tv Politics and Public Policy Today CSPAN April 26, 2016 4:30pm-6:31pm EDT
from a lot of sources, and the agency i think understands that and they're using open sources big data collecting, and in, for example, being able to detect where electoral violence, and exploring a counter-twitter or counter-text message campaign to calm the violence down. these are wonderful tools that allow us to know in real time what's going on, and i think the challenge is for the intelligence community becoming an information community, and incorporate these into the kind of information support that goes to principals. there's a tendency to think that the only reliable information is the information you steal? i don't think that's right.
i think a lot of assist lot of, if you look historically, some of the more nefarious world leaders, they told you exactly what they were going to do in the written literature, and their speeches, just nobody read them. so i think there's a rich opportunity for open source and big data and all those other things. the problem, of course is there's a lot more information than there is understanding or knowledge or wisdom. the trick of it is not getting overwhelmed by it, and the problem with all that information and the availability of the senior-level decision makers is that it invites them to get down into the weeds, when what really you need to do as a senior policy leader is stepping out of the weeds and asking the strateg strategic, and one of the great stories, if you read george
shultz has written a book three or fouriers called "things on my mind." when he used to be secretary of state, once a week he would go to the folks outside his office and i'm i'm going to sit down, close my door for the next hour and a half. i don't want to be disturbed unless my wife calls or the president calls, showing domestic policy is more important than foreign policy, even for the secretary of state. they all thought he was going in to take a nap. but he would take a yellow pad, a pen and take the issue of the day and i would say, what's the issue? what is the real issue we are thinking about? what are we trying to do? and then in simple bullet points -- how are we going to do it? we don't -- what's the strategy?
there is so much information, so much press of business that we are fighting fires, and we're managing crises, and if all you do is manage crises, all you will get is more crises, because you would not be putting in place the strategies and policies that you need to shape events and avoid crises. that's the real challenge for people in senior national security positions today. this gentleman in the back with the lab yard? >> reporting for the voice of america news. we know that members of the u.s. congress sometimes don't go home and sleep overnight on the capitol hill, because they're too busy. has your own duty, presence in
the white house ever arrived more than 24 hours maybe in a time of crisis? and what was the reason? thank you. >> well, um, after 9/11, i can't remember when i finally went home, but it wasn't for a while. and i remember one night in particular and the president has written about, when the president and national security adviser and secretary of state had all gotten on an airplane to go to china, and a biodetector around the white house detected i think it was botulinim toxin, and the president had been exposed about before he left. we didn't know if it was a false or real indicator. i was back, worked with the vice
president and attorney general and head of homeland security to try to manage that crisis. well, we were up all night. quite frankly, figuring out how to try to get some medical support to the president, but also waiting for the report, because they were going to test the sample on some rats. and the question and -- and so i talked to the president, i want, what are we going to do? we're going to test the rats, we've got some anti-toxin coming your way by airplane, and we're going to test it on the rats, and the question will be next morning how the rats, you know feel up or feet down. so we stayed up all right, and we got the report, it was a good report, so i called over, asked them to pull condie rice out of
a meeting. the president said, what is it? and she said, it's a call from hadley, we'll find out the news. i said, good news, feet down, so he walked back into the room, and the president said, condie? she said, feet down. that was a long night, a long night. arm caption, you mentioned you don't think they should not be -- not it's intent, could you comment on the size of the ncs right now and what it does for interagency relations right now? >> the nsc has gotten larger over the years, and there's something -- some roechbl explanation for that.
after 9/is 1, the on piece became so much more important, and we didn't have the kind of interagency -- on the domestic side. so some of the growth maid sense. they don't always communicate for the way they need to do, and what the nsc has to do. you've got to cured nailed and integrate across the stovepipe. you know, you want to have a small group of people, president to be organized the i would have
task force, five or six different offices, but if your nsc gets too big and you get stovepipes one the nsc that mirror the stovemines, you won't be able to integrate that it's your job to try to overcome. so my preference was always have more information in fewer heads, because it allowed you to integrate. it allowed you to see connections between things, and overcome the stove pipes. i think the challenge is to get to a smaller, leaner nsc that supports the position, but with the presumption that less is more and smaller is better.
>> steve, i'm going to end where we really started. that is -- the title of this presentation is "how intelligence is used by the president." give us your thoughts. how is it used by the president. it's an input. both information and an interaction with people in the intelligence community who have spent their lives studying these problems. at the brings a lot of people who share the political agenda of that position. they then interact with the permanent government the foreign service officers and the
intelligence officers. they are the repose repose tore of knowledge and experience. where the political employees are trying to and the pearl innocent don't is try trying to take those priorities and filter them through the knowledge and experience. but they are only an input into the president. there are judgments the president has to make that transcend the intelligence community. there are some people who think that the president can never go -- use military force unless the intelligence community has told him or her with a high level of confidence that there is an imminent threat to the
people of the united states. and i think giving the intelligence community that kind of checkoff, which i think for some people is not how hour system governs, that people know -- the person the american people elected to make those kinds of decision, with intelligence is an input, but jell intense is often wrong, and in addition to the intelligence, a president when they make hard decisions are taking account a whole lot of other factors, their sense of politics, their sense of where the country is, their sense and judgments about the political leaders that they're dealing with. all these kinds of intangibles that really come to play when the president has adjourned the meeting of the national security council staff -- national security council principals and is thinking overnight about a decision that he or she is going
to announce the next morning. it's in that period of time that all of those things that the principals and views of his or her spouse come into play. i think it's important on recognize that issed process. the intelligence community is only input. glue steve, this has been terrific. i appreciate you coming to heritage to their your shouts. police join me in thanking steve. and we are adjourned.
the biggest social events of the year. 6:00 on saturday with arrivals, and the dinner starts later in the evening. up next, a hearing on the bill establishing new transparency and accountability measures to the nuclear regulatory commission's budget, fee programs and regulation. the agency's executive director of operations says the commission is on track to develop the regulatory framework necessary. but several nuclear industry experts say the current framework doesn't cover new technology and high fees for innovators hinder nuclear development. well, i'd like to welcome all of our winces today, and a particular welcome to limb news of the commit year, mr. mer
ifield, who told me he began here in 1986, each within has five minutes, and then we'll thattic questions. i think we're here to examine an exciting topic, advanced nuclear reactors. i would like to while nuclear issues are somewhat new to me, i'm learning they new technologies have the potential to make grade strits? advancing nuclear technology, this is a topic that many of us are very interested in, because nuclear energy is an essential component for all and above policy. our current plants provide clean, safe, resgloop advanced reactors have the potential to be cleaner, safer and more
secure. and so one purpose for this hearing is to better understand these technologies and the barriers to their development. the order purpose is to the nuclear innovation and modernization act, which was introduced last week by my colleague senators imhoff, booker, and s-2975 directs the nrc to develop a regulatory framework under which licensed applications for a variety of technologies can be reviewed in keeping with the nrc's safe and security mission. this is clearly an issue our committee needs to address and i'm glad my colleagues have come through with a solution. it's crucial for our exists plants and emerging technologies. the bill modernizes the nrc's budget and fee structure to ensure funds of available to complete reviews, that the existing industry needs to
remain economically competitive, and that will alloy emerging technologies to grow. the nrc safety and security somition is a vital one, but must be accomplished el fiscally and with discipline. according to nrc's principles, the american taxpayer, the ratepaying customer and listenees are all entitled to the best possibility management and administration of regulatory agencies. this bill aligns with this principles, and i thank my colleagues for their hard work to -- these are technologies where our nation should lead the way. not just for our energy security, but also in the interest of our national security, only by leading can we hope to advance or nonproliferation goals. with that, ironing anxious to hear the senator's remarks and those of our witness. senator carper. >> thank you to lets me your wingman. it's going to be here with
everyone who have luge interests in these issues. welcome to each of you, nice to see one of you again for many years when our country began exploring nuclear power, i don't know how many people really had much of an idea how important this technology could be to the future of our nation's energy supply. serious incidents at places like chernobyl caused a number of people around the world to question the viability of nuclear power being but i think support has begun to grow again in recent years. given that development, congress has an important role to play in ensuring that our nation invests wisely in nuclear while at the same time maintaining our focus
on safety. many americans may be unaware that nuclear technologies was actually invented will in the united states. for a number of years our nation led the world in nuclear manufacturing and construction and in production. joshs and economic benefit stayed here at home for the most part and unfortunately, this is no longer the case. many nuclear components are only veil from our international economic competitors, including the french, south koreans, japanese and now the chinese. while the united states continues to have more nuclear power plants than any other country, other nations, china in particular, are gaining quickly. at the same time, our country's nuclear reactors are getting older and many need replaced. some people believe that the nuclear success story may be winding down, but i believe that like a distance runner, america is just getting its second wind. albert einstein used to say with adversity lies opportunity. he was right then and he's right
today. a lot of this industry has faced a good deal of adversity in recent years. there appears to be a fair amount of opportunity ahead of it now and if we're smart, we'll seize the day and begin to replace our aging nuclear reactors with new ones in the years ahead that are safer, produce more and are less expensive to operate. if we're smart, i see a next generation on american soil and foresee a chance at some of our closed manufacturing plants will be reopened, construction crews will be called back to work and colleges will face a renewed demand from industry for skilled nuclear technicians. in short, i foresee an opportunity for the united states to once again lead the world in nuclear technology. today's hearing is about how we seize this opportunity.
fortunately we're beginning to deploy new nuclear technology. several years ago, the nrc approved construction to build four new rehe actors in georgia and south carolina. construction is creating thousands of new jobs for those states. it's increasingly likely that small modular reactors will become a reality. this is an encouraging start, but i know we can and need to do better. over 50 companies are investing in next generation nuclear technologies and today we will hear directly from a company that is making some of those investments. as these companies make advancements in technology, we need to make sure that our regulatory framework can keep pace. the nrc is considered the world's gold standard.
however science and technology involves also the nrc. in closing, i will that government in this country has a number of roles to play. i'm sure you agree. among them, few are as important as helping to create a nurturing environment for job creation and job preservation. that includes making sure that we have affordable dependable energy and we produce it safely in this that diminish the threat of climate change. advances can provide more promising future for our nut, for its people and for our planet. i hope we'll learn today about the roles that the nrc and other e agencies need to play if that promising future is to be realized. >> with that, i think the chairman has requested -- >> that i put my statement in the record. >> without objection so ordered. again i'd like to thank the
witnesses and welcome you. you'll give a five minute statement. your full testimony has been submitted for the record and then we'll go through round of questioning. senator booker, i understand you'd like to make a comment? >> i'm very grateful for this opportunity. thank you. i'm a senator with no name today. i want you on recognize that. or the senator whose name some not be mentioned. but again, thank you, chair, and i want to definitely thank you for your partnership on this really important bill. american leadership on nuclear energy is absolutely critical. historic paris climate agreement set ambitious goals to target limited global warm to go 1.5 centigrade above pre-industrial levels. but scientists degree that even
if all countries meet their commitments, we're not on track to meet these ambitious are tar gets. meeting the rising global demand for energy and slashing carbon emissions present as very difficult challenge for this generation. by 2050, meeting the paris targets would require us to cut emissions by up to 70% while producing 70% more electricity. that's incredibly difficult thing to do. i'm a big believer in renewable energy. i fought with other senators to expand the tax credits last year for renewables. but in order to overt the worst effects of climate change, we do not see anyway around the idea that we must substantially increase our nuclear energy capacity. i'm now back to normal. in the coming decades. we have no choice but to increase nuclear capacity.
nuclear energy which provide as critical base load power currently comprises more than 60% of our nation's free electricity -- carbon-free electricity generation. and right now in the united states, we have five new reactors under construction. the first new commercial units in 30 years. but several existing reactors have already been shut down prematurely and many more are at risk. we need to make sure that we see dozens of more private sector companies beginning to move into this area and help to produce an environment where they're making their billion dollars of investment. we desperately need sound long term government policies that will support our existing fleet and also support a sustained commitment by the private sector to advance nuclear reactors that can be commercialized in the future. this bill s-2795 takes several positive bipartisan steps in that direction. first, the bill would direct nrc
to develop new staged licensing processes. next the bill would over longer terms put in place new technology inclusive regulatory framework and would make licensing of advanced nuclear more efficient, flexible and predictable while maintaining the nrc safety and security missions. third, the pibill would authori a new cost sharing program that would help the first advanced reactive projects that move forward to pay for some of the licensing costs. it would place a cap on the annual fees paid to the nrc. while it may never be hit, putting it in place will provide certainty and protection for existing fleet. this is a critical challenge we have in our nation right now. making sure we're meeting our energy needs, dealing with the realities of climate change, and empowering business and innovation. i'm very happy to have working
in a bipartisan fashion on what is a solid bill helping us to take a step forward. thank you, chair, for providing me this opportunity to make an introduction to the bill and i look forward to hearing from all of our witnesses. >> let me assure you while we enjoy this bill and we're co-spoken the bill, it has nothing to do with global warming and the disaster that you will see tomorrow on what they call earth day in new york is an embarrassment and the president is not even going up for it. our idea, my motivation on this is when i say all of the above, to save this country, all energy, it includes nuclear. thank you. >> thank you. and another bill sponsor would like to make introduction to the bill. >> thank you. i appreciate the opportunity to be here today and the senators and i have introduced legislation to ensure the nrc will be ready toreactor designs companies are ready to
commercialize them. we have undertaken a deep dive into the inner workings of the commission. through hearings and discussions, we have developed a plan that will help modernize the commission sand enable a to stay abreast of reactor design advancements. our bill, nema, increases transparency and account and. in t accountability through modernizing reforms that are based on years of epw oversight efforts. the measure also addressed the address to develop a technology inclusive regulatory framework enabling the commission to review a diverse set of advanced reactor technologies. we want the commission to make changes that allow stakeholders of various backgrounds and motivations to look at the commission's actions and understand what it's doing.
in particular, the agency must be more transparent. this is especially true regarding the commission overhead costs. when the nrc talks about overhead costs, it refers to activities that may be categorized as corporate support, office support and mission indirect. at this point our bill only captures one portion of these overhead costs. the corporate support costs. because that is the only portion of the overhead costs that we can get the nrc to clearly label and define. the nrc must endeavor to make its budgeting information more transparent and accessible. some amount of overhead is necessary to all organizations. nonetheless, the nrc needs to be able to clearly account for its overhead costs and for the way it uses fees from licenses to support these costs. clear and transparent budget processes are required for effective oversight. this is something i look forward to working with my fellow epw
colleagues on both in this bill and beyond. finally it's imperative that the licensing process for advanced reactors is transparent and takes into account past lessons learned. n nema enables the nrc to have technology inclusive framework. this enables nrc to review and license any reactor design that it considers to be safe and secure. we aren't enforcing to allocate resources on one type of reactor. as a whole, nema provides important transparency and accountability improvements and improves the communication between various stakeholder groups and the agency. enabling better transparency, accountability and communication are critical to ensuring the nrc remains the world's preeminent safety and security regulator.
such improvements also provide more stability and predict ability in the industry and among stakeholder groups. increasing the nrc's ability to be transparent and accountable will increase its ability to perform its safety mission and share information with all stakeholder groups. thank you very much, madame chairman. >> we'd like to go to the witnesses. but i understand the original sponsor has comments. >> thank you very much for the work we have done together to try to streamline this process. the sense that i have and that brought me to this conversation is that the approval process at nrc is an obstacle course that is designed for a particular type of technology but is not well suited to technologies that
aren't that technology. indeed the ir relevancy is two plus two equal s cheese. it doesn't make sense at all. we do have new technologies that are emerging. they have enormous promise. we have done in america a lot of the leadership design for them, but if we can't get them through a process to where they're actually creating electrons, then we haven't done ourselves any good. so i look forward to pursuing this. i would add two brief points: one is that it should remain, i think, a very high priority goal of this committee and this process to continue to point
towards ways to use -- reuse, i should say, spent nuclear fuel. some of these technologies hold out at least the promise of taking the enormous stockpile of what is now dangerous nuclear waste for which we have no means of disposal and which will be very expensive to deal with and repurpose that into what a person told me trillions dollars of free power. that needs to be a significant subordinate role as we go into this process. i think it is a tragedy we are losing some of our nuclear facilities to an economic problem that there is no payment for their carbon-free power. if a nuclear plant is not safe, then i'm the first person to want to shut it down yesterday, but if the only reason that it's being shut down is because it can't compete economically with
a natural gas plant and the only reason it can't compete with a natural gas plant is because it gets no benefit throughout the corporate world and our government, we recognize there is value to being carbon free, we are artificially damaging an industry that should be doing better. and we need to figure out a way to make sure that there is, in fact, a payment a payment to the carbon-free value and the electrons they produce. with at that i close my comments and thank you for your leadership on this bill. i'm delighted to be working with them. >> we'll proceed with the witnesses. i'm going to start with
dr. christina back. welcome. >> thank you very much. >> i would like to thank chairman capito, and ranking member carper for holding this hearing, senators inhofe. g.a. is a privately held company with over 60 years of experience in nuclear energy and one where we continuously push the technological envelope. i was asked to describe what may be appropriate issues to consider when developing public policy for encouraging the development of new reactors.
we believe advanced reactors are variety owe to making nuclear power, economically competitive and vital to reversing the current decline of the nuclear industry. in order to be helpful to the committee's effort, i would like to start by noting the term advanced reactors is somewhat loosely used. some people consider them to be non-light water reactors while others mean new light water reactors. we believe an advanced reactor concept is one whose design is guided by the four core principles that help ensure economic success. these principles are to produce significantly cheaper electricity, to be safer, to produce significantly less waste and reduce proliferation risk. we believe every worthy reactor concept must address these four core principles jointly, if it is to be an advanced reactor. it is not sufficient to excel in just one with disregard to the others.
now i would like to discuss g.a.'s reactor concept. this is one of the many advanced reactor concepts referred to before. g.a. has a concept which is the energy multiplier module or em squared and is a way of illustrating what advance can mean, i'd like to discuss this reactor. g.a. chose to employ innovative design and engineer materials to meet the four core principles. what makes it compelling to think about nuclear reactors and advanced nuclear reactors now is that in the past 30 years scientists have made unprecedented advances in understanding materials. we at g.a. know how to manipulate these materials and we're trying to revitalize the nuclear industry with them. so now let's consider each of the principles i mentioned. the first is cost. the drive to make a cheaper reactor led us to design a much smaller reactor, one that would
produce up to 60% more power than today's reactor from the same amount of heat. second is safety. for a radical improvement in safety, em-squared uses engineered ceramic materials that hold the fuel that work in intense radiation and withstand more than two times higher temperatures than current reactor materials today. they would not be subjective failure like those in fukushima. third is waste. em-squared will reduce the amount of waste by at least 80% the reactor can also use spent like water reactor waste as fuel, thus turning this waste into energy. fourth is nonproliferation. it keeps the fuel in the reactor for 30 years, without the need for refueling or repositioning the fuel rods. this means we access the core once, much less than the 20 times than the current reactors
need for existing refueling. we calling late that em-2 will produce power at approximately 40% lower cost than today's reactors and be passively safe. as for any new reactor design, this one will require extensive interactions with the nrc and we think involving the nrc early in this process is important to envelope the design for a safer reactor. radically new concepts require up front investments involving risk. some of these investments may not pay off and even those that are successful could take up to ten years to produce revenue. while ga has already invested 40 million in em-squared, it is hard to divert dollars to considerations at this early point in time. if this committee's objective is to stimulate the development of enough advanced reactors, hope flip as we've defined and
outlined here, we suggest that it would be relatively inexpensive to involve the nrc early in the consultations with potentially very high impact. we suggest the committee consider authorizes the appropriation of 5 million at first to advance development of reactors and a relatively low cost share of 3%. the nrc is important and necessary for ensuring nuclear power is safe, therefore it plays a critical role in nuclear power innovation. in closing i'd just like to say this is a very exciting time in nuclear energy right now. i love that i get to put science in practice and engage the next generation of scientists and engineers and help meet the nation's energy needs by creating a new innovative way to produce clean and safe power. thank you for the efforts of this committee and thank you for the opportunity to speak to you.
i'd be pleased to answer questions. >> thank you. our next witness is dr. ashley finn, the clean air task force of energy systems. >> thank you for holding this hearing and for giving me the a of energy systems. >> thank you for holding this hearing and for giving me the opportunity to testify. my name is ashley finan. i am policy director to the nuclear innovation alliance, a nonprofit organization dedicated to leading nuclear energy innovation. the nia was established by a cross cutting group who believed advanced nuclear energy is needed to ensure a better future. this includes innovators, academic, environmental organizations, industry groups and other experts and stakeholders. the world will double or triple its energy demand in the next 30 years. this is driven by a growing middle class and the developing world and the need to bring electricity to 1.4 billion people who lack it today.
at the same time many analyses point to the pressing need to reduce global carbon emissions by 80% or more by 2050 if we are to avoid the worst impacts of climate change. a more rapid expansion of nuclear power is an essential part of the solution. in the united states and elsewhere, dozens of stakeholders are -- the transition from design to commercialization and deployment both in the u.s. and globally has been slow. current nrc regulation confronts the licensing of advanced technologies will two major challenges. first, nrc designed certification or approval calls for enormous front loading and investment. without a stage structure to provide applicants with clear early feedback on an agreed schedule. second, current regulation primarily involved oversea light water reactor technologies.
it must be adapted to the features and characteristics of advanced reactors, which rely on substantially different fuels, cooling and safety systems and require novel operating strategies. over the past two years, the nia has been developing strategies for the efficient and cost effective licensing in the united states. we compiled the results of our work into a report, which was issued on april 12th. the report has been provided to the committee and is available to the public on the nia web site. it discusses in much greater detail the topics i'm touching on today. to address the lwr centric nature of the regulations, a different approach is needed. it will allow the nrc to review
a diverse set of reactor technologies. as 2975 provides work to do in this area without impacting the cost to existing plants. to illustrate the investment challenge, i'd like to direct your attention to figure 1. this shows the risk investment pro freestyle relatively to the licensing process today and the large hurdle of obtaining design approval. figure 2 illustrates a staged approach that provide interim feedback and opportunity for risk reduction. it aligns better by using a topical report and other mechanisms this approach maintains the rigor and high standards of the nrc and facilitates the development of advanced nuclear technology that
produces less waste or even consumes it. s-2795 authorizes the nrc to do the crucial work to develop and implement this stage licensing process with dedicated funding. this is important for two reasons, it helps the nrc develop a rigorous technology inclusive structure to support the review of technologies. it does this without diluting funds to regulate operating plants. it also allows for immediate adjustments that will provide a more efficient, predictable and effect of process. thank you for this opportunity to testify. s-2795 is needed to enable progress and advance and enable nuclear energy. >> thank you. our next witness is maria korsnick.
welcome. >> thank you very much. on behalf of the commercial nuclear energy industry, i want to thank the committee for considering 2795. introduction of this bill is particularly well timed. nuclear energy makes a significant contribution to our clean air quality, the reliability of our electricity supply and our national security. yet regulatory inefficiency and cost are constraining our use of this valuable national resource. if not addressed in the very near term, those issues will impede deployment of even more innovative reactor technologies here and around the world. despite nrc's efforts to reduce its budget and right size the agency, fees continue to be excessive and the limitations of the mandated 90% fee rule create fundamental structural problems. the nrc's budget continues to hover at approximately $1
billion a year, despite significant declines in its workload as plants have shut down. in particular, according to ernst and young, the nrc spends 37% of its budget on support costs. that's more than 10% higher than some of its peer agencies. because the nrc must collect 90% of its budget from licensees and the nrc budget has not declined, remaining licensees are responsible for paying these higher annual fees. with several recent premature shutdowns and additional reactors decommissioning in the coming years, the coming fee structure virtually guarantees remaining licensees will continue to bear higher annual fees. the cost continues to advance well beyond the cost of living. since 2000, the nrc review fees and license renewals have been
an eight-fold increase in review cost. objectively, one would expect a decrease based on efficiencies gained in the review process. now this is particularly notable as we look ahead and want second license renewal for some of our plants. these illustrate a fundamental change to the nrc fee recovery structure in fact needed. s-2795 repeals the 90% fee recovery requirement and replaces it with much more rational approach. it requires the nrc to expressly identify annual expenditures anticipated for licensing and other activities requested by applicants. the legislation would also help drive greater efficiency in the nrc's operation. in turn, it would drive down annual fees by limiting corporate support percentages, although we do recommend that the cap be lower than the 28% level proposed by this
legislation. complementing the limit on corporate support, the bill would cap annual fees for operating power reactors at the fiscal year 2015 level. we also recommend that it apply to all licensees, so nonreactor licensees as well. s-2795 also affirms congress's view that this country can and in fact should be a leader in advanced reactor technology. the bill effectively directs the nrc to think differently about reactor licensing. it requires that the nrc's regulatory regime accommodate large light water reactors as it does today, small light water modular reactors and advanced nonlight water reactors. in short, an all of the above approach. the bills call for a technology inclusive licensing framework, use of a risk informed performance based licensing technique and a staged licensing process, will in fact be a good,
helpful step forward. developers will be able to demonstrate progress to investors in this first of a kind project, thus obtaining capital resources as they achieve milestones. too often we hear from our members that regulatory uncertainty is the greatest impediment. in sum, we must be thoughtful and deliberate in the way that we plan for advanced reactor technologies, but we must also begin today if we are to meet the potentially enormous demand by 2030 for u.s. technology not only here but in the international market. senators inhofe, crapo, white house and booker, on behalf of the industry, i want to thank you very much for taking a strong leadership role. nei supports the bill and look forward to working with and your
staff as it progresses through congress and hope it's enacted expeditiously. >> our next witness is dr. edwin lyman. welcome. >> thank you, chairman capito, and other ranking members of the subcommittee. i'm a senior scientist at the organization of concerned scientists. i would like to thank you for the opportunity to provide testimony on this subject of nuclear energy and innovation and effective regulation to ensure nuclear safety and security. we are a nuclear safety watch dog and we work to ensure that u.s. reactors are adequately safe both from accidents and secure from terrorist attacks. our position on nuclear power is
not ideological but pragmatic. we believe nuclear power could have a role to play in helping to mitigate the threat of climate change but it can only happen if nuclear power is sufficiently safe and secure. if nuclear power is to grow, there must be a corresponding increase in safety and security. otherwise the risk to public health and the environment will increase. and nuclear power could take itself out of the running if there is another event like the march 20 fukushima disaster. japan was a leader in nuclear energy and had over 50 operating nuclear power plants. today only two reactors are running and a battle is raging in the courts to restart just two others. the u.s. needs to do everything it can to avoid repeating japan's mistakes and congress must ensure that the nrc continues to serve as a thorough and rigorous regulator overseeing existing plants and licensing new ones.
we believe the most efficient and cost effective way to enhance reactor security is through evolutionary improvements and current designs and strengthening oversight but we do acknowledge new and novel technologies have the opportunity to reach these in the longer term. although each new type has advocates who claim that their preferred designs have benefits for safety, proliferation resistance or economic competitiveness, search assertions stand up to scrutiny. reality is a lot messier. given the proliferation of new reactor designs and the mass investment needed to commercialize a single one of them, development should be focused on concepts that meet the greatest goals of economic viability and cutting through the hype and identifying the best prospects is a major challenge.
for this reason we do need a thorough technical peer review process to be part of any government program that's going to provide supports for nuclear projects, whether at the national labs or private sector. i'd like to focus on s-2795. we believe nrc's regulations are not strong enough today to achieve the level of safety and security we need in the post fukushima era. we correspondingly doesn't agree that the licensing processing of advanced reactors are too stringent and need to be weakened. some argue it is impeding u.s. competitive initial, allowing countries like china to get ahead of us but we think the opposite is true. the reputation nrc for being a gold standard is a good brand. and so the nrc's reputation for
rigorous safety review on enhances that brand. we don't think we should be engaged with china and other countries in a regulatory race to the bottom just to secure customers. >> we believe the focus of the bill on nrc licensing is misplaced and will do little to facilitate the deployment of advanced reactors in the u.s. licensing process may be a convenient target but we think the nrc is being scapegoated. these include a lack of support for government funded energy r & d, the long-time needed for commercializing a reactor, the lack of utility interests in making those investments and the failure of the so-called nuclear power entrepreneurs to put any significant money into the projects that they espouse. we don't think the nrc's licensing process is a signature process in inhibiting employment. as a result, we don't think that the prescriptions in 2795 are the problem.
the problem is the cost and difficulty of obtaining the analyses and experimental data sufficient to satisfy regulatory requirements. this is the fundamental issue we think congress needs to address. so in summary, we think the legislation is premature. we would offer that the national academy of sciences first review the systemic obstacles to licensing and deployment of advanced reactors, including all the issues we mentioned and their specific prescriptions in change -- we think congress should reject any attempt to short circuit nrc safety reviews and help ensure that oversight and licensing will result in clear improvements and safe and secure operation. thank you for your attention. >> our next witness is victor mccree, director of operations at the nuclear regulatory commission. welcome.
>> thank you and good morning. i appreciate the opportunity to testify this morning. i appear before you today representing the technical staff of the u.s. nuclear regulatory commission. i plan to breefr briefly discuss the current and planned activities. and to offer nrc staff views on senate bill 2795, the unusual clear energy innovation and modernization act. a number of advanced nonlight reactor that employ innovative design features are under development. the nrc has the licensing and is ready to work with potential applicants to prepare for and review applications for these reactors. the nrc is also considering the extent to which enhancements to
existing licensing framework could influence efficiency, timeliness and safety of our environmental reviews. objectives today are to strategically prepare for nonlight water reactor applications commensurate with the development of vendor and have i plans. our overall goal is to create a more effective, efficient clear and predictable licensing process for advanced reactor safety reviews. with this in mind, the nrc staff is pursuing a multi-part strategy to prepare for our review of nonlight water reactor technologies the president's fiscal year 2017 budget request includes $5 million in non-fee recoverable activities to execute the strategy. if congress appropriates this funding, it will be used to facilitate the nrc's preparation
to undertake efficient and effective safety reviews of advanced reactor technologies. we plan to pursue activities in three primary areas. licensing infrastructure, technical preparation and stake holder outreach. first, with licensing infrastructure activities, we'll optimize the regulatory framework and licensing process for advanced reactor safety reviews. second, our technical preparation activities will evaluate, clarify and resolve critical policy issues that need to be address for effective efficient advanced reactor safety reviews. finally, we will expand upon our outreach activities to pro actively engage key stake holders to ensure all parties will be ready to proceed in the development and review of new reactor designs. our strategy reflects insights we've gained from many years of interaction with the department of energy and nonlight water reactor community.
we believe this strategy will enable the resolution of novel policy issues and lead to the development of a design criteria, regulatory guidance and industry codes and standard for nonlight water reactor designs. by enhancing the efficiency and effectiveness of nonlight water reactor reviews, this strategy will reduce uncertainty and business risk. the nrc's advanced reactor programs is one of several topics addressed in the senate bill. consistent in my role, my comments represent the nrc staff's assessment of factual issues associated with a draft version of the bill. based on our preliminary review, the bill would require the nrc to undertake a number of activities related to developing plans, strategy and rule making associated with the licensing of advanced reactor and of research and test reactors and report on those to congress. significant time and resources would be required over several years to implement the full range of additional activities described in the bill,
particularly with regard to the rule making required by the bill. another area covered by the bill is performance and reporting. these provisions would require the nrc to develop performance metrics and milestone schedules for any activity requested by a licensee or applicant and to report to congress for certain delays. this would require nrc to develop performance metrics and milestone schedules for many activities beyond those for which metrics and milestones are currently prepared. we believe we have appropriate metrics to provide the desired outcome. these measures recognize the need to adapt to schedule change that may arise to an applicant's performance. as written, the proposed requirements may limit nrc's flexibility in this area. in closing, i welcome the commission's interest in and ideas for enhancing the nrc's performance and the success of
our commission. this concludes my formal remarks. i thank you for the opportunity to appear before you and would be pleased to respond to your questions. >> thank you. our final witness is the honorable jeffrey s. merrifield chairman, advanced reactor task force chairman. >> it's indeed a pleasure to be here today before a committee on which i used to work as a counsel and testified on many occasions as an nrc commissioner. today i'm appearing in my role as chair, though my full-time occupation is an attorney and partner with the pillsbury law firm. in addition to my full testimony, i would ask that letters from seven advanced reactor developments supporting this legislation be included in the record. my testimony in s-2795 will focus on how the nrc conducts its business as well as mixed
reviews regarding the bill. we applaud the elements supporting the development and deployment of advanced reactor technologies. on february 22nd of this year, nic issued a framework for advanced reactor monetization light reactor. while we will suggest a few additional areas for areas of improvement, we are committed to working the committee and its staff to promptly move the legislation forward. when i became a commissioner, senator inhofe led the way to oversee the nrc. consistent with the mission of protecting people and the environment, the commission with full support of this committee worked to right size the agency. at that time the agency had approximately 3,400 employees and within the next few years we were able to reduce it down to
about 2,800, principally through attrition yet not with any sacrifice to the safety mission of the agency. today the agency faces the same challenge. i understand the concerns voiced by the committee regarding the size of the agency, the increase in licensing review time and growth in overhead activities at the agency, which is inconsistent with the current nrc licensees. while the nrc has made great strides, i believe further reductions can be accomplished while at the same time effectively maintaining safety and inspection activities and improving the time limits of licensing actions. i support the provisions of s-2795 which would limit the overhead of the nrc and place appropriate caps on the growth of agency fees. as was the case when i appeared before this committee over 15
years ago, i believe the amount of fees placed on individual licensees is not appropriate and should not cover inherently governmental functions in overhead. i believe that the fee provision of s-2795 appropriately balance the important nonlicensee activities which should be born by general revenues and those licensee activities that should be born by user fees. during the past decade the u.s. has maintained its technology leadership through progressive light water reactor designs including passive generation three-plus reactors deployed in georgia and south carolina, as well as small module light nuclear reactors headed toward deployment. if the u.s. is to be successful in maintaining its lead in developing and deploying a new nuclear reactor fleet, congress must consider significant new policy changes. in addition to funding and infrastructure, a modern licenses framework is needed to enable development and employment of advanced reactor technologies. currently the licensing process
of the agency is perceived as one of the largest risk factors confronting private developers of advanced reactors. the proposed licensing process changes envisioned by s-2795 will help to address this gap. additionally congress should provide additional resources to both nrc and due as well as direct them to focus and mobilize their resources and expertise to enable the deployment of advanced reactors. we believe section 7 will allow the agency risk-informed development to enable regulations without passing costs to existing utilities or advanced reactor developments. criteria are critically required to finalize criteria as well as source term emergency planning and similar requests. we believe there are two areas where further enhancement are warranted. while the nrc is not a promoter, it is appropriate to engage in advance discussion with developers. as members of the reactor
community are early stage and entrepreneurially driven companies, they lack the resources necessary to finance these activities. nic supports section 9 involving the cost share grant program. we believe this is an appropriate development. we would say we think it could be further enhanced by allowing for early stage engagement with the advanced reactor community at no cost with perhaps a 50/50 share in later stages of the licensing progresses. collectively we believe this will allow the free market to
create winners and losers rather than the d.u.e. and nrc. while section 7 b calls to establish stages in the advanced nuclear reactor process, we believe it is generally consistent with our white paper that the bill should be strengthened by incorporating specific language requiring the nrc to present prelicensing review to clearly and promptly articulate where advanced reactor designs do and do not need additional work, would enable investors to have a clearer picture in where they stand in meeting nrc requirements. finally, we support the elimination of the mandatory hearing requirements contained in section 8 and please discuss my views on this during the question and answer portion. we believe it's time to make appropriate reforms to the nrc overhead and reform process as well as modernize the agency's licensing program to spur innovation in advanced reactor technologies to achieve full
promise. achieving that goal and we're committed to working with this committee to its passage. thank you for your allowing me to testify today. >> thank you. thank you all very much. and i will begin the questioning with asking mr. mccree, a lot of what we've heard in the testimony and certainly what's contained in the bill has to do with right sizing the agency in terms of license fees and support. so in 2006, the nrc spent $208 million on corporate support spending which amounts to 28%. you can see it on the chart -- of the budgetary authority. this was at a time the nrc was regulating more reactors and materials with fewer people and resources. so, mr. mccree, do you recall any impairment of the nrc's safety and security mission in 2006 as a result of this level of corporate support?
>> chairman, thank you for your question. and to your question about impairment of any of our safety and security mission, i would indication that answer is no. >> thank you. so what i would say is if corporate support spending equal to 28% of the nrc's budget, the amount would be $275 million which is only $30 million less than what the nrc is expecting in corporate support. in light of there's more work and more licenses in 2006 with this 28%, do you have any reason to believe this amount of corporate spending at the top part, which would be $30 million less than what you would expect, could impair the nrc's ability, again, on safety and security?
>> senator, again, comparing nrc now to 2006, we're certainly a different agency. while there are about 100 operating reactors than there were in 2006 there is, of course, additional work that we have now that we didn't have then with the four ap-1000s that we're overseeing as well as completion of oversight of unit two. so the workload is different than 2006. certainly our staff size is different as well. >> so are you saying that you think that if it were to be right sized to the 28% there could be some concerns over safety and security? >> that's not what i'm saying, senator. i'm simply saying that we're comparing different agency now in 2016 to 2006. as far as right sizing we are taking under projects, significant steps to right size for the work that we have and the work that we anticipate in the future.
and that right sizing includes right sizing our corporate support area where we have taken significant reductions, about $30 million in reductions this year, in 2016, and, additionally, a number of recommendations under project baselining that will result in additional reductions in 2017. several weeks ago the chief financial officer and i assigned a tasking for several of our larger corporate support offices to look at additional reductions we would plan to submit to the commission in planning for our fiscal '18 budget. as the chairman noted yesterday in the house hearing, we're not done. the project right sizing continues. i do believe that the corporate support portion of our budget will continue to go down. >> ms. korsnick, you spent a lot of your testimony addressing this issue.
do you have a reaction to what the gentleman's it testified to my question? >> yeah, i think i included in my testimony, in fact that when we looked at the peer agencies to the nuclear regulatory commission, they appear to be effective with the corporate support level even less than 28%. the other thing that we're interested in in the fee structure is the way that the current bill is structured. it not only asks for the nrc to allocate for certain licensee requests but the money needs to be spent on that and that alone whereas right now there's the ability to move money around, if you will, in fact, move it to corporate support. and we would like a stronger fiscal responsibility on that.
>> thank you. dr. back, you mentioned safety, less waste, cost competitiveness and reducing a proliferation risk as your four corners of developing an advanced reactor. what i think i'm hearing is the nrc would get in on the front end, maybe raise red flags in the beginning of the licensing procedure rather than the back end where the time lines are leaking and maybe incurring more expense would be more helpful to you in order to reach these four benchmarks. is that a correct assumption? >> yes, although it's not at the point where the reactor is not performing well. we're looking for input early because the technologies are different so the way you evaluate it, the metrics you assess the safety and cost competitiveness and other factors of the reactor are different. >> at this point in your development you've had no internal conversations on your advanced reactor? >> we've had one conversation because we're allowed one conversation which is free, so to speak, before the hourly rates come up.
and in our development of the reactor it's not well suited to our particular technologies so when we look at where we were investing our research dollars versus funds to try and get input from the nrc because we know it's a long path, there has been a history with many white papers without a clear decision. there's an uncertainty that is very difficult to manage at this early, early stage. that's why a very small investment from nrc funds in the beginning would be very helpful. >> thank you. senator? >> i would be happy to yield to those who have urgent business to attend to. anybody in a tight squeeze?
who would be next? senator crapo. >> thank you very much, senator carper. we've received at this point 19 letters of support for this legislation, can i ask these be included in the record? >> those will be included in the record without objection. >> i would like to direct my first question to you, mr. mccree. we've been working hard to understand the budget of the nrc and its inner workings. and there is, i review the nrc budget process is very opaque. in addition to fee structure i'm concerned about lack of clarity on how the nrc budgets for its overhead functions. will you commit to working with my staff and the staff of other members to provide timely your overhead functions and budget requests?
>> thank you, senator, yes, absolutely. we need a commitment about how the nrc allocates and spends its resources so we can understand how the budget works more effectively. i want to use the rest of my time to talk to the whole panel and i know that will be hard in four minutes. the point i want to get at is dr. lyman in his testimony has two points he raised. one of them was we should not weaken the nrc structure, it's the gold standard and we need it to continue to be the gold standard. i don't view this as weakening the structure in any way. i view it as increasing transparency and efficiency and maybe i'll turn to you first, mr. merrifield. what is your view of that issue? >> thank you very much, senator. i fundamentally disagree with mr. lyman in that regard.
what we are really asking for, and i think what this legislation will accomplish is risk informing the regulatory activities of the nrc and tailoring those activities to be appropriate for the licensing. this will in no way reduce the level of safety. in fact, arguably it will allow the agency to appropriately tailor resources to be regulated in the right way and hopefully will have the successful accomplishment of doing it at a lower cost which is important as well. >> the earlier the agency is involved in the development of the technologies and the understanding of it, the more efficient and effective the regulation can be? >> that's exactly right. i think it would allow much better utilization resources. a couple things i would say real quick. one, what the staff, mr. mccree's staff needs to do is elevate as quickly as possible
many of the generic policymaking decisions that can be made to the commission and by the commission to reduce the uncertainty for advanced reactor technologies. secondly, we talked about the fee process. it is very important to provide fee relief in the early stages of the program to allow active discussion between the developers and the nrc. as was discussed by one of the other witnesses, there is a concern right now -- there is a lack of engagement because once you start talking to the nrc, besides your initial meeting, the fee, $268 an hour fee is going to start triggering, and that's not good. we really should be encouraging very active discussion between the developers and the nrc right now. >> i probably only have time for one of the other witnesses and i'm going to turn to dr. finan on this because of your charts. the other issue i focused on is
the problem isn't really the regulatory system but the fact we can't get investment at the early stages of the development of these new technologies but, to me, that seems to be exactly the point that we can't -- because of our regulatory structure, at least a big part of that issue is that if you don't have the staged development or something like that, this bill contemplates a situation which is very hard to get early investment in these expensive technologies. could you address that? >> thank you, senator. that's right. i think there are a lot of other challenges to deploying advanced reactors as for renewables and carbon capture and other energy options but the investors and innovators have made it very clear their most immediate and pressing concern is regulatory uncertainty. so i don't think we need to have another study. twl have been a lot of studies on this. i'd be happy to provide a list of references. the climate change is urgent. the private sector is engaged
and eager and the time to fix this is really right now. >> all right. thank you very much. my time has expired and it looks to me like i'm now chairing the hearing. >> and i think you're doing a great job. [ laughter ] >> i think maybe cory is next. >> i would turn to senator booker next. >> thank you, mr. chairman, for that. my staff and i were just talk ing about how incredible your staff has been not just in working on the bill but reaching out to all these groups and the letters you submitted is really a testimony to the kind of inclusion that you've been going about in this process, so thank you very much. and, by the way, i felt your power descend because senator inhofe is back in the room. >> i will gladly yield that power. >> now i don't have to be so nice to you. so moving on -- >> duly noted. [ laughter ] >> ms. korsnick, in your testimony you make the point the reduction in the number of licenseees increases the fee
burden on the remaining licenseees. i think we hope we don't see this rash of premature closings within our nuclear fleet. that would be bad for the overall energy picture in the united states. that said if we did, could you explain how that would impact the reactors that remain and whether this bill would alleviate that scenario? >> yes, in fact, the current bill is structured to alleviate that very concern. as the current structure is in place with the obligation to collect 90% of the budget, it's 90% of whoever is there to pay. so if the plants that close down and are no longer part of that fee structure, then the plants that are remaining, the operating reactors that are remaining have to pay that 90% bill. and our experience has been based on the chart you just saw and our experience with the nrc budget historically has not reduced commensurate with the operating reactors shutting down. >> thank you very much. so, dr. finan, besides the fact you mentioned those two terrible
words, climate change, i'll forgive you for that, the reality is i'm into innovation and i've had a problem since i've been two years in the senate with the faa to the patent office. we do a lot to constrict innovation. in this space, innovation is, i think, critically important. and so you, actually the gao last year did this incredible report that looked at the challenges facing companies attempting to deploy new reactor concepts. in this report the gao noted a first of its kind technologies of the design review costs for these folks can be exceptionally higher than subsequent projects. do you believe this is a real problem as is noted in this report? and do you think the doe matching grant report program can solve the problem? >> i think that's a critical problem for innovators. there's a need not only to make
sure the costs are under control but to make them more predictable so investors and innovators can plan accordingly. i think the matching program could certainly assist them in that immensely. >> that's great. these innovators that are really critical in terms of the safety, in terms of being able to better deal with challenges like waste from current light water reactors as well as deal with problems that we have including proliferation of the material. is that correct? >> that's correct. and i think this is very exciting. in the past nuclear was developed really initially for the navy, for submarines and then adapted for land. today's innovators are putting a our ovals today. key values, safety, proliferation, cost and all of the other things that nuclear can provide and so i think these new designers and innovators will bring that to the table and we need to help them move forward.
>> and create a government regulatory climate where the folks can flourish and not putting undue cost burdens on them, correct? >> absolutely. >> can you expand a bit on your testimony in the little bit of time i have left as to why the existing nuclear framework is problematic for reactors, just a little bit more like specifically what's so problematic about the framework? >> sure. just as an analogy if we looked at emissions standards for vehicles, they are performance based. they set maximum emissions levels. instead if they required particular catalytic converter technologies, tesla would have to seek exemptions it to the technology requirements. for a nuclear reactor that's much more complex and has a lot more regulation, those would be multiplied and have a lot of issues where you need to come in and seek different treatment. and that's something that's a
big barrier for new technologies because every time they have do that that's an uncertain process that has not been done before. that creates a great problem for investors and innovators. >> i really appreciate that. in the one minute i have left, obviously senator crapo and inhofe come at this differently than we do. senator whitehouse and i come at this with real concerns and fears about overall climate change. and there's a massively expanding demand for energy globally, expanding rapidly, as i said in my opening remarks, at a rate that people, like i do, have visions for solar, visions for wind, visions for battery storage. there's no way that renewable pace will keep up with the demands that we're having. and right now 60% of our clean energy is being produced by nuclear. and so do you believe this is a pace -- a place where we have to actually expand innovation if we're going to really deal with the overall problem that senator whitehouse and i see of climate change? >> absolutely. and i think that's really
important because this isn't just a political issue. it's not just about -- it's not even just about climate change or just about energy security. this is a humanitarian issue. there are a billion plus people on this earth who don't have electricity and we need to provide that energy. we need to have all the tools on the table and that has to include nuclear. so i think this is critical work. >> thank you very much, dr. finan. >> thank you very much, senator booker. it looks like i still have the gavel. >> you are like thor, sir, with your mighty hammer. >> senator inhofe? >> well, confession is good for the soul, and i confess that you did a much better job of pointing out something than i did. but the interesting thing about this is those are on your side who are driven -- whose lives are driven by climate change and those on this side who are realists. [ laughter ] we still agree on this bill and
we know this is going to serve everyone's best interests, and i believe that. i'm not sure what all was covered. i had to go down to armed services which is the problem on this committee, we have nine members both on this committee and armed services. somehow i've never been able to convince john mccain that we're a committee, too. i have a chart. where is that chart? do you want to put that up? now as you can see, ms. korsnick, i want to you look at this, the fees on reactors increased substantially over the last few years. in this bill we capped the annual fee for operating reactors at the 2015 level base ed on the most recent fee recovery rule. this level is very near the all-time highest amount that reflects the post-fukushima work load. that work load is now declining. we also provide for inflation adjustment. now, ms. korsnick, do you believe this amount is an
appropriate ceiling to ensure the nrc is adequately resourced to execute this safety and security mission? >> thank you, senator. yes. in fact, as you've just described we think fiscal year 2015 is the high water mark, quite frankly, for the agency. we feel, in fact, that it shouldn't need to approach that ceiling. as you describe some of that work load, in fact, is declining from post-fukushima and we feel that a more efficient agency should, in fact, be able to operate with a corporate spending more in line with their peer agencies. >> but whether or not you would want to reach that cap, it is adequate? >> it is adequate, yes, senator. >> now under the amount of annual fees that the nrc collects would increase when newly operating plants begin to pay their fees or would decrease
when reactors close, do you believe that's an appropriate way to account for increases and decreases? >> yes, senator, we do. that obviously speaks directly to work load and we think that's a fair process. >> i would agree with that. when companies decide to close nuclear reactors, do they give the nrc adequate notice such as the nrc can account for the decrease in fees in their budget process? >> we believe so, senator. the individual plants also need to go through a planning process. they need to inform the regional transmission operator. for example, in advance it's typically a 12 to 18 month type time frame you're making these types of announcements. >> that's good. well, mr. merrifield, i think back when you first started -- actually when i first chaired this committee, you were then the attorney, i guess, on here. you were not a commissioner yet at the time. >> no, i was a counsel on this committee. >> a counsel, yes. you might remember at that time
this committee had no oversight for four years. >> that's true. you did a very good job of correcting that problem. >> well, we did correct it. we got busy and we set goals. we set priorities as to when we would be coming in and what we were supposed to be doing. and i think that did work. >> it did, senator. >> during your tenure as commissioner, you led an effort to improve the efficiency of new plant licensing. one of your recommendations was to eliminate the mandatory hearing. isn't that true? >> that's true, senator. >> and would you kind of explain what that was all about? >> well, the hearing process the agency has right now dates back to the early days of the atomic energy commission. and when you look at the legislative history, the reason for its imposition is several reactors were approved with no public involvement whatsoever. and the outcry caused congress to impose a mandatory hearing requirement, which was appropriate at the time.
over the years with the changes under the administrative procedure act and the wide number of opportunities for the public to be involved in the many steps of the licensing process, in my view then as it is now is that is an antiquated notion and is no longer necessary. if there are specific issues, those can be brought up in a contested proceeding that the commission can go over. i believe mandatory hearing is not necessary and, indeed, frankly, the requirement right now causes significant staff resources ultimately which must be borne by a combination of the federal government and the licensees to deal with the mandatory hearing. it would be a significant reduction of fees if that was eliminated. >> okay. getting back to one last question, my time has expired, but for a short answer. i described the lax situation there, having gone four years, oversight is important.
do you think since that time we've slipped a little bit back and need to become a little bit more forceful overseeing the nrc? >> as a commissioner, i welcomed involvement. >> i know you did. >> with the committee. and it was helpful to us to have our feet held to the fire. it gave us the discipline to make sure we oversaw the agency and its mission. the commissioners have the responsibility to oversee what victor mccree and his staff does. i think further reductions of the staffing are appropriate, and i think the involvement of this committee in overseeing is welcome. >> thank you, mr. merrifield. >> thank you, senator inhofe. senator whitehouse? >> let me say first how happy i am that the chairman had a twinkle in his eye when he made that comment about senator booker and myself. let me, second, say to dr. lyman that it is very much not our intention in this bill to short circuit the safety review of any nuclear facility.
the concern that i have is that the review process of the nrc has become so reactive, getting through that obstacle course is facing hazards that have nothing to do with short-circuited or long circuitedness but simply not being appropriate to the technology in the same way that if you had to pass a test for how solid the canvas was on the wings of your proposed aircraft when you are actually proposing an aluminum winged aircraft or where the pilot's goggles needed to be and what they needed to be made of when, in fact, you are proposing a closed cockpit aircraft, it's an issue of relevancy not of shortcuts. what i would invite you to do and any other member of the panel who wishes to do is to put in writing some benchmarks for
us that you think would indicate the departure from moving the regulatory process more towards relevance to new technologies and into simply short-circuiting safety because i don't think there's a person who supports this bill who wants to short circuit safety and it would be helpful to have this conversation in a more specific way about what the, you know, red flags might be rather than just speaking very generally about that. i worry that we have technologies that are effectively smothered in the crib because they can't figure out what their regulatory process is going to look like and, therefore, they can't raise capital and they can't proceed and there's a big x factor, a big question mark around the
process if you're not a traditionaling light water reactor. that's how i think of the problem and i'd be interested in not only yours but everybody's response in writing if you would care to make that. the last point i'll make goes back to something i said in my opening remarks and that is i think it's a tragedy and a carbon constrained environment to have nuclear plants closing that are producing carbon-free power for no other reason than that nobody has figured out how to pay them for what we all agree, almost all agree, is the value of the carbon freeness of their power. we have an administration that has an office of management and budget that has $42.50 per ton, social cost of carbon. if somebody has a suggestion as to how we can figure out a way to pay the existing nuclear fleet $42.50 per equivalent ton
of carbon, i'm down for that. we need to find the revenues. i don't think it's a good thing to run up the deficit, but i do think there ought to be a way to provide that revenue stream to the facility so that artificially driven economic decisions that are, in fact, wrong from both an environmental and economic perspective aren't being driven across this industry by this market failure. so i know that's beyond the scope of this particular bill, but i would encourage if any of you have ideas on that to please go ahead and offer them and i would offer that solicitation to my colleagues as well. so, again, chairman, thank you very much. >> senator? if i may, on the first point that you made -- and -- >> the one about chairman inhofe? >> not that one.
>> you saw the twinkle in his eye, too? >> i did see the twinkle in his eye. >> actually, i would like the opportunity to respond. >> as it relates, if i may finish my thought first, as it relates to the first point -- >> you'll have the opportunity to respond, i would just love to have it in writing because i think it's going to be a long response. this isn't a continuing conversation that i think we need to have. >> i think on your first point you were entirely correct. i think the process does need to be tailored for these advanced reactor technologies. as a country we've had a leadership role historically in the nuclear energy field. it is a different world today. there are lots of opportunities for advanced reactor developers to work with regulators around the world. if we don't maintain our lead in having them come before the nrc for review, they may well decide that there are other countries for which they are better suited to have those licensed. >> i've been to china and heard the reports on the facilities that were designed in the united
states that are being constructed over there. my time has expired. >> if i could just have -- >> senator fischer needs to go next. i don't know if anybody else wants a second round. i have one more question and i'll give you a chance, dr. lyman, to respond at that point. >> and i do look forward to work with you. i'm not trying to be hostile. i'm trying to open a conversation that i think separates a good point that you've indicated for us, thank you. >> i appreciate that, thank you. >> thank you, mr. chairman. nebraska hosts two nuclear reactors that provide that clean, affordable, reliable energy to our rate pairs and also to our families. and this important legislation that we are discussing today will provide our nuclear innovators the transparent framework that is necessary to launch this nuclear fleet into the future. it will also enable our utilities to continue to provide affordable and reliable energy.
so i am appreciative of the discussion that we are having today and also that we are recognizing the outstanding job that our nuclear reactor utilities perform every single day. mr. mccree, the legislation that we're considering today creates an advanced nuclear energy cost share grant program that enables the department of energy to establish a grant program. and i understand that there has been criticisms regarding the d.o.e. grant programs that share the costs of nrc licensing as picking winners and losers. so in your experience, do you believe it would be appropriate for the nrc to manage such a grant program to reduce review fees for applicants or would the nrc consider that promotional and in conflict with its role as regulator? >> senator, thank you for the question.
as we -- again, i want to reiterate the commission has not expressed its view on the bill, but i would note that as written the nrc would not manage the grant program but that the d.o.e. would. and in that sense it's not too dissimilar from a grant that the d.o.e. made available for the combined operating license holders for the ap-1,000s for georgia and south carolina. to that extent it has worked well and it has not impacted our fundamental safety and security mission nor our independence principle which the chairman referred to earlier. >> you would not be supportive of the nrc becoming involved in the grant program in any kind of promotional way, and you do recognize there's a conflict there? >> yes, ma'am, i do. and, again, although the commission has not weighed in on this, it would appear, i
believe, to represent a conflict. i would feel confident that the commission would weigh in on that with a similar view. >> thank you. and mrs. korsnick, you stated in your testimony that the cost and duration of reviews for license renewals on new plants have dramatically increased rather than decreased as the nrc and the industry gains experience with processes. s-2795 directs the nrc to ensure funds are available to complete reviews that the industry needs and the bill also has provisions, as you know, requiring performance metrics and reporting. so do you believe this two-pronged approach will improve the efficiency and the timeliness of these reviews? >> yes, senator, we do.
the nrc will budget specifically for licensing requests of the industry will help provide the necessary focus and attention on those. we do think the bill will be helpful in the area. >> do you believe it will also help lay the groundwork so we can have more predictable reviews in the future? >> i think so. the challenge is when we say performance metrics and reporting, the devil is in the detail on that in terms of what performance metrics are developed but absolutely in concept i think having metrics and reporting is absolutely helpful in demonstrating the success, quite frankly, if the nrc is so successful, it's an opportunity to share that. >> as we look at developing those metrics, how important is it that we have all the stakeholders at the table on that? you said it's very important and the devil's in the details, can you give me an example maybe where you would be representing a view that might not be
available that other stakeholders would present? >> i think stakeholder engagement would be very helpful in that way as with any performance metric, you get what you measure. and so you can perform in a way that you say, well, making the metric look good but it's not satisfying, if you will, you know, the greater good. and i think the way to avoid that is to get stakeholder engagement and review what the metrics would be to make sure that all of the stakeholders' concerns would be reflected appropriately in the metric. >> thank you. and mr. merrifield, during your service as a commissioner you helped prepare the nrc to review new plant applications. and this bill directs the nrc to undertake several activities to develop a regulatory framework and to review the application. is the scope of this work too ambitious or do you think it's feasible? >> i think it's absolutely feasible. credit to the nrc staff. i think they will throw
themselves at making this work. victor mccree is a talented gentleman. it is very achievable for the agency to do this. i think they can come up with a process that is transparent and done in such a way to allow the technologies to move forward. the bill encourages that. one point on the earlier issue i would like to mention having been on the commission, i do think the oversight that this committee provides on the timing of various activities of the agency, license renewals, new license applications, those are important metrics to take a look at. the timing of those has increased since i left the commission. that is an area that needs attention. >> thank you, mr. chairman. >> thank you, senator fischer. senator markey? >> thank you so much. mr. mccree, sequestration and
the early closure of a number of nuclear plants have already put the nrc in a declining budget environment. at the same time the revelation that isis recorded video at the home of a belgian nuclear official underscores the need for additional resources for security and safety at u.s. nuclear power plants. it's at the top of the terrorist target list for isis. instead, the bill under consideration in this committee would constrain the nrc's resources by imposing a blanket cap on fees for operating reactor licensees. do you agree there's a possibility that such a cap could adversely impact safety and security by reducing resources and support for nrc staff working to protect reactors against insider threats or physical attacks? >> senator, thank you for your
question. i would reiterate the commission has not weighed in on the proposed bill including the caps that are described in the bill. if they would become law, of course the nrc would abide by those -- >> fewer resources are not good for the agency in protecting against a potential terrorist attack. is that true? >> and, quite frankly, senator, we are in a declining budgetary environment and we are doing our due diligence to assure that our resources are appropriately allocated. >> no, i appreciate that. now you're pulling it away from other nuclear safety issues in order to deal with the terrorist attack when both are very real in our country. so i just think that we have to be realistic, that the belgian warning, that they were looking at a nuclear power plant, that they were trying to attack it, is clearly something we have to take into account here in the united states. and when we're talking about the nuclear regulatory commission's budget, yeah, we might want to do a favor for utilities and
reduce their fees, but where is the money going to come from then in order to produce the level of safety which we're going to need in our country? now the findings in this bill state that nuclear energy provides for just short of 20% of electrical generation in the united states. there are currently 99 reactors producing electricity in our country. at least three are closing very soon. fitzpatrick, oyster creek, and pilgrim. according to the department of energy data for nuclear energy to stay at 20% of total energy generation by 2025, we need to bring 13 large reactors online in the next nine years. we are currently building four and one more is scheduled to produce electricity this year. that leaves us eight reactors short of what the goal is. do any of you disagree that there is little or no possibility that eight
additional new reactors that we have not even begun to build will come online by 2025? do any of you disagree with that, theat there aren't going to be eight new plants operating between now and 2025? any of you disagree with that? >> no, sir. >> okay. so let the record reflect that no one disagreed with that and, remember, eight new nuclear reactors are what we need to maintain nuclear share of electricity generation in our country. there would be a need to replace even more of that to replace fossil fuel generation as coal plants go off line. we need even more capacity. the two reactors under construction have experienced years long delay, billions of dollars in cost overruns and it took 43 years to complete construction. do any of you disagree that problems that caused the cost
and schedule overruns at vogel would need to be solved before any significant number of new reactors could be built in the next 10, 15, or 20 years? do any of you disagree with that? let the record reflect that no one disagrees. in recent years the price of renewable energy sources has declined considerably. here's the big number. since 2010, the price of solar panels has declined by 80%. since 2010. we're talking five years. 80% decline. the cost of constructing nuclear plants has remained stubbornly high. in light of these facts, it simply is not realistic to expect nuclear power will continue to provide the majority of emissions free electricity in the united states let alone be part of a solution for climate change. in 2005 in the united states, there were 79 new mega watts of
solar installed. this year it's 16,000 new mega watts of solar in one year. so you can see where the trend lines are. increased solar deployment and wind deployment as the price of both decline radically in total costs where stubborn regulatory issues in terms of safety and design still plague the nuclear industry. dr. lyman, this bill would scrap the requirement that the nuclear regulatory commission hold a mandatory hearing on each application for a construction permit or operating license. instead, such hearings would only occur if they are requested by a person whose interests might be affected. is there any evidence that mandatory hearings have uncovered weaknesses in nrc staff evaluations of construction permit or operating license applications that otherwise would never have come to public view? >> senator markey, thank you for the question.
in our view of the mandatory hearing does establish a unique and important role in filling a gap in the event that a contested hearing does not occur and even if a contested hearing does occur, the mandatory hearing, the scope examines other issues including the adequacy of the staff's review. and a colleague of mine, diane kern, has compiled a number of instances where the mandatory hearings have uncovered significant inadequacies in the nrc staff's review. i would offer that list to you for your inspection. so we believe that the mandatory hearing process is important. it's also important for transparency. we heard a lot about the need to maintain transparency in the nrc review process and the public doesn't always have the
resources to be able to contest the hearing. even if there are very important safety issues that need adjudication. for those reasons we think mandatory hearings should be preserved. >> and i agree with you. there are mandatory hearings if you want to build a new house next door to somebody else's house. it's a public hearing not a town hall. here we're building a nuclear power plant and mandatory hearings for a construction permit, for an operating permit would no longer be mandatory? that just makes no sense whatsoever. that's an inherently dangerous technology that needs all kinds of tough questions to be asked about it. so i understand the wish list the industry would say no more hearings, no more questions asked by the union, scientists and public hearings questioning the underlying premise of building a nuclear power plant in somebody's neighborhood. i don't think the public will be happy they're told no hearings on this dangerous technology. again, it still needs insurance protection from the federal government. that's how inherently dangerous it is. the private sector still isn't willing to provide the insurance. you need the government to
intervene, to provide that insurance coverage. i thank you for your indulgence. mr. chairman? >> thank you. senator carper. >> if i were the chairman, you never would have gotten those extra three minutes and six seconds. [ laughter ] mr. chairman, i would say it's probably safe to assume that senator markey is probably not going to co-sponsor this legislation. >> i got that figured out. >> anytime soon. one of our colleagues is not here today. he and ted kennedy used to lead the committee on pensions for a number of years, very conservative republican, kennedy very liberal democrat. somehow or other they managed to get a huge amount done. i used to say to mike, how are you and ted kennedy able to bridge the divide and get so much done? he always talked about the 80/20 rule. i said, what is that? he said, ted and i agree on 80% of the stuff. we disagree on 20%.
and what we decided to do is focus on the 80% on which we agree. good enough. jim inhofe and i co-sponsored legislation on diesel emission reduction and making great progress on that front. we decided to focus on what we agree. i want to ask this panel in the spirit of the 80/20 rule to tell us -- and we'll start with you, dr. back -- where is the 80% where you agree or maybe it's 70% or even 60%? where is the agreement on this panel on some of the important issues? and just take a minute. no more than a minute. >> i'm sorry. i'm not quite sure -- >> where are the points of consensus on this panel? where do you think you agree? >> i believe we agree that early interaction with the nrc is helpful for new technologies for advanced reactors. i believe a staged approach is also very helpful. and i believe some kind of cost share to help with the fees or to change the burden of having
all fees do the design certification or licensing application is not appropriate. >> all right. thank you. dr. finan? >> thank you, senator. i think there's a really important area where we all agree, even senator markey laid out some of the challenges faced by nuclear. this is an industry that desperately needs innovation to address those challenges. and solar and wind have done really well and benefitted from a great deal of innovation in that space. and nuclear energy is ready. there are innovators and investors ready to take on that innovation challenge. and i think that we really need to have a more efficient and transparent regulatory framework to enable that work that we need to do to address those challenges that senator markey outlined. >> all right, thank you. please? >> i think we all agree that nuclear power is very important and very necessary for a base load carbon-free future for how we generate electricity.
i think we also agree we need a strong, effective regulator. i think the industry feels we used earlier the term a gold standard. i think we don't want the nrc to be a weakened regulator. i don't think that's helpful for the industry. we do feel we can have an efficient and strong regulator and a regulator that is more transparent from a cost perspective. >> all right, thank you. dr. lyman, where is the consensus here? >> well, i would hope the consensus is that there needs to be a structured process to ensure that nrc safety reviews of new reactors are not spent. those resources are actually used to end up with a product that generates electricity and aren't just academic exercises and so that's one concern we have with the bill that we hope this panel would all agree with. i also would point out that we don't agree that the stage
processes outlined in the bill necessarily would be helpful. >> dr. lyman, i was just looking for points of agreement. we'll come back to the 20% some other hearing, all right? [ laughter ] commander mccree, navy captain -- navy commander, right? >> yes. thank you for the question. >> naval academy? my favorite rank in the navy. >> let me first agree with my fellow panel member, ms. korsnick, nrc remaining a strong, credible regulator is essential and we are committed to our efficiency principle of regulation and are making strides to become more efficient in this important area. again, the most important thing we do is assure the safety and security of the operating nuclear power plants and the materials license holders. but within that, i alluded to the three pronged strategy earlier, the multipatr