cilitate efforts by U.S. industry to usher in a new, advanced generation of nuclear powerplants of this type. We believe the time is ripe for completion of development and certification of advanced state-of-the-art light-water reactor designs. In fiscal years 1987 and 1986, the Department, through competitive contracting and in cooperation with EPRI, will be providing selected technology support for these advanced designs through cost-shared programs. We believe these efforts, along with those which this committee is appropriately taking the lead regarding licensing reform, are essential to restoration and revitalization of the nuclear option in this country. In the advanced civilian reactor research and development area, we have made excellent progress in our high-temperature gascooled reactor and liquid metal reactor design work in the past 2 to 3 years. Focus is now upon key features affecting the economic, passive safety and technical issues of these concepts to preserve their potential for the future, including the potential application of liquid metal reactors as breeder reactors when our supply of uranium becomes either too short or too expensive. The advanced reactor program for fiscal year 1987 and beyond will build on the substantial progress made in this technology and design effort over the years. The space and defense power systems segment of our program is structured to respond to requirements identified by NASA and the Department of Defense, including particularly the Strategic Defense Initiative Organization. This cost-shared program activities will provide the design, development, and supporting technology to build compact, high-performance reactors for space and terrestrial applications and dynamic isotope power systems for space application. With your permission, Mr. Chairman, I would like to provide for the record a letter which I recently received from General Abrahamson outlining the SDIO's strong support for these joint programs. The CHAIRMAN. That will be made a part of the record. [The letter follows:] DEPARTMENT OF DEFENSE STRATEGIC DEFENSE INITIATIVE ORGANIZATION 29 APR 1986 Mr. James W. Vaughan, Jr. Acting Assistant Secretary for Nuclear Energy U.S. Department of Energy, NE-1 Washington, D.C. Dear Mr. Vaughan: 20585 As a result of our discussion last week, I would like to reemphasize my support for several nuclear energy programs that are important to the overall success of the Strategic Defense Initiative (SDI). These programs include the SP-100 and Multimegawatt (MMW) space reactors, the Dynamic Isotope Power System (DIPS), and the Secure Military Powerplant Project (SMPP). Space reactor systems will be required in the SP-100 power range in order to satisfy the space platform operational power requirements of a space based SDI system. Higher power MMW space reactors are also candidates to meet the pulse power needs of several of the Directed Energy Weapons (DEW) and Kinetic Energy Weapons (KEW) currently being investigated. Key technology and development issues should be addressed in both programs and the ongoing SP-100 Ground Subsystem Test Program and nuclear MMW development programs need to be continued to address these issues. The DIPS and SMPP Programs are primarily U.S. Air Force initiatives, but because of their potential application to SDI, I endorse them and urge your continued support as part of your cooperative efforts with the Air Force. The DIPS concept is the preferred power source for an operational Boost Surveillance and Tracking System (BSTS) and development should proceed on a time scale that is compatible with overall BSTS development. As part of my overall funding support for BSTS, some SDI funding will be directed toward DIPS development. As I indicated to you in an earlier letter, the SMPP may be important to ground based SDI assets. The ground based systems are receiving increased emphasis and I encourage you to continue this cooperative effort with the Air Force. Because it is more of a new application of existing technology rather than a new technology or feasibility issue, Air Force funding is more appropriate than direct SDI funding, and I am relying on Air Force funding to help carry this project forward. As you consider the various program alternatives that the rigid budget constraints force you to consider, I urge you to give a high priority to these programs that are important to the Strategic Defense Initiative. Mr. VAUGHAN. And I would also note, Mr. Chairman, that we are pleased that you have invited Colonel Hess from that organization here today to add his support and to comment on these particular programs. Therefore, I will be brief, but would note that in the space and defense area, our SP-100 space reactor program is moving into the 5-year ground engineering test phase based on reference missions that have been established by SDIO. The multimegawatt space nuclear power program concentrates on the evaluation of potential multimegawatt space power concepts and the testing and development of enabling technology which could lead to a reference concept by 1991. Our small nuclear power source demonstration project will demonstrate in fiscal year 1986 performance of a reactor subsystem that can be an alternative to conventional power systems for applications such as the North warning system, which is an upgrade of the DEW line across northern Canada. Lastly, as part of our multimegawatt terrestrial reactor project, DOE will design a passively safe 10 megawatt electric hardened nuclear powerplant to meet needs which have been identified by the Air Force, as well as potential applications by the SDI organization. We have, for your information, also had a number of expressions of interest from the civilian sector regarding this concept. I am pleased to report that a request for proposals for this joint department Department of Defense/Department of Energy project have recently been issued and there is a good deal of interest in this effort. Turning to our Advanced Nuclear Systems Program, you are aware that its objectives are to develop and demonstrate and to deliver radioisotope power sources for U.S. military and civilian space and terrestrial missions. The so-called RTG's which were developed for the Galileo and Ulysses missions passed all their tests and they are ready for possibly a 1987 launch when that rescheduling effort occurs. In the future, NASA and DOD are continuing to ask us to pursue the technology and the development of advanced RTG's that offer promise of higher power density and greater size adaptability as mission requirements change. I would also note with regard to our Reactor Development Program that the accomplishments and activities of our facilities and test programs are significant. There have been significant accomplishments at our facilities both in the State of Washington, and in your home State of Idaho, Mr. Chairman, and they are articulated in my written statement. I won't elaborate on them here. I would note that operation of these facilities continues to make very significant contributions to both United States and international liquid metal reactor operating experience and does provide testing capabilities that are required for the development of nuclear energy sources that will be needed not only for civilian, but for space and military applications. Turning now to the area of our Remedial Action and Waste Technology Program, I would simply note that my written statement contains detailed information on each of the projects that are under way, that the emphasis in all of these remedial action programs will continue to concentrate on cleanup activities at the highest priority sites, and on the continued protection of the public and the environment at all sites. Let me conclude with the summary of our uranium enrichment activities. Our fiscal year 1987 budget request for that program is approximately $1.05 billion in budget authority which will be fully offset by $1.29 billion in projected revenues. In addition, the DOE budget proposes to return $235 million to the Treasury in fiscal year 1987 as a partial payment of prior Government investment in the uranium enrichment enterprise. We are, of course, mindful of the recently passed Budget Reconciliation Act which includes lower targets for payments to the Treasury and are currently analyzing the detailed provisions of that act versus our fiscal year 1987 proposal. Our primary objective in this program is to retain a competitive, financially healthy uranium enrichment supply capability in the United States for the long term. We think we have made important progress in achieving the seven major goals which we established for that enterprise as were articulated in our June 1985 strategy, announced by the Secretary, and as contained in my written statement. Most importantly, we have stabilized the uranium enrichment market and become more cost competitive. We have improved the efficiency of our production operations, placed the Oak Ridge gaseous diffusion plant in standby, and cancelled the gas centrifuge enrichment plant. We are continuing to conduct a rational R&D program to develop the world's most advanced enrichment technology, which goes under the acronym of AVLIS. The net result of all these actions is that we have been able to increase our share of the free world enrichment market from about 46 percent in 1985, to a projected 53 percent in 1990. But there is much more to be done and we consider that the next 2 years will be critical for the uranium enrichment enterprise as we enter the third phase of our strategy, that of stabilizing the enterprise for the future. During this fiscal year and the next, we will develop the institutional framework that we trust will assure that the Nation continues to have a reliable supply of enrichment services for the long term. One key action that has recently been initiated is the proposed modification of the uranium enrichment services criteria, and since I covered this subject in some detail in my April 10 testimony before this subcommittee, I will not elaborate except to add a note that we did publish on April 25 an additional analysis regarding the recovery of prior Government costs and requested further public comment on this supplementary information. We still hope to complete the rulemaking process by the end of this year. Additionally, we requested earlier this month expressions of interest from the private sector concerning potential participation in the uranium enrichment enterprise. This request for private sector expressions of interest is clearly exploratory in nature, and while our action is part of a broad administration initiative to evaluate the transfer of certain Federal functions to the private sector, let |