<DOC> [109th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:21364.wais] THE ROLE OF NUCLEAR POWER GENERATION IN A COMPREHENSIVE NATIONAL ENERGY POLICY ======================================================================= HEARING before the SUBCOMMITTEE ON ENERGY AND RESOURCES of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS FIRST SESSION __________ APRIL 28, 2005 __________ Serial No. 109-25 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform ______ U.S. GOVERNMENT PRINTING OFFICE 21-364 WASHINGTON : 2005 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512ÿ091800 Fax: (202) 512ÿ092250 Mail: Stop SSOP, Washington, DC 20402ÿ090001 COMMITTEE ON GOVERNMENT REFORM TOM DAVIS, Virginia, Chairman CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California DAN BURTON, Indiana TOM LANTOS, California ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois CHRIS CANNON, Utah WM. LACY CLAY, Missouri JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland DARRELL E. ISSA, California LINDA T. SANCHEZ, California GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland JON C. PORTER, Nevada BRIAN HIGGINS, New York KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of LYNN A. WESTMORELAND, Georgia Columbia PATRICK T. McHENRY, North Carolina ------ CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont VIRGINIA FOXX, North Carolina (Independent) ------ ------ Melissa Wojciak, Staff Director David Marin, Deputy Staff Director/Communications Director Rob Borden, Parliamentarian Teresa Austin, Chief Clerk Phil Barnett, Minority Chief of Staff/Chief Counsel Subcommittee on Energy and Resources DARRELL E. ISSA, California, Chairman LYNN A. WESTMORELAND, Georgia DIANE E. WATSON, California ILEANA ROS-LEHTINEN, Florida BRIAN HIGGINS, New York JOHN M. McHUGH, New York TOM LANTOS, California PATRICK T. McHENRY, North Carolina DENNIS J. KUCINICH, Ohio KENNY MARCHANT, Texas Ex Officio TOM DAVIS, Virginia HENRY A. WAXMAN, California Lawrence J. Brady, Staff Director Dave Solan, Professional Staff Member Lori Gavaghan, Clerk Richard Butcher, Minority Professional Staff Member C O N T E N T S ---------- Page Hearing held on April 28, 2005................................... 1 Statement of: Jones, Donald, vice president and senior economist, RCF Economic and Financial Consulting, Inc.; Marvin Fertel, senior vice president for business operations, Nuclear Energy Institute; and Patrick Moore, chairman and chief scientist, Greenspirit Strategies LTD...................... 8 Fertel, Marvin........................................... 17 Jones, Donald............................................ 8 Moore, Patrick........................................... 42 Letters, statements, etc., submitted for the record by: Fertel, Marvin, senior vice president for business operations, Nuclear Energy Institute: February 2005 public opinion............................. 116 Prepared statement of.................................... 22 Issa, Hon. Darrell E., a Representative in Congress from the State of California: Constituent survey....................................... 105 Study of University of Chicago........................... 63 Prepared statement of.................................... 3 President Bush's remarks of April 27, 2005............... 97 Jones, Donald, vice president and senior economist, RCF Economic and Financial Consulting, Inc., prepared statement of......................................................... 11 Kucinich, Hon. Dennis J., a Representative in Congress from the State of Ohio, prepared statement of................... 35 Moore, Patrick, chairman and chief scientist, Greenspirit Strategies LTD, prepared statement of...................... 46 Watson, Hon. Dianne E., a Representative in Congress from the State of California, prepared statement of................. 39 Westmoreland, Hon. Lynn A., a Representative in Congress from the State of Georgia, prepared statement of................ 58 THE ROLE OF NUCLEAR POWER GENERATION IN A COMPREHENSIVE NATIONAL ENERGY POLICY ---------- THURSDAY, APRIL 28, 2005 House of Representatives, Subcommittee on Energy and Resources, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 2247, Rayburn House Office Building, Hon. Darrell E. Issa (chairman of the subcommittee) presiding. Present: Representatives Issa, Westmoreland, Watson, Higgins, and Kucinich. Staff present: Larry Brady, staff director; Lori Gavaghan, legislative clerk; Dave Solan, Ph.D., Steve Cima, and Chase Huntley, professional staff members; Richard Butcher, minority professional staff; and Jean Gosa, minority assistant clerk. Mr. Issa. Good morning. My opening statement always says, ``A quorum being present.'' It takes two for a quorum here, so we will skip that line. I have an opening, and I am going to put it in the record and be very brief. If the ranking member arrives before we begin testimony, that would be better. However, I don't want to abuse you of your time, and I definitely want to very much hear what you have to say and get to questioning. I can assure you we have had enough members respond that they will be here for Q&A, which seems to be the direction that Members prefer. So we will get to that as quickly as possible. The reason for this hearing today is that our Nation's electricity demand continues to rise while, in fact, production from nuclear sources does not. According to the Department of Energy, 41 new 1,000 megawatt nuclear plants will be needed by the year 2025 just to maintain nuclear power's 20 percent share of our Nation's electricity generation. However, there hasn't been a new nuclear power plant built in three decades. There are none presently licensed to be built, and without re- licensing, or essentially extensions of their lives, a significant amount of capacity will go offline by 2025. The growth in electricity demand, coupled with the retirement of older generation plants, means the Nation will need 281 million kilowatts, to put it in kilowatt terms, of new generation capacity--enough to power the State of California, which, of course, is the world's sixth largest economy if it were a separate nation. I always get that into every one of my opening lines, as a Californian. I think it is important that we hear from you today about the role that nuclear power should play in America's future because we have oversight and because we are steering ourselves into a train wreck. And I think if there is any message that I would like to hear today, it would be what are the ramifications of our not acting. And as each of the distinguished individuals and I were talking about earlier, I think we also touched on the areas of global warming and our participation in it, and I hope that that will also come up. [The prepared statement of Hon. Darrell E. Issa follows:] [GRAPHIC] [TIFF OMITTED] T1364.001 [GRAPHIC] [TIFF OMITTED] T1364.002 [GRAPHIC] [TIFF OMITTED] T1364.003 [GRAPHIC] [TIFF OMITTED] T1364.004 [GRAPHIC] [TIFF OMITTED] T1364.005 Mr. Issa. Now, if I can just briefly introduce our guests. Donald Jones is vice president and senior economist at RCF Economics, a financial consulting firm in Chicago. In 2003 and 2004, he co-directed the study at the University of Chicago on the economic future of nuclear power in the United States. It couldn't have been more timely. Marvin Fertel is senior vice president of business operations and chief nuclear officer at the Nuclear Energy Institute. Mr. Fertel has over three decades experience--which means you actually remember when they last built a nuclear power plant--in consulting through electrical utilities on issues related to designing, siting, licensing, and managing both fossil fuels and nuclear power plants. Last, and very important to me personally, and I thank you for being here, Dr. Patrick Moore has been a leader in the international environmental field for over 30 years. He is a founding member of Greenpeace and served 7 years as a director of Greenpeace International. In 1991, Dr. Moore founded Greenspirit Strategies, a consultancy focusing on environmental policy and communications. With the indulgence of the minority staff, what we will do is return to the ranking member's opening statement upon her arrival, according to the rules. With that, Mr. Jones, I would really appreciate if you would lead off. For all the witnesses, your testimony will be put into the record. And as is this policy of this committee, if I could ask you each to raise your hands and be sworn, if that is acceptable. [Witnesses sworn.] Mr. Issa. Please indicate that all have said I do. Thank you. Mr. Jones. STATEMENTS OF DONALD JONES, VICE PRESIDENT AND SENIOR ECONOMIST, RCF ECONOMIC AND FINANCIAL CONSULTING, INC.; MARVIN FERTEL, SENIOR VICE PRESIDENT FOR BUSINESS OPERATIONS, NUCLEAR ENERGY INSTITUTE; AND PATRICK MOORE, CHAIRMAN AND CHIEF SCIENTIST, GREENSPIRIT STRATEGIES LTD STATEMENT OF DONALD JONES Mr. Jones. Good morning, Mr. Chairman, members of the Subcommittee on Energy and Resources of the House Committee on Government Reform. I am Donald W. Jones, vice president of the RCF Economic and Financial Consulting, an economic research firm in Chicago which conducts analysis of energy and environmental issues, as well as other economic topics. Together with Dr. George S. Tolley, professor emeritus of economics at the University of Chicago, I co-directed the University of Chicago study of the economic future of nuclear power in the United States. My comments today are based on the findings of that study. I have been asked to address the issue of policies that would be needed to foster the development of nuclear power and maintain a 20 percent nuclear share of electricity generation by 2020. Because no construction has begun on a new nuclear plant in the United States since 1973, a number of uncertainties surround the construction of the first few new plants: the success of the new licensing procedure, the construction time, and the delivered cost of the new reactor designs. Uncertainty in an investment raises the cost of capital to a risky project so as to keep the expected rate of return at a level required by the capital market. These uncertainties raise the cost of generating electricity from these plants above levels that would be competitive with electricity generated by coal- and gas-fired plants. Our calculations indicate that the first new nuclear plants could deliver electricity at costs of $53 to $71 dollars per megawatt hour, depending on reactor design and capital cost, while coal- and gas-fired plants would cost from $33 to $45 per megawatt hour. The majority of these uncertainties could be resolved after the construction of the first several plants, and assuming they are resolved satisfactorily, the nuclear costs would fall well within the range of fossil-generated costs by the fourth or fifth new plant of a given design. Table 1, to my right front, shows the progress of nuclear generation costs over the first eight plants of a reactor design with a capital cost of $1,500 per kilowatt of capacity. Learning and construction is assumed to reduce capital costs by 3 percent for each doubling of plants built, which is a conservative estimate of this learning effect according to United States and international experience. The generation costs in the right-most column of the table indicate that by the fourth or fifth new plant of this design, generation costs fall to $34 to $36 per megawatt hour, which is competitive with fossil-fired generation costs of $33 to $45 per megawatt hour. The nuclear plant's cost reductions derive from pay-off of first-of-a-kind-engineering [FOAKE], costs borne only on the first plant, shortening of construction time, investors' gaining the confidence needed to eliminate the risk premium and permit higher portions of debt financing, and learning in manufacturing and construction. The first problem to be solved is getting from the first plant to the fourth plant. The Chicago study examined four financial assistance policies applied separately and in various combinations: a production tax credit equivalent to that currently offered to renewable energy development, an investment tax credit, accelerated depreciation, and loan guarantees. Table 2, to my left, reports the generation costs on a first plant achieved by each of these policies. An effective combination is a 20 percent investment tax credit and a production tax credit of $18 per megawatt hour for 8 years with a cap of $125 million per plant per year. These would bring the cost of the first plants within the competitive range of coal- and gas-fired plants. Policies such as these should be needed only for the first four or five plants because of the cost reductions that can be expected after the first plant. An important policy influencing the cost of new nuclear plants is the Nuclear Regulatory Commission's licensing procedure. The new process codified in 10 CFR Part 52 permits resolution of many of the uncertainties surrounding the construction and commissioning of a new nuclear plant prior to the times when major financial commitments must be made. Hopes are high for its successful implementation, but the system remains to be tested. Several comparisons of generation costs illustrate the importance of this new procedure. Licensing that shortens construction time by 2 years and gives investors the confidence to reduce the risk premium on nuclear financing to the level on fossil-fired projects could reduce the generation cost of eight plants by 25 to 48 percent. Eliminating construction delays also has a significant effect on costs: a 2-year delay in the middle of a construction period would raise generation costs by 11 percent, while a similar delay at the end of construction would raise costs by 23 percent. The methodology of these calculations is reported in detail in the published report of the study, the Economic Future of Nuclear Power; A Study Conducted at the University of Chicago, dated August 2004. Although it was not part of the formal study, our study team reviewed the subcommittee's question regarding what would be required to maintain the 20 percent contribution nuclear energy makes in meeting over electricity demand by 2020. According to projections of the growth of electricity generation capacity needed to satisfy demand growth, two to four new nuclear plants could need to come on line each year between 2015 and 2020 if the nuclear share of electricity generation is to remain at 20 percent. This could amount to a total of 15 to 24 new plants, of 1,000 megawatts each, over a period of 6 years. One important point emerging from these numbers is that the number and pace of new plants is large enough to permit 5 to 10 percent cost reductions from learning by the fourth and fifth plants of a given type, which would be of considerable value in making those plants competitive. Thank you very much, Mr. Chairman and subcommittee members. This concludes my written statement, and I would be happy to answer any questions you might have. [The prepared statement of Mr. Jones follows:] [GRAPHIC] [TIFF OMITTED] T1364.006 [GRAPHIC] [TIFF OMITTED] T1364.007 [GRAPHIC] [TIFF OMITTED] T1364.008 [GRAPHIC] [TIFF OMITTED] T1364.009 [GRAPHIC] [TIFF OMITTED] T1364.010 [GRAPHIC] [TIFF OMITTED] T1364.011 Mr. Issa. Thank you. Mr. Fertel. STATEMENT OF MARVIN FERTEL Mr. Fertel. Thank you, Chairman Issa. I am Marvin Fertel. I am senior vice president and chief nuclear officer at the Nuclear Energy Institute. And on behalf of our members, I thank you for the opportunity to be here today. NEI is responsible for developing policy for the U.S. nuclear industry. Our organization's 270 member companies represent a spectrum of interests, including every U.S. energy company that operates a nuclear power plant. America's 103 nuclear power plants are right now the most efficient and reliable in the world. Our nuclear energy is the largest source of emission-free electricity in the United States and our second largest source of electricity overall after coal. Nuclear power plants in 31 States currently provide electricity for one of every five U.S. homes and businesses. Given these facts and the strategic importance of nuclear energy to our Nation's energy security and economic growth, NEI encourages Congress to maintain policies that ensure continued operation of our Nation's operating plants, and to provide an impetus required to expand emission-free nuclear energy as a vital part of our Nation's diverse energy mix. Last week, the House of Representatives demonstrated strong support for nuclear energy's role when it passed H.R. 6. This morning, I would like to address three major areas: first, the strategic value of nuclear power plants as a source of safe, reliable, and stable electricity; second, industry initiatives to ensure continued operation of today's nuclear plants; and, third, the importance of strong congressional oversight to ensure effective and efficient implementation of the Federal Government's responsibilities that affect nuclear energy programs. As I mentioned, nuclear power represents 20 percent of U.S. electricity power today. It did 10 years ago also. And basically over that period we have increased demand for electricity in our country by 25 percent. We are able to maintain our market share thanks to dramatic improvements in reliability, safety, and productivity of our current fleet of plants, which today operate at about 90 percent capacity, which means they are on line and operating 90 percent of the time, 24 hours a day, 365 days a year. Improved productivity at our plants have satisfied 20 percent of the growth in electricity demand over the last decade. Nuclear power serves a number of other important national needs. First, nuclear power plants contribute to the fuel and technology diversity that is the core strength of the U.S. electricity supply system. Our position is that we need nuclear, coal, renewables, gas, and any other source, and you just have to have the right mix and use them for the right purposes. Second, nuclear power plants provide future price stability that is not available from electric generating plants fueled, say, with natural gas and, in today's market, with coal. Intense volatility in natural gas prices over the last several years is likely to continue thanks partly to unsustainable demand for natural gas from the electric sector. Nuclear plants reduce the pressure on natural gas supply, thereby relieving cost pressures on other non-electric uses for natural gas where you don't have alternative fuel sources. Third, nuclear power plays a strategic role in meeting U.S. clean air goals and the Nation's goal of reducing greenhouse gas emissions. Without our current nuclear plants, greenhouse gas emissions from the electric sector would be 30 percent higher today. New nuclear power plants reduce electricity that otherwise would be supplied by oil-, gas-, or coal-fired generating capacity, and thus avoid the emissions associated with that fossil-fueled capacity. Overall, we believe nuclear power represents a unique value proposition. It provides large volumes of electricity cleanly, reliably and safely, and, most importantly, also affordably; it provides future price stability and serves as a hedge against price and supply volatility; and nuclear plants have valuable environmental attributes and they help preserve our Nation's energy security. These demonstrated characteristics of why nuclear power has such strategic importance in our overall U.S. energy policy. The 103 operating plants are valuable today. The chairman mentioned renewing licenses, and what I would like to say is we are actually making very good progress on that. Two-thirds of the 103 units have either renewed their license, announced they are going to renew their license, or are in the process of getting reviewed, and our expectation is that every 1 of the 103 plants will renew their license. They are licensed for 40 years. The NRC can renew the license for another 20 years after their reviews, and, to be honest, they can renew it for 20 years after that if you wanted to do that. Despite the dramatic gains in reliability and productivity at our operating plants, there are obvious limits to how much additional electricity they can produce, so meeting the Nation's growing demand for electricity, which according to the Energy Information Administration will require between 230,000 and 330,000 megawatts additional by 2025, we believe will require the construction of new nuclear plants in this country. New plants would provide Americans with low-cost, safe, and reliable electricity; would bring long-term price stability to electricity; and prevent the emission of air pollutants and greenhouse gases. In addition, new plant construction would create thousands of skilled, high-tech jobs and help us rebuild our manufacturing facilities in this country, which we have lost. A program of a new nuclear plant construction is absolutely necessary for the United States to regain its technological leadership in this high-tech field. The nuclear energy industry and the Department of Energy launched a program several years ago that will position the industry to build new nuclear plants when needed and when the business conditions are right. This is a comprehensive program designed to achieve the business issues, including licensing and regulatory issues mentioned by Dr. Jones, development of new plant designs and financing that could be roadblocks to new nuclear plant construction. The overall objective for this joint industry-government initiative is to ensure that new nuclear plants can be operational in the 2010 to 2020 timeframe in this country. Industry and government will be prepared to meet the demands for new emission-free base load plants in that timeframe only through a sustained focus on the necessary programs and policies between now and then. As it has in the past, strong congressional oversight will be necessary to ensure effective and efficient implementation of the Federal Government's nuclear energy programs, and to maintain America's leadership in nuclear technology development and its influence over other important diplomatic initiatives like nonproliferation. Nowhere is this more important than with the Department of Energy's program to manage the used nuclear fuel from our nuclear power plants. Continued progress toward a Federal used nuclear fuel repository is necessary to support nuclear energy's vital role in a comprehensive national energy policy. Since enactment of the 1982 Nuclear Waste Policy Act, DOE's nuclear fuel management program has overcome many challenges, and challenges remain before the Yucca Mountain facility can begin operations. But as we address these issues, it is important to keep the overall progress of the program in context. First, there is international scientific consensus that a deep geologic repository is the best solution for long-term disposition of any waste from any nuclear power facility, that is, whether you recycle it or you do a once-through fuel cycle. You still need a deep geologic repository. Second, the Bush administration and Congress, with strong bipartisan support, affirmed the suitability of Yucca Mountain for a repository in 2002. Over the past 3 years, the Energy Department and its contractors have made considerable progress providing yet greater confirmation that Yucca Mountain is an appropriate site. Third, during the past year, Federal courts have rejected significant legal challenges by the State of Nevada and others to the Nuclear Waste Policy Act and the 2002 Yucca Mountain suitability determination. In the coming year, Congress will play an essential role in keeping this program on schedule by taking steps necessary to provide increased funding for the project in fiscal year 2006 and years beyond. The industry urges the Congress to support the administration's proposal to change the funding mechanism for the Yucca Mountain program so that consumer payments to the Nuclear Waste Fund can be used only for the project and excluded from traditional congressional budget caps. Although the program should remain subject to congressional oversight, Yucca Mountain appropriations should not compete each year for funding with unrelated programs when Congress directed a dedicated funding stream for the project. Industry also believes that it is appropriate and necessary to consider alternative approaches to the Yucca Mountain project. These alternatives could include an extended period for monitoring operation of the repository for up to 300 years or longer, other things as far as retrievability, and concepts like waste treatment and conditioning. What should be done is what is necessary to enhance safety and public confidence in the safety of the repository. Congressional oversight can also play a key role in maintaining and encouraging the transparency and stability of the Nuclear Regulatory Commission's regulatory process. Such stability is essential for our 103 operating nuclear plants and equally critical in licensing new nuclear plants. Congress played a key role several years ago in encouraging the NRC to move toward a new oversight process for the Nation's nuclear plants, based on quantitative performance indicators and safety significance. Today's reactor oversight process focuses industry and NRC resources on equipment, components and operational issues that have the greatest importance to safety. The need for regulatory stability is particularly acute today in the area of nuclear plant security. The NRC and the industry have worked hard to identify and implement new and extensive security requirements at our plants. In the 3\1/2\ years since September 11, the NRC has issued a series of requirements to increase security and enhance training for security programs. The industry has complied fully and rapidly. The industry has spent more than $1 billion enhancing security since September 11. We have identified and addressed potential vulnerabilities. Today, 3\1/2\ years after September 11, the industry is at almost the practical limits of what a private industry can do to secure these facilities. We need to fully incorporate the new significant changes into our operations and emergency planning programs, and increase our proficiency in executing the programs to meet the high expectations of the NRC. Both industry and the NRC need congressional oversight to support and encourage this kind of stability. In conclusion, the public sector, including the oversight committees of the U.S. Congress, can help maintain the conditions that ensure Americans will continue to reap the benefits of nuclear energy in the years ahead. The passage of comprehensive energy legislation that recognizes nuclear energy's contributions to meeting our growing energy demands, ensuring our energy security, and protecting our environment is an important step. Equally important, however, is the need to ensure effective and efficient implementation of existing laws, like the Nuclear Waste Policy Act, and to provide Federal agencies with the resources and oversight necessary to discharge their statutory responsibilities. The commercial nuclear power sector was born in the United States, and nations around the world continue to look to the United States for leadership in this technology and in the issues associated with nuclear power. Our ability to influence critical international policies in areas like nuclear nonproliferation depend on our ability to maintain a leadership role in prudent deployment, use and regulation of nuclear energy technologies here at home, and on our ability to manage the technological and policy challenges, like waste management, that arises with all advanced technologies. This is a broad responsibility and, in the case of nuclear energy, rests equally on the shoulders of industry, government agencies like the Department of Energy and the Nuclear Regulatory Commission, and the appropriate committees of Congress. Thank you very much for the opportunity to say this. [The prepared statement of Mr. Fertel follows:] [GRAPHIC] [TIFF OMITTED] T1364.012 [GRAPHIC] [TIFF OMITTED] T1364.013 [GRAPHIC] [TIFF OMITTED] T1364.014 [GRAPHIC] [TIFF OMITTED] T1364.015 [GRAPHIC] [TIFF OMITTED] T1364.016 [GRAPHIC] [TIFF OMITTED] T1364.017 [GRAPHIC] [TIFF OMITTED] T1364.018 [GRAPHIC] [TIFF OMITTED] T1364.019 [GRAPHIC] [TIFF OMITTED] T1364.020 [GRAPHIC] [TIFF OMITTED] T1364.021 [GRAPHIC] [TIFF OMITTED] T1364.022 [GRAPHIC] [TIFF OMITTED] T1364.023 Mr. Issa. Thank you. And, as promised, our ranking member and others have arrived, so we will go to opening statements before Dr. Moore. I would like to recognize Representative Westmoreland from Georgia, who has arrived. Representative Kucinich had to apologize, he has left his opening statement, and it will be put in the record. He had another conflict and will try to return. [The prepared statement of Hon. Dennis J. Kucinich follows:] [GRAPHIC] [TIFF OMITTED] T1364.024 [GRAPHIC] [TIFF OMITTED] T1364.025 Mr. Issa. With that, I would like to recognize our ranking member, Ms. Watson, for her opening remarks. Ms. Watson. I want to thank the Chair for holding this very important subcommittee hearing on the role of nuclear power. Most importantly, I have with me a young student. It is bring your daughter or son to work with you day. Megan Tarr is in the back. And it is important for these young people--and I have some interns from my office--to hear a discussion on power use for the future; how we can generate it, how we can care for it, how we can maintain it. So the subject of this hearing, the nuclear power generation, is a comprehensive national energy policy that is so essential, and I am very pleased that these young people will start getting themselves informed. No nuclear plants have been ordered in the United States since 1978 and more than 100 reactors have been canceled. However, the rising costs of electricity generated from natural gas and coal-fired power plants may make nuclear power and renewable energy sources relatively more competitive. It has been argued that expanded nuclear generation could help substitute for some of the demand for natural gas. Electricity is a major contributing source to the increased demand for natural gas. In contrast to oil, uranium, the key fuel source for nuclear reactors, is domestically available and supplies are not vulnerable to disruption by political instability overseas. Is this a reasonable viewpoint? In addition, a significant aspect of reduced fossil fuel consumption is a reduction in carbon dioxide emission. Nuclear energy does not produce substantial air pollution; therefore, it could help reduce air pollution problems such as smog, particulate matter, and global warming. The United States is responsible for about one-fourth of the world's total greenhouse gas emissions. Americans must do better. How much fossil fuel electric generation must be replaced to make a difference? Is nuclear generation the answer? I am hoping that we will have the input so we can continue that dialog. Nuclear power generation has many downsides. Nuclear power produces large quantities of waste that remain highly radioactive for thousands of years. The Nuclear Waste Policy Act of 1982, as amended in 1987, requires the Department of Energy to manage Yucca Mountain, NV, as a permanent repository for high-level waste. The United States must commit the scientific manpower and monetary resources needed to educate the public and provide the appropriate protection to the Nation's environmental and physical health. If the Government develops a high-level nuclear waste disposal site, then the proper precautions must be in place to safeguard the transportation of spent fuel from across the country and to protect the area surrounding the repository from radiation exposure. What is the status of Yucca Mountain? The over-arching issue of nuclear proliferation has been around for decades. The United Nations and other world organizations have been vigilant and aggressive in monitoring non-civil applications of nuclear energy. The United States should remain responsible and conscientious in this regard. On another thought, this is an issue regarding uranium and plutonium in domestic use. What about the accidents that could come about or a terrorist attack? The potential catastrophic nature of an accident at a nuclear power plant makes this a very serious concern and needs much debate. The last major accident in the United States was at Three Mile Island, Pennsylvania, in 1979. The general feeling of improved safety and acceptable standards in current operations is commendable. However, in March 2002, leaking boric acid produced a large hole in the nuclear reactor vessel head at the Davis-Besse nuclear plant in Ohio. The corrosion left only a quarter-inch-thick stainless steel inner liner to prevent a potentially dangerous loss of reactor cooling water. The Nuclear Regulatory Commission must hold the nuclear industry to the highest standards in order to prevent such problems. How safe is the industry, especially with no new construction in the last 30 years? These are issues that have to be debated. All commercial nuclear power plants licensed by the NRC have a series of physical barriers to accessing the nuclear reactor area and are required to maintain a trained security force to protect them. America presents a prime terrorist target on a site that contains radioactive materials. Following the terrorist attack of September 11, 2001, the NRC began a review to improve defenses against terrorist attack. What has been done to prevent terrorism? And is it enough? So, Mr. Chairman, it is very foresighted of you to call this hearing today, and I look forward to hearing from the rest of the witnesses. I am sorry I was late, but I am sure that you can address some of the questions that I raise. Thank you very much. [The prepared statement of Hon. Dianne E. Watson follows:] [GRAPHIC] [TIFF OMITTED] T1364.026 [GRAPHIC] [TIFF OMITTED] T1364.027 [GRAPHIC] [TIFF OMITTED] T1364.028 Mr. Issa. Thank you. And I would note that Representative Brian Higgins of New York has joined us, and each has said that they will incorporate their opening statements into the round of questioning. So with that, Dr. Moore, we look forward to hearing your remarks. And I will remind all the members, I guess for the next panel, too, your entire written statement will be put into the record, so you may use it or abbreviate it or add to it as you see fit. We know that your wealth of knowledge is not on that piece of paper, but in your years of experience. Thank you, Dr. Moore. STATEMENT OF PATRICK MOORE Mr. Moore. Thank you, Mr. Chairman and members of the subcommittee. I am a Canadian citizen born and raised on Northern Vancouver Island, in a tiny fishing and logging village, and was sent off to boarding school in Vancouver at age 14, where I soon learned city ways, and ended up at the University of British Columbia eventually, studying the life sciences. I studied biology, biochemistry, genetics, forestry, agriculture. But then I discovered ecology, a subject that not many people knew about at that time, in the late 1960's, and I realized that I had discovered something that was going to change my life. And, as I put it, I became a born again ecologist, because it taught me how all living things are interrelated and how we are related to them. While doing my Ph.D. in ecology in 1971, I joined a small group of people in a church basement in Vancouver, and we planned a protest voyage against U.S. hydrogen bomb testing in Alaska. The United States was conducting underground hydrogen bomb tests at Amchitka Island in the Aleutians. We sailed a leaky old boat across the North Pacific and provided a focal point for media attention to opposition to the tests. When that H-bomb was detonated in November 1971 at Amchitka, it was the last hydrogen bomb the United States exploded. There were more atomic tests after that, but President Nixon, at the height of the cold war and the height of the Vietnam War, canceled the remaining tests in the series due to overwhelming public opposition. This was the birth of the organization Greenpeace. I spent the next 15 years full-time in the top committee of Greenpeace, as we took on campaigns around the world: against French atmospheric nuclear testing in the South Pacific; we confronted the Soviet factory whaling fleets in the North Pacific; we confronted the Canadian seal slaughter off the East Coast of Canada; we took on toxic wastes and nuclear wastes; and uranium mining; and kangaroo slaughtering; an amazing number of issues over a 15-year period, at the end of which, of the 15 years I was in Greenpeace, we had grown from the church basement to a group with $100 million a year coming in and offices in 21 countries. I felt we had largely accomplished our task by this time, the mass public awareness of the importance of the environment, and for me it was time to make a change. I had been against about three or four things every day of my life for 15 years. I decided I would like to be in favor of something for a change. I made the transition from the politics of confrontation, telling people what they should stop doing, to trying to figure out what we should do instead, because, after all, over 6 billion of us wake up every morning on this planet with real needs for food, energy, and materials. Sustainability, which I believe is the next logical step after environmental activism, is about continuing to provide for those needs, maybe even getting some more things for the people in the developing countries, while at the same time reducing our negative environmental impact. I believe this is one of the most important points around how we move forward in continuing to provide our civilization with the things it needs to survive every day: that we can continue to have civilization and reduce negative impacts. A lot of environmental thinkers, Paul Ehrlich and his school of thought, they contend that automatically the more people there are and the more stuff they use everyday, the more negative impact there will be on the environment. This is not the case. It is possible to change the way we obtain the material and energy we need, while at the same time reducing our negative impact. That is basically the definition of sustainable development in many ways. Back in the mid-1980's, not all my former colleagues saw things that way as I moved into sustainability and consensus. Environmental extremism arose at that time for two distinct reasons. First, because most of the public now agreed with all of the reasonable things we were saying in the environmental movement, the only way to remain adversarial and anti- establishment was to adopt ever-more unreasonable positions, eventually abandoning science and logic altogether in zero tolerance policies that we see today, nuclear energy being one of them, genetically modified foods being another one. Policies of zero tolerance in areas where there is actually tremendous potential for environmental and human welfare improvement. So I diverged from this approach, which ended up, in my estimation, with a movement that is, to a considerable extent, just plain anti-civilization. They are anti-globalization; they are basically anti-capitalist; they are anti-business, anti- science, anti-technology. There is too many antis for me. As I say, I was against things for a long enough time that I wanted to be in favor of something. There is this kind of naive vision of returning to some kind of utopian Garden of Eden, that actually never existed in the first place, conveniently forgetting that just 100 years ago the average person's life was 35 years in this world. And the tremendous advances that have been made in all areas since then is why our life span is so much longer now, and one of those, of course, is in energy. What does environmental extremism have to do with nuclear energy? I believe the majority of environmental activists--and I would include Greenpeace, the Sierra Club, the Rainforest Action Network, the NRDC, and many of the others--have now become so blinded by their extremist policies that they fail to consider the enormous and obvious benefits of harnessing nuclear power to meet and secure America's growing energy needs. I believe these benefits far outweigh the risks. As mentioned earlier, nuclear supplies 20 percent of U.S. electrical energy today. If no more nuclear plants are built, that will be cut in half just in the next few years. And it is virtually certain that the only technically feasible path, if nuclear is not built, is greater reliance on fossil fuels than we have today. I can't see any analysis that shows any other way than that we would have more reliance on coal, oil, and natural gas in the future than we do today, and I believe it is becoming a rather untenable position even at the present time. In a ``business as usual'' scenario, that is, no more nukes, a significant reduction in greenhouse gas emissions would be impossible. An investment in nuclear energy could go a long way to reducing this reliance on fossil fuels, and could actually result in reduced CO<INF>2</INF> emissions. According to the Clean Air Council, annual fossil fuel- fired power plant emissions are responsible for 36 percent of all the CO<INF>2</INF> emitted in the United States, and coal- fired plants account for 88 percent of the CO<INF>2</INF> being emitted from the entire power industry. One of the most interesting events that is occurring now is that a number of prominent environmentalists are changing their position on nuclear energy. I have to say, Mr. Chairman, in my whole time in Greenpeace, and since then to date, over 30 years, I have never changed my position on a single major policy area other than nuclear energy. I am portrayed sometimes as someone that has gone over to the other side, the dark side or whatever. It is not as if I am advocating the resumption of hydrogen bomb testing or whale slaughtering. I still hold true to all the positions I held when I was in Greenpeace. Those positions that I disagree with them on today are either ones that they have adopted since I left, in 1986, or they are nuclear issues like this; it is the only one I really changed. But I am not the only one who is changing their opinion. Stewart Brand, a prominent philosopher and thinker, the founder of the Whole Earth Catalog that we all used as a bible when we went back to the land in the 1970's, has come out with a very important essay in the May 2005 issue of Technology Review, in which he says the environmental movement has to change their position on nuclear energy, among other things. My acquaintance and friend, James Lovelock, the Gaia theorist, has also come out saying that nuclear is the only solution to reducing CO<INF>2</INF> emissions. He says, ``Civilization is in imminent danger and has to use nuclear, the one safe available energy source, or suffer the pain soon to be inflicted by our outraged planet.'' While I might not be so strident as my friend, Lovelock, it is clear that whatever risk there is from increased CO<INF>2</INF> levels in the atmosphere--and there may be considerable risk--it can be offset by an emphasis on nuclear energy. Nuclear energy is a proven alternative and now provides over 75 percent of the U.S.' emission-free generation. The bulk of the other emission-free generation is hydroelectric. Again, back to environmental extremism. If you poll many of these environmental groups, including Greenpeace, you will find that they are against coal-fired power plants, they are against nuclear plants, and they are against building new hydroelectric projects, and are even proposing to tear some of the existing ones down. If you take coal, nuclear, and hydro, and add them together, you have nearly the whole energy supply for the United States. So, therefore, it is completely unrealistic to be against all of these things. We do have to choose winners. I must say, just in concluding, that even though I have said and have been quoted on numerous occasions, I believe this: ``Nuclear energy is the only non-greenhouse gas emitting energy source that can effectively replace fossil fuels and satisfy global demand.'' That said, however, I want to make it very clear that there should also be a much greater emphasis on renewable energy production. I believe the two most important of these, along with hydro, which is already established as an important source, are wind energy, which actually has far more potential than hydro on a global basis for electrical production; and ground source heat pumps, also known as geothermal or GeoExchange. In particular, when non-CO<INF>2</INF>-emitting electrical sources, such as wind, hydro, or nuclear, are tied with ground source heat pumps for heating and cooling and providing hot water in all of our buildings, tremendous reduction of CO<INF>2</INF> and fossil fuel consumption can be realized. A combination of nuclear, geothermal, and wind could actually bring the United States in line with the Kyoto Protocol, whether or not the United States signs that treaty. I think that concludes my remarks. Oh, just one more thing, if I may, Mr. Chairman. Mr. Issa. Absolutely. Mr. Moore. Just on the issue of accidents. It is true that Chernobyl was a terrible accident, but I characterize it as the exception that proves the rule that nuclear energy is generally safe. There are 434 reactors operating around the world as we speak. Chernobyl is the only really bad accident that has ever happened, and it was an accident waiting to happen. It had no containment structure, it was badly designed, it was badly operated, and badly maintained. And Three Mile Island, which has been mentioned, I actually consider a success story, because the radiation was contained even in the event of what was nearly the worst possible thing that could happen in there, which was a partial meltdown of the reactor core. The radiation from the core was contained in that reaction and did not come out like it did in Chernobyl. Of course, since Three Mile Island we have learned even more. So I don't think the safety issue is an obstacle to moving ahead. One other point: the nuclear proliferation point. These have to be taken as two separate issues, the issues of nuclear energy and the issues of nuclear proliferation. It is apparent that actually the main technologies that have resulted in the most combat deaths in this world in recent years are machetes, rifles, and car bombs. No one would seriously suggest banning machetes, guns, cars, or the fertilizer and diesel oil that are used to make the explosives in car bombs. These have to be looked at as separate issues; we can't simply say no nuclear power because the byproducts of it can be made into deadly weapons. Thank you very much, Mr. Chairman. [The prepared statement of Mr. Moore follows:] [GRAPHIC] [TIFF OMITTED] T1364.029 [GRAPHIC] [TIFF OMITTED] T1364.030 [GRAPHIC] [TIFF OMITTED] T1364.031 [GRAPHIC] [TIFF OMITTED] T1364.032 [GRAPHIC] [TIFF OMITTED] T1364.033 [GRAPHIC] [TIFF OMITTED] T1364.034 [GRAPHIC] [TIFF OMITTED] T1364.035 [GRAPHIC] [TIFF OMITTED] T1364.036 Mr. Issa. Thank you, Dr. Moore. As is my policy, I will waive my opening questions until all the other panel members have theirs, but I will tee up the discussion with just two items: one, in concert with yours, Dr. Moore, no person in the United States has ever died in a civilian nuclear power accident, period, including Three Mile Island, which cannot be said, obviously, for everyone driving gasoline, oil, and all the other petrochemicals down the road; nor can it be said either of liquified natural gas or refineries, all of which have had fairly spectacular loss of lives over the years. Last, it is estimated that had the United States built all the nuclear power plants which were on order in the late 1970's, when they all became canceled directly as a result of Three Mile Island, we would presently be in Kyoto compliance. And I personally strongly suggest that had we already been in Kyoto compliance, the willingness of Congress to ratify Kyoto might have been dramatically greater than when we were on a collision course for no such opportunity. With that, I would recognize the ranking member for her questions. Ms. Watson. Dr. Moore, I certainly appreciate your viewpoint and your input. There are several questions that come up in my mind. We certainly are interested in alternative energy power and fuels. I just returned from Qatar a few weeks ago, the emir told us that we have enough natural gas to furnish every single home in America for the next 100 years. And I thought if they have our natural resources, they have the power. And their question, the week-long that we were there, was we want to be treated like equals; and they were talking about democracy and so on and so forth. But what strikes me is that our energy needs rest in other places. So I am very interested in what we can develop as energy sources here that would not pollute our environment and destroy our planet. I believe in global warming; I have seen the climate change in Los Angeles, my home. We had the largest rainfall ever in the last few months, larger than what we have in a cumulative 15 years or so. In saying all that, I heard you speak of your background with Greenpeace. I think what they do is one thing; what they believe in is another. I don't like their tactics; I don't think you have to destroy to get the point over. I am hoping that you can share with us what they believe are other sources of energy, rather than the fossil fuel that we have been so dependent on that comes from the Middle East, where we are having tremendous problems at the current time, at a tremendous cost. What is it that we can use? I heard you talk about wind power and so on. I really am looking at nuclear energy and, as you say, it has been a real tsunami of a change with you, and just by the fact that I am saying this it is a real change with me too. But we are going to have to have some source of energy where we don't have to go change a whole nation's politics to get what we need. Then I look at Greenpeace, who is trying to save the environment and save the planet. What is it that you see, what is it that they see, what is it that we can see as sources of fuel for the future? Can you go into that? What are their winning proposals? I don't like their destructive ones. What are their winning proposals? Mr. Moore. Thank you. Unfortunately, one of the great distractions in the debate around renewable energy is the focus on solar voltaic panels, the solar panels that go on a roof. They are all show and no go in many ways. They are very techy looking, they give the impression that you are a green person. They show up because they are on top of your roof. Whereas, just to give a couple of facts, $20,000 invested in solar panels in this part of the world brings about $100 to $120 worth of electricity into your house per year. So you get a $120 return per year on a $20,000 investment. This is why they have to be so heavily subsidized before anybody will put them on the roof. If you invest that same $20,000 in a ground source heat pump for your home, you get $1,300 equivalent worth of energy. But it is in your basement, where nobody can see it, and the pipes that it uses to get the energy out of the ground are buried in the ground where no one can see them, so it is not a symbol of your commitment to renewable energy and it doesn't have the same appeal. It is sort of the same thing as with automobiles, where 90 percent of it is psychological about what kind of car you want to drive. So solar has really distracted people. I have a solar system in a little place I go to down in Mexico because there is no electricity into this little town, and it does make sense, when you are off the grid, to use solar energy. But it costs about 10 times as much as normal electrical power does; whereas, wind energy is now becoming reasonably close, in terms of competitiveness, with conventional electrical production. So we should be focusing on wind. Between the two of them, Germany and Denmark produce 50 percent of the world's wind energy. Now, they certainly don't have 50 percent of the world's wind in those two little countries. Now, some people would argue that they put too much of it in, that it is not cost-effective, but General Electric is now making 5 megawatt wind turbines, individual turbines that produce 5 megawatts each. It doesn't take that many of them to start producing a substantial amount of power. And a lot of coal-fired generation companies are actually investing in wind as a way of diversifying their energy portfolio. So there is tremendous potential there. Back to ground source heat pumps. This is the key to making our electricity more efficient in terms of heating and cooling our homes, and getting rid of the peaks and valleys in our electrical requirements so you don't need so much base load. See, ground source heat pumps could heat, cool, and provide the hot water for every single structure in the world. You can get heat out of permafrost in Alaska in order to heat a building. This is stored solar energy that is in the top of the earth. Ms. Watson. How far down do you have to go? Mr. Moore. You put pipe in the ground 8, 10 feet deep; sometimes, if you drill down, you go 50 feet or more. But basically you put pipe in the ground, circulate water through it, and bring the heat of the ground into your house and magnify it with a heat pump. It is actually the same technology as is used in refrigeration and freezing. Your refrigerator is a heat pump. I don't know if you notice, when you put your hand at the back of it, there is hot air coming out of it. Most people don't know where that hot air is coming from, they think it is coming from the motor. It is actually coming from inside the fridge. That is how the fridge gets the heat out of the inside, is by pumping it out and pumping it into the room. Whereas, if you think of your house as a big fridge, with ground source heat pumps, you can take the heat out of the ground and pump it into your house, or you can take the heat out of your house and pump it back into the ground. It is available technology. Actually, many military bases are being retrofitted with this under the mandate for the 10-year payback. Lots of people are installing it, but it is nowhere near as large a program as it could or should be. And combined with nuclear energy, wind energy, hydro energy, and all the other non-CO<INF>2</INF>-emitting sources of energy, both renewables and nuclear, combined with that, we could cut CO<INF>2</INF> emissions by so much more than even Kyoto would require. And none of this is pie-in-the-sky. There are two factories producing over 100 million--a conglomerate. Two factories, one in Fort Wayne, IN, which is Water Furnace International, and one in Oklahoma City, Climate Master, producing these heat pumps on a mass scale in factories, and people are installing them. I understand President Bush and Vice President Cheney both have ground source heat pump systems in their homes. President Bush's ranch in Texas, I believe. I am told this by the heat pump people, so I assume it is true. I wish more emphasis would be put on these technologies which are actually feasible, rather than so much emphasis-- California nearly passed a mandate for solar panels to be required on all new residential construction. At least that got beat back. It is just a big waste of money if you are on the grid. There are so many other things you can do, whether it is insulating your home or putting in a ground source heat pump. There are so many better ways to invest that money--that is a real waste. Instead, California has now got, what is it, the million solar homes program? Now they are subsidizing putting the solar panels on to such an extent that people will do it. You practically have to buy these things for people to get them to want to put them on their roofs. And that is the route they are going, instead of going in a more cost-effective way. As I say, solar panels are great for niche applications off-grid, but I call them the world's most expensive roofing tiles, and I believe that is a fair description. Mr. Issa. Thank you. Ms. Watson. Thank you. Mr. Issa. With that, I recognize Mr. Westmoreland for his round of questioning. Mr. Westmoreland. Thank you, Mr. Chairman. I would like to thank you for holding this hearing. It is very timely that we just got through passing the energy bill. Let me say that, being from Georgia, we get 27 percent of our power from nuclear plants, and it is not near that percentage of the coal-fired, fossil fuel plants that we have in Georgia. And I hope that 1 day, starting today, that we can look at--because our needs are going to be great. Our economy is growing, our State is growing. Our needs are going to greatly increase, and I hope that we can look at doing some more nuclear facilities in Georgia. Mr. Chairman, I would like to submit my opening remarks, if I could, for the record. Mr. Issa. Without objection. [The prepared statement of Hon. Lynn A. Westmoreland follows:] [GRAPHIC] [TIFF OMITTED] T1364.037 [GRAPHIC] [TIFF OMITTED] T1364.038 [GRAPHIC] [TIFF OMITTED] T1364.039 Mr. Westmoreland. Mr. Moore, I want to compliment you for the things that you have said today about the nuclear power. I am in the building business, and I do agree with you on the geothermal. But I promise you that before long the environmentalists will be saying something about having that much pipe in the ground. Trust me. And I know we didn't want to get into a geothermal discussion, but you are dead on with that because of the energy savings, but heat pumps are becoming more and more efficient. You can get an 17 to 23 SAER rating now on some of those heat pumps. But the windmill, you know, they need to come up with some other kind of design rather than the windmill type of design, because I don't know that they would ever be aesthetically pleasing to have as many as you would need to create the electricity to supply a neighborhood. I understand that they are doing it in other countries, but I just don't know if that would ever be possible, at least in my area, coming from where I am from. You are dead on on the solar panels also. That was a big thing when we were in the building business 20 years ago, and it just caused a lot of roof leaks is basically what those solar panels caused. But I would like to see us look at not only this nuclear option, but look at doing, on a State-to-State basis--and it might be something for you to do--giving tax credits for people who will seal up and use envelope type insulation packages, geothermal higher SAER rating equipment to cool and heat these houses, because it takes a tremendous amount of energy. Mr. Chairman, my last comment is that I have been looking over the cost of these nuclear plants, but with the amount of demand that is going to be on electricity and the amount of increase it is going to take in the infrastructure of our grid system right now--because I think our grid systems are not in the best shape that they could be, as evidenced by some of the blackouts that we had up in the northeast--that when you look at the amount of work and the new grid that would have to be put on, I think that we are not that far out of line with the nuclear additions. And as you have here, as the plants that we build, we become more and more competitive with them. Also, the ranking member was talking about the safety aspects of it. We can learn a lot from the European countries as far as what they are doing, but I think our technology is so far advanced now from where it was when we built the original nuclear plants that it is definitely something we need to do, and I hope, by the chairman having this hearing, that we will not only sit here and talk about these things, but we will actually do something to further the building of these nuclear power plants. Thank you, Mr. Chairman. Mr. Issa. Thank you. I have good news and bad news. The good news is it is only one vote. The bad news is we will stand adjourned for about 15 minutes, until we go over and come back and renew questioning. I know our committee structure will support any cost of coffee or soft drinks you would like to have while we are gone. With that, we stand recessed. [Recess.] Mr. Issa. One nice thing about being chairman, if you can be patient to get your questions in, you will get your questions in. I will now recognize myself for as much time as I will consume--there will be Members coming back here shortly-- and I have a list of them. First of all, Mr. Jones, would it be all right for us to include your entire study in the record? You have no objections? I would like to have it submitted in the record. 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Additionally, I would like to have yesterday's remarks by President Bush put in the record, since he helped set up our meeting with his efforts. [The information referred to follows:] [GRAPHIC] [TIFF OMITTED] T1364.073 [GRAPHIC] [TIFF OMITTED] T1364.074 [GRAPHIC] [TIFF OMITTED] T1364.075 [GRAPHIC] [TIFF OMITTED] T1364.076 [GRAPHIC] [TIFF OMITTED] T1364.077 [GRAPHIC] [TIFF OMITTED] T1364.078 Mr. Issa. I am not sure that officially we coordinated, but it certainly was timely. With that, I would like to lead off with my first question. And probably, Dr. Moore, I suspect I have a lot of questions for you, but I am going to go to our other two from the standpoint of equal time. You are looking a little lonely there. This is both for Fertel and Jones. The blend of financial incentives that you talked about in your study that is up here, the President's proposal was for four nuclear power plants to be funded. When I look at the eight, I can certainly see where you get down to eight, you are down to 3.2 cents per kilowatt hour, to put it in the ratepayer's terms, which means it is competitive with fossil fuel, without accounting for the advantages to zero emissions generation. It seems your study concluded that you needed to get to eight. Are you and the President talking essentially two different visions of the same thing, getting us through those what we used to call non-recurring expenses? Can you characterize where there may be common ground or whether there is a difference of four power plants between the proposals? Mr. Jones. Yes, sir. The President and I seem to be speaking off the same page. In Table 1, right here to my right, your left, by the time we get down to the fourth or fifth plant, we are well within the competitive range with fossil generation. So the President and the Chicago study are in perfect agreement on that number. Mr. Issa. Mr. Fertel. Mr. Fertel. I think, Mr. Chairman, first of all, the President's discussion yesterday, which we welcome--and this is about the fifth time since the State of the Union he has spoken out positively on nuclear energy, which is clearly very encouraging to us. Mr. Issa. The first time he did it timely for my hearing, though. Mr. Fertel. We thought he did it intentionally for your hearing. We thought you had orchestrated that, and really appreciated the timing. What the President said yesterday, he actually talked less incentives for these four plants than a risk insurance, which is something that the chief executive officers, because of the experience they had in the previous licensing process, have raised with Secretary Bodman and with the White House a number of times now as something that they felt was very important. And to be honest, if you demonstrated the licensing process worked on four plants--put aside the economic incentives--we think that you would have a track record that would give both the financial community and the boards of directors the confidence that the licensing process is disciplined. We are actually pretty optimistic the licensing process, as it is being reshaped, will be not only protective of health and safety, but actually pretty reasonable in how you implement it. But it hasn't been demonstrated. So I think that four plants for that is clearly a very adequate demonstration. And I think that as Don pointed out, we think you get pretty economic pretty fast these days. Mr. Issa. Excellent. I will also ask that a poll done in my own district, at government expense, which shows approximately 80 percent of my constituents favor adding an additional reactor where we have two working reactors at San Onofre. And I will provide that in the next 5 days so it gets in the record. That doesn't mean that there aren't 20 percent who didn't say yes, but certainly I don't get 80 percent in my district, so I always assume it is an awfully good sign when something is more popular than I am. Sticking to our nuclear experts, per se, on production, the President yesterday seemed to be talking about Generation 3.5, and not Gen 4. Could you characterize the differences and the advantages? Because I think you are talking Gen 3.5 here too. [The information referred to follows:] [GRAPHIC] [TIFF OMITTED] T1364.079 Mr. Fertel. Our current reactors, if you sort of just baselined them and said that the 103 operating reactors we have today are Gen 3, if you just took that as a baseline--and let me go first out to Gen 4, which is a program that the Department of Energy has ongoing right now, and has been ongoing for probably about 5 or 6 years. It is looking at both new advanced fuel cycles, liquid metal fuel cycles, high temperature gas fuel cycles, and reactors that will be commercial. It may vary in people's minds, but their commercial timing is probably in the 2030, 2040 timeframe, for really commercializing the reactors. So, for instance, our Nation is looking to move ahead in Gen 4 space to build a very high temperature gas reactor, helium being the gas that they are talking about. And it has some very significant advantages if you make it work right. First, it is a high enough temperature that you can actually produce hydrogen chemically with it, so it is a good source for producing hydrogen. It also is very efficient because of the high temperature, so rather than the 30 to 32 percent efficiency for producing electricity today, you might get as high as close to 50 percent. It also has the potential, because of the way you would design your fuel, that you could never melt the fuel, so you could never have the type of accident you protect against from our current reactors, so it moves down that road. But that is a Gen 4 type reactor, and we are doing that internationally with other folks. Mr. Issa. Is it also true--I am terrible with these leading questions--that helium type production would also be able to be put completely underground? Mr. Fertel. Actually, the General Atomics design is below ground, that is true. That is true. You could design it that way. Or, again, you could design it aboveground, as they are looking at for some of what they call pebble bed reactors. Mr. Issa. I only ask that because obviously in our other hearings we are constantly dealing with the question of terrorism and airplanes strikes and so on. Mr. Fertel. The Gen 3.5 is actually--you can think of Gen 3.5 in two types of designs that basically exist today, and in fact are operational in some countries. One design is what we call an evolutionary design; it is taking our current plants and moving them to where technology is right now. So I have gone to digital systems rather than analog systems. I have taken everything I have learned on my current plants and moved it both from a technology and operational perspective going forward. I have also done a bunch of things that are smarter in how I am going to maintain my plant for operational activities, so what I have learned when I have run into interferences in lay-down areas, I have now built it in so it is better. So it is an evolutionary design. It doesn't take the technology at all, it is still a light/water reactor design, it works the same as my current plants, it is just moved along in technology to where we are today or where we think we can be, and it has taken up all the lessons learned from the operation of current plants. The other Gen 3.5 that we have is we have moved to what we call passive designs. We call both of these advanced light/ water reactors. We did message testing and passive designs, which the engineers thought was great. Passive design is if I can move the water by gravity rather than a pump and motor, why don't I do that? So if I need water to get to here, rather than pumping it from here to here, why don't I have it flow downhill to that? Pretty simple. Mr. Issa. Meaning a pump failure is no longer a catastrophic failure. Mr. Fertel. That is right. One, I eliminate equipment, so I save some money because I don't need as much equipment; and, two, I decrease the failure modes from a safety standpoint. So basically you have gone to passive designs for moving water around or for heat convection. Now, I was kidding on passive, because the engineers thought passive was great. We did message testing with the public, and the public's reaction to passive was it sounded like it didn't do anything when it got into trouble and, oh my God, that sounds terrible. So we had to drop passive. Mr. Issa. So it is now called self-healing? Mr. Fertel. We will try that one. We just call it advanced. But that is what you have in 3.5, you have an evolutionary design, then you have a design that is basically trying to eliminate failure modes and equipment if I can do it through any sort of natural processes. And both of those designs right now are being licensed or have been licensed by the Nuclear Regulatory Commission. The evolutionary design is actually operating in Japan; they have two large General Electric advanced boiling water reactors operating in Japan right now. Mr. Issa. One followup question on that line, which is we are known in America for being the most eclectic nuclear producer; we have no two plants that you can walk into that look alike. And I know from safety studies that has been one of the problems. You train for the plant you are at because we built them one off in most cases. Would this 3.5 provide, if you will--and this is terrible to say--the airbus type cockpit, to where people and inspectors would have significant improvement in the ability to learn one, inspect, or operate all? Mr. Fertel. The very short answer is yes. The whole intent going forward is to sort of implement the French model, which is standardized families of plants, and basically say if I am going to build the advanced boiling water reactor or, in this case, the economic simplified boiling water reactor, which is what they are marketing in our country, you would build a family of those, they would be identical. If I were an operator at one and the chairman was an operator at another one, it wouldn't matter which control room we walked into. Same thing on maintenance, and even going down, if we could, we would like to keep the equipment standardized, to the degree we could, so that you could basically have common inventory and safe money on supplies. Your observation on our industry, which I did grow up in in a bit, it was sort of the American way, because in France they had---- Mr. Issa. The American way before Henry Ford. Mr. Fertel. I mean, in France you had one electricity company, you had one reactor supplier, you had one fuel supplier, and they were all owned by the government. So when the government made a decision you should do something, everybody kind of marched to the same road. In our case, basically every utility wanted something slightly different than their brethren, and every supplier saw those as out of scopes. So capitalism here created a myriad of different plant designs. But, no, the answer to your question is going forward we are doing to go with standardized designs. Mr. Issa. Excellent. One more question that I had which was peripheral, but you touched on it. The 2025, 2030, 2040, about the time we want to be a hydrogen economy, the next generation, Gen 4, produces significant amounts of hydrogen. How significant is that? What does it really relate to from a standpoint of providing it as a fuel or for other industrial uses? Mr. Fertel. You mean as far as the nuclear role in that? Mr. Issa. Right. If we were to begin rolling out that next generation, let us just say in 2020, and ramp up to where, by 2050, that was the standard, these more efficient, and it were producing our entire base load, how much hydrogen would it produce that theoretically is going to be used for driving automobiles? Mr. Fertel. I don't know quantitatively the answer, but what I can tell you is you won't use the plant for dual purposes, in all likelihood. You would probably build the high temperature gas reactors that would produce hydrogen for you, and you would produce high temperature gas reactors that are going to produce electricity. There may be certain times where you might be able to use it for a dual function, but in talking to at least the Department of Energy folks and the industry folks that are looking at it, they are saying that if you really are going to produce hydrogen in the quantities that you are going to need, you are going to dedicate the plants to doing that. Likewise, if you are using the plants for electricity, and the value of the plants for electricity would be they are smaller; I can build them in increments in a more competitive electricity market, as opposed to the large plants we build right now. But it sounds like you would have separate plants. Though they would be capable of doing both, you probably wouldn't build them, or at least most of them, to do both. Mr. Issa. Is there any other practical way to produce the quantity of hydrogen necessary to move our entire fleet of automobiles and trucks on hydrogen? Is there any other practical way to do it? Mr. Fertel. The other practical way is you are basically using fossil fuels to split them to get hydrogen, and then you are burning. It is sort of counterproductive to produce emissions to reduce emissions. So we don't think so. There are honestly people at the national labs who aren't sure that even using nuclear to produce hydrogen is the right thing, that is the answer to our problem; not the nuclear, but the hydrogen. But clearly in talking with folks, if we are going to produce large quantities of hydrogen, nuclear seems to be a way that we should seriously look at trying to do it, and I think that is why our Government has decided that the Gen 4 reactor they want to look at is the very high temperature, because they see the dual value, and that is why the Idaho folks want to see a reactor built there to try and begin to demonstrate its use in that mode. Mr. Issa. And, Dr. Moore, as an expert on this whole sustainability question, how do you see that playing, as far as looking, to a great extent, beyond our careers, into the 2040 timeframe? Is this sensible or, as you were so good in pointing out, if not this, then what? Is there an ``or what'' that you can see on the horizon? Mr. Moore. Well, again, I haven't done the math thoroughly on it, but it is very obvious to me that there is no other non- CO<INF>2</INF>-emitting form of energy that you could make that much hydrogen with. I mean, it would take a lot of nuclear plants to make enough hydrogen to replace all of the fossil fuel in the transport fleet. The other option is that hybrid technology will come in and be with us for 40 or 50 years before there is a change to another technology from that. That is another possibility. Another possibility is that someone will eventually invent a battery or electrical storage device where then you could use the nuclear energy to charge the vehicle directly, rather than having to make hydrogen. It is not just the making of the hydrogen that is technically difficult with the idea of going to a hydrogen fleet. Then you have to distribute it. It is very corrosive. Then you have to figure out how to get enough of it into an automobile to make it go 300 miles. And they still haven't figured that out yet. GM is experimenting with 10,000 psi tanks, and you still can't get enough in there and still have room for your suitcase in your car. So there are quite a few technical obstacles besides the manufacturing of the hydrogen. But once again, as with power generation, there is no other technology that we know of today that can make the kind of dent in fossil fuel reliance that we are thinking about in terms of both CO<INF>2</INF> emissions, air pollution, and energy security, reliance on offshore sources. Nothing else that I know of could do that. Actually, in the break we had a discussion about conservation. I know that subject was mentioned fairly high up in the President's speech yesterday, and, of course, that has to be a central part of a comprehensive energy policy. I know that is not what we are here to talk about today, but just to go on record---- Mr. Issa. Dr. Moore, we wouldn't have invited you if we didn't want to be complete in dealing with nuclear versus alternatives, so please feel free to elaborate. Mr. Moore. Conservation is an across-the-board thing, it doesn't matter how you are producing the electricity--and in all other energy areas as well--it doesn't matter what your fuel is, the issue of conservation has to do with efficient use. For example, we could probably turn half the lights off in here, nearly all of them, and open up the curtains and conserve the electricity that is being used to light this room right now. Mr. Issa. They don't trust Congressmen in the dark. Mr. Moore. They do in the light? Mr. Issa. Well, forewarned is forearmed. Mr. Moore. But suffice it to say that conservation is a very important part of this whole thing, and that the United States is not exactly the world's leader in conservation of energy. Mr. Issa. Although I will mention that California is the Nation's leader in conservation of energy. One question I have, nuclear is a great base load because, as we all know, it doesn't turn on and off quickly. Geothermal obviously has a little more flexibility, but it is still inherently a base load. Wind, you get it when you get it; solar, you get it when you get it. If I go through all the zero emissions fuels, it would appear that hydro is the only large- scale zero emissions that is demand-oriented, turns on and off very quickly. And each of you could participate in this. If nuclear were the answer for 100 percent of what its capacity is, how do you see it fitting in? What is its maximum? We always hear about France, for example, that believes they are at their maximum, which is about 80 percent. Where is the maximum for nuclear before you simply are in that problem that it is a base load only and peak has to come from some other source? Mr. Fertel. First of all, just to put our system in perspective with the French system, the amount of generation we have from nuclear power plants in this country, the kilowatt hours that keep the lights on is larger than France and the next largest nuclear country after them, Japan, combined. So going to what Patrick said, we consume a lot of electricity in this country. In France, they actually do load follow. Now, they follow a load, they basically are either at full capacity or they will go down as the load goes down. They also export a lot of electricity, their nuclear electricity, to make money off of it to other European countries. I think, in our country, the strength of the system continues to be the fact that you do have a different technology. I think you will always--probably not always, but at least in my lifetime--have combustion turbines for peaking. You operate them a couple percent a year. So they are there; they burn a lot of gas when they operate. I was telling Patrick during the break that if you take a 1,000 megawatt plant--we have built 280,000 megawatts of gas since 1992 in this country. That is why gas is such a problem. And we built 14,000 megawatts of coal and nuclear since 1992. That gives you a perspective of what we have been doing. And if you take a 1,000 megawatt gas plant, combined cycle, and say it operates its base load, 1,000 megawatt plant uses as much gas as 1 percent of the Nation's residential use; 1 percent of the Nation's residential use. It sucks gas if you use it as a base load plant. But using it for peaking, it only operates a couple percent. So I think, Mr. Chairman, what you would have, at least in the horizon we look out at--and we support conservation and efficiency. We as a Nation need to do more, and prices help us do more in this country. Industry leads that and commercial follows it, and residential customers lag it. But fundamentally high prices will drive more conservation and efficiency. But I think we are going to burn coal. We are going to need clean coal. I mean, we have loads of coal, 250 years worth of coal, probably, so we will continue to do it. We have just got to do it smarter and begin to do less of it. Nuclear is 20 percent right now. If I had my druthers, we would grow to probably double that or more. But that is a long time to do, because we have 900,000 megawatts on this grid. I mean, it is a monster electricity system in this country. I mean, it is just huge. And it is sort of the lifeblood of everything we do in the Nation. So I think you are going to have, at least for the lifetime of most of the people we care about and know about today, you are going to need a mix, and you are going to still use gas, but you shouldn't use it for anything but peaking. And I wouldn't even use it for intermediate down the road because I think it has other more important uses in other processes. I think that we still need to use clean coal and I think we should increase renewables and we should increase nuclear. On renewables, I think the critical thing I mentioned to Patrick is you need to develop storage. Your comment on wind is right; you only get electricity when the wind blows. And if you had some storage techniques, you could have electricity longer. The only storage technique we could come up with was pump hydro, which used to be a storage technique if you looked it up with a hydro facility. But we don't have many new hydro facilities in this country. So I think you still have a mix. Mr. Issa. Marvin, in the energy bill there is a pump storage station for 500 kilowatts. Mr. Fertel. It is probably megawatts. Mr. Issa. 500 megawatts, thank you. 500 megawatts twin turbine in my district. It is the fourth time that I have put it into a bill. We are going to get there but, in fairness, the FERC has gone through the process and is in a preliminary stage. But it is one of those areas where I am very familiar that the 1,500 feet of rise over a very short period of time doesn't occur just anywhere. So the ability to produce it in our Lake Elcinor area is a pleasant opportunity. It happens to also be exactly the point where the southern California power outage was caused by a lack of about half of that much power to be available at peak. And I always try to make that point. Yes, please, Patrick. Mr. Moore. Just a couple points on the demand issue versus intermittent. One of the problems with the word geothermal, geothermal refers to two completely separate technologies; it refers to the type of geothermal you have in California, where you get down into deep hot vents and you are basically producing steam to run turbines. Iceland has a big system like that. It happened when the Department of Energy in Washington decided to take on ground source heat pumps, and some people had already started calling it geothermal or earth energy at that time. They didn't want to create a new department, so they lumped ground source heat pumps in with the geothermal department, so they are both called geothermal. And it was a big mistake in terms of public understanding, because not only is all this stuff happening, it is invisible; it is in your basement and under the ground. But now people are thinking geothermal, I thought that was what they do in California or New Zealand or Iceland. Mr. Issa. Noted. I am going to force myself to change. I will tell you that I was fortunate enough going to ANWR by ground vehicle at my own expense. We talked about travel earlier. I took my family up because I wanted to actually drive the Tundra and experience it and get a real feel, because it is a serious consideration to expand into that wildlife and natural refuge. But the strange thing is decades ago, when they were putting in the pipeline above ground, they were faced with the fact that, with heating and cooling, the pipe would have broken periodically, except they used ground source heat pumps, zero electricity consumed. I think it is ammonia-based in their case--don't hold me to that--but they came up with the whole concept that exactly when they needed cooling for the ground, they had a heat source in the air, and vice versa. So they were able to maintain the permafrost year-round on the Alaskan pipeline. And the environmentalists who took us on this trip were very proud that this was a zero outside energy and environmentally probably the most responsible thing that they could come up with, in addition to all the other success stories of the pipeline. If I can switch for a moment, one of the interesting things I discovered in preparing for this hearing was the old expression of swords into plowshares, and how that could relate to next generation nuclear. I have estimates that just the weapons grade uranium, not plutonium, that is available and that the Russians would be happy to sell us, would represent about 5 years of powering all of our nuclear power plants at the present time, and obviously we have the benefit of taking it offline. And then a followup--since I see Marvin going, yeah, I can answer this one--if we had Gen 4, which can burn plutonium--and General Atomics I believe is the one that has this--what would be your estimate of the value based on the separate plutonium stockpile, that is also massive? Mr. Fertel. In 1992 President Bush signed an agreement with the Russians to basically take 500 metric tons of high-enriched uranium that they had in warheads. This was not surplus sitting somewhere, which they also have, apparently, but this was actually coming out of warheads, so it was actually dismantling warheads and taking high-enriched uranium out and blending it down. Basically what we use in power plants is low-enriched uranium, which is somewhere less than 5 percent enrichment; it cannot blow up. High-enriched uranium for weapons is well above 92 percent. So you blend it down, you get a lot of nuclear fuel out of it. Right now, 10 percent of the electricity in this country is generated as a result of weapons material in Russia being dismantled. We get about half the fuel for our reactors coming from Russia, and that has been going on now and it is going to go through 2013, then this particular trench of 500 metric tons ends. And the question from our industry standpoint is do we get another trench. We know they have much more weapons material. They are getting paid for this, this is actually a system where initially, when it started, it was probably one of the largest revenue sources Russia was getting. Now, they are a lot more commercial, they are getting money for selling gas to Europe and oil to others. But Megatons to Megawatts is a very successful program being implemented by USEC, which is a Maryland company here that used to be part of the Department of Energy, and it is a really good program. Now, we don't know what they will do with the rest of their material, whether they will sell it to us, whether they will use it to sell reactors to other people and throw it in as a fuel deal---- Mr. Issa. Comes with a full tank of gas. Mr. Fertel. Comes with a full tank of gas, right. Whatever they can do. But we know they have a lot more stuff, and it is important just commercially. And I know the chairman being a businessman would appreciate this: on our side the industry that mines uranium, when you get weapons material, you are basically displacing uranium, you are displacing the conversion to make it into something else, and then the enrichment part, because you are getting it as a fuel, you are getting it as a final product. Mr. Issa. Kind of like emptying out Fort Knox could depress the gold market. Mr. Fertel. That is right. Mr. Issa. If there was anything left at Fort Knox. Mr. Fertel. That is right. And also, if you were emptying it, you probably wouldn't be mining for gold, because you would know that is coming on the market. Well, that is a problem for our side because the primary producers need to know if it is coming so they know what kind of production facilities they need to build. It is a real issue for making business decisions. On plutonium---- Mr. Issa. Marvin, I assume, then, your message for us is we should be, as soon as possible making that commitment, but we should also recognize that we wouldn't want to provide 100 percent for 5 years and thus lay off a whole industry. Mr. Fertel. To be honest, you could even do 100 percent for 5 years in this country. I wouldn't recommend that. What you need for the business decisions--and, again, I am sure you understand this--is certainty. You need to know how much is coming when so that the primary producers can make business decisions on when they can finance stuff and build it. And we would advocate the sooner we could get a decision from Russia, the better off we as a Nation would be in not only getting rid of weapons material, which is certainly the primary objective, but in assuring adequate fuel supply. On plutonium, right now there is a program that the U.S. and Russia have agreed to to look at disposing of surplus weapons plutonium. And Duke Energy---- Mr. Issa. That is the MOx program? Mr. Fertel. That is the MOx program. Mr. Issa. That is disposal, not power generation. Mr. Fertel. Well, it is power generation. MOx is mixed oxide fuel, which is mixing plutonium and uranium to make the fuel so that I use it in a reactor as fuel. The French use MOx fuel right now; the Japanese are moving to use MOx fuel. And what we are doing is have a deal with the Russians to get rid of weapons plutonium. And actually, I think the last 2 weeks, what we call lead test assemblies--which are fuel assemblies with a new fuel that you haven't tried so you want to put it in a reactor and you want to test its performance before you actually load a full core in the reactor--arrived at Duke's Catawba plant, and they are going to be testing the lead test assemblies, and if all goes right, they would be licensing the facility to be able to ``use MOx fuel,'' which would be getting rid of plutonium that the Russians have. I think the bottom line, Mr. Chairman, is anything our country can do to help get weapons material made more benign and then put into reactors so you are actually getting rid of it is probably a very, very good thing for not only our Nation, but for the world, because it is getting rid of stuff that is not good stuff to have around. And the more we can push it, the more better off we would be. The uranium is probably a bigger problem, to be honest with you, than the plutonium, because there is more high-enriched uranium around than there is plutonium. Mr. Issa. And more all the time being enriched, apparently, over there. Any other comments on that round of questions? [No response.] Mr. Issa. The President, by talking about nuclear yesterday--and, as you said, repeatedly since the State of the Union--is touching on an issue in which there may not be a majority opposed to it, but the minority, including some of your old colleagues, Dr. Moore, are pretty active. Where do you think public opinion is on new nuclear power plants? I have already stated the result of a professionally done poll, but obviously only in a district that is familiar with nuclear. Where do you think public opinion is and will education, properly done--and I don't mean propaganda, I mean fair education--would it be helpful to move that to a point in which nuclear power would be more doable? And, actually, I would like to start with Dr. Moore, because you obviously know enough about nuclear to have very strong opinions on it. Mr. Moore. Yes. And I don't think you can count on certain of the environmental groups changing their minds on the subject. It is a winner for them, for one thing, and it is along the lines of many of the campaigns these days are unfortunately basically just scare campaigns, and this is one that fits very neatly into that category of just making people afraid, whether it is a Frankenstein foods or PCBs in their salmon or pesticides in their fruit, or all the other things where there actually isn't much of a basis to the concern, but it works to make people afraid. So I think you will see the campaigns against nuclear energy continue. But I think the key thing is the placement of the reactors. If they are placed in existing nuclear facilities, I don't think you are going to see sufficient opposition to stop it from going forward, providing everything else is in place to make it go forward. I don't think it will be stopped by public opinion. If you try and put in a greenfield nuclear facility, that might be a different case, because there is a whole new NIMBY comes into it then. Mr. Fertel. I agree with Patrick on it certainly being easier at existing sites. I had mentioned two-thirds of the plants have either gotten license renewal or filed for it, and the license renewal process involved public hearings at the site; and the opposition around sites is really very low. There is opposition at some sites, and you could probably figure out where that might be, but most sites you get very strong support because the people that work at the plant live in the area, they have lived there for years, they know everybody and they have developed credibility; and also the political environment around there has gotten to know the plant. Mr. Chairman, I have with me--just the stuff I had brought--a February 2005 perspective on public opinion which I would---- Mr. Issa. We appreciate it. We will include it in the record. [The information referred to follows:] [GRAPHIC] [TIFF OMITTED] T1364.080 [GRAPHIC] [TIFF OMITTED] T1364.081 [GRAPHIC] [TIFF OMITTED] T1364.082 [GRAPHIC] [TIFF OMITTED] T1364.083 Mr. Fertel. It supports basically--I had not heard the San Onofree number that you mentioned, but we have been doing polling for a long time, and we ask the same questions, so you can either decide you like our question or you don't like our question, but we don't gain the question each time we ask it, so you sort of do get some trend. We have asked the question on ``Do you agree or disagree we should definitely build more nuclear power plants?'' going back a long way, and just to show the public does change its mind, back in the 1998-1999 timeframe, basically 49 percent said no and 47 percent said yes. When you are out in sort of the timeframe of the end of last year, what you are getting is 60 percent say yes and 34 percent say no. You see a big switch. And that is because energy was on their screen for a while. Blackouts get people's attention; high prices for gasoline get their attention. Or else, to be honest, I think we, as Americans, take energy for granted. When we have done focus groups when energy isn't on the screen and you ask where electricity comes from, the two most dominant answers are the switch and the outlet. So if I wanted more energy, I used to have a slide that showed more switches and outlets, and that is how you got it. Now, if you probe a little, you do get answers, but the initial answer is that. Mr. Issa. My son once said if you want money, you can either earn it or go to the bank. Mr. Fertel. That was better than go to dad. Mr. Issa. I am trying to keep it that way. Mr. Fertel. The other question--I think it goes to what Patrick said on NIMBY--is since I think about 2000 we have been asking a question which says ``Given there was a need for more electricity, would it be acceptable or unacceptable to you to build a new nuclear power plant at a site where one exists?'' And what we find on that is that you are in the 60's to 70 percent acceptable, because you have kind of dealt with NIMBY. If I don't have a plant near me, I can say yes, you should build it because it is not going to be near me, and if I do have a plant near me, I am probably understanding of the value of it. And I think Americans are pretty responsible when they understand a need. I think in the abstract we are maybe not as responsible. But I would put this in: I think, counterintuitive to what people think, there is a lot more support for nuclear than is generally recognized. Mr. Issa. Excellent. I will mention that the nuclear power plant does a whole lot better than existing or future airports in my district. For some reason, everyone does believe they can go somewhere else for an airport. I want to close with just a question that I think tees up the question of do we need more nuclear or not. I was born and raised in Ohio. Natural gas is the fuel of choice in Ohio for heating our homes, as it is in much of the--well, not the northeast, but the lands of the western reserve tend to be gas heavy. Ground source heat pumps are very uncommon in that area. Electric heat pumps are also considered to be losers, because electricity historically costs more than just burning natural gas, even if it is in 17 percent efficient furnaces. If natural gas continues to go up in price, then it is obvious. But if we just take sort of the base today, if we achieve 3.2 cents per kilowatt hour, high efficiency heat pumps, ground source heat pumps, which always tend to be augmented with some electricity consumption, does it represent a viable alternative to home heating with natural gas or other fossil fuels? Because we are looking today at a load based on the status quo, which is Ohio heating with natural gas and using electricity for lights and air conditioning. If we are looking at dramatically reducing our dependence on fossil fuel other than on mobile vehicles, which we don't have a great answer for today, the next greatest use obviously is the home. In various heating systems it varies from area. So I will start with Mr. Jones, if you have an answer, and I will finish up with Dr. Moore. Mr. Jones. I don't have an answer on natural gas versus heat pumps. Mr. Issa. Marvin. Mr. Fertel. I think that to think about answering your question you have to think globally. I mean, one of the things that we are seeing happening is China and India driving the price for a lot of things right now--oil, for instance; even we are concerned about nuclear fuel. As China builds a big program, they are going to tie up a lot of nuclear fuel. And I think as the developing nations begin to use more gas, as Japan uses more gas--it is all going to be LNG because they don't have any domestic supplies--I think what it is going to do is drive up the price of gas, as the rest of the world does their thing. And as you drive up the price for gas, what we are going to find is you need to go--I mean, electricity and gas have always had this love/hate relationship on home heating, and I think that it will probably begin to favor electricity as the gas prices go up per use worldwide. So that would be my guess. Mr. Issa. And, Dr. Moore, I must admit I teed this up for you primarily because it is a question of sustainability. Mr. Moore. Well, one way of putting it is it doesn't make much sense to have a 1,200 degree Fahrenheit flame in your basement to heat your house up to 72 degrees Fahrenheit. Mr. Issa. Touche. Mr. Moore. In other words, we are using a very high form of energy for what can be accomplished with low-grade energy, and the energy that is in the surface of the earth around and under your home is a low-grade energy which is there because 50 percent of the sun's energy is absorbed by the earth, and it is sitting there waiting to be used; and there is 50 times as much energy under your house than you are ever going to need to heat, cool, and provide all your domestic hot water. So my friend David Hatherton, president of Next Energy Solutions in Ontario, is the largest distributor of ground source heat pumps in Canada. He also built with his partner the Fort Wayne Water Furnace International plant. And I have been working with Dave for over 12 years on this subject now. There is no doubt now that as gas prices are going up, more and more people are choosing to put ground source heat pumps in their homes. His business is growing an average of 50 percent a year right now, and that is reflected across the board. So high gas prices are good for ground source heat pumps. One of the reasons ground source heat pump sales have been centered in rural areas, and why the rural electrical co-ops have been very much involved with ground source heat pumps, is because often there is no natural gas in these rural areas and people are using propane and oil. And when you compare ground source with propane and oil, there is just no comparison; the ground source is more cost-effective. Compared with gas--until now at least, as gas prices go up and up--ground source has had a hard argument because the payback is so much longer, even 10 or 12 years, and the average homeowner won't go for something like that. Now, in my estimation, this is purely an issue of human psychology and nothing to do with real economics, because you do get a payback with ground source; it does reduce your energy cost tremendously, because you are getting most of your energy now more or less for free out of the ground, and all you have to do is buy the electricity that you need to pump that energy into your house. For example, many of us will willingly pay $10,000 or $20,000 more for an automobile than we really need to in order to get all of the functions of an automobile, if we want a BMW, for example, instead of buying a Chevrolet. That happens all across the country everyday; hundreds of thousands of people making that decision, when there is absolutely no practical necessity for it, it is all psychological. People will pay $20,000, $30,000, $40,000 for a home entertainment system when an i-pod hooked up to a micro-stereo would do just fine. Mr. Issa. Especially for those of us with older hearing. Mr. Moore. Right. But it is hard to get people to make the decision to invest an extra $10,000 in their home heating, cooling, and hot water supply, even though that allows them to say I have a CO<INF>2</INF> emissions-free home. And what we have to do is get people to be as proud of having a CO<INF>2</INF> emissions-free home as they are of having a pretty car. And I don't know how you achieve that, whether it is just a fundamental problem with human psychology, but I do know that it has nothing to do with economics. Mr. Issa. Well, thank you. I will close by going on the record and saying that I have both a Lexus and a Toyota Prius. I want to appeal to both voters any chance I can. Mr. Moore. That is very political. Mr. Issa. Actually, I really love the Prius, it is the ideal car for here in Washington, DC. All kidding aside, it is the statement--and, Patrick, you alluded to this all throughout. We have to use all these sustainable alternatives, nuclear being the subject du jour, but no question at all that we can't give up on any of these. I look forward to having you back, if you will come back as we progress through this process. And with that, with unanimous consent, we are adjourned. [Whereupon, at 12:13 p.m., the subcommittee was adjourned.] <all>