Good evening. It is indeed a great honor to be appearing here to deliver this year’s W.B. Lewis Memorial Lecture.

As I thought about this occasion, and the man who inspired it, I could not help but remember the words of Sir Isaac Newton, “If I have seen further, it is by standing on the shoulders of giants.”

Newton was referring to scientific predecessors such as Galileo and Copernicus. In the nuclear industry, Dr. Wilfrid Bennett Lewis certainly ranks among our giants.

Dr. Lewis and his colleagues here in Canada, and their counterparts in the U.S., saw the tremendous promise of nuclear energy. Standing on their shoulders, we are fulfilling that promise.

Dr. Lewis saw more than just the technical aspects of nuclear energy, however. He saw nuclear energy as a tremendous benefit for humanity.

In reading Dr. Lewis’s biographical material, I saw a quote by his AECL colleague Dr. Ara Mooradian, who said of him, “In lectures, Dr. Lewis argued that mankind had a responsibility to learn how to control the abundant supplies of energy within its grasp. Only in this way could it hope to raise the standard of living and improve the quality of life of millions of people throughout the world.”

The commercial nuclear industry has over the past three decades made increasingly significant contributions to our countries, and to the rest of the world. And now, at the beginning of the 21st century, we are embarking down the path to the fulfillment of his hopes. This new century, I am convinced, will see the realization of nuclear energy’s potential to contribute to worldwide sustainable development – growing the world’s economy, helping to provide electricity to some 2 billion people who do not yet have access to it in their daily lives, and doing so while preserving our global environment.

The nuclear energy industry has gained enormous credibility among policymakers and the public by virtue of dramatically improved performance – in efficiency and even more importantly in safety. In the United States, coverage by the media has been more positive than ever – even with the security concerns that have been raised since last year’s terrorist attacks.

Nuclear energy’s affordability and reliability alone would justify a role for the technology in the new century. But an even more important reason is the mounting concern over the environment – air quality, and in particular global warming.

Although there is ample support for the role of nuclear energy in our electricity system, we, like you, still face irrational opposition by some anti-nuclear groups. However, more and more public officials – and the general public – the world over are weighing the advantages of nuclear energy against the fear-mongering of nuclear opponents…and are choosing the advantages.

A number of signatories to the Kyoto Climate Change Accords are discovering that they will find it impossible to meet the targets without nuclear energy. Finland acknowledged as much, before voting to build a new reactor. Japan and Korea have included expansion of nuclear capacity in their plans for compliance.

Other countries are discovering that compliance with the Kyoto Accords would be much costlier without nuclear power. Germany, for instance, is planning to phase out nuclear energy, but depends on nuclear energy today more than it ever has. Without nuclear energy, a recent report estimates that compliance with Kyoto would cost Germany six percent in GDP and 1.8 million jobs in 2010, and have further residual impacts through 2020. Obviously, the impact would be much less if Germany keeps its nuclear fleet intact. We have seen recent indications that the Germans are reconsidering the advisability of the phaseout, even in the aftermath of the recent election.

 In the U.S., nuclear energy accounts for three-fourths of all emission-free electricity generation. Even though the U.S. did not sign the Kyoto Accords, the Bush Administration has established the nation’s own environmental goals. Earlier this year, the President unveiled his proposal to cut U.S. greenhouse gas emissions by 18 percent by 2012 through a voluntary approach that is compatible with economic growth. The Administration clearly believes that nuclear energy is a key to the plan’s success.

Secretary of Energy Spencer Abraham recently said of nuclear energy, “It’s obvious to me that an energy source capable of supplying a significant proportion of the world’s power with no greenhouse gas emissions should be at the center of the debate.”

The Administration is considering expansion of an existing emissions trading program that currently covers some pollutants, but not carbon dioxide. Nuclear energy is not now included in the emissions trading, and therefore gains no credit – monetary or otherwise – for its clean air value. We believe it should be included, and statements such as Secretary Abraham’s give us hope that it will be.

The Administration’s support has been invaluable to the industry. Earlier this year, the President had the courage to make the decision that the Yucca Mountain used fuel repository site should proceed to the siting and licensing phase.

You may have heard or read about the ensuing battle – the objection of the State of Nevada, and the dramatic vote in the U.S. Congress to overrule Nevada’s objection – by large margins in both the U.S. House of Representatives and the Senate.

Yucca Mountain was a tremendous public policy victory for the U.S. nuclear industry – and for our nation -- and it is significant for the industry globally.

It is another in a series of favorable signals from U.S. policymakers that they recognize that our industry is healthy and poised for growth. That support has grown, as I said earlier, out of the tremendous improvement in safety and efficiency of operations at U.S. nuclear plants.

The historic vote in the Congress was more than a vote against Nevada’s objection to the repository site…it was a vote of confidence in nuclear energy and a vote for our environment.

The approval of the Yucca Mountain project was aided by a tremendous grassroots effort, supported by a national network of diverse groups, such as the Chicago Federation of Labor, Indiana Black Chamber of Commerce, Minnesota Dairy Farmers and Oregon Association of Hospitals -- organizations that represent more than 28 million Americans. Newspapers also showed their support, with 118 positive editorials on Yucca Mountain and almost no negative editorials – outside Nevada. When we were ultimately successful in changing the views of the New York Times and the Washington Post, we knew we were on the path to success.

The designation of Yucca Mountain is an important component in a U.S. energy policy that is setting the stage for new nuclear plant construction. However, it is by no means the final step that assures the future of nuclear power. We have a long way to go, and as you would recognize, many challenges remain.

We need patience, commitment and a lot of hard work in the trenches to fulfill nuclear energy’s potential in the U.S., and around the world. We must take control of our future. That has been our strategy in the U.S.

Let me spend some time now discussing the state of the U.S. nuclear industry in the wake of the Yucca Mountain decision – our vision of the future, and the challenges we face.
 
First, the Yucca Mountain project is not complete, and will not be for at least another decade. Twenty years and $6 billion of scientific study have affirmed the suitability of the Yucca Mountain site, but much scientific work remains – and a tremendous amount of work in preparation of the DOE license application to the U.S. Nuclear Regulatory Commission. DOE expects to file the license application in 2004, and if things go smoothly could bring the repository into operation by 2010.

The U.S. Congress was a key to the final approval to go ahead with Yucca Mountain, and remains a key for the next series of Yucca Mountain decisions. DOE needs hundreds of millions of dollars each year to fund the project, and there remains some opposition to continued funding at the levels needed.

We have some indication that sentiment in Nevada is changing, as the state realizes the potential economic benefit it might receive from hosting the largest public works project in our history. Nevertheless, we need to work to make that case to overcome remaining pockets of opposition in the state.

And the issue of used fuel transportation also looms large. The Nevada opposition played to public fears of waste shipments in its TV and radio ads, and the issue lingers in the public mind. We will need a grassroots education effort far greater than the one mounted to win the Congressional vote. Used fuel shipments from 103 reactors will travel through 40 states to reach the repository, and we need to allay those remaining public fears and build support.

It can be done. And it must be done. We have attained a level of public confidence and support that remained solid even during the national uncertainty of the past year, and is now on the upswing again. Our latest survey shows that 65 percent of the American people favor nuclear energy as part of our electricity mix, and more than three quarters believe that nuclear energy should play a role in meeting future U.S. energy needs.

Nuclear energy’s favorability numbers grew throughout the ‘90s, and it is no coincidence that they rose at the same time the nuclear industry’s performance was improving.

Performance in safety, reliability and economics is the bedrock of the favorable policies and public confidence. In the past dozen years, nuclear energy has been a solid, dependable foundation for the U.S. electricity industry…through an uncertain period of deregulation, demand increases associated with our decade-long economic expansion, and electricity shortages and natural gas price spikes in California and elsewhere.

The U.S. nuclear industry’s average capacity factor has risen 20 percent over the past decade, to a record 91 percent. Nuclear electricity production has increased by one-third since 1990 – about 24,000 megawatts. That’s like having 24 new reactors come on line, with no construction costs.

And most vital of all to our future, the nuclear industry continues to set records for safety. The level of significant events – equipment malfunctions or operational anomalies reportable to the NRC – is 30 times lower than it was at the end of the ‘80s – an industry average of 0.03 annual events per reactor.

That safety and efficiency is reflected in the bottom line. Nuclear power in the U.S. now has the lowest production costs of any widely expandable fuel for electricity generation – even coal -- and even with all of nuclear energy’s external costs included. And nuclear energy is not subject to the price volatility of natural gas, the third-leading source of electricity generation in the U.S. after coal and nuclear.

The performance of U.S. nuclear plants, coupled with deregulation and the drawbacks associated with other sources of generation, makes them valuable assets to their owners. Naturally, they want to keep them running as long as they can – beyond the arbitrary 40-year span of their licenses.

The Nuclear Regulatory Commission has streamlined its regulations for license renewal, and we now expect virtually all U.S. plants to seek 20-year renewals. Ten have already been renewed, owners of 16 more plants have applied, and owners of 25 more have notified the NRC of their intention to seek license renewal by 2005. That’s nearly half of existing plants in the U.S., already in the process.

Affordable, reliable, stable in forward pricing, emission-free. With all those advantages, it’s no wonder nuclear energy is gaining political support. As Secretary Abraham said recently, “Forcefully declaring that nuclear power should be part of the world’s fuel mix took some people by surprise, but to us it was just common sense.”

I assume that here in Canada you are accustomed to an energy policy based on common sense…but in Washington it has been a welcome change. Equally refreshing is that President Bush and Secretary Abraham have shown the courage of their convictions…not only in affirming that the Yucca Mountain repository should be licensed and built, but also in taking concrete action toward building the next generation of nuclear plants.

The Yucca Mountain site designation has been the most visible aspect of Administration support for nuclear power, but equally important is the Department of Energy’s Nuclear Power 2010 program – with the goal of seeing new nuclear plants built in the U.S. by the end of the decade. The private sector must do most of the work to get new plants built, including the all-important issue of how to finance them. But the government has a key role to play.

DOE has begun the process, awarding study grants for the untested NRC early site permitting process to three U.S. companies – Exelon, Entergy and Dominion Resources. The early site permitting work will help to demonstrate new NRC licensing procedures that are theoretically more streamlined, but are unproven.

Another role the government can play is in research and development. The DOE 2003 budget for nuclear R&D funding has also risen dramatically. The Nuclear Energy Technologies program budget request was $46.5 million – more than four times the previous year’s level. Much of that will go to support Nuclear Power 2010 activities.

The Administration has also announced the conversion of a major government laboratory in Idaho to a national advanced nuclear research center. In addition to existing R&D funding, DOE is giving $5 million to “jump start” the lab’s operations.
 
And, as I mentioned earlier, the Administration has explicitly acknowledged nuclear energy’s beneficial role in preserving our air quality.

Of course, one topic that has been exhaustively discussed in Washington for more than a year now is security. It remains a concern for most Americans, and some of that concern has been directed at nuclear plants.

Every nuclear plant in the U.S. has been on the highest alert for more than a year now. Prior to the 9-11 attacks, our security was the benchmark for the U.S. industrial sector, and we have significantly enhanced that security.

During the emotional period that followed the attacks, there were some in Congress who contemplated federalization of the nuclear plant security force, but that is no longer an issue.

We have conducted a comprehensive review of our safeguards and security requirements, and we are working with the NRC as it revises its security requirements. Many state governors, state security directors, the FBI and members of Congress have seen nuclear plant security firsthand, and they uniformly praise the security of our facilities.

A particular concern for some in the public has been the potential impacts of aircraft attacks to nuclear plants. We commissioned an independent study, and based on preliminary results, we are increasingly confident that the reinforced concrete and steel containment can protect the reactor from large, fully fueled aircraft at high speeds. Fuel pools and steel container storage would also protect used fuel even from a direct hit by a commercial aircraft.

Our overall strategic objective for nuclear plant security in the U.S. is to create a seamless defense against terrorist action that fully integrates the capabilities of our industry and all levels of government…including our military capability…to forge a defensive shield that fully protects all of our critical energy infrastructure – pipelines, transmission lines, refineries, chemical plants, and so on – as well as nuclear facilities.

While we are devoting a lot of our time to the issues I’ve been discussing, we are not neglecting the future of the industry. Last year, NEI unveiled our own vision of nuclear energy’s future in the U.S. Our Vision 2020 plan calls for 50,000 megawatts of new nuclear capacity by 2020, and another 10,000 megawatts of expansion from existing capacity.

I know that AECL has its own related vision – that at least some – or all -- of that 50,000 new megawatts is comprised of your ACR-700 reactors. The energy companies themselves will select their reactor designs of choice. But I can say that we are working toward creating conditions in the marketplace where someone will supply the new technology, and if AECL is competitive, it stands as good a chance as anyone.

An additional 60,000 megawatts of new capacity might seem like an ambitious goal -- the equivalent of three new 1,000-megawatt plants per year between now and 2020 -- but it is in reality not excessive, when we consider America’s energy needs and our clean air goals. Sixty-thousand megawatts by 2020 will only maintain, not expand, nuclear energy’s market share. And it will only maintain our current 30 percent share of emission-free electricity, even with a doubling of renewables in the electricity sector.

Our goal of 10,000 megawatts of expansion is realistic – we’re already well under way. Uprates approved or under review by the NRC, or announced, will add about 3800 megawatts to U.S. capacity by 2007. About 1500 megawatts of that is attributable to the Tennessee Valley Authority’s Browns Ferry Unit One, if it restarts as expected, in combination with uprates at the two other Browns Ferry reactors.

In the year since we announced Vision 2020, we have begun laying the groundwork to make it a reality. The early site permitting initiative I mentioned earlier is part of a system of new legislative and regulatory processes for building and licensing new nuclear plants that includes the Department of Energy’s plans. The NRC also has pre-certified three advanced plant designs, and other such approvals are expected.

In addition, NEI is coordinating an industry-wide program to attract the capable young people we will need to run the nuclear plants of the future, and we are working with industry to make sure that the necessary infrastructure – the materials, equipment and construction capabilities -- are in place when needed.

Of course, financing large capital projects in today’s business climate is a concern. Our big problem is that we are a long-term industry in a short-term world…we’re thinking about 2020 when Wall Street and some corporations rarely focus beyond the next quarter’s earnings.

With all of nuclear energy’s advantages, and a construction cost in the $1000 range per kilowatt electric competitive with other sources, a new nuclear plant is still a hard sell, primarily because of the initial capital costs. We’re trying to get the investment community to expand its range of vision, and we are exploring creative ways to get the deals done, and capital costs recovered in about 10 years time.

We think we have a few things to teach Wall Street about vision and creativity – and about determination.

It took us 20 years to come within sight of a solution to the used fuel problem, with the approval of the Yucca Mountain repository. And we’ve removed so many other barriers:

• Public opposition has turned around into public support and confidence.
• We have gained the support of the Administration and the Congress.
• An adversarial regulatory system has given way to one that is increasingly based on safety-focused regulation and objective criteria.
• The technology, infrastructure and economics that will lead to the next generation of nuclear plants are falling into place.

As the barriers have dropped, we can begin to see the destination that the early giants of the industry such as W.B. Lewis envisioned.

The future of the nuclear industry is far from assured, though. We need to maintain the reliability, efficiency and above all, safety of our facilities. We need to keep building our support among opinion leaders and the public.
 
And we need to work in the trenches – on the formidable logistics of getting 50 or more nuclear plants built and staffed by a new generation of visionaries.

Every country faces different types, and varying degrees of challenge. But throughout the world, the outlook is as hopeful as it has been since the earliest days of the industry, when men like Dr. Lewis realized the promise of nuclear energy.
 
Standing on their shoulders, building on their accomplishments, we are within sight of fulfillment of that promise. Thank you.