DEPARTMENT OF ENERGY AUTHORIZATIONS FOR FISCAL YEAR 1987 FRIDAY, FEBRUARY 7, 1986 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND THE ENVIRONMENT, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, The subcommittee met, pursuant to call, at 10 a.m., in room 1310, Longworth House Office Building, Hon. Sam Gejdenson presiding. Mr. GEJDENSON. The hearing will come to order. I will read the first paragraph of the statement of the chairman, Mr. Udall, and I think both of you gentlemen are aware of his general concerns and the committee's concerns. Today the Subcommittee on Energy and the Environment will receive testimony on the Department of Energy's budget request for certain nuclear energy activities during fiscal year 1987. DOE activities within the subcommittee's jurisdiction include several energy supply research and development programs, the uranium enrichment enterprise, and activities under the Nuclear Waste Policy Act of 1982. We are pleased to have with us this morning James W. Vaughan, Jr., Acting Assistant Secretary for Nuclear Energy, to discuss the Department's energy supply, R&D, and uranium enrichment activities, and Ben C. Rusche, Director, Office of Civil Radioactive Waste Management, to discuss high-level waste programs. If you gentlemen care to begin. [Prepared statements of Hon. James W. Vaughan, Jr., with attachments, and Ben C. Rusche may be found in appendix II.] PANEL FROM THE U.S. DEPARTMENT OF ENERGY CONSISTING I am pleased to be here today to discuss the Department's fiscal year 1987 nuclear energy programs involving our remedial action and low-level waste efforts, and our uranium enrichment enterprise. I have provided both a detailed written statement and responses to the questions on uranium enrichment which were posed in your letter of invitation, and I would request that these be made part of the hearing record. Mr. GEJDENSON. Without objection. Mr. VAUGHAN. Our fiscal year 1987 budget request for both of these activities is tabulated in my written statement. The fiscal year 1987 funding request for our Nuclear Energy Supply Research and Development is $626.8 million in budget authority, as compared to $607.4 million estimated in fiscal year 1986. I would note that all of the fiscal year 1986 figures in my statement and those to which I will refer orally reflect appropriated totals which have been reduced by the sequestrations responsive to the GrammRudman-Hollings Deficit Reduction Act, management initiatives, and other general reductions. The fiscal year 1987 uranium enrichment budget request reflects planned offsetting revenues and partial payback of prior Government investment resulting in a net zero appropriation for that activity. The Department of Energy continues to place high priority on ensuring that nuclear energy contributes to a strong, stable, and secure national energy base to meet both civilian and military requirements. Our commitment to nuclear energy remains strong, and our execution of a reliable, competitive, and businesslike uranium enrichment enterprise is an integral part of that commitment. The Department also remains strongly committed to protecting public health and safety and to assuring a safe and clean environment in connection with its activities. Our remedial action and waste technology efforts are an integral part of that commitment. In fiscal year 1987 there are several shifts in emphasis within the nuclear energy budget. Within an essentially level budget compared to fiscal year 1986, our funding request for nuclear energy research and development has decreased about $46 million, while funding for remedial actions and waste technology-including lowlevel waste activities-has increased by some $64 million. There are several key factors that have influenced these shifts in program priorities: First, the Department is fully committed to support the bipartisan effort to control and reduce the Federal deficit, and while it may appear to some that some worthwhile R&D elements have been eliminated or significantly reduced, we believe that each of our programs is sharply focused to make optimum use of our limited resources. Second, space and defense nuclear energy needs are increasing, particularly those associated with the strategic defense initiative, a top national priority. Accordingly, our funding request for these efforts in our nuclear energy R&D programs have increased in fiscal year 1987. Third, the currently anticipated timing for the commercial introduction of innovative reactor technologies beyond light water reactors has stretched out. Accordingly, our funding requests for civilian advanced reactor development activities have been reduced in fiscal year 1987 consistent with this stretched-out timing and other nearer-term priorities, including our space and defense nuclear energy activities. Fourth, the remedial action and waste technology budget request does increase significantly compared to the fiscal year 1986 esti mate, but less than previously forecast. The program objectives can be achieved at this level of funding by extending the authorization period for the Department's Uranium Mill Tailings Remedial Action Program from March 1990 until the end of fiscal year 1993, consistent with the guidance which was provided in the House report accompanying the fiscal year 1986 Energy and Water Development Appropriations Act. Emphasis in all remedial action programs will concentrate on cleanup activities at highest priority sites and the continued protection of the public and the environment at all sites. Finally, the uranium enrichment budget request reflects several strategic decisions made by the Department during the past year. Chief among these are placing the Oak Ridge Gaseous Diffusion Plant in standby, termination of the gas centrifuge enrichment plant project, and selection of the atomic vapor laser isotope separation process, commonly called AVLIS, as the uranium-enrichment technology for the United States in the 21st century. During fiscal year 1986, the Department will initiate an effort to involve the private sector in AVLIS research, development, and demonstration on a cost-sharing basis. Turning now specifically to our Remedial Action and Waste Technology Program, I would first note that my detailed written statement contains information on each of the projects underway in this program. I will briefly discuss two areas of particular interest to this subcommittee-the uranium mill tailings remedial action project and our low-level waste activities which will help implement the Low-Level Radioactive Waste Policy Amendments Act of 1985 that this subcommittee was instrumental in enacting. The uranium mill tailings remedial action project is responsible for conducting these efforts at 24 former uranium-ore processing sites and several thousand contaminated vicinity properties. Nine of the sites are designated as high priority, six as medium priority, and nine as low priority. The proposed 22-year extension of this project takes into consideration the actual project experience gained in performing remedial action at several processing sites and many vicinity properties. Project plans have been revised to reflect this experience and more level funding and work loading among the projects. Within these plans, work will continue first at the high-priority sites with very minimal planned extension in previous schedules for these sites. The Department's Low-Level Waste Program provides assistance to States and regions in developing capacities for the disposal of low-level radioactive waste, in accordance with the recent act. The goal of the Department's Low-Level Waste Program is to assist the States and regions in the development of an effective nationwide low-level waste management system. The act has also assigned several new responsibilities to the Department in addition to providing this assistance. During fiscal years 1986 and 1987, we will conduct activities required by the act and will focus primarily on meeting the generic technical needs of the States and compact regions as they work to select sites and develop new disposal facilities and to evaluate alternative disposal technologies. The report identifying options for the Congress on disposing of greater than Class C low-level wastes will be completed in January 1987 as requested by the act. I would like to next discuss our uranium enrichment enterprise. Your letter of invitation specifically requested the Department's views on the requirements of the Atomic Energy Act relative to enrichment pricing and to the domestic uranium industry. I have appended to my written statement a copy of our "Notice of Proposed Rulemaking" that was published in the Federal Register on January 29, 1986. Let me simply note that the Department's views on this particular issue are best summarized under the "supplementary information section" of our proposed modification to the uranium enrichment services criteria. In the past 2 years, significant progress has been made in redirecting the uranium enrichment enterprise to assure its competitiveness and long-term viability in both the domestic and international marketplace. Supply and demand have been stabilized by issuing the utility services [US] contracts and by successfully converting existing customers to the new contracts. Having defined this customer demand that must be met, the Department then developed appropriate production and research and development strategies to meet that demand and announced those decisions last June. During the next 2 years the restructuring of the enterprise which began in 1984 will continue. A new initiative beginning later this month will be an effort to involve the private sector in uranium enrichment to the maximum extent possible. The areas in which the private sector can most beneficially be involved in the enterprise will be defined by the response to a request for expressions of interest that will be issued later this month. At a minimum, it is hoped that the private sector will be interested in supporting the deployment of the AVLIS technology. In that light, the Department will initiate, during 1986, an industrial access program to allow qualified U.S. firms to become familiar with the AVLIS technology so that there is an assured industrial base to deploy this technology in the future. One issue that has received a considerable amount of attention recently is a decision issued by the U.S. District Court for the District of Colorado regarding the utility services contracts. While we cannot make any detailed comments on this litigation, the Department believes that the utility services contracts are legally valid and consistent with the existing uranium enrichment services criteria. As such, it is our belief that the individual utility services contracts executed between DOE and its individual customers remain a valid basis for business transactions, and that this view will be upheld on appeal. We anticipate that the current rulemaking process to modify the uranium enrichment services criteria will be completed this summer. All interested parties will have the opportunity to comment on the proposed criteria change in writing and at a public hearing which we will convene in Washington, DC, on March 18 and 19. DOE will then submit the new criteria to Congress at least 45 days prior to their actual effective date. A crucial element of the competitive strategy in the uranium enrichment enterprise is our approach to pricing. The market is extremely price sensitive and DOE prices simply must be more com |