Good morning. It is a great pleasure for me to take part in this panel. The theme of this session — planning for clean affordable energy — is an endeavor that the nuclear industry heartily subscribes to, since clean, affordable energy is what we’re all about. The nuclear energy industry worldwide generates the most electricity without the emission of harmful greenhouse gases.

For nearly five decades, nuclear energy has proven its crucial contribution to sustaining the world’s energy supply and economic growth, while protecting the environment. And while our industry has been ahead of the game in “planning” for clean, affordable energy, we are pleased to be part of the ongoing and expanding efforts to make future generations of energy sources consistent with the social, economic and environmental values of today and the future.

There is a renewed interest in nuclear energy, coming at a time when the United States and many other countries are facing serious energy issues.

The electricity shortages in California earlier this year captured a great deal of attention, and raised concerns about the future of electricity deregulation. However, I believe deregulation will continue in the U.S. — albeit at a slower pace than before. A number of states as well as several other countries have already deregulated their electricity industries without the wild price spikes and rolling blackouts that California suffered.

The basic issue for any country is whether its electricity supply and transmission capability are adequate to meet its needs. Dynamic economic growth, such as we have seen in California, increases the demand for electricity. And in order to meet that demand, new capacity has to be added — which was not done in the California region.

New power plants, transmission lines, oil refineries and natural gas pipelines must be built to keep pace with demand. That is a fact of modern life. Another fact of modern life…our need to strike a balance between meeting future energy demands while adhering to environmental guidelines.

I was asked to discuss used fuel management and the environmental conditions within the nuclear energy industry in the United States. Although much of the industry’s success is attributed to its contributions to the environment and to its safe, reliable and economic power, the success of nuclear energy cannot be recognized without mentioning some of the other areas that play off each other to make our industry thrive.

Mr. Grant showed you some of this data yesterday, so I will do so quickly.
 
U.S. Plant Performance
The remarkable performance of the world’s nuclear power plants has helped to focus new attention on nuclear energy in the United States.

Certainly, it’s a technology that is safe, reliable, affordable and environmentally clean. But the single biggest reason that nuclear energy is seen in a more favorable light in the United States is the outstanding performance of our 103 nuclear power plants.

In 2000, the average capability factors of U.S. reactors reached a record level of 91 percent.

Most importantly, this record capability level came at the same time as significant plant events have fallen to a record low level — a decline of 97 percent over the past 15 years.

U.S. reactors generated a record 754 billion kilowatt-hours of electricity in 2000, three and one-half percent more than the year before, and 12 percent more than in 1998.

The increase in electricity generation over the past decade is the equivalent of bringing 22 large power plants on-line. This additional generation met approximately one-fifth of the increase in electricity demand over that period — safely, reliably and emission-free.

As output has increased, the production cost for U.S. reactors has decreased. In 2000 — the latest year for which we have complete data — nuclear energy’s production costs were 1.74 cents per kilowatt-hour. The price of nuclear-generated electricity is stable — a very attractive selling point in our rapidly expanding digital economy.
 
Environmental Value
It should be obvious…from our stellar safety and performance records…that safety is our top priority. Beyond that, nuclear energy has proven to be immensely beneficial in protecting our environment.

The environmental impact of nuclear plants is minimal, since they require small amounts of land, burn nothing to generate electricity and produce no greenhouse gases.

In fact, U.S. nuclear plants are responsible for the largest share of voluntary carbon reductions in the U. S. Department of Energy’s carbon reduction program. These plants, however, get no economic recognition for their role in reducing emissions.

Since the 1973 oil embargo, nuclear energy has been one of the most important contributors in improving U.S. air quality. By substituting for other fuels in electricity production (primarily oil and some coal), nuclear energy has significantly reduced U.S. and global emissions of carbon dioxide, the chief greenhouse gas. Between 1973 and 2000, U.S. nuclear plants reduced the cumulative amount of carbon emission by 2.79 billion tons of carbon. In 2000 alone, U.S. nuclear plants prevented the discharge of 174 million metric tons of carbon into the atmosphere.

Clean Air Act
Nuclear plants have also played a major role in the avoidance of nitrogen oxide emissions¾a primary contributor in the formation of ozone and sulfur dioxide emissions which contributes to acid rain. Between 1973 and 2000, nuclear power plants reduced cumulative emissions of nitrogen oxide (NO_x ) and sulfur dioxide (SO_x ) by 33.6 million tons and 66.1 million tons, respectively.

Renewables, such as solar and wind, are generally considered more environmentally friendly than traditional large generating stations. But solar and wind farms are land-intensive and must be sited in geographically suitable places often many miles from the load demand. Wind generation poses a hazard to endangered bird species.

By contrast, most U.S. nuclear power plants support or operate environmental protection programs, including on-site wildlife habitats and estuary restoration.

Nuclear energy is America’s only expandable source of baseload electricity that is emission-free — which makes nuclear energy the leader in emission avoidance technology available to fight global warming.

As the international nuclear industry has noted, nuclear energy is part of the solution when it comes to climate change. I’m pleased to report to you that our government — including President Bush and Vice President Cheney and many in our Congress — recognize and verbalize this as well.

The cornerstone of the nuclear industry’s position at the United Nations climate negotiations session says it all: we cannot eliminate greenhouse gas emissions and increase electricity supplies without using nuclear energy.

In addition, the global imperative for the use of nuclear energy to achieve another important environmental goal — sustainable development — is compelling.

The world’s population — currently 6 billion people — is projected by the United Nations to reach 10 billion by 2050. With that growth comes the need for clean electricity — generated through means that protect our environment and foster sustainable development for future generations.

Conferences like this one help to raise the visibility of nuclear energy’s role in sustainable development throughout the world.

Aside from helping nuclear energy receive appropriate recognition for the benefits it provides, one of the most important things the industry can do is educate people around the world about sustainable development — a term not always well understood.

Sustainable development involves making the wisest use possible of our planet’s limited resources. From our industry’s perspective, then, it would make more sense — particularly for developed nations — to continue to rely to a great extent on nuclear power for their electricity, since uranium’s primary use is for generating electricity. Reliance on nuclear energy would then free up other resources, such as coal or gas, to be used to benefit nations in other ways.

Only a few years ago, energy issues garnered little attention on the American political front. Now, as the United States confronts tough decisions about energy, nuclear energy is a prominent topic.

Vice President Cheney discussed the administration’s energy policy in May at NEI’s annual conference in Washington. The vice president was forthright in his support for nuclear energy and its role in the administration’s energy policy, which he termed a “reliable, affordable and environmentally sound policy going forward.”

The Bush Administration took a bold step forward by calling for a national energy policy, because it realized the dire need for new electricity supplies that will drive continued economic prosperity while safeguarding our environment.

The administration’s recommendations encourage the NRC’s expeditious evaluation of applications for new plants and for relicensing existing plants, it directs the U.S. Energy Department and Environmental Protection Agency to assess nuclear energy’s potential to improve our air quality, and it supports scientific research for geologic disposal of used nuclear fuel at Yucca Mountain in the Nevada desert.

Managing Used Fuel — Yucca Mountain
In one of the most important activities undertaken by policymakers, the process is in motion for U.S. Secretary of Energy Spencer Abraham to decide whether to recommend Yucca Mountain in Nevada to President Bush as a national used nuclear fuel repository.

The U.S. government was to begin collecting and storing used nuclear fuel from power plants and radioactive waste from our weapons program in 1998. Although the government failed to do so by the deadline, major strides are being made in developing a national repository.

The Energy Department in November issued its final Site Suitability Guidelines for the proposed used fuel repository at Yucca Mountain. This completes the regulatory prerequisites needed to support a decision on whether to recommend the site to President Bush for a permanent repository.

This final report incorporates two major regulations — the Environmental Protection Agency’s radiation protection standard and the Nuclear Regulatory Commission’s final repository licensing criteria — both issued after the Energy Department released its draft siting guidelines for comment in 1999.

In addition, the U.S. Nuclear Regulatory Commission has said that sufficient information on DOE’s analysis of Yucca Mountain and the used fuel containers will be available for inclusion in a license application to build a repository.

DOE announced that it is providing a 30-day “supplemental public comment period” (which ends on December 14) on its site recommendation process, which will allow for additional feedback. The latest science can now be reviewed in light of the finalized suitability regulation. The additional comment period is part of a diligent effort by the Energy Department to thoroughly address all public concerns. Supplemental hearings have also now been scheduled in Nevada during the first two weeks of December.

The industry’s effort to spur the decision on Yucca Mountain has been aided by a coalition of 1,200 business, labor and consumer organizations, called the Alliance for Energy and Economic Growth. Former New Hampshire Governor and White House Chief of Staff John Sununu and former congresswoman and vice presidential nominee Geraldine Ferarro are co-chairs of this initiative.

The initiative will involve urging lawmakers, Energy Secretary Abraham and President Bush to officially select Yucca Mountain as a permanent site and begin work on deep geologic storage facility.

If DOE considers the Yucca Mountain site suitable and President Bush concurs, Nevada will have an opportunity to reject the president’s decision. If the host state does so, which we expect, then Congress would make the final decision on the repository.

If the Yucca Mountain site recommendation is approved early next year, it will be followed by a rigorous licensing process by the Nuclear Regulatory Commission for both construction and operation of a repository. The licensing process would take us to 2007¾the expected date that NRC could issue a license for construction of a repository at Yucca Mountain, if regulatory requirements for public health and safety protection are satisfied.

If the license is issued in 2007, we expect DOE to complete construction of the repository and for the NRC to issue an operating license by 2010.

While this process of creating a used nuclear fuel repository continues, U.S. nuclear power plants recognized long ago that they would be required to store used fuel on site for extended periods of time.

Typically, the first choice is to rerack the used fuel pool — moving the stored assemblies closer together. More than 130 re-rackings have been performed at various U.S. nuclear plant sites.

A number of nuclear plants are storing used fuel in large, rugged containers made of steel or steel-reinforced concrete. The containers--18 or more inches thick — use materials like steel, concrete and lead — instead of water — as a radiation shield. Depending on the design, a dry container — called dry casks — can hold from 7 to 56 12-foot-long fuel assemblies. These containers are safe, but they are not a permanent solution

Various dry storage technologies are being successfully used by utilities today. Loaded containers are filled with an inert gas, sealed and stored either on reinforced concrete pads or inside steel-reinforced concrete bunkers. The containers are designed to withstand natural disasters such as tornadoes, hurricanes and floods, and to prevent the release of radioactivity.

The United States generates 300 million tons of hazardous waste each year, while a nuclear power plant produces on average fewer than 25 tons annually. To place waste byproducts and emissions from all forms of power generation into perspective requires life-cycle analysis, which would demonstrate that nuclear energy is one of the most environmentally preferred forms of electricity available.

The U.S. Congress has also recognized these environmental benefits and we’re seeing expanding support for nuclear energy’s environmental contributions.

Legislation has been introduced that confirms nuclear energy as an “environmentally preferable” electricity technology, expands research and development on innovative used nuclear fuel management solutions, reforms outdated NRC rules and procedures, and seeks to reverse the decline in nuclear scientists and engineers in the United States.

These pieces of legislation are important, because they show the strength of Congressional support for nuclear energy and demonstrate to the industry, the financial community, and the public that nuclear energy is an important part of our nation’s…and our world’s…energy future.

Security is Top Priority at Nuclear Power Plants
Considering the United States’ focus on public protection following the September 11 terrorist attacks, plant security is now a leading issue.

All U.S. plants remain on full alert, and will continue to do so for some time. It is important to emphasize that the robust containment structures are part of the “defense in depth” physical safety measures and security forces at each plant, and that this protects the public from release of radiation in the event of a reactor incident.

All U.S. nuclear power reactors meet NRC requirements for security. As part of a seamlessly coordinated security system, information is exchanged regularly between the industry, NRC and federal agencies to safeguard against terrorist activity. Further, the industry constantly updates its security plans and systems to protect U.S. facilities against the possibility of a terrorist strike.

I want to emphasize that the security of nuclear power plants and the public safety of Americans living near them are industry’s top priorities, and we stand ready, along with the rest of America, to respond appropriately and swiftly to changing circumstances in the aftermath of the September 11 attacks.

Vision 2020: Nuclear Energy is Poised for the Future
The foundation is in place in the United States for preserving the benefits of nuclear energy far into the future, and the U.S. will certainly need more nuclear energy in the future.

The U.S. Energy Information Agency projects that the U.S. will need an additional 393,000 megawatts of electricity to meet a modest growth rate in electricity demand of 1.8 percent annually over the next 20 years. This is actually a slower growth rate than the 2.2 percent growth in electricity demand that the country has experienced over the past decade.

Our future demand for electricity will be great, which means our industry’s need for a solid strategic plan to meet that demand is even greater.

The new world our industry has entered requires a bold new strategy for continued progress. To that end, we developed a set of ambitious and specific goals to carry our industry forward for the next two decades.

We call this plan “Vision 2020.”

The centerpiece of our vision is dramatic. Between today and the year 2020, we plan to add 50,000 megawatts of new nuclear generating capacity to the nation’s electricity grid, with another 10,000 MW added through upgrading the technology and improving the efficiency of our current reactors.

Although this is an ambitious goal, 50,000 megawatts of new nuclear capacity — combined with anticipated capacity factor and efficiency gains — is simply what it will take for the U.S. to retain the 30 percent share of emission-free generation that currently exists.
 
And if the U.S. wants to increase its share of non-emitting electrical generation beyond 30 percent, nuclear energy will be the central component of the strategy.

Another vital element of Vision 2020 is that within the next two decades “Policymakers and the public will be demanding further increases in the share of sustainable nuclear energy to satisfy economic growth and environmental objectives.”

We expect people to ask for an increased role for nuclear energy because adequate electricity supply and growing the economy go hand-in-hand.

The third important element of Vision 2020 is that “Nuclear technologies will be widely used in medicine, food safety, water management and to produce complementary clean fuels such as hydrogen” as we heard about yesterday — and yes, even to screen the mail.

Today, nuclear technologies are widely used. It is often just a matter of letting people know about the benefits we bring to their everyday lives.

We will face tremendous challenges as we strive to achieve this vision.

That is why we must approach the future 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.

The U.S. Industry’s Long-Term Plan
Vision 2020 is an ambitious vision for the U.S. nuclear industry, but our success in achieving this vision relies on the continued success of operators throughout the world.

While the U.S. nuclear industry seeks to expand its generating capabilities, we also strive to be a part of a balanced national energy portfolio.

Conclusion
Clearly, the nuclear energy industry is championing the effort to meet growing energy demands through its emission-free generating capabilities. As we maintain steady progress toward a repository for used nuclear fuel storage, the nuclear energy industry will continue to uphold its long-standing policy of helping the environment.

I look forward to helping the world nuclear energy industry meet the challenges of the future.

Thank you.