Statement by

Ambrose Schwallie
President,
Westinghouse Savannah River Company

Thank you Mr. Chairman, members of the committee and staff. My name is Ambrose Schwallie. I'm President of Westinghouse Savannah River Company. We manage and operate the Savannah River Site near Aiken, South Carolina, under a contract with the Department of Energy.

It's my pleasure to be with you this morning to offer an operating contractor's perspective on some of the issues we face during this crucial period of down-sizing and realignment in the nuclear weapons complex. The decisions made this year on budgets and our approach to stockpile management and stewardship will have a profound effect on our nuclear deterrent and the activities at Savannah River.

I'll try to present a practical point of view from an operation that has reliably and safely met the nation's requirements for defense nuclear materials for 45 years. It's something we continue to do as we shift from the Cold War climate of the last five decades to safely maintaining a smaller, but enduring stockpile in the new national security realities of today.

Since the first hydrogen weapon was made, the Savannah River Site has been the nation's sole producer and primary handler of tritium -- the hydrogen isotope that is the "H" in H Bombs. It's a vital material that increases the explosive yield of modern thermonuclear weapons. But it's also a material that decays fairly rapidly -- more than five percent a year -- and needs to be routinely replenished in all of our nuclear weapons.

With no immediate need to produce new tritium due to recent arms control agreements, we've focused our efforts since the end of the Cold War on recovering and recycling existing tritium -- most of it from decommissioned weapons -- to support the nation's enduring stockpile. In making this adjustment, our tritium operators have extended their decades-old record of 100-percent on-time delivery without a single reliability problem in the field.

About two years ago -- in a start-up the Defense Nuclear Facilities Safety Board termed a "model" for the DOE complex -- our employees brought a new tritium processing plant on line to replace facilities dating back to the 1950s.

That start-up has allowed us to reduce the cost of supporting our tritium stockpile by 20 percent, and to substantially improve both environmental and worker protection -- important factors underscored by the fact that we're now storing more tritium than we have at any other time in the site's history.

This state-of-the-art facility can meet any potential surge capacity for recycling or reloading. It also has the flexibility to be operated cost effectively at reduced demand levels if needed.

Already, our people are at the half-way point in assuming their new responsibilities for the tritium work formerly performed at the Mound Plant in Ohio. For example, today we've taken over the reservoir surveillance mission for the complex.

Throughout this period of simultaneously downsizing while absorbing new responsibilities, our men and women have also found creative ways to stretch available dollars and continue to move out of our very maintenance-intensive, older facilities and into our new tritium facility.

The FY1998 budget request includes a Capital Line Item -- 98-D-123 -- identified as "Tritium Facility Modernization and Consolidation." It's critical to our continuing efforts to reduce costs. This consolidation not only enables us to reap the full environmental benefit of that new underground plant, it also has a dramatic impact on our long-term costs. Money spent today on consolidation recoups the cost in a little over four years.

The same goes for the limited dollars we're spending to offset the inevitable degradation at the older facilities that are still operating such as the additional funding you provided last year that enabled us to upgrade our process control system with new computer equipment. Those were critical dollars, but there are other areas of need -- such as worn heating and ventilation equipment -- that can't go too much longer without upgrades as well.

While our tight funding levels are OK to get us through this year, I worry that we are eroding our ability to be responsive in the future -- in both facilities and staffing. Our margins and contingencies are razor thin.

On top of the work we're doing to consolidate and maintain our existing infrastructure, we're also pressing ahead with plans to support DOE's dual track strategy to bring a new tritium production source on line for our stockpile needs in the next century. While there is no immediate need to produce new tritium to support the current stockpile, within the next two decades our current reserves will have decayed to the point that we will need a new production source to satisfy the needs of even a greatly reduced stockpile.

To support the commercial light water reactor option, we're preparing the design of a new tritium extraction facility and closely coupling it to our new tritium recycle plant to maximize operational efficiencies.

In addition, we're working hand-in-hand with Los Alamos on the accelerator as a tritium production source. We've passed the conceptual design baton to Burns & Roe, the new prime contractor for the project, to build a production scale plant at Savannah River should that option be chosen.

While waiting for that contract selection to be made, our employees kept the project on schedule by performing a wide range of preliminary design activities.

In all of these cases -- implementing cost-effective production innovations; assuming the Mound activities; modernizing and consolidating our on-site tritium operations; and incorporating the new production options -- our men and women have worked tirelessly to optimize the capabilities and benefits of each endeavor to find greater economies of scale and bring down long-term costs.

But while we've managed to do this in the past, our core staffing needs, our overall funding levels and our capital infrastructure are now to the point that doing much more than basic mission requirements will be difficult. At Savannah River -- if we allow our skill base to erode and don't adequately maintain our facilities -- our ability to reliably meet the challenge of future stockpile stewardship will be jeopardized. Our people continue remarkably to maintain that operational capability the best they can, despite the hardship of more than 10,000 lost jobs, constricting budgets and a very uncertain future.

In closing, the men and women at Savannah River have demonstrated through many accomplishments over the years their strong dedication to meeting our national security needs. With your help, they stand ready to continue that support well into the next century.