Introduction
Thank you Neil, it’s always a pleasure to return to the Santa Fe Energy Seminar to renew old acquaintances and to share strategies for the future of nuclear energy in our countries. That is particularly so this year, when there has been so much excitement over our industry’s future around the world.

I’m also pleased to share the podium today with Mr. Mori, a man who has done much to encourage the development of safety culture in Japan’s nuclear industry. As I’ll outline in my remarks today, every member of the global nuclear industry has a critical role to play in sustaining our industry’s positive momentum.

• First, I’d like to talk about the encouraging news concerning the revival of the nuclear industry in the United States. 2005 has been a pivotal year as President Bush signed the bipartisan Energy Policy Act into law; and now, just in the last few weeks, additional companies have announced their intention to test the new plant licensing process, and take steps toward ordering a new fleet of American reactors.
• Second, I’d like to talk about the market conditions that have led to America’s new look at nuclear energy, and why nuclear energy has such unique value.
• Third, as exciting as this era may be, our growth and our ability to fulfill the enormous potential of nuclear energy depends on rededicating ourselves to the principles of nuclear safety, information sharing and operational transparency. With nuclear energy, an accident anywhere is an accident everywhere. And because public confidence in our industry can easily be shaken, it is in our own self-interest to cooperate with one another and remain eternally vigilant.

America’s Nuclear Revival
The Energy Policy Act of 2005, passed by a bipartisan majority in the U.S. Congress and signed into law by President Bush this past August, has provided powerful incentives to promote the construction of new nuclear plants.

First, the act provided limited investment stimulus for new nuclear power plants to offset the higher cost of the first new plant designs that we build. The investment stimulus includes a combination of a production tax credit and loan guarantees for a limited number of plants for a limited time.

Next, the legislation provides investment protection for the first six reactors to contain the risk of licensing delays that are beyond the company’s control.

Finally, Congress renewed Price Anderson liability protection and tax treatment of decommissioning funds, and authorized a significant commitment to future R&D.

To say the legislation worked as intended would be an understatement. Throughout this year there has been a growing number of companies getting involved in new plant activities. We have seen a surge in interest since the legislation was signed Aug. 8. Three companies—Entergy at Grand Gulf, Exelon at Clinton and Dominion at North Anna—have applied for early site permits (ESPs). Southern Co. has announced its intention to submit an ESP for Vogtle.

Two consortia—one headed by Dominion and the other by NuStart Energy Development—are involved in developing combined construction and operating licenses (COLs).

Six other companies—Entergy, Progress Energy, South Carolina Electric and Gas, Duke, and the Unistar joint venture of Constellation Energy and AREVA—have announced their intent to apply for a COL.

Advanced reactor designs—the Westinghouse AP1000 and the General Electric ESBWR—are in varying stages of the NRC’s design certification process, and a third company, AREVA, plans to join the process as well.

The Nuclear Value Proposition
Although the Energy Policy Act will provide the stimulus the industry needs, it’s important to understand the market conditions that fostered support from Congress and President Bush to act.

First, American electric companies are projecting that there will be a need to add extensive baseload electric generating capacity in the post-2010 timeframe. And in light of the superior performance of the U.S. reactor fleet in the past two decades, nuclear energy is proving to be one of the most attractive options to meet future demand, especially in the rapidly growing areas of the country.

Over the past 25 years, the American nuclear industry, putting into practice a system of rigorous peer review plant evaluations overseen by the Institute of Nuclear Power Operations, has experienced significant improvements in safety and operational efficiency, and the average industrywide capacity factor has increased from 65 percent to above 90 percent. Between 1994 and 2004, nuclear output increased by the equivalent of 18 1,000-megawatt power plants.

And Wall Street has discovered that once those initial costs have been amortized, nuclear plants are attractive and profitable assets. Nuclear companies once traded at a slight discount to their peers. Today they trade on a peer with the Dow Jones Utility Index.

Which leads to nuclear energy’s second advantage: Because fuel costs comprise such a small share of nuclear production costs, nuclear energy provides tremendous forward price stability—an attribute with significant value in a volatile commodity marketplace.

Even before Hurricanes Katrina and Rita, oil and natural gas prices were high and marked by significant volatility, and our energy supply and delivery infrastructure already were stressed. The hurricanes pushed that infrastructure along the Gulf Coast beyond the breaking point.

In those parts of the country that depend heavily on natural gas for electric power generation, we can expect significant increases in electricity prices this winter.

But it isn’t only natural gas prices that are roiling markets. We’ve seen recent price volatility in coal markets, with some coal prices doubling in the last 24 months.

While it’s true that uranium prices have increased, nuclear energy produces large volumes of electricity at low cost; additional nuclear capacity will provide tremendous forward price stability in electricity markets.

This leads us to the last leg of the nuclear value proposition: its clean air benefits.

More than two-thirds of U.S. electricity is generated by burning fossil fuels. The rest of America’s electricity production is emission-free—and three-fourths of that comes from nuclear power plants.

It’s clear that by promoting the construction of new nuclear power plants, we have found a way to continue to generate significant amounts of baseload electric power without emitting any additional carbon into the atmosphere. This is important as we all work together to use technological solutions to stem the emission of greenhouse gases.

Today, policymakers, academics and environmentalists are embracing the value of nuclear energy to our air quality. And the last few months have seen other promising events.

Following the G8 Summit in July in Scotland, the leaders of the world’s leading economies acknowledged how nuclear energy helps battle climate change.

Also that month, Japan and the United States, along with Australia, China, India and South Korea, announced the formation of the Asia-Pacific Partnership on Clean Development. Included in this agreement is an implicit recognition that nuclear has a role to play in sustainable development.

And increasingly, it appears the message is breaking through.

Public Opinion
At NEI, we’ve been tracking public perceptions about the nuclear industry, and have seen steady growth in support for nuclear energy. A nationwide poll of adults that Bisconti Research and NOP World conducted for NEI in May found that:

• 83 percent of Americans think nuclear power is important for our energy future, and 70 percent favor the use of nuclear energy as a way of meeting our electricity needs. These are record levels of support
• 58 percent of Americans agree that “we should definitely build more nuclear power plants in the future”
• 69 percent said it would be acceptable to build new reactors at the nuclear power plant closest to where they live.

Our most recent public opinion survey suggests that the people who trust us most are the ones who know us best—those who live closest to our current operating plants. By being transparent and open about our operations, our neighbors around the plants have a clear understanding of who we are and what we do.

Here’s what that August survey of 1,100 adults (excluding electric company employees) who lived within 10 miles of the nation’s 64 reactor sites found:

• 83 percent favor nuclear energy
• 76 percent are willing to see a new reactor built near them
• 85 percent give the nearest nuclear power plant a “high” safety rating
• 88 percent are confident that the company operating the plant can do so safely.

Challenge of Yucca Mountain
Despite favorable public opinion, obstacles remain.

The regulatory process, though it’s been reformed, is still untested. Some industry analysts are concerned that uranium conversion services might not be able to keep up with increased demand. And one of the most important challenges is used nuclear fuel.

The U.S. government continues to make progress toward developing the centralized disposal facilities necessary to discharge that responsibility. We do not believe a permanent disposal facility must be operational in order to start construction of new nuclear plants, but we do believe that we must have a plausible program in place that is making visible progress.

People who are opposed to nuclear energy often say that “we don’t know what we’re going to do with the high-level radioactive waste.” That is a myth. We know exactly what we’re going to do with it. We’re going to follow the course recommended for decades by independent scientific organizations around the world. We’re going to isolate this material deep underground in stable geological formations, in a dry environment, remote from people.

We have just such a place to store that fuel: Yucca Mountain. We also have 20 years and $6 billion of scientific investigation that demonstrate that the site is suitable for long-term isolation and management of used nuclear fuel or the waste byproducts of our industry.

Recently, other options for the way forward on used fuel have been discussed, including the possibility of closing the fuel cycle and recycling. But even if we choose to take that course, we still must have a national repository program.

Safety and Operational Transparency
We operate in an unforgiving public environment where the penalties for mistakes are high and where credibility and public confidence, if lost, are difficult to recover.

Our conservative “defense in depth” safety approach provides a high degree of confidence that we can protect public health and safety. But we must never forget that nuclear power can be an unforgiving technology.

Managing this technology successfully requires high standards and eternal vigilance. Safety must continue to be our highest priority.

In the United States, the nuclear power industry has achieved dramatic gains in productivity, reliability and safety over the last 15 years. The best plants are achieving three-year average capacity factors above 95 percent, but we must still guard against complacency and remain mindful of our challenges.

As electricity markets become increasingly competitive, we must resist pressures to shave investment in staff, in training, in equipment. Many companies rely increasingly on contractors to provide services and capabilities, and that is not necessarily bad—as long as we realize we cannot contract out responsibility for safe operations and a strong safety culture.

As plants age, we are—and must—devote more attention to materials management issues, and manage potential material condition issues before they have an impact on plant performance or regulatory and public confidence. We have had a few surprises in this area, and we cannot tolerate surprises.

Transparency and Information Sharing
Most importantly, as we go forward with a global nuclear resurgence, we also have a responsibility to ensure there is an open channel of communications across the global nuclear enterprise.

Building on the concept of the World Association of Nuclear Operators, nuclear operations have an obligation to share experiences—good and bad—to learn from them and let the public know what we are doing.

We recognize this responsibility. We believe we are meeting this obligation. But we cannot afford to grow complacent.

Conclusion
In closing, I’d like to remind you that we’re here to talk about future energy strategies in two of the most powerful industrialized nations in the world. As such, we need to pay greater attention to our responsibilities as stewards of the environment both at home and globally.

Certainly, over the last few years, the world has struggled to come to a consensus on these issues. Creating a reasonable balance between environmental protection and a growing economy has never been, and will never be, simple. But it can be done.

As we plan our future, think of the hundreds of millions of people who still don’t have access to electric power—one of the building blocks of creating a civilized society. And how can we provide that power without causing havoc with our environment.

We already have a solution—one that uses nuclear energy as a cornerstone of energy security and sustainable development.

And in a carbon-constrained world, nuclear energy must play a significant role.

Over the course of recent years our proven performance has increased policymaker and public support. And now, because of a volatile market for oil and natural gas and a desire for clean air, those people are willing to give us a fresh look.

Normally you don’t get a second chance to make a first impression. Let’s make sure we take advantage of ours.