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ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 1998

WEDNESDAY, MARCH 12, 1997.

ENVIRONMENTAL MANAGEMENT AND NUCLEAR WASTE DISPOSAL BUDGET OVERVIEW

WITNESSES

ALVIN L. ALM, ASSISTANT SECRETARY FOR ENVIRONMENTAL MANAGEMENT

LAKE H. BARRETT, ACTING DIRECTOR, OFFICE OF CIVILIAN RADIOACTIVE WASTE MANAGEMENT

HOWARD R. CANTER, ACTING DIRECTOR, OFFICE OF FISSILE MATERIALS DISPOSITION

Opening Remarks

  Mr. MCDADE [presiding]. The Committee will come to order.

  We're happy to see a familiar face around the corridors of the Capitol, and we're delighted to see you, Al, and delighted to have you here, accompanied by Lake Barrett. We're delighted to have you here, Mr. Barrett.

  May I say to you that we would suggest that you file your formal statement with the committee, and for the record it will be well-studied, and that you summarize in your own fashion informally what you want us to hear.

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  Mr. Alm, you're recognized, please.

Oral Statement of Mr. Alvin Alm

  Mr. ALM. Thank you, Mr. Chairman and members of the committee.

  First, I wanted to indicate how much I appreciate the support this committee has given to the EM program over the years, and I'd also like to compliment the very quality of the staff who have been really very good to deal with.

  Our fiscal year 1998 budget is a transitional one. We're shifting from a program that was projected to span many decades to one focusing on cleaning up most of the sites within a decade. What I'd like to do briefly this morning is to describe where the program has been and where it's going.

  The EM program exploded in the late 1980s and early 1990s. It grew from, I believe, $2.2 billion to $5.5 billion over that period of time. At one time the program was estimated to rise to $10 billion annually, but then a period of fiscal stringency came in and people realized that those levels wouldn't be possible.

  From 1993 to 1996, a series of reforms were initiated. Incentive-based contracts were completed at all the major sites, Oak Ridge being the last, and that proposal is in draft right now.

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  There have been substantial reductions in costs by working with regulators and contractors, and real progress in getting work done in the field. This allows us to begin to think about completion of cleanup at our major sites.

environment management challenges

  Now let me mention the three challenges to the DOE program. First of all, we have extremely hazardous materials; for example, high-level radioactive wastes in hundreds of large underground tanks, plutonium scattered around many, many buildings in some of our facilities. Secondly, we have extremely high fixed costs, and these fixed costs are necessary in order to conduct our operation safely and securely. And we have a series of regulatory agreements between DOE and the State and EPA at each of our sites. In addition, we have a Defense Nuclear Facilities Safety Board. So we have a lot of people involved in the program, and State and EPA agreements are enforceable. So from time to time, we face some penalties.

  In order to achieve the 10-year goal, three elements are going to be necessary. One is stable funding over a substantial number of years; second, substantial efficiency improvements, and, third, privatization. The purpose of this hearing is to talk about funding. So I'd like to focus on that and the other elements that are necessary to achieve our goal.

  First is productivity. We're initiating a whole series of efforts which are described in my testimony, and I won't go through them now, but they're all designed to make our program more efficient. We are going to be setting two bottom-line goals. One is, to the extent possible, we're going to try to reduce support costs at each one of our facilities, the contractor support costs at 30 percent of the total. In other words, we will be moving people out of support, nonproductive work, into cleanup.

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  We're also going to be setting overall efficiency targets based on industry learning curves at the site. So for each of the 10 years we'll be looking for continuous improvement in efficiency.

PRIVATIZATION

  Let me turn now to privatization. Privatization is key to our total program. Of the dollar amounts of the budget authority requested for 1998, 75 percent of the $1 billion is related to compliance, near-term compliance agreements. Privatization, as we define it, represents a form of project financing that's used increasingly in other fields to finance power plants, waste water treatment, et cetera.

  In DOE, under privatization, the private sector will finance and construct projects under competitive conditions. The government does not pay until a product or service is actually delivered.

  There are two major advantages to privatization. First, privatized projects will be cheaper than the projects that would have been conducted if the management and operating contractors conducted them. That's merely because of competition.

  Second, privatization allows us to initiate projects earlier, thereby helping reduce mortgages. If we did not have the privatization program, many of the projects that we're requesting to be privatized would have to be added back into our base budget. That would mean that a number of other compliance activities would fall off the table, and it would also mean that we'd have to allocate funds among the sites. Privatization really allows us to move ahead with some substantial projects. It would be very difficult without it.

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  The appropriations and authorization requested is an amount sufficient to cover termination, if termination occurred at the convenience of the government. The outlays occur in the years when the product or services are actually delivered.

  All the steps I've talked about are designed to allow us to accelerate the program. As they're successful, then we will be able to invest funds by moving projects up and reducing the fixed costs in the new projects. So it has a spiraling effect.

THE FISCAL YEAR 1998 BUDGET

  The fiscal year 1998 budget includes $5.8 billion for regular conventional budget authority, $477 million to forward-fund or completely fund a number of construction projects, and $1.6 billion for the privatization projects. I should add that, although that looks like a big increase, if one looks at the outlays, the actual program level, our program budget is going down since 1996. The outlays in that year were $7.2 billion, and we're looking at roughly $6 billion for 1997 and 1998.

  Our budget has really three goals for 1998. First is reduce the most urgent risks, and these include the two spent fuel facilities, moving ahead on the Hanford tanks, all designed to deal with real risk; secondly, reduce mortgage and support costs. The B Plant at Hanford, by accelerating that program, we will save $75 million in surveillance and maintenance costs by accelerating that for three years. At Rocky Flats, by cleaning out the buildings, we will reduce the long-term babysitting cost of that facility. And, third, compliance and safety, we have a series of compliance agreements that we're legally committed to. We work with the States continually on modest provisions, but, in total, I expect the Department to meet its legal obligations. Second, we have obligations arising out of safety, needs identified by the Defense Nuclear Facilities Safety Board.

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  Let me just conclude by saying that I think funding this program is very important for one reason, and that is that it will have a real impact on reduction the obligation on our children and grandchildren. I'm a strong proponent of deficit reduction, and I think that controlling the deficit is absolutely critical. But one of the major purposes of deficit reducing is to reduce this burden, and I feel that the extent to which we pass on the burdens of a deteriorating system with high fixed costs, while it is working, it is counterproductive to our deficit-reducing goals.

  Thank you very much for this opportunity, Mr. Chairman. I'm willing to answer any questions you may have.

  [The prepared statement of Mr. Alm follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. We'll probably have a flock of them for you. We thank you for a fine statement and for your efforts at bringing both competition and innovation into the system. We appreciate it very much.

  Mr. Barrett, we'll be delighted to hear from you now.

Oral Statement of Mr. Lake Barrett

  Mr. BARRETT. Thank you very much, Mr. Chairman, and good morning to members of the committee. I appreciate the opportunity to appear before you today to discuss our 1998 budget request and our plans to maintain the momentum toward the development of a federal radioactive waste management system to effectively and responsibly manage the spent nuclear fuel and high-level radioactive waste in our country today.

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  I'm pleased to report that within our existing authorities we made significant progress since we last reported to this committee. We have put forth and are implementing a credible plan that maintains the progress toward a national decision on the geologic disposal option. Almost all of our funding for fiscal year 1997 was allocated to, and is being utilized by, the Yucca Mountain Project, which is expected to achieve all of its annual targets.

  As directed by Congress, we did not provide funding for oversight to the State of Nevada and affected local units of local government, and we reduced the program management costs by eliminating work not directly associated with our site-characterization efforts at Yucca Mountain for non-site-specific storage activities.

FISCAL YEAR 1997 ACCOMPLISHMENTS

  Now I'd like to describe the progress we have been making with our fiscal year 1997 appropriation. At Yucca Mountain, we have nearly completed construction of the five-mile underground exploratory studies facility, which is providing scientists with access to the repository setting, where they can directly observe the geologic and hydrologic features of the Yucca Mountain site and conduct tests in the rock under simulated repository conditions. Thus far, we have found nothing to indicate that the Yucca Mountain site would be unsuitable for a permanent geologic repository. The tunnel-boring machine has passed through the repository horizon, has made the turn, and is proceeding up the south ramp, and is now approximately 200 meters from the south portal. We expect to break out of the mountain within the next four weeks.

  The emphasis of the underground work now shifts to investigations of the Ghost Dance Fault, a principal geologic feature in the repository setting, hydrologic testing, and thermal testing, which simulates the heat of spent nuclear fuel in a repository environment. Construction is now underway on the northern and southern Ghost Dance Fault alcoves, which will provide important information about that fault.

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YUCCA MOUNTAIN VIABILITY ASSESMENT

  We're also placing considerable emphasis on the completion of the Yucca Mountain viability assessment. The viability assessment will provide policymakers information about the probability that a repository is a viable undertaking. By drawing on a decade or more of data-gathering and by placing emphasis upon the most significant remaining issues, we can provide a better understanding of the repository design and its performance in a geologic setting, a better appreciation of the remaining work needed to prepare a license application, and more accurate estimates of the cost of repository construction and operation. When completed in 1998, the viability assessment will be an early and integral step in the path to preparing a repository Environmental Impact Statement and a license application. This committee's support of our fiscal year 1998 budget request will enable us to complete this important activity.

COMMERCIAL WASTE ACCEPTANCE

  Now I'd like to address the area of waste acceptance. Last summer the U.S. Court of Appeals held that an obligation has been created for the Department of Energy in return for payment of fees by utilities that contracted for disposal services, to start disposing of spent nuclear fuel no later than January 31, 1998. We formally notified standard contract-holders by letter on December 17, 1996, that the Department would be unable to begin acceptance of their spent nuclear fuel in either a repository or an interim storage facility by that date and invited contract-holders to provide their views by March 14 on how the delay can best be accommodated. Once we've had an opportunity to analyze those views and conduct a dialog with the contract-holders, we will be in a better position to determine our next steps.

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  In the non-site-specific interim storage area we have also made considerable progress. In accordance with direction from the administration and the Congress, we started to conduct non-site-specific safety design and engineering analyses for a possible interim storage facility to reduce the facility licensing time once a site is designated.

  An example of this activity is the generic topical safety analysis report. The report is on schedule to be submitted to the Nuclear Regulatory Commission this May and will contain the necessary required analyses and evaluations to demonstrate that the operation of the facility would not endanger the health and safety of the public.

  In the area of transportation during the past year, we have begun development of a market-driven approach that will rely on the maximum use of private industry capabilities, expertise, and experience to accept and transport commercial spent nuclear fuel to the federal receiving facility.

  In the program management area we have restructured our program management funding allocation in 1997 and our request in 1998, in accordance with congressional guidance in the Fiscal Year 1997 Appropriations Act. Since last year we have completed a realignment of our program management organization, strengthened our capabilities at headquarters and in the field to more effectively monitor and maintain our progress. We have provided greater management attention to key scientific and engineering issues relating to the repository viability assessment.

FISCAL YEAR 1998 BUDGET REQUEST

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  Now I would like to turn on how we plan to use the 1998 budget request. The President's budget request is $380 million for fiscal year 1998 and is consistent with the policy that this committee and the Congress directed in the Fiscal Year 1997 Appropriations Act. Of the $380 million request, $325 million will be used by the Yucca Mountain Site Characterization Project. Of the remaining funds, $10 million would be to fund the waste acceptance storage and transportation activities and $45 million for required program management activities.

  The source of the funds requested is to be equally divided between $190 million from the Nuclear Waste Fund and $190 million from the Defense Nuclear Waste appropriation.

  The $325 million we are requesting for Yucca Mountain will be used to address the remaining scientific and technical uncertainties regarding the construction and operation of a repository at Yucca Mountain. We will apply most of the fiscal year 1998 funding toward completing the repository viability assessment and continuing work on the Environmental Impact Statement and license application.

  In fiscal year 1998 our budget request includes resources to initiate additional underground exploration in an east-west excavation to further reduce the technical uncertainties about the site and to improve our understanding of the processes in Yucca Mountain that are important to the performance and construction of a repository.

  The 1998 budget request also includes funding for the State of Nevada and affected units of local government that are affected by our site characterization activities at the Yucca Mountain site. These payments are provided for in section 116(c) of the Nuclear Waste Policy Act. We continue to believe that such support is important to enable local governments most directly affected by the activities at the Yucca Mountain site to remain informed and to participate in a meaningful way in the day-to-day program activities that may affect them.

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  The fiscal year 1998 request of $325 million will allow us to maintain momentum toward a national decision on the geologic disposal option by funding activities that are necessary to do the following:

  Number One, complete the viability assessment in 1998.

  Number Two, update the regulatory framework to focus the Yucca Mountain site suitability evaluation on safety and environmental performance and to reduce redundant activities.

  Number Three, publish an environmental impact statement in the year 2000.

  Number Four, recommend a repository site to the President in 2001, if the site is suitable, and submit a license application to the Nuclear Regulatory Commission for construction of a repository in 2002.

  And, Number Five, begin placement of nuclear waste in a geologic repository in 2010, if the Commission grants the license to proceed with operations.

  Now shifting to the area of waste acceptance, storage, and transportation, the budget request is $10 million and includes funding for our ongoing generic responsibilities concerning commercial spent fuel and long-lead-time activities that must precede the removal of spent nuclear fuel from reactor sites once a federal facility becomes available.

  During the year we will seek to work with the standard contract-holders to discuss and develop strategies to mitigate the consequences relating to our inability to accept waste in January 1998. We will continue the effort to develop our market-driven approach for waste acceptance, storage, and transportation. We will work with the Nuclear Regulatory Commission to address any safety questions they may have regarding the interim storage topical safety analysis report that we will submit this coming May, and we will continue to plan for the provision of technical and financial assistance under current law to States and Indian tribes for emergency response training for public safety officials, through whose jurisdiction shipments of nuclear fuel and high-level waste will be transported.

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  In the program management area, our request reflects the continued response to your direction to reduce budget elements related to general and project management activities not directly associated with the performance of site characterization or waste acceptance planning. Consequently, the program management request of $45 million is $2 million less than what we have in 1997.

conclusion

  In conclusion, I would like to make the following remarks. Your approval of our 1998 budget request will allow us to maintain the momentum we have gained over the last two years toward completion of the viability assessment. At the proposed funding level, we will also be able to maintain the capability to respond to any new policy direction that results from the debate on interim storage. And, finally, we will be able to complete and fully benefit from the significant changes we have made to strengthen and reduce the cost of the program management activities.

  I thank you and I'm pleased to answer any questions the committee may have.

  [The prepared statement of Mr. Barrett follows:]

  "The Official Committee record contains additional material here."


TEN-YEAR PLAN

  Mr. MCDADE. Mr. Barrett, thank you for a fine statement, and no doubt we'll be back to you before the morning of the day is finished.

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  Mr. Alm, let me begin by asking you what you estimate the total cost of the cleanup program to be, how many years it will take, and what the impact on those estimates might be from the 10-year plan.

  Mr. ALM. Well, Mr. Chairman, we are in the process right now of evaluating our field submissions. The field provided us submissions on February 28, and we hope to get the draft 10-year plan out around March 30.

  What we're doing right now is taking a look at two things. One is, can we sequence the projects better? And, two, we must begin to set the efficiency goals that I talked about. I can say in general terms I think that most sites will be able to meet the 10-year period. I think the exceptions are Savannah River, Hanford, Idaho—all of which have high-level waste problems—and Oak Ridge, which has just so many different activities.

  I do think it's very important, though, that we have a couple of elements managed. One, of course, is that, from our management point of view, we manage these funds in a way that we get continuous improvement, just like you'd see in the private sector. And, secondly, as I mentioned, the privatization will be of great help to us in achieving the overall objective.

  Mr. MCDADE. What do you estimate the cost to be, the total cleanup cost?

  Mr. ALM. I think if I gave you an estimate now—if I could, as soon as we come up with a number, I'd be glad to get back to the committee.

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  Mr. MCDADE. And that would be about the end of the month? Is that what you're thinking?

  Mr. ALM. Yes.

  Mr. MCDADE. All right, you can furnish it for the record, if you would, and also communicate directly, if you will, with the staff.

  [The information follows:]

TOTAL CLEANUP COST

  The most-recently released Department of Energy estimate for the total cost of cleanup was the 1996 Baseline Environmental Management Report, which estimated life cycle costs between $189 and $289 billion over a 75-year period. The Department is now in the process of compiling and evaluating draft Ten-Year Plans submitted by our Operations Offices on February 28, 1997. These plans will be rolled up into a Draft National Ten Year Plan, to be released for public comment this Spring. We anticipate significant reductions in total costs and acceleration of cleanup project dates as part of this ten-year planning effort.

  Mr. MCDADE. What about length of time for completion of cleanup?

  Mr. ALM. Well, as I indicated, with most sites we'll be able to meet the 10-year period. The ones that will take the longest dates are for the high-level facilities at both Hanford——

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  Mr. MCDADE. Give us an estimate of the number of years to clean up those high-level sites.

  Mr. ALM. At Idaho and Hanford it could be halfway through the next century. That's a long period of time. There are some major choices that have to be made on exactly how we are going to do this. At Idaho it's a question about whether we continue calcining or putting the waste in one stable form, which then would require them to dissolve then to vitrify. So we've got some major issues, but in general terms, when you think about most of the things that can be done, you can get an awful lot done within 10 years, and certainly a great deal done after that. I would expect Oak Ridge to be done within 15 years. And it's a high-level waste program, and I could give you estimates now, but there are so many decisions to be made down the road that are going to change things——

  Mr. MCDADE. Well, we're just trying to get a handle on what it looks like, your crystal ball looks like today as we meet here at 10:25.

  Mr. ALM. That's the reason I think a 10-year plan is so important, because we'll lay this out to the public.

  Mr. MCDADE. Okay, let me ask a question. Is this data that's coming in about the end of the month, is that based on the 10-year plan being in place or is it based on just the generalization in terms of the cost and the time, et cetera?

  Mr. ALM. It is based on, for most sites, how they would achieve cleanup within 10 years. We've used two funding scenarios, one at a constant $6 billion a year and one at $5.5 billion. So we will be able to get a feel for how much that funding difference will make in the program in terms of reducing mortgages and lowering the total cost.

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  Mr. MCDADE. And we all agree with that general objective of trying to get those fixed costs down.

  Mr. ALM. Can I just make one last comment?

  Mr. MCDADE. Please do, yes.

  Mr. ALM. In the past there was a tendency to merely add up all the ''requirements,'' but I think we have an obligation to manage the program. One way to make history is to affect history, and we really want to manage this program, get it efficient enough that we can move everything. You can talk about some substantial differences, if you're aggressive.

ACCOMPLISHMENTS OF ENVIRONMENTAL MANAGEMENT PROGRAM

  Mr. MCDADE. And let me say to you that the committee is highly interested and commends you for your efforts at trying to, as I say, introduce the competition, get this thing speeded up, put the money into the cleanup rather than in, as you call it, the mortgage costs. We have some questions about how we're going to get there.

  Let me ask you this, and this is one that I hear a lot from colleagues. Since 1992, $34 billion has been invested in this program. What's been accomplished? What can we tell the public, the taxpayers, and our colleagues on the floor has been accomplished by the expenditure of this money?

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  Mr. ALM. Mr. Chairman, I think the best way, actually, to get a feel for this is to go to the sites, and we always love to have Members, if they have that opportunity. But let me take a few sites. Let's take Hanford. We are finishing immobilization of the Purex facility, which will save around $35 million a year. We moved some areas off the National Priorities List at Hanford. We've got a huge waste disposal cell developed, and that's helping the remediation program move ahead. We have about finished a dry storage facility, and that will allow us to take the spent fuel rods from the K Basin and put them into a stable configuration.

  At Savannah River we have the world's largest vitrifier at the Defense Waste Processing Facility, DWPF. It's amazing, you use acronyms and you forget what they stand for.

  Mr. MCDADE. It happens to us all the time. [Laughter.]

  Mr. ALM. That's the largest vitrifier, and although it's not without problems, we are vitrifying a lot of logs. Likewise, we have a vitrifier working at West Valley. At Rocky Flats we've stabilized a very large amount of plutonium liquids. At Idaho we will have finished calcining the non-sodium waste in 1998. At every one of our sites you see a lot of activity.

  In 1995 we had a crossover. Prior to that, in the remediation program we had more studies than cleanup. That crossed over in 1995 and we continue to do more of our work in the field and not in the office.

  Mr. MCDADE. For which we offer you our commendation and our thanks.

  You can amplify, if you like, that statement for the record, so that we can be rather precise about how we respond to that question from a lot of different quarters. As you can imagine, we hear it a lot.

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  [The information follows:]

  "The Official Committee record contains additional material here."


OUTYEAR FUNDING

  Mr. MCDADE. Do you think this program is going to run along at $6, $7 billion a year?

  Mr. ALM. Mr. Chairman, I'm not sure I'm the person to ask that question to. I think, seriously, I think that stability for the program is very, very important. The $7 billion is a little misleading because of the large budget authority for privatization and the forward funding. But I think deciding on a stable funding level and then managing against that has a lot of attractiveness.

  Mr. MCDADE. Yes, well, what—casting aside the people you have to contend with at OMB and other places, what is your personal opinion of what the effective level has to be on an annual basis?

  Mr. ALM. I think the level in the 1998 budget—I'm not just saying this—is an adequate level. I mean, you can moderate that between privatization and nonprivatization, but——

  Mr. MCDADE. Yes, so assuming you have a number like that, and thanks to your initiatives, a 10-year goal out there, after the $60 or the $70 billion, what does your crystal ball tell you then? Where are we going to be in 10 years?

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  Mr. ALM. At that time we'll have, for many of the sites, continued low-level surveillance and maintenance. We can't just walk away from these sites. We'll still have the bulk of the high-level waste program to go. We will have about half the TRU-wastes into the Waste Isolation Pilot Plant. Low-level waste will be generated some from time to time. All the mixed low-level waste should be taken care of by then.

  Mr. MCDADE. What would you estimate—the ratio now, as you've described it, is about 70 percent fixed cost of the budget, about 30 percent cleanup, or somewhere in that——

  Mr. ALM. Well, no, it's not that bad, but it varies by site. It's certainly over 50 percent, and at some sites——

  Mr. MCDADE. That's a generalization.

  Mr. ALM. Yes. At some sites it's as high as 70 percent.

  Mr. MCDADE. After 10 years, if that degree of funding occurs, what would you expect to be the fixed costs and the ratio of your fixed costs and cleanup?

  Mr. ALM. Well, actually, they'd be higher, because that's all you'd have is fixed cost, low level of maintenance. In other words, if you're done and all you have to do is monitor, that might all be——

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  Mr. MCDADE. That's the low level, but not the high level.

  Mr. ALM. Okay, on the high level, I think that 30 percent we think is about as far as you can go. Thirty percent supports 70 percent direct.

  Mr. MCDADE. Well, that's a reversal kind of where we are today?

  Mr. ALM. We're about 26 percent support today.

GAO REPORT ON END LAND USE

  Mr. MCDADE. GAO is arguing that there are assumptions made on end-land use that are made too late and it affects the project costs very substantially. Would you respond to that? I'm sure you've seen that GAO report.

  Mr. ALM. We've talked about that internally. The way this program has worked, and it's working right now in terms of the 10-Year plan, land use and the cleanup set of activities go hand-in-hand. And let me give you some examples because the land use is very, very different, depending on where you are.

  Mr. MCDADE. Yes.

  Mr. ALM. At Rocky Flats, 19 miles from Denver, the idea is to get most of the buildings, and maybe all the buildings, off the site. At the other extreme, Savannah River would continue to be a federal reservation. So the goal there is mainly to decontaminate these buildings so they're very cheap to keep up and not necessarily demolish them.

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  I'm not sure I know of anywhere where the land use is a serious problem impeding our ability to move ahead. The one site where there's no clear land use decision right now is Oak Ridge. In Oak Ridge, the State, DOE, and the stakeholders are working together to come up with a longer-term use plan for the facility and also cleanup standards.

  Mr. MCDADE. I'll tell you what I wish you'd do. The GAO has a number of $600 million in potential savings, depending upon how this problem is worked out, and if you would take a look at it and give us your additional reply for the record, we would be appreciative.

  Mr. ALM. I'd be delighted to, Mr. Chairman.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. I'd yield at this time to the gentleman from Indiana, Mr. Visclosky.

  Mr. VISCLOSKY. Mr. Chairman, thank you very much. Mr. Chairman, I have a couple of questions I would appreciate if I could submit for the record.

  Mr. MCDADE. Without objection.

WASTE VITRIFICATION

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  Mr. VISCLOSKY. Mr. Alm, could you tell me what is involved in vitrifying waste? What is that?

  Mr. ALM. Well, vitrification is a thermal process where you basically take a waste, usually in a sludge-like composition, and you mix it with frit, which is crushed-up glass, and you heat it together, and what comes out is a borosilicate glass, and then you take that glass and you put it into a huge stainless steel container, which you then cover, weld, and store temporarily onsite. Ultimately, these casks or vessels will go to the Yucca Mountain site for permanent disposal.

  Mr. VISCLOSKY. Let me ask, then, is there a difference between how you're approaching dealing with the waste at Savannah River and the waste at Hanford?

  Mr. ALM. At Savannah River the vitrification facility was designed by the M&O contractor and then constructed and built by the M&O contractor. At Hanford we have a major privatization effort, where we have a phase 1A for two contractors, Lockheed Martin and British Nuclear Fuels, Limited. Each will receive $27 million to do a pilot study, actually develop a pilot facility and a conceptual plan to go ahead. At that point, then, there will be a bid for one or two possibilities for treating low-level hazardous waste and treating high-level hazardous waste. So we could have one plant, two plants, and even three plants.

  The difference between what we did at Hanford compared to Savannah River, at Hanford we had a competitive contract, a privatization effort.

  Mr. VISCLOSKY. At Savannah River?

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  Mr. ALM. At Hanford.

  Mr. VISCLOSKY. At Hanford, okay.

  Mr. ALM. At Hanford.

  Mr. VISCLOSKY. So you had a competitive process at Hanford. Which technique is going to be more expensive, Hanford or Savannah River?

  Mr. ALM. We think that per unit that Hanford will be considerably cheaper. We had a previous estimate by an M&O to build a vitrification plant in Hanford. And it's hard to generalize because they're all different sizes, and et cetera. But that study indicated that the estimates we have now from the privatized contract are cheaper, and we've got better estimates at Idaho at the Advanced Mix Waste Treatment facility, where we have firm bids for the cleanup and a relatively recent estimate of what it would take for an M&O to do the work.

  Mr. VISCLOSKY. Are you going to vitrify low-and high-level waste at Hanford?

  Mr. ALM. Yes, sir.

  Mr. VISCLOSKY. And are you saying that, on a unit basis combining the two, the process will be cheaper at Hanford than it was at Savannah River?

  Mr. ALM. Yes, sir, that is our intent. I mean, we haven't got a firm bid yet. So I can't promise you, but that is the presumption.

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  Mr. VISCLOSKY. You mentioned the competitive process at Hanford. Was there not a competitive process at Savannah River?

  Mr. ALM. No, sir. The traditional approach from the early days of the Manhattan Project was to have large management and operation contractors. They conducted a lot of the work themselves or through their subcontractors without competitive bids. I can't swear that parts of it weren't competitive for some of the components, but the design and much of the work was done by the M&O.

INTERIM STORAGE AND TRANSPORTATION

  Mr. VISCLOSKY. Mr. Barrett, are there any significant technical obstacles that you're facing as far as transportation and the interim storage of the spent fuel? I'm especially interested on the transportation side.

  Mr. BARRETT. The technology for transportation is well understood across the world. So I don't believe there are any substantial technical challenges on transportation. In this country there is not sufficient hardware presently built, designed or built, to sustain a large transportation initiative like we would have of nominally 3,000 extra tons per year. So several hundred million dollars worth of hardware would need to be built, but, from a technological point of view, no, I don't see anything that's a major issue there.

INTERNATIONAL DISPOSAL OF SPENT FUEL

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  Mr. VISCLOSKY. Would you compare for me our national nuclear waste disposal program with that of other nuclear-producing countries? Highlight any particular differences.

  Mr. BARRETT. They're fairly similar in that they all have the basic concept of deep geologic disposal. That is the end result in all the programs in all the world. Various nations have different schedules that they're proceeding along with the deep geologic disposal option. Many countries also have an interim storage concept in their national policies; Sweden comes to mind. Some countries also have reprocessing, such as the UK and the French, in their programs. But, basically, they're all, as far as the end result, pursuing geological repository.

  Mr. VISCLOSKY. There's no country considering a permanent solution other than the deep geological repository?

  Mr. BARRETT. None that I'm aware of.

  Mr. VISCLOSKY. Mr. Chairman, I would thank you for the time.

  Mr. MCDADE. Thank you. I yield to the gentleman from Michigan.

TEN-YEAR PLAN

  Mr. KNOLLENBERG. Mr. Chairman, thank you very much. I appreciate that. It has been an experience to get out and see some of these. I've been to Savannah, to Rocky, to Hanford. Until you see, I don't believe you really get a feel for what is taking place.

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  I want to, first, thank both of you for agreeing to meet with me in my office on different occasions and to also just say I appreciate the hard work that you're both doing in terms of trying to bring to closure some of these sites. Now in your opening remarks, Mr. Alm, you mentioned, I think when the chairman questioned you about which of the major sites would not fit within the 10-year plan, I didn't hear you say Rocky. I assume Rocky Flats, then, is doable within the 10 years?

  Mr. ALM. In my opinion, it is, and I would certainly make every effort to make sure that Rocky finishes within a 10-year period. You've got a political consensus. You've got high risk and you've got very high fixed costs. So, for all those reasons, I think Rocky has very high priority.

  Mr. KNOLLENBERG. I think the stars are lined up pretty well for Rocky Flats. So I appreciate hearing that.

  One of the things about the 10-year plan, I know it's frustrating to you because you've been very much involved in the architecture of this 10-year program, and one of the questions I have for you, though, is it's fine to have a 10-year program, but when does the program start? In other words, when does the clock start ticking? Or, maybe more importantly, when does DOE start counting? Can you help us out just a little bit with how soon you expect the hammer to come down and we're off and running?

  Mr. ALM. Mr. Knollenberg, let me talk about end date first. The end date is 2006. So the 10-Year plan, in a sense, would cover the years 1997 and 1998. But in terms of a heavy lifting, I think we're going to really start with the 1998 budget, which is mainly pushing very hard to get our efficiency targets in place and beginning to sequence the projects in the most sensible way. So those activities are prospective.

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  Mr. KNOLLENBERG. So you still think it is doable within that timeframe that you just talked about.

  Mr. ALM. I do. It's not easy. It's going to take a lot of work, but——

PROJECT CLOSURE FUND

  Mr. KNOLLENBERG. In regard to that, let me question you on the closure. There's a provision in the report language of last year's bill that announced the closure fund. There is some $15 million in that fund. The idea, obviously, is to accelerate precisely along the lines of what you've projected to clean up those sites in a priority fashion that appear to be the likely targets, Rocky being, obviously, one of the first in that regard.

  Do you have any views about—and I know that money was allocated this last year in certain sites, and Rocky was one of those; I believe Fernald was another; I think Hanford and Savannah were also involved. I guess my question is: why didn't you ask for, why didn't the administration ask for, more than $15 million this time, or are you looking elsewhere for that money to accelerate closure?

  Mr. ALM. The reason, Mr. Knollenberg, is that by the time we added up all the compliance requirements and Defense Nuclear Safety Board recommendations, the things that were more or less mandatory for safety, we didn't have a lot of room. But I will say this: that the $15 million will be very, very helpful.

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  Mr. KNOLLENBERG. It's money.

  Mr. ALM. Well, it's money, and——

  Mr. KNOLLENBERG. But it's targeted.

  Mr. ALM. [continuing]. It's incentive, too.

  Mr. KNOLLENBERG. Yes.

  Mr. ALM. It's incentive to get on with the job, and if you can show the sites where the contractors, the DOE people, the local constituencies want to move ahead, then there ought to be a reward for that.

DEFENSE AUTHORIZATION ACT: SECTION 3161

  Mr. KNOLLENBERG. Yes, the criteria has to be met, the criteria set, and those specifics have to be met in order for it to become operable.

  On the matter of the section 3161, if we could just turn to that for a bit. The interest that I have in that is the so-called—well, it's workforce restructuring, but it literally has to do with part of the Defense Authorization Act. We talked about before Cold War warriors, and we talked about how many of those Cold War warriors are still in the mix with all the folks out there, and has a reduction in so-called Cold War warriors reduced to a point now where it's kind of flat? What is the status of that?

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  Mr. ALM. I don't honestly know. Can I provide that for the record? I've got presumptions, but I don't have the actual figures. It would be better to provide that.

  Mr. KNOLLENBERG. All right, if you would.

  [The information follows:]

NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  From a peak of 148,700 prime contract employees at the end of Fiscal Year 1992, the Department's contractors separated about 37,000 employees through the end of Fiscal Year 1996, an average of over 9,300 employees per year. The Department does not currently maintain a comprehensive listing of separated contract workers by Cold War status. Therefore, these figures include both workers employed during and after the Cold War.

  Mr. KNOLLENBERG. Do you believe that there may be a point to discontinuing the section 3161 program as it applies to this area?

  Mr. ALM. I don't have a firm opinion. I would say the 3161 was a useful tool for a number of years in helping us transition the program, and that was a period of time when the reduction of contract personnel was very, very substantial. We see that as being less of a problem. So it is assuming something that you need to continually—one needs to continually think about, and we will do so.

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  Mr. KNOLLENBERG. We may want to think about retailoring it, though, in light of what is taking place?

  Mr. ALM. That's a possibility. Again, I would have to think about it some more.

WASTE ISOLATION PILOT PLANT

  Mr. KNOLLENBERG. On the matter of WIPP, I'm very pleased that—I don't know why they call it the Waste Isolation Pilot Plant; WIPP sounds a lot simpler to me, but I know you've been very enthusiastic about—or at least you're optimistic about what you see as a realizable thing on the horizon. And my question has to do with the standards of the certification. I know we've talked about this before, but how long does EPA have to publish a final rule?

  Mr. ALM. Well, they are mandated to publish, I believe, a year after they've got a complete application, but my understanding——

  Mr. KNOLLENBERG. And that was submitted in the fall of what, 1996, was it or——

  Mr. ALM. We submitted it—yes, we submitted it in the fall of 1996. So it would be November of 1997 when, if the application was completed, I would think that they would have to approve the certification. Where we stand with EPA is we've been working very closely with them. My sense is that we can get approval in early calendar year 1998. Maybe it will slip a few months.

  Mr. KNOLLENBERG. Who authorizes the startup on that? Is that the Secretary or is that you?

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  Mr. ALM. I am presuming it's the Secretary, once we get the certification. We also need a RCRA, Resource Conservation and Recovery Act, permit.

  Mr. KNOLLENBERG. So there are other permits outstanding as well?

  Mr. ALM. That should be no problem. And then there's a final Environmental Impact Statement. Again, that's under our control. So the EPA certification is the major—not roadblock, but the major step to finishing this. Now the only other thing that one always has to think of in this day and age is litigation.

  Mr. KNOLLENBERG. Would that be considered a show-stopper, litigation?

  Mr. ALM. Yes, sir, it could be, but, hopefully, we're not going to have litigation, or if we have litigation, we'll be successful. I must say that we've gone to great pains to meet all the procedural and substantive requirements. We have and EPA has, and I'm confident that we'll do that. But it's certainly something we think about all the time.

  Mr. KNOLLENBERG. I want to ask you also—I'm sorry.

  Mr. ALM. I'm just saying that opening WIPP is absolutely critical to this program, to the credibility of the program, to meeting compliance agreements. If we don't open WIPP, we're out of compliance with the Idaho agreement; on the other sites, Rocky Flats, Los Alamos, we're expecting to ship waste. And, finally, what it does to the credibility of an effort to try and get this program moving would be devastating.

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FAST FLUX TEST FACILITY

  Mr. KNOLLENBERG. Let me ask a final question at the moment in this round. I know that the prior Secretary of Energy announced that the FFTF, the Fast Flux Test Facility—you really have to be careful when you pronounce that one.

  Mr. ALM. Right. [Laughter.]

  Mr. KNOLLENBERG. She announced that it would be at the Hanford site that they're going to maintain a hot standby condition. I'm not real sure what that means, and isn't the whole thing in a decommission mode rather than keeping it in hot standby?

  Mr. ALM. The Environmental Management Program had been in the process of decommissioning the facility. The Secretary made the decision to leave the FFTF open as an option, which meant that we would not drain the tanks. We are continuing to do some decommissioning work which would be necessary—excuse me, decontamination and stabilization work that would need to be conducted anyway. The money for so-called landlord costs we will transfer.

  Mr. KNOLLENBERG. What does ''hot standby'' mean, though? What does it really mean? It seems to me if you're decommissioning something, you've got to reverse field and reactivate—what does it mean?

  Mr. ALM. Hot standby is that it could be turned over for the purpose. That's my understanding of the term. Also, in this case there is a certain amount of real heat that's applied to the sodium. So maybe that's——

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  Mr. KNOLLENBERG. But to keep something in a hot standby condition or status, you're not decommissioning it then, are you?

  Mr. ALM. Yes, it means that it could be used for another purpose. For example, the Defense Nuclear Facilities Safety Board asked that we keep one of our Savannah River canyons in hot standby. The term in that case meant that it could be activated.

  Mr. KNOLLENBERG. Right, that's the one I was referring to.

  Mr. ALM. And in this case the FFTF is open as an option for producing tritium, along with two other options.

  Mr. KNOLLENBERG. Well, thank you, Mr. Chairman, and thank you, Mr. Alm. I have questions for Mr. Barrett, if we have time, but I'll more than certainly submit some other questions for the record, if that would be acceptable.

  Mr. MCDADE. Without objection.

  Mr. KNOLLENBERG. Thank you.

HAZARDOUS WASTE LEGISLATION

  Mr. MCDADE. The Chair recognizes the gentleman from Texas.

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  Mr. EDWARDS. Thank you, Mr. Chairman. Thank you both for being here today.

  Mr. Alm, let me ask some very basic questions. What law is it that specifically dictates what the end product must be at each of these cleanup sites? For example, let's use Hanford as the focus on my questions. Specifically, does it have to be so clean that you can build an elementary school on that site, or does it have to just be not a serious threat to the public in the vicinity? What law is it that sets the standards?

  Mr. ALM Well, first of all, we deal with a number of laws with respect to hazardous waste, and we have plenty of hazardous waste at our facilities. And this includes CERCLA, the Superfund Act, and RCRA. Then, as I indicated before, we are somewhat regulated by the Defense Nuclear Facilities Safety Board. They don't have regulatory authority, but they have strong recommending authority.

  But, beyond that, for portions of our activities, we're self-regulating, but we work very, very closely with the State and EPA—and these tripartite agreements in general are really the factors that govern the cleanup.

  Mr. EDWARDS. So do you have quite a bit of leeway in determining what the end product must be?

  Mr. ALM. Well, we have leeway to negotiate with the State and the EPA. Let me give you an example, because it was one of the most recent compliance agreements, and I signed it.

  At Rocky Flats, first of all, a contractor can develop a proposal to clean up much faster. That, then, was reviewed by a group that created a vision for the site, and these were the stakeholders, the outside citizens around the site, public officials, et cetera. The vision, then, was translated into a compliance agreement, and there was one issue that was not included in the compliance issue, which was the soil release standards which occurred under a separate regulatory approval.

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  But what I'm telling you is that, for every one of our sites, the final result relies heavily on interaction between the regulatory agencies and the stakeholders, and we've found that it's very difficult to proceed with any credibility without the support of stakeholders.

  Mr. EDWARDS. Let me ask—the point I want to eventually get to is this: I understand it could cost $30 to $40 billion for construction and life cycle costs at Hanford, and just assume that's a ball park figure. And this may be heretical to some, but I wonder if you look at the enormous cost to clean up at some of these sites, does there come a point at which we draw the line and literally build a fence around so many acres of property, and that what's left is not a threat to the public, but you certainly wouldn't want to build a schoolhouse there and then take the $10 billion you save and build the finest national park in the country, and give that money to that community or that State to use those funds. And I want to get a better understanding of just how much leeway we have in determining what the end product must be.

  Mr. ALM. Let me focus on the one example you gave, which is the Hanford tanks, which is the most expensive environmental project, if it goes to completion, ever conducted. The Hanford tank requirements were established in the tripartite agreement between the State Department of Ecology and the Environmental Protection Agency. But even though you've got these requirements, the approach the DOE's taken is a staged approach. The privatization contracts we're talking about can treat anywhere from 6 to 13 percent of the waste. So this is the first phase.

  The National Academy of Sciences suggests that a phased approach be taken to the tanks. By the time that's finished, there may be some technological alternatives. I mean, there may even be a different set of priorities. Who knows the things that are going to happen many, many years in the future?

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  Mr. EDWARDS. So, to summarize then, in your opinion, we still have the ability to look at different options of what the end product should be. In the real world of real budgets and trying to balance a budget under difficult circumstances, in your opinion, the law allows us some flexibility in determining just what clean is—is the final product for different projects within limits?

  Mr. ALM. That's correct. Again, with this program it would require a change in the compliance agreements. But I do think it's incumbent upon us for these very expensive, high-level waste projects to continually evaluate where we're going and whether there's a better, cheaper way of achieving the same amount of risk reduction and stability.

  Mr. EDWARDS. Thank you. Thank you, Mr. Chairman.

  Mr. MCDADE. We thank the gentleman from Texas. The Chair recognizes the gentleman from New Jersey.

GEOLOGIC DISPOSAL

  Mr. FRELINGHUYSEN. Thank you, Mr. Chairman. Gentlemen, good morning.

  I had an opportunity—and I want to thank the Department of Energy for the opportunity—earlier this year to visit Yucca Mountain. It certainly gave me a better knowledge of what's going on out there, raised some rightful concerns, and a greater admiration for the men and women who work on that site far outside Las Vegas at the Nevada Test Site.

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  I think the critical issue in this committee is the disposal issue. You can vitrify whatever you want, and that may be a proper way to contain things, but I think that the larger issue that needs to be discussed publicly is how we're going to dispose of low-level and high-level nuclear waste. I get a feeling, as a private citizen, as a Member of Congress, that there is not the sense of urgency that we should all be having as a nation—that you ought to be having as people who work in the DOE—that the President, for one reason or the other, isn't using his bully pulpit to talk about these critical disposal issues. I think there are some pretty critical issues on the table here. Would you both agree? And what is the DOE doing to sort of hone and sharpen public attention to these disposal issues? I sort of get a sense of paralysis around here, and I'm not sure what it is, but tell me what your feeling is.

  Mr. BARRETT. The administration's position I think is fairly clear: that geologic disposal is the basic goal of the high-level radioactive waste program, and that we are proceeding as quickly as science will allow us to go forward with the Yucca Mountain program. I believe we have a very aggressive program in place at Yucca Mountain, and we're implementing it as best as we can within the statutes as they exist at this time.

  Mr. FRELINGHUYSEN. But we're way behind schedule, isn't that accurate?

  Mr. BARRETT. Well, it depends on what schedule you're referring to with respect to the Yucca Mountain project.

  Mr. FRELINGHUYSEN. What's the significance of the acceptance date of January, late January 1998?

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  Mr. BARRETT. Well, there are two different issues involved here. One is the contractual relationship we have with the utilities to receive fuel, and that's the January 31, 1998, date you referred to. The other is the geologic repository program. When the act was passed, and all through the eighties, there was debate about two parts of the program: an interim storage aspect of the program and a deep geologic disposal program. The deep geologic disposal program was to implement what was laid out in the Act in 1982. But the due process of site selection, et al., was going to take longer, and no repository, therefore, could be online in 1998.

  So we are proceeding on the repository with all diligent speed in an effort to see if Yucca Mountain will be a suitable location for a deep geologic repository, and if it is, go forward through the processes.

  Mr. FRELINGHUYSEN. It appears on the surface that there's a strong probability it would be a proper site?

  Mr. BARRETT. We have found no technical reason why Yucca Mountain would not be a proper site at this time. But, we still do not have all the scientific evidence necessary to go before an independent regulatory body like the Nuclear Regulatory Commission and demonstrate, in the adjudicatory process, to a reasonable assurance standard that it would meet all the standards for many thousands of years. We do not have all that information yet so that we could make that case at this time.

INTERIM STORAGE

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  Mr. FRELINGHUYSEN. Tell me why the Department, and it appears the President, feels that the interim storage proposal is a bad idea. Given the fact that the deadline can't be met—and I understand there's some good reasons for it—why are people throwing cold water on the interim storage proposal? I know you've mentioned some things in your remarks, but I don't get a sense of optimism that it's ever going to be a viable alternative.

  Mr. BARRETT. Well, the Administration's position, I think, has been fairly clear: that the geologic disposal aspect of the program is an essential, a most essential part of the program. The debate has been going around about interim storage at this time. That is really about how interim storage plays into the program. So that is the debate that is going on between the administration and the Congress.

  Mr. FRELINGHUYSEN. But what's your feeling?

  Mr. BARRETT. Well, the——

  Mr. FRELINGHUYSEN. What's wrong with an interim site?

  Mr. BARRETT. I don't think anyone has said anything's wrong with interim storage. I don't believe the Administration is set against interim storage. For example, we are proceeding, as part of the Administration's proposal in our testimony, with a non-site-specific interim storage activity. So the Administration is not opposed to interim storage, per se. The debate that goes on is on the siting of interim storage, on when you do it, and under what circumstances.

  The Administration's position has been articulated in various letters to the Congress, indicating that the Administration is committed to resolving the complex issue of nuclear waste storage in a timely and sensible manner, consistent with sound science and the protection of the public health and safety and the environment. The basic goal is geologic disposal, and it should remain the basic goal of the high-level radioactive waste management policy.

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  The Administration believes that the decision of siting an interim storage facility should be based on objective, science-based criteria and should take into account the viability assessment for Yucca Mountain which will be completed in 1998, as I previously discussed. That is the essence of the Administration's policy at this time.

  Mr. FRELINGHUYSEN. Well, I read those words, and they do give me sort of a certain level of reassurance. And if you repeat them enough, you might believe that that's satisfactory.

  But, yes, excuse me?

  Mr. ALM. Well, Mr. Frelinghuysen, your comment was or question was what kind of a priority does the Administration give to geological disposal, and we have two projects, the Yucca Mountain Project, but we also have the Waste Isolation Pilot Plant. I can tell you that's one of my three top priorities; the same with the Under Secretary, and Secretary Pena has indicated that he considers this a very high priority.

  My staff is meeting weekly, following progress on the certification application. We're meeting frequently with EPA. So I can assure you that this has a very, very high priority within DOE.

  Mr. FRELINGHUYSEN. Relative to the lawsuit that a number of utilities have filed over—yes, Mr. Chairman?

  Mr. MCDADE. If I may, we have a vote on the floor, and it's my intention to recess for 10 minutes. I hope members will hurry back and we'll resume the hearing.

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  [Recess.]

  Mr. MCDADE. The committee will come to order.

  The Chair recognizes for further questions the gentleman from New Jersey.

UTILITY LAWSUIT

  Mr. FRELINGHUYSEN. Thank you, Mr. Chairman.

  Mr. Barrett, it's good to be back with you. I just have a few more questions that relate to Yucca Mountain activities.

  Relative to the lawsuit filed by the utilities, what if that lawsuit is successful and the utilities stop paying into the Nuclear Waste Fund? What effect does that have on the permanent repository?

  Mr. BARRETT. We hope to continue the permanent repository program independent of what may happen with the lawsuit. Utilities have paid a substantial amount already into the waste fund, and I believe the balance in the waste fund is around $5 billion that has already been paid in. So using your assumption, sir, that there is some withholding of payments or escrow, or whatever the case may be, we would still request of this committee to go forward with the Yucca Mountain program because we believe that is essential and vital to this Nation. We would certainly wish to continue the program.

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  Mr. FRELINGHUYSEN. I assume you're concerned about the lawsuit, though?

  Mr. BARRETT. Sure. Yes, we are very concerned about the lawsuit.

  Mr. FRELINGHUYSEN. You've given the balance in the Nuclear Waste Fund. What has been the investment to date in the Yucca Mountain Project?

  Mr. BARRETT. To date, through Fiscal Year 1996, we have spent in total, back to 1982, around $2.4 billion at Yucca Mountain.

YUCCA MOUNTAIN TECHNICAL UNCERTAINTIES

  Mr. FRELINGHUYSEN. All right. In your opening statement, this you may have said orally or maybe in your written statement on the background portion on page 1, you—and I quote—say, ''Consistent with Energy and Water Development Appropriations Act''—that's the second paragraph—''the Department plans to address the remaining technical uncertainties of the Yucca Mountain site and complete a viability assessment,'' et cetera, et cetera. Would you shed some light on those technical uncertainties?

  Mr. BARRETT. Certainly. We are gathering data and doing the necessary scientific and engineering work to determine what a repository would look like in the Yucca Mountain natural setting and how it would perform under heat, and what it would cost and what its performance would be over many thousands of years, and how well it would contain the radioactivity within the engineered barriers and how any contamination would behave in the natural environment over thousands of years into the future.

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  So the issues we're looking at are hydrology: how much water is in the mountain; what is its geochemical condition; the geology as far as the fractures and faults and how they would behave; and rock stability with increased temperatures. You would heat the rock up to over 400 degrees Fahrenheit in a real repository. So, we're gathering all this scientific data into a very large performance model, so we can model how the mountain would perform, and we can submit that evidence to the regulators in the Nuclear Regulatory Commission and go through a licensing proceeding.

  Mr. FRELINGHUYSEN. Yes, I did have an opportunity to sort of see firsthand the number of people that are on the site who I assume are performing a lot of these studies.

  Mr. BARRETT. Yes, sir, many of our scientists and our engineers are working there at the mountain.

  Mr. FRELINGHUYSEN. Quite a large and impressive contingent.

  I have some other questions, but I believe my time is up. Thank you, Mr. Chairman.

PRIVATIZATION

  Mr. MCDADE. Mr. Alm, let me chat with you a bit, if I may, about privatization. If there's a great hope in this budget for a silver bullet, it's the privatization process, and as I said at the beginning, you're to be commended for attempting to introduce competition and try to get this thing going.

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  A lot of us worry that we'll be in a tremendous pickle, should this process fail. Would you comment on that, please?

  Mr. ALM. Yes, Mr. Chairman. I would completely agree with you; we'd be in a pickle if these projects fail.

  Mr. MCDADE. You've got 10 of them——

  Mr. ALM. Right.

  Mr. MCDADE [continuing]. Proposed in the budget and a billion dollars startup.

  Mr. ALM. I would say in the beginning that we have evaluated the projects in terms of technical complexity, and only a handful—maybe two or three—are really technically complex. Some of them, like building a dry storage building, are probably no more risky than building an apartment building. So let's focus on the ones that are technically complex.

  We are going through a review of what it's going to take to completely manage this program. That includes what kind of people we need from within the Department, what kind of people we need from the contractors, and what kind of people we need in the field to monitor.

  In my experience, there are two things that are necessary to make these projects work. One is we need to draw tight technical scopes of work. We need to tell the contractors precisely what we want, so that can be clearly determined when the product or service is delivered. Secondly, we need good contracts to protect the government, but which are also fair to the contractor. The next thing we need is people in the field with the kind of experience, project management and project finance experience, to oversee the work. And, finally, we need the absolute best project managers from the contractors, people who have done projects of similar magnitude and have done them successfully.

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  Mr. MCDADE. Yes, you and I had a conversation about that, and you indicated the Department is going to focus on the project managers as one of the highest-priority items you'd look at.

  Mr. ALM. For example, I just happened to be talking to somebody yesterday at the British Nuclear Fuels, Limited about the project manager for the Tank Waste Remediation System, TWRS, Project, assuming that goes ahead, and the gentleman who will be the project manager is the gentleman who oversaw the design and construction of the Thorpe facility at Sellafield. I'm not sure of the exact figure, but it's heretofore a good project.

  Mr. MCDADE. Since you have the type person onboard that you believe is the kind of project manager that you want, would you at this point in the record give us some detail on why you think this man is highly qualified to do what we hope he will be able to do?

  Mr. ALM. Right.

  [The information follows:]

NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  Following the FY 1995 Multi-year Work Plan estimate of $40 billion to complete the TWRS Mission, DOE made a decision to privatize the TWRS treatment and immobilization project. On September 22, 1995 the Secretary of the Department of Energy issued a decision memorandum directing the Richland Operations Office to put in place a privatized approach to immobilize the Hanford tank wastes. Privatization, as defined by the Tank Waste Remediation System (TWRS) process waste contract, requires that DOE only buy a service, not technology, design, facilities or operations of facilities. DOE management of a privatized project requires almost no direct day-to-day management; involves a significant reduction in program deliverables such as reports and status meetings; and totally eliminates the DOE's role in defining prescriptive technical and programmatic solutions. Consequently, the TWRS privatization initiative required a significant managerial change from the typical DOE oversight role of a Management and Operations (M&O) contractor. Two key managers are responsible for this effort.

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  Jackson E. Kinzer is the Assistant Manager of the Tank Waste Remediation System, and has comprehensive understanding of private industry's role in accomplishing the DOE's Cold War mission after serving 35 years as a senior manager for Rockwell Corporation, a key DOE M&O contractor. During this time, his significant accomplishments included the restart of the Hanford Purex Plant in 1983; and then complete restructuring of the Program Office at Rocky Flats. Upon his retirement from Rockwell in 1989, Mr. Kinzer was hired by the Raytheon Corporation to start up the nation's first chemical weapons destruction facility on Johnson Atoll in the South Pacific.

  On September 25, 1996, two contracts were awarded to BNFL, Inc. and Lockheed Martin Advanced Environmental Services to perform the privatization work described in the Request for Proposal that had been issued in February 1996. The management of this work has been assigned to William Taylor, Director of the Waste Disposal Division of TWRS. Mr. Taylor was hired by Jackson Kinzer in July 1995 after he had served 27 years with Raytheon Engineers and Constructors, Inc. Mr. Taylor's previous assignments included the construction of two nuclear power plants in New Jersey in the 1970's, Seabrook nuclear power plant in the 1980's and the program development and initial construction of the Hanford Waste Vitrification Plant Project in the early 1990's. All of these assignments involved the management of hundreds of people and many billions of dollars.

  DOE considers the TWRS privatization initiative to be extremely successful. This success was made possible by the sound management skills of the Federal project managers and by strategically blending resources from both DOE and private industry.

PRIVATIZATION CONTRACTS

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  Mr. MCDADE. All these contracts are a fixed price, aren't they? There's a lot of R&D in them, is there not?

  Mr. ALM. What we try and do with the complex ones is to segregate that first phase and actually pay for that. That's what we did with the tank waste. We're going to pay $27 million each to the contractors for the design.

  Mr. MCDADE. What's the magic of the $27 million?

  Mr. ALM. It's really not magic. It was just the estimate of——

  Mr. MCDADE. It's an estimate that you're working under?

  Mr. ALM. Right. Let me talk about the two contracts because I think that's an important consideration. The BNFL approach would be to take an ion exchange, which is a well-used technology—they use it in their own facilities at Sellafield, England—and the vitrifier, which would be somewhat modified from what they do there, but that company has done vitrification. So they have experience. They've done it for some years.

  The Lockheed Martin approach is more innovative. Lockheed Martin would use molten metal as a way of substituting—not substitution, but separation——

  Mr. MCDADE. In lieu of the vitrification process?

  Mr. ALM. No, in lieu of the ion exchange, as I understand it; it would be the separations process.

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  Mr. MCDADE. Then it would be vitrified?

  Mr. ALM. Then it would be vitrified. So you've got these two different approaches, one of which I think is pretty standard. You've got someone who has run a project that's at least this big on a fairly standard technology, and the other is more innovative, and that's obviously a consideration as we move ahead.

  Mr. MCDADE. Yes, and you expect those to be—I mean, can you classify those as R&D projects or do you classify them differently?

  Mr. ALM. They're not R&D projects——

  Mr. MCDADE. The reason I'm asking is you've had some experience, as we've discussed, that fixed-price R&D doesn't work very well.

  Mr. ALM. Absolutely. These are not R&D projects.

  Mr. MCDADE. These are not R&D projects?

  Mr. ALM. No, these are projects where you've taken technologies and various stages of commercialization and applying them at the advanced waste treatment facility. Again, when British Nuclear Fuels won this project, they're going to use processes that they have used before.

  Mr. MCDADE. Well, the one we talked about, for example, with Lockheed, should that get somewhere into the chain or some approval, that's a pretty new process, isn't it?

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  Mr. ALM. The vitrifier itself is a new COGEMA vitrifier, which I believe is in use.

  Mr. MCDADE. So it's commercialized?

  Mr. ALM. The vitrifier I believe is. I will check that for the record.

  [The information follows:]

NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  The Hanford Tank Waste Remediation System privatization contracts allow the contractors to select and implement either the technology identified in their proposal or an alternative technology. However, the contractors must demonstrate they have a viable approach that will work on Hanford tank waste as a ''Phase 1, Part A'' contract deliverable. Testing used to demonstrate that the approach is viable will include work on actual tank waste samples that have been delivered to the contractors. The contractors are taking the performance risk in TWRS privatization. If their technical approaches do not work, they will not be paid for treatment services.

  The Lockheed Martin Advanced Environmental Systems (LMAES) technology for processing High-Level Waste (HLW) includes calcination and vitrification. These technologies are proven and similar systems are operational in multiple countries. The LMAES facility would improve on these designs and implement a cold crucible melter to increase waste loading and throughput as well as minimize secondary waste. The cold crucible vitrification technology has been demonstrated on a small scale. Further scale-up work is required, which is not part of the DOE privatization funding but is the direct responsibility of the contractor.

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  LMAES will use proven Low Activity Waste (LAW) pretreatment technologies with relatively low risk in application at a commercial scale. LMAES has proposed use of the Molten Metal Quantum Catalytic Extraction Process (Q–CEP) to immobilize LAW. This technology has been developed but its application for Hanford Waste Processing will require further demonstration.

  LMAES will have to prove the business, regulatory, and technical merits of their approach in ''Phase 1, Part A'' prior to authorization to proceed into ''Phase 1, Part B.'' Part B is the final design, construction, and operational part of Phase 1.

  Mr. MCDADE. How about the separation process?

  Mr. ALM. Well, molten metal—there's a number of facilities where they're testing the applications, but I don't know whether they've—they probably have not tested the application of separation of radioactive as one of the techniques. I would think that, although this is the way it's been now, if they foresaw a lot of problems, they could obviously go to a more standard technology when they bid, and I'm just sort of second-guessing what they would actually bid.

  Next year about this time, after these conceptual designs are finished and the final plans are put together, we'll let them bid on the number of units and the price, and at that point in time——

  Mr. MCDADE. One of the concerns on this side of the table is that if we appropriate the billion that you're requesting for the 10 projects, we're committed to the tune of maybe $7 or $8 billion. Isn't that accurate? The taxpayers will have to pay somewhere around $7 or $8 billion, if we give you the billion to commit?

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  Mr. ALM. Well, the billion to commit would result in $3.3 billion in capital costs, and then if you take the operating and other costs to finish the projects, it would be $8 billion; that's correct, sir.

  Mr. MCDADE. Yes, and you described the 10 projects as having varying degrees of risk in them. Would you inform the committee which, in your judgment, Al, are the toughest technological projects?

  Mr. ALM. The Hanford tanks, the Advanced Mixed Waste Treatment Facility. There's one of the other treatment projects that was——

  Mr. MCDADE. You can put that in the record, if you would, so we have a feel about what it looks like from the standpoint of risk.

  Mr. ALM. I will provide that for the record.

  [The information follows:]

NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  Of the privatization projects receiving fiscal year 1998 funding, the most technically challenging is the Tank Waste Remediation System at Richland. The next most challenging projects are considered to be the Transuranic Waste Treatment project at Oak Ridge, and the Low Activity Waste Treatment project at Idaho.

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  In general terms, technical complexity is defined as high, moderate or low. ''High'' indicates highly complexity projects with a scope of work that is very intricate and where limited (comparable) systems have been demonstrated in the private sector. ''Moderate'' indicates those projects with a scope of work for which systems are in place, however, some unknowns may exist. ''Low'' refers to those activities for which systems are in place and well established. The technical complexity for each of the fiscal 1997 and 1998 projects in shown below:

Table 1

PERMITTING PROCESS

  Mr. MCDADE. One of the things that we didn't discuss that was discussed tangentially, I think the gentleman from Indiana or Texas raised the issue of permitting. I would like you, if you would, to put into the record at this point the permitting process that you have to go through and the permitting process, not just Federal but all the way through, that the private contractor would have to go through, should we agree that this is a method that we think we ought to pursue.

  Mr. ALM. I will provide that for the record.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. I'm really concerned about the permitting process. I know you are, too. You say, ''litigation,'' and you get a little pale, and I think we all do, and we understand that that can have a tremendous effect on the timing of the project. It's kind of got to be my experience that everything in the world takes 10 years anymore, and that's the closeout date in your proposal.

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  I got a chance to look at the WIPP history, and I think that took something like 20 years, didn't it?

  Mr. ALM. It took a long time. Yes, I think that's right because I was in the Department when it was first being considered, and I was a young man then. So it's been a while.

  Mr. MCDADE. Well, you still are. [Laughter.]

  Address yourself, will you, to the concept of the permitting process and all the groups that have to approve on these privatization contracts in terms of getting them within the 10-year schedule, in terms of getting them financed, in terms of the risk if you were on the private side. And you've spent a lot of time on the private side, and you were kind enough to come back and make the sacrifice of public service again. If you're on the private side and you're going to have all this kind of risk, not just technological, but permitting risk, why would anybody commit capital to you?

  Mr. ALM. Well, it's very interesting. Your point is well-taken. For the Advanced Mixed Waste Treatment process, for example, we are putting in appropriated funds for the purpose of getting the permit. We want to get the permit—obviously, you have to have the permit before you get started, so you're not in a risky stage.

  Mr. MCDADE. What does that cost? What does it cost us? Do you expect——

  Mr. ALM. My recollection, I'll provide it for the record for sure, but I think it's $15 million.

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  Mr. MCDADE. Put it into the record for us, please.

  Mr. ALM. Yes, but I think that figure is correct.

  [The information follows:]

NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  The cost for permitting is included in the total cost of the contract in most cases and may not be discretely identifiable. In some instances, support costs may be incurred by the Department of Energy or the site operating contractor. Many activities, such as conceptual design and safety and health planning must be performed before permits can be obtained. For example, the drafting of permit applications and associated conceptual design will be completed at the Tank Waste Remediation System (TWRS) for a portion of the $27 million to be paid to each of the two contractors in ''Phase 1 Part A.'' Cost for the final permit process at TWRS will not be established until award of the Phase 1 Part B contract. The payments to the contractor for the Advanced Mixed Waste Treatment (AMWT) facility permit applications and associated deliverables will be $16.3 million. For most of the FY 1998 projects, the permit costs will be much smaller than the amounts for the TWRS and the AMWT facilities.

  Mr. MCDADE. Go ahead. On that one, you're providing appropriated dollars to do the permitting?

  Mr. ALM. Right. I would make one comment that the risky, the projects of the highest level of risk, are the ones that both receive money and started in the 1997 budget. That includes both the tank waste——

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  Mr. MCDADE. Yes.

  Mr. ALM. [continuing]. And the Advanced Mixed Waste Treatment.

  Mr. MCDADE. They were design concepts, though, weren't they, pretty much?

  Mr. ALM. Well, the first step.

  Mr. MCDADE. Yes.

  Mr. ALM. Although the contracts were let—for example, for the mixed waste treatment, we do have a contract for the entire work, even though the early stages are design and permit.

  Mr. MCDADE. So we're committed on that project to completion?

  Mr. ALM. We're not committed. I'm just saying that the Congress did provide budget authority.

PRIVATIZATION

  Mr. MCDADE. I'm aware of that, but unlike the billion here, if we commit the billion this year, it's out to eight and it's operating costs, et cetera.

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  Mr. ALM. I would make two comments because I understand the concern you all have about the commitment. Let me indicate, first of all, with the projects we're talking about, 75 percent of that billion is tied to the regulatory commitments. In other words, these are projects that must be done. It's not the whim. It's not some project that——

  Mr. MCDADE. What do you mean by regulatory commitments?

  Mr. ALM. Well, for example, with the Hanford tanks, we are committed to a tripartite agreement that's been signed by the Washington Department of Ecology and the Environmental Protection Agency and DOE, and we have deadlines for when we begin moving wastes out of those tanks, with an ultimate goal of removing all the wastes and vitrifying them into both low-activity fractions and high-activity fractions.

  Mr. MCDADE. So 75 percent of the billion is for that process, getting the permits, getting——

  Mr. ALM. No, $427 million out of the billion is for that one project.

  Mr. MCDADE. For that one project?

  Mr. ALM. Right, in 1998.

  Mr. MCDADE. Just briefly run down the others for us, will you?

  Mr. ALM. Okay, I'll go down the regulatory ones and then the non-regulatory ones.

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  Mr. MCDADE. I'll tell you what let's do, in the interest of saving some time, why don't you furnish for the record what it looks like and inform the committee of anything you think we should know about complexities in that process on the 10 that you're asking that we start.

  Mr. ALM. I will provide that for the record.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Mr. ALM. Now I was going to make one other comment, if I may, Mr. Chairman.

  Mr. MCDADE. Please.

  Mr. ALM. I think because of the nature of these projects and the complexity, the concern about the management, that we need to develop—we would be willing to, I think we need to develop a consultation process with the Congress where at the critical junctures of these large contracts we would come in—it, obviously, depends on how you all wanted to do it, either Members or the staff, or both——and go over what we're doing, go over the kind of technical reviews, independent technical reviews that we have undertaken, lay out our management plan. For example, in managing these projects, we planned in the big ones to have quarterly management reviews, which I would attend personally because they're so important to the program.

  And one last thing——

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  Mr. MCDADE. And I want to say, as you and I have said before, we want to stay in touch as you go through this process and others, as a matter of communication back and forth, so that we have an idea of what kind of resistance you're meeting, and what kind of successes appear down the road, and we can evaluate together. As you said just a minute ago, I think it's essential to the process.

  Mr. ALM. I couldn't agree more. I think that we have to be together on these projects or——

  Mr. MCDADE. Has anybody, any guru down at the DOE, estimated the amount of time in the permitting process from first application all the way through? You've got a budget figure; you must have some——

  Mr. ALM. I'll get that for the record. Permits are so variable in terms of how much time they take.

  Mr. MCDADE. Okay.

  Mr. ALM. We haven't had great problems with permits, to my knowledge.

  Mr. MCDADE. If you would amplify it, do it in the record.

  Mr. ALM. I will provide that for the record.

  [The information follows:]

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NUCLEAR WASTE MANAGEMENT AND DISPOSAL

  The time schedule for permitting will vary greatly depending on what permits are needed. Permitting can take anywhere from a few months to four years. The schedule will be better known after contract awards and development of milestones for the projects by the vendor. The Department provides our schedule requirements for start of services or completion of services, and the vendor will develop their specific implementation schedule, to include permit acquisition, as appropriate.

PRIVATE FINANCING

  Mr. MCDADE. And address for me the question of private financing on what appears to be complex and risky projects. What makes you so confident that XYZ company is going to get private financing to do one of these projects that's complex?

  Mr. ALM. Well, I've talked to a number of people. I've talked to people who are financial intermediaries, and I've talked to the companies about their financing plans. They'll be working, obviously, to make a final bank commitment on a number of factors, but I'm pretty confident that you can find money. As I indicated to you yesterday, people finance big shopping centers and other developments which I would consider more risky than a project that has a government contract behind it and some budget authority.

  Mr. MCDADE. Well, the problem is the degree of risk and the possibility of the failure that could take place, it seems to me, or even a termination.

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  Mr. ALM. I think the biggest concern the private sector would have—and I need to put this delicately—and that is the extent to which government can be trusted in an operational way. So one way to get around that mistrust—and we did it at Idaho. As we said, the contractor can retrieve the wastes. They don't have to depend on the government retrieving them. So they have access to the waste, and then they have a contract that they get paid for processing. That's one way which you can provide the certainty.

  I think in this consultation process and in the management process it's incumbent upon us to talk to the financial community, to talk to the contractors, and get a sense of what it is we can do to get the best deal for the government on this.

  Mr. MCDADE. A lot of people are saying the government ought to be involved in some way because they can get the money more cheaply than the private side and they'd save money in the long run.

  Mr. ALM. First of all, government money has an opportunity cost, and that is the extent to which you take money out of appropriated money; you're taking money out of the economy—I don't want to get into the economic theory, but government money is not free.

  Mr. MCDADE. Oh, I'm talking about a guarantee or some such thing, a government guarantee. If you've got them on the hook anyway—if these projects should go belly-up, we're stuck for $8 billion, or somewhere in that range—and heaven forbid that they do. But what would be the impact on the financial community if you threw in a government guarantee?

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  Mr. ALM. Let me answer the first part of your question, and then I'll come——

  Mr. MCDADE. Please.

  Mr. ALM. The capital portion of these programs is $3.3 billion. So if they all went belly-up at the same time, the liability would be $3.3 billion, although I think that chance is one in many millions.

  The second part was the question of a government guarantee. There is no doubt that if the government guarantee were provided, a strong, complete government guarantee on the project, that would reduce the cost of capital. Anything the government does that reduces risk and makes the government share more of the risk—in other words, the interest cost, it's a real tradeoff.

  Mr. MCDADE. Yes, and you've decided to go the other way?

  Mr. ALM. We've decided that we'll take some risks, but we think the contractor, to create all the incentives, proper incentives, ought to take the majority of the risk.

  Mr. MCDADE. Yes.

  Mr. ALM. But have we got it exactly right? I don't know.

ROLL CALL

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  Mr. MCDADE. If I might ask my friend, Mr. Fazio—we have a quorum present and we have to do some housekeeping. There's a motion that needs to be offered by Mr. Fazio which we have to vote on. I would appreciate it if you would offer it.

  Mr. FAZIO. Mr. Chairman, because the Subcommittee on Energy and Water Development will be dealing with national security and other sensitive matters at its hearing on atomic energy defense activities, I move that the hearing on April 9, 1997 be held in Executive Session.

  Mr. MCDADE. The clerk will call the roll.

  The CLERK. Mr. McDade.

  Mr. MCDADE. Aye.

  The CLERK. Mr. Rogers.

  [No response.]

  The CLERK. Mr. Knollenberg.

  Mr. KNOLLENBERG. Aye.

  The CLERK. Mr. Frelinghuysen.

  Mr. FRELINGHUYSEN. Aye.

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  The CLERK. Mr. Parker.

  [No response.]

  The CLERK. Mr. Callahan.

  [No response.]

  The CLERK. Mr. Dickey.

  Mr. DICKEY. Yes.

  The CLERK. Mr. Livingston.

  [No response.]

  The CLERK. Mr. Fazio.

  Mr. FAZIO. Aye.

  The CLERK. Mr. Visclosky.

  Mr. VISCLOSKY. Aye.

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  The CLERK. Mr. Edwards.

  Mr. EDWARDS. Aye.

  The CLERK. Mr. Pastor.

  [No response.]

  The CLERK. Mr. Obey.

  [No response.]

  Mr. MCDADE. The majority has agreed the hearing will be closed in accordance with the motion.

  Mr. Alm, thank you very much for your insightful comments on the dialog that we just had.

  And I yield now to the distinguished gentleman from California.

DIFFERENT BENEFITS TO PRIVATIZATION PROCESS

  Mr. FAZIO. Thank you, Mr. Chairman, and I want to thank both of you gentlemen for coming in, and apologize for not being here for the earlier part of the hearing.

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  Mr. Alm, you say that you think that privatization will result in cost savings, certainly compared to the traditional DOE approach, where we own the facilities and the contractors typically operate it and build it. Mr. Barrett also proposes privatization of transportation of spent fuel, but does not assert that the privatization is necessarily going to save the government any money. I wonder if the two of you could explain how we come to the same conclusion in terms of approach, but have different benefits that we ascribe to the privatization process. Is this a function of the task that you're privatizing or is this simply a difference of opinion in terms of what the outcome will be as a result?

  Mr. ALM. I'm sure there's some logical explanation—I'll begin. The precedence we took in looking at the privatization projects was to get an estimate of what it would take to do the M&O. We had to make sure that the privatization estimates did bring about savings. All studies that I've ever seen comparing level-of-efforts kinds of contracts or activities and competitive activities always show that it's substantially cheaper to go competitive. And from my own business experience, when you're in a fixed-price kind of contract, you sharpen your pencil because you know the other guy is going to be sharpening his or her pencil. So we see substantial savings.

  Mr. FAZIO. But they're pretty much premised on your experience, your philosophical premise that competition will——

  Mr. ALM. Well, not only that, but we have estimates which we provided, and some of them we called draft because the estimates are in fairly early stages—they're at different times and different sizes, but the most recent contract, the Advanced Mixed Waste Treatment contract, we have a firm contractor proposal, which is about $1.1 billion, and the M&O estimate a few years earlier was about $2.5 billion. That's at the extreme, but that's an incredible difference in cost.

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  Mr. FAZIO. So you've got more than a philosophical premise here; you've got evidence that this works and it drives down costs?

  Mr. ALM. Yes. We've also hired one of the KPGG, or whatever it is, Peat Marwick——

  Mr. FAZIO. AMPG/Peat Marwick?

  Mr. ALM. Yes, that's it.

  Mr. FAZIO. The latest merger of our major accounting firms.

  Mr. ALM. We've hired them to look at our cost-estimating methodology, and they've given us generally favorable comments.

  Mr. FAZIO. Lake?

  Mr. BARRETT. I think another way to look at it is that what we're buying is really quite different. Mr. Alm is dealing with a situation that he's trying to clean up facilities and the situation exists and there it is, and there is a history of the classical M&O approach to that. We're starting sort of with a clean sheet of paper as far as our transportation program, and we started off with some of the efficiencies with our fairly new M&O contractor. We were able to put together a more efficient situation, when we started with a fresh program. So when we looked at the cost, we didn't see any great savings.

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  Now we do hope that privatization and the spirit of competition will bring substantial cost savings, as Mr. Alm has mentioned, but we're not claiming credit for any of that yet. We will see how the bids come in when we go forward with the RFP.

  Mr. FAZIO. I assume that if you're pleasantly surprised, we will be, too, in next year's budget? Is that the idea?

  Mr. BARRETT. It would be a win/win situation for everyone, sir.

  Mr. FAZIO. Yes. When would you expect to have some sense of how much competition exists in the market? Are you getting feelers now from potential bidders that build confidence that there may be actually a higher estimate than we may need to fund?

  Mr. BARRETT. We have not gotten to talking about hard money yet. We have had several meetings where we've had 100 and 200 people in the room. There has been great interest, let me say, in the industrial and the financial community in what we're talking about, but no one has talked those type of estimates yet.

FEDERAL GOVERNMENT'S LIABILITY FOR PRIVATIZED PROJECTS

  Mr. FAZIO. What is the Federal Government's liability for privatized projects that, frankly, don't work out, that end up being a bust? Maybe you'd both want to respond.

  Mr. ALM. The Federal liability, contractually, there is no Federal liability.

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  Mr. FAZIO. If they run into cost overruns, technical difficulties, this is all at their risk? We don't have to step in at any point——

  Mr. ALM. At their risk——

  Mr. FAZIO [continuing]. And look out for the public interest?

  Mr. ALM. They can, obviously, make a claim that the government misled them or they weren't given proper information in the center, and you can evaluate the claim.

  Mr. FAZIO. So they'll blame you for their failure, typically?

  Mr. ALM. That's certainly a possibility.

  But one of the things that's really critical is that, as we move forward, we're going to pay a lot of attention to these projects at the very beginning. I'm going to watch them very, very carefully.

  As you know, the project at Pit 9 has run into problems.

  Mr. FAZIO. Right.

  Mr. ALM. And I would argue that this may seem like somewhat of a Pollyanna statement, but I've had some experience to bear it out—I think the fact that a project did run into these problems will translate itself into firms being more careful, DOE being more careful, and regulators being more careful. I've seen it in the private sector where a fixed-price overrun got everybody's attention, and then they began to focus on——

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  Mr. FAZIO. So it may clear the air as to what——

  Mr. ALM. That's right.

  Mr. FAZIO [continuing]. Will be the result of these kinds of problems? It's not business as usual, you would argue?

  Mr. ALM. I think the fact that a project had some problems lowers the probability of failure in the future.

  Mr. FAZIO. What if Congress cancels the project?

  Mr. ALM. If Congress cancelled the project, the amount of budget authority that the Congress had agreed to in earlier years would be used for terminating the project. In other words, that would be similar to termination at the convenience of the government.

  Mr. FAZIO. What if we get less than we're asking for? What if we get a performance that, in the view of the government, is less than we had anticipated and asked for in the bidding process? For example, less waste treated, less fuel transported—what is our remedy at that point?

  Mr. ALM. Well, one remedy is not pay them or not pay them the full amount. The whole purpose of a privatized contract is that we specify very clearly the requirements, and we do this with the two projects we have. The waste will be tested when it comes out, and it's got to meet certain specifications. And if it doesn't meet it, it's back to the—not the drawing board, but back to the vitrifier.

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  Mr. FAZIO. And our contracts make very clear that they continue to have the burden of responsibility to complete what they agreed to do, even if it eats into their marrow?

  Mr. ALM. Yes, that is the intent of our contracts.

  Mr. FAZIO. Thank you, Mr. Chairman. For now, I'll wait and go another round.

  Mr. MCDADE. Yes. The Chair would like to inform the members that Mr. Knollenberg is about to be recognized on our side. I sent him over to vote. Anybody who wishes may leave and go vote—we're going to resume when Mr. Knollenberg comes back; the Chair's going to vote at that time.

  The gentleman from New Jersey is recognized.

  Mr. FRELINGHUYSEN. Thank you, Mr. Chairman. I have a number of written questions that relate to the Yucca Mountain Project and I'd like to get those questions answered on the Yucca Mountain Project.

  Mr. MCDADE. Absolutely. Without objection.

  Mr. FRELINGHUYSEN. All right, thank you.

FORMERLY UTILIZED SITES REMEDIAL ACTION PROGRAM

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  Mr. FRELINGHUYSEN. Relative to the Formerly Used Site Remediation Action Program, as you may know, over the last two years I've been interested in this committee in the progress at the Wayne, New Jersey thorium site and the Maywood thorium site. Last year this committee provided $6.5 million specifically for the Wayne site. Can you tell me how the Department has used this funding and what's been accomplished by that investment?

  Mr. ALM Well, my understanding with respect to the Wayne project is that we will completely remove the pile in 1998, and then take action on the subsurface contamination. In Maywood, the pile's already removed, and what we need to do is now remediate the residential vicinity projects, and finally the commercial projects.

  As you know, as you may know, Mr. Frelinghuysen, we have increased the so-called Formerly Utilized Sites Remedial Action Program (FUSRAP) budget, by $100 million this year to speed up all those sites, and this is to be consistent with the President's general initiative to speed up cleanup of Superfund sites in urban areas. So this will be a great boost for the program. It is our hope with level funding that we can finish the FUSRAP program by the year 2002.

  Mr. FRELINGHUYSEN. Specifically to these sites, is there a specific departmental fiscal year 1998 request for Wayne?

  Mr. ALM We have a request for—right now we've broken them out by State, and the amount for New Jersey would be about $60 million, which knowing there's no other States represented, I can say is the largest allocation among the FUSRAP.

  Mr. FRELINGHUYSEN. At your convenience, could you provide the committee with information on when you might anticipate the site work would be finished and contaminants removed, and could you be good enough to provide me with how much we've spent to date on program costs and overhead costs on this construction project?

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  Mr. ALM I'd be delighted to.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Mr. FRELINGHUYSEN. Thank you very much. I have a number of other questions relative to those sites, as well as, Mr. Chairman, some questions that relate to the ground water cleanup at Hanford and Savannah, and, most specifically, questions raised by the Inspector General's report that notes that there have been some problems down there relative to the management of the Hanford site.

  Mr. MCDADE. Without objection.

  Mr. FRELINGHUYSEN. Thank you.

  Mr. MCDADE. Let me say that the Chair is getting antsy; we're under 10 minutes to vote. So I'm going to vote, and Mr. Knollenberg should be back in the room in just a few minutes, and he is authorized—he's recognized as the next questioner. He's authorized to begin the hearing. He should be here in just a few minutes.

  [Recess.]

PROJECT CLOSURE FUND

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  Mr. KNOLLENBERG. [presiding] The meeting will come to order, and we'll be back into the question mode here.

  Let me just identify precisely the order of those that are in line to speak. I think I would be next, and then, as people come on back, we'll make a determination about how long this will be held open.

  Mr. Alm, when we met in my office, you were evaluating the two-track proposal, the $5.5 billion and the $6 billion scenario. I did a little arithmetic pretty quickly and realized there's a half a billion bucks there that is over and above what was in the original budget.

  My question has to do with these two budget cases. Would you support—I'm talking about the excess over $5.5 billion—would you support some move to place some of that in the closure fund? Because, again, what it does is it moves in the direction of where you want to go, and we've talked about that. We're on, I think, the same page when it comes to bringing these projects to closure. Would you consider allocating funding to that closure fund for the projects that are considered in your 10-year plan?

  Mr. ALM. I think what the most suitable arrangement would be the closer we get to the higher end of that range, the more possibility of expanding the closure fund.

  Mr. KNOLLENBERG. The fact is I think you've already prioritized pretty much what the projects are in that closure fund. You're trying to arrive at deciding and prioritizing and targeting monies that, I presume, that excess allocation. So there's a system already in place, a mechanization, or I should say machinery, in place to accommodate what you want to do and I think what all of us want to do, which is to lower those mortgage costs. So the closure fund would be a reason for that.

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  Some of my colleagues and the chairman have talked about privatization and the concerns that go along with that. I believe the Department is trying to set aside $1 billion, that you're proposing $1 billion——

  Mr. ALM. That's correct.

  Mr. KNOLLENBERG [continuing]. For privatization initiatives——

  Mr. ALM. That's correct.

  Mr. KNOLLENBERG [continuing]. Including the Hanford tank remedial system? And I know you and I have discussed this, and we know some of the dangers of what might occur along that path. And, by the way, I buy into the whole privatization effort because what it does do, of course, is it puts more risk than has ever been placed before on contractors, and you've already discussed some of that. I won't go into that, but I do want to talk about the NRC. Some of these efforts are going to be regulated, of course, by the NRC.

  Mr. ALM. That's correct.

NRC REGULATIONS

  Mr. KNOLLENBERG. How do you prevent the cost of complying with NRC regulations then from driving up costs on contractors for projects, for example, that cannot be completed. How do you prevent those costs from rising, with the NRC in mind?

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  Mr. ALM. Well, I think that's a very good question. In terms of the Tank Waste Remediation System (TWRS) project, we are developing our own internal regulatory staff. We have about 20 people allocated just to the regulatory kind of function. It is our intention over time, in a way that would not in any way reduce the momentum of the project, to turn the regulatory authority over to the Nuclear Regulatory Commission (NRC), presumably with the people in the system intact.

  Likewise, the Department has had a committee reviewing external regulation, and the report developed by that committee was that we'd transition to NRC regulation, but only on large new projects and over a graduated period of time.

  I think the question is really a management question. We need to make sure that the regulatory system does not place roadblocks in the way of getting these projects done. We've done a lot with EPA and the States to streamline the program. We do not need to create another new set of regulatory roadblocks.

YUCCA MOUNTAIN SCHEDULE

  Mr. KNOLLENBERG. There appears to be some movement in the direction of accomplishing just what you've stated, particularly in respect to Rocky Flats and then some of the other sites.

  Let me ask a question or two of Mr. Barrett. And, again, I wanted to thank you, Mr. Barrett, for coming into the office the other day to give us kind of a preview of some things, and thanks to Mr. Alm for his having done the same.

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  And our discussion that day kind of clarified some of the things that we have concerns about. This whole thing with Yucca Mountain, the timeline, the schedule—by the way, I particularly applaud the progress I think that has been made in the last year, particularly since Mr. Dreyfuss came to testify. Was it about a year ago or thereabouts? So some things have happened, and you discussed, for example, the completion or near completion of the tunnel. It wasn't that way a year ago, and so we're arriving at a point where I believe we can expect completion by March 27, isn't that right?

  Mr. BARRETT. Close.

  Mr. KNOLLENBERG. Close. Okay. And I studied this whole schedule about permanent storage and disposal and what's proposed for the secretarial decision on suitability and then, of course, the President's recommendation to Congress. But what could we do or what can we do to reduce that timeframe? I think right now the suitability recommendation is supposed to occur, is it, in 2001?

  Mr. BARRETT. Yes, sir.

  Mr. KNOLLENBERG. Is there anything we can do to advance that to the year 2000? And, of course, the question, I think, is probably somewhat obvious: administrations change, and what is the magic about 2001? Could we transpose it to the year 2000? Is that possible?

  Mr. BARRETT. We'd have to go back and look very carefully, more carefully, at the schedule. We've looked very carefully at the schedules. A lot of that work is basically scientific work. For example, one of the things we're going to be doing for the license application is a thermal test. It takes five years to do a very large thermal test. You cannot make that go any faster if you were to put additional funds on it or you worked harder at it. It takes time for the rock to heat; it takes time for the rock to cool, and to gather the data.

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  So there are many aspects of the schedule that we cannot really change. There are some things that, maybe if you added additional funding to it, you might be able to put additional scientists or engineers on the job, and you might be able to do certain segments faster. We have not looked at basically what I would call—I hate to use the word—an unconstrained budget. Much larger budgets than what we've basically been proposing, which is in the nominal range of $300 million, $325 million per year at Yucca Mountain.

  It's possible you could shorten up some of those timeframes and we could look at that, for the record, but I don't expect that there would be any substantial changes in that. There's just the matter of gathering the data and working with the regulators to put together that package.

INTERIM STORAGE

  Mr. KNOLLENBERG. I wouldn't expect you to do anything to lower the standards of activity that have to be in place, but it is a question, I think, that might deserve some more serious attention.

  Now on the interim storage situation, is the Department, in your judgment, doing everything necessary, everything that can be done in advance of the completion of the viability assessment with respect to interim storage? Are they doing everything they can, in your judgment, to reach that or stay on target, stay on track?

  Mr. BARRETT. Within the constraints of the statutes, we're doing everything that reasonably can be done in that area.

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  Mr. KNOLLENBERG. Could the Department do an EIS in advance that might speed up the process?

  Mr. BARRETT. Well, to do an EIS—an Environmental Impact Statement—you'd have to know about what the site was. So that becomes an issue. For what site would you do an EIS?

  Mr. KNOLLENBERG. You're not there yet?

  Mr. BARRETT. We are not at that point. So what we are doing is doing work in the safety area, where we can do safety analyses and engineering designs.

  Mr. KNOLLENBERG. So how long would it take, then, to design, to construct, and begin operation of an interim storage facility, let's say, if authorizing legislation were enacted this year?

  Mr. BARRETT. It depends upon what the statutes would say. If we were to be treated as a commercial entity, we could basically, given the start we will have with the design work we've done for the generic interim storage work, in three-and-a-half years from start to finish, we could be receiving fuel at that facility.

  Mr. KNOLLENBERG. Three-and-a-half years?

  Mr. BARRETT. Approximately, yes, sir.

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REPOSITORY SCHEDULE

  Mr. KNOLLENBERG. On the timeline itself for Yucca Mountain, as I understand it, everything falls in place just the way you have it gauged, and the EIS won't be drafted until the year of 1999; isn't that right?

  Mr. BARRETT. The draft would be; the final would be in the year 2000.

  Mr. KNOLLENBERG. Yes, the final will be the year 2000; right?

  Mr. BARRETT. That is for the repository.

  Mr. KNOLLENBERG. The repository, yes. Thank you for clarifying that. And speaking of the repository then, the timeline, in addition, would include the three-year waiting period, or whatever you call it, from the year 2002 to 2005; is that right?

  Mr. BARRETT. In March 2002, if all goes well, we would submit the license application to the Nuclear Regulatory Commission. Then they would take over through the adjudicatory process, and in the statute, the original 1982 statute, the goal was three years, possibly four. So that process would go through until 2005 or 2006. And then a construction authorization could be issued, and we could actually start construction of the facility.

  Mr. KNOLLENBERG. Is there any fat at all in that schedule in terms of 2010 being the year that it would be operative?

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  Mr. BARRETT. For emplacement?

  Mr. KNOLLENBERG. For the repository. I guess the NRC review period begins in the year 2005.

  Mr. BARRETT. 2002. Excuse me. 2002.

  Mr. KNOLLENBERG. I'm sorry, 2002. But then there's a three-year review period after that. I'm trying to plug in these years to come up with where 2010 is the magic number. How do you get from 2002 to 2010 if there is a two- and a three-year timeframe that is end-to-end within that eight years?

  Mr. BARRETT. Let me walk through the sequence of events between 2002 and 2010, sir. In 2002, we'd submit the license application to the NRC. If they take three to four years, then we would have a construction authorization in the year 2005 to 2006.

  Mr. KNOLLENBERG. That's where the flex is?

  Mr. BARRETT. Right. Then—well, you'd have to speak with the NRC about how much flex is in their timeframe.

  Mr. KNOLLENBERG. Yes.

  Mr. BARRETT. I'm the regulated, not the regulator in this case.

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  But from when the construction authorization is issued in the 2005-to-2006 timeframe, then we have four to five years to build the receiving facilities and build the underground facility before we could actually be placing waste in the geologic repository in the year 2010. So the four to five years is the construction of the underground tunnels that would actually be for the waste emplacement. It is possible that we could advance the receipt of fuel to the facility to something between the 2006-to-2010 timeframe, depending on what we want it to do. So that's possible.

  Mr. KNOLLENBERG. So it's pretty much end-to-end, then. Is that what you're saying?

  Mr. BARRETT. Yes, sir, these are serial activities.

  Mr. KNOLLENBERG. There's not a lot of free time in there.

  Well, I have some other questions that I'll submit for the record. I do want, though, to refer back to the gentleman from Indiana, Mr. Visclosky, if he has any additional questions.

  And I thank both of you for your testimony. We look forward to working with you. We're looking forward, very much so, to that report that's due at the end of this month, and we'd like to see Yucca—I think I speak for the chairman and others—become a reality. We'd like to see the timeline you've presented to us adhered to as best possible. Certainly this Member is in agreement that we'd like to see some fruition and something at the end of the rainbow.

  So, Mr. Visclosky.

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ADEQUACY OF UTILITY FEE

  Mr. VISCLOSKY. Mr. Chairman, thank you very much.

  Mr. Barrett, some observers have concluded that the current fee imposed on the nuclear utilities may not be sufficient to fund the permanent geological repository. What would be your reaction to that observation?

  Mr. BARRETT. This is a matter we watch very closely. We prepared a report last year. It was called a fee adequacy report where we looked at what the cost estimates were in the 1994 timeframe. We also looked at the projections for the income, based on the 1-mil-per-kilowatt fee. As we looked at that, it looked like it was going to be sufficient for a single repository case, and there was no need to change the fee.

  Mr. VISCLOSKY. Would that supply you with enough revenue to do the interim storage facility as well?

  Mr. BARRETT. It was all close and it depended upon your assumptions of what the future interest rates would be over the next several decades.

  Mr. VISCLOSKY. Payments into the Nuclear Waste Fund will decrease as nuclear power plants are taken out of service. What if a significant number are taken out of service because of the proposed deregulation? What impact would that have on your program?

  Mr. BARRETT. That would alter the income side of the equation. What we assumed in our study was what we called a ''no new orders case.'' We did not assume that there would be any new nuclear power plants coming online in the foreseeable future. We also assumed that the existing licensed plants would operate through their licensed time periods and would not close early, nor would there be extensions of their lives, either. So that's the case that we looked at. If you, however, would hypothetically consider many nuclear power plants go out earlier, the revenue projections would go down proportionately and we'd have to re-look at the situation.

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  Mr. VISCLOSKY. Do you have a contingency plan in case that would happen?

  Mr. BARRETT. Basically, to date, there has been an excess of payments to the waste fund. There is $5 billion currently in the waste fund that can be used to continue the program. We would have to watch and see what the situation would be with that, but I think we do not have a specific contingency plan right now that addresses that issue. I believe there would be plenty of time to adjust our program and to come back to this committee if some of those projections come to fruition.

  Mr. VISCLOSKY. All right. Is it true that the marginal cost of developing an interim storage capacity would be significantly lower if it was located at the site of the permanent repository?

  Mr. BARRETT. That's probably true. You could, if you put interim storage where you're certain the repository is going to be, then share many of the facilities as you're building a stand-alone facility somewhere else. So, yes, there would be a substantial cost savings if you knew that was going to be the location.

  Mr. VISCLOSKY. Mr. Alm, a recent Inspector General report noted duplication and overlapping ground water monitoring at Hanford. What steps are being taken to coordinate the activities?

  Mr. ALM My understanding is, based on the IG report, the field office developed a single comprehensive ground water program, so we followed up on the IG report.

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  Mr. VISCLOSKY. Mr. Chairman, thank you very much.

  Mr. KNOLLENBERG. Well, thank you, Mr. Visclosky.

  I think that concludes the session today. We very much appreciate, again—very much appreciate the testimony of Mr. Alm and Mr. Barrett and appreciate your indulgence while we waited through a couple of votes. That happens, and it will happen again.

  So this committee stands adjourned until 10:00 a.m. tomorrow morning.

  [The questions and answers for the record follow:]

  "The Official Committee record contains additional material here."


WEDNESDAY, APRIL 9, 1997.

FISCAL YEAR 1998 ATOMIC ENERGY DEFENSE ACTIVITIES BUDGET OVERVIEW

WITNESSES

DR. VICTOR H. REIS, ASSISTANT SECRETARY FOR DEFENSE PROGRAMS

KENNETH E. BAKER, ACTING DIRECTOR, OFFICE OF NONPROLIFERATION AND NATIONAL SECURITY

DR. HAROLD P. SMITH, JR., ASSISTANT TO THE SECRETARY OF DEFENSE (NUCLEAR AND CHEMICAL AND BIOLOGICAL DEFENSE PROGRAMS), U.S. DEPARTMENT OF DEFENSE

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HOWARD CANTER, ACTING DIRECTOR, OFFICE OF FISSILE MATERIALS DISPOSITION

Opening Remarks

  Mr. MCDADE. Good morning. I have a housekeeping matter to take care of for the record.

  Pursuant to the vote of this committee on March 12th, 1997, today's hearing on the Department of Energy's Atomic Energy Defense Activities will be held in executive session.

  Doctor Reis, I am sure you know everybody on a first name basis and can verify that the people in the room have the appropriate level of clearances?

  Dr. REIS. Yes.

  Mr. MCDADE. For the members of the subcommittee, I just want to give a reminder that the information discussed today is highly classified and shouldn't be discussed outside this room. And we would ask everybody, please, to turn off any two-way pagers and any kind of cell phones that anybody might have.

  With that, let me welcome the panel. I apologize to you for being late. I was at another committee which ran a little bit longer than I expected it to. So I apologize for keeping you waiting, but I am delighted to see all the pros who are in the room. This is the consummate group of professionals who are here. You are more than welcome to be here. We are delighted to have you.

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  You know the rules of the game so we would appreciate it if you would file your formal statements and then proceed informally, tell us where we can cut the budget. I did not hear much response to that.

  Dr. REIS. Be delighted to help you with that, Mr. McDade.

  Mr. MCDADE. Doctor, I knew you would come forward.

  So proceed. Who is going to be the first witness, Dr. Smith or Dr. Reis?

  Dr. SMITH. Traditionally, we start the Vic and Hal act with Vic.

Oral Statement of Dr. Victor Reis

  Dr. REIS. Okay. Thank you, Mr. Chairman.

  Mr. MCDADE. We are delighted to have you here, my friend. Proceed in your own fashion.

DEFENSE PROGRAMS FY 1998 BUDGET REQUEST

  Dr. REIS. Thank you, Dr. Smith.

  It is a pleasure to appear before you today to present the fiscal year 1998 Department of Energy Defense Programs' budget, and I will just hit a few highlights.

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  The Defense Programs' budget request for next year is some $5 billion, of which approximately $1 billion is in the Defense Asset Acquisition Account to fully authorize construction projects.

  Full authorization of construction projects is a new approach for the Department of Energy, but is similar to that used by the Department of Defense. On an apples-to-apples comparison with the fiscal year 1997 budget, this would correspond to a budget request of about $4 billion, an increase of $133 million over last year's appropriation.

DEFENSE PROGRAMS MISSION

  Mr. Chairman, the mission of Defense Programs is to ensure the safety and reliability of the Nation's nuclear weapons stockpile indefinitely without underground nuclear testing; to safely dismantle and store excess nuclear weapons; and to be prepared to resume testing and produce new nuclear weapons if the President and the Congress so direct.

  This is an unprecedented job and one that involves considerable risk, but we are committed to do the job and manage the risk.

  My task today is to demonstrate that the Stewardship and Management program is working now and will continue to work into the future.

STOCKPILE LIFE EXTENSION PROGRAM

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  The essence of Stockpile Stewardship and Management is the Stockpile Life Extension Program. Weapons in the stockpile will age and the performance of these weapons may deteriorate. Weapon parts must be identified, replaced, and certified before any deterioration becomes unacceptable.

  For every part in every weapon now in the stockpile, the tools for assessment exist now and are being used now. But they will not be sufficient in the future, as the time since the weapon's last underground test increases and as experts who maintain the current weapons retire.

  Therefore, the Stockpile Stewardship and Management program must be dynamic. It must continually improve as the job gets more difficult.

ANNUAL CERTIFICATION

  How do we know whether we are good enough now and will be good enough in the future?

  On August 11th, 1995, when the President announced the U.S. intention to seek a zero yield Comprehensive Test Ban Treaty, CTBT, he stipulated six conditions for ratification. The last condition directed an extensive annual certification process that requires independent assessments from the directors of the nuclear weapons laboratories, the Commander-in-Chief of the U.S. Strategic Command, and the Nuclear Weapons Council.

  We did not wait until the CTBT was signed to start this process but began immediately. I am pleased to report to this committee that the first of these annual reviews has been completed. A memorandum went to the President from Secretary Cohen and Acting Secretary Curtis stating that the stockpile is judged safe and reliable, without nuclear testing. And with your permission, I would like to place that memo into the record.

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  Mr. MCDADE. No objection.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Dr. REIS. This annual certification represents a snapshot in time. So you might ask, what have we done this year to give you confidence that the program will be able to accomplish its mission in the future?

  Are we indeed able to discover problems before they affect performance, replace parts, and certify weapons? Could we return to testing and production if need be? Are we dismantling weapons according to schedule?

  There are a number of examples that provide us with some optimism and they are included in my testimony, but I would like to mention just a few.

B61 STRATEGIC BOMB MODIFICATION

  The first of these is the modification of the B61 strategic bomb. This modification changed the weapon so that it could penetrate the surface of a target area, impacting the ground at over a thousand times the force of gravity; yet not compromising its nuclear warhead. [Deleted.]

  When this modification program is complete, we will be able to retire the B53, the oldest and largest weapon in the arsenal and the weapon that lacks many modern safety features. The B61 modification program used many of the elements of the Stewardship and Management program, from new computer simulation capability, through design at the Sandia and Los Alamos laboratories, to the production at the Kansas City and Y–12 Plants, culminating in successful testing in Alaska and at the Nevada Test Site.

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  Not the least of this success was the extraordinary degree of teamwork with our Air Force customer.

ACCELERATED STRATEGIC COMPUTING INITIATIVE

  The second example is in simulation. Without new underground tests the ability to certify places enormous stress on our ability to simulate, and validate, the processes occurring in nuclear explosions.

  Last December the INTEL/Sandia team produced a computer that was the world's fastest, by a factor of three. More importantly, that computer is now solving stockpile problems that simply could not have been done heretofore in any practical amount of time. For example, one complex simulation that would have previously taken 74 days to run was completed in just 7 hours.

  Both IBM with Livermore and Silicon Graphics/Cray with Los Alamos have delivered installments of still faster machines, on which we are also making operational breakthroughs as we seek to maintain the pace of the Stockpile Stewardship program.

ADVANCED EXPERIMENTAL CAPABILITIES

  There are equivalent examples in surveillance, manufacturing, and science-based understanding of aging.

  The Dual Axis Radiographic Hydrotest machine at Los Alamos is back on schedule, and we have begun construction of the National Ignition Facility at Livermore. When completed, the National Ignition Facility will produce temperatures and pressures reached only inside an exploding nuclear weapon and the sun.

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  Results from the Los Alamos' Pegasus and Sandia's PBFA–Z pulse power machines show remarkable promise, and the NOVA and OMEGA lasers continue to generate spectacular results directly applicable to the stewardship tasks.

TRITIUM SUPPLY

  Both the accelerator and the commercial light water reactor tritium production tracks are on schedule for a fiscal year 1998 decision that will support a START I stockpile. We established a tritium reservoir production capability at Kansas City, produced some 90 tritium reservoirs, and have filled over 1,000 tritium reservoirs at Savannah River.

STOCKPILE STEWARDSHIP AND MANAGEMENT

  We dismantled 1,064 weapons at Pantex, and completed both the Stockpile Stewardship and Management Programmatic Environmental Impact Statement, which defines the streamlined complex of the future, and the Nevada Test Site Environmental Impact Statement, which will permit us to begin crucial subcritical experiments this June.

  A detailed plan describing what we expect to accomplish over the next 5 years has been completed in coordination with our Department of Defense colleagues, and we expect to submit it to the Congress very shortly.

Conclusion

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  Mr. Chairman, when President Clinton announced that this country would seek a zero yield Comprehensive Test Ban Treaty, he stated that the nuclear weapons stockpile was a supreme national interest to the United States and that the Stockpile Stewardship and Management program was the means to ensure that the stockpile will remain viable.

  Mr. Chairman, I believe that the program before you now is fulfilling that national imperative. The people in the program are working now, and with your continued support the people in the program will continue to succeed.

  Thank you for your attention and, of course, I would be delighted to answer any of your questions.

  Mr. MCDADE. Thank you very much, Doctor Reis, for your usual excellent statement, and we will be back to you in a later round with a series of questions.

  [The statement of Dr. Reis follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. Dr. Smith, do you want to proceed?

  Dr. SMITH. Mr. Chairman, Mr. Baker will complete the testimony by the Department of Energy.

  Mr. MCDADE. Proceed as you wish, please, informally.

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ORAL STATEMENT OF MR. KENNETH E. BAKER

  Mr. BAKER. Good morning, Mr. Chairman, and members of the committee. It is a pleasure to address you today as the Acting Director of the Office of Nonproliferation and National Security at the Department of Energy. I have a brief statement and request that my formal statement be submitted for the record.

  Mr. MCDADE. Without objection.

Introduction

  Mr. BAKER. The worldwide proliferation of weapons of mass destruction, or WMD, and their delivery system has emerged as one of the most serious dangers confronting the United States. In November 1994, and every year since, President Clinton declared such proliferation as a national emergency that must be addressed as one of the United States Government's highest priorities.

  I would like to report that we have been and will continue at a rapid pace to confront this critical national security issue. Today, I will discuss the progress of some of our key programs, as well as our new initiatives.

  Our commitment to serving our Nation's security involves preventing the spread of weapons of mass destruction materials, technology, and expertise; detecting the proliferation of weapons of mass destruction worldwide; reversing the proliferation of nuclear weapons capabilities; and responding to emergencies. We particularly draw upon 50 years of science and technology expertise resident throughout the DOE laboratory system to help us achieve these goals.

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MATERIAL PROTECTION, CONTROL AND ACCOUNTING

  Our program of cooperation between DOE laboratories and nuclear facilities in Russia and the Newly Independent States to improve the protection, control, and accounting of weapons-usable nuclear materials is yielding dramatic results.

  When I testified before this committee 2 years ago, I showed upgrades at one facility. I am happy to report today the program has expanded to over 40 facilities in the former Soviet Union where cooperation is now under way to improve security of hundreds of tons of weapons-usable materials.

  As you can see from the map of the former Soviet Union, we are working in five different sectors: MINATOM's, which stands for the Ministry of Atomic Energy, civilian complex; MINATOM's defense complex; the independent civilian sector; the non-Russian Newly Independent States' sector; and the naval nuclear fuel sector. Our work in 1997 will address all known facilities in the former Soviet Union that contain weapons-usable nuclear material.

  Through this critical program, we are working to improve security for approximately 1,200 metric tons of highly enriched uranium and 200 metric tons of plutonium in the former Soviet Union. We are working with the Russian Navy and the icebreaker fleets to protect their fresh naval fuel, which could also be used in nuclear weapons. Our work in 1998 will accelerate our ongoing efforts and expand to address broader Russian Navy fuel protection issues and improve the materials' protection control and accounting of Russian nuclear materials during transport. By the end of fiscal year 1998, we will expect to have completed MPC&A work at 25 facilities.

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  Some of my staff have just returned from Obninsk, Russia, after having participated in the first Russian International Conference on Nuclear Material Protection Control and Accounting. This historic conference was extremely successful, drawing participation from 250 Russians from nearly all the nuclear facilities in Russia, as well as the other representative countries.

  At this conference, Russian Minister of Atomic Energy Victor Mikhaylov expressed his commitment to modernize safeguards and security for the Russian nuclear materials, noting that Russian is now financing a substantial amount of the MPC&A upgrades.

  It is clear, not only from the extensive support for this conference by the Russian government but also by the high quality of discussion at the conference, that there is serious dedication to the improvement of nuclear materials safeguards and security in Russia. This new developing safeguards culture is important evidence of the success of the Department of Energy's cooperative program of MPC&A improvements.

INITIATIVE FOR PROLIFERATION PREVENTION

  Similar to the MPC&A program is the Initiative for Proliferation Prevention, or IPP, that seeks to draw scientists, engineers and technicians from the former Soviet Union's nuclear, chemical, and biological weapons programs into long-term commercial ventures, thereby working to reduce the potential for brain drain to proliferant states or organizations.

  These commercial ventures have engaged over 2,700 former weapons personnel, and will have 5,100 people involved at the end of this year; 10 DOE national laboratories and a coalition of over 75 U.S. corporations and universities and over 70 institutes in the former Soviet Union. We project that these numbers will increase tremendously throughout the year.

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RESEARCH AND DEVELOPMENT

  My office plays a key role in supporting the United States' efforts to monitor and verify a Comprehensive Test Ban Treaty. We are developing technologies that will detect nuclear explosions underground, underwater, and in the atmosphere. If such an explosion does occur, these technologies can detect, locate, and identify its source.

  This summer, the Air Force will be launching for us our FORTE small-satellite, which will demonstrate the improved ability to detect and characterize electromagnetic pulses from nuclear explosions in the atmosphere, an important aspect of our treaty monitoring capability.

CHEMICAL AND BIOLOGICAL NONPROLIFERATION

  This year, we began a new chemical and biological nonproliferation program that seeks to leverage the chemical and biological science capabilities of our national laboratories to develop technologies to detect, characterize, and facilitate decontamination of chemical and biological threat agents. In 1998, we plan to expand our emergency management and response capabilities to effectively respond to chemical and biological incidents.

COUNTERING NUCLEAR SMUGGLING

  Our program to counter nuclear smuggling is part of the partnership with other Federal agencies that overlays barriers to illegal diversion of fissile and radiological materials at their source; detection and interdiction of materials during transit and at international borders; and response to threatened or actual use of these materials.

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  We have just completed work on an overall program plan, and I will pass this out to you, sir, on nuclear smuggling. This plan will lay out our work for the next year. In fiscal year 1997, we have demonstrated the ability of the national laboratories to determine the source of smuggled nuclear material through nuclear forensic techniques. In 1998, we plan to provide customized versions of equipment used at DOE facilities to improve security on the U.S. borders, and we expect to develop highly portable and inexpensive radiation detection technology for city and State law enforcement and other emergency personnel. Things like this would be used for radiation detection by the Customs agents, about this big.

  Mr. MCDADE. Does it work better than a dog?

  Mr. BAKER. Yes, sir, it works a little better than a dog. Not much better but it works better.

  Dr REIS. It probably eats a lot less, too.

  Mr. MCDADE. Mr. Baker, isn't that technology that is pretty mature, the technology you just showed us? Is that new technology?

  Mr. BAKER. It is technology in the last 2 years.

  Mr. MCDADE. The last 2 years?

  Mr. BAKER. Yes, sir. [Deleted.]

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  Mr. MCDADE. That is a good place to test it.

  Mr. BAKER. Yes, sir.

  Mr. MCDADE. Go ahead, my friend.

INTELLIGENCE

  Mr. BAKER. Finally, our intelligence program continues to focus on the DOE's laboratory experience in nuclear weapons design and production to provide nuclear weapon foreign intelligence information and technical analyses on emerging national security issues of today.

DOMESTIC PROGRAMS

  In concert with all our international activities, we are responsible for wide-ranging activities to accomplish nonproliferation and national security goals in the United States. These activities include directing a rigorous nuclear safeguards and security program for the entire Department of Energy complex, thereby ensuring the security of our own materials, technology and expertise; declassifying millions of departmental documents while protecting critical information that has the potential to facilitate the proliferation of weapons of mass destruction; maintaining a security investigations program for both Federal and contractor personnel; and managing and strengthening the Department's emergency management and response capability to provide assistance to other government agencies as well as State, tribal, and local governments.

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conclusion

  Our budget request for fiscal year 1998 generally reflects an increase in the nonproliferation activities with the former Soviet Union, the MPC&A program, increasing the chemical and biological weapons nonproliferation program and countering nuclear smuggling activities, as well as supporting our program staffing requirements.

  Preventing the spread of weapons of mass destruction is a critical national interest and a global security issue. We are proud to be one of the leaders working aggressively with this committee and other committees of Congress, other U.S. Government agencies, and the international community, to make this world a safer place for all.

  Thank you for your time, Mr. Chairman. I will be happy to answer any questions that you may have.

  Mr. MCDADE. Mr. Baker, thank you for an excellent statement. We will be back to you with questions, and we certainly, all of us, recognize the awesome responsibilities that you have, and we wish you Godspeed in your efforts.

  [The statement of Mr. Baker follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. Dr. Smith, it is nice to see you again.

  Dr. SMITH. Thank you, sir.

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Oral Statement of Dr. Harold Smith

  Mr. MCDADE. Welcome to the committee and file your statement, if you would, for the record and proceed as you wish.

Introduction

  Dr. SMITH. I shall do that. And as you suggest, I will comment informally on some of the highlights of the past year. After all, I am the focal point in the Department of Defense for all things nuclear and as such I have the pleasure of working with my colleagues left and right in maintaining the nuclear arsenal.

  I have also taken the opportunity of this past year to travel widely to some of their facilities. I visited all three laboratories, Oak Ridge, and Savannah River. I also took the time to visit some of our important DOD installations such as Barksdale Air Force Base where we have the B52s and the key bases in Europe where we have nuclear weapons.

  I would characterize the general feeling within the Department of Energy, particularly at the laboratories, as having gone through a watershed this year. When the fact of the moratorium was first made known, I would say the laboratories were in a state of denial. That has changed. That has clearly changed.

  Now I think the challenge is accepted and they are moving smartly to carry out the program that Dr. Reis has described to you before and undoubtedly will describe in detail later today.

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ANNUAL CERTIFICATION

  The highlight has been, we have gone through our first annual certification. That is an enormous joint effort between the two departments involving the directors of the national laboratories, General Habiger, the commander of the strategic command, and the Nuclear Weapons Council where I have the pleasure of being the executive secretary. Dr. Kaminski is the chairman. Mr. Curtis has been representing the Department of Energy, and General Ralston, the Vice Chairman of the Joint Chiefs of Staff.

  It is the correct way to interface the two departments and thanks to the input from the laboratories, from STRATCOM and from the Nuclear Weapons Council, we were able to inform both Secretaries and, from the Secretaries, the President, that we find the stockpiles safe, secure and reliable, and that we see no need for testing for the foreseeable future. But we will, as the President directed, reexamine the issue each and every year.

  In fact, we have already now started the process in which we hope to certify the stockpile in August of this coming summer, which would be the second anniversary of the President's statement. In simple terms, all goes well with regard to annual certification.

  Mr. MCDADE. Do you have a specific date to hit in August, Doctor?

  Dr. SMITH. As the executive secretary, I try to maintain that on exactly the anniversary of the President's speech. So it is about——

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  Mr. MCDADE. Tell me that date again, please.

  Dr. SMITH. I think it is August 11th.

  Dr. REIS. Eleventh of August.

  Mr. MCDADE. So you have to certify over by 11 August?

  Dr. SMITH. That is our hope, sir.

  Mr. MCDADE. Okay. Thank you.

B61–MOD 11

  Dr. SMITH. Finally, Dr. Reis has already highlighted, I think, one of our most important accomplishments in the sense that the two departments are working shoulder to shoulder, and that is the B61–11, the tactical nuclear weapon that does provide penetration and allowed us, from the war-fighters' point of view, to retire the B53. Dr. Reis has already described that achievement.

  Let me just note some of the aspects on the defense side. The B53 could be only carried on the B52 bomber, and I apologize for all the use of Bs and Ws and numbers. But the B11—the B61–11 can be carried on the F16 and as you read in the press these past few days on the B2. So it is a much more versatile weapon capable of doing everything, with regard to targeting, that its predecessor, the B53, was capable of doing; has one-twentieth the yield and therefore has greatly reduced collateral effects.

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  It was, as Dr. Reis said, a wonderful collaborative effort in which we went from the drawing boards to in the fleet in 16 months. That is an amazing accomplishment and one in which we are truly proud.

  I also want to note that the Air Force, under the leadership of General Fogleman, responded with alacrity and thoroughness to my request that we have a single focal point in the Air Force, as we do in the Navy, for all things nuclear. Major General Neary has been given that position and he has moved out smartly. I think we are doing a very, very good job there.

B52

  Mr. MCDADE. Let me ask you a question, if I could just interrupt you at this juncture. When you talk about the new weapon and the delivery systems that will replace the B52, the B52 was the machine that had the capacity and the range to do all sorts of things. Would you address yourself to the number of platforms that are available to deliver and the kind of ranges that they have?

  Dr. SMITH. Well, the B2 is equipped with—15 of them equipped to carry the B61, all the B61s, including the ones I just mentioned.

  Mr. MCDADE. What is the number in the B52 fleet, for example? What is the gross number?

  Dr. SMITH. I can get you the exact number but I think it is about on the order of 60.

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  Dr. REIS. I believe it is more like 90.

  Mr. MCDADE. The question that comes to me is if you have got the new weapon——

MODIFICATION OF THE B61–11

  Dr. REIS. I think the confusion might be that we are replacing the B53, which is a weapon, which could only go on the B52. We still have the same number of B52s and B2s but the new weapon can fit on the B52, if you had to, but it is primarily designed to go on the B2 or the F16.

  Mr. MCDADE. It is part of the program to replace the B52?

  Dr. REIS. No, it is not to replace the B52, but it is to replace the weapon. [Deleted.]

  Mr. MCDADE. Not the platforms?

  Dr. REIS. Not the platforms.

  Mr. MCDADE. Go ahead, Doctor.

  Dr. SMITH. I want to emphasize, the B52 uses the ALCM, the stand-off cruise missile. But to answer your question, 15 B2s will be equipped to carry the B61 bombs, and we have dual capable aircraft in Europe, the so-called DCA, which are F16s, carried by us and our allies, and their range, of course, is that of a tactical fighter. But with air refueling, literally it is only the ability of the pilot to withstand the rigors of flight that limits the range of that aircraft.

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  All of these, I think, show that the partnership between the two departments is strong and, in an era where we can't test, getting stronger. We now have to be both a faithful partner and a smart customer of DOE.

  In that sense, the relationship is progressing towards that of a prime contractor to its subcontractor. That is, we have to know an awful lot more about nuclear weapons today than we ever had to in the past.

  Fortunately, due to such programs as dual revalidation we work shoulder to shoulder in the laboratories and in the plants so that we have skilled people on our side who can evaluate the voluminous reports and tests that will be coming to us.

Conclusion

  In short, sir, I think the partnership is working very well. I would be more than pleased to answer any questions that you or your colleagues might have.

  Mr. MCDADE. Thank you, Doctor. We are certainly glad to hear that.

  [The statement of Dr. Smith follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. Dr. Reis, I am coming your way first with some questions. But let me first express our thanks to you for the briefing that you gave us on the weapon itself. It was, as you know, Jeanne's suggestion up here, and you complied with it, and all the Members went away better informed, and we are grateful to you for your efforts and for your time.

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  Dr REIS. Thank you, Mr. Chairman.

DEFENSE PROGRAMS BUDGET REQUEST

  Mr. MCDADE. Let me say that you really caught our attention on this $40 billion item over a 10-year period, extraordinary sum of money as we look at what we are facing as we go downstream.

  Is that the number that is still—so far as you are concerned, is that the accurate amount that the Department wants to ask this committee for, $40 billion over a 10-year period?

  Dr. REIS. That is approximately correct. You can never obviously project—we are dealing in an unknown area so that is our general estimate at this time, and we haven't seen anything yet to change that.

  Mr. MCDADE. How much are you asking for the next fiscal year? What is that number?

  Dr. REIS. The next fiscal year would be just $4 billion.

  Mr. MCDADE. Well, just $4 billion?

  Dr. REIS. Considering what you get, it is a bargain. You can appropriate with pride, Mr. Chairman.

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  Mr. MCDADE. Be careful, friend.

  Dr. REIS. But it depends, of course. We are actually asking for $5.1 billion because there will be about a billion dollars in the Defense Asset Acquisition Account.

  Mr. MCDADE. Gross amount is $5.1 billion?

  Dr. REIS. $5.1 billion, yes.

  Mr. MCDADE. If you are funding this in two accounts, what is the gross amount besides the $40 billion estimated?

  Dr. REIS. That would be the same.

  Mr. MCDADE. There is no difference?

  Dr. REIS. No, It is just a difference in what——

  Mr. MCDADE. What kind of facilities are we talking about or are we talking about facilities?

  Dr. REIS. Well, we are talking about facilities, we are talking about plants and we are talking about computers. We are talking about a good deal of experiments, and we are talking about, most importantly, maintaining an expert staff over the years. We are also developing—shall I run through those perhaps for you?

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  Mr. MCDADE. I think that the committee needs that. It is a very significant decision that we all have to make together.

  Dr. REIS. Right.

  Mr. MCDADE. And I think that it would be helpful if you enlightened us to the extent that you think we need to be enlightened.

TRITIUM SUPPLY

  Dr. REIS. Well, we will try to do that over the course of the hearing.

  Let me start perhaps at the top. We have to produce tritium for the nuclear weapons. As you know, or I think you have now been through the nuclear weapons 101 so you are experts in understanding why we need tritium to ensure that all the weapons boost properly.

  Mr. MCDADE. All we can do is add 101 and 102. That is all we need, Doctor. Be careful of it, though.

  Dr. REIS. It will make you dangerous then, right?

  Mr. MCDADE. Yes, indeed.

  Dr. REIS. So the country has not produced any tritium since 1988. Since we had a considerable amount of excess weapons at the time and we are bringing the numbers down, we are using the tritium that we had used for previous weapons that we expect to have in the future. As you recall, tritium decays by 5 percent every year so we have to replace that.

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  So a large chunk of the budget, both not just this year's but in the outyears, is being used to produce a new tritium source. So that will be one.

  Mr. MCDADE. Let me make an inquiry there. As we approach that subject under START I, it is information of the committee that we have enough tritium to go to 2005 with a 5-year reserve.

  Dr. REIS. That is correct.

  Mr. MCDADE. Is that an accurate number?

  Dr. REIS. That is correct.

  Mr. MCDADE. Isn't there some flexibility here? I mean, if we have got $40 billion in one program and the tritium program right behind it, is there some flexibility in terms of funding that you can see in the next fiscal year?

  Dr. REIS. With the current requirement set upon us by the Defense Department through the Nuclear Weapons Stockpile Memorandum, we are pretty much up against the stops on that. Perhaps it would be appropriate at this time to show you that specifically on a viewgraph curve (Chart 1).

  [The information follows:]

  [Deleted.]

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  Mr. MCDADE. Sure.

  Dr. REIS. I think we can do that.

  Maybe we can shut the lights just a bit.

  This is the real stuff. These are the classified numbers. What this shows is tritium as it decays. The red line is the decay of tritium. That is what mother nature gives us. That is physics. There is nothing much we can do about that. So as you can see right now, we do have excess tritium in the—gee, a little high technology laser pointer. There we go. This is terrific. Wow. There it is.

  Dr. SMITH. I want you to note his steady hand, Mr. Chairman.

  Dr. REIS. We will be talking about lasers very soon as well, so this shows you that. They are somewhat bigger than this one, I should add.

  And this is the requirement that is given to us from the Department of Defense.

  Mr. MCDADE. To the year 2005?

  Dr. REIS. In the year 2005, we begin to run into this 5-year reserve.

  Mr. MCDADE. Can you say that the real critical time is 2010, then?

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  Dr. REIS. If you run out of the reserve, then you are, as what you can see, you are completely out of the 5-year reserve back in about 2009, 2010; that is correct.

  Mr. MCDADE. The question I am asking is that as you look at it, and the committee has to make all of these decisions about how we try to find the money to fund very important programs——

  Dr. REIS. That is correct.

  Mr. MCDADE [continuing]. The real year is 2010 rather than 2005?

  Dr. REIS. Well, the concern would be, and again that is a number that comes to us from the Department of Defense. Perhaps Dr. Smith can add to that. The concern there is if something happens to your supply during this period, how much time, how much excess do you really need. There has been a fair amount of analysis done, primarily again by the Department of Defense, in terms of where and what the number is.

  Mr. MCDADE. DOD says you need a 5-year breathing period——

  Dr. REIS. Yes, sir.

  Mr. MCDADE [continuing]. Between the original date or ramp-up date or whatever you have to go through to replace it?

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  Dr. REIS. That is correct.

  Harold, would you want to comment on that?

  Dr. SMITH. Yes. Just two quick comments, Mr. Chairman. What Dr. Reis is arguing is the lead and hedge strategy, that if—we intend under the nuclear posture review to be able to maintain a START I level ad infinitum.

  Now, that does not involve great amounts of expenditures in the near term but could involve large expenditures in the future. If the Russians ratify START II and, even better, if we actually do proceed to a START III, with even lower stockpiles, then as Dr. Reis will explain, the requirements for tritium drop.

  Those decisions should be made in the future. But for the time being——

  Mr. MCDADE. That is what we are going to get into and we do want you to factor that in, Doctor, and explain to the committee what the impacts are of START II, or if things got even, a START III.

  Dr. SMITH. The second point I wanted to emphasize is that the Department of Defense insists that we keep the reserve. That is, we will have no planned use of that 5-year reserve.

  That is a contradiction in terms, in our opinion. So we do not want to dig into that for any known reason. If it turns out, due to unanticipated events, we have to, of course that is a different question.

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  Mr. MCDADE. How did you come to the 5-year conclusion?

  Dr. SMITH. That is a management judgment, sir.

  Mr. MCDADE. It is a judgment call?

  Dr. SMITH. That is a judgment.

ACTIVE/INACTIVE STOCKPILE

  Dr. REIS. Yes. Let me get to that. This viewgraph shows you the difference between START I and START II (Chart 2). These are the numbers we are responsible for in START I, and it doesn't show up too well. This is the number in the active stockpile. This is the number in the inactive stockpile.

  [The information follows:]

  [Deleted.]

  What you see here, and I will try to get that for you, if we move to START II, this is the inactive/active stockpile. But the total number that the DOE is responsible for, and right now that includes the amount of tritium—in other words, a requirement from the Department of Defense signed by the President said you will also include tritium for the inactive stockpile. So in a sense, whether the Department of Defense gives us the requirement that says START II or even START I, it won't make that much difference from our perspective because their requirement is still that total number there. [Deleted.] So it would not make that much difference.

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  Mr. MCDADE. That is a judgment call?

  Dr. REIS. It is a judgment call.

  Mr. MCDADE. Let me ask you this question, because there is a lot of conversation and I know that you and Dr. Smith are privy to it, that if you went out to, say, 2000, the stockpile is going to be much smaller that we are going to have to manage; isn't that accurate?

  Dr. REIS. [Deleted.]

  Mr. MCDADE. What has happened—we need enlightenment. What has happened to the requirement for tritium by 2006? We are being asked to make a judgment based on 2010. At the stockpile, it is around 10.

  Dr. REIS. The difference between the two is what you are keeping in the reserve, and that is the 5-year reserve which, as Dr. Smith said, is for the unknowns.

  We can predict this. We know and we are producing—our program defines, a tritium program, a new production source of tritium. We will have that on line by 2005, 2007, depending upon which choice we choose.

  Dr. SMITH. Let me just elaborate on that point, that the Department of Energy will make a decision in 1998 as to which of the two tracks to take to produce tritium. At that point, we are down to a single track. If something should go wrong between then and, say, 2005, that is where we need that 5-year reserve, because I think history and prudent management suggest that it might take as much as 5 years to get back on line again at the kind of rates we are talking about here.

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  Mr. MCDADE. It would take you 5 years to get back to a different system, if this one should belly up in some way?

  Dr. SMITH. That is a prudent judgment, yes.

DUAL TRACK TRITIUM PROGRAM

  Mr. MCDADE. You have got two tracks now, right?

  Dr. SMITH. That is correct.

  Mr. MCDADE. Explain to the committee what the two tracks are.

  Dr. SMITH. Victor, do you want to do that?

  Dr. REIS. Yes. We have two tracks. The first track, I won't use them first or second because we are trying to keep an even field on that, is an accelerator production of tritium. That is a new technology. We feel very comfortable with it, and, again, our progress over the past year shows that we feel very comfortable to be able to meet the schedule for producing that. Things are going to very well on that. But it is not a reactor. It is a new way of producing tritium.

  And that is a program that would, if we went ahead, that it is being——

  Mr. MCDADE. Let me interrupt you there, Doctor.

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  Dr. REIS. Yes.

  Mr. MCDADE. Because obviously as you are doing that you are looking for some benefits to be gained on the side. One is cleanliness; isn't it? It is a means of—tell the committee why you have to go to an accelerator rather than just keep doing what you have been doing?

  Dr. REIS. Well, the advantages of an accelerator again are primarily that it is not a reactor. There will be no waste; there will be almost no radioactive waste. As many of you are aware, radioactive waste is always a major problem with many new reactors. It is intrinsically safe.

  If something happens, it just turns off. There is no radioactive material that you have to deal with.

  Mr. MCDADE. No meltdown possibilities?

  Dr. REIS. There are no meltdown possibilities. There is nothing to melt down.

  Mr. MCDADE. What about cost factors?

  Dr. REIS. On the other hand, our estimate right now is that construction costs would be about $3 billion to meet this requirement and a total operating cost of about $4 billion. So that is not cheap.

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  Mr. MCDADE. What are the cost figures on the other system?

  Dr. REIS. The other system, we don't have cost figures yet. The idea there would be to use a commercial light water reactor. There are approximately several hundred million, perhaps as much as a half billion dollars, for an extraction facility beyond that. The idea is that one would use a commercial light water reactor that is already in existence, and we would produce special rods.

  Mr. MCDADE. Let me ask you: Is that a more comfortable technology for you? Do you know more about that than the accelerator program?

  Dr. REIS. We certainly know more—of course, that is the traditional way that reactors have been used in the past. I am sorry. That is the traditional way that tritium has been produced in the past by using reactors. We have never used, this country, commercial light water reactors. We have always used heavy water reactors. But as you know, there have been over 100 reactors producing electricity, and the idea is that you would use one of those currently in service.

  Either the Department would purchase one from a commercial company or it would, if you will, rent radiation services from them. We are in the process of making that happen. We have a request for a preliminary or a draft proposal that has been out. We expect to have responses back on that proposal by this fall.

  The reason we are looking at dual tracks is that the country has never actually mixed the making of tritium, which is obviously for nuclear weapons, with commercial practices of generating electricity or the other things one does with reactors. So we expect that there will be considerable legal and perhaps some regulatory concerns with doing that.

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  So that is why we have taken those two tracks.

  Mr. MCDADE. We know, or at least it would be one's experience that if you go the light water reactor way you are going to have a lot of resistance to it, you are liable to end up in court for 10 years or heaven knows what.

  Dr. REIS. That is right.

  Mr. MCDADE. Will you face the same problems with the accelerator?

  Dr. REIS. The accelerator will be used only for the production of tritium. And again, the safety concerns and the environmental concerns, that are the thrust of much of the litigation and regulatory concerns just don't exist, or exist to a much, much lower level for the accelerator.

SCIENCE-BASED STOCKPILE STEWARDSHIP

  Mr. MCDADE. Okay. I just want to ask one more question before I yield to my friend, Mr. Fazio.

  We all have a concern on this side of the table about the science-based program and how well it works; are we secure enough, et cetera, et cetera, et cetera.

  What examples can you give the committee to assure us that the science-based program is effective; that the stockpile is going to be what we want it to be, when, as and if we need it, and pray God we never do, but if we do, what can you tell us about or what can you demonstrate to us about the science-based program and how it works well?

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W76

  Dr. REIS. Let me mention one example that we have done over the past several years. And this is a classified example, so again I would——

  Mr. MCDADE. Let me just say to the members of the committee, some were not here, this is a classified hearing, and we would ask you all not to discuss outside of the room what you hear in the room. We need to have frank discussions, and we need to make sure we don't have any kind of leaks or discussions outside of this room.

  Go ahead, Doctor.

  Dr. REIS. Thank you very much, Mr. Chairman.

  [Deleted.]

  In the past, what one would have done is to go out and test it, would have put it underground and give it a test. We didn't want to do that now because we were under a moratorium and people felt it wasn't sufficient to go back and look at that. So we would try to go back and certify.

  When each of the laboratories first looked at that problem, one laboratory came back and said, well, as best we can tell there is no problem. The other laboratory said, as best we can tell, it is a big problem. [Deleted.]

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  So we initiated a dual—it was one of our early ideas of dual revalidation. We both——

  Mr. MCDADE. What year has that been?

  Dr. REIS. That was like 2 years ago.

  Mr. MCDADE. Two years ago?

  Dr. REIS. Right. This is just when dual revalidation was basically getting started. It is really an important warhead, and it is one that people are very concerned about, so let's see if we can take this working with our defense colleagues to see what would happen.

  We used both laboratories separately. They did several things. One developed a special three dimensional code, which allows you to begin to estimate how closely—what this effect might be. [Deleted.]

  This is a very complicated physical phenomena.

  Both laboratories used different types of computational techniques. How do you validate those computational techniques?

  We had to develop special experiments for that. We used some of the pulse power machines at Los Alamos. We developed some shock tube work at Los Alamos. We adjusted the NOVA laser at Livermore. We ran special experiments, which were able to validate that the codes we were using on the W76 made sense. [Deleted.]

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  So, again, we used these codes that we developed to go back and look at those test data. So we used previous test data. We used new experiments. We used new codes. [Deleted.]

  Now, this was one weapon, literally, you know, one weapon. But it was a problem that might show up all the time.

  However, it took us about a year and a half to go through all of these situations.

  Much of the experiments that we are doing now, much of the code work we are doing now, would allow us to do that in much shorter time than we were able to do it.

  Again, we were able to go through that process. It was science based because we really had to understand what was happening. It wasn't enough to test. We used a lot of the archival data. We were very much code driven but we had to validate those codes with new experiments. So the process itself, the science-based process itself, was used on that. It was used on that particular device.

  We are doing it right now, with the W87 life extension program, where there will be some changes to the W87. Again, we have gone back and used much of the modern codes. We are actually using many of the new Accelerated Strategic Computing Initiative, ASCI, accelerated computer devices itself. The B61 Mod 11 that I mentioned——

COMPUTING

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  Mr. MCDADE. Let me interrupt you there. You said you will be using the new computers?

  Dr. REIS. Will be using the new computers.

  Mr. MCDADE. Is that science-based?

  Dr. REIS. Yes, right now.

  Mr. MCDADE. Just tell us a little bit about that because we know it is an important development in the country. Tell us about that. What are you doing with that computer that you couldn't do before, for example?

  Dr. REIS. The main things that are coming across are three dimensional problems. In the past, everything we did was because the weapons, as you recall, were basically all symmetric. We really only need two dimensions to be able to model what is happening and to be able to test what is happening.

  As these weapons age, what happens is you get bumps and cracks and warts. I mean, we are all familiar with that problem ourselves. And to be able to calculate what happens to these effects really does require a lot more computational power. We have indicated, and our analysis is that the computing will have to be about 100,000 times improved over what one had in the normal supercomputers, if you will, of the day right now.

   So that is what this whole Accelerated Strategic Computing Initiative is, and I am sure we will get a chance to talk more about it, but the key is that those experiments and those calculations are really being done today, while the computers are moving along a very, very significant path. We are not waiting until they are all there. We are working them. We are working them today. There are a number of examples, which I would be pleased to give you for the record as well as how much that is helping with what we are doing now.

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   Mr. MCDADE. Please supply them for the record, and also send copies of what you are going to put in the record to the staff, please.

   Dr. REIS. Surely.

   [The information follows:]

ACCELERATED STRATEGIC COMPUTING INITIATIVE

   Simulation capabilities have always played an important role in the assessment and certification of the nuclear stockpile. The Comprehensive Test Ban Treaty requires an increased reliance on those capabilities. Simulation has recently played an important role for DP in resolving several stockpile issues without nuclear testing, including a question about the W76. It also provided critical information for the certification of the B–61 Mod 11. The advanced and accelerated simulation capabilities provided by the Accelerated Strategic Computing Initiative (ASCI) will also play a critical role in ongoing stockpile programs such as the W87 life extension project, W76 recertification, and W88 pit rebuild. Finally, ASCI provides advanced simulation and computing capability on a continuing basis for assessment and certification.

   Some current and near term examples of computing and simulations that could not be done before are attributable to our development of supercomputers operating in the 1–3 trillion operations per second (TeraOps) range. These include: a reduction of simulations for predicting neutron generator failures from 74 days to 7 hours; neutron generator critical component failure simulation times reduced from 2 years to overnight; and the first 3–D implosion of a WR primary with real engineering features was performed last Fall on the ASCI Red platform. These types of tests become increasingly important as the enduring stockpile ages beyond its planned design lifetime.

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   Additional benefits expected to accrue to increased capabilities from the platforms operating in the 10 to 30 TeraOps range are: virtual testing and virtual prototyping through the use of 3D forging/welding analysis, full physics prototyping and crash/fire safety analysis.

   Future capabilities that DP plans to perform on a 100 TeraOps platform include: 3D large molecule dynamics and 3D large scale coupled physics. This will provide the weapons designers with a platform that will truly serve as a digital proxy to underground testing.

   Nevertheless, even though we have been extremely successful to date and are making significant intermediate contributions, we must focus on our overall goal. Our goal is to provide the digital alternative to underground testing, and that requires a sustained, balanced program over time resulting in the development of full three dimensional codes, the platforms capable of running them, the networks and problem solving environments needed to optimize them, and the effective participation of the designer community in code validation while they are still available to the program. The above successes provide confidence that we are on the right track and can accomplish our objectives. They are steps toward our ultimate objective, not alternatives to it.

   Dr. SMITH. Mr. Chairman, just to give our side of what Dr. Reis has been describing, he has done an excellent job. But just because we can't test doesn't mean that we can't experiment. Therefore, that is the reason that I think I have seen the laboratories go from denial to challenge.

   What Victor just described is an intellectual scientific tour de force in which there is clever calculation, putting it all together. That is an enormous step which gives the Department of Defense some confidence that, indeed, we can have the kind of stockpile we need without the ultimate test, that is, underground explosion.

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   Mr. MCDADE. That is a tremendous change and awesome responsibility.

  I am pleased to yield to my friend from California.

STOCKPILE STEWARDSHIP

   Mr. FAZIO. Thank you, Mr. Chairman.

   I appreciate the questioning that we have just engaged in, and I guess I would like to just sort of see if we can summarize it with something maybe just slightly longer than a sound bite, but I know how hard that is.

   We don't hear a lot about the peace dividend, but when we go to the Floor and we talk to our constituents and we say that it is going to cost us more not to build and test nuclear weapons than it did to produce and test them in the atmosphere or underground, people are astounded. They can't necessarily relate to that.

   Can you try to give us in summary terms why that is so?

   Dr. REIS. Well, of course, first of all——

   Mr. FAZIO. Do you have a sound bite?

   Dr. REIS. It is a little hard to do in a sound bite. But first of all, it is not costing us more. It, in fact, is costing us perhaps a little bit less to do this.

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   Your question is, why is it $4 billion, not $2 billion or some number like that? It is a much more difficult—it is really a more difficult job in many respects.

   I will show a viewgraph of that because I think it is important (Chart 3).

   [The information follows:]

  "The Official Committee record contains additional material here."


   Mr. FAZIO. The concept, basically, everybody on this committee is going to have to not only understand, but be in a position to translate to our constituency.

   Dr. REIS. There are two parts to this, and one is the dollar amount that is in constant dollars, which is important. This is the amount of funding for the total Defense Programs—the Atomic Energy Defense Activities that this Committee has been voting on since 1950. This is the Savannah River Site.

   What you can see is the average over many, many years was approximately $5 billion. Okay. This is the buildup that occurred, if you will, in the 1980s and the green is what we are doing now, what we are spending now for the cleanup of Hanford, Savannah River, and Rocky Flats. These are the dollars we are talking about to maintain the stockpile.

  Mr. FAZIO. Deferred maintenance, perhaps you can say?

  Dr. REIS. You know, this is deferred maintenance and in my discussions with Jim Schlesinger and several other people, they said, gee, they could always get money for whatever they wanted, but maintenance was something that was very, very difficult on a year-to-year basis to fund. So that is where we are now.

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  This is what we are talking about. This is the $4 billion, basically put into context. So the first idea is, no, this isn't much more than we were paying for, if you will, back here. It is less. All right? But it is still a lot. You know, this is still a lot.

  The second question is, why? Why is it necessary to do this? One is, we are trying to keep the weapons in our stockpile forever. Okay? It is just very, very difficult to continue. They are very complex, as you know, and the task is to keep them working, to keep their performance up, keep their safety up, indefinitely, forever. Okay?

  That is a very, very difficult job because these weapons are now, all of them, are getting beyond their designed life. It is very difficult to do that. As you know, you know, in your own experiences, when you buy spare parts for an automobile, it costs you more than having done them because, you know, it is a different, if you will, it is a different manufacturing base. They have to do the work to different specifications. In some sense, it is a much more difficult problem.

  While we have the lights dimmed, let me show the other viewgraph (Chart 4).

  [The information follows:]

  OFFSET FOLIOS 881 INSERT HERE

  Dr. REIS. This is, in essence, what the problem is all about. And this is why we hear you talking about a decade. These are all the weapons in the stockpile that we expect to have. [Deleted.]

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  What you are seeing in green here, this one on these weapons, is that is the design life, the field life for which those weapons were designed to deal with.

  As you can see, when you go yellow, what that means is the first of those weapons, the oldest of those weapons, are now starting to go to an era where we just don't have that experience. By the time you get to 10 or so years from now, what you see is just about every weapon in the stockpile will be beyond its designed life. That is one problem that you have never had to deal with before.

  The second problem is one also that people don't recognize, and that is very, very important, and why many of these new tools, many of these new facilities, are necessary to bring up at the rate at which we are trying to bring them up. That is why we need the computing going as rapidly as we have to go, and that is why we need some of the other facilities as rapidly as we are asking for them.

  This is the designer experience, and what that means is this is the number of designers that exist at the two weapons laboratories, the two weapons design laboratories. This is the Lawrence Livermore National Laboratory. The lighter is the Los Alamos National Laboratory. This is the number designed this time, the shots at which they had experience in. These people are retiring. So the numbers of weapons designers and the shots that they—not just years service but how many real weapon shots that they have actually participated in, that is drying—you know, that is also going away. These people are going to retire.

  At the same time, you are in the process of making the weapons beyond their design life or transition zone, if you will, but restore their field life, which is what we are trying to do. The experienced people who have to make those assessments, make those judgments and do it without testing, they are also going away. That is why the rate of this problem is so difficult. That is why we are pushing so hard on getting the computers, the experiments, because they have to be validated while these people still are around to be able to say, yes, that makes sense to us.

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  That is why this program is very different from any other program you may have to face in a peacetime situation.

  In a wartime situation, this is pretty obvious. But in a peacetime situation, it is this time urgency that I think that makes this program difficult, because the people who have the confidence are going away at the same time the weapons are getting old.

  Now, again, the reason we are relatively optimistic about all of this is that we are doing it now. In other words, we haven't waited until 10 years and then said, oh, well, now we will give you a chance. That is why your question was a good one, because we are working this problem. We are basically working this problem now.

  As we get further and further downstream, as we get further and further from the last test that we have had, the problems get more difficult. The people are going away and the tools have to be better because the problems get more and more difficult.

  This isn't exactly a sound bite but I think it is——

  Mr. FAZIO. I can tell you the modern media would not call that a sound bite.

  Dr. REIS. That is right. But I really do think it is important that you understand. I did get my opportunity to make a sound bite. During the Cold War we were fighting against the Soviet Union. Now our enemy is mother nature. It is mother nature here; all right? And it is mother nature here.

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  If you remember the other curve I put up, Mr. Chairman, was with the tritium, because what you are seeing is somewhere between the year 2005, 2010, the tritium is running out. The designers are retiring and all the weapons will be beyond their designed lifetime.

  This isn't just laboratories now. We are going to have the plants available to start replacing every one of those parts. The way we do this is the same way you would do, again, with your automobile. When the battery runs down you don't buy a new one. You replace the battery. When the transmission goes, you know, that sort of thing, you go out and do a new transmission. We have to produce that in the factories that we are working, and at the same time we have got to downsize and we are basically downsizing those and modernizing those factories. So that is what is giving you, the quote, you know, the $40 billion over 10 years. I think that is our best estimate of about what it takes to do basically—that type of a process. It is a very, very difficult job.

NATIONAL IGNITION FACILITY

  Mr. FAZIO. Let me go into something a little more specific. You know, this committee historically has been burned on a number of issues, from Clinch River to the Super Collider. So there is a residual sensitivity, at least on the part of some of the carryover staff and Members.

  We had an estimate that the total cost of NIF would be $1.2 billion. It has been revised upward by $125 million from the original estimates made in 1994.

  Can you give us some feel for what caused that increase and how firm we may be on the costs that currently are ascribed to that very essential project part of your entire program?

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  Dr. REIS. The initial briefing, of course, was just based on a concept, a conceptual review. What we have done now is go through a lot of detail. I can give you a specific list just handed to me in terms of what drove the change in cost, such as changing the size of the amplifiers, and I will submit that for the record.

  [The information follows:]

NATIONAL IGNITION FACILITY

  Previous estimates were based on a conceptual design only. This estimate is based on much more detailed Title I engineering. That said, the cost estimate based on the conceptual design proved to be quite accurate. Changes to the NIF cost estimate were driven by scope changes to improve project utility and site-specific requirements. These cost changes are due to added and modified components in the Title I detailed engineering design rather than to increases in the costs of specific components, which were accurately costed in the previous Conceptual Design. These changes were managed through the Department's disciplined baseline change control process as described in the NIF Project Execution Plan. We have established effective management control systems to track actual expenditures against established baselines.

  We have given extra care to validating design concepts of the NIF (through the Beamlet laser prototype experiments), details in the design work, and costing basis. Costs were derived in a ''bottom up'' estimate at the lowest Work Breakdown Structure level necessary for accuracy. The Automated Estimating System developed by Martin Marietta Systems, Inc. was used to calculate costs for the project taking into consideration schedule, contingency and escalation data. A probabilistic contingency analysis was conducted by the Bechtel Corporation using the Microrac Monte Carlo code. Cost escalation was based on DOE published rates for general construction and defense programs. The Independent Cost Estimate team from Foster Wheeler USA for the Title I design found that ''the overall variance between the Independent Cost Estimate and the Project Office Total Estimated Cost and Other Project Cost is negligible,'' and was actually within less than 1 percent of the new project baseline. That result for the Title I design is similar to the result for the previous Conceptual Design; both cost estimates are believed to be accurate but the design was modified.

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  The NIF design now has been frozen and no further changes are anticipated.

  Dr. REIS. I think the real answer to your question is that we have now gone through a lot of detail. We have had a lot of independent assessment of that. What we are trying to do with the National Ignition Facility, Congressman, is to go through this early to assure you that there are not any things lurking in the background that are going to bite you, because we are certain we have been very sensitive to that, as is this Committee, and I am reminded of it. I have heard more about Clinch River from this committee than I think I knew about—than I knew existed before I came to the Department of Energy.

  But we are very sensitive to that particular situation, particularly on the National Ignition Facility, because that is a major new scientific advancement. It is one of the biggest programs that the Department has on the books that it is going foward. So we have been very, very sensitive to that.

  We are comfortable, for example, and that is the big chunk of this Defense Asset Acquisition Account, and that would put in place the dollars now, rather than try to do it on an incremental basis. So we have assured ourselves that if this is the number we get, the number is as good as possible.

  I think what history tells you on programs that succeed and those that don't succeed, is that if you do the up-front work carefully, if you put the money in up front to ensure yourself that you have got the right design, you have got the right team in place, that you have a much higher probability of succeeding within that cost and within that schedule.

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  I would point out to you that the predecessor laser NOVA was brought in under cost at Livermore and was successful. I believe the laboratory—the Department of Energy, in terms of the Thomas Jefferson machine down in Norfolk, Virginia, was brought in successfully. I believe several of the light sources that have been completed have also been brought in successfully. They are approximately the same size as this device.

  So, with the exception of the Superconducting Super Collider, which is not part of it, again, I think the Department can show that of those devices that are approximately the same size as the National Ignition Facility, why we have a pretty good record. And I think many of those people were, you know, we vetted our National Ignition Facility design with a lot of those people. I am certainly comfortable that we have done everything we can to ensure ourselves that those costs are—what you see is what you will get.

  Mr. FAZIO. Well, let me just say in the environment we are operating in, I think the degree to which we can prevent any further cost creep will be very fundamental to our success in getting this project through the process. And I hope we really have firmed it up to the point where we are not going to experience any more of that because it just erodes the minimal amount of confidence that the Congress has in staying the course on some of these over time expensive issues.

  Let me just ask briefly on the environmental issues, you know there are a lot of people who oppose NIF in the local community in northern California. Is there any plausible environmental risk to this facility?

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  Dr. REIS. No, sir.

  Mr. FAZIO. Or is it just another organizing effort that is purely political?

  Dr. REIS. We have been very, very careful on that. As you know, we have really gone an extra mile, and I think that is part of the Department's approach on problems. In general, it is certainly to go an extra mile on environmental affairs. We do bring in not just experts but we work very, very hard with the local community to ensure ourselves that, one, we feel comfortable that we are doing the right thing and, second, that the local community feels comfortable that we are doing the right thing.

  Our experience, while there are certainly antinuclear activitists who are concerned about this, in terms of working with all of the local civic people, the mayors of all the towns, the local officials and many of the local groups have been very, very supportive of what we are trying to do at the National Ignition Facility.

NEXT GENERATION INTERNET

  Mr. FAZIO. I know some people may want to bring up the leak at Brookhaven later on today. I will leave that. I just wanted to ask one question about computing capacity. Is there any potential for interaction with the new computer development initiative, the so-called Next Generation Internet, that the Office of Energy Research at the Department of Energy is engaged in? Is there any way to find some opportunities to collaborate as we talk about the new supercomputer capacity that you are trying to develop under your stockpile stewardship program?

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  Dr. REIS. I am sure there will be. I will point out to you two things. One, all of the computers that we are dealing with here have been designed, to start out with, to be able to handle both classified and unclassified material. Much of what we are doing now obviously is the classified work since we are pushing very hard to make sure that we work on real problems that we have. But every one of them have been designed to do both of those, to be able to change over within half an hour or an hour or so, which is really quite remarkable, to be able to go from fully classified, the highest classified work, to unclassified in that period of time.

  While much of the work we are doing is classified, there is still a fair amount of work that can be done. We are looking at not just the work in energy research, but even a broader community in terms of the academic community which could be able to participate with the ASCI problem.

  Where you run into, if you will, a potential mismatch is that we are moving on a very, very accelerated schedule, and you can see why. We have to get this going over basically the next 10 years. Other people who are, again, anxious to participate in that are not working quite on that level of schedule. If you don't do an experiment on global climate or something this year or next year, the one year doesn't necessarily make that much difference.

  So when people ask me why isn't there more collaboration, because everybody, literally everybody can use that level of computing, it really does have to do with this mismatch in terms of the rate at which we have to push forward, and that is what we are focusing on.

  But I expect over time you will see a good deal of collaboration between what we are doing not only in energy research, but certainly with our friends in the Defense Department and in the government and in academia across the country.

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  Mr. FAZIO. Without wanting to slow you down, we obviously have to stimulate the others who want to participate because I think there are opportunities here for savings that the government can't afford to miss.

  Dr. REIS. We have discussed this with just on that much, to Dan Goldin at NASA, to have NASA participate as well. I expect that will be happening. We discussed this with John Deutch, when he was Director of the Central Intelligence Agency; Anita Jones, and Paul Kaminski in the Defense Department. I have talked to people at the Federal Aviation Administration. So we really do expect to see a good deal of collaboration occurring over time.

  But, you know, we expect to be the leaders in that.

  Mr. FAZIO. Thank you, Mr. Chairman.

  Mr. MCDADE. The gentleman from Michigan.

PLUTONIUM DISPOSITION

  Mr. KNOLLENBERG. Mr. Chairman, thank you very kindly.

  Gentlemen, welcome. I am glad to have you here. I want to talk about the disposition of weapons grade nuclear material. I have traveled, as some members of the committee have, to various parts of the world, Japan, to France, to Chernobyl, Russia, within the State, within the States, I should say, to Hanford, Rocky Flats and certainly Savannah. And I think this question might be for Mr. Baker, although anyone can chime in on it.

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  I understand we have had some testimony previously that we are on a dual track in terms of the plutonium disposition and with that we have both the vitrification and MOX fuel methods. That is still the case, is it not? We are still dual tracked?

  Mr. BAKER. Yes, sir.

  Mr. KNOLLENBERG. Obviously, the MOX fuel process appeals to a lot of us because there is a peaceful disposition of the plutonium, and I know that the Russians are suspicious of our vitrification process because that suggests that we may want to use it again at some point rather than getting rid of it. And they have kind of been on hold, I think, to some extent, to see exactly how sincere we are about our dual track approach.

  Can you tell us—well, first of all, do all of you support the dual track process? I assume you do.

  Mr. BAKER. Oh, yes, sir.

  Mr. MCDADE. Will the gentleman yield for one second before he puts the question there?

  Mr. KNOLLENBERG. Yes, sir.

  Mr. MCDADE. There is a gentleman in the room, Mr. Canter. Mr. Canter, would you come up and join the panel, please.

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  He handles the program directly.

  Mr. KNOLLENBERG. I guess the question, then—you are in the hot seat. The question is: What is being done right now? Can you give me some tangible support, of being on track or being involved in both of those courses of action, both the MOX fuel approach and the glass vitrification?

  Mr. CANTER. For the U.S. side of the program or working with the Russians?

  Mr. KNOLLENBERG. Well, you can give me on both counts because I am particularly interested in, of course, the Russian side.

  Mr. CANTER. All right. Well, on the U.S. side, what we are doing right now is proceeding to make preparations to implement both tracks. With regard to the immobilization option, we have experimental work being done at a number of laboratories, Lawrence Livermore, at Savannah River, at Pacific Northwest Labs, and at Argonne, to select the right formulation for the material.

  The method that we have selected now, although we are not done yet with confirmation of this, is what we call the ''can-in-canister,'' and this allows us to save——

  Mr. KNOLLENBERG. I didn't get that. What was that again?

  Mr. CANTER. ''Can-in-canister.'' This is where we immobilize the plutonium material in either a glass or ceramic and we put it in small, approximately 2 liter cans, and those cans are then suspended in a framework.

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  Mr. KNOLLENBERG. I have seen all of that.

  Mr. CANTER. Okay.

  Mr. KNOLLENBERG. That I am familiar with. You can speed through that.

  Mr. CANTER. All right. And so we are doing some experiments on the formulation that will go in those cans. We are redesigning the can itself so that it is more proliferation resistant, and we will eventually get to full size tests of that process.

  The main purpose of this is to avoid the costs of building a large, expensive facility to handle high-level waste and immobilize. We can use the defense waste processing facility or any other facility that does that.

  On the reactor side, the MOX, we have started a program of fuel qualification. It is small-scale tests and experiments right now. Eventually, later this year, we will be making some mixed oxide fuel at Los Alamos that will be tested in the advanced test reactor in Idaho.

  We have initiated an effort to prepare—at the end of this month, we will be coming out in the Commerce Business Daily with a plan for procurement.

  We don't own the reactors so we have to go through a competitive procurement to select the reactor, to use it and to select a contractor or a number of contractors to design, obtain a license, construct and operate the mixed oxide fuel fabrication facility. That is all proceeding now as we speak.

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DISPOSITION OF PLUTONIUM IN RUSSIA

  With the Russians, we have started an effort which last year produced an extensive report, which was a study on the methods that would be used for disposition of plutonium in Russia and compared it to the United States. That report, I think, although it was not a decision-making document, it was a document to lay forth some facts on the different methods that were evaluated in a consistent manner. It was a joint effort between us and the Russians. We published it in September or October.

  There are some important points in that report in the summary. One was that the Russians agreed that no matter what methods we use in the two nations, our objective would be to reduce down to equal levels of remaining plutonium. And that is very important, because we think they have a lot more than we have. So if they get rid of a ton when we get rid of a ton, when we get rid of all of ours, they still may have some 50 or 100 tons.

  The other was that they agreed until such time as all the separated material is consumed there would be no recycle.

  Now, we know that they wrote that in there and then they must have thought a little bit about what they had agreed to, because they came back and tried for a little while to back away from that. But they have left it in place.

  There was an experts meeting in Paris the end of October where all the P–8 nations, the G–7 plus Russia, met as well as several other nations, and it drew certain technical conclusions that we are now working on.

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  We have shifted our effort from a study phase to a small-scale test and demonstration phase. I have got experiments going in Russia on some formulation of plutonium going into glass. They have some expertise. We are analyzing, with the Russians, their use of their VVER–1000 reactors, which are their large light water reactors, similar to U.S. reactors. They have seven of those in operation. They have agreed to consider using the 11 that are in the Ukraine, which gives you a substantial number, then and you can probably do a decent job. The seven wouldn't do it.

  We are doing an analysis with the Russians to convert their one fast reactor, which is the BN 600, from a breeder to a burner so it will consume more plutonium than it produces.

  We had, 2 weeks ago, a meeting of—we have this Joint Steering Committee with the Russians. On the Russian side, it is chaired by Deputy Minister, Egorov of MINATOM, and we met out at Los Alamos and came up with an agreement to proceed with the early work to develop a pilot scale pit disassembly and conversion facility in Russia. This will be a capability where the pits, the plutonium pits, is converted from metal to oxide.

  No matter what you do with the plutonium, you have to convert it to oxide. Once you convert it to oxide, it is essentially declassified and you could put it under international safeguards. So this will be a pilot scale facility. They don't have this capability. And we are starting this year with the feasibility and conceptual work, and next year hopefully get real design and procurement.

  We are working with them on that, and what we are hoping here is that within about 3 or 4 years, on a pilot scale, which is more than a little experiment, maybe 500 or 700 pits a year would be converted in both countries. If we need to do it bilaterally, we will have the capability at Los Alamos to do that. And this is a very significant step forward.

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  Mr. KNOLLENBERG. Are you encouraged by the steps that are being taken, and the progress?

  Mr. CANTER. This recent step is very encouraging. Now, we still have to go through the process of negotiating a bilateral agreement of some kind with the Russians because, obviously, we don't want to go get rid of our material if they are not going to be getting rid of theirs.

  So that is where we are right now.

WASTE ISOLATION PILOT PLANT

  Mr. KNOLLENBERG. I just have one quick question, too, Mr. Chairman, relative to—Mr. Alm is not here; is he?

  Mr. CANTER. No.

  Mr. KNOLLENBERG. Relative to WIPP. I understand that the DOE just announced a few days ago that there has been a delay in the start-up to sometime—it was originally going to be, I believe, in March of 1998, if I am not mistaken. Isn't that right? And now they are talking about May of 1998. Can you comment on why the delay?

  We get into these things and we have gotten some—and I am not questioning Mr. Alm I am sure he gave us everything on the basis of precisely what he knew, but I am just wondering what has developed since that stretches this out a little bit? Because these delays are the ones that cost money, too, in the long run.

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  Mr. CANTER. I think we will have to defer that question to Mr. Alm.

  Mr. MCDADE. Will the gentleman yield?

  Mr. KNOLLENBERG. Be glad to.

  Mr. MCDADE. Why don't we take that for the record in detail and supply an answer, please, to the gentleman from Michigan under Mr. Alm's signature?

  Mr. KNOLLENBERG. That would be appreciated. And I will conclude with that, Mr. Chairman. Thank you.

  Mr. CANTER. I would like to provide the WIPP information for the record.

  [The information follows:]

WASTE ISOLATION PILOT PLANT

  The Department announced that it anticipates that the start-up date for the Waste Isolation Pilot Plant (WIPP) will be May 1998 rather than November 1997. This revision to the start-up date reflects the Environmental Protection Agency and the Department's current estimate of the schedule for: (1) EPA's review and evaluation of the Department's Compliance Certification Application; (2) DOE's submission and EPA's review of additional information requested by the Agency; and (3) EPA determining (through a rulemaking proceeding) whether WIPP will comply with the standards for disposal of radioactive wastes for 10,000 years. The Department will work with EPA to investigate ways to accelerate the schedule for operating WIPP. In addition, the State of New Mexico must grant a RCRA part B operating permit prior to opening WIPP. The Department submitted the permit application January 16, 1996.

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  Mr. MCDADE. I would recognize the gentleman from Texas.

TERRORISM

  Mr. EDWARDS. Thank you, Mr. Chairman.

  Dr. Reis, Dr. Smith, Mr. Baker, thank you all for what you do, and the others in this room. I know these are subject matters that very few people want to talk about. There must be frustrations in not being able to even talk to your family members and friends about what you do day to day.

  While I will try not to take myself or most of us in Congress very seriously, most of the things we do don't have as much of an enormous impact on the world as we would like to think. Literally, those of you in this room are dealing with issues that could affect the survival of countries, cities or, you know, hundreds of millions of people or the future of the world. It probably wouldn't be exaggerating to say that. So thank you for what you do.

  Let me just ask, Mr. Baker, you, if I could, we haven't talked a lot about biological and chemical weapons as potential threats to this country. As a former member of the Defense Committee, I debated a lot about the issue of national missile defense against incoming ballistic missiles. We are going to spend probably billions on that, and I am not opposed to some groundbased limited system to protect us against rogue missiles, but the problem I have with building an extensive system was that you could spend $10, $20, $30, to $60 billion on that system and somebody could take a nuclear bomb, put it in a truck and park it in downtown Manhattan and you wouldn't know where it came from. If I were a terrorist, that would be my choice of delivery system, not an ICBM where the U.S. could identify where it came from and how to destroy my Nation.

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  Tell me, in terms of nuclear material smuggling, and then I would like to ask about biological questions, do we know for a fact that there have been x number of ounces or pounds of weapons grade nuclear material smuggled out of the former Soviet Union?

NUCLEAR MATERIALS PROTECTION

  Mr. BAKER. We monitor that as closely as we can, Congressman Edwards. The Russians right now have, as I said, 1,200 metric tons of highly enriched uranium, which you can build 48,000 bombs. It is the size of one Hiroshima. They have 200 metric tons of plutonium, which you can build another 25,000 bombs. And as a matter of fact, I have got a picture of that that you could—you could put 5,333 cases of grapefruits the size of—all you need is about a grapefruit of HEU, highly enriched uranium, and a Coke can of plutonium to build a bomb.

  So you can—on the plutonium that we are trying to protect, you can—it takes 20—you can build 25,000 bombs, 4,166 6-packs of Coke, and all of this we are trying to protect at its source so this will not leak out.

  Now, we are watching the smuggling very closely. We are doing everything we can. We are watching the black market very closely. We get threats all the time on what is happening, and there are small things that have happened. But, again, the best way to protect this, and like some Members of Congress say, you are not working fast enough to get all this done, but after the Cold War is over, we are working as fast as we can with the money that is given to us by Congress to get all these fixed.

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  So we are trying to protect it first at its source. If we can't protect it then, we are trying to protect it on its borders, on their borders. We are trying to make sure the Customs agents and everyone else are briefed and trained and have the technology that is available in our labs on nuclear smuggling, to protect it on their borders and then protect it, of course, on our borders as best we can. So we are doing everything we can.

  There have been small amounts smuggled through Germany and other places, but they have been arrested as far as we know. So it is being protected as best one can right now, with small smuggling cases. But, again, it is a very dangerous situation.

  Mr. EDWARDS. Let me ask, even our Department of Defense can't account for billions of dollars of equipment, not necessarily nuclear materials, but just an inventory system is difficult to put in place.

  Does the former Soviet Union have—do those countries have an inventory system where we would even know for sure if nuclear grade materials were smuggled?

  Mr. BAKER. The Russians had a—or the former Soviet Union had a bad inventory system. They couldn't tell you where all the material was located. However, with our materials protection control and accounting system that we are setting up, we are setting up an accounting system for them so that they can monitor where the nuclear material is. And so that they will have a system that knows exactly where it is at, modeling our system and how we track ours.

  So their system was a mess, because during the Cold War they had—the way they monitored their equipment, of course, was guard guarding guards. But after the Cold War was over, all these guards disappeared. And you may have one or two guards guarding it. So the accounting system was bad. But, again, we are fixing it right now as quickly as we can. They are working with us.

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  The people of the former Soviet Union are just as concerned about this as we are. And they are working with us and together we are working this, again, trying to train them—we have got a school set up in Obninsk, Russia, to train all of these materials protection, control, and accounting people; also to train them on nuclear smuggling, and all of that is being done at a very quick pace.

PROTECTION OF NUCLEAR WEAPONS

  Dr. SMITH. Mr. Edwards, there is another aspect of the problem that I think the committee should be aware of, and that is your questions are quite properly aimed at the nuclear material but the same kinds of questions can be aimed at the nuclear weapons.

  Mr. EDWARDS. Right.

  Dr. SMITH. It is under the Nunn-Lugar program that the Department of Defense is assisting the Russians to make sure they can keep track of every nuclear weapon they have.

PROTECTION OF NUCLEAR MATERIALS

  Mr. EDWARDS. Right. Very good. Thank you, Dr. Smith.

  Mr. Baker, do you still have that canister that you once showed me in which you could smuggle?

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  Mr. BAKER. Yes. I showed it to the Chairman yesterday, too.

  Yes. This is a plutonium pellet. You go into Obninsk, Russia, where we have secured things now, you find thousands of them. I don't want to say millions but you will find all kinds of these, and you can stick it right in your pocket, and, again, fill a Coke can full of these and you have got enough to make a bomb. It is very small and people can walk out with these very easily.

  And I am getting for you, Mr. Chairman, and Congressman Edwards, the cost of what it takes to make a bomb. And, you know, when the Russians——

  Mr. MCDADE. Nonnuclear?

  Mr. BAKER. I am getting it for you, sir. You know, I will supply it to you.

  When the soldiers have not been paid, they see this amounts to a lot.

  Now, I would like to tell a story here. Deputy Secretary Curtis and I went 2 years ago to Kurchatov Institute, walked in, the soldier was half asleep. We walked inside, and inside this building were locker rooms just like you would find in any locker room with a bicycle lock on a locker. So we opened it up. And inside the locker was all kinds of highly enriched uranium laying in the locker.

  Now, Charlie walked out, Mr. Curtis walked out, and a soldier was driving a brand new Mercedes around the building. Charlie said it got his attention very quickly that how, when the soldiers do not get paid, how does this happen. But this is how loose some of this was.

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  And what we did, we went to build this program, we went to the intelligence community and said, okay, which one of these—which one of these facilities or how many facilities in Russia or the former Soviet Union are at risk of nuclear smuggling? And they gave us a number. We are working all of these.

  And again, I am happy to report to this committee today, thanks to this committee that has provided this money, that we are in all of these facilities now. We will not be finished until 2002, but we are working as quickly as we can. We are in all of these facilities. Some of them are very big, like Chelyabinsk–70, which has got a lot of facilities. This is a weapons facility, and it takes a long time to fix all of this. But, again, we have got their attention. We are working with them and it is a real national security problem.

  Mr. EDWARDS. Mr. Chairman, if I could be allowed an editorial comment, having come from the Defense Committee, we are spending—and I am a defense hawk and put myself up there with just about anybody from either party on defense, supporting defense programs. It seems that in some ways in the post-Cold War era we are going to need to redefine ''national security'' and ''defense programs'' and one bomber, one B–2 bomber costs more money than your entire budget, and yet one of the great concerns I have is the threat of thugs getting hold of biological, chemical or nuclear weapons. At some point, I guess we are going to have to educate more Members of Congress and the public about how serious these threats could be.

THREAT FROM BIOLOGICAL WEAPONS

  Let me just finish with one last question. Again, we haven't talked about biological problems. I know there are many people who think biological threats can be more serious than even the nuclear threats, which concern me. As a new Member, and there are several new members of this committee, pick just one—pick a very lethal, biological product. Tell us what it could do to a city, and how a terrorist could expose a city and millions of people to that and then briefly summarize, if you could, what we are trying to do to stop that type of threat.

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  Mr. BAKER. Well, it is something like anthrax. You know, there are many ways that that can get in. It can get into pipes, get into the air, get into—just many ways that terrorists could bring something like this in.

  Now, you know, we are working very hard. The lead on this, of course, is the Defense Department. Dr. Smith has the chemical/biological area.

  Now, let me tell you what we are doing to help him to fix this biological problem and also the chemical problem.

  Last year, the Nunn-Lugar II Defense Authorization Act gave to the Department of Energy $17 million to do some work on this; we are really concerned. This is even a bigger threat than the nuclear threat, many people feel, because we haven't done that much work in the biological area.

  What we did, we looked at the gaps that were made in the defense program. They are indeed the gaps that are made, and how can we fill those gaps which have high payoff? And what we are doing right now, we are assessing and developing and validating plume models to predict how chemical/biological agents are disbursed.

  If you put one in New York City, as you asked, sir, or some place else, how do these things disburse? How many people will be affected? There is not a real good estimate right now, so we are working on that. How many will be at risk with this?

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  Also, we are worried about the battlefield. We are trying to work stand-off sensors, how to build stand-off sensors so before you go into the area you know what you are going into. There is chemical—there is biological stuff there. We are trying to build these stand-off sensors.

  Another thing we are doing, we are building point sensors, sensors very close to you, what effect they would have on people.

  So we are trying to fill—and I will let Dr. Smith tell how well we are doing on this, we are trying to fill these gaps that are critical. And, Mr. Chairman, I can say that for $17 million, I have never seen 10 labs work so hard for $17 million on proposals to come in, here is how to do this; here is how to build this stuff. So it is the community together.

  And we went to the customer and said, here is what we can do for you; here is big payoff. And I think with the money that we will have this year that we can go on.

  But to answer how big an area this can affect, we are working that right now.

  Mr. EDWARDS. Well, I appreciate your answer. But just to put it in perspective, pick a worst case scenario, Dr. Smith or Mr. Baker, New York City, I don't know what a thug, you know, a terrorist would do, but the worst case scenario, where they wanted to kill the most number of people. I know this isn't pleasant to talk about, but we need to be aware of it. They put it in the water supply or somehow disbursed in the air anthrax, how many millions of people would you kill? What are your estimates?

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  Dr. SMITH. [Deleted.]

  Dr. EDWARDS. [Deleted.]

  Dr. SMITH. [Deleted.]

  Dr. EDWARDS. [Deleted.]

  Dr. SMITH. [Deleted.]

  I guess the way I would summarize it is that we have to protect this society at every stage. One stage, of course, Mr. Baker has already talked about, and that is bringing our world class laboratories to bear on what is a national problem. In the Defense Department, we have been worried, of course, about the battlefield. But the things that we have been developing to make sure our troops can detect, be protected, decontaminate, et cetera, including the medical consequences and the medical steps we can take, have some application to the kind of scenario that you are alluding to with New York.

  Under the Nunn-Lugar II bill, we are doing everything from buying detectors for the Customs Department to training the first responders, the fire fighters, the policemen, the hospitals. But I think one of the areas that we are most pleased with is the tens of millions that Mr. Baker mentioned that go to these fine laboratories where we are getting, I think, excellent support, primarily in the area of detection.

  After all, if you know that there is anthrax in the air, a surgical mask can provide wonderful protection, but you have go to know it is there. All the way through to the world of vaccinations, where those alleged nuclear weapons laboratories are, in fact, world leaders in the world of the Genome project, that is understanding the DNA and understanding what genetic engineering can do both negatively and positively.

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  So that as Mr. Baker put it, he has never seen 10 laboratories work so hard for $17 million. That is true. And I think your budget is going up. But the Defense Department is elated with the kind of fundamental support we are getting there.

  Mr. EDWARDS. Thank you. Thank you all for your comments. Mr. Chairman.

  Mr. BAKER. Congressman, I have just one thing on radius of effect. I will provide to you and to the members of the committee a picture of the Oklahoma City—if we put the Oklahoma City bombing on Pennsylvania Avenue, the radius of effect that would have, and then with a 5 PSI, or a 1 kiloton nuclear weapon, what that would do to this city, to show you—that is very small, very small. It is about 300 times as much as the Oklahoma City.

  Mr. MCDADE. Without objection, we will insert that in the record at this point, Mr. Baker, and we appreciate it.

  [The information follows:]

  "The Official Committee record contains additional material here."


  Mr. MCDADE. I am pleased to recognize the gentleman from Mississippi.

  Mr. PARKER. I thank the Chairman.

  You know, I have heard everybody talk about how much they love each other around here in these closed hearings, and I want to let everybody know how much I love you.

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  Dr. SMITH. That is highly classified, sir.

  Mr. PARKER. I know. Let's try to keep it classified.

  But, you know, a lot of this worries me. As a funeral director, one thing I have learned is no matter how bad it gets, it can get worse.

  But I am real concerned about a lot of different things. And, you know, I see this little brochure. It is a nice brochure, and on page 15 it has got a picture of a facility, and we are bragging, we are just tickled to death about a fence and some lights. I don't know about you all, but that doesn't instill a whole lot of confidence in me.

  I have listened to you, Mr. Baker. You have said, we are setting up. Now, that gives me the idea that it has not been set; it should have been set up but we are in the process of setting it, and ''as far as we know'' and ''we are doing everything we can,'' and ''we may,'' and ''as close as we can.'' I have heard all of those little phrases. And I just want you to know, no confidence has been instilled in me whatsoever.

  But we are also dealing, and I mean, when people come before a committee they tend to—exaggerations are—well, hyperbole is always used around here a lot.

  I mean, do any of you know at any time, and this may go to you, Dr. Smith, has the DOD ever underestimated the amount of money it needed on anything? Now, that is a rhetorical question by the way. But I don't think so.

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  But that is true of DOD, and I don't want to leave anybody out. It is also true of DOE. It is true of any bureaucracy.

  Now, I have some real problems. You have got a—is it Reis, Dr. Reis?

  Dr. REIS. Reis.

WEAPON DESIGNERS' EXPERIENCE

  Mr. PARKER. Dr. Reis, you have got a—you had a thing up here on the board of a slide, and I am going to ask this question and I don't need a long answer. I mean, you just may say, well, Parker, you are just stupid so that is the problem. But let me just throw this out.

  Dr. REIS. I will be unlikely to say that, however, no matter how classified this gets.

  Mr. PARKER. You had this in here where you had the red and the blue.

  Dr. REIS. Right.

  Mr. PARKER. And the people at Los Alamos.

  Dr. REIS. That is right.

  Mr. PARKER. And the different things, and these are how many people are getting away from actual testing.

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  Dr. REIS. That is correct.

  Mr. PARKER. Now, this is just me, but don't you still have the data from those tests?

  Dr. REIS. We do.

  Mr. PARKER. So anything that anybody who is hired on, if he looks at the data, it is just the same; I mean, he doesn't have to be standing there while they blow the thing up to know what is going on? Even though he doesn't have the new modern tests, I mean, he has still got the data that started it. So, I mean, in actuality that is not really a real argument.

  Dr. REIS. The data itself is very complicated.

  Mr. PARKER. Yes.

  Dr. REIS. It frequently is pictures, radiographs. Frequently that data no longer exists. We are getting back to confidence. I think that is really where you are putting your finger on it, because that is what we are talking about here.

  Would you trust somebody who has just looked at all data or would you trust somebody who has really worked with that data in the past? It isn't the same thing as looking at—you know, let me try to draw an analogy, because looking at x-rays, right, you go to your doctor, he knows you, you know him, and he looks at an x-ray, he understands your situation, that is very much the same thing as the one who is dealing with the old pictures here. In fact, we are looking very frequently at old x-rays; not the same thing as you are taking that x-ray and just giving it to someone who is an intern at a medical school, who says, well, the data is there. Right?

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  We are really talking about arts here. It isn't all science. You are not just looking at a map that says, gee, I am looking at a map that is 20 years old or 30 years old. It is approximately the same thing. This is extraordinarily highly skilled, very difficult problems that one dealt with in the past.

  Again, we are classified here. There are still many issues that we just don't understand even looking at those old data. We put in fudge factors.

  Mr. PARKER. I am going to tell you——

  Dr. REIS. I beg your pardon?

  Mr. PARKER. I must tell you that some of the things that you have told me about, some of these fudge factors, scare the heck out of me because you are supposed to be so smart, and you don't understand some of it?

  Dr. REIS. You bet.

  Mr. PARKER. I am telling you that doesn't give an old fellow like me a lot of confidence because you are at a different level than I am. I don't understand this stuff. And whenever you start telling me that, well, we didn't know this gap was here——

  Dr. REIS. Right.

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  Mr. PARKER [continuing]. And it appears and we didn't know what effect it would have, that is a pretty serious thing to me.

  Dr. REIS. You bet. That is correct.

TRITIUM PRODUCTION

  Mr. PARKER. You know. Well, I could say something but, anyway. You made the mention—you talked about as far as tritium, producing tritium, you have got a new process and this process produced no side waste products, and there is no danger of meltdown or anything like that.

  Dr. REIS. Very little.

  Mr. PARKER. I am interested to know, in this process, can you produce electricity by this process?

  Dr. REIS. No, sir.

  Mr. PARKER. You can't do it?

  Dr. REIS. That is correct.

  Mr. PARKER. It is just for the production of tritium?

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  Dr. REIS. It is just for the production of tritium.

  Mr. PARKER. I am going to tell you, if the decision is made on these two tracks where you decide to buy a reactor, I have got one for sale, and I just want you to be aware of that. I at least want first refusal on this thing.

  Dr. REIS. Well, you have got——

  Mr. PARKER. A reactor.

  Dr. REIS. Well, yes, I am sure we will be hearing from you, then, over the next 6 months.

MATERIALS PROTECTION, CONTROL AND ACCOUNTABILITY

  Mr. PARKER. Well, it cost way too much. You pay more than what it is really worth, but I mean, you know, that is all part of it.

  I am interested in this thing on Russia and the former Soviet Union, how much can we trust the information we have got. It seems to me that we don't have a handle on any of this; that there are so many unknowns out there, and it doesn't take but a small amount of the unknown to get us into a world of trouble.

  Mr. BAKER. Let me say this, Congressman, we think that we have worked this thing as hard as one can. [Deleted.]

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  Mr. PARKER. But you don't know.

  Mr. BAKER. This is what our intelligence has, to the best of our knowledge.

  Mr. PARKER. Well, our intelligence told us a lot about the Persian Gulf and everything else. I mean, you know, intelligence means a lot of things to different people.

  Mr. BAKER. This is one reason, sir, we are trying to protect this material at its source. You know, we are doing many things. We are not just putting fences up. We are putting radiation detection systems in, We are putting computer systems in. We are putting bar codes in. We are putting monitoring——

  Mr. PARKER. You are not doing anything that hasn't already happened, though, right?

  Mr. BAKER. No, sir.

  But the question is, do we let all of this material, 1,200 metric tons of HEU and 200 metric tons of plutonium that is over there—just when the Intelligence Committee says this is at risk of nuclear smuggling, don't we try to help the Russians fix this?

  And it has been a partnership. I have been over there many times. We have worked with them. They want our help. They do not—they did not have the automation that we had because it was guards guarding guards during the Cold War.

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  Mr. PARKER. Let me ask you a question.

  Mr. BAKER. Yes, sir.

  Mr. PARKER. Do they have a gold reserve?

  Mr. BAKER. Do they have a gold reserve?

  Mr. PARKER. Of course, they have a gold reserve. They do. Do you think they got people watching that gold so they can tell you how much gold they got?

  Somewhere along the way—you know, we got people watching. We have pretty close tabs on it. People do what they want to do. Every time one of my kids asks, I say, ''Son, people do what they want to do.'' When people come up to me and say, after the election, I didn't support you, fine, but people do what they want to do.

  The point is the former Soviet Union, Russia, they put emphasis where they want to put emphasis. I am very much concerned about that.

  I am not saying that we shouldn't move forward. I have voted consistently to put money in this and be able to go over there and do what they have not been able to afford to do and what they have not cared to do in our best interests. I want to make the right decision.

INACTIVE RESERVE

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  [Deleted.]

  Dr. REIS. That is correct.

  Mr. PARKER. The top part was dark blue and inactive. The bottom was light blue and it was active.

  [Deleted.]

  Dr. REIS. That is correct.

  Mr. PARKER. How much of this $4 billion as far as continuation and of the $40 billion do we—we have to do something to maintain the inactive.

  Dr. REIS. [Deleted.]

  Mr. PARKER. [Deleted.]

  Dr. REIS. It is a little hard to separate one from the other. As far as we are concerned in the Department of Energy.

  Mr. PARKER. You have to look at both of them?

  Dr. REIS. Yes, we have to look at both of them because as part of the strategy what is inactive may change. They have to be ready.

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  Mr. PARKER. This is going to simplify it for me. This is a simple statement. [Deleted.]

  Dr. REIS. No, it doesn't.

  Mr. PARKER. How much does it take to destroy the world?

  Dr. REIS. I think the argument is how many does it take to avoid nuclear war. That is the right question.

  Mr. PARKER. [Deleted.]

  A bureaucracy is a self-perpetuating entity and as—I am not talking about as a Congressman—as an American citizen, I have seen through the years where this bureaucracy has been perpetuating itself. I am not talking about DOD and DOE; I am talking about everything, perpetuating itself. [Deleted.]

  I mean, there comes a point when dead is dead and I mean—and I know the former Soviet Union, Russia, has got more than we have got, but at the same time I mean there comes a point where you cut it off.

  Would you like to respond to that?

  Dr. SMITH. First of all, I want to say that Dr. Reis should not be the brunt of the questioning that the DOD is responsible for.

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  Mr. PARKER. I told you I loved all of you. I didn't want you to feel you were the brunt of anything.

  Dr. REIS. I feel perfectly comfortable, but the Department of Defense sets that number and our job is to——

  Mr. PARKER. To meet the number

  Dr. REIS. To meet the number.

  Mr. PARKER. Dr. Smith, what is the problem?

  Dr. SMITH. I feel loved as well.

  The fact is we are maintaining the lead and hedge strategy. The fact is there are two large bureaucracies, Russia and the United States, but there is another factor I want to consider is the size of the arsenal has dropped precipitously over the last few years and if the negotiations which are a function of the Department of State are successful, and I personally think they will be, the number of warheads will continue to drop. But for the time being——

STOCKPILE SIZE

  Mr. PARKER. Wait now, the number of warheads that are active will continue to drop?

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  Dr. SMITH. No, we can look forward to a future I think where the number of warheads, active and inactive, will drop. That will certainly be the case if START III comes to fruition, as it has been seriously discussed at the highest levels of government. But in the interim, Russia has not ratified START II, and therefore, I think the Department of Defense is quite sensible in ensuring that we have an active plus inactive stockpile enough to meet the START I conditions which has been ratified by Russia.

  I feel comfortable both with the strategy and the resultant requirements we have given DOE, and as a citizen I also feel comfortable with the rate they have been coming down, and I look forward to a future where they will continue to come down.

  Mr. PARKER. Let me say, I don't want to do anything from a unilateral nature. The biggest problem I have is that we have no idea; we have got some guesses but we don't know for sure everything Russia has got.

  We don't know what they have in place from the standpoint of a lot of nuclear materials. That just scares me. We should know more.

  I realize that it is not your function to know some of that. Our intelligence should have picked that up in the past, but I am a little disappointed in our intelligence, too, and our lack of intelligence. In both meanings.

  Mr. BAKER. I can't quote on the lack of intelligence. I think it has been fairly good, sir, but I tell you one thing, when I go home at night and look at my wife and my kids and I know how easy it is to get some nuclear material and how easy it is that you and I could put a bomb together, just pull a book, if we got plutonium and we got highly enriched uranium, we would put one together in a short time. It may be crude but it would absolutely wipe out this town.

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  That is why we have got to do everything we can to do what we know, and we may not know everything, but to do what we know in Russia. I couldn't even—I couldn't even go home and tell my family how loose that stuff is over there. It would scare the American public if you tell them.

  We have got to do something about it, and we are doing everything we can I think that we know to get this done. We have men working nights, days, weekends and everything else. [Deleted.]

  When you look at your family, it really comes home that if one ever goes off somewhere, and believe me, I think—I used to be in the war-planning business, war-planning advisor to the President for years. We wrote the book: Here are your options, Mr. President, here is what you can do. I did that for 5 years.

  I tell you right now my personal opinion, just like Jim Woolsey's personal opinion, there is a higher probability of a nuclear weapon going off today than there was back in the Cold War just because of this loose nuclear material.

  It scares me to death when I got a family and small kids and small grandkids, also.

  Mr. PARKER. I want you to know you helped my feelings a lot. Mr. Chairman.

  Mr. MCDADE. We thank the gentleman for his very useful questioning.

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  Gentlemen, we are—you will not be surprised to hear—going to submit to you a series of questions we want you to answer in detail and with specificity for the record. We do not expect to have you back again. If that eventually is required, we will let you know.

  We thank you very much for your very useful testimony. Thank you.

  We will recess, subject to the call of the Chair.

  [The prepared statement of Mr. Howard Canter and the questions and answers for the record follow:]

  "The Official Committee record contains additional material here."

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