No. S-07-017

“Looking Back, Looking Forward: Trends in Nuclear Energy”

Remarks Prepared For
Dr. Dale E. Klein
Chairman
U.S. Nuclear Regulatory Commission

at the

Nuclear Energy Assembly
Miami, Florida

May 25, 2007

I am very pleased to be here for this important conference. The fact that there are so many attendees here to listen to me speak at this relatively early hour is pretty solid evidence that the Nuclear Renaissance is genuine, and indeed thriving.

Speaking of nuclear power’s renaissance—a word that a simple Texan like me never used until I got to the NRC—I attended a dinner a few weeks ago honoring Pete Domenici, and I was asked to say a few words. I mentioned that the Senator has good reason to be proud of what he has accomplished in the energy field—especially nuclear energy. But as I pointed out at the dinner, some of his achievements, such as the Energy Policy Act of 2005, are making life fairly difficult for the NRC! For instance:

o We’ve been told by many of you here this morning to expect license applications for 28 new reactors in the next two years... and every day Luis Reyes warns me to prepare for an even higher number.

o To do that, we had to create an entirely new inspection office in Atlanta.

o We are scrambling to increase our workforce by a net of 600 employees.

o We urgently need 120,000 more square feet of office space at our headquarters.

o With uranium at $100 a pound, we are hearing from a dozen companies expressing an interest in new mining operations in the U.S.

o We are dealing with a huge increase in public inquiries from people wanting more information about the expansion of nuclear power.

o Congress has also heightened its interest in our activities and our plans.

o Our office in charge of international programs is in overdrive to deal with the fact that nuclear energy has become, in almost every respect, a multinational business.

o And all of that is on top of our regular workload of overseeing the safety of the 104 plants already operating in the U.S. and a large number of licensees using radioactive materials.

o So as I told the Senator: “You’ve done enough; please slow down!”

I was joking, of course. And fortunately for me the Senator has a good sense of humor. But there was also a kernel of truth in my plea that the enthusiasm for building new plants should not get too far ahead of reality. In other words, I hope that those of you in industry understand the need to be careful about managing expectations regarding the future of nuclear power. Let me put it this way: I suspect that one or two holes of golf may have been played here over the last few days. Now, I don’t play golf myself, but even I know that the game is not about hitting the ball as hard as you can. There’s more to it than that. Making a good shot involves planning, patience, foresight, and even a bit of finesse. By the same token, it seems obvious that similar qualities are needed to manage the growth—and the expectations—regarding nuclear energy. It is not just a matter of “hitting it as hard as you can.”

One important point I hear discussed is that the expansion of nuclear power would enhance the nation’s energy diversity – which is a theme that Sam Bodman at the Energy Department talks about all the time. But the justification for energy diversity is to prevent the nation from becoming overly dependent on any one source of power. So it is important for everyone to understand that as nuclear energy appears to be moving in the direction of becoming a larger part of the mix in the nation’s energy supply, it is still just one part of the overall balance.

Now, since you were kind enough to invite me down here, and also got up early to hear me speak, let me return the favor as best I can and offer you some more free advice!

But first – since it has been almost one year since I became NRC Chairman – I thought I might take a moment to reflect on the last 11 months or so… and then look ahead to see what is taking shape in the future.

In reviewing my time on the Commission, I have identified four areas that I think deserve special attention. Looking forward over the near term, I have five observations. Winston Churchill once said that “the future is imminent, though obscure,” so I need an extra point to deal with the future.

All of the things I plan to mention will be brief, however, because I want to leave time for questions. First, when I came to the Commission and had a chance to look around, I realized there were two things I had to focus on. One was directed to the outside world—to all of you, of course, but also to Congress, other stakeholders, and the American people. That was the need to reaffirm the NRC’s commitment to being a strong, stable, predictable regulator. I have made this point repeatedly in my public remarks. We want our licensees to have a reasonable expectation of timely regulatory decisions based on good science and high-quality engineering practices. We need to be clear that we will hold our licensees accountable; but we will also articulate our requirements clearly. And frankly, given the limits on what can be accomplished in one year, I think we have done a good job of reaffirming that commitment.

The second priority I had was directed inward. At the NRC we hold our licensees up to a high standard of modern business and engineering practices, as well as technological excellence. So I thought it was important for the staff to understand that we need to do a better job of living up to a higher, more modern standard ourselves. One thing that struck me immediately was how antiquated our computing and communications technology was. I considered this a symptom of the larger need for the agency to modernize.

One of my in-house priorities, therefore, was to focus on updating the agency’s infrastructure. The events of September 11, 2001, led the agency to divert resources from infrastructure improvements to higher-priority security enhancements for a few years. We have now achieved a stable regulatory environment in the post-9/11 world and it is time to focus once again on infrastructure improvements. Just to illustrate how far out of step the agency had fallen on information technology, only this past year did we issue Blackberries to the senior staff. We are also in the midst of transitioning to the Microsoft Office Suite, which is today's business standard.

But, as I said, these upgrades are really just a symptom of a larger need to modernize our business practices, and develop an adequately sized workforce with the proper space, training, and equipment. Given the expanded workload we are facing, in addition to ordinary employee turnover, we will have 1,200 new people at the NRC headquarters by 2009—which is nearly one-third of our entire workforce. And once we have trained and equipped all these people, we are going to work hard to keep them.

Now, none of these things I have mentioned would have been possible if we did not receive full funding of our budget from Congress. That’s point number three.

I would like to congratulate my fellow Commissioners, our offices of Congressional Affairs and Public Affairs, and our senior managers – as well as many of you from industry, who acted on your own initiative and independently helped to persuade Congress to support the NRC’s critical work. Let me take this occasion to thank all of you who helped to make that happen. If that issue had not been successfully resolved, I would probably be up here this morning talking about how the Commission is re-prioritizing its activities—which is something I know you would not want to hear.

In addition to the achievements we can point to, we have had our share of controversies – which is my fourth point. One of the first issues I confronted was the debate over unmonitored tritium releases. In response, we formed a Task Force to carefully study the matter, and released a report in October of 2006 which made several recommendations, and found that unmonitored releases of radioactive liquids from power plants had no significant impact on public health. Other controversies have not been resolved as successfully.

We attempted over the last year to explain why Independent Safety Assessments were a useful tool in the past but are no longer relevant today, given the NRC’s updated oversight procedures. However, as you all know, the matter of ISA’s is still with us. Another issue that has re-emerged is Davis-Besse.

And of course some controversial issues are still being discussed, such as the question of aircraft impacts on new reactor designs. It is my hope that this will be settled in a reasonable manner that meets the NRC’s high standards for nuclear safety and security.

So, all in all, it’s been an interesting 11 months!

Now let me look ahead for a moment, and mention five topics that I think deserve special attention in the near future. First and foremost, I feel confident in saying that whatever bottlenecks may slow down the building of new plants, the NRC licensing process will not be one of them. Notwithstanding the challenges I just outlined, our staff is highly professional, motivated, and dedicated. And in case you missed the announcement, we are the “Best Place to Work” in the federal government. So we will do our job, and we will do it well.

Of course, making the process work smoothly is a two-way street. That is my second topic. As I have said many times in my public statements, a quality application for a Combined Operating License, license renewal, design certification or anything else takes less time to review than a bad one. Quality and clarity of submissions will equal timeliness in NRC regulatory reviews. And I should add that “high-quality” in this sense also means a complete application.

My third subject is something that I know my fellow Commissioners believe in and have said before – which is this: owning a commercial nuclear reactor is not a business for amateurs. If the nuclear power business is treated with less than the seriousness it deserves – and people begin to think that anyone can just jump on the nuclear bandwagon – it opens up the very real danger of making the “wave” of the nuclear resurgence look more like a “bubble.” And bubbles have a tendency to pop. It is not my function as a regulator to tell industry how to manage its capital investments or construct its business models. As a regulator, however, I do have a legitimate interest in seeing that the “captains” of the nuclear energy industry have a proper appreciation for the technical, engineering, and security challenges involved in operating commercial nuclear reactors. So when I observe utilities spinning off their nuclear energy components, or see plans for changes in the ownership of nuclear power companies, I think it is worth reiterating the basic point that the nuclear energy business is in many ways unique, and should be treated as such. Highly qualified technical leadership will continue to be essential – and so it needs to be developed and maintained.

My fourth topic is actually a point that Jeff Merrifield has made very incisively over the years, which I would like to share with all of you-- and that is the self-interest you all have in working cooperatively with your counterparts in other countries. I want to urge all of you this morning to appreciate how important this is – especially in regard to developing nations that possess nuclear technology. I know that some, but not all of you, are active in the World Association of Nuclear Operators. If you are not already, I hope you will at least consider the importance of organizations such as WANO in light of the fact that nuclear energy will only become more—not less—international in the future.

As I am sure you know, three-quarters of the world’s reactors are of U.S. origin in construction or design. Therefore, a significant nuclear incident anywhere in the world would have inescapable consequences for the commercial nuclear energy sector here at home. So it seems to me that you have a bottom-line interest in helping ensure that the global expansion of nuclear energy proceeds in a way that promotes safe construction and operation.

This needs to be a priority for industry and regulators, and it is something that was discussed at length at the meeting of the International Nuclear Regulators Association I just attended in Spain. There are some good international efforts already under way, such as the Multinational Design Evaluation Program. As you know, MDEP is an effort to leverage knowledge and experience on power plant design, and promote global convergence in associated codes, standards, and regulations. In the security arena, I would like to see us move toward increased standardization in the establishment of common threat parameters, and even beyond that. But, as I said, these efforts must be a focus of both industry and regulators. For my final topic, I would remind you of what might seem like an obvious point: Utilities need to have a communication plan… with state and local governments, and of course with the NRC. If you have been reading the trade publications you will see how important it is to maintain open and honest lines of communication. Again, it is not my place to tell you how to do this, but I think it is worth reiterating how important it is to have a clear and effective communications plan. That was topic five--which means I am done, except for this final word.

I am always careful to note that as a regulator I cannot be an advocate for or against commercial nuclear energy. And while that is unquestionably true, it is also true that you and I share the same ultimate goal: the safety and security of nuclear power plants and materials.

These critical goals of safety and security require each of us to fulfill our separate but complementary responsibilities. For our part, the NRC will be a strong and independent Commission; and we will continue developing the needed framework of regulatory stability. In turn, we expect that the manufacturers, builders, and operators of current and future plants will meet their obligations to the public as well. In this way, with all of us doing our jobs, nuclear energy will continue to play a valuable role in our nation’s energy future. Thank you for your attention. I will be happy to take some questions.

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Monday, July 16, 2007