Nuclear Power in a Warming World: Solution or Illusion? Năng lượng hạt nhân và Sựu ấm lên toàn cầu: Giải pháp hay ảo tưởng

Nuclear Power in a Warming World: Solution or Illusion? Năng lượng hạt nhân và Sựu ấm lên toàn cầu: Giải pháp hay ảo tưởng - Quốc hội Mỹ thảo luận

Nuclear Power in a Warming World: Solution or Illusion? - Select Committee on Energy Independence and Global Warming - 2008-03-12 - On March 12, 2008, Chairman Edward J. Markey (D-Mass.) the Select Committee on Energy Independence and Global Warming will hold a hearing at 9:30 AM. in a 311 Cannon House Office Building entitled "Nuclear Power in a Warming World: Solution or Illusion?" This hearing will explore the degree to which nuclear power could provide a solution for addressing climate change. The contemplated future role of nuclear power in reducing global greenhouse gas emissions will clearly require a monumental capital investment, many years if not decades of planning and construction, extensive international coordination, and substantial assumption of risk by the general public and by investors. This hearing will examine the feasibility of achieving such a nuclear expansion, the costs and benefits of this nuclear path, and whether nuclear power can play a leading role in solving the climate challenge. WITNESS LIST: Amory Lovins, Cofounder, Chairman, and Chief Scientist of the Rocky Mountain Institute; Sharon Squassoni, Senior Associate in the Nonproliferation Program of the Carnegie Endowment for International Peace; David Lochbaum, Director of the Nuclear Safety Project for the Union of Concerned Scientists; Alex Flint, Senior Vice President of Governmental Affairs, Nuclear Energy Institute. Video provided by the U.S. House of Representatives.

Nuclear Power in a Warming World: Solution or Illusion?

WEDNESDAY, MARCH 12, 2008

House of Representatives,

Select Committee on Energy Independence

and Global Warming,

Washington, DC.

The committee met, pursuant to call, at 9:05 a.m. in Room 311, Cannon House Office Building, Hon. Edward J. Markey [chairman of the committee] presiding.

Present: Representatives Markey, Herseth Sandlin, Cleaver,

Hall, McNerney, Sensenbrenner, and Blackburn.

Staff present: Jonathan Phillips.

The Chairman. Good morning. This is a hearing conducted by the Select Committee on Energy Independence and Global Warming.

We welcome you this morning to this very, very important hearing.

The hearing is now called to order.

Decades ago, Americans from Wall Street to Main Street rejected nuclear power. After years of construction delays, reactor shutdowns and massive cost overruns, the private sector abandoned nuclear energy. Americans nervous about the health and safety of their families and communities had few objections to seeing the nuclear construction age grind to a halt.

However, the growing threat of global warming has thrust nuclear power back into the debate. With the health of our planet on the line, some believe that all options, even those set aside long ago, merit our support. I called this hearing today to take a deeper look at whether continuing taxpayer support of nuclear power gets us closer to achieving our energy and climate goals or whether it is holding us back.

All of the available evidence suggests the prospective costs, risks and uncertainties facing the nuclear industry are higher today than they have ever been. The domestic manufacturing and human resource capacity of nuclear power has dwindled. Nuclear construction worldwide has slowed to a crawl. And the nuclear projects currently under construction are plagued by the same delays and cost overruns that have always riddled the industry.

In addition to these profound, direct problems, the collateral-damage issues--uranium mining impacts, long-term waste storage, nuclear weapons proliferation, targets for terrorism--are even greater.

The last new nuclear plant opened in 1996 in Tennessee after 22 years of construction and at a cost of $7 billion. Are delays like this acceptable in any other industry?

Florida Power & Light recently announced its plans for two new reactors at its Turkey Point facility, which it projects will cost from $12 billion to $24 billion. Could the most ambitious solar- or wind-generating station succeed if its cost projections included uncertainties of $12 billion?

Another electric utility, Progress Energy, announced yesterday that it plans to build two reactors at an estimated price of $17 billion, passing on an additional cost to customers of about $9 per month per household. Customers would begin paying this surcharge beginning in 2009, 7 years before the project would produce a single kilowatt of electricity. Can the wind industry ask for and expect to receive a 7-year cash advance from future customers?

At the Select Committee hearing last week, we witnessed the power of free markets rising to meet our energy and climate challenges. Private capital markets are moving billions of dollars into clean, renewable energy technologies, in the process creating new jobs and driving economic growth. As proof that this green revolution is taking hold, the wind industry installed over 5,200 megawatts of new generating capacity in the United States last year, about 30 percent of all new

capacity installed in the United States.

Worldwide, the story is the same. The 20,000 megawatts of wind energy capacity built in 2007 was more than 10 times that of nuclear. Between now and 2016, the year in which we are likely to see the first new nuclear plant come on line in the United States, the world is projected to add 361,000 megawatts of wind. That means, in the next 10 years, as much wind-generating capacity will be installed as the total amount of nuclear capacity built worldwide over the previous half-century.

The job of Congress is not to fix problems by creating new ones or, in this case, recreating them. The innovative spirit of the American entrepreneur is forging a path forward. It is clean, it is scalable, it is distributed, it is safe, and its price is falling. These are claims that nuclear power cannot make.

Taxpayer support for the nuclear industry over the past 50 years has been massive. From 1950 through 2000, the nuclear energy industry received $145 billion in Federal subsidies in constant 1999 dollars, or over 96 percent of the total subsidies allocated to wind, solar and nuclear energy.

The American public and financial investors are responsible for putting nuclear power on mothballs. Congress must think long and hard about the wisdom of reversing that decision.

Let's trust and encourage the ingenuity of the American people to solve the energy and climate challenge. The nuclear industry is not going to be the economic driver of the 21st century, but

there is abundant evidence that renewable energy will.

That completes the opening statement of the Chair. I now turn to recognize the ranking member of the committee, the gentleman from Wisconsin, Mr. Sensenbrenner.

[The prepared statement of Mr. Markey follows:]

Mr. Sensenbrenner. Thank you very much, Mr. Chairman.

Today, I will talk about the merits of nuclear energy, which is a technology that stands to produce real results in reducing greenhouse gasses. But, first, let me be clear. I understand that nuclear technology has drawbacks too, as do renewable resources and fossil fuels. While some here today will try to sell the merits of one technology over another, I will not do that, because, in the end, Members of Congress are setting policy, not selling energy. It is the utilities and the energy producers who will sell energy and electricity in the marketplace. I believe it should be the marketplace, not regulators and policymakers, which ultimately decides what sources of energy are the most realistic for the future. It is not Congress's job to pick winners and losers, but I worry that many on this panel aim to do just that.

Nuclear power is efficient and cost-effective and, I believe, in many places, the right answer for our electricity needs, but it is not the right answer for all places.

Nuclear power is an especially useful solution for reducing greenhouse gas emissions. Mr. Alex Flint, the senior vice president of the Nuclear Energy Institute, will testify today that the 439 nuclear power plants worldwide help avoid 2.6 billion tons of CO2 each year. That is more than

three times the amount of carbon dioxide produced by all the cars in the United States in 2005. I welcome Mr. Flint's testimony and look forward to learning more about the potential that nuclear power offers the world.

Nuclear power is such a powerful greenhouse gas-reducing technology that the Nobel Peace Prize-winning U.N.

International Panel on Climate Change cited nuclear power as one of the key technologies for addressing global warming in the future.

As I stated at our hearing last week, renewable energy has its own set of benefits and drawbacks and is not technically feasible for all areas of the country. But renewable energy should be an increasing part of our energy future, just like nuclear power, energy efficiency and fossil fuels. The world's energy future needs require us to maintain a diverse portfolio of energy technologies.

While some today will highlight the drawbacks of nuclear power, they do so without fully acknowledging the drawbacks of other technologies they support. For instance, a recent story

in The Washington Post reported on the industrial pollution left behind by Chinese solar energy panel producers. And the New York Times reported this week that a biodiesel plant in

Alabama is producing pollution as a byproduct and dumping it into a local river. Kermit the frog was right: It is not easy being green.

As I have said many times, the advancement of technology must be a part of any energy security or global warming policy.

Nuclear power should be a key part of the diverse array of technologies needed for the future. Plus, nuclear power's potential for reducing greenhouse gasses can't be ignored by anyone who thinks this is a pressing priority for the world. If we are searching for realistic solutions, nuclear power can't be ignored but must be approached with a healthy skepticism to see whether that is the right thing to do at the right time, at the right place.

I have to apologize to our witnesses because, at 10 o'clock, I have to go to the Science Committee, where Bill Gates is testifying. And I do want to tell him that if he wants more high-tech visas, he had better get realistic on how to get that through the Congress.

So I thank the Chairman and yield back the balance of my time.

The Chairman. Great. The gentleman's time has expired.

The Chair recognizes the gentleman from Missouri, Mr. Cleaver.

Mr. Cleaver. Thank you, Mr. Chairman and Mr. Sensenbrenner.

There can be no doubt, or at least there is no doubt in my mind, that our planet is in crisis. And our constant, growing need for energy has inspired this potentially perilous situation.

However, emerging industries, such as solar and wind energy, can aid our country and others in accessing enough energy without causing potentially dangerous effects on the environment and public health.

Nuclear energy currently produces 19 percent of our Nation's electricity from 104 nuclear reactors, one of which is in my home State, not very far from my hometown, Kansas City.

Nuclear power has the ability to produce domestic energy without greenhouse gasses as a byproduct. However, if we can recall the disaster of Chernobyl and the reactor accident at

Three Mile Island, we know all too well that there are potentially harmful risks and unintended consequences.

A large nuclear reactor produces around 25 to 30 tons of spent fuel annually. However, the proposed Yucca Mountain waste site, about 90 miles from Las Vegas, would only have the

capacity to hold waste produced through the year 2010. Thus, this would only be a temporary solution, but it is a major risk.

Before we invest in the new production of nuclear power, we need to thoroughly examine all of the threats to public safety and the environment that it presents. We must remember that the

welfare of our communities is our highest priority. We must also consider and make decisions on which energy sources will work best for our future.

I look forward to hearing the views of our witnesses this morning, as we discuss this and other ways that we can deal with this source of energy without Federal subsidies at a level that will break the bank.

I would like to thank the panel in advance for your insight and for joining us here today. Thank you very kindly.

I yield back the balance of my time.

[The prepared statement of Mr. Cleaver follows:]

The Chairman. Great. The gentleman's time has expired.

The Chair recognizes the gentlelady from Tennessee, Mrs. Blackburn.

Mrs. Blackburn. Thank you, Mr. Chairman. I thank you for the hearing.

And I want to welcome all of our guests.

As we know, nuclear power is a vital component to meet future energy needs and help America maintain its competitive edge. It is the most stable, least expensive and cleanest form

of electric power generation available today. It is an emissions-free, domestic energy source with enough fuel stocks to last for centuries.

Nuclear energy will also be a key asset to the electric power infrastructure as the public embraces the use of electric vehicles for transportation needs and if Congress enacts a

greenhouse gas reduction scheme.

Some critics maintain that nuclear energy is either too costly or that it has too poor a track record. In the past, that could have been true. But nuclear power plant construction once experienced delays and cost overruns due to licensing problems, poor project management and economic chaos of the 1970s, but Congress mitigated some of these factors in the Energy Policy Act of 2005, and the Nuclear Regulatory Commission took steps last year to drastically restructure the licensing process to ensure all major issues are settled before a company starts building a nuclear power plant and puts those billions of dollars at risk.

Further, over time and experience, the nuclear industry has vastly reduced past problems by implementing measures to manage and to contain risk, to financing and completing capital

projects. And now, with modular construction, standard designs and integrated engineering and construction schedules, nuclear power plants can be built both on time and on target.

Mr. Chairman, the key to achieving American energy independence is maintaining a diversity of power generation. We cannot rely solely on a few favored energy sources. Gas, coal, renewable energy and nuclear power all should play a part in the infrastructure.

I yield back the balance of my time.

The Chairman. That is great. The gentlelady's time has expired.

The Chair recognizes the gentleman from California, Mr. McNerney.

Mr. McNerney. Thank you. I would like to thank the ranking member and the Chairman for holding this timely and important hearing.

My interest today is to get a deeper understanding of the merits and the demerits of nuclear energy. I have three main concerns: the economics, the safety, and nuclear proliferation.

Safety, I believe, is an engineering issue, which reflects back on the economics. Proliferation is a political and engineering issue. So, ultimately, what I want to understand today is the economics, and so I am looking forward to your testimony. If you can elevate that to where it can be understood, I will very much appreciate your hearing today.

Thank you very much. I yield back the balance of my time.

The Chairman. Great. The gentleman's time has expired.

All time for statements by the members has expired, so we will turn to recognize our witnesses.

We are going to begin with Mr. Alex Flint. He is our opening speaker. He joins us from the Nuclear Energy Institute where he is the senior vice president of government affairs. He is also very familiar with these issues from his time as staff director of the Senate Committee on Energy and Natural Resources.

We look forward to your testimony, Mr. Flint. Whenever you are ready, please begin.

STATEMENTS OF MR. ALEX FLINT, SENIOR VICE PRESIDENT OF

GOVERNMENT AFFAIRS, NUCLEAR ENERGY INSTITUTE; MS. SHARON

SQUASSONI, SENIOR ASSOCIATE, NONPROLIFERATION PROGRAM, CARNEGIE

ENDOWMENT; MR. DAVID LOCHBAUM, DIRECTOR, NUCLEAR SAFETY

PROJECT, UNION OF CONCERNED SCIENTISTS; MR. AMORY LOVINS,

CHAIRMAN AND CHIEF SCIENTIST, ROCKY MOUNTAIN INSTITUTE

STATEMENT OF ALEX FLINT

Mr. Flint. Chairman Markey, Ranking Member Sensenbrenner, members of the committee, thank you for the opportunity to appear before you today. I have a written statement that I ask

be included in the record.

The Chairman. Without objection, it will be included in the record.

Mr. Flint. Mr. Chairman, in preparation for this morning's hearing, I scanned through your book, ``Nuclear Peril.'' It has been a long time since I read it. I was struck by how very different the U.S. nuclear industry is today from when you wrote your book in 1982.

It also reinforced for me the years and now decades in which you have been concerned about nuclear energy and weapons.

It is with sincere appreciation of that concern that I thank you for taking the time to consider the attributes of nuclear energy, which make it so interesting and compelling as we decide how to address the challenge of climate change.

Because of rapid population and economic growth, EIA forecasts global electricity demand to nearly double between 2004 and 2030. It is extraordinarily challenging to imagine credible scenarios by which the world can double electricity production in the coming decades and concurrently reduce greenhouse gas emissions. To do so will take the successful implementation of a wide range of solutions, as Professors Pacala and Socolow made clear in their wedge analysis. To do so will require the widespread use of renewables, conservation, efficiency, carbon sequestration and nuclear energy.

That conclusion is shared by leaders and governments around the world. My written statement includes quotes and references in that regard from individuals and groups, including Yvo de Boer, the Fourth Assessment Report of the IPCC, the World Energy Council, the World Business Council for Sustainable Development, Dr. Jeffrey Sachs, and the Progressive Policy Institute.

The willingness of individuals and organizations that would not otherwise be so inclined to consider and now support the deployment of new nuclear power plants is due, in part, to the

need to identify all credible ways to reduce greenhouse gas emissions. However, this reconsideration also is made possible by the extraordinarily safe and efficient operation of the

existing nuclear fleet.

In 2007, the 104 reactors in the U.S. nuclear fleet operated at 92 percent of capacity. That was accomplished because of high management standards, a focus on reliability and safety, and fewer and shorter outages. It enabled nuclear power plants, which are 12 percent of installed U.S. generation capacity, to produce nearly 20 percent of the electricity generated in the United States last year.

Concurrently, production costs continued to fall last year to 1.68 cents per kilowatt hour, a record low and the 7th straight year that nuclear plants have had the lowest production cost of any major source of electricity.

Nuclear power plants generate over 70 percent of all carbon-free electricity in the United States, and prevented 681 million metric tons of carbon dioxide emissions in 2006. For perspective, the volume of greenhouse gas emissions prevented at the Nation's 104 nuclear power plants is equivalent to taking 96 percent of all passenger cars off the roads.

Our nuclear power plants are also extraordinarily safe places to work. In 2006, our lost time accident rate was 0.12 accidents per 200,000 worker hours. That is significantly safer

than the 3.5 accidents per 200,000 worker hours in the manufacturing sector. It is even safer to work at a nuclear power plant than it is to work at a bank.

At a global level, 439 nuclear power plants produce 16 percent of the world's electricity while avoiding the emission of 2.6 billion metric tons of CO2 each year. And a new build renaissance is under way. There are 34 nuclear units under construction worldwide, including seven in Russia, six in India and five in China. In the United States, we have one, the 5-year, $2.5 billion completion of TVA's Watts Bar 2.

In the United States, 17 companies or groups of companies are preparing license applications for as many as 31 new reactors. Five complete or partial applications for COLs were filed with the NRC in 2007, and another 11 to 15 are expected this year. As a result, the industry expects four to eight new U.S. plants in operation by 2016 or so, depending on a variety of factors that are provided in my written statement. A second wave could be well under construction as the first wave reaches commercial operation.

Every source of electricity has benefits and challenges. Capital costs for new nuclear plants are significant. However, when both operating and capital costs are considered, nuclear power will be competitive with other new sources of electricity.

Chairman Markey, you mentioned the Florida Power & Light Company petition for determination of need. One of the things in that petition was FP&L's finding that the addition of new nuclear capacity is economically superior versus the corresponding addition of new gas-fired combined cycle units required to provide the same power output.

At the peak of construction, a nuclear plant will employ 2,300 skilled workers. Upon completion, approximately 700 workers will be required to operate and maintain the plant.

Those workers receive excellent benefits and earn pay that is, on average, 40 percent higher than wages earned by workers doing similar work in nonnuclear facilities.

The industry also is working with organized labor to develop training and other programs to provide the cadre of highly skilled workers that our future requires. NEI supports

the application of Federal prevailing wage requirements, contained in the Davis-Besse Act of 1931, to loan guarantees authorized by title 17 of the Energy Policy Act of 2005.

In addition, NEI is working aggressively to revitalize the United States' nuclear manufacturing infrastructure. The global nuclear renaissance will require additional capacity for a range of products, from very small components to ultra-heavy steel forgings and castings.

Even as we work to build the next fleet of advanced reactors for electricity production, we also are developing reactors that will provide energy security and environmental benefits well beyond the traditional electric sector. One promising next-generation technology is the high-temperature gas reactor. Its unique design is well-suited to meet a wide variety of future needs, such as the production of hydrogen, drinking water, industrial process heat, and to generate electricity appropriate for the distribution systems in developing countries.

In closing, nuclear energy is the single largest source of non-carbon-emitting generation. It is a proven technology, operated at high standards, by an experienced industry that is committed to safety. It is the only energy option available today that can provide large-scale electricity, 24/7, at a competitive cost, without emitting greenhouse gasses.

Mr. Chairman, that concludes my statement. I would be glad to take any questions.

[The prepared statement of Mr. Flint follows:]

The Chairman. Thank you, Mr. Flint, very much.

Our second witness is Ms. Sharon Squassoni, who has been analyzing arms control and nonproliferation issues for 20 years. She is a senior associate in the nonproliferation program at the Carnegie Endowment for International Peace. She has also served in the Nonproliferation and Political Military Bureaus in the State Department.

We welcome you. Whenever you are ready, please begin.

STATEMENT OF SHARON SQUASSONI

Ms. Squassoni. Good morning. Thank you, Chairman Markey and Ranking Member Sensenbrenner and other members of the committee, for inviting me to provide comments on the topic of nuclear energy expansion and its contribution to mitigating global climate change.

Chairman Markey, I would like to request permission to submit longer testimony for the record, and I will summarize my remarks here.

The Chairman. Without objection, so ordered.

Ms. Squassoni. Thank you.

In addition, I would like to present a few graphics on nuclear expansion, which I understand is unorthodox, but, in this case, a picture may be worth a thousand words.

Recent nuclear enthusiasm stems from several expectations: that it can help beat global climate change, meet rapidly increasing demand for electricity, combat rising costs for oil and gas, and provide energy security. The gap between expectations and reality, however, is significant. This

morning, I will focus on what it will really take for nuclear energy to make a difference in terms of global climate change and why this is unlikely to happen.

As you can see on the first slide, global nuclear reactor capacity now stands at 373 gigawatts electric, or about 439 reactors. By 2030, under what I call a "realistic growth

scenario,'' which is based on U.S. Energy Information Administration figures, that capacity could grow about 20 percent. Yet, since electricity demand is expected to almost double in that time, nuclear energy is unlikely to keep its market share, which could drop from the current 16 percent to 10 percent of worldwide electricity generation.

In the U.S. alone, according to nuclear industry estimates, a stable market share for nuclear energy would require the U.S. to build 50 nuclear reactors by 2025. At the same time, the

U.S. would also be building 261 coal-fired plants, 279 natural-gas-fired plants and 73 renewables projects. This is based on, I believe, Booz Allen Hamilton information.

States' plans for nuclear energy, however, may be anything but realistic. What you are looking at now are these red dots, which are 2030 plans, the announced intentions of States for nuclear energy.

In my second scenario, what I call the "wildly optimistic'' one, the total reactor capacity would reach about 700 gigawatts by 2030. This is not a projection but, rather, takes at face value what States have announced they will do.

More than 20 nations have announced intentions to install nuclear capacity that do not now have nuclear power plants. More than half of these are in the Middle East.

The final scenario depicts what an expansion to 1,500 gigawatts might look like based roughly on the high-end projections for 2050 done by MIT in its 2003 study entitled, ``The Future of Nuclear Power.'' I call this the "climate change scenario.'' It is a little bit more than a Pacala-

Socolow wedge, which is defined as the level of growth needed to reduce carbon emissions by more than 1 billion tons per year by 2050, which equals about 1,070 gigawatts, but it is less

than the Stern report on climate change estimates that nuclear energy could reduce carbon emissions between 2 billion and 6 billion tons per year. The Stern numbers were literally off the

map, so I did not include them here.

For 1,500 gigawatt capacity, MIT estimated that 54 countries, which is an additional 23 compared to today, would have commercial nuclear power programs. This essentially means

a fivefold increase in the number of reactors worldwide and an annual build rate of 35 reactors per year.

If we go to the next slide, you can see what this looks like. This is 2030 and, again, 2050. These are all new nuclear power states.

Then, if you go to the next slide, you will see a closer look. The darker the color, the firmer the plans are. When I say "announced intentions,'' some of these plants will never come to fruition.

These expansion scenarios have implications for both the front and back ends of the fuel cycle. As the next graph shows, building one nuclear wedge would require tripling uranium enrichment capacity. So that is the first green bar that you see. The orange is today's enrichment capacity, about 50 million separative work units. In the first green one, there is the climate change scenario. As you see, it gets much larger if you go to the Stern numbers.

New states could find it economically feasible to develop their own enrichment. If we go to the next slide, you will see that is current enrichment capacity. Keep going; these are 2030

plans. Then beyond climate change, you see that a lot more states could potentially be enriching. These are also a little bit lower than the MIT numbers, which estimated, I guess, that

18 countries would have enough reactor capacity to merit enrichment.

It is unlikely that these expansion rates will be achieved, however. The U.S. has just a fraction of the nuclear infrastructure it had decades ago, 2 decades ago, and other countries have not fared much better. In the last 20 years, there have been fewer than 10 new construction starts in any

given year. Industrial bottlenecks are significant now, particularly in forging reactor-pressure vessels and steam generators.

The sole company with ultra-large forging capacity, Japan Steelworks, has a 2-year waiting list. When it completes its expansion in 2010, it will only produce enough forging sets for eight reactors per year. The capabilities of alternative suppliers, such as China, are unknown.

Other constraints include labor shortages, not just in engineers but also craft and construction labor, and long lead times for components and materials. Financing is another huge topic, worthy of a separate hearing. And the cost of inputs has risen significantly in recent years.

Finally, the proliferation risks of nuclear expansion are not limited just to a three-, four- or fivefold increase in the number of reactors. Some states may move forward anyway, propelled by unrealistic expectations, and could acquire uranium enrichment and plutonium separation capabilities. Such national fuel production capabilities could introduce even greater uncertainty about proliferation intentions in regions like the Middle East because of the latent nuclear weapons capability of such plants. Efforts to address both supply and demand for such sensitive capabilities need to be redoubled.

The current policy debate paints nuclear energy clean and green; advocates nuclear energy for all, even though some states with nuclear reactors could pose significant safety and proliferation concerns; and suggests that nuclear energy is a path to energy security.

At the same time, U.S. officials insist that some states forgo developing indigenous nuclear capabilities. This confused message obscures important policy considerations. If nuclear

energy----

The Chairman. Could you try to summarize, please?

Ms. Squassoni. Last sentence.

If nuclear energy can't really make a difference in terms of global climate change, are the huge costs and risks worth it?

Thank you.

[The prepared statement of Ms. Squassoni follows:]

The Chairman. Thank you so much.

Our next witness is Mr. David Lochbaum. He is the director of the Nuclear Safety Project for the Union of Concerned Scientists, where he leads the efforts to ensure the safety of nuclear power in the United States. Mr. Lochbaum has more than 17 years of experience in commercial nuclear power plant startup, testing, operations, licensing, software development, training, and design engineering.

We welcome you, sir. Whenever you are ready, please begin.

STATEMENT OF DAVID LOCHBAUM

Mr. Lochbaum. Thank you, Mr. Chairman and members of the committee. I appreciate this opportunity to present our views. I have submitted a written statement that I request be

entered into the record.

The Chairman. Without objection, so ordered.

Mr. Lochbaum. 253 nuclear power reactors have been ordered in the United States. 28 percent were cancelled before construction even began. Another 20 percent were cancelled after construction began. So about half of the reactors ordered never generated a single watt of electricity.

But what about the other half? 11 percent of the reactors ordered shut down prematurely due to unfavorable economics. 14 percent of the reactors ordered are operating today but have

had to shut down for at least a year to restore safety levels.

Only 27 percent of the reactors ordered are operating today without having experienced a year-plus safety restoration outage.

The NRC anticipates 33 nuclear reactor applications in the near term. Running the calendar forward 55 years could yield the following retrospective: 33 nuclear reactors ordered, nine

reactors cancelled before construction began, seven reactors cancelled after construction began, four reactors shut down due to economics, four reactors operating despite 1-or-more-year-

plus outages, nine reactors operating without a year-plus outage.

Does past performance predict the future? Yes, when the underlying causes and behavior patterns are firmly in place, as if set in concrete.

Nearly 30 years ago, during the 97th Congress, the House held a hearing on construction problems caused by poor quality control. Chairman Udall posed four questions: How did these

quality assurance failings occur? Why did the failings go undetected so long by the owners and the NRC? What is being done to minimize the likelihood of future failings? How can we be sure that completed plants have been constructed in accordance with NRC's regulations?

The answer to the first question is mismanagement by plant owners, a recurring theme in nuclear power plant problems since that hearing. Mismanagement shut down all of TVA's nuclear plants in the 1980s, it shut down eight reactors for over a year in the late 1990s, shut down Davis-Besse for over 2 years earlier in this decade, and caused the current problems at the

Palo Verde plant in Arizona.

The answer to question two is mismanagement by the plant owners, coupled by ineffective oversight by the NRC. The companion theme in nuclear plant problems since that hearing

has been ineffective oversight by the NRC. The GAO reported in 1997, quote, ``NRC is not effectively overseeing the plants that have problems. NRC enforcement actions are too late to be

effective,'' end quote. Seven years later, almost to the day, GAO updated its conclusion: Quote, ``NRC should have but did not identify or prevent the vessel head corrosion at Davis-

Besse because both its inspections at the plant and its assessments of the operator's performance yielded inaccurate and incomplete information on plant safety conditions,'' end quote.

The names and the dates change, but the underlying pattern of mismanagement, coupled with ineffective NRC oversight, remains the same.

The answer to question three is that quality assurance failings during nuclear plant construction were minimized when we stopped constructing nuclear power plants. The problem was

never solved; it just became moot.

The answer to question four is that no such assurance

exists. In 2000, the NRC reported hundreds of design errors at operating plants--prima facie evidence that the completed reactors did not meet NRC's regulations. 70 percent of those

design errors dated back to original construction that were not detected.

More recently, there are signs that the nuclear industry cannot even renovate its existing plants. Consider the two reactors at Quad Cities, licensed in 1972. 29 years later, the

NRC approved increasing its power level by 20 percent. Within 3 weeks, the unit 2 reactor was shut down due to repair leaks caused by vibrations from the hot-air steam flows. During

restart, vibrations broke a drain line off a steam pipe. Weeks later, the reactor had to be shut down again when vibrations damaged the steam dryer. The owner reported, quote, ``The root

cause of the steam dryer failure was determined to be a lack of industry experience and knowledge of flow-induced vibration dryer failures,'' end quote.

If the nuclear industry is inexperienced and knowledge-challenged about their old reactors, how can they have sufficient knowledge and experience to tinker with new ones?

The Energy Bill of 2005 contains billions of dollars of subsidies to jumpstart a moribund nuclear industry to help address global warming. Nuclear power plant owners are protected when their mismanagement causes a reactor under construction to be cancelled, a reactor under construction to take longer and cost more, or an operating reactor to melt down. But how are Americans protected from global warming when their mismanagement causes nuclear power plant "solutions'' to come up empty? Clearly, Americans deserve protection against the nuclear industry defaulting on its global warming pledges, especially since so many of our tax dollars are subsidizing those pledges.

The best protection would be a zealously aggressive regulator enforcing safety regulations. The NRC is not that regulator.

The NRC needs to take three steps toward becoming that regulator: institute safety culture surveys of its workforce every 2 years and make the results available; fill senior manager vacancies from a pool that includes external candidates; institute a rotation plan in which middle-level managers are rotated to other Federal agencies and middle managers from those agencies come to work at the NRC.

If the NRC is not reformed, nuclear power will be more of an illusion than a solution to global warming.

Thank you.

[The prepared statement of Mr. Lochbaum follows:]

The Chairman. Thank you, Mr. Lochbaum, very much.

Our final witness is Mr. Amory Lovins, who is chairman and chief scientist of the Rocky Mountain Institute and chairman emeritus of Fiberforge, Incorporated. Mr. Lovins has published 29 books and hundreds of papers, and advises governments and major firms worldwide on advanced energy and resource efficiency.

We are honored to have you with us here today, Mr. Lovins.

Whenever you are ready, please begin.

STATEMENT OF AMORY LOVINS

Mr. Lovins. Thank you, Mr. Chairman and distinguished committee members. I appreciate this opportunity to share with the committee some recent analysis of whether we need nuclear

power, especially to protect the climate.

And I request that my written submission be included in the record.

The Chairman. Without objection, so ordered.

Mr. Lovins. Thank you.

I will summarize why nuclear power is not needed for any civilian purpose, how and why it is being dramatically outcompeted in the global marketplace by no-carbon and low-carbon electrical resources that deliver far more climate solution per dollar far faster, and why nuclear expansion would inhibit climate protection, energy security and reliably powering prosperity. Even if nuclear power could attract private risk capital, it could not in principle deliver its

claimed climate and security benefits, but because it is uneconomic and unnecessary, we need not inquire into its other attributes.

Far from undergoing a renaissance, nuclear power is conspicuously failing in the marketplace for the same forgotten reason it failed previously: It costs too much, and it bears too much financial risk to attract private risk capital, despite Federal subsidies now approaching or exceeding its

total cost.

What is beating nuclear power at other central thermal plants? Micropower--that is, cogeneration plus distributed renewables--now produces a sixth of the world's total electricity, more than nuclear, at least a third of the world's new electricity, and from a sixth to over half of all electricity in a dozen industrial countries. The U.S. lags, with about 4 percent. Negawatts, electricity saved by using it more efficiently or timely, are about as big worldwide as

micropower and cost even less.

In 2006, nuclear power added less capacity than photovoltaics added, one-tenth what wind power added, and 30 to 41 times less than micropower added. Its output growth was one-

sixth of micropower's.

Distributed renewables won $56 billion of private risk capital. Nuclear, as usual, got zero. Only central planners buy

it. China's distributed renewable capacity reached seven times its nuclear capacity and is growing seven times faster.

Micropower has such huge potential that just the full economic use of electric efficiency, zero-carbon waste-heat cogeneration and wind power, with no other renewables, could

provide roughly 13 to 15 times nuclear power's current share of U.S. electric generation without significant land use, reliability or other constraints, at much lower cost and with millions of good new jobs.

Distributed generators are generally more dependable than centralized ones because their many small units will not all fail at once and can bypass the grid where nearly all power failures originate. Variable renewable resources--sun and wind--even in large amounts, need less backup than we have already bought and built to manage the intermittence of big thermal plants, especially nuclear plants, many of which can fail simultaneously, unpredictably and for long periods.

The Nuclear Energy Institute says 78 percent of the new coal plants announced in the past couple of years got cancelled. I expect announced nuclear projects to do worse because they cost more. They have attracted no private risk capital, despite U.S. taxpayer subsidies that can now total about $13 billion per new nuclear plant, roughly its entire cost, which exceeds the market cap of any U.S. utility, save one.

The smart money, led by Warren Buffet, is now heading for the exit, spooked by steeply rising nuclear costs, disappointments in the flagship Finnish project, competition by ever-cheaper micropower negawatts, and the credit crunch. The U.S. can have only about as many new nuclear plants as taxpayers are forced to buy. Heroic efforts at near or over 100 percent subsidization will continue to elicit the same response as defibrillating a corpse: It will jump, but it won't revive.

That is good for climate protection, because nuclear power is so expensive that it buys roughly one and a half to 11 or more times less carbon reduction per dollar than competing no-carbon technologies or even fossil fuel cogeneration in factories and buildings.

As the graph in my prefiled testimony's Annex E explains--or as the graphs explain, I should say--nuclear plants cost so much more than competing climate solutions that spending a

dollar on nuclear, instead of on efficient end use, worsens global warming more than spending the same dollar on new coal power. It is, therefore, time to got on with judicious investments that yield the most energy services and the most climate protection per dollar and per year.

The straightest path to American energy security and to a richer, fairer, cooler and safer world is to let all ways to save or produce energy compete fairly at honest prices, regardless of their type, technology, size, location and ownership. That is pretty much the opposite of the Federal

energy policy we have.

Thank you, sir.

[The prepared statement of Mr. Lovins follows:]

The Chairman. I thank you very much, Mr. Lovins.

The Chair will now recognize for a round of questions the gentleman from Missouri, Mr. Cleaver.

Mr. Cleaver. Thank you, Mr. Chairman.

Again, I thank all of you.

The issue of safety is extremely important in my community.

We are not far from one of the nuclear facilities, one of the 104, in our community. We are clearly aware of the two significant accidents that have happened in the nuclear facilities.

This would go to any of you. If you were giving information to the 1.7 million people in our metropolitan area, what would you say that you believe would assure them of the safety of

such a facility?

Mr. Flint. If I can take that question, Congressman, I would tell you that the track record of the U.S. nuclear power plants is that they are exceptionally safe and that the safety is improving, and that the metrics by which the NRC tracks that--and there are a variety of metrics, be they from the Bureau of Labor Statistics, worker injury statistics that were in my statement, or be they the NRC's metrics where they track unplanned shutdowns and other issues--are all trending very positively.

And so those plants are absolutely safe. They are safe from a perspective of their physical operations, from the way in which the professional staff operates those plants and from the

security. In every manner, those plants are currently very safe.

Mr. Cleaver. Yes, I mean, I listened in your statement, and I appreciate the information you provided with regard to the safety, you know, that it is as safe as working in a bank. But,

you know, airplane travel is far, far safer than driving an automobile. The issue, though, is that there is a possibility of surviving an automobile accident. Surviving an airplane accident is dramatically lower. And so, you know, people are thinking one event at a nuclear facility, a major event, could be just devastating. And so people are afraid all over the country, which is part of the reason.

Part of the reason, of course, is the cost, the Federal subsidy, which is something we would be concerned about. But also, I am not sure that there are a lot of electeds around the country who are willing to stand up and say to a community, "We are going to build a new facility.'' I mean, you can say that electeds do not have courage or whatever, but the truth of the matter is people are afraid.

Mr. Flint. Congressman, we deal with that issue frequently.

It is a question of helping people understand real versus perceived risks.

I will tell you that, currently, some of the greatest support new nuclear power plants have for construction in this country comes from the elected officials whose districts include those plants and whose communities include those plants. Frankly, our polling shows that people who live nearby nuclear power plants, who are familiar with them, who know people who work at the plants so that they have those personal relationships and where they can talk to people, their

neighbors, actually are some of the strongest supporters of nuclear power.

So I agree with you, we have a perception problem. When we are given the opportunity and we sit down with people over a period of time and they grow to trust us and they grow to trust

the people who work at and who operate those plants, those perceptions change over time.

Mr. Cleaver. That may happen. But the other issue that we all would have to deal with, as it relates to a community, is that the waste is primarily unconverted uranium. When you say

``unconverted uranium'' in the climate today, there is then going to be the discussion about, you know, what if this is somehow used or falls in the hands of those who would want to harm people in this country?

And where do we store the waste? What area in the country is open and joyful about receiving the waste?

Mr. Flint. Congressman, you, having a nuclear power plant near your district, are well aware of the political difficulties associated with storing used fuel on site.

Ideally, the Nuclear Waste Policy Act, which requires the DOE to pick up used fuel beginning in 1998, over a decade ago, would be operative. Unfortunately, it is not. As a result, we store used fuel on site, be it in pools or dry casks. We do it very safely. That fuel is handled in a way in which it is protective of the health and environment. It is secure.

Mr. Cleaver. But we can't continue to do that at each site.

Mr. Flint. Sir, you are absolutely correct. And the Government's failure to move used fuel is extremely frustrating, particularly to politicians to whom utilities have made promises that used fuel will be moved.

However, in the absence of DOE meeting its obligations, the utilities are responding very constructively to dealing with the used fuel on site, and it is currently stored safely and securely. It is not an ideal situation, but I can assure you it is very protective of health and safety.

Mr. Cleaver. Thank you, Mr. Flint.

Thank you, Mr. Chairman.

The Chairman. The gentleman's time has expired.

The Chair recognizes the gentlelady from South Dakota, Ms. Herseth Sandlin.

Or I could ask questions and come back to the gentlelady?

Great. Thank you.

The Chair will recognize himself for a round of questions.

Mr. Lovins, you heard the argument made by Mr. Flint from the Nuclear Energy Institute. This is a stark difference of opinion in terms of the economics of nuclear in our country. He is contending that nuclear is on the rebound, it has had a revival, it is about to produce perhaps four to eight completed nuclear power plants by the year 2016, and that the prospects

beyond that are very rosy, indeed.

How do you analyze the prospects as you have just heard Mr.

Flint present them to the committee here today?

Mr. Lovins. I am very puzzled. The motto in our shop is, "In God we trust; all others bring data,'' so I look at the numbers. I do not see any private investment in new nuclear plants. It has never been bid into a competitive market. It has never been bought in what is normally--in the current

generation, of what is normally considered a free-market transaction anywhere in the world. And the competitors that the nuclear industry dismisses as uneconomic, impractical and trivial are producing more electricity today than nuclear is, growing tens of times faster, and it has tens of times nuclear's market share.

So I fear the nuclear industry lives in a sort of "Alice in Wonderland'' world in which nuclear merits every kind of subsidy and support because it is supposedly indispensable, while it actually has only about a 2 percent market share in the world's new electric capacity, and its competitors--micropower and negawatts--are beating all central plants.

The Chairman. Now, again, when you say ``negawatts,'' what do you mean by--you mean N-E-G, negative watts?

Mr. Lovins. Correct.

The Chairman. What do you mean by that?

Mr. Lovins. And ``N'' for ``Nellie.''

Negawatts are saved electricity, saved through either efficient end use or a demand response. And although they are not nearly as well measured as megawatts, they do appear to be having about the same annual capacity effect in the world, maybe even bigger, as micropower has.

The Chairman. I want to go over to Mr. Flint and have him respond to what you are saying. I think I hear you saying that there is no private-sector investment in nuclear power, that

there is no market right now for private money to be placed into the nuclear power market. Is that correct?

Mr. Lovins. Yes, sir, despite Federal subsidies now approaching or exceeding new nuclear plants' U.S. cost.

Now, I find this really remarkable because, normally, if you lay out that lavish a trough, some pigs will arrive. But I do not see them arriving, because the private capital market believes, in my view, that the reward is not greater than the financial cost of risk.

The Chairman. Let me go over to Mr. Flint then.

How do you respond to what Mr. Lovins just said? He says there is no private capital going into nuclear power.

Mr. Flint. Well, Mr. Chairman, I appreciate the opportunity to address the issue.

I am confronted with a situation in which many people have proposed that nuclear power receives a variety of different levels of subsidies. I have tried on occasion to duplicate the

math, and I can't make some of those numbers work.

And so I went off and I looked at two different sources.

And, if you like, I can make these available for the record. I have the June 2006 issue of Science and Technology, which is the publication of the National Academies. There is an article in there entitled ``Real Numbers: The U.S. Energy Subsidy Scorecard,'' by Mr. Bezdek and Mr. Wendling of the Management Information Services. And they compare the subsidization rates

of all energy technologies in the United States.

And let me read one of their conclusions: ``Considerable disparity exists between the level of incentives received by different energy sources and their current contribution to the U.S. energy mix. Although oil has received roughly its proportionate share of energy subsidies, nuclear energy, natural gas and coal may have been undersubsidized. And renewable energy, especially solar, may have received a disproportionately large share of Federal energy incentives.''

Now, that is sort of an aggregate assessment. There are two issues--and Mr. Lochbaum mentioned them in his statement--with which I am particularly familiar, so I would like to focus on those two things.

The Energy Policy Act of 2005 reauthorized Price Anderson in title 6. In title 17, it had a loan guarantee program for innovative technologies. Frequently, Price Anderson and the

loan guarantee title are considered significant subsidies for the nuclear energy industry.

So I brought with me CBO's score of the Conference Report on the 2006 Energy Policy Act. CBO, of course, keeps track of how much legislation costs. Title 6, which includes Price Anderson reauthorization, is not even on the detail table attached to that score because it does not score.

Title 17, for loan guarantees, does warrant a notation in the score. In particular, CBO estimated that it would score $100 million in outlays, and outlays only, in 2006. From that point on, there is a set of zeros that reach out to the end of the chart, because CBO estimates that the loan guarantee program's cost will be fully paid by the recipients of the loans.

So I have to base my analysis on something, and, in this case, I base it on CBO's assessment. I think----

The Chairman. Are there loan guarantees in that bill for solar and wind?

Mr. Flint. Yes, sir. Title 17 applies to--and I actually have it with me, but it will take a minute to dig out--"Innovative Technologies that Reduce or Sequester Greenhouse

Gas Emissions,'' I believe is the title. It is not nuclear-specific. So it is any technology that meets those requirements.

I think part of the reason we get into these discussions about the subsidization rates for nuclear in particular is because people like Mr. Lovins and I can disagree on some of the fundamental issues, like what is the score of the loan guarantee title and what is the score of Price Anderson. When I turn to independent analyses, I run into things like this article and issues in Science and Technology that indicate that nuclear power is subsidized at a rate less than other technologies.

The Chairman. Let me go back over to you then, Mr. Lovins.

You have heard this contention.

Mr. Lovins. Yes.

The Chairman. Can you provide further analysis?

Mr. Lovins. Well, I did not hear an answer to your question, Mr. Chairman. What I did hear was some selective quotation.

I, actually, have also relied on the CBO findings that there is a well-above-50-percent default risk on nuclear loan guarantees. My understanding is that the $18.5 billion latest nuclear loan guarantee allocation occurs in a committee conference report, not in the actual legislative language, so that it evades CBO scoring.

However, I thought your question was about the absence of private capital investment, and I believe that is correct. This is simply not an attractive option. Again, I would contrast it

with just distributed renewables, let alone cogeneration, having received $56 billion of worldwide private risk capital in 2006 alone. If you add cogen, the total would be well over $100 billion, compared to zero for nuclear. And that trend continues.

I was also very puzzled by Mr. Flint's remarks about nuclear's being competitive with other sources of electricity.

The average 1999 through 2006 wind power price in the United States was 3.5 U.S. cents per kilowatt hour net of production tax credit, which has a levelized value of about .9 cents. This

is all in 2006 levelized dollars.

And even if you firm the wind power and even if you count the uptick in price to 4.9 average cents in 2006, because largely of a shortage of turbines because of the booming market, it is still hard to get much over a nickel a kilowatt hour. That is approximately a third of any plausible nuclear busbar cost on the margin.

Mr. Flint. Mr. Chairman, may I?

The Chairman. Please.

Mr. Flint. This is a continuing dialogue, clearly. He cited a CBO analysis that showed a 50 percent default rate on a loan guarantee program for nuclear power. There was such a CBO analysis. It was for a loan guarantee program that was considered in the Energy Policy Act of 2003 on the floor of the U.S. Senate. That provision did not pass the Senate. It has not become law. The operative document is the CBO analysis of the 2005 energy policy, a conference report which is the law. As you can imagine, it frustrates me significantly to have to be able to track every CBO analysis of nuclear-related provisions regardless of whether they became law or not. In this case I can tell you that the operative analysis shows that the loan guarantee title does not score.

The Chairman. And the reason it does not score, why is that, Mr. Flint? How can there be a $40 billion loan guarantee program and have it not score and yet have the same agency, just a couple of years before, project that there would be a 50 percent default rate? That doesn't make any sense. How can you respect an agency that projects a 50 percent default rate, says there is $40 billion at risk, and then scores for all of the subsequent years the risk to taxpayers as zero? That makes no sense.

Mr. Flint. Actually, Mr. Chairman, when you read the two provisions and you realize that CBO was scoring two different proposed laws, it does make a lot of sense. The provisions were written very differently. The 2005 provision is written in accordance with the Federal Credit Reform Act which requires that the cost of the loan guarantees be paid in advance so that any cost that will be associated with those loans have to be paid by the project sponsors. They will write a check to the Federal Government to cover the total cost of the loan guarantee. As a result, because they are being paid in advance for the cost of the loans, the loan guarantee program in Title 17 does not score. I mean, I would request that I be able to submit this.

The Chairman. And we would welcome that for the record.

[The information follows:]\

* * * * COMMITTEE INSERT * * * *

The Chairman. Mr. Lovins, do you have any comment on this?

This a very perplexing concept here that all of this taxpayer money can be at risk, and yet it is not scored in any way in terms of an obligation the taxpayers have assumed.

Mr. Lovins. Mr. Chairman, in principle the project sponsors are supposed to put up what amounts to an insurance premium against default. My understanding is that it is up to the

Department of Energy to determine what is an adequate premium, and that the industry expects that this Department of Energy will set a very low premium because otherwise the conditions would be unacceptable to the industry. I don't think any fundamental risk conditions have changed except that probably the risk has increased.

And in a longer paper that I will submit for the record, you will find a remarkable history in which the Department of Energy initially proposed relatively responsible rules for its

very generous loan guarantees under the 2005 act, but then progressively relaxed the rules under intense pressure from the nuclear and financial industries so that the loan guarantees

are now strippable. They are 100 percent of 80 percent debt financing.

The sponsor is supposed to put up what DOE considers, without any criteria, to be a significant equity stake. But the sponsors don't seem to be willing to do that, so I assume DOE's

judgment of what is a significant equity stake will be appropriately relaxed. And DOE even put in language in its final decision saying that it may even choose to subordinate Federal debt to private debt. So the financial industry got everything it wanted and yet is still unwilling to invest.

The Chairman. My time has expired. The Chair recognizes the gentlelady from South Dakota, Ms. Herseth Sandlin.

Ms. Herseth Sandlin. Thank you, Mr. Chairman, and thank you for having this hearing. I find the discussion very interesting, and in some ways similar to an issue that I have worked very hard on in the Congress. And that is the issue of biofuels development. And I am not comparing nuclear energy to biofuels, but the debate here in trying to get the facts right and the ongoing discussion about whether or not there is information based on either older technologies or information that has been around since the 1970s that really has evolved in a way that we have to address this in light of new technologies, in light of other new developments and in light

of priorities that have changed from a policy perspective on what is the greater risk that we face, either within the country for national security purposes or worldwide as it relates to climate change.

And so I am very interested, as I think the Chairman is, and others will be, to continue--whether we get some of the information that is being cited here on both sides of the argument--to try to figure out what the facts are today and some of the arguments and the reputations of those arguments.

But I am interested a little bit in terms of this discussion of sort of the private capital investment, whether there is an absence of it, what the reasons may be for that.

And a lot of what we have done in the Select Committee is taken testimony in other hearings as it relates to the experience of Europe with its cap-and-trade system.

And so I would be interested in hearing from any of our witnesses today about what you know of the experience in Europe as it relates to nuclear energy development prior to and since they adopted a cap-and-trade system, and whether or not that has affected private capital investment and the levels of that investment in European countries that are looking at--that

either had historically nuclear energy in their portfolio or looking at that as a possibility as it relates to the requirements of their cap-and-trade system.

Mr. Lovins. Perhaps I could take that because I am very active in Europe. There have been no such nuclear purchases in Europe. The one that I expect Mr. Flint would tell you about,

although he might find other aspects of it embarrassing, is the Finish project which was bought by the Finish equivalence of TVA. That is, it is a nonprofit customer-based consortium. It

has long-term power purchase contracts passed through to customers. And it got a lot of very well below-free-market financing from German and French parastatals, which appears to

many of us to be illegal, but the Commission hasn't yet said so. The plant after 28 months of construction was 24 months behind schedule and roughly $2 billion over budget, which was

not what was supposed to be demonstrated. So this has spooked a lot of folks who were thinking otherwise.

Now, the British Government has lately reversed its previous white paper and proposed to build replacements for its aging and retiring nuclear reactors and believes this can be done in the private market without subsidy. No other country has achieved that, so many of us will be interested to see how it can be pulled off. The main method of doing it so far appears to be that the government, like the French Government, has announced a willingness to intervene in carbon markets to raise carbon prices high enough for nuclear to compete. I don't think this will work, however, because higher carbon prices will equally advantage efficiency renewables and largely advantage co-gen as well. In other words, the competitors will do about as well as nuclear will out of higher carbon prices.

The other British intervention proposed is basically to continue policies that discriminate against things like wind power of which they have an immense resource. They don't call it that. They say they are favoring wind power, but that has not so far been the practical effect.

I think the most interesting case to watch will be France.

They get 78 percent of their electricity from nuclear and it is widely considered the world leader in that regard. What is not often said is the program was so costly that it required costly

taxpayer bailouts of both the largely state-owned national utility and the nuclear construction firm. So France today is using about a tenth less fossil fuel than in 1973, which isn't a big difference. It has a large and sometimes unsellable nuclear surplus. And to try to sell the surplus it has intensively promoted electric heating, which a quarter of French houses have but it is very expensive. And they are having to restart some inefficient old oil-fired plants to cope with the winter peak load that their electric heating promotion created, so it has made quite a mess of the electricity system.

And having been engaged in the policy discussions in France from the beginning when the Cabinet was split down the middle, I can tell you that France is very rich in renewable energy, is

starting to figure that out and, as in most of Europe, there is serious policy discussion going on that is shifting very rapidly toward renewables. You will find this in the latest European Union climate policy which is very strong on efficiency and renewables and not on nuclear.

Ms. Herseth Sandlin. Mr. Flint.

Mr. Flint. Congresswoman, if I might, before you arrived I told the Chairman that I was struck by the changes in the

nuclear industry since 1982 when he wrote a book about nuclear power and nuclear weapons, and I think some of those changes are important to keep in mind. Clearly, there have been nuclear power plants that have had a multitude of problems with cost overruns and design changes and many of them eventually not being completed and operating.

We have learned a great deal from that experience. And the way in which we hope to build nuclear power plants in the United States now is dramatically different than we did prior

to that time. From 1960 through the 1970s and the early 1980s the U.S. nuclear industry rapidly advanced in this country. We scaled up the size of reactors from several hundred megawatts to over a thousand megawatts. Designs were evolving, plants went under construction without completed designs, we had problems with engineering and construction contracts, we built them in an era in which interest rates went to 18 percent as the economy slowed in the late 1970s and many utilities decided they didn't need the electricity, so they stretched out the plants of their own design. Or their own business needs caused them to stretch out the plants, the capital costs went up. We had a variety of issues that we have learned from.

Now as we look around the world and we see 34 nuclear reactors under construction, we do have problems with cost and schedule in Finland, but we have learned a great deal from reactors under construction in China and Japan. The new EPR that is under construction in France is not having the same issues that we had with plants under construction in Finland.

We hope to bring to the United States some of the best regulatory financial as well as design characteristics of plants being built around the world.

We have a different licensing process in the United States, this one-step licensing process. We have modularized construction techniques that we intend to use. My expectation is that you are going to see nuclear power plants built here much more cautiously on the one hand by the utilities doing their analysis in advance, and on the other hand incorporating best-in-class capabilities from reactors around the world. This may be one place where it is an advantage that the United States is not the world leader.

The Chairman. The gentlelady's time has expired, but we will go to another round as well if you would like.

The Chair will recognize himself again. Again, I want to go back to this $40 billion loan guarantee program and it not being scored. And it is my understanding that the reason that CBO didn't score it is that it was put into report language rather than into the actual appropriations language itself. And by circumventing that analysis, it is able to create a false impression that it doesn't really cost any money or put the American taxpayer at risk if there is a default. And I think

that very devious technique is something that gives a misimpression to the American people about the risk in the same way that subprime loans, in the way in which they were scored,

gave a very grave misimpression to the American public as to the amount of risk that was being run.

Mr. Flint.

Mr. Flint. Mr. Chairman, let me make sure I am very precise about what I say. The 2005 Energy Policy Act, which includes the authority for Title 17 loan guarantees, did not score. And

that is the CBO document that I was referring to. You are now referring to the 2008 Energy and Water appropriations bill.

That bill includes two provisions. It includes bill language authorizing the loan guarantee program to go forward. In fact, that language has no cap on the volume of loans that may be

issued. That language does not score comparable to the 2005 Energy Policy Act, because it uses the authorities in the 2005 Energy Policy Act. An unlimited loan volume does not score.

The Chairman. But again, Mr. Flint, that is ridiculous.

Mr. Flint. Mr. Chairman----The Chairman. No, that is an absurd conclusion. That is the

same thing that the banking regulators were doing in not properly weighing the risk of subprime loans. And the more you had, of course, and the more diversified the risk was, the lower the risk was to the American consumer; when in fact, it was only increasing it by breaking it up into these little sub-bits. So, again, this is just phony accounting.

In looking at the whole history of nuclear power, Mr.

Lochbaum went through the history of cancellations. We have got this Florida case where Florida Power & Light has two nuclear reactors that are now going to cost up to $24 billion. And, again, all of this is part of an illusion that is sought to be created by the nuclear industry and abetted by those at CBO, I guess, or the crafty legislators who are able to avoid having it counted as any potential risk for the American taxpayer.

But the reality is that looking at the past, looking at what is happening in Finland right now, looking at what is happening to Florida Power & Light, which is seeing an explosion in the risk to its ratepayers, and, if it qualifies for loan guarantees, there is a real mess on the hands of the

American taxpayer.

Mr. Lovins, let me go back to you.

Mr. Lovins. It seems to me the fundamental point here is not whether CBO was prevented from scoring by the way the legislation was enacted, but why should a mature industry that claims to be robustly competitive require loan guarantees or any other subsidies. And of course we have competing experts here. I happen to think since my institute did the first real scoring of Federal energy subsidies back in the 1980s that Doug Koplow has emerged as the most careful independent student of this subject, and I think his numbers are careful and transparent. And I would prefer them to the ones Mr. Flint cited.

But it seems to me however big the subsidies are, they shouldn't be needed. And I find it very telling that the leading financial houses make quite clear they are not willing to assume the risks that they wish to impose on the public, and neither are the utilities. It is also clear that in the roughly half of the United States where investors bear their own risks and have no rate barriers to impose them on because those States have restructured their electric systems, nuclear plants

are especially unlikely to be built. But what we are going to see, I think, in places that do have the traditional rate-of-return regulation is considerable sticker shock.

If you take a nuclear capital cost pretty near the low end of Moody's range, that would correspond to a busbar levelized cost of about $0.16 a kilowatt hour in year 2007 dollars. But

that means the first-year revenue requirements is about a $0.26

a kilowatt hour rate and that rate shock I think will reverberate considerably.

The Chairman. Well, if the taxpayer has to pick up the tab, of course it will.

Mr. Flint, in your testimony you said you expect between four and eight new reactors to be in operation in the U.S. by 2016, with the possibility of a second wave of additional reactors, as long as the first wave is on schedule and on budget.

Last week the EIA projected that by 2030 the United States would add 16.4 gigawatts of new nuclear generation capacity, which translates into roughly 15 or 16 new reactors. But according to Ms. Squassoni's testimony, the nuclear industry would have to build 50 new nuclear reactors in the United States by the year 2025 just to maintain its current share of the U.S. electricity market.

Do you agree with EIA's projection that even with the current financial incentives in place, the nuclear industry is going to dramatically lose, not gain, in its share of the U.S.

electricity market in the next couple of decades?

Mr. Flint. Mr. Chairman, my statement has a number of issues that are going to consider whether or not the second wave of new nuclear power plants gets built. And I am trying to

turn to that section right now. They have to do with a variety of issues that utilities will face. What is the cost of competing technologies, what are the costs associated with carbon, what is the economic growth, what are the electricity demands in their region of the country, what are the costs of nuclear built power plants as they get built? There are many variables thereafter that significantly influence what happens with that second wave. We are quite confident of this initial

estimate of four to eight plants in the 2016 time frame. The issues beyond 2015, for me to make a particularly accurate prediction, there are simply too many business----The Chairman. I appreciate that, but I think it is important for us because we are talking about climate change.

That is our objective here. Are you confident that the 42 to 46 reactors needed to maintain the share of the market which the nuclear industry has today, can be built in the United States

by 2025?

Mr. Flint. Maybe I can answer the question more broadly. We are well aware of the challenges that are presented by the wedge analysis and whether or not nuclear can respond globally

and build the number of plants necessary. Back-of-the-envelope calculations, you are talking 200 gigawatts of new electric generation in a decade in order to support the rates of growth

that you see in the Socolow analysis. That did occur in the 1980s. We saw that sort of growth worldwide. Now, today we do not have the manufacturing infrastructure, we do not have

enough skilled labor to be able to do that. The market has contracted in the following decade.

The Chairman. So is it fair to say, then, that the nuclear power industry, given the financial uncertainties, is not going to be able to grow in a manner that would be needed for it to

accomplish the sort of expanded vision by Socolow?

Mr. Flint. No, sir.

The Chairman. No matter how much U.S. Federal Government subsidies are there for the industry?

Mr. Flint. No, sir, it wouldn't. What you could say is the marketplace has responded by contracting capability in that regard.

The Chairman. No, what I am saying to you is--and I just need you to deal with the numbers--you need 42 to 46 new nuclear power plants by 2025 to maintain your current share of the electricity market. You are projecting 4 to 8 by 2016. Are you saying that somewhere between 40 and 45 new nuclear power plants are going to be built from 2016 to 2025; is that what you are saying?

Mr. Flint. Mr. Chairman, there are a number of variables that will affect how----The Chairman. I understand that. We know that we are going to have approximately 365,000 megawatts of wind by then, over 100,000 megawatts of wind in the United States by 2016. We are here talking about between four and eight nuclear power plants by 2016. So as we are making our plans here to solve the global warming problem, we want to hear from you that you are

confident and your industry is confident that it can build 45 nuclear power plants by the year 2025.

Mr. Flint. Mr. Chairman, there are analyses done by very reputable organizations such as the Electric Power Research Institute that predict construction in excess of that much nuclear capacity in the United States. The EPRI PRISM analysis predicts 64 gigawatts of new power by 2036. We are in the process of----

The Chairman. Again, even by 2036 that would only keep you at where you are today, at 19 percent in terms of a total percentage of the marketplace. Is there any reason to believe

that you are going to actually see an increase, an increase in the percentage of electricity that is generated by nuclear power by 2016, by 2025, by 2035?

Mr. Flint. If you let me give you a complete sentence as an answer.

The Chairman. Okay, please.

Mr. Flint. We are doing a very--as we call it, a cold-blooded analysis so that we are neither overly optimistic nor overly pessimistic about exactly what rates of new nuclear industry can support. We are in the process of developing new manufacturing capability, of building training centers for the skilled workforce. We are working with State legislators on a----

The Chairman. That is not an answer. We can see where wind is going, we can see where solar is going. We have blinders on when it comes to the nuclear industry, even with these massive

multibillion-dollar subsidies. So that is the real problem that we have right now, Mr. Flint. We are trying to predict a future looking at the reality of the marketplace, which is a renewable

and a negawatt, an efficiency marketplace. And you want us to basically continue to go back to the American taxpayer to get loan guarantees for an industry that the industry itself can't

garner investment from the private sector.

Let me just stop there for a second. I want to give the gentlelady from South Dakota another round.

Ms. Herseth Sandlin. Well, I appreciate that. I know we've got a pending vote, so I will just reserve my right to submit questions in writing for the panelists to pursue some of what

both Mr. Flint and Mr. Lovins were responding to in my previous questions as it relates to the ability to meet some of these projections; what the renewables are, but what the projected

demands are, to be able to determine whether or not as we develop the renewables either here, as some of the European countries are developing their renewables further and the tax incentives and government policies that go along to facilitating that, just whether or not that is going to be sufficient to meet all the projections and demands.

So I appreciate the opportunity for another round, but I think I will reserve the right to submit them in writing.

The Chairman. I thank the gentlelady. And the Chair will recognize himself once again.

Again, I have to go back, Mr. Flint, to your testimony where you say that the potential contribution nuclear power can make to reducing projected greenhouse gas emissions in the

electricity sector in coming decades is ``extraordinary.'' That is the word you use.

Mr. Flint. Yes.

The Chairman. And yet you then turn and say that you are doing a cold-blooded analysis of whether or not that is possible. So there is kind of a public representation that the

opportunities are extraordinary, but when you are asked a specific question about a quantity of electricity that the industry is willing to represent that it will build, we don't hear that number. All we hear is between four and eight, which is a pretty wide variation between now and 2016. And beyond that we don't hear any specific numbers.

Whereas the renewable electricity industry, the energy efficiency sector, can give us quantifiable amounts of electricity produced or saved that we can rely upon going forward in our fight against climate change. And that is the dilemma that we have with the nuclear industry right now.

Mr. Flint. Mr. Chairman, I can understand your frustration.

But recognize that we are trying to ensure that we meet the expectations that are established. I will give you some specifics. I have 17 utility companies that have announced plans to build 31 new nuclear reactors. That is significant.

Those companies are spending real money in pursuit of those license applications.

To give you a back-of-the-envelope estimate, a license application process at the NRC costs about $100 million. Recall the nuclear industry, we pay not only our own costs of submitting a license application, we also pay 90 percent of NRC's annual budget. We pay them. And the NRC budget for 2009 is a little over $1 billion. So utility companies are now spending very real money in the development of these nuclear reactors.

I can't tell you exactly what year certain reactors will come on line. Largely it is dependent upon whether electricity growth in certain regions is at 7 percent or 4 percent or whether it goes to 0 percent. But I can tell you that independent analyses, like the EPRI analysis, anticipate 64

gigawatts of new generation by 2036. That is an extraordinary contribution to greenhouse gas emission avoidance.

The Chairman. Let me go to you, Ms. Squassoni. At this point many people think that there is a small probability that the Yucca Mountain site to store all the nuclear waste in the United States will ever be opened. Have you looked at the question of how many Yucca Mountains we would need to store the waste that all of these new hypothetical reactors will generate?

Ms. Squassoni. Thank you. Yes, I have, although people more expert than I say it is a little misleading to use that as a figure, because the limits for Yucca have been legislated at 75

metric tons and there is a big debate about whether it could hold more. In part, the calculation of the kinds of spent fuel that will be generated depends on what you think that future nuclear fuel cycle will look like: Is it just lightwater reactors or are you going to reprocess? Will we have fast

breeder reactors?

And so I will rely on some other people's data--if I can see this here. A scenario of 700 gigawatts would require, according to the NRDC, 14 Yuccas. That is at the 70,000-metric ton limit. If you go to a one nuclear wedge, you would require one Yucca every 3.5 years or 20 Yuccas. And if you go to the MIT 2050 scenario, you would require about 30 Yucca Mountains.

The Chairman. Let me ask you this, Ms. Squassoni. Do you think that the nuclear industry can ramp-up the way it did in the 1970s and 1980s? Is that possible in this new era as Mr.

Flint talks about a nuclear renaissance? Can we expect to see dozens of new nuclear power plants come on line over a 20-year period?

Ms. Squassoni. Well, I think there are a lot of factors, as Alex Flint has mentioned. I think you have to keep in mind that in the 1970s and 1980s, the period of greatest growth, we had a

large nuclear infrastructure. We don't have that anymore, particularly in--I forget the figures--just in terms of the supporting industries.

For example in the 1980s, the U.S. had 400 nuclear suppliers and 900 holders of N-stamp certificates. That is, nuclear qualified. Now we only have 80 suppliers and 200 N-stamp holders, so we have a much much smaller percentage.

The Chairman. Let me ask, in your testimony you cite some of the industry bottlenecks that pose a challenge to the nuclear industry, such as the fact that there is only one company in the world that can make the specialized metal forgings needed to build new reactors. That company has a 2-year long wait list, and, even when it scales up, will still only be able to produce material sufficient for eight reactors a year.

But you also cite the MIT nuclear study which says that for nuclear energy to play its projected climate role that there would have to be a fivefold increase in the number of reactors worldwide and an annual build rate of 35 per year. How can this and other projections for a significant expansion of nuclear energy be reconciled? What would it take, for example, to bring the global specialized metal forging capacity up to 35 reactors per year?

Ms. Squassoni. I think there is a gap between the expectations and what can be accomplished in the next 10 years.

Obviously, countries can develop specialized forging capabilities over time. I would say that the information provided to me by Japan Steel Works--I asked, Well, why does everyone come to you? And they said, Well, because we have 30 years of experience, including Russian companies and entities.

The Chairman. So what would it take to just double the capacity, Ms. Squassoni?

Ms. Squassoni. Well, you have to keep in mind that JSW I think provides about 30--or not 100 percent of the forgings. It depends on what reactors will be built. But it is significantly greater than----The Chairman. In order to not even do 35 power plants per year, let us just say 17 power plants per year across the world, what would it take to double that capacity? What kind of

investment is necessary in order to provide the materials?

Ms. Squassoni. I would have to get back to you on that.

The Chairman. If you would do that for the record, I would very much appreciate it.

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The Chairman. Let me go over to you, then, Mr. Lochbaum.

You haven't had a chance to comment on what you have been hearing. Can you take any one of these points and comment upon it?

Mr. Lochbaum. I joined the nuclear industry in 1979 after the Three Mile accident, so I have an alibi for that. But that was during the expansion, the great expansion of nuclear power in the United States. And looking back on that, we ramped-up too quickly. For example, the Nuclear Regulatory Commission didn't have enough staff to do the reviews of the reactors in the pipeline. They had interns, summer interns that were reviewing the safety applications that resulted in problems like the Connecticut Yankee final safety analysis report having the Millstone final safety analysis report incorporated, without catching the fact that it was a totally different

reactor.

I worked at Grand Gulf. I recall your comments around the time of Grand Gulf's licensing, calling it Grand Goof. I worked at Grand Gulf. We messed that up very badly. The original license for Grand Gulf was for another plant. We didn't catch that. We submitted it to the Nuclear Regulatory Commission and they didn't catch it. So the problems with ramping-up haven't

been dealt with.

I noticed your comments in September of last year about the Nuclear Regulatory Commission's plans to meet the 24-month review time for new reactors. The NRC plans to do that by

farming out the work to private industry. That is totally unacceptable. That shows that the NRC is focused on schedule.

Not on quality. It hasn't learned a lesson of the past. It seems like it is destined to repeat that mistake rather than avoid it. So I don't see any optimism at all for believing that the future will be any different than the past, except for the fact that we have fewer excuses for repeating that mistake, since we know about them now.

The Chairman. My time has expired. The Chair recognizes the gentleman from New York State, Mr. Hall.

Mr. Hall. Thank you, Mr. Chairman. I am sorry, due to the vote to adjourn, I was unable to hear your oral testimony, but I did have a chance to review it. And let me just state, first of all, as one who represents the 19th District in New York where we currently have the second and third units at Indian Point awaiting relicensing proceedings with the NRC at a time that they are leaking strontium and tritium from the spent-fuel cooling ponds into the groundwater and into the Hudson River, and when there have been a series of unscheduled outages caused

by anything from an exploding transformer to river debris washing up into the water intake and clogging it, and the folks in Rockland County who do emergency management finding out

about that transformer fire in particular by seeing a puff of smoke across the river, rather than by getting a call as the procedure is supposed to be. There are many people in my district who are nervous in particular about this plant.

So to me there are a couple of issues. One regarding whether we should be investing our short precious resources in nuclear as opposed to renewables, which I think, given the same massive--and depending on whose numbers you look at, it is easily over $100 billion from the birth of the industry, some would say $145 billion, $150 billion and all kinds of subsidies--and insurance by the taxpayer. The only industry to my knowledge that has been unable to get insurance against a catastrophic accident, and therefore the utilities required that the government provide taxpayer-backed insurance. And the average taxpayer didn't even know this.

So there is a question overall in terms of whether nuclear power, commercial nuclear power can stand on its own two feet if it had to compete on a level playing field against various other sources.

But then there arises the question of whether one should relicense a plant in the area that probably shouldn't have been built in the first place. And certainly I don't think a utility

today would apply to build a new nuclear plant in Westchester County, in an area where 8 percent of the population lives within a 15-mile radius of the plant. You look at where

applications are going. They are generally going for more remote locations, for good reason.

We also know that Mohammed Atta flew over the New York area several times on commercial flights, checking out targets. And one of his notes that was found in his possessions after 9/11

included a comment about a nuclear plant that was presumed to have been Indian Point that he flew over as a potential target.

At any rate I would just like to ask all of you, I guess one question to start with, and I may be out of time by then, thanks to my talking so much, but I asked our first panel last year when the Chairman called a security panel with Jim Woolsey, our former CIA chief, and Steven Haas from the Council on Foreign Relations, and Admiral McGinn and folks who were involved in the security end of this.

If we ramp-up the kind of increase in nuclear power across the world--and I know that there are companies. In fact, this President has authorized sales of, for instance to India, of nuclear technology and materials and even waived, if I remember correctly, certain provisions of the Nonproliferation Treaty to be able to do so.

What I asked that panel a year ago I ask you again: When we are increasing the transit by ship and by rail and by truck of many thousands of shipments all over the world, including in this country, of enriched fuel on its way to a plant and of spent fuel on its way to a repository, whether such a repository actually exists for a long-term basis or if it is a temporary one, are we not making eventually the explosion of a dirty bomb virtually a certainty?

Feel free to go first.

Mr. Flint. Congressman, it is important to recognize there have been 24,000 international shipments, or around the world they are having 24,000 shipments of nuclear material to date.

Those shipments are handled safely and securely and will continue to be done in such a manner.

Mr. Hall. Thank you.

Ms. Squassoni. I think both Reuters and Nucleonics Week have reported recently that States are getting jittery about these kinds of transfers, mostly even in just the fresh fuel. I think if you see the kind of expansion for the global climate change levels, you are talking about a lot of nuclear material in transit, much more than we have seen now. And so I think that does--I don't know if it makes it a certainty, but I think it does increase the risk. Thank you.

Mr. Lovins. I don't think one needs to imagine airplane crash scenarios, which I wrote about in a Pentagon study in 1981, to be concerned about particularly nearsighted nuclear plants with their gigacurie inventories being a terrorist target. Most of the existing plants can be caused to melt down by interventions that would take readily available devices that can generally be operated from outside the site boundary and would cause the safety systems to fail.

Mr. Hall. Thank you. My time has expired. And I just wanted to comment, if I may, Mr. Chairman, that the 20-some-thousand shipments of nuclear material around the world, I presume a good number of them were before the rise of Islamic terror, terrorists and groups that we have seen in the last several years. And I also assume that that number would have to be drastically increased in order to reach the level of total nuclear output worldwide that is being considered.

So with that, I thank the Chairman and yield back.

The Chairman. I thank the gentleman, and the Chair will recognize himself for another round of questions.

Let me go back to you again Mr. Lovins, then I can go back to Mr. Flint. And I want to focus on this Florida Power & Light decision to build two reactors that could cost upwards of $24

billion. Why would Florida Power & Light, Mr. Lovins, want to build two reactors that couldn't possibly generate any more than perhaps 2,500 megawatts and be willing to run the risk of

having it cost them $24 billion? What is in the mind of Florida Power & Light or any utility that moves in that direction?

Mr. Lovins. Having worked in the utility industry for several decades, I must say that what must be in their minds is a rare phenomenon and typically does not survive encounters with the capital market.

The longer paper I will submit for the record is replete with statements by the bond rating agencies and others in the industry, and indeed by utility executives very knowledgeable

in this field, that they would not contemplate such an investment or they think it is unlikely or imprudent. So I must presume that whoever made that statement must not know very

much about cost-effective alternatives.

I think we are likely to have 100 gigawatts of wind power installed in this country before we have our first gigawatt of new nuclear, if ever.

It was interesting thinking about the four to eight plants Mr. Flint mentioned when the NRC expects 33 applications. Now, perhaps there is a difference between a plant and a unit, but

it sounds kind of like the funnel that Mr. Lochbaum talked about, going from announcements to actualities.

The Nuclear Energy Institute has noted the cancellation already of about three-quarters of the announced coal plants. I expect somewhere between that and all of the nuclear announcements will lead to nothing. And the global nuclear industry projects that in the 5 years 2006 through 2010, it is going to build about 17 gigawatts of capacity of which, by the way, most all or more than all is expected to be offset by retirements meanwhile, which we haven't discussed here. But

basically the bulk of the fleet is old. The average age is 24 years. And it will gradually go away.

Now, compare 17 gigawatts over 5 years with the current construction rate just of Micro-Power let alone negawatts.

Micro-Power today is adding 17 gigawatts about every 15 weeks.

The Chairman. Why don't you redefine for the audience what Micro-Power is?

Mr. Lovins. Micro-Power is cogeneration plus renewables minus big hydro. Well, Micro-Power is adding 17 gigawatts about every 15 weeks. In other words, times faster than the nuclear industry has projected. Gross additions, not net of retirements. I don't know what part of that number anyone who takes the market seriously doesn't understand.

The Chairman. Thank you. Let me go back to you again, Mr. Flint. It seems like an astounding amount of money, $24 billion for two reactors, given the fact that, as Mr. Lovins says, there is likely to be 100,000 megawatts of wind by 2016 across the country. So Florida Power & Light, it is known as a company that believes in wind power, solar power, other renewables in other parts of the country. But here it is willing to risk ratepayer, and I guess taxpayer, dollars up to the tune of $24 billion. It just doesn't seem economical. It seems to be completely out of sync with what is going on in the whole rest of the national and international marketplace.

Mr. Flint. Well, Mr. Chairman, the reality is it is not out of sync, you are absolutely right. Florida Power & Light I believe is the largest wind utility in the United States, very familiar with the economics of wind going forward. But let me read you a little bit more from their determination of need petition. It said that the company, quote, has conducted an extensive review of information currently available within the industry on the expected cost of new generation nuclear units.

Quote, the addition of new nuclear capacity is economically superior versus the corresponding addition of new gas-fired combined cycle units required to provide the same power output, yielding large direct economic benefits to customers. Based on all the information available today it is clearly desirable to take the steps and make the expenditures necessary to retain

the option of new nuclear capacity coming on line in 2018, end quote.

Mr. Chairman, the reality is that we are seeing significant increases in the cost of all types of baseload generation. What we say is that nuclear power will be competitive. We have costs

that are rising as concrete and steel and labor costs rise, but those are the same pressures that coal and gas-fired plants are being subject to. The cost of natural gas is going up and one

can only speculate as to the future of coal in whatever the regulatory environment will be.

The Chairman. Go back to Mr. Lovins. You just heard the Florida Power & Light justification for two nuclear power plants costing $24 billion. What is your comment?

Mr. Lovins. Or more precisely, for retaining the option value, which is very different from actually ordering a plant and putting cash on the barrel head to pay for it.

I would differ in several respects with Mr. Flint's remarks. The Cambridge Energy Research Associates construction industry--or excuse me, construction cost index for U.S. power plants in the 3 years ending third quarter 2007 for North America showed a 2.31 times year 2000 cost for all main types of power plants, but 1.79 times for non-nuclear types; that is, nuclear suffering uniquely rapid cost escalation. This shows up very clearly not just in the nuclear numbers from the Keystone study last June, which were so devastating that the industry, and specifically NEI, misrepresents the results or ignores them, but also in actual comparisons.

And I think Mr. Flint is incorrect to say that the right comparison--or to imply the right comparison is with other baseload central thermal plants, coal or gas. Those are not the real competitors. It is all central plants that are getting absolutely walloped in the marketplace by Micro-Power and negawatts. And the very competitors that the nuclear industry refuses to accept as important are eating its lunch.

The Chairman. Thank you.

Let me go to you, Ms. Squassoni. And let us talk about the nuclear power plants that are being proposed for Egypt, for other countries around the world that could pose nonproliferation threats to our country and to the rest of the world.

Give us a little bit of detail as you are looking at what is now projected in terms of plutonium, uranium, nuclear materials, spreading to country after country, especially in the Middle East.

Ms. Squassoni. I think you have to start with the context that over 27 countries have announced intentions to install nuclear capacity. And because they don't have nuclear power plants now, they lack the infrastructure, not just--I mean regulatory, legal----The Chairman. So which countries frighten you the most from a nonproliferation perspective Ms. Squassoni?

Ms. Squassoni. Yemen.

The Chairman. Keep going.

Ms. Squassoni. I have to get out my map here. I think part of the proliferation concern, it is not just--you know, nonproliferation advocates tend to be painted as non-nuclear.

It is not a question of non-nuclear. But when you have what nuclear power plants will do in these countries, it will give them expertise, it will give them a scientific and technological basis. And in the current state of the nonproliferation regime where we have been completely unsuccessful in discouraging other countries from developing enrichment or reprocessing plants, these countries will then have a further excuse, if you will, for developing the entire fuel cycle.

Now, is that cost effective? No. But that doesn't happen to be stopping Iran, for one.

The Chairman. So the risk we run, obviously, is that if nuclear becomes this global solution and they are constructed in Yemen, in Egypt, in Saudi Arabia, in other countries----Ms. Squassoni. United Arab Emirates. I mean I don't want to paint the--it is not that these individual countries in the Middle East themselves might pose a problem, but they are certainly looking at their options as the probability that Iran can't be discouraged from its nuclear program. They are

certainly looking at their options and thinking, well, we will develop our own nuclear infrastructure to keep our options open.

The Chairman. And that is the problem that I think I hear out of this testimony today. That Mr. Flint is not willing to project that by 2025 the nuclear industry can meet a production level that is perhaps upwards of 45 new nuclear power plants and keep it at the same level in the United States of its percentage of electricity generation as it has today. And to meet the problem globally we have to watch nuclear power plants be built in countries that don't have regulatory systems or security systems in place that would give people confidence that the price we are paying in increased climate protection is not completely counteracted by a collapse of our nuclear global nonproliferation regime. And that is a real price that I think the whole world has to understand.

Let me turn and recognize again the gentleman from New York, Mr. Hall.

Mr. Hall. Thank you Mr. Chairman. I just have a couple of quick questions before I have to go vote.

Mr. Flint, I just wanted to refer to a comment that Admiral McGinn made in his testimony before this committee that the experience of the Navy with naval reactors has been very, very

positive, unquote. And this is often brought up as a point that safety can be achieved to a much higher degree. And I think that as we all know, the Navy is not a for-profit business.

They have sailors down in the submarine close to the reactor, and it is in their interest, and they spare no expense and cut no corners.

And if it were decided by--I mean, this is a societal decision I think we are talking about. We need to as a country decide what mix of different sources of power we are going to use. But in order to gain the degree of confidence of safety that would generate broad public support, do you personally or do you think the industry would take kindly to the idea of being nationalized as opposed to being a for-profit bunch of utilities that operate in different plants?

Mr. Flint. Congressman, if I may, I would like to answer that in part and take part of that as a question for the record. First, the U.S. utility industry is not interested in being nationalized. The reason I would like to take part of that as a question for the record is that Admiral Skip Bowman

who previously ran the nuclear reactor program is now the president and CEO of the Nuclear Energy Institute and he might like the opportunity to address that question directly, particularly the issues associated with naval reactors and its application to the civilian sector.

And so if I may take that part as a question for the record, I would be delighted to get back to you.

Mr. Hall. Thank you.

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Mr. Hall. And just one more for you, Mr. Flint. A couple of times in your testimony you reference clean--the benefits of clean energy from nuclear power. I am just curious why you would describe as clean a technology which produces cancer-producing radioactive isotopes that remain radioactive for hundreds of thousands of years.

When we look back at King Tut 7,000 years ago, or whenever that was, it is pretty hard to imagine that we will actually be able to isolate the longer-lived radioactive products of the fission process for the length of time that they need to be isolated and protect people that need to be shielded from them.

I mean there have been books written about this that speculate about a nuclear priesthood that will design some kind of symbolism or language that can be read by future civilizations and might come across our repository so that they know not to go in there and get too close to it.

I mean, that is the level of--now, also we don't have a control planet, by the way. The fact that I have in my own family and friends half a dozen people who are either just recently deceased of cancer or fighting off some kind of cancer. Who happen to live in the immediate area of Indian

Point, for instance, is something that we will never know if there is a connection because there is also PCBs and pesticides and all these other things in this one environment, this whole Earth that we have.

There is no control planet, and then a planet that we can see what the effects would be. But I contend that it is not clean and it is actually fraudulent advertising to say that it is. Your response?

Mr. Flint. Congressman, the issue of what to say with somebody who lives near a power plant and gets cancer is always very difficult when you are sitting directly with somebody, as you do with your constituents from time to time. In different settings, though, it is appropriate to recall that 40 percent of the population will get cancer during its lifetime from other causes, okay. The issue really is, does nuclear power result in any incremental increase in cancer?

And let us look at radiation for just a moment. Currently we anticipate that a new disposal standard for Yucca Mountain will be issued that will contemplate a million-year disposal

requirement for Yucca Mountain. We estimate that DOE will come up with models that will show at what rate radionuclides from Yucca Mountain might migrate through the environment and be

released out to the environment and might get close enough to the surface to be brought up in plants and water and other things like that.

Mr. Hall. Excuse me, my time has expired, so I just wanted to ask you--I gather that all these great lengths that you are going to to try to keep it isolated would imply that in fact the waste is not clean?

Mr. Flint. Congressman, I would imply that the doses of radiation that people receive from the civilian nuclear industry in this country are minuscule compared to background and other sources of radiation. The net benefit is the issue at hand. So, for example, when somebody goes in for an MRI and receives a fair amount of radiation, the amount of radiation they receive from a nuclear power plant is inconsequential in comparison, and the benefits of the clean electricity generated from that nuclear power plant are tremendous.

The Chairman. I hate to say this, the gentleman's time has expired. We have a very important roll call on the House floor.

We have been constantly interrupted. I missed one or two, so I could keep the hearing going. I am going to ask each one of you to give us 30 seconds, what you want us to remember about the

nuclear power industry as we are going forward. Begin with you, Mr. Flint.

Mr. Flint. Mr. Chairman, climate change is one of the great challenges facing this country. I see no scenario by which we can possibly achieve reductions in greenhouse gas emissions

while we meet the electricity demands of our country, estimated to grow at 30 percent between now and 2030, without a significant increase in the amount of nuclear power that we have. The industry is preparing to respond to that, and we will be able to respond to that challenge.

The Chairman. Thank you. Ms. Squassoni.

Ms. Squassoni. Thank you. The kinds of nuclear expansion that would be needed to affect global climate change are huge and unrealistic and incredibly costly, and moreover they carry

with them proliferation risk that I don't think the United States and the international community yet have begun to really combat.

The Chairman. Thank you. Mr. Lochbaum.

Mr. Lochbaum. We have 104 nuclear power reactors in the United States today. We may build some in the future, we may not. We don't know. But we are going to have nuclear power in

our future for a few decades. The best protection the American public has against that risk is an effective nuclear regulator.

We don't have that today. We need that as soon as we can get it.

The Chairman. Thank you. Mr. Lovins.

Mr. Lovins. Nuclear power is continuing to drive an incurable attack of market forces just by heroic efforts to revive it with subsidies. But even though it is being massively outcompeted by larger, faster, cheaper options, Micro-Power negawatts, it has claimed to produce climate benefits. That claim is simply false. Because nuclear is so expensive that if the same money were spent instead on Micro-Power negawatts, we would get 1\1/2\ to 11 times more carbon saving per dollar, and we would get it sooner.

The Chairman. Thank you, Mr. Lovins.

We thank each of you. I think this was a very important panel for us to have. There are still questions I think that the Members of the committee who could not attend would like to pose to you in writing. We would appreciate written responses in a timely fashion.

With that and the thanks of the committee, this hearing is adjourned.

[Whereupon, at 11:05 a.m., the committee was adjourned.]