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if the cost of the product is brought in line with the cost of

its competition and if it can be made attractive (i.e., safe

and reliable) to both the customer and the public. And this

challenge must be faced in light of new realities regarding Federal support for energy development. While the Federal

Government will continue to be needed to provide certain

institutional and financial support, large capital outlays are not practical or appropriate in the budgetary and political environment we face. Nor are they likely to be practical for some time to come. .

The challenge, then, is to develop a breeder concept that can be built by the private sector on an economical basis, with the Federal Government playing a strong but limited role. In fact, during the past year, we have encouraged and supported industry to develop advanced reactor designs aimed at meeting sound economic, reliability, and safety criteria.

The clinch River Project has produced valuable experience in

the areas of design, component testing, and licensing. This

information will be retained for use in the restructured base

technology program. NRC's Atomic Safety and Licensing Board recently issued a memorandum of findings which resolved all issues in the CRBR Construction Permit hearings in favor of the Applicants. This decision, which would have been sufficient to

authorize the issuance of a construction permit provides firm conclusions regarding the safety and environmental acceptability

of breeder reactors and provides a benchmark for future breeder

licensing efforts. Clinch River Project closeout activities

are proceeding smoothly. An appropriation transfer of S40 million

has been made from the Uranium Enrichment Program as an interim

measure to fund CRBRP termination requirements. No new

appropriations are expected to be requested in FY 1985.

The LFMBR research and development program in FY 1985 will be

directed toward improving the technology for power conversion systems, components, instrumentation, and materials technology to the point where cost reduction and reliability potentials

are realized. Continued operation of the breeder test facility complex at the Hanford Engineering Development Laboratory (HEDL) and the Energy Technology Engineering Center (ETEC) will provide the experience base and test capability for this effort.

The program will also assess advanced breeder concepts that

offer the potential of improved economics and safety. These

studies will include investigation of smaller scale breeders,

standardized designs, and reactors manufactured as a complete

package or as modules in central fabrication facilities.

They

will be conducted with input from industry, the ultimate customer

for breeders. Moreover, cooperative research with, and technology

transfer to, the private sector will constitute an important

element of development activity.

Another priority element of our program will be a substantial increase in international cooperative effort. We see significant benefits to be gained from the division of workload and the

pooling of resources. We also anticipate that joint effort

will encourage uniform or compatible safety standards, physical

security measures, and safeguards.

In FY 1985, we will continue development of the breeder fuel

cycle technology as well as confirmation of fuel breeding in a

light-water reactor using the uranium-233 fuel cycle. Our

breeder fuel cycle program, however, will be conducted at a

substantially lower level of effort. The lower funding recognizes the reduced requirements in both pace and extent for breeder fuel cycle technology development as a result of the clinch River termination. It is my personal belief that this is a period of reassessment and that circumstances will evolve that will signal the need for more aggressive development of the - . breeder fuel cycle.

Advanced Nuclear Systems

Another important area of Department activity is the research and development of advanced nuclear systems in support of u.s.

military and civilian space missions and other special

applications. Work is divided into two major subprograms.

The first is the Special Isotopic Power Sources Program.

In

FY 1985, flight systems development, production, and safety

support will be conducted for isotopic power generators to be

used in the Galileo and International Solar Polar spacecraft to

be launched by NASA in 1986. Design efforts for an advanced

modular generator to be used in space missions and for other

special applications will be continued.

A second program

element is the Space Nuclear Reactor Program, which is a

cooperative effort of the DOD, NASA, and DOE to examine several

reactor concepts for potential use in future space missions

Waste Technology

As you know, Mr. Chairman, under the requirements of the Nuclear Waste Policy Act of 1982, the activities associated with the siting, construction, and operation of a national repository system for high-level nuclear waste were assigned to the newly

established Office of Civilian Radioactive Waste Management.

Prior to that, in 1980, legislation was enacted stating that the responsibility for disposal of low-level nuclear waste

rests with the States. My role in nuclear waste management is

to develop waste treatment technologies for the long-term

management, storage, and disposal of civilian radioactive waste,

be it low-level, high-level, or transuranic. In FY 1985, one of our activities will be to conduct safety and reliability

tests on the ceramic melter system that is used to solidify

high-level wastes. We will also continue to provide technical

assistance to the States in their efforts to establish (either

individually or by regional compacts) facilities for low-level waste disposal. In this regard, I am pleased to report that progress in forming compacts has been encouraging. To date,

four compacts await Congressional approval and two more have been approved by the required number of States (four) in each region to permit submission to Congress.

Remedial Actions

Another important Federal responsibility in the management of

nuclear wastes is our program for remedial actions at certain contaminated facilities and sites. This program is divided into four major subprograms: (1) The Formerly Utilized Site Remedial Action Program (FUSRAP) covers former nuclear processing sites that require stabilization or removal of contaminated material. DOE currently has authority for conducting remedial action at 19 sites. In FY 1985, remedial action will be completed at the Niagara Falls Storage Site in New York, and work will continue at other sites for which DOE has authority. (2) The Uranium mill Tailings Remedial Action Program (UMTRAP)

is directed toward the cleanup of 24 inactive uranium mill

tailings disposal sites and several thousand associated vicinity

properties. In FY 1985, cleanup will be completed at the site in Canonsburg, Pennsylvania, and about one-third of the necessary work at the Salt Lake City, Utah, site and about two-thirds at the Shiprock, New Mexico, site will be completed. (3) A third

program covers our participation in a Federal/State cooperative

effort to remove uranium mill tailings used for construction

purposes in Grand Junction, Colorado. By the end of FY 1985,

we will have completed remedial actions at 623 of the 626

structures requiring attention. (4) The Surplus facilities Program provides for the safe management and disposition of contaminated DOE civilian program facilities (currently grouped

into about 55 projects) that are no longer in use.

In FY 1985,

dismantlement of the shippingport Atomic Power Station will be initiated, which will demonstrate the safe and economical

cleanup of a commercial power reactor.

Yet another waste management activity for which we have

responsibility is the demonstration of high-level waste

solidification at the Western New York Nuclear Center, near

West Valley. In FY 1985, the West Valley Program will focus on vitrification testing, engineering, and procurement of waste solidification support systems and decontamination and decommissioning of the facility.

Uranium Enrichment

I have saved discussion of one of the Department's business

enterprises -- the Uranium Enrichment Proyram -- for last.

The FY 1985 enrichment request, which represents a 24 percent reduction from the FY 1984 appropriation, supports a program

approach that is substantially changed from that of previous

years. This major departure from "business as usual" operations has been necessitated by a series of events and circumstances that have threatened the ability of the United States to remain

a viable long-term supplier of uranium enrichment services.

When I appeared before this Committee last year, I described the complex and interrelated problems that were frustrating the attempts of the Department to be a competitive supplier of

enrichment services. Decreased demand and the worldwide excess

of enriched uranium (the current inventory of enriched uranium

is sufficient to meet the requirements of the next 3 years without additional production); increasing competition from

foreign'enrichment suppliers (Urenco and Eurodif); the emergence

of a secondary market; and the major shift in foreign currency

exchange rates have all taken a heavy toll on our enrichment

enterprise. Underlying and aggravating these problems has

been the failure of the U.S. Government to operate the enrichment

enterprise in a businesslike manner.

In response to this untenable situation, the Department of

Energy has developed a strategy designed to reverse the erosion

of the U.S. enrichment market share.

Today I am prepared to

describe this strategy, which I believe will enable us to

survive this transition period and to emerge in a commanding

financial and technological position.

Basic to our effort is a fundamental change in management philosophy. The monopolistic mindset that has prevailed since the early days of the enterprise must yield to an attitude of healthy, aggressive competition. Enrichment operations can no longer be driven by an undisciplined, pie-in-the-sky production

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