Public Policy

Testimony for the Record

Marvin S. Fertel
President and Chief Executive Officer
Nuclear Energy Institute
Appropriations Subcommittee on Interior, Environment, and Related Agencies
U.S. House of Representatives
March 28, 2012

The Nuclear Energy Institute¹  (NEI) appreciates the opportunity to express its concern over the revision or enforcement of certain regulations promulgated, and actions taken under certain laws, by the Department of the Interior, the Bureau of Land Management, and the Environmental Protection Agency:

• EPA’s infeasible requirements and prohibitively restrictive definitions in the proposed rule for existing facilities implementing Section 316(b) of the Clean Water Act governing cooling water intake structures;
• DOI’s withdrawal of land in northern Arizona from uranium mining activity;
• BLM’s proposal to amend land segregation regulations to allow withdrawal of lands from mining activity when they are included in a pending or future wind or solar energy generation right-of-way application, or identified by BLM for potential authorization for that purpose; 
• BLM sage grouse habitat management in 10 Western states, which could unduly restrict uranium mining activity; and, 
• EPA Region 6’s departure from EPA Guidelines for Reviewing Aquifer Exemption Requests for mining projects and unilaterally establishing its own evaluation standards.

316(b) Regulations Will Increase Consumer Electricity Prices With No Environmental Benefit Unless They Are Made More Flexible to Account for Ecological, Geographic and Engineering Diversity of Existing Industrial Facilities

EPA has issued a proposed regulation to reduce aquatic life mortality at cooling system intake structures for existing industrial facilities, including power plants.  The final rule is scheduled to be promulgated in July.  The proposed regulation treats entrainment (fish drawn through the cooling system) and impingement (fish trapped on intake screens of these systems) separately. The proposed impingement requirements will result in the installation of costly, ineffective technologies with no assurance of compliance or environmental benefit.  The EPA cost-benefit calculations indicate that the proposed rule will cost citizens 21 times the benefit they will derive if these changes at facilities are implemented.  In addition, the nation’s electricity sector could face grid reliability challenges if the rule is promulgated recommending excessive mitigation technologies that could reduce plant efficiency and electrical output.

Studies of aquatic life population conducted periodically at America’s power plants indicate that once-through cooling systems do not harm aquatic life populations.  This is because the very small number of fish lost to the cooling system, when compared to the overall population, is readily replaced by reproduction.  Any nationwide numeric performance standard ignores ecosystem diversity at the 1,152 affected sites.  For instance, there are 3,153 species of fish in U.S. waters.  Every water body has a different mix and population of fish species and each species differs in susceptibility to impingement and impingement mortality, and in behavioral responses to various technologies developed to prevent these occurrences.

If EPA continues to insist upon a nationwide impingement requirement, it should be a technology-based standard that would accommodate rather than violate site diversity.  The regulation should offer a variety of pre-approved technologies from which to choose for compliance.  Also, there should be the opportunity to propose an alternative technology if it can achieve significant impingement mortality reduction at that site.

The electricity industry, including companies who own and operate nuclear energy plants, continues to encourage EPA to develop cooling water intake structure regulations that strike a reasonable balance between electricity production and environmental protection.  A technology-based standard for a nationwide impingement requirement would accommodate site bio-diversity.  The proposed rule, in its current form, does not achieve these results.  We ask the subcommittee to encourage EPA to adopt a technology-based standard for impingement. 

DOI’s Withdrawal of Land from New Uranium Mining in Northern Arizona Is Unnecessary for Environmental Protection and Removes from Production a Domestic Source of High-Grade Uranium for Energy Security

DOI has withdrawn from new uranium mining activity one million acres outside the boundaries of the Grand Canyon National Park, which encompasses 1.2 million acres and includes a buffer zone to protect the Grand Canyon.  There is no current or proposed uranium mining inside Grand Canyon National Park.

The proposed land withdrawal is not justified by information contained in DOI’s Final Environmental Impact Statement.  For instance, regarding land disturbance, “impact to overall soil productivity and watershed function would be small because the level of disturbance represents a very small fraction of the respective parcel areas.”  In terms of water resources, “impacts would be local and temporary.”  Modern in situ mining practices and standards, unlike the mining of 50 to 60 years ago, have minimal environmental impact.  Contrary to Secretary Salazar’s statement in announcing the land withdrawal on January 9, today’s environmental laws ensure that ore extraction and production at uranium mines have negligible impact on surrounding land, water and wildlife.

Uranium resources in the Arizona Strip are among the highest-grade ores in the United States. These uranium resources are higher grade than 85 percent of the world’s uranium resources, according to DOI’s Final Environmental Impact Statement.  The area represents as much as 375 million pounds of uranium—more than seven times U.S. annual demand.  NEI supports legislation introduced in the Senate and the House to overturn the DOI decision.  NEI encourages the subcommittee to hold an oversight hearing on this very important issue.

BLM’s Proposal to Amend Land Segregation Regulations to Allow Withdrawal of Lands from Mining Activity for Wind or Solar Energy Generation Violates the Multiple-Use Mandate of Federal Lands, Penalizing Economic Growth and Job Creation

The Federal Land Policy and Management Act of 1976 requires BLM to manage public lands to accommodate multiple uses and to provide for the nation’s mineral needs so that the most benefit will accrue to U.S. citizens.  Conflicts should be resolved in favor of maximum land use and benefit.  The BLM proposal violates the multiple-use requirement, being overly broad in its outright segregation of lands for renewable energy use only.  Moreover, the amendment is unnecessary, as conflict resolution is possible.

Mining and all renewable energy projects are not mutually exclusive.  Wind energy projects and mining operations can be co-located and developed simultaneously.  Solar projects consisting of fields of photovoltaic panels, on the other hand, eliminate all other uses of the land, including grazing, recreation, and oil and gas exploration and production.  Photovoltaic fields also eliminate the mining of minerals, many of which are required for renewable energy generation and transmission.

Thus, rather than BLM designating lands solely for solar projects, NEI urges the subcommittee to direct BLM to evaluate whether other potential uses of federal land are being prevented and if benefits would be lost to the American public during the BLM process of determining sole use segregation of land for renewable energy production. 

BLM Sage Grouse Habitat Management in 10 Western States May Unduly Restrict Uranium Mining Activity

BLM has issued two instructional memorandums regarding immediate and longer term conservation actions for sage grouse priority habitat (breeding, late brood-rearing, winter concentration areas) and general habitat (additional occupied seasonal or year-round areas).  Both types of habitat are being identified in collaboration with state wildlife agencies.

The affected Western states are California, Colorado, Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. With about 47 million acres of sage grouse habitat involved, BLM’s conservation efforts could have a substantial impact on uranium mining activity on public lands.  Wyoming’s guidance for sage grouse preservation has been approved by the Fish and Wildlife Service and adopted by BLM.  For the other states, the interim management memorandum guidance instructs mining operators “to avoid effects on sage grouse and its habitat.”

According to the long-term planning directive memorandum, BLM will establish consistent protection measures for the sage grouse and its habitat. BLM will incorporate the protection measures into one or more alternatives for analysis in the environmental impact statements that BLM will use to amend its resource management plans. These plans are scheduled for release in 2014.  NEI believes there is the potential that these plans will require wholesale withdrawal of lands from mining activities with no validity examination allowed for ongoing or future mining claims. 

NEI recommends close congressional oversight of the BLM process for releasing the Sage Grouse Habitat Management plan.  In addition, NEI asks that the subcommittee direct BLM to adopt a balanced approach to sage grouse conservation that is consistent with BLM’s statutory mandate for multiple uses of public lands and avoid or minimize adverse social and economic impacts.

EPA Region 6’s Departure from EPA Guidelines for Reviewing Aquifer Exemption Requests Will Have a Prohibitive Effect on Expanding the Domestic Uranium Industry

EPA guidance is clear regarding evaluation of requests to exempt aquifers from drinking water protections so that mining projects can proceed: (1) the exempted area does not currently serve as a source of drinking water and (2) it cannot now, and will not in the future, serve as a source of drinking water because of the presence of minerals or hydrocarbons expected to be commercially producible.  To demonstrate that a particular area meets these requirements, applicants must perform, respectively, a water well survey covering the exempted area and a buffer of one-quarter mile from the exempted area’s boundary, and provide a history of mineral production in the area.

In the case of the Goliad County, Texas, uranium mining project, EPA Region 6 is requiring modeling analysis in addition to a well survey and history―a unilateral departure from the established EPA guidance.  Moreover, the requested modeling is not defined, and Region 6 says that it will review whatever modeling results are submitted to determine if more modeling is needed, creating an open-ended regulatory process.

The new standards unilaterally imposed by Region 6 will jeopardize future uranium mining in Texas and limit the potential of one of this country’s most promising domestic supplies of uranium.  Moreover, this effect will be compounded if one, or more additional EPA regions, unilaterally decides to impose its own evaluation criteria counter to established EPA guidance.

The nuclear industry believes that the result will be a serious impediment to expanding the domestic uranium industry and ensuring a reliable and secure supply of nuclear power plant fuel. In addition, the EPA Region 6 process introduces uncertainty into well-known guidance. The overall result will adversely impact U.S. mining operations and unnecessarily restrict domestic job creation. 

NEI urges the subcommittee to direct the agency to review the guidelines for reviewing aquifer exemption requests to ensure that these guidelines are clear and the EPA regions are not unilaterally imposing unfunded mandates on mining companies.
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¹ The Nuclear Energy Institute is the industry’s policy organization, whose broad mission is to foster the beneficial uses of nuclear technology in its many commercial forms.  Its membership, more than 350 corporate members in 17 countries, includes every U.S. utility that operates a nuclear power plant as well as international utilities, plant designers, architect and engineering firms, uranium mining and milling companies, nuclear service providers, universities, manufacturers of radiopharmaceuticals, universities, labor unions and law firms.

The Nuclear Energy Institute¹  (NEI) supports the Administration’s request for Fiscal Year 2013 (FY13) funding for the Nuclear Regulatory Commission (NRC) ($1.053 billion), the DOE National Nuclear Security Administration (NNSA) Fissile Materials Disposition program ($921 million), and the DOE Office of Environmental Management ($5.7 billion).  NEI recommends $117 million more for the DOE Office of Nuclear Energy ($792 million), and an increase of $1 million to restore the NNSA Export Control Review and Compliance program to $12.5 million.

Uranium Enrichment D&D Fund Tax Undue Burden on Electricity Consumers

The Administration’s FY13 budget proposes to reinstate the uranium enrichment decontamination and decommissioning fund, with a tax on electric consumers of $200 million a year until 2022.  Electric utilities have already paid twice for decontamination and decommissioning at uranium enrichment plants that were originally operated by the Department of Energy—first as part of the price for uranium enrichment services from the facilities and again under the Energy Policy Act of 1992.  Under the 1992 law, the tax on utilities was to end after 15 years or the collection of $2.25 billion, adjusted for inflation. The utilities paid this amount in full.   Because the industry has fully met its obligation for the cleanup of the government facilities twice already, NEI strongly opposes the Administration’s proposal. The industry appreciates the support of the subcommittee in rejecting this proposal in prior years and encourages you to continue to oppose this proposal. 

Ensuring a Strong Nuclear Regulatory Commission

An independent, credible regulatory agency is required for public confidence in commercial nuclear energy facilities.  During the next couple of years, the NRC must continue its inspection and licensing activities at America’s nuclear energy facilities while implementing safety recommendations of the agency’s task force based on lessons learned from the Fukushima Daiichi accident.  Effectiveness of the five-member commission is essential to ensure NRC staff and licensees alike have clear policy guidance.  The commission functions most effectively when it has a full complement of five commissioners, and the nuclear energy industry believes Congress’ highest priority should be ensuring that vacancies on the commission do not occur.

The industry supports FY13 funding at the NRC’s requested level of $1.053 billion, an increase of $15 million above its FY12 funding levels.  The industry remains concerned, however, at the steep escalation in agency budgets and staffing levels over the last decade, from 2,763 staff in FY01 to 3,927 staff proposed in FY13, and from $487 million in FY01 to more than $1 billion proposed in FY13.  The industry is aware that the agency has $32 million in unobligated balances from prior years’ appropriations.  The NRC chairman has suggested that the additional Fukushima-related work would amount to nearly $30 million in new spending.  If the agency does not plan to allocate these funds in this manner, the industry believes that the unobligated balances should be used to reduce licensee fees in future years.  

The industry applauds the oversight of the NRC by Congress to ensure the agency effectively prioritizes its activities and achieves closure on open issues in a timely and appropriate manner.  The agency should continue to achieve greater transparency in its budgeting to reveal planned staffing and resource needs by individual divisions.  This is particularly true concerning the defense and national interest programs funded by taxpayers in appropriated funds.  In any one year, the NRC should ensure that these programs are funded at the entire 10 percent of available funds. A firewall should exist between fee-based sources of funds so the user fee is not used as an additional source of funding for appropriated programs.  This would demonstrate to Congress, the public and the industry (which pays 90 percent of the NRC’s budget) that the budget fairly reflects industry-specific activities.

Once again, the Administration has proposed terminating the Integrated University Program, which supports the nation’s universities and community colleges.  This program supports important nuclear science and engineering research and workforce training. Given that more than half of America’s green jobs in the electric sector are at nuclear energy facilities, it is vital that Congress provide financial support for students and junior faculty.  The NRC program is managed jointly with DOE’s Office of Nuclear Energy and DOE’s National Nuclear Security Administration and has been authorized by Congress.  NEI supports $15 million for NRC to continue its participation in the program in FY13 and recommends that NRC fund the program at that level.

Adopting the Recommendations of the Blue Ribbon Commission on America’s Nuclear Future

NEI supports the general policy recommendations of the Blue Ribbon Commission (BRC) on managing used nuclear fuel and high-level radioactive waste.  A DOE task force is scheduled to provide a plan on implementing the recommendations to Congress by the end of July, and industry believes that report should provide a basis for the FY13 budget.   The following programs deserve support and represent the highest priorities for the nuclear energy industry:

• Fuel Cycle Research and Development - $191 million (an increase of $16 million)
  • Used Nuclear Fuel Disposition (the BRC recommendations) - $60 million
  • Advanced Fuel Research and Development - $60 million (+$20 million)

NEI also supports the request of $10 million derived from the Nuclear Waste Fund to use on used fuel storage and disposal programs at DOE.   NEI urges the subcommittee to support the following initiatives using $10 million from the Nuclear Waste Fund in FY 13.  DOE should:

• Work closely with utilities, and based on work performed by the Department in FY12, develop timelines, specifications and estimated costs for the development, licensing, construction, and operation of a consolidated storage facility for spent nuclear fuel and high level waste;
• Work closely with affected states, Indian Tribes, and utilities to develop detailed transportation plans for moving spent nuclear fuel from the sites of nuclear power plants that have ceased operation to a consolidated storage facility;
• Work closely with affected states, Indian Tribes, and utilities, to develop and implement a plan for training first responders in preparation for transportation under section 180c of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101);  and,
• Identify communities potentially interested in hosting a consolidated storage facility; and,
• Forward to the appropriate committees of the Senate and House of Representatives a budget and authorizing legislation for recommendations from DOE.

Within the DOE Fuel Cycle R&D program, $5 million should be used in FY13 to collect data on the aging characteristics of used nuclear fuel in dry cask storage systems, to support the extended use of these systems, and ensure their transportability after periods of extended storage. The Advanced Fuel R&D program will focus on the Accident Tolerant Fuel Initiative which is important to long-term light water reactor fuel development and should receive $60 million in FY13. 

The nuclear industry remains concerned about the termination of the Yucca Mountain project.  The project should proceed and be funded so the technical review of the license application can be completed.  Numerous state and local governments and the National Association of Regulatory Utility Commissioners are actively opposing DOE’s withdrawal of the application for the Yucca Mountain repository at the NRC and in the courts. We urge the committee to request a specific plan, including the resources required for completing the Yucca Mountain licensing process, assuming the courts rule the application cannot be withdrawn.

Development of Advanced Reactor and Fuel Technologies

The proposed DOE Office of Nuclear Energy FY13 budget is 12 percent lower than FY12 while other DOE non-nuclear programs are funded at much higher levels.  Funding was reduced by 17 percent in research and development programs that are vital to the nation’s interest in nuclear energy, science and technology.  These cuts in DOE programs hinder the nation’s ability to manage used nuclear fuel and promote key research in innovative reactor concepts.   The following programs deserve support and represent the highest priorities for the nuclear energy industry:

• Small Modular Reactor Licensing Technical Support - $95 million (+$30 million)
• Light Water Reactor Sustainability Program - $25 million (+$4 million)
• Energy Innovation Hub for Modeling & Simulation - $25 million
• Integrated University Program - $5 million (+$5 million)
• Next Generation Nuclear Plant - $41.5 million (+$20 million)

The Secretary of Energy strongly supports the small modular reactor licensing program and has proposed a five-year, $452-million program.  Unfortunately, the DOE FY13 request of $65 million falls well short of that obligation, and the industry requests that funding be increased to $95 million.  DOE made a similar five-year $250 million commitment for the Modeling and Simulation Hub and it is vitally important that this program receive the funding necessary to succeed.   In addition, the Light Water Reactor Sustainability program that is cost-shared with industry should receive $4 million more than the DOE FY 13 request to implement research to extend the licenses of the nation’s operating reactors.

Industry Supports the DOE Innovative Technologies Loan Guarantee Program

The nuclear industry appreciates the support provided by the subcommittee for the DOE loan guarantee program for nuclear energy plants and uranium fuel cycle facilities.  NEI urges the subcommittee to maintain the appropriated funds for projects under development for FY13.

There is no cost to taxpayers for nuclear energy project loan guarantees, but there is significant benefit to consumers.  The use of loan guarantees will lower the overall cost of nuclear energy projects, ultimately reducing the cost of electricity to consumers.  Companies granted loan guarantees by DOE for nuclear energy projects must pay a premium for use of the program, plus cover all administrative costs.  However, the clean energy loan guarantee program, although essential, is not yet a workable financing platform.  NEI urges the subcommittee to exercise its oversight responsibilities on implementation by the Executive Branch, particularly on the issues of the credit subsidy cost that project sponsors are expected to pay.

Environmental Cleanup and National Security

DOE’s budget for the Environmental Management Office should be kept at level funding to ensure DOE meets its FY13 enforceable environmental compliance milestones.  NEI remains concerned about NNSA’s Part 810 export control rulemaking.  The industry has identified several issues that will impact the implementation of the program in FY13.  The NEI urges the subcommittee to consider the impact to the U.S. industry as a result of the inadequate funding of $11.4 million proposed for FY13 for review of export licenses, about $1 million less than last year.  NEI supports the Administration’s request of $921 million for the Fissile Materials Disposition program.
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¹  The Nuclear Energy Institute is the industry’s policy organization, whose broad mission is to foster the beneficial uses of nuclear technology in its many commercial forms.  Its membership, more than 350 corporate members in 17 countries, includes every U.S. utility that operates a nuclear power plant as well as international utilities, plant designers, architect and engineering firms, uranium mining and milling companies, nuclear service providers, universities, manufacturers of radiopharmaceuticals, universities, labor unions and law firms.