Statement of Federico Peña
U.S. Department of Energy
before the
Subcommittee on Military Procurement
Committee on National Security
U.S. House of Representatives

March 19, 1998

Mr. Chairman, and members of the Subcommittee, it is a pleasure for me to appear before you today to report on the Department of Energy's fiscal year 1999 budget request for its national security programs. It has been almost one year since I first appeared before you as the newly sworn-in Secretary of Energy. Let me thank you and the other members of the Subcommittee who have actively supported us during this past year in addressing the many tough challenges facing the Department.

This morning I would like to highlight for you a few of our Departmental accomplishments since I last met with you. And I would also like to describe some of the challenges that lie before us. But first, let me briefly describe the budget request that we recently forwarded to the Congress. In Fiscal Year 1999, we are requesting $12.1 Billion for the Atomic Energy Defense Activities account -- or DOE's portion of the national defense budget. This $12.1 Billion request represents an increase of some 6% over our FY 98 budget request for national security activities, and constitutes about 67% of our total budget request of $18 Billion for the Department in FY 1999.

This $12.1 Billion request supports a broad range of programs within the Department's defense account, for example:

  • more than a third of our overall request ($4.5 Billion) will support our Stockpile Stewardship Program. This is the program that we initiated with your help and direction nearly five years ago to maintain our nuclear deterrent without underground nuclear testing after the Congress entered the United States into a testing moratorium;

  • another third of this request ($4.78 billion) will support clean-up of our nuclear weapons production complex;

  • funds will also be used to prevent and detect the spread of weapons of mass destruction through our nonproliferation efforts at the Department, whether it be through helping Russia and other former Soviet states secure their nuclear materials against theft, through developing advanced technologies to help detect and counter chemical and biological weapons, or through helping to permanently dispose of excess weapons grade materials both here and in Russia so that those materials may never again be used in nuclear weapons.

  • for the Navy, we are developing the next generation of nuclear propulsion, and providing for the safe and reliable operation of existing naval reactors;

  • and finally, this budget also supports assistance to our workers who have been separated as a result of downsizing and restructuring our nationwide production complex.

As we embark on each of these national security challenges in Fiscal Year 1999, we will need your sustained bipartisan commitment to ensure their continued success.

Let me describe some of our program accomplishments and challenges in more detail.


President Clinton last year forwarded the Comprehensive Test Ban Treaty to the Senate for ratification. As he said in the State of the Union, "By ending nuclear testing, we can help to prevent the development of new and more dangerous weapons, and make it more difficult for non-nuclear states to build them." The Department's ability to assure the safety and reliability of the nuclear deterrent without underground nuclear testing -- through Science Based Stockpile Stewardship -- is fundamental to our national security under a Comprehensive Test Ban Treaty (CTBT). We are requesting $4.5 Billion for the Stockpile Stewardship Program (SSP) in FY 1999.

The United States nuclear deterrent remains a cornerstone of our national security strategy. President Clinton has stated that "the United States must and will retain strategic nuclear forces sufficient to deter any future hostile foreign leadership with access to strategic nuclear forces from acting against our vital interests and to convince it that seeking a nuclear advantage would be futile. In this regard, I consider the maintenance of a safe and reliable nuclear stockpile to be a supreme national interest of the United States." As such, the President established specific safeguards that define the conditions under which the United States will enter into a CTBT. Four of them relate to Stockpile Stewardship. These conditions are:

    (A) the conduct of a Science-based Stockpile Stewardship Program to insure a high level of confidence in the safety and reliability of nuclear weapons in the active stockpile, including the conduct of a broad range of effective and continuing experimental programs;

    (B) the maintenance of modern nuclear laboratory facilities and programs in theoretical and exploratory nuclear technology which will attract, retain, and ensure the continued application of our human scientific resources to those programs on which continued progress in nuclear technology depends;

    (C) the maintenance of a basic capability to resume nuclear test activities prohibited by the CTBT should the United States cease to be bound to adhere to this treaty; and

    (F) the understanding that if the President is informed by the Secretaries of Defense and Energy as advised by the Nuclear Weapons Council, the Directors of the nuclear weapons laboratories, and the Commander of U.S. Strategic Command that a high level of confidence in the safety and reliability of a nuclear weapon type which the two secretaries consider critical to our nuclear deterrent could no longer be certified, the President, in consultation with the Congress, would be prepared to withdraw from the CTBT under the supreme national interest clause in order to conduct whatever testing might be required.

As Secretary of Energy, I have made the safety and reliability of our nation's nuclear stockpile a top priority. I cannot imagine any responsibility more serious than certifying to the President on an annual basis whether or not our nuclear stockpile is both safe and reliable.

At the core of the program is the issue of confidence. Confidence in our weapons comes from the effective management of the system that maintains the weapons and the expert judgment of the scientists and engineers at the three remarkable weapons laboratories--Los Alamos, Lawrence Livermore and Sandia National Laboratories-- who assess them. The ultimate measure of success for the program is the presidentially mandated annual certification. The certification process requires that the weapons design laboratories and the Department of Defense review all weapons types -- both active and inactive. From this review, the laboratory directors, the Nuclear Weapons Council, and the Commander-in-Chief of Strategic Command independently advise the Secretaries of Energy and Defense on the results. Based upon these results, we determine whether or not to certify to the President that there is no need to return to underground nuclear testing. The rigor and thoroughness of this process ensures that, from the technicians working with the weapons on a day-to-day basis, to the designers who know the inner workings of the weapons, to the Secretaries of Energy and Defense, every level of authority is appropriately informed of, and accountable for, the safety and reliability of the weapons stockpile. We have successfully completed the process twice, and the third annual certification process is well underway. A copy of the second certification was forwarded to the Congress by the President on February 12.

Over the last year I have had an opportunity to visit each of the Department's three weapons laboratories, the Nevada Test Site, Savannah River, Pantex and Oak Ridge, and I have personally engaged each of the weapons laboratory directors in discussions about the strength and adequacy of the Stockpile Stewardship Program. I have met with the employees and I have been deeply impressed with their commitment to make this program a continuing success story of American science and technology. I have also met with other experts both within and outside of the Department, and I am pleased to report that there is a strong consensus that Stockpile Stewardship is the right program to address the challenges of maintaining our nuclear deterrent without underground nuclear testing; that the program is working now; that the program is properly sized and funded for the outyears; and that, with the President's CTBT safeguards, we can enter into the Treaty with confidence that the safety and reliability of our nuclear deterrent can be maintained.


The FY 1999 request allows us to build upon significant accomplishments of the Stockpile Stewardship program during FY 1997 and FY 1998. DOE's production plants at Pantex, Savannah River, Oak Ridge, and Kansas City continue to support the day -to-day needs of the enduring nuclear weapons stockpile by making the necessary repairs and annually providing the thousands of replacement parts needed by the stockpile. I would like to now focus on a few of the key actions that we are taking to ensure the continued safety and reliability of the nation's nuclear weapons stockpile.

Reestablishing Critical Production Capabilities

Just last month the Department's Los Alamos National Laboratory (LANL) took a significant step toward the successful reestablishment of a capability to build plutonium "pits" -- this is the component of a nuclear weapon that triggers a fission reaction. DOE has not had this capacity since 1989 when the Rocky Flats Plant that used to manufacture this essential nuclear component was closed.

Los Alamos manufactured an early development unit for the W-88 warhead. The Laboratory will manufacture more of these development units while it is validating these new production processes, and will eventually fabricate a " war reserve" pit -- a pit that will be certified for use in the stockpile -- by the fourth quarter of FY 2001. By 2007 Los Alamos will have the capability to manufacture approximately 20 pits per year.

In addition, in April DOE also plans to resume uranium processing operations at our Y-12 facility at Oak Ridge. These operations were shut down in 1994 due to violations of administrative safety controls.


Tritium gas, a radioactive isotope of hydrogen, is a critical element used in all of our stockpiled weapons today. Tritium decays at a rate of 5% per year. We have not produced tritium in the U.S. since 1988 and must develop a new tritium production source by 2005 in order to meet current directives. DOE is in the final year of analyzing a dual track strategy using an existing commercial light water reactor or using a newly developed accelerator. A primary source for tritium production will be selected in 1998.

We foresee no technical difficulties associated with the production of tritium in a light water reactor. A key test was begun in October of 1997, at the TVA's Watts Bar 1 Nuclear Plant. The test involves the irradiation of 32 specially designed twelve-foot "target" rods in the plant's reactor core. These targets are designed to replace a standard component of reactor fuel assemblies. During the plant's normal 18-month operating cycle, the rods will produce and retain small amounts of tritium. The Watts Bar test completes, on a small scale, the demonstration of the entire commercial reactor tritium production cycle, from fabrication of components through completion of regulatory approvals.

On June 3, 1997, the Department issued a Request for Proposals (RFP) for the purchase of one or more commercial light water reactors or irradiation services. Proposals from TVA were received on September 15, 1997. The DOE expects to make a preliminary selection from the proposals later this spring.

The accelerator alternative made impressive gains in 1997. LANL has completed the construction of the first test items for the accelerator and others are being manufactured. The first of the accelerator components, an injector, is being tested and is exceeding performance specifications. Thousands of samples of materials, welds, and structures have been irradiated to confirm choices and projections of performance for materials for the "target-blanket," the part of the plant in which the tritium would actually be made. First results of these tests are currently being analyzed.

The FY 1999 request includes $157 million to pursue the option to be selected in 1998. If the purchase of irradiation services from commercial light water reactors is selected, the budget request will be sufficient to meet current requirements. If the Department selects accelerator production of tritium as the primary option, the Department will need to delay the current target date for initiating new tritium production or request additional funding.

To ensure that all options remain open the Department's Fast Flux Test Facility (FFTF) at Hanford is being kept on standby until a decision is made regarding whether it should play any role in the tritium supply strategy.

National Ignition Facility

The National Ignition Facility (NIF) is one of the most important new tools that DOE will need to ensure the safety and reliability of the stockpile under a CTBT. The facility, now under construction at the Lawrence Livermore National Laboratory, is on schedule and on budget. NIF is designed to produce for the first time in a laboratory setting conditions of temperature and density of matter close to those that occur in the detonation of nuclear weapons. The ability to study the behavior of matter and the transfer of energy and radiation under these conditions is key to understanding the basic physics of nuclear weapons and predicting their performance without underground nuclear testing.

Experiments at the NIF will test the simulation codes developed under the Accelerated Strategic Computing Initiative (ASCI) and demonstrate how aged or changed materials in weapons could behave under the unique conditions of nuclear weapons detonation. Two JASON panels, which are comprised of scientific and technical national security experts, have stated that the NIF is the most scientifically valuable of all programs proposed for science-based stockpile stewardship. The first experiments on the NIF will be conducted in FY 2001 using the first eight lasers. Construction will be finished by FY 2003 and full operating capability, using all 192 laser beams will be achieved in FY 2004.

Nuclear Test Readiness

Consistent with Safeguard C of the CTBT, the Department is maintaining the necessary infrastructure at the Nevada Test Site and the specialized facilities, equipment and skilled personnel required for nuclear testing. The safe execution of a nuclear test requires a complex series of operations that exercise several areas of expertise including: nuclear explosive design and fabrication; diagnostic instrument design; emplacement and calibration; radioactive material containment; timing and firing, data recording, etc. Certification of the personnel and equipment to accomplish these operations will be assured by a number of ongoing and planned experimental activities utilizing both the Nevada Test Site and weapon laboratory facilities.

Part of our test readiness program involves the conduct of subcritical experiments at the Nevada Test Site. Subcritical experiments will provide currently scarce empirical data on the high pressure behavior of weapon materials, realistic benchmark data on the dynamic, nonnuclear behavior of components of today's stockpile, the effects of remanufacturing techniques, the effects of aging materials, and other technical issues.

Last year we successfully conducted two subcritical experiments -- Rebound and Holog. These experiments have provided a wealth of data about the properties of plutonium. Three subcritical experiments are planned for this fiscal year and a fourth is planned in October. The FY 1999 budget will support three to four additional subcritical experiments.

Accelerated Strategic Computing Initiative (ASCI)

We know that the level of computation needed to effectively simulate the effects of aging on nuclear weapons, as well as an in-depth understanding of the behavior of remanufactured weapons components is much, much greater than that currently available. We have begun the Accelerated Strategic Computing Initiative (ASCI) to address this need.

Our goal is to a have a computer system capable of achieving 100 Trillion Operations Per Second (TeraOps) by 2004. We are on schedule to meet that goal: In 1996 we set a new world computing record with the operation of a computer at Sandia National Laboratory that achieved 1 TeraOp. Next year we expect to achieve three TeraOps. We have already begun work with IBM to build a ten TeraOps computer which is scheduled to be completed by the year 2000. And we have already entered into contracts to begin developing the underlying technologies needed to support the procurement of a 30 TeraOps machine.

Even at this early stage of the program there has been a extraordinary increase in the speed of our computers at the Laboratories. More importantly, the actual number of calculations on weapons issues has increased. For example, in 1992, the last year of underground testing the estimated number of weapons related calculations was 5 GigaOps- years, or about 5 CRAY - YMP supercomputers running for a full year. In FY 1997 due to ASCI that number was 500 GigaOps-years, it will rise to 2400 in FY 1998, and in FY 1999 we plan on executing 7000 GigaOps-years of weapons related code. (A GigaOps=1 billion calculations per second.)

This phenomenal computing power is also being made available to the university community through the Department's Academic Strategic Alliances Program (ASAP). The Department of Energy announced on July 31, 1997, initial awards to five major U.S. universities--Stanford University, California Institute of Technology, the University of Chicago, the University of Utah and the University of Illinois. These universities are conducting unclassified advanced simulation research on important, large scale applications with potential for broad societal and economic payoff. The benefit for the weapons program is the validation of the methodology of simulation and to accelerate the development of simulation science and engineering. The program will also help us attract the next generation of scientists and engineers.

Stewardship is Working Now

These are but a few highlights of the activities that are going on and are planned for the Stockpile Stewardship program. While the program is hardly without risk, I am confident that we have a high probability of success. Why do I feel as I do?

First it is important to understand that we start from a solid position. The current stockpile is well tested and well understood. An extensive data base is available on each weapon as well as a cadre of scientists, engineers, and technicians that can with confidence certify the safety and reliability of the weapons in the stockpile. we have laid out a plan for the stockpile stewardship program --- weapon by weapon, part by part, that projects the tasks required to maintain the stockpile over the next ten years, and beyond. We have concurrence on this program from the Department of Defense, and the Joint Chiefs, and the Administration has committed to fund this program and all its parts. The three weapons labs are the best in the world - and they are better now than they were four years ago because of the enthusiasm and vigor with which they are attacking the Stockpile Stewardship effort.

History tells us that great labs need great missions, and stewardship, like the Manhattan and Apollo projects, is just such a mission. Most importantly, we are doing stewardship now, and doing it successfully. While it has been over five years since the last nuclear test we have successfully addressed an issue with a stockpile warhead by using a combination of analysis, new experimental data, archived test and manufacturing data, and most importantly the collective judgement of the two weapon design laboratories. This success, using the experimental and testing tools available today, gives us confidence that the even more powerful computing and testing tools being developed will allow us to solve future stockpile problems without nuclear testing. Finally, in the unlikely event that testing should be required, the Department is maintaining, consistent with Safeguard C, the capability to conduct underground nuclear tests.

I believe the Stockpile Stewardship program, with continued bipartisan support, will meet its goal of a safe and reliable stockpile, indefinitely, without nuclear testing, and I look forward to working with you and members of this committee over the coming year. I know of no national security issue that is more important.


The total FY 1999 Environmental Management budget request is $6.124 billion, including $517 million to support the privatization of certain large cleanup projects. The appropriation will fund cleanup from coast to coast in thirty-one states and one territory, with ten states accounting for about 85% of the total request. This request reflects a roughly level budget from last year, with a substantial investment in carrying forward our existing privatization projects. As Secretary Peña said in presenting our budget this year,

    "This demonstrates our continued commitment to accelerating our efforts to clean up our sites and return them for economic development or open space. At the same time, we recognize that safety is our top priority and we remain committed to meeting our environmental compliance obligations."

We have restructured the EM budget for FY 1999. It now includes three components: Site Closure, Site/Project Completion, and Post-2006 Completion -- which will help us to focus on our cleanup targets. With this account structure we are seeking to place greater accountability on project managers and to focus our mark on clear goals, we are consolidating the culture of cleanup at DOE, and we are moving quickly to embrace closure. We aim to complete cleanup at as many site and projects by 2006 as we can. We are accelerating cleanup, maintaining compliance and reducing risk at the same time. We have set forth our cleanup and closure strategy in a recent draft report called "Accelerating Cleanup: Paths to Closure."

Today we are operating at 53 sites in 31 states and one territory. By 2006 we aim to complete cleanup at 43 sites, after which the EM program hopes to be conducting cleanup at 10 sites in 8 states. Realizing this vision will require a sustained national commitment as well as a number of other requirements, including:

  • Sufficient funding;

  • Use of world class technologies;

  • Improved efficiency;

  • National integration of operations;

  • Resolving future land use issues with communities and regulators; and

  • Resolving other site-specific issues.

Another key change is the organization of our budget into projects with measurable endpoints to improve accountability. The EM budget reflects specific commitments to accelerate cleanup, treat an unprecedented amount of waste, deploy new technologies, accelerated and making progress on resolving the nuclear waste logjam. We have also set very ambitious goals for closing several sites by the year 2006, including the Rocky Flats site in Colorado, the Weldon Spring Site in Missouri, as well as the Mound and Fernald sites in Ohio.

I am pleased to report to you that the Department has maintained its target to open the Waste Isolation Pilot Plant as soon as possible, after the expected certification from the Environmental Protection Agency this spring. We also have submitted an application in support of the State of New Mexico's RCRA permitting process. This will be a crucial step forward in providing for the permanent disposal of the Department's long-lived radioactive waste. The opening of WIPP will be key to making further cleanup progress at other sites.

In FY 1999, we will continue to work closely with our communities as we develop our plans for cleanup, risk reduction, environmental and health monitoring and smaller site closures.

This is something I would like to emphasize to this Committee: despite the enormous challenge and some disappointing setbacks, we have made enormous progress on the cleanup. Let me summarize a few of our accomplishments - both the results on the ground in cleaning up facilities, and the variety of management reforms that we have undertaken to improve the efficiency and effectiveness of the program.

  • In FY 1997, we completed cleanup at 411 waste "release sites", four percent more than our target of complete cleanup at 395 sites. This cleanup rate averages better than one cleanup completed every day of the year, including holidays. At another 76 release sites, we completed technical evaluations with regulators which determined that no further action was warranted. In addition, we completed assessments to prepare for cleanup at 411 release sites -- 16 percent more than required by regulatory requirements. By the end of FY 1999, we expect to have completed cleanup or "no further action" determinations at nearly half (47 percent) of the approximately 9,300 contaminated release sites for which the EM program is responsible.

  • In the past year, we transferred one surplus nuclear weapons facility in Florida to local communities for constructive reuse and committed in a Memorandum of Understanding to transfer another in Ohio. This highlights our goals of completing cleanup as rapidly as possible, focusing on meeting cleanup standards appropriate for the expected future use, and ensuring long-term stewardship and institutional control for residual contamination following transfer.

  • After recently opening the nation's two largest high level waste treatment facilities in South Carolina and New York, we have been making steady progress in preparing waste for disposal in a geologic repository. We expect to have treated approximately 85 percent of all the high level waste (HLW) at the New York site later this year. In South Carolina, we have closed two underground high level waste tanks after removing most of the waste contents and then filling the tanks with a cement grout mixture. The HLW was blended with molten glass, and sealed in stainless steel canisters, ready for disposal. During FY 1997, we treated a total of 564,860 gallons of high level waste and produced 291 canisters at these two facilities.

  • Our investments in science and technology are also paying off. Since its inception, the Science and Technology program has sponsored over 700 new technologies, and over 200 new technologies are currently available for use - - many of which allow us to perform tasks that were previously impossible. We demonstrated more than 50 new technologies during FY 1997, and deployed 40 new technologies for cleanup in the field.

  • At the Hanford site in Washington, we completed the deactivation of a large plutonium facility 15 months ahead of schedule and $75 million under budget. By deactivating this high risk facility (removing sensitive weapons materials and shutting down unnecessary systems), we reduced the annual surveillance and maintenance costs from $34 million to only $1 million.

Our management improvements have also resulted in greater efficiency:

  • Perhaps the most important management reform is the establishment of a goal to clean up as many of our 53 contaminated sites as possible by 2006, in a safe and cost-effective manner. By working towards this goal, we can not only reduce the hazards presently facing our workforce and the public, but also reduce the long-term financial burden on the taxpayer. For every year that a site remains open because cleanup has not been completed, we are paying a "mortgage" in terms of necessary overhead for activities such as site security, facility operations, personnel, safety and other costs. By completing cleanup sooner, particularly at sites where no other missions continue, we can substantially reduce these overhead costs. The FY 1999 budget request reflects a fundamental restructuring to emphasize our site closure and project completion goals.

  • EM's budget and plans are now built upon clearly defined projects, with life-cycle cost, scope, schedule and other data.

  • By the end of FY 1997, our uncosted balances were lower than the targeted benchmark for the second year in a row, after several years of excessive uncosted balances.

  • We have reduced headquarters support costs by 85 percent during the last few years from $130 million (two percent of total EM budget) to $28 million (less than one-half percent).

  • The number of headquarters employees has been reduced by approximately 35 percent since 1995.

We are proud of our accomplishments, but also realize that completing the daunting task of stabilizing these facilities will require accelerated cleanup and greater efficiency if we are to succeed within projected budget targets. We are confident that we can meet this challenge by continuing our results-oriented focus, and by continuing to make management and efficiency improvements.

The Environmental Management program (EM) is responsible for managing and cleaning up the environmental legacy of the nation's nuclear weapons and government nuclear energy projects. Beginning with World War II, DOE and its predecessor agencies developed the largest government-owned industry in the United States, responsible for nuclear weapons research, development, testing, and production as well as a variety of other nuclear-related research projects. When most nuclear weapons production operations ceased in the late 1980's, the DOE established the Office of Environmental Management in 1989 to address the environmental legacy of nuclear weapons production and other nuclear-related contaminants. Our responsibilities include facilities and sites in 31 states and one territory which occupy about 2.1 million acres -- an area equal to that of Rhode Island and Delaware combined.

Although EM is being referred to as the "cleanup program," this term can be misleading if it is interpreted as comparable to EPA's Superfund program or the environmental restoration program at the Department of Defense. In addition to these "standard" cleanup duties at DOE sites, EM is also responsible for the world's largest nuclear materials stewardship program, which maintains the safety and security of more than 25 metric tons of weapons-usable plutonium, thousands of tons of intensely radioactive spent nuclear fuel, and critical nuclear nonproliferation programs. Finally, it is important to note that the nature of much of the waste handled by DOE is fundamentally different from most chemical waste cleanup programs: it cannot be broken down into constituent elements; but instead requires isolation from the environment through treatment and/or disposal while it decays. Because of the frequently long-lived radioactive nature of the 36 million cubic meters (containing about one billion curies of radioactivity) of waste, we can treat it, stabilize it, contain it, isolate it and monitor it; but, we cannot readily destroy it with currently available technology. Finally, some of the nuclear materials we handle present unique hazards. For example, plutonium can spontaneously ignite in contact with moist air in certain circumstances, thereby requiring extraordinary precautions for safe handling and storage.

We have been focussing our priorities on high risk problems such as stabilizing and ensuring the security of plutonium and stabilizing tanks containing high level radioactive waste. We have also addressed problems that are required to comply with statutory and regulatory requirements, and to meet our legal obligations under our compliance agreements with state and federal agencies. Despite the pressure to address these high risk problems and comply with legal requirements, we also know that successful cleanup requires investing in developing and deploying more effective technologies. Without successful investments in technology, the cost and technical challenges would make long-term success impossible. Finally, we have found that performing good technical work is not enough. Getting the job done requires cooperation with regulators and other stakeholders. We have supported effective public participation through continued relationships with States and Site-Specific and National Advisory Boards, as well as funding for Indian tribes potentially affected by our activities.

Given the fiscal constraints and the unfortunate reality that our nuclear waste legacy is a long- term problem, the present investment now in science and technology is one of our best hopes to ensure real reductions of risk to the environment and to improve worker and public safety for our future. We are confident that this is the right course, and that with your support we can make the land and facilities available for community use or conservation, as well as develop new environmental technologies that will improve tomorrow's environment and economy.

Let me highlight a few of our principal goals for 1998 and 1999. First, we are engaged in analyzing the optimal flows of waste and cleanup materials among our sites across the country to achieve greater efficiency. We have been, and will continue to, collaborate with States, Tribal Nations and Stakeholders at each step. I am particularly intent on achieving a consensus among our principal states as to the waste and cleanup missions of our sites. We are already feeling some States disrupt our plans and compliance agreements in other States, simply by raising objections to single waste treatment or disposal plans on the basis of equity. We recognize their legitimate concerns, and we will be able to address only when we are all able to get together and establish a common agreement.

This same process will also enable us to build upon our search for savings and productivity improvements to establish a stable budget which satisfies our legal and safety requirements and still allows us to accelerate cleanup to reach closure earlier. Again, we intend to work closely with the Office of Management and Budget and with Congress toward that end.

Finally, Dr. Moniz, our Under Secretary, is working with the Office of Environmental Management to raise the quality, standards and rigor of its sciences program and to ensure that technologies already developed are matched up with our needs in the field and actually deployed. Again, a robust science and technology program is vital to our successful tackling of the enormous cleanup challenges we face.

Nonproliferation and National Security

The Department draws upon 50 years of science and technology expertise resident throughout the DOE National Laboratories to help us stem the spread of weapons of mass destruction (WMD). Our DOE nonproliferation program is a layered program which seeks to address the threat at multiple levels, including: (1) preventing the spread of WMD materials, technology, and expertise; (2) detecting the proliferation of WMD worldwide; (3) reversing the proliferation of nuclear weapons capabilities; and (4) responding to emergencies.

Let me highlight some of our accomplishments of the past year:

  • Our program of cooperation between DOE laboratories and nuclear facilities in Russia and the Newly Independent States to improve the protection, control, and accounting of weapons-useable nuclear materials is yielding dramatic results. Today, I am happy to say that we are working with authorities in Russia and other former Soviet states to upgrade security at 53 sites -- these 53 sites comprise every known nuclear material storage site in the former Soviet Union. We expect to have completed upgrades at 27 FSU sites by the end of the year. Overall, we are looking at improved security for OVER A THOUSAND TONS of weapons-usable materials.

  • It is clear from the extensive support for our efforts by the Russian government that there is a serious dedication to the improvement of nuclear materials safeguards and security in Russia. This new, developing safeguards culture is important evidence of the success of the Department of Energy's cooperative program of MPC&A improvement. We are just now beginning major efforts at the uranium and plutonium cities, the Russian weapons laboratories, and other sensitive facilities. Completion of these sites will require a sustained, multi-year effort, outlined in much more detail in our recently published MPC&A Program Strategic Plan.

  • Similar to the MPC&A program, the Initiatives for Proliferation Prevention program seeks to draw scientists, engineers, and technicians from the former Soviet Union's nuclear, chemical, and biological weapons programs into long-term commercial ventures, thereby working to reduce the potential for "brain drain" to proliferant states or organizations. This program serves as to fulfill a larger goal of the U.S. Government's policy to downsize the former Soviet nuclear cities.

  • Our strong technological capabilities allow us to work today to fulfill future technical needs for implementing important nonproliferation and arms control treaties. DOE plays a key role in supporting the United States's efforts to monitor and verify a Comprehensive Test Ban Treaty. We are developing technologies that will detect nuclear explosions underground, underwater, or in the atmosphere. This past summer, we deployed a small-satellite, known as FORTE, which is demonstrating improved ability to detect and characterize electromagnetic pulses from nuclear explosions in the atmosphere -- an important aspect of our treaty monitoring capability. Additionally, we are currently developing technical solutions to fulfill requirements of the warhead dismantlement transparency provisions of a potential START III agreement, predicated by Presidents Clinton and Yeltsin at the Helsinki Summit.

  • As we have seen by events over the past few months in particular, but also particularly since the end of the Cold War, the threat of chemical and biological terrorism has grown. The Department's Chemical-Biological Nonproliferation Program leverages our extensive investment in the chemical and biological sciences at our National Laboratories to develop next generation sensors to detect and characterize chemical and biological agents in the field rapidly and with high accuracy. The Department's investment in the human genome project has also enabled us, through forensic analysis, to help determine the geographic origin of biological agents. Such attribution is important for ultimate criminal prosecution. This program complements efforts of the other federal agencies to develop critically needed technologies. We are also working in support of the U.S. Government's overall programs to combat terrorism as well as protect the nation's critical infrastructure.

  • Together with our international activities, we are equally responsible for ensuring a comprehensive safeguards and security program for DOE's domestic sites. At several sites, based on comprehensive reviews, security systems are being upgraded and protective forces are being increased. We recently completed an interactive television seminar with the FBI on WMD planning. The session, which originated from our Central Training Academy in Albuquerque, New Mexico, was the first-ever cooperative effort among DOE security managers, FBI special agents, and State and local law enforcement officials on WMD counter terrorism planning and responsibilities. Under Deputy Secretary Moler's direction, Sandia National Laboratories leads a special Security Review Team to address and resolve other key issues which have been raised as a result of our recent site-specific safeguards and security plan reviews.

Our budget request for Fiscal Year 1999 reflects an increase in funding for our activities with the former Soviet Union in the MPC&A program, and for the Department's chemical and biological nonproliferation initiative.


The Department of Energy's Office of Fissile Materials Disposition is responsible for implementing the Administration's approach to irreversibly dispose of the Nation's post-Cold War stockpiles of surplus plutonium and highly enriched uranium and for providing technical support for Administration efforts to attain reciprocal actions for the disposition of surplus Russian plutonium. These important nonproliferation efforts are aimed directly at reducing the threat that nuclear weapons materials could fall into the hands of terrorists or rogue nations.

We have begun to implement a hybrid plutonium disposition strategy that calls for pursuing both immobilization and burning mixed oxide (MOX) fuel in existing, domestic commercial reactors. The Fiscal Year 1999 budget request for these activities is $169 million, an increase of $65.3 million over the Fiscal Year 1998 comparable amount. The increase in Fiscal Year 1999 will allow the Department to begin the design of key U.S. plutonium disposition facilities for disassembling and converting nuclear weapons pits to unclassified forms and for fabricating MOX fuel and to expand joint technical work with Russia by designing a pilot-scale plutonium conversion system in Russia. DOE is also completing the analyses necessary to select the sites where surplus plutonium disposition will take place and we expect to announce shortly the Department's preferred alternatives for siting the Pit Disassembly and Conversion Facility and the MOX Fuel Fabrication Facility. The Savannah River Site, which has an operational high level waste vitrification facility has already been identified as the Preferred Alternative for immobilization. Following completion of an Environmental Impact Statement, final site selection would appear in a Record of Decision scheduled for release in late 1998.

Fiscal Year 1999 efforts on the immobilization approach are aimed at resolving technological issues, developing and demonstrating production-scale processes and equipment, and conducting the necessary verification testing of the preferred can-in-canister approach in order to be confident that it can be successfully implemented in a timely and cost-effective manner. For the MOX/reactor approach, we plan to complete fuel qualification design, licensing efforts, process development for MOX fuel fabrication, irradiation tests of the MOX fuel as well as to begin the design of a MOX Fuel Fabrication Facility with a capability to process 3.5 metric tons of surplus plutonium oxide per-year

The next two to three years will be a crucial period in the U.S.-Russian relationship concerning the storage and disposition of surplus weapons plutonium. Work with Russia on small-scale tests and demonstrations of disposition technologies is moving forward and negotiations with Russia have begun on a framework of agreements for plutonium disposition. We recognize, however, that the United States cannot proceed independently to dispose of our surplus plutonium without significant progress from Russia. As a result, the Administration will not construct new facilities for disposing of surplus U.S. plutonium (scheduled to begin in the FY 2001-02 time frame) unless there is significant progress with Russia on plans for plutonium disposition.

Beginning the design of key U.S. disposition facilities, developing a pilot-scale system in Russia to demilitarize weapons plutonium, and implementing a framework of agreements on plutonium disposition are significant steps in this important nonproliferation program. I believe that these efforts will send a clear signal to the world community regarding our nonproliferation goals and will further encourage the Russian Government to take significant reciprocal actions to initiate plutonium disposition. It is an investment in our future well worth making.


International Nuclear Safety

Our budget includes $35 million for the International Nuclear Safety Program to address serious problems with the safety of Soviet-design nuclear power plants. This is a multi-year program that will end early next century, depending on the level of annual appropriations. By improving the safety of Soviet-designed nuclear power plants and by supporting shutdown of the Chornobyl nuclear power plant, we support an important component in the nation's effort to develop free-market democracy in countries formerly within the Soviet Union. The United States has an important national security interest in helping these countries avoid political and economic problems such as those seen in the aftermath of the Chornobyl accident, which contributed to the breakup of the Soviet Union. An accident of such magnitude today would severely weaken the political stability of the region in addition to creating catastrophic economic and environmental impacts.

We have made substantial progress in improving safety through operator training, improved procedures and installation of modern equipment. But, much work remains before these countries approach internationally accepted practices in the safe operation of their nuclear power plants. These funds will continue to improve nuclear safety by providing simulators as important tools for teaching plant operators how to respond during accidents; safety parameter display systems allowing operators to detect abnormal conditions rapidly and take appropriate corrective actions; and in-depth safety assessments to teach host countries how to evaluate the safety condition of their plants and make needed safety improvements. This program is carefully coordinated with similar activities conducted by other countries and international organizations to avoid duplication and to leverage U.S. funds.

Naval Reactors

Naval Reactor's mission is to provide the Navy with safe, long-lived, militarily-effective nuclear propulsion plants in keeping with the Nation's defense requirements, and to ensure their continued safe and reliable operation. In FY 1999, we are requesting $665.5 million for this program.

Naval Reactor's responsibility extends to all aspects of Naval nuclear propulsion -- from technology development through reactor operations to, ultimately, reactor plant disposal. The Programs efforts are critical to the continued success of the numerous reactors in operating submarines and surface ships, comprising 40 percent of the Navy's warships and the successful development of the reactor plant for the New Attack Submarine class. Naval Reactors is responsible for more reactors than the entire U.S. commercial nuclear power generating industry and more reactors than the next two largest commercial nuclear power generating nations in the world combined (France and Japan).

The FY 1999 budget request for the Naval Reactors program reflects investments in the following priority areas: 1) support to the current operating fleet; 2) continuation of the development of the New Attack Submarine reactor plant; and 3) operation of two prototype naval reactors, and the inactivation of six shutdown prototypes. The decrease in the Naval Reactors budget request for FY 99 reflects a reduction in the inactivation work on the shutdown prototype reactor plants.


The FY 1999 request for the Worker and Community Transition Program is $45.0 million. This program supports work force restructuring activities related to the defense mission, local impact assistance to those communities affected by work force restructuring plans, and management of short and long-term programs and initiatives that identify assets excess to current Department needs and are potentially available for sale, transfer, or reuse.

We anticipate that the Office of Worker and Community Transition will manage the Department's effort to reduce the size of the contractor work force and implement more efficient contract mechanisms that could impact 5,000 workers in FY 1999. Community transition assistance is expected to create approximately 2,500 jobs within affected communities during FY 1999.


In the past year we have made progress in changing the way we do business at the Department. In particular:

  • Since 1995, we have reduced our federal workforce by nearly 3,000, or 22 percent. Contractor employment has declined 29 percent, from an all-time high of 148,000 in 1992 to just over 100,000 this past year. Since I became Secretary of Energy, the Department already has met both the 1998 and 1999 overall personnel targets. We are more than a year ahead of schedule.

  • Since 1994, we have completed competitions for eight management and operating contracts worth more than $24 billion. During my tenure as Secretary, I have directed competitive procurements for every management contract requiring my decision.

  • We have made substantial improvements in our environmental privatization program in the past year including actions to strengthen our procurement, legal, and safety and health reviews of Requests for Proposals and contracts. And we have taken steps to improve cost estimating and training of personnel. As I promised, we have just selected an individual to coordinate the Department's privatization efforts who will bring extensive private sector expertise to bear on these issues.

  • We have dramatically decreased the amount of money spent on support service contractors. In fiscal year 1994, we spent $700 million on support service contracts. We have reduced that amount by $247 million, a 35 percent reduction.

But I recognize that we still face many challenges. Since coming to the Department, I have sought to reverse a decades long history of weak contractor accountability. One of the first major decisions that I made as Secretary was to terminate the contract at the Brookhaven National Laboratory because I believe that the contractor was not performing adequately in critical areas of environmental protection, safety, and public accountability.

And, I believe my message is being heard. In December, our management contractor at Hanford issued a "cure notice" to the subcontractor managing the $1 billion K-basin spent fuel project threatening termination if management improvements were not made. Two weeks ago, our management contractor at our Idaho site issued a "cure notice" to the Pit 9 project subcontractor, with the message that the subcontractor was expected to perform or be terminated.

We have made progress in changing the way we do business at the Department, but much remains to be done. In particular, we need to do a better job of project management; of integrating our facilities; of matching our workforce to our evolving missions; of increasing line management's responsibility for environment, safety, and health; of resolving critical safeguards and security issue; and of assuring top-level integration of key cross-cutting functions.

I am pleased that our top management team is in place and believe that their strong managerial and technical expertise will help us address many of these long-standing problems.


These are just some of the highlights. Though the budget, in adjusted dollars, is much smaller than our peak year, it proposed investments that are vital to our country's future. With your support, the Department of Energy can make a significant contribution to this nation's national security needs for the 21st century.

Thank you. I would be happy to answer your questions.