in these areas include: accepting Federal royalties in the form of oil to add to the Strategic Petroleum Reserve; funding the development and demonstration of advanced technologies to improve recovery from mature reservoirs; supporting streamlined administrative processes, such as on-line permitting; and helping ensure that producers have full access to Small Business Administration loans.
The Administration and DOE:
initiated a process with the Minerals Management Service to take 28 million barrels of royalty oil ''in-kind'' to add to the SPR,
issued a solicitation for new r&d proposals for technologies to lower costs of production,
conducted a White House conference with industry to address the industry's concerns,
is meeting with the Department of Interior to explore other initiatives that could be pursued on Federal lands,
is working with the Small Business Authority to discuss means to make loans more readily available to small operators, and.
Page 150 PREV PAGE TOP OF DOC is working with the Department of Agriculture to determine if their loan guarantee program for businesses in rural areas can be used to support oil operators.
One of the first results of the White House meeting was the establishment of an energy working group within the White House's National Economic Council. We hope these initiatives will address your concerns.
QUESTIONS SUBMITTED BY MR. RYUN.
AGING OF NUCLEAR WEAPONS AND PERSONNEL
Mr. RYUN. How will the aging of current nuclear weapons and the aging of personnel to maintain these weapons, threaten their stability in the near or distant future?
Secretary RICHARDSON. Although the aging of nuclear weapons and maintenance personnel is a concern, we are very confident in our current method of certifying the stockpile and our efforts to ensure it's future stability. By training new personnel before experienced personnel retire and by developing enhanced surveillance techniques to anticipate, rather than react to problems in weapons, we are working to stabilize and better understand the aging situation. A sustained commitment by both the Congress and the Administration will ensure that nonnuclear experimental facilities, computer modeling, archiving, and other stockpile stewardship program elements and tools will be available, without interruption, for training new personnel.
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Mr. RYUN. How will the Department solve the security threat that foreign visitors may pose to nuclear laboratories in the United States?
Secretary RICHARDSON. From the counterintelligence perspective, the Department has taken several steps to tighten controls on foreign visitors to the laboratories, including:
Delegating the authority for approval of foreign national visits and assignments to the local level, thereby holding the Laboratory Directors accountable for all foreign visit and assignment activity at their sites;
Designing a new information system that will make it possible to better track the numbers and nationalities of foreign visitors and assignees at the Laboratories at any given time;
Rewriting the DOE Order on Unclassified Foreign Visits and Assignments to reflect the necessary changes;
Rescinding for all facilities all exemptions from reporting on sensitive country foreign national visits and assignments, and on those non-sensitive country foreign nationals who will have access to sensitive subjects and/or security areas;
Tracking and conducting indices checks on all foreign national visitors and assignees from sensitive countries, and on all non-sensitive foreign nationals who will have access to sensitive technologies and/or security areas;
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Requiring as part of its overall unclassified foreign national visits and assignments program, that all DOE employees and contractor having close and continuing contact with foreign nationals from sensitive countries report these contacts to local CI Officers (ClOs); and
Establishing relationships between OCI and the various international non-proliferation scientific exchange programs at the Department. These programs include, but are not limited to: 1) Materials Protection, Control and Accounting (MPC&A), 2) High Enriched Uranium (HEU), 3) Nuclear Cities Initiative, and 4) Initiative for Proliferation Prevention (IPP). Departmental personnel participating in these activities will be prebriefed and debriefed by CIOs.
START I/II Readiness Levels
Mr. RYUN. If the Russian government ratifies START II, where would the Department stand regarding readiness levels to meet START II initiatives?
Secretary RICHARDSON. There are no provisions in START II that directly affect the Department of Energy's stockpile readiness because it places limits on weapon delivery systems, not warhead levels. As a result of START II ratification, the Nuclear Weapons Council may recommend adjustments to the allocation of warheads between the active and inactive stockpile, however, the Department's readiness level would not be affected. The Department may be indirectly affected by START II ratification if the Nuclear Weapons Council deems it necessary to recommend dismantling excess warheads. The increase in warhead dismantlement would require a change in future dismantlement plans, but this change would not negatively affect stockpile readiness levels.
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Mr. RYUN. What programs are in place or are being considered to deter the proliferation of nuclear technology and materials from countries like Russia and China?
Secretary RICHARDSON. DOE's Office of Nonproliferation and National Security pursues a number of programs designed to deter the proliferation of nuclear technology, equipment, and materials:
INITIATIVES FOR PROLIFERATION PREVENTION
The Department of Energy (DOE) Initiatives for Proliferation Prevention (IPP) was established in 1994 as one of several United States (U.S.) nonproliferation programs to address the ''brain drain'' of former weapons of mass destruction scientists, engineers and other specialists in Russia, Kazakhstan, Ukraine and Belarus. The mission of the IPP is to provide meaningful, sustainable, non-weapons-related work for former NIS weapons scientists, engineers and other specialists, through commercially viable market opportunities. Market opportunities are pursued through legal contracts between DOE national laboratories, NIS institutes, and the involvement of U.S. industry. The goal of these efforts is to engage NIS institutes in direct partnerships with U.S. industry leading toward the development of commercial products. This engagement process is effectively implemented through the work of DOE national laboratory specialists at the Russian institutes. So far, IPP has engaged over 6,200 scientists and engineers at 170 institutes in over 400 projects. Over 80 of these involve U.S. industry cost-share, and several have reached a point of commercial takeoff.
NUCLEAR CITIES INITIATIVE
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The Nuclear Cities Initiative is a bilateral nonproliferation program between the United States and the Russian Federation. The purpose of the Initiative, as set out by Article I of the Agreement, is ''... to create a framework for cooperation in facilitating civilian production that will provide new jobs for workers displaced from enterprises of the nuclear complex in the Nuclear Cities controlled by the Ministry of the Russian Federation for Atomic Energy.'' The two goals of the program are: assisting the Russian Federation in its announced intention of reducing the size of its nuclear weapons establishment in accord with its post-Cold War budgeting plans and smaller nuclear arsenal; and promoting nonproliferation goals through redirecting the work of nuclear weapons scientists, engineers and technicians in the ten closed Russian ''Nuclear Cities'' to alternative, non-military scientific or commercial activities.
The Nuclear Cities Initiative serves the U.S. national security interests in these ways:
Assisting the Russian Federation in reducing its nuclear weapons establishment, which still is significantly larger than that of the United States,
Facilitating movement of Russian scientists, engineers, technicians and other specialists from weapons development or production to civilian work in order to reduce financial temptations to transmit their weapons knowledge to criminal elements, rogue states, or other undesirable customers. This objective already is being pursued on a bilateral or multilateral basis through the Department of Energy Initiatives for Proliferation Prevention Program, the Department of State Science Centers Program, the U.S. Civilian Research and Development Foundation, and others;
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Extending into the ten nuclear cities, formerly the most privileged sector and the heart of the Soviet nuclear establishment, U.S. efforts to assist Russian science to turn from weapons development to civilian activities, and
Helping to promote stability in Russia at a time when Russia is confronting growing financial and political challenges.
Material Protection, Control and Accounting Program
The United States, Russia, the NIS, and the Baltics have been cooperating since 1994 to enhance the security of weapons-usable nuclear materials under the Department of Energy's (DOE) Material Protection, Control, and Accounting (MPC&A) program. Due to the breakup of the Soviet Union and the social, political and economic conditions that followed, protection, control and accounting for nuclear materials deteriorated rapidly in Russia, the NIS and the Baltic States. DOE developed the MPC&A program to respond to the threat to U.S. national security posed by the approximately 650 metric tons of weapons-usable nuclear materials in the form of metals, oxides, solutions and scrap located at 55 or more locations throughout the region.
The program is managed through the Russia/NIS Nuclear Material Security Task Force located within the Office of Nonproliferation and National Security and involves more than 400 experts from DOE's National Laboratories and highly trained contractor personnel. These experts are working with their foreign counterparts at these locations to implement rapid and systematic MPC&A upgrades to improve nuclear materials security. The program is expanding exponentially as confidence and trust has developed with former Soviet Union counterparts. In addition to nuclear security upgrades, the program has enlarged its cooperative work with the Russian Federation Navy. The program is also working to provide secured railcars and trucks to improve nuclear transportation security in Russia. In the area of regulatory cooperation, the program is developing MPC&A training and regulatory infrastructure measures to enhance and ensure the sustainability of nuclear security and accounting upgrades.
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SECOND LINE OF DEFENSE
The Second Line of Defense program was begun in 1998 to assist Russia in enhancing its ability to deter, detect, and interdict nuclear materials at its borders. Between June 1998, when the program's initial protocol was signed with the Russians and September 1998, two sites (Moscow's Sheremetyevo International Airport and the Seaport at Astrakhan on the Caspian Sea) were equipped with radiation detection equipment to serve as models for other sites in Russia. Additionally, relevant Russian Customs training materials were provided to DOE for review so that joint training areas could be identified for future cooperation. There are plans to equip several additional strategic sites in Russia currently under discussion.
By virtue of its technical expertise, DOE has played an especially vital role in the area of nuclear export controls. The Russian and Newly Independent States Nuclear Export Control program was developed as a cooperative program aimed at deterring the proliferation of equipment, materials, and technologies by helping develop export control systems in the NIS and enhancing the existing system in Russia. In order to achieve its goals, this program has conducted technical exchanges on national and multilateral nuclear export controls, industry outreach programs that promote awareness of and compliance with the laws and regulations, and joint training programs on nuclear nonproliferation. Recently, an assessment of the nuclear export control systems of the various NIS countries was undertaken to aid DOE and other USG agencies in evaluating their assistance efforts and in determining areas where additional assistance is required. This assessment identifies key issues, problem areas, and makes recommendations about long term planning strategies for DOE assistance efforts.
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The United States is working to dispose of excess Russian highly enriched uranium (HEU) and plutonium that pose a proliferation concern. The Russians have stated that they are disposing of their excess HEU by selling this material to the United States under the U.S.-Russian HEU Purchase Agreement. The 1993 U.S.-Russian HEU Purchase Agreement is designed to deter the proliferation of weapons-grade HEU from Russia. Under the HEU Purchase Agreement, the United States is buying 500 metric tons of HEU extracted from dismantled Russian nuclear weapons over a 20 year period.
With regard to plutonium, the Department is working on a series of collaborative disposition efforts with Russia which include gas reactor technology research and development as well as analyses and small-scale tests and demonstrations of plutonium disposition technologies. These efforts will add to the technical knowledge base, confirm the viability of certain technologies, and demonstrate the technologies that might be employed for disposition of surplus Russian plutonium. At the same time, negotiations with Russia on a bilateral plutonium disposition agreement are underway. Initial conversations with our Russian counterparts reveal significant commonality of vision on the content, structure, and timing of this agreement with the end result that the United States hopes to conclude an agreement this fall. Once the agreement is in place, the United States and Russia would each proceed with parallel programs to convert approximately 50 tons of plutonium, withdrawn in stages from nuclear military programs into forms unusable for nuclear weapons.
Page 158 PREV PAGE TOP OF DOC Preceding implementation in 1998 of the 1985 U.S.-China nuclear cooperation agreement, DOE participated in two years of negotiations with China, stressing the need for export control laws and regulations and for China to become a member of the international nuclear proliferation regime. In 1998, China enacted laws and regulations laying the groundwork for an effective export control system, became a member of the Nuclear Non-Proliferation Treaty Exporters Committee (Zangger Committee), and signed an agreement with DOE for cooperation in export control for nonproliferation purposes.
Under the DOE/China Arms Control Exchange, workshops were held in 1997 and 1998 between DOE scientists from Los Alamos, Livermore, and Sandia National Laboratories and scientists from Chinese nuclear institutes on material protection, control, and accounting and on export controls. During these workshops, DOE scientists stressed the key roles that laboratory technical experts play supporting U.S. nonproliferation activities.