Good morning…Thank you all for being here on the second day of the Nuclear Energy Assembly.

I would particularly like to thank Senators Domenici and Voinovich for their insightful comments…

And, more importantly, for their continuing support of our industry.

As you have already heard over the course of this conference…

Nuclear energy is being appropriately recognized for what it is—a safe, environmentally sound, competitive and indispensable component of our national energy mix.

That recognition is in no small measure due to the leadership of these two distinguished Senators, and…

A number of their congressional colleagues on both sides of the political aisle.

And, as we have seen in recent weeks, the Bush administration.

I am proud that our industry has always been able to rise to the occasion.

When faced with a challenge—a call to arms, if you will—we have always responded with a boldness born of the leadership and determination of those of you here today.

Three years ago, our industry was at a crossroad…

Our collective efforts to improve performance over the last decade had paid off…Our plants were setting safety and economic performance records…

Yet our confidence had waned.

Yes, we were at a crossroad.

We could have either accepted the conventional wisdom that nuclear energy’s market share of electrical generation would be cut in half by 2020...

Or, we could choose a better road…one that built upon the hard work and technological achievements of the past, but also diligently pursued a more relevant course for nuclear energy.

That year, NEI published for the industry  Nuclear Energy: 2000 and Beyond, A Strategic Direction for the 21st Century .

The Strategic Direction set a bold and innovative new tone…

It outlined specific policy areas—ranging from energy security to increasing public support—in which we needed to pursue a new course of action to guide industry and government efforts.

Behind the Strategic Direction was our firmly held belief that, because of the industry’s greatly improved performance, the advent of market restructuring and the growing public concern for the environment…

Our industry had before it a vast opportunity…

The opportunity to move to an entirely new stage in its development.

One vital dimension of that opportunity was the notion that renewing the licenses of existing nuclear plants made enormous economic sense…

NEI’s Board Chairman Chris Poindexter responded with the boldness expected of an industry leader in times of challenge.

With the innovation typical of our industry, he led his company to the first 20-year license renewal in our industry’s history.

Others have followed his lead…and still others—many others—have informed the NRC of their intentions to relicense their plants.

We now expect that virtually all plants will do so in the future.

Today I will introduce a new vision for our industry’s future over the next two decades…

Because, as our Chairman reminded us yesterday, in order to ensure our industry’s future, we must focus on the long-term as we address important near-term issues.

But it is important to keep in mind that elements of the Strategic Direction will continue to punctuate our work…even as we take our industry into its next chapter.

That is why, based on the best available science…we will continue to pursue used fuel storage and the Yucca Mountain repository.

That is why we will continue to pursue regulatory reform by emphasizing the importance of safety-focused and performance-based oversight.

And that is why we will continue to emphasize our industry’s many environmental benefits.

Nelson Mandela wrote in his autobiography, that after climbing a great hill, one generally finds that there are many more hills to climb.

You have led our industry through nothing short of a nuclear renaissance.

For that, each of you deserves great credit.

But today, we face an even greater challenge.

Our nation faces an energy crisis of serious proportion in all areas of energy supply.

And with it the potential for enormous economic disruption…domestically and abroad.

Our nation also faces the challenge of meeting its energy needs in a sustainable and environmentally responsible fashion.

And as our country’s only baseload, emission-free generation…our industry is an important part of the solution.

The convergence of four important elements—growing energy demand, energy supply shortfalls, the continued environmental imperative and the need for continued economic growth—demand that we set out upon a new and more dynamic vision of the future…Vision 2020.

As I review the elements of that new vision…where our industry needs to be and how we will get there... place yourselves 20 years in the future and imagine what could be…

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The centerpiece of that vision is that… “In the two decades since the turn of the century, 50,000 megawatts of new nuclear generating capacity have been added to the grid.”

What does 50,000 megawatts of new nuclear generation mean?

If you assume a moderate growth in electricity demand of 1.8 percent per year…

Factor in a decline of about 3 percent in hydroelectric generation’s market share…and assume a small increase in non-emitting renewables…

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Adding 50,000 megawatts of new nuclear capacity—in addition to anticipated capacity factor and efficiency gains—means that the nation will retain its 30 percent share of emission-free generation…

That’s right, despite being a goal that will call upon all of our intellectual, technical and human resources…

Adding 50,000 megawatts of new generation retains the nation’s current 30 percent share of emission-free, sustainable generation.

Because of the enormous demand growth anticipated over the next two decades, it also increases nuclear energy’s total market share of electrical generation a modest three percent…

Let me say that again…

Adding 50,000 megawatts of new nuclear capacity by 2020…

In conjunction with anticipated capacity factor and efficiency gains…

Maintains as stable the percentage of emission free generation…

And increases nuclear energy’s market share to 23 percent of the electricity produced in this country.

This helps put into perspective the scope of the energy challenge that the nation must confront…and underscores the enormous importance of our industry adopting this bold new vision.
 
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Another vital element of Vision 2020 is that in two decades “Policymakers and the public are actually demanding further increases in the share of sustainable nuclear energy to satisfy economic growth and environmental objectives.”

Why? Because the potential economic effects of even temporary energy shortages are staggering…

For example…summer blackouts could cost California—the sixth largest economy in the world—as much as $22 billion in lost productivity and as many as 135,000 jobs.

Intel chief executive Craig Barrett, whose company is the largest microchip producer in our digital world.

Recently vowed not to expand his business in California because of the state’s challenged energy infrastructure…

He said that he would seek out alternative locations for expansion…where he could be assured a secure, reliable and cost-effective supply of electricity.

His point is well taken…Adequate electricity supply and growing the economy go hand-in-hand…You can not have one with out the other.

Barrett also said that nuclear power was the only answer to California’s long-term energy woes—albeit not the “politically correct” answer.

But increasingly, nuclear power is the politically correct answer…

Policymakers and the public increasingly acknowledge nuclear energy’s role in the energy equation…

And over the next 20 years, they will be asking why nuclear power is not a larger part of our national energy mix…even beyond what we pledge today.

Likewise, you cannot reduce air pollution and greenhouse gas emissions while producing large amounts of baseload electricity unless nuclear energy plays a significant role in the national energy mix.

The industry has known this since the first commercial reactor went online at Shippingport…

Environmentalists have known it since the 1960s when they cited nuclear energy’s emission-free nature in lawsuits seeking the closure of oil-fired power plants…

And policymakers and the public are increasingly embracing the fundamental truth that nuclear energy is a sustainable and environmentally responsible energy source.

That is why Cogema CEO Anne Lauvergeon—who you heard from yesterday—was right on target when she recently questioned in France’s leading newspaper Le Monde , whether anti-nuclear activists were fighting the wrong battle—fighting against nuclear energy instead of combating air emissions.

Nuclear energy is not an environmental question…it is part of the environmental answer.

And as such, a vital component of sustainable development.

As Chris Poindexter said yesterday, the industry must proudly take credit for our environmental attributes.
 
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The third important element of Vision 2020 is that “Nuclear technologies are widely used in medicine, food safety, water management and to produce complementary clean fuels such as hydrogen.”

Many know about the more than 10 million diagnostic and therapeutic nuclear medicine procedures performed each year in the United States that save lives and improve the quality of medical care…

And about the tons of food products and everyday household items that are made safe through exposure to ionizing radiation…

What is less well appreciated is nuclear energy’s potentially wide scale role in purifying contaminated water supplies and desalinating seawater…

Along with electricity…safe, clean drinking water is the lifeblood of society.

By 2050, estimates are that 10 billion people will populate our world…mostly in developing countries.

Nuclear energy could play a pivotal role in supporting that growing population with the water and electricity needed to sustain development.

But even in our own country, nuclear energy could help reverse the trend in fresh water shortages…both in homes and in agriculture

And by 2020 help guarantee a virtually inexhaustible clean water supply.

The situation is the same in terms of producing complementary clean fuels like hydrogen.

There has been much talk of using hydrogen fuel for fleet transportation systems such as metropolitan area mass transit…

But producing hydrogen requires energy…and unless the hydrogen is produced with energy from an equally clean fuel source…emission gains are largely negated.

As nuclear energy gains in prominence, so too will the public’s appreciation of these important aspects of our industry…

Instilling an increased comfort and acceptance of nuclear energy as an extraordinarily beneficial resource.

In short, in 2020 nuclear energy is widely recognized as a safe, reliable, competitive and environmentally sound source of electricity…and adding value to our quality of life.

And U.S. leadership continues to be demonstrated in the deployment of new nuclear technology on a global basis.

To meet our nation’s future energy appetite…

The nation will need all generation types…including nuclear, fossil and renewables…

Along with increased energy efficiency and conservation measures…

In particular, increased energy conservation and efficiency—natural byproducts of technological advances—can help provide some relief to the current energy crisis.

But for long-term relief, as the administration has pointed out, more generation is needed.

Consider the following projections of increased electricity demand…

The Energy Information Administration, the statistical arm of the U.S. Department of Energy, predicts that over the next two decades…

Our nation will need nearly 400,000 megawatts of replacement and new electrical generation…if electricity demand grows at the modest rate of 1.8 percent per year.

At a growth rate of 2.5 percent per year…slightly larger than the 2.2 percent annual growth rate during the 1990s…

The need for new and replacement generation jumps to over 560,000 megawatts by 2020.

Since 1980, real U.S. construction spending on electric power plants fell an incredible 50 percent …

Clearly, we have been living on borrowed time in terms of electricity supply…surviving on the excess generation inventory of the past.

The baseload generation put in service during and after the energy crisis of the 1970s provided for the prosperity of today.

And we must respond with that same vigor to the national challenge of the energy crisis of 2000 and beyond…

It is both our civic and corporate duty.

To be sure, the nation will have to pursue some quick fixes in the short-term…

But quick fixes can have many unintended consequences that impact our quality of life.

Let me give you one small and slightly amusing example…

As many of you know, I am a confirmed dog lover…

But there must be some people here who keep “indoor” cats?

Have you noticed that your “kitty litter” has become rather expensive recently?

That is because the absorbents industry uses natural gas to condition clay, the essential ingredient in “kitty litter.”

As the price of natural gas increases, so does the cost of  “kitty litter”…

And if we radically expand the use of natural gas in electricity production…thereby significantly increasing its cost…

I suspect we will see a corresponding increase in the number of “outdoor” cats!

On a more serious note, the industrial market accounts for a significant amount of the natural gas sales in the United States.

And many common products essential to our daily lives and the economy like plastics, textiles and fertilizer…

Will experience the “kitty litter” effect if we seek only short-term solutions to long-term problems.

That is why building additional nuclear generation is necessary…

Because it is a long-term solution that supports the long-term health of our economy, our environment and our energy supply.

Will there be challenges?

Of course there will…

That is why we must approach this challenge more effectively, efficiently and economically than in the past.

And we will…with standardized, safe and cost-effective new plant designs…

And by continuing to build on the enormous gains in operating efficiency that the industry has achieved over the years.

In short, we will do so from the perspective of a unified industry taking advantage of our strong collective management strength and experience.

Those challenges are also why our goal of adding 50,000 megawatts of new nuclear generation is supported by six Strategic Objectives designed to organize and define our efforts.

These objectives are…
 
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Attain prominent and equitable acknowledgement of nuclear energy as a necessary and vital component of national and international energy and environmental policy.

As our Chairman pointed out yesterday, we no longer refer to the “nuclear option,” because we believe nuclear energy is a necessity.

Second, maintain excellence in safe, reliable nuclear energy operations supported by consistent and predictable regulatory processes.

Third, attain an integrated and robust nuclear fuel cycle that is both reliable and competitive.

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Fourth, maximize the value of nuclear energy assets in a competitive electricity market.

Fifth, increase public and policymaker support for nuclear energy and associated technologies.

And…sixth, develop the necessary infrastructure and qualified human resources to meet the needs of the nuclear industry today and for the future.

There is little doubt that Vision 2020 is a bold business initiative…

An initiative that recognizes that we need both predictable new plant construction costs…an efficient, stable licensing process... and sustained excellence in operating safety and performance.

In other words…we need to ensure an equitable return on investment for those companies willing to lead the way…and for those that will inevitably follow.

And it is my firm conviction that Vision 202 0 is both necessary and achievable.

It is necessary because our industry has too much to offer to sit idly by as critical electricity shortages challenge this nation’s social and economic wellbeing…

And it is achievable because it capitalizes on this industry’s vitality, experience and strength of conviction.

To paraphrase the patriot Thomas Paine…

We have it in our power to begin our industry over again…

And we would be terribly remiss to ignore this remarkable opportunity.
 
So the industry will rise to the challenge posed by Chris Poindexter on the opening day of this conference…and to the challenge outlined by the Vice President and the Administration’s energy policy report released last week.

And NEI promises to provide the strong leadership and direction necessary to help position today’s nuclear energy industry to meet tomorrow’s energy challenges…

And to turn the nuclear energy renaissance of today…into the reality of Vision 2020 .

Like Nelson Mandela, we have encountered another impressive hill to climb...

But one that once conquered by the leaders in this room …

Will make for a challenging but achievable ascent over the next 20 years.
 
Thank you.