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Weapons of Mass Destruction (WMD)

STATEMENT OF ADMIRAL JAMES D. WATKINS, USN (Ret.)
                              SECRETARY OF ENERGY
                           U.S. DEPARTMENT OF ENERGY
                                   before the
                          COMMITTEE ON ARMED SERVICES
                                  U.S. SENATE
                ATOMIC ENERGY DEFENSE ACTIVITIES (050 ACCOUNT)
                                 April 18, 1991
  
 Mr. Chairman and Members of the Committee, I am pleased to appear before
 you today to present an overview of the Department of Energy's FY 1992
 budget request for those national security programs funded by the 050
 Atomic Energy Defense Activities Account. Programs in this category are
 administered by the Offices of Defense Programs; Environmental
 Restoration and Waste Management; New Production Reactors; Naval
 Reactors Program under the Office of Nuclear Energy; Security Affairs;
 Security Evaluations under the Assistant Secretary for Environment,
 Safety and Health; and Intelligence.
  
 Before I continue, I would like to thank the Members of the Committee
 for your support of the Department's $623 million FY 1991 Supplemental
 Authorization request. These funds will be used to assure that all
 necessary safety, security and environmental steps are taken to permit
 the resumption of plutonium manufacturing operations at Rocky Flats
 Plant, and for several high priority Environmental Restoration and
 Waste Management activities.  Your continued support is an important
 ingredient in helping me change the course at the Department of Energy.
 As new dimensions take shape--sounder environmental stewardship,
 downsizing the production complex, and assuring the construction of a
 new production reactor for the 21st century--I look forward to working
 with you to secure the necessary resources and support to carry out
 effectively and completely the vitally important national security
 missions of the Department of Energy.
  
                       Overview
  
 Nuclear deterrence has been the cornerstone of our national security
 policy since the end of World War II. It has been essential in
 preserving world peace and will remain a vital element of our national
 defense strategy for the foreseeable future. This is not to say that
 the world situation has not changed since I became Secretary of Energy.
 Rather, we find that nuclear stockpiles in Europe are being reduced and
 arms control treaties with the Soviet Union offer the promise of further
 number and mix of nuclear weapons in our stockpile are defined in the
 reductions in nuclear weapons. Regardless of that future promise, the
 Nuclear  Weapons Stockpile Memorandum, which is negotiated between the
 Departments of Defense and Energy, approved by Secretary Cheney and me,
 and then forwarded to the President for final approval.  Irrespective
 of ultimate stockpile requirements, federal budgets will be increasingly
 constrained, a trend that can be expected to continue.  These and other
 impacts on the Department's national security programs are profound and
 must be considered as we position ourselves to move into the 21st century.
  
 The Department's overall Atomic Energy Defense Activities budget
 request for FY 1992 is $11.8 billion, almost two-thirds of the
 Department's total budget. The request is comprised of $6.75 billion
 for Defense Programs which includes $159 million for Security Affairs,
 and $50 million for Intelligence; $3.7 billion for Environmental
 Restoration and Waste Management activities; $500 million for the New
 Production Reactors Program, $801 million for the Naval Reactors program;
 and $15 million for Security Evaluations.
  
 Since the submission of the President's FY 1992 budget, the Department
 of Defense has decided not to fund the B 90 weapons system production
 activities in FY 1992. We are working closely with cognizant
 congressional staffs to allow DOE funding in FY 1992 for this weapons
 system to be reallocated to high priority needs such as the W 79 change
 requirement recently validated by the Secretary of Defense, support for
 increased weapon retirements, and other priority funding of Weapons
 an expanded nuclear weapon disposal capability at Pantex to handle
 Production  and Surveillance requirements.
  
 I will describe my objectives for the programs comprising DOE's portion
 of the 050 account and the immediate concerns I see facing the
 Department of Energy. During 1991, my priority goals under the Atomic
 Energy Defense Activities Account are to achieve the following:
  
 o     Conduct safe restart of the first production reactor at the Savannah
       River Site in South Carolina after a nearly three-year shutdown for
       safety deficiencies.
  
 o     Conduct safe resumption of plutonium processing operations at the
       Rocky Flats plant in Colorado after a more than one year shut down
       for significant operational weaknesses.
  
 o     Conduct safe start of the operational research test program at the
       Waste Isolation Pilot Plant (WIPP) in New Mexico to demonstrate
       compliance with disposal requirements for radioactive transuranic
       wastes.
  
 o    Resolve the safety concerns related to the waste tanks at the
      Hanford site in Washington State.
  
 o    Issue the Record of Decision for New Production Reactor capacity
      in December.
  
 o    Continue to make significant progress in improving the safety,
      security, control and effectiveness of our nuclear weapons stockpile.
  
 o    Continue efforts at Headquarters and each DOE facility to
      implement recommendations of the Secretary's Safeguards and Security
      Task Force, which I commissioned, and other initiatives to enhance
      protection of facilities, special nuclear materials, nuclear weapons
      and their component parts and classified information.
  
 As I noted earlier, this is an important year for the Department. It
 has not been easy getting to this point. I want to share with you
 the dilemma I faced regarding decisions for the Atomic Energy
 Defense Activities programs.
  
 I believe the Department's budget, including the FY 1991 supplemental,
 is the rock bottom amount required to support our national security
 programs in a safe and environmentally sound manner. This budget was
 arrived at only after much soul searching that included the deferral of
 many critical activities and severe cuts in our weapons production
 complex, in our weapons research and development program, and in our
 program to pursue new production reactor capacity to replace our aging
 reactors.
  
 The following chart depicts the current problem facing the Department
 in balancing all of its national security activities.
  
  
   [[[[[[  a graphical chart can be found with the original  ]]]]]]
  
 This growth in resources allocated to environmental management is of
 particular concern to me since there are a significant number of
 uncertainties still confronting the Department as it strives to meet
 the requirements of applicable environmental statutes.   Most of our
 sites are still in the characterization phase where problems are still
 being identified and proposed solutions studied. Once the study phase
 is over, we can anticipate further cost increases as the actual cleanup
 contributor to the uncertainty of the costs associated with achieving
 work begins on schedules with statutory milestones.  Another
 compliance  with environmental laws is the increasing number of
 compliance agreements we are negotiating with the States and the
 Environmental Protection Agency.  When setting the requirements
 in these agreements, there is no incentive for the regulators to
 demand less than full compliance, as soon as possible, regardless
 of the degree of risk associated with any non-compliance
 condition that may develop.  And their position is being supported
 through litigation.  This situation puts the Department in a
 difficult position from the standpoint of controlling budgetary growth,
 since these resource requirements are driven, to a great degree, by our
 regulators.
  
 I am certain that the budgetary requirements for the Environmental
 Restoration and Waste Management effort will expand as environmental
 compliance and cleanup becomes better defined. That is why I am very
 uncomfortable with the trends that are portrayed on the chart.
  
               Status of the Nuclear Weapons Complex
  
 Over the past two years as Secretary of Energy, one of my key concerns
 has been correcting the problems brought about by past neglect in the
 management of the Department's nuclear weapons complex. As a result of
 my Ten Point Plan, issued in June 1989, to move the Department toward
 full accountability and compliance with environmental, safety, and
 health laws, we have made good progress toward achieving our
 objectives.
  
 From the onset, it was clear that instilling a new operating culture
 would take time and that new challenges and changing circumstances
 would require revisions to planned timetables.  Nevertheless, we have
 made real and measurable progress in implementing new operating
 policies and procedures to bring the Department into compliance with
 Federal and State environmental, health, and safety regulations.
 Achieving both production and environmental, safety and security
 objectives are compatible goals.
  
 Operations at the Savannah River Site and Rocky Flats Plant will not
 resume until I am completely satisfied that they can be operated in a
 manner that assures the health and safety of the public and our
 workers, protects the environment, and complies with the Department's
 safeguards and security requirements. I will not be driven by rigid
 schedules.  Furthermore, I remain committed to correcting existing
 deficiencies. The programs we have in place are sound. I am optimistic
 about our ability to achieve these goals in 1991.
  
                     Savannah River Reactors
  
 On February 4, 1991, I signed the Record of Decision (ROD), completing
 the National Environmental Policy Act (NEPA) process, which reflects my
 decision to continue to operate the K Reactor at the Savannah River
 Site, defer until later the operation of the L Reactor, and defer
 indefinitely the operation of the P Reactor.
  
 Important milestones must still be achieved before the K Reactor can be
 ready for operation this summer, including: continuing with the safety
 upgrades as outlined in the Safety Evaluation Report; preparing for an
 Operational Readiness Review prior to a decision to restart; preparing
 an action plan for mitigation of any environmental impacts associated
 with the restart; completing system testing and security reviews. These
 and other milestones must be successfully completed; and I must be
 personally assured that applicable environmental, safety, health and
 security considerations have been satisfied before I will authorize the
 restart.
  
             Plutonium Operations at Rocky Flats Plant
  
 Also, this summer, I expect to authorize resumption of operations in
 the analytical laboratory, Building 559, at Rocky Flats. Although the
 laboratory is not a production facility, I believe it is prudent to use
 startup of the laboratory as a critical verification tool for other
 buildings at the plant.
  
 But again, I will not authorize resumption at Rocky Flats until I am
 personally satisfied that applicable environment, safety, health, and
 security considerations have been fully addressed. If all goes
 according to plan, I expect that pit fabrication at Rocky Flats will
 resume later this calendar year.
  
 As you know, it is vitally important that Savannah River and Rocky
 Flats resume operations in order to meet national defense requirements.
 This is especially important in view of the critical role these
 facilities have in the maintenance of our existing nuclear weapons
 stockpile and in improving the safety and security of the future
 stockpile.
  
                     Nuclear Weapons Safety
  
 I have reviewed in detail the recommendations which the Drell Panel has
 made to the Congress regarding the safety of nuclear weapons in the
 stockpile.  Both Secretary Cheney and I support the thrust and
 intent of the Drell Panel's recommendations, and we have charged the
 Nuclear Weapons Council to carry out promptly a course of action to deal
 with these recommendations.
  
             Environmental Restoration and Waste Management
  
 The Department is committed to managing its facilities in an
 environmentally sound manner, restoring environmentally damaged sites,
 promoting environment, safety and health oversight, and safely
 disposing of nuclear waste. Environmental Restoration and Waste
 Management (EM) is the fastest growing program area in the Department.
 My Five-Year Cleanup Plan is the cornerstone of the Department's
 long-term strategy to consolidate and coordinate the Department's
 billion being proposed under the Atomic Energy Defense Activities
 cleanup activities.  The FY 1992 EM budget request contains $3.7
 appropriation.  This is an increase of approximately $1 billion over
 the FY 1991 appropriation.
  
 In order to clearly define the future course of this program, I have
 directed that a Programmatic Environmental Impact Statement (PEIS) be
 prepared for the Department's Environmental Restoration and Waste
 Management activities. Twenty- three public scoping hearings related to
 this PEIS were conducted throughout the country. Let me emphasize that
 this effort must be maintained independent of the PEIS for Complex
 Reconfiguration. The missions of these two programs is significantly
 different. Although future complex operations will generate additional
 compared to the large amount that already exists in the complex and
 waste for disposal, these volumes will be relatively small when
 must be  managed under rigid regulations. These two efforts will be
 thoroughly coordinated to assure consistency, but they must be
 independently maintained.
  
 Implementation of the Environmental Restoration and Waste management
 program is indicative of our determination to manage the Department
 complex in an environmentally acceptable manner. There are sound
 reasons for the requested approximate one billion dollar program
 growth. Constraints on the 050 account dictate that we closely examine
 future program requirements, but the challenges are significant. For
 approximately one billion dollars from preliminary program estimates
 instance, in the process of validating requirements, we cut
 that came  in from field activities and were fed into the Five Year
 planning information. In addition, closure of facilities and the
 transfer of activities from other programs represented approximately
 $700 million worth of real EM requirements. The infrastructure
 necessary to manage this program must be expanded to assure that
 funding. In 1992, the amount of real growth in this program in the
 appropriate controls are in place to effectively expand this level of
 defense area  is only about 11 percent.
  
 Part of this real growth is driven by the significant increase in the
 number of compliance agreements negotiated with the States and the
 Environmental Protection Agency. At the end of FY 1990, 59 such
 agreements were in place; at the end of 1991, this number will increase
 to 82 with even more anticipated by the end of FY 1992. However, there
 is considerable uncertainty associated with negotiating the
 uncertainty is the fact that the Resource Conservation and Recovery Act
 requirements of some of our agreements.  A major contributor to this
 (RCRA),  which governs many of these agreements, was not written to
 provide specifically for mixed waste. Mixed waste is generically
 defined as having both radioactive and hazardous waste present and
 constitutes the major portion of the material in the Department
 complex. Therefore, the uncertainties of the regulatory
 requirements are of particular concern. It is essential that this
 situation be remedied during the current RCRA reauthorization process
 so that the Department can focus its attention on a consistent cleanup
 program.
  
 I am particularly pleased with our efforts in starting to manage the
 significant volume of Department waste and in minimizing current waste
 generation, as well as achieving parallel progress in environmental
 restoration. The nation's first geologic repository, the Waste
 Isolation Pilot Project or WIPP, is essentially completed. The test
 phase for the facility is scheduled to begin in June or July of this
 in achieving final disposal of the nation's transuranic waste. Another
 year. The ultimate opening of this facility is the essential component
 major  step forward in waste management is the testing of the Defense
 Waste Processing Facility at Savannah River.  This facility, which is
 currently in the cold operations phase, is a major link in the program
 designed to accomplish the ultimate disposal of the large volume of
 high level waste that is currently stored in underground tanks at
 Savannah River.
  
 In the area of environmental restoration, we are starting to make a
 dent in the substantial cleanup task that confronts us.  Remedial
 assessments and major closures are proceeding on schedule. For example,
 to date, we have met 78 of 82 major compliance agreement related
 milestones in the Hanford Tri Party Agreement. Significant volumes of
 contaminated materials have been removed from Grand Junction and Rocky
 completed decontamination and decommissioning at the Los Alamos reactor
 Flats in Colorado and the Hanford solar basins.  We have facilities and
 at a number of hot cells and buildings throughout the Department complex.
 The technology development activity in EM stated that we would
 initially try to come up with faster, better, safer and cheaper ways
 to accomplish the cleanup tasks. The Integrated Demonstration at
 Savannah River for treating ground water has been our first unqualified
 success. The initial test removed 15,000 pounds of trichloroethylene in
 75 days in comparison to the existing system of pump, strip and treat
 that removed 15,000 pounds of trichlorethylene in 2 1/2 years at a cost
 of $54 million compared with a cost of $3 1/2 million for the
 integrated demonstration.
  
 Sustained progress in the area of environmental restoration and waste
 management is essential if the Department is going to continue to
 exhibit environmental responsibility. I am certain that the budgetary
 requirements for this program will continue to be assessed as the task
 of environmental compliance becomes better defined, unique special
 nuclear materials throughout the complex are classified as wastes and
 additional facilities are removed from service. We need to develop new
 construction projects. If implemented, the new requirements for recycle
 requirements allowing the recycle of old material for use in new
 have the  potential to reduce both the amount of waste requiring
 disposal and overall program costs.
  
             Reconfiguration of the Nuclear Weapons Complex
  
 To assure that our nuclear weapons complex can meet future national
 security requirements, I directed that a plan be developed for
 reconfiguration of the nuclear weapons complex to assure that a safe,
 reliable, and efficient complex is available over the long term to
 support the nuclear deterrent. On February 7, 1991, I released to the
 public the Nuclear Weapons Complex Reconfiguration Study and provided
 individual copies to the members of this Committee. I am convinced that
 the Department's mission to produce defense materials is compatible with
 protection of the environment; one need not be sacrificed to obtain the
 other. This plan is the first step in bringing that about. We are now
 conducting an in- depth examination of the proposals contained in the
 Study, beginning with the preparation of a Programmatic Environmental
 Impact Statement (PEIS). The firm of Tetra Tech Inc., of Pasadena,
 California, has been selected to support the Department in the
 preparation of the PEIS. Public participation is encouraged in the
 public scoping meetings now under way near each of the major DOE sites,
 here in Washington, and when we publish the draft PEIS scheduled for
 November 1992. Three such meetings have been held to date and a fourth
 meeting is scheduled this week near the Department's Pinellas Plant in
 Florida.
  
 The PEIS will examine a number of options, ranging from no action to a
 restructuring that could reduce the complex from its present 13 sites
 to six or seven.  Preferred options include relocating the Rocky Flats
 Plant to a new facility employing improved technology to minimize
 environmental and health impacts while facilitating economy of
 operation. Also preferred is consolidating nonnuclear manufacturing
 activities at one dedicated site.  Other possible changes include
 sector; decommissioning at least one facility entirely; and examining
 transferring many nonnuclear manufacturing activities to the private
 the  missions, facilities and operations of the three research and
 development laboratories for changes that could result in satisfying
 essential weapons requirements while streamlining research, development
 and testing facilities.
  
 The Department's plans for reconfiguration of the complex will require
 substantial resources at a time of significant federal budget
 constraints. In the meantime, significant resources must be devoted to
 maintaining the present complex and assuring it can carry out its
 production mission with required attention to health, safety, security,
 and the environment.  Providing the funding for transition and
 reconfiguration is considered necessary to ensure continued viability
 of our nuclear deterrent.
  
                 New Production Reactors Program
  
 The mission of the New Production Reactors (NPR) Program is to provide,
 on an urgent schedule, new production reactor capacity in a safe and
 environmentally sound manner for an assured supply of nuclear
 materials, primarily tritium, to maintain the Nation's deterrent
 capability. Future defense nuclear materials production cannot be met
 indefinitely with our present reactor capacity, which will be over 45
 years old when new reactor capacity is scheduled to begin production.
 and sustaining this Nation's defense policy of nuclear deterrence. The
 The ability to produce tritium is a critical component to fulfilling
 proposed,  state-of-the-art, new production reactor would provide, on
 an urgent schedule, the means necessary for the reliable production of
 tritium in a safe and environmentally sound manner well into the next
 century.
  
 To achieve this objective, I have decided that the former strategy of
 concurrently designing and constructing two new production reactors at
 two sites can no longer be supported given the multiple competing
 priorities within the Atomic Energy Defense Activities Account. My new
 strategy, as outlined in our FY 1992 budget request, is to continue
 the preliminary designs of both the Heavy Mater Reactor and the Modular
 High-Temperature Gas-Cooled Reactor, complete the final Environmental
 Impact Statement in November 1991 and then, make a final choice at the
 Record of Decision in December 1991. At that time, the Department will
 select one technology and one site, utilizing all safety, environmental,
 technical, and cost and schedule data needed to make the most sound and
 complete decision possible.  Then, depending upon the decision, we
 will proceed to complete the design and construction of a single
 reactor technology at the chosen site. The design of the technology not
 selected will be terminated in an orderly fashion. As a contingency,
 the light water reactor target development effort will continue until
 its completion.
  
  
 The requested FY 1992 funding level of $500 million for the New
 Production Reactor Program consists of $152.3 million in operating
 budget authority; $336.5 million in construction funds for design and
 $11.2 million for capital equipment. These funds are needed to support
 the continued broad range of activities necessary to bring new
 production reactor capacity on line.
  
 On April 10, 1991, the draft Environmental Impact Statement on the
 siting, construction and operation of new production reactor capacity
 was released to the Congress. This begins a 60-day public comment
 period which will end in June. During that time, the Department will
 conduct 13 public hearings in five states (South Carolina, Georgia,
 Idaho, Oregon, and Washington) regarding this proposed action. The
 final EIS is scheduled to be completed in November 1991, with the
 Record of Decision scheduled for December.  In the immediate future,
 the NPR Program will proceed with those activities necessary to complete
 the final EIS, concurrently with engineering development, confirmatory
 testing and project design efforts. These activities will all lead to
 supporting detailed design and construction as soon as possible after
 the Record of Decision.
  
              The Weapons Research and Development Laboratory
  
 To meet national security requirements, our National Laboratories at
 Los Alamos, Lawrence Livermore, and Sandia carry out research,
 development, and testing of nuclear weapons.  They also perform the
 vital function of monitoring the stockpile to assure continued safety,
 security and effectiveness.  This core mission has been the
 technical cornerstone of our nuclear deterrent since its inception with
 research expanding the frontiers of science and technology. They have
 the Manhattan Project. In addition, these laboratories engage in vital
 made  substantial contributions in such fields as materials research,
 chemistry, nuclear physics, solid-state physics, microelectronics,
 mathematics, and computer science.  As testament to this versatility,
 our weapons laboratories made substantial contributions to Operations
 Desert Shield and Desert Storm.
  
 Meanwhile, I am very concerned with the downward trend in laboratory
 staffing which has resulted from increasingly constrained Federal
 budgets. Since FY 1987, there has been a decline in laboratory
 personnel dedicated to weapons research, development, and testing of
 nearly 30 percent; in addition, laboratory employment in this core
 program is expected to decline by an additional 6 percent during FY
 1991, resulting in the loss of approximately 500 additional positions.
 Moreover, it is anticipated that reductions in the defense budget will
 also significantly impact the laboratories inasmuch as approximately 25
 percent of laboratory funding has been associated with work for others,
 largely funded by the Department of Defense.
  
 The erosion of laboratory technical capability is a major concern to
 me. In recognition of this and changing national priorities, I have
 established a task force under the Secretary of Energy's Advisory Board
 to develop plans to help me better utilize the intellectual capital in
 our national laboratories. This task force will review and recommend
 changes in the roles and responsibilities of these laboratories, while
 preserving the core mission of weapons research, development, and
 testing. During the coming year, I expect a report which will provide a
 framework for utilizing these assets to maximize military and economic
 security objectives and to meet changing national priorities.
  
 One of those future priorities that our Defense Programs laboratories
 are actively pursuing is technology transfer. We have worked aggressively
 to develop an enhanced program to improve the process by which we transfer
 knowledge from the laboratories and into the economy.  We are increasing
 our funding for technology transfer at our defense laboratories by 60
 percent in FY 1992. If the United States is to maintain its competitive
 edge and remain a leading economic power, we must move quickly to adapt
 this technical knowledge to our practicalneeds.
  
                                 Naval Reactors
  
 Naval Reactors' objectives remain unchanged from last year -- they are
 charged with providing militarily effective Naval nuclear propulsion
 plants and ensuring their continued safe and reliable operation. Naval
 Reactors' outstanding safety and environmental record -- 3,800
 reactor-years of operation without a reactor accident or significant
 impact on the environment -- is the most eloquent statement of the
 tremendous job they're doing.
  
 Naval Reactors' success is the result of hard work, dedication, and a
 philosophy of personal responsibility for safety, control of
 radioactivity, and environmental preservation. The FY 1992 request of
 approximately $801 million supports their "cradle-to-grave"
 responsibilities for Naval nuclear propulsion and includes such key
 work efforts as:
  
  o    Keeping Advanced Fleet Reactor (AFR) work on-schedule for
       the SEAWOLF Class attack submarine; AFR is planned to be
       tested in the existing land-based S8G prototype plant prior
       to fleet introduction;
  
  o    Maintaining an integrated, comprehensive research and
       development effort, including work on new plant and reactor
       equipment concepts and post-AFR reactor development;
  
  o   Continuing land-based prototype reactor operations,
      maintenance, and servicing to ensure an effective testing
      effort which will meet programmatic needs well into the next
      century;
  
  o   Meeting all environmental, safety, security, and health
      requirements;
  
  o   Ensuring that continued technical excellence and high quality
      mark all Naval Nuclear Propulsion Program work; and
  
  o   Providing enriched materials to meet Naval fuel needs.
  
 Nuclear-powered warships remain an essential investment even in times
 of defense "belt-tightening" -- nuclear attack submarines and surface
 ships provide unparalleled flexibility in reaching global trouble spots
 and delivering measured responses, while fleet ballistic missile
 submarines are the most reliable leg of the strategic defense triad.
 The nuclear fleet is a cost-effective backbone for the strong Navy we
 need to protect our maritime interests now and into the 21st Century.
  
                         Intelligence
  
 The Department faces daily challenges of a global nature spanning the
 spectrum from national defense and energy security issues to issues
 involving nuclear reactor safety and nuclear waste disposal.  To meet
 these challenges, the Department's intelligence element was reorganized
 in April of 1990 with an expanded mission to provide special support
 over a broader range of issues. The primary missions of the reorganized
 element are to ensure that the Department's intelligence information
 requirements are met and to provide specialized DOE intelligence
 expertise to other elements of the Intelligence Community.
  
 During FY 1990, the Department provided support to the nation's top
 intelligence priorities as identified by the President's Foreign
 Intelligence Priorities Committee. These efforts continue during the
 current fiscal year.
  
 In addition to ongoing activities, the Department provided support to
 Operations Desert Shield and Desert Storm in a wide range of areas.
 Activities included analysis of energy impacts and the potential
 economic, environmental and military impacts of the Iraqi use of oil as
 a defensive weapon. Finally, the Office of Intelligence provided the
 Joint Chiefs of Staff and Defense Intelligence Agency with assessments
 of the Iraqi nuclear weapons program and its capabilities.
  
 The FY 1992 request reflects a $8 million increase over the FY 1991
 appropriation.  The additional funds will provide for:  (1) the
 Department's direct support of-the implementation of the Threshold Test
 Ban Treaty and the Peaceful Nuclear Explosions Treaty; (2) expanded
 activities in support of Intelligence Community requirements in the
 areas of nuclear proliferation and U.S. energy security; and (3)
 increased analysis of international terrorist activities that could
 affect DOE interests.
  
                        Security Affairs
  
 The Department's Safeguards and Security estimate for FY 1992 is
 $1.1 billion, compared to $1 billion in FY 1991.  This total
 funding is identified in the Department's crosscut estimate, which
 is a summation of Safeguards and Security items in all the
 Department's program requests, including the Nuclear Safeguards
 and Security budget at $96 million and the Security Investigations
 budget at $62.6 million which I will address separately. The
 Defense Programs' portion is $908 million in FY 1992, compared
 to $846 million in FY 1991.
  
 The Department is currently engaged in a massive effort to enhance
 the safeguards and security posture at Rocky Flats.  Physical
 security upgrades and enhanced nuclear materials control measures
 are being made to ensure a high confidence that nuclear materials
 are satisfactorily protected. In addition, we are working to ensure
 an enhanced security posture at Savannah River, when resumption of
 operations begin at this facility.
  
 We are making significant progress toward increasing the level of
 protection of our facilities and the protection of DOE assets. Our
 ability to mitigate the potential outsider threat remains at an
 acceptable level at our nuclear weapons facilities. Current efforts are
 focused in ensuring adequate protection against the potential insider
 threat. We are making progress, but at a much slower pace than we would
 like.
  
 The budgets of Nuclear Safeguards and Security and Security
 Investigations which I mentioned above, addresses such elements as
 safeguards and security operations, technology development,
 international safeguards, classification and technology policy, and
 security investigations.  Through these budgets, the Office of Security
 procedures to prevent the theft of nuclear weapons or materials, the
 Affairs carries out its responsibilities in policy, guidelines, and
 sabotage of  Departmental facilities, and the compromise of classified
 information.  The safeguards and security budget request supports
 increased Headquarters assistance to field operations, while the
 security investigations request will enable the Department to conduct
 initial investigations for security clearances for new employees
 while reducing the backlog of overdue reinvestigations for personnel
 who currently possess a security clearance.
  
 Last year, I directed that a thorough review be conducted of the
 safeguards and security activities of the Department necessary to
 assure the protection of nuclear weapons, materials, and facilities.
 A task force of uniquely qualified individuals was formed to accomplish
 this review.  The task force issued its report on December 20, 1990. In
 response to this assessment, I directed the reassignment of the
 security affairs functions from the Office of the Assistant Secretary
 directly to the Under Secretary of Energy, effective April 1, 1991.
 for Defense Programs to a new Office of Security Affairs reporting
 This was  done in order to improve the Department's policy making
 aspects of safeguards and security, which not only affects Defense
 Programs, but many Departmental programs as well.
  
 Many other initiatives related to actions recommended in this report
 are underway. Such actions include an Accelerated Access Authorization
 pilot project designed to significantly reduce processing times for "Q"
 clearances for contractor employees (from 180 to 40-50 days). This
 project is focused at Rocky Flats and is being conducted in cooperation
 with our on-site contractors and early indications are that this
 voluntary program is being well received by contractor employees.  We
 are also developing a new program designed to dramatically reduce the
 number of "Q" clearances and increase the access afforded by "L"
 clearances. This program is currently in the conceptual phase.
  
  
 Consistent with report recommendations, our classified document
 control initiatives include new accountability requirements for Secret
 documents. This change will provide adequate and proper control of
 classified material while reducing the administrative burden.
  
 We have initiated several actions to review and streamline Master
 Safeguards and Security Agreements (MSSA).  For instance, we have
 initiated a comprehensive review of the MSSA process, and have prepared
 a draft MSSA Verification Guide and Team Handbook which will assist in
 standardization of MSSA's across the complex.
  
 The items which I have identified to you today are just a few of the
 major undertakings which I have directed as a result of the findings in
 the Task Force Report. I will continue to work with the Congress to
 ensure that the protection of the Department's national security assets
 continues as one of our highest priorities.
  
                      Security Evaluations
  
 Also funded in the Atomic Energy Defense Activities appropriation is
 the Office of Security Evaluations (OSE) which is responsible for the
 independent oversight of the Department's safeguards and security
 activities.
  
 Since I was confirmed as Secretary of Energy I have focused on changing
 the environment in DOE. A key element of the change is the
 reorganization I outlined in my Notice SEN 6A. This reorganization
 unequivocally placed the responsibility for executing and monitoring
 required environmental, safety, health, and security actions within
 the technical program offices as a line management function.
 Additionally, my position is very clear that safety, health,
 environment and security activities would not be subordinate to
 production.
  
 I have also moved OSE from the Assistant Secretary for Defense Programs
 to the Assistant Secretary for Environment, Safety and Health.  OSE
 acts as the principal focal point for all safeguards and security
 inspection and evaluation matters and serves as my independent
 oversight assessing the posture of safeguards and security of the
 Department of Energy. This function is carried out by conducting
 assessments and special studies and performing other functions as
 inspections at field sites and Headquarters, preparing topical
 directed.
  
 During FY 1992, OSE's budget request is for $15 million to continue
 these oversight activities which will include eight comprehensive
 inspections and ten short notice reviews.
  
                 Additional Management Improvements
  
 I would also like to mention recent management improvements I have
 undertaken to increase staffing, enhance worker health and safety,
 improve contractor performance, and strengthen the management
 capability within Defense Programs to address current priorities.
  
                       STAFFING
  
 Departmental staffing has increased significantly above the FY 1990
 Full Time Equivalent (FTE) usage, and staffing growth for the major
 Department programs is almost 16 percent above FY 1990 levels. These
 increases will provide FTEs to staff the critical, high priority
 workloads in the Department in FY 1992. However, the Department is
 continuing its comprehensive review of manpower resource requirements,
 which was begun in FY 1990, to assure the most effective deployment of
 containing much desired critical pay and dual compensation provisions
 its limited staffing resources. Enactment last year of legislation
 promises  to us in staffing these positions with men and women who have
 the skills necessary to perform the required functions. Further
 legislative changes that would allow highly skilled National Laboratory
 personnel to rotate into and out of Department service would provide a
 significant additional source of scientific and technical excellence in
 the management of the Department's nuclear complex.
  
                    Worker Health and Safety
  
 In the area of worker health and safety, I requested a comprehensive
 evaluation a year ago in view of the workplace safety deficiencies
 found during DOE environment, safety and health "Tiger Team" compliance
 appraisals at our facilities. The Department of Labor recently released
 its report entitled, "Evaluation of the Department of Energy's (DOE's)
 Safety and Health Programs for it's Government-Owned and
 Contractor-Operated Facilities." The findings in this report were
 significant and, in response, I directed that a series of actions take
 place to build on our existing programs:
  
 o    The existing capability of DOE and contractor line programs
      to administer and oversee workplace safety effectively will
      be promptly surveyed; specific recommendations on staffing,
      equipment and qualifications and training needs are to be
      provided within 90 days.
  
 o    The role of self-assessment programs in DOE and contractor
      line operating programs will be expanded to address
      occupational safety and health.
  
 o    All cost-plus-award-fee determinations will address
      occupational safety and health compliance as an explicit
      performance element.
  
 o   Independent--oversight by the Assistant Secretary for
     Environment, Safety and Health will be strengthened by
     elevating its OSHA oversight role through the development
     of revised mission and function statements, and the reallocation
     of resources required to create a new Office of Occupational
     Safety Programs.  I expect this office to serve as a 'technical
     catalyst' for fostering needed changes in the way the Department
     approaches workplace safety and health technology and practice.
  
 0    On a longer-term basis, I have issued tasking memoranda that
      prescribe internal assessments to be performed over the next
      few months to address all of the findings and recommendations
      contained in the OSHA report.
  
 0    Also, DOE Orders governing workplace safety and health will be
      revised within six months to correspond more closely to OSHA
      regulations and these will be used as the basis for
      considering adoption of DOE occupational safety and health
      requirements through rulemaking.
  
 I believe these, as well as future steps for worker safety and health,
 will help focus initiatives already mandated to make DOE line programs
 fully accountable for operational programs and activities.
  
                        M&O Contractor Rule
  
 Another recent initiative involves increasing the Department's efforts
 to improve how we and our contractors are carrying out our fiscal
 responsibilities. By the very nature of how DOE conducts its business,
 the Department depends almost entirely on contractors to perform the
 tasks assigned. While it is essential that DOE exercise proper
 technical control over this effort, it is equally essential that DOE
 exercise proper fiscal control.  As custodians of the taxpayers money,
 it is up to us to ensure that it is properly spent. I do not believe we
 have done a good Job in this respect. As a result, I have directed that
 certain actions be taken to improve the way DOE discharges its fiscal
 responsibilities in the management of our contractors.
  
 One such action is directed at increasing the accountability of our
 M&O contractors and restructuring the award fee system to provide
 incentives for improved performance. On January 25, 1991, 1 announced
 an Interim final Rule to hold the Department's profit-making M&O
 contractors, rather than the government, responsible for costs that
 could have been avoided by proper contractor performance.
  
 This new rule represents the most far-reaching changes in the
 contracting practices of the Department since the Manhattan Project and
 has been almost two years in the drafting.  Historically, the
 Department has reimbursed its contractors for almost every cost or
 expense and indemnified them from virtually every risk, without regard
 to the amount of care and responsibility exercised by the contractors.
 accountability of DOE's contractors and will provide the Department
 The Interim Final Rule is designed to enhance the performance and
 with  another management tool to promote excellence in performance by
 its contractors. The new regulations, which will be effective for all
 new or extended M&O contracts, will apply to contractors who manage and
 operate DOE's facilities for profit. In their recent five year contract
 extension, Martin Marietta Energy Systems has substantially agreed to
 the provisions in the Interim Final Rule. We anticipate reaching
 similar agreements with our other M&O contractors in the future.
  
                       Defense Programs Management Changes
  
 I have also taken steps to strengthen the management, organization,
 performance and oversight within the Office of Defense Programs for two
 new activities critical to our success.  Two new positions have been
 created.  The Deputy Assistant Secretary for Weapons Complex
 Reconfiguration will be responsible for directing headquarters
 guidance and oversight of all activities leading to a Secretarial
 decision concerning the reconfiguration options; and subsequently
 to all activities leading to full operation of a reconfigured
 nuclear weapons complex. The Deputy Science and Technology Advisor
 (Defense) will be responsible  for providing advice and
 recommendations to the Assistant Secretary for Defense Programs
 and the Department's Science and Technology Advisor to optimize
 the utilization, performance, and contribution of the three weapons
 laboratories and the Idaho National Engineering Laboratory.
  
                                Summary
  
 As the Committee proceeds with the difficult process of reaching final
 decisions on our FY 1992 budget request, I want to reiterate the
 dilemma I face regarding decisions for the Atomic Energy Defense
 Activities programs.  I believe the Department's FY 1992 budget,
 including the FY 1991 Supplemental, is the bare minimum amount required
 to support our national security programs in a safe and environmentally
 sound manner. This budget was arrived at only after much soul searching
 same time there is necessary growth in the Environmental Restoration
 that included the deferral of many critical activities. However, at the
 and  Waste Management program. This growth was anticipated and is
 vitally needed to support infrastructure expansion as we strive to meet
 our statutorily dictated environmental requirements. In a sense, this
 puts me between a rock and a hard place. In the outyears, there is a
 cap on the 050 account which must be met; however, there is no doubt
 that budgetary increases will be needed to meet the Department's
 ways to assure all programs are operating efficiently, and I have
 expanding production and environmental obligations. We are looking at
 directed  that the Department undertake a program to reduce costs by
 improving our business management practices, but there are no easy
 solutions.
  
 However, two others factors exist which contribute to potential
 future funding adjustments in environmental restoration and waste
 management.  The first factor involves the transfer of
 responsibility for retired production facilities and other related
 activities to the Office of Environmental Restoration and Waste
 Management. We have the ability to plan for these anticipated
 changes.  However, the other factor involves the potential cost
 increases to meet environmental compliance. This is of particular
 concern to me since, as I already mentioned, there are a significant
 number of uncertainties confronting the Department as it strives to
 meet the requirements of applicable environmental statutes.
  
 Budget realities dictated constraints such that I had to make severe
 cuts in our weapons production complex, in our weapons research and
 development program, and in our program to pursue new production
 reactor capacity to replace our aging reactors.  As I have already
 stated, those cuts required me to provide for restart of only one
 reactor at Savannah River, prematurely terminate the two reactor
 Program, reduce critical laboratory personnel employment dedicated to
 strategy before the Record of Decision on the New Production Reactor
 maintaining  nuclear weapons competence by about 6 percent, limit
 significantly important underground nuclear testing to its lowest
 levels since the testing moratorium in the 1960s, and continue to
 defer necessary maintenance and facility upgrades throughout the
 nuclear weapons complex.
  
 I do not believe it prudent to continue to make these reductions in
 critical activities that support our national security. The situation
 for next year will not be better. I need your support so that I can
 provide the Nation with the appropriate national security programs
 this Department must statutorily provide. I would be pleased to
 answer any questions you may have.



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