Mr. Chairman, and members of this committee for inviting me to testify before you here today. I would like to express my appreciation to Senator Biden for agreeing to hold this hearing and for the foresight he has shown in keeping the Senate focused on long-term threats, even as we deal with the foreign policy crises of the moment in Iraq and elsewhere.

I would also like to acknowledge my good friend and colleague from Indiana, Senator Lugar, whose leadership on nonproliferation issues is unmatched in this chamber. I feel fortunate to have had the opportunity to work on legislation in this area with Senator Lugar and only wish that every state’s delegation enjoyed the kind of warm and productive relationship that we have been able to forge in our time together in the Senate.

Mr. Chairman, the 21st century has ushered in with unprecedented global demand for energy. This increase is the result of economic expansion in the United States, in the industrial economies of Europe and Japan, and from emerging countries like India and China.

Given the rapid rates of growth in the developing world, prices for traditional sources of energy are likely to remain high. Supplies of oil, gas, and coal are finite, so countries will be looking elsewhere to secure stable, affordable sources of energy. Nuclear power is an obvious place to look.

Environmental factors will reinforce this trend. Energy derived from fossil fuels contributes to global climate change. Electricity generated by nuclear power, on the other hand, does not produce pollutants like sulfur or mercury or greenhouse gases like carbon dioxide. While alternative energy sources like wind, solar, and geothermal show great promise, it is unlikely they will be sufficient to satisfy expanding global electricity needs in the near term. For example, total world energy demand is expected to double by 2050, so there will be both strong economic and environmental incentives for countries to examine the nuclear option.

Increased use of nuclear power will mean new nuclear facilities and material in the possession of many new states over the coming decades—exponentially raising the risk of fissile material being acquired by rogue nations or terrorist groups. According to our latest public intelligence assessments, terrorist organizations continue to pursue the acquisition of a nuclear device and would not hesitate to use it.

We must ensure that the International Atomic Energy Agency has the necessary resources and technology to cope with this expansion of civilian nuclear power and safeguard against dangerous proliferation.

We must also ensure that this increased demand for civilian nuclear energy does not become a subterfuge for rogue nations seeking to acquire a nuclear military capability. Regrettably, that is precisely what is happening today in Iran.

Because Iran claims to be enriching uranium for civilian uses, the current global regulatory structure allows Tehran to walk up to the threshold of a nuclear bomb. This is dangerously naïve. North Korea used precisely the same tactic to realize its nuclear ambitions, and we are perilously close to seeing history repeat itself—this time with a nation actively supporting terrorist groups and deeply hostile to the United States.

Once this genie gets out of the bottle, there is no putting it back. At a minimum, allowing Iran to obtain a nuclear warhead would be a regionally destabilizing event certain to spark a Middle East arms race. At worst, it would be a global security catastrophe in which Tehran obtains the means to blackmail its European neighbors and threaten Israel’s destruction.

This gaping loophole in the Nuclear Nonproliferation Treaty must be closed. The Lugar-Bayh Nuclear Safeguards and Supply Act of 2007 begins to do just that. The Lugar-Bayh Act passed out of this committee unanimously last month. It makes it the official policy of the United States to discourage the development of enrichment and reprocessing capabilities. It also requires the President to begin exploring the creation of an International Nuclear Fuel Bank.

Our legislation would authorize the President to negotiate bilateral and multilateral mechanisms to assure that nations seeking civilian nuclear power have a reliable and affordable supply of nuclear fuel for peaceful purposes. In return, countries must agree to forgo enriching uranium themselves and submit to rigorous IAEA inspections of their civilian reactors to guard against North Korean and Iranian-style cheating.

This approach makes both economic and national security sense. We have learned a lot about the economics of nuclear power since the Nonproliferation Treaty was negotiated more than three decades ago. Enrichment is expensive, as is disposal of nuclear waste. It is not economical for nations desiring civilian nuclear power to enrich their own fuel. There is an enormous surplus of uranium in existing enrichment facilities worldwide. Due to bigger economies of scale, it is now much cheaper for countries lacking enrichment capacity to purchase fuel from a central repository than to enrich and reprocess themselves.

An international nuclear fuel bank would provide affordable nuclear fuel to countries genuinely interested in pursuing civilian nuclear power. It would allow countries to draw fuel for use in their own civilian nuclear reactors and then return the spent fuel for safe oversight by the IAEA. The approach advocated by Senator Lugar and I would reduce the potential for proliferation of fissile materials—and reduce the prospect of nuclear weapons falling into the hands of the world’s most dangerous people.

Of equal importance, our approach would cut short the debate over nuclear technology rights. Every nation would have access to civilian nuclear power so long as they are willing to abide by conditions that protect global security. Countries that refuse fuel bank services will come under immediate suspicion about their weapons intentions.

For example, Iran contends that it is pursuing a civilian nuclear program to reduce domestic oil consumption conserving their reserves for sale on the global market. If true, surely Iran would leap at the opportunity for a more affordable supply of nuclear fuel. Fuel bank services would provide Iran with a faster and cheaper path toward achieving their stated objective of a purely civilian nuclear program.

Of course, if the pursuit of civil nuclear power is a disingenuous pretext—something I strongly suspect—then Tehran’s true ambitions will be revealed, making it easier to rally world opinion for more aggressive action before it’s too late. Our proposal for a civilian nuclear fuel bank minimizes the risk of inadvertent proliferation, maximizes the prospects for exposing subterfuges for intentional proliferation, and will help forge consensus for more rigorous steps should they prove necessary.

Finally, the Lugar-Bayh legislation strengthens the International Atomic Energy Agency safeguards system. The IAEA labs that examine nuclear samples collected by the international inspectors are horribly outdated. Their nuclear scientists are working with 1970s equipment amid dangerous working conditions. I was shocked to learn that the IAEA laboratory staff is actually limited in the time they can spend analyzing evidence in the nuclear area of the lab because of a dilapidated air purification system.

Our legislation makes a critical investment to see that this laboratory is refurbished. As more countries expand their nuclear power infrastructure, the IAEA laboratory will be responsible for inspecting a growing number of samples. They need first-rate facilities and modern equipment to carry out this critical work.

If the cop on the beat doesn’t have the tools to patrol the streets, then no one in the world’s nuclear neighborhood will be safe.

Too often in Congress, we wait for crises to develop before taking action. In a pre-nuclear age, perhaps we could get away with this type of reactive posture—but we are living in a different era today. We cannot afford to be complacent when it comes to preventing the spread of nuclear weapons. The consequences of delay or inaction in confronting this threat could have dire repercussions both for ourselves and for our children.

I urge all of my colleagues to support the Lugar-Bayh bill, as this committee unanimously has, and hope we can bring this important legislation to a vote when we return from our August recess. Thank you, Mr. Chairman.