INTERVIEW TRANSCRIPT

C-SPAN’S “THE NEWSMAKERS”

Guest: Chairman of the Nuclear Regulatory Commission, Dale Klein

Moderator: Susan Swain

Reporters: Jeff Nesmith, Cox Newspapers & George Lobsenz, Energy Daily

TAPE DATE: Wednesday, October 18, 2006

AIR DATE/TIME: SUNDAY, October 22, 2006 at 10 a.m. and 6 p.m. ET

USE WITH ATTRIBUTION TO C-SPAN’S “THE NEWSMAKERS”

If you have any questions, please contact Jennifer Moire in C-SPAN's Media Relations Department at jmoire@c-span.org or 202-626-8797

© NCSC

Copyrighted material: use with attribution only

C-SPAN/Newsmakers

October 18, 2006

SUSAN SWAIN, MODERATOR: In July of 2006 Dale Klein became chairman of the Nuclear Regulatory Commission. We are very pleased to welcome you here today on Newsmakers.

Our questioners for today’s program are Jeff Nesmith, long-time reporter for Cox Newspapers; and George Lobsenz who is the editor of Energy Daily.

Mr. Lobsenz, I’ll turn the floor over to you.

GEORGE LOBSENZ, EDITOR, ENERGY DAILY: Hi, Mr. Chairman.

DALE KLEIN, CHAIRMAN, NUCLEAR REGULATORY COMMISSION: Good morning.

LOBSENZ: We’re hearing a lot about a nuclear renaissance these days and your agency, which regulates commercial nuclear plants – I believe it has about – applications from utilities to build about 30 new reactors. The funny thing about it is is none of these utilities that are putting in the applications have actually committed to build one of these. So they are sort of waiting to see how NRC responds to their applications. And one of their major concerns is how long is it going to take NRC to approve our application.

And the Bush administration also has made a big priority to reduce the licensing time for these new plants. Now your agency is supposed to be responsible for public safety and how does this pressure to speed up the review of these news plants, how does that fit with your public safety mission? Isn’t that going to be a little difficult for you?

KLEIN: Well, as you know, our job is, as you indicated, public health and safety and so we will do it right. We hope to be able to do it timely, but our first activity is to do it right, do it safe, and make sure that it is safe, secure and reliable.

And as you indicated, we are looking at the – potentially up to 29 new reactors being discussed. We have been hiring additional people to handle the workload. So we believe we can be a responsive agency. The NRC should be a tough regulator but I believe we can also be a kindly regulator.

LOBSENZ: As you look at the – at these new reactors, what are the key safety issues that you're going to be focusing on? And I mean, obviously, these are new designs that have never been built before, do they present, in your view, you know – I mean what are the serious or major issues you’ll be looking at?

KLEIN: I think the good news that the American public should realize is that we now have over 40 years of nuclear experience in running reactors. So there’s a good history of what are the safety issues and what to look for.

I think the most important thing that I would look at is how do we train the people that run them, make sure that they are appropriately trained, accountable, and that we have a monitoring system that we can do it right.

The technology will be the same in these new designs just like the existing ones. So the important thing that I believe we need to watch is how do we train the people, how do we have the procedures to watch that it’s being done right.

SWAIN: Jeff Nesmith.

JEFF NESMITH, REPORTER, COX NEWSPAPERS: Is there – is there really going to be a nuclear renaissance or is that just some pipe dream that’s been generated by the Energy Policy Act and however many billions of dollars they’ve agreed to pump into this industry?

KLEIN: If you look at the energy demand for electricity, it’s clearly going up. And so then the question is how do we get that energy.

I do believe that we will see license applications in 2007 and we are looking – we have expressions of intent from a lot of the utilities indicating up – as I said, up to about 29 new nuclear plants. So I believe that there will be a renaissance in the United States.

Whether there is in the United States or not, what is clear the rest of the world will be building and issuing nuclear plants. So world wide we're looking at 140 plants either under construction or being planned.

So clearly, there will be new nuclear plants built in the world. In the United States I believe there will be new plants built.

NESMITH: Well, the Act provides subsidies and – in the form of tax breaks and loan guarantees and whatever, for I believe four plants. So is it – how likely do you think it is that these 20 expressions of interest are just companies who hope to cash in on that opportunity or truly represents a new wave of power plants?

KLEIN: If you look at the Department of Energy’s projections, they believe that the electrical demand will increase by 50 percent by 2025. With the concerns about the cost and reliability of fossil fuels and with concern of global warming, I believe that there will be several of those plants. We may not see all 29 of those that have expressed interest right now but I believe we will see a significant number simply because our demand for electricity is growing.

Nuclear power – our job as a regulator is to make sure that it is safe, sound. We are not a promoter. But I believe the American public will benefit from an environmental and reliable safe nuclear program.

NESMITH: With respect to global warming, the – a group from MIT came out with a report, the Dutch (ph) Group, last year or the year before and they – I don’t remember exactly but it was something like 25 – a thousand megawatts or a thousand gigawatts of new nuclear power comes on line in the next 25 years it will reduce the growth of greenhouse gasses by 20 percent or 25 percent.

So how many nuclear power plants and how many Yucca Mountains, and how many trucks going back and forth across the road carrying fuel and used fuel are we going to have to have for nuclear power to make a serious – to have a serious impact on that problem?

KLEIN: Well, I think currently nuclear power is already playing a significant role. I’m not an expert in global warming and so I try to stay in my technical arena. But currently we have 104 nuclear plants licensed, we get 20 percent of our electricity from nuclear power. So it means on average one about every five days comes from nuclear power electricity.

The more nuclear plants that are built versus those that are fossil-fuel driven will reduce CO2 emissions. How much of that will depend on I think the utilities projections, where they are located, what the demand is.

For example, if you are located in a place like Montana or Wyoming and a lot of abundance of coal, then you would not likely build a nuclear plant in that region. But in the southeastern part of the United States, the northeastern part, where you have to transport coal long distances, then there is an incentive for a utility to look long-term at alternatives such as nuclear.

LOBSENZ: One of the major issues that’s arisen about both existing nuclear plants and the new ones that are going to be built in the wake of the 9/11 attacks has been concerns about terrorist attacks on nuclear plants. And the NRC has been moving to address this concern. I know that they’ve put out numerous new security requirements for the existing plants when you're talking to the people wanting to build new plants about addressing that issue.

However, the NRC has said that in doing environmental reviews of new plants it will not be looking at possible impacts from terrorism. And I think that there's been a contrary court decision questioning the NRC’s position on this. And I guess the question I would have for you is, this is clearly an issue that’s in the public’s mind about nuclear plants. And if you don’t have a public dialog in the course of doing an environmental review, how are you going to address this public concern? Shouldn’t there be a public dialog in relation to the building of these new plants about what would happen if there is a terrorism attack and maybe you could even reassure the public somewhat that something is being done?

KLEIN: There’s a little bit of misperception on the terrorist issue, that issue that you raised about looking at terrorist from a – in an environmental perspective only has to do with dry cast storage at Diablo Canyon in California.

I can assure you that nuclear power plants are examined for terrorist activities. We take that very seriously. We have a very robust program. Prior to my arrival at the Nuclear Regulatory Commission I was at the Department of Defense and I had the responsibility for nuclear physical security of other nuclear assets that are available. And I can assure you that we take security very seriously. We address that. We have procedures in place.

I have been to several nuclear plants since becoming the chairman and I’ve been impressed by the response that both the Nuclear Regulatory Commission has taken and the utilities to address potential terrorist threats. These are robust facilities.

LOBSENZ: But I mean your environmental reviews of new reactors you mentioned that obviously this was a court decision concerning a spent-fuel storage facility. But in fact, your environmental reviews of new reactors, they won't consider terrorism either, will they?

KLEIN: The challenge on – we definitely look at terrorist activities and what the consequences might be. We want to make sure these plants are safe and secure no matter what the new designs may involve. So we are looking at potential terrorist threats on those designs.

The challenge that we have, and I can't get into a lot of the details because there is a court case on the Diablo Canyon so I am unable to go into a lot of the details on that because of being in an adjudicatory role, but I can assure the public that we will be looking at – concerned about the potential of terrorist acts on both existing plants and new ones and so that is being addressed.

The question is whether they are addressed under a NEPA requirement as opposed to being addressed.

LOBSENZ: Right, but that’s what I was getting at. In other words, that’s the only – that’s the only venue for public participation is in the NEPA reviews, the environmental reviews.

KLEIN: In terms of the public’s participation, because of the security requirements that are there, there are certain things that we don’t go into a lot of detail on how we address security for obvious reasons. The terrorist get too many hints the way it is. So we don’t want to provide a lot of information about how we address that, but I can assure you we do look at safety, security and reliability and we are addressing potential terrorist threats in a very robust and effective way.

SWAIN: 15 minutes left.

NESMITH: The National Academy of Sciences wasn’t particularly assured. They issued a report last year saying that it’s only a matter of time before a determined, well-equipped terrorist crashes an airliner into one of these plants and releases a large amount of radioactivity. And I think they recommended that NRC undertake a plant-by-plant review of the safety procedures. Has that been done?

KLEIN: Yes. We do have a very robust plant-by-plant analysis both for pressurized water reactors, boiling water reactors. We have a very detailed assessment. We know what flight plans are. We know what potential consequences might be. So we have done a very robust analysis of potential terrorist activity.

I think one of the advantages that a nuclear plant has over some alternative targets is the fact that the containment vessels around these plants are very robust. They have a low profile to be hit from an airplane. You'd have to be a very skilled pilot to be able to hit one because they are a small profile.

But in addition to that, they have about three-and-a-half feet of reinforced concrete on the outside of those containment buildings. So they are a very robust structure.

NESMITH: They’re not as tall as – are they taller than the Pentagon?

KLEIN: They – depending on the location and how one might come in to a building. The advantage that the terrorists had on the Pentagon is not necessarily the height but the width. We don’t know exactly what area at the Pentagon they were striving to hit. We do know from the films that it hit the ground initially and then bounced up.

But on a profile the Pentagon, the side of the Pentagon is much wider than, for example, a containment building. So it’s not just the height that one looks at it’s also the width.

NESMITH: An organization from somewhere out in California petitioned the Commission a couple of years ago following the 9/11 incident, to require power plants to install virtual forests of steel beams, vertical steel beams around these plants so that if somebody with a skilled pilot – and they are – there are skilled pilots in the world – tried to crash into a plant and perhaps not hit the containment vessel but where the nuclear fuel is being stored, the plane would tear itself up on these beams. The Commission turned that petition down.

Do you – before your tenure, I know, but are you familiar with that idea and …

KLEIN: I’m not familiar with that study. I do know that some weapons storage sites we have erected poles primarily to prevent helicopters from coming in in that area.

But I think if you look at a terrorist, number one, they have to get an airplane, they have to know where they’re flying it. Obviously, on 9/11 they were successful in getting four airplanes. There's been a lot of security changes from that point in time. So from my perspective the first thing you do is you don’t let them get a hold of an airplane. And then second of all, if you do know that an airplane is coming, we have procedures already in place that can minimize any damage that might occur.

LOBSENZ: Another issue on the new plants and for existing plants as well is what’s been called the waste confidence issue, which is basically that for both existing plants and the new plants there isn’t a final disposal route or spot for this. The Energy Department has been working on the Yucca Mountain repository for some years but now they say they don’t expect that it will open until 2017 at the earliest.

If you talk to anti-nuclear groups they’ll question whether we should be approving new plants at a time when we can't even dispose of the existing waste that’s piling up at the existing plants. Is this – is this a valid concern? How does NRC resolve this in looking at these new plants?

KLEIN: The latest information from the Department of Energy is that they will submit a license application for our review in June of ’08. Then we will go through that process to determine if there’s an appropriate license.

As a nation we need to solve the waste issue regardless of whether there's existing plants or new plants. In other words the issue is there so we need to solve that as a nation.

The entire world is looking at ultimately geological disposal. There are other countries that are looking at waste disposal as well. So France, Russia, Sweden and other countries are all looking at a geological stable formation at some point in time.

From my perspective, we will make sure that the plants are licensed that are safe and secure. We will review the application when DOE submits it and we will not license a facility that we do not have high confidence that it will be safe and reliable.

But we need to solve the waste issue regardless of whether there’s new plants.

LOBSENZ: But I mean should we be moving ahead with new plants when there's really nothing out there, no facility ready to take their waste for, you know, almost a decade?

KLEIN: If you look at the current situation, there is at-reactor dry-cast storage that is available. The NRC has assured that we an store those materials in those casts for at least 50 years and probably a hundred years. So it’s not a problem that has to have an immediate solution to. We do have an alternative to dry-cast storage that is also safe and is licensed by the NRC, but as a nation it would be beneficial to move toward a permanent solution.

As you know, the Department of Energy is now looking at the global nuclear energy program where they are looking at the potential of recycling. So if we go through a recycling that will change the waste package format and the volume as well.

So there are a lot of alternatives being discussed. And so we do need as a nation to move forward on solving the waste issue. But it’s not a problem that one has to say we cannot start up a new plant because we do have alternatives for dry-cast storage as well as in-pool storage.

SWAIN: Our guest today is the chairman of the Nuclear Regulatory Commission, Dr. Dale Klein.

Dr. Klein, reading the literature it seemed like there was a good deal of excitement in the industry for a while about drawing from the DOD experience for smaller facilities that maybe were even off grid. Has the increased concern about terrorism taking some of the fizz out of that excitement?

KLEIN: I think that is has, Susan. If you look at how our nation generates electricity, we do have to be concerned about terrorist activities and so these smaller, remote reactors are not as attractive as they were early on, just a fact of life.

SWAIN: Even though they were easier to finance?

KLEIN: They're easier to finance but if you look at the cost per kilowatt and you have to put a lot of security around the small reactor then the cost per kilowatt goes up. So I believe that other countries, for example, will look at these modular gas reactors as a possibility that are smaller, but I think for the United States with our demand for base load the utilities will probably continue to look at larger plants in the United States.

SWAIN: Don?

NESMITH: You – Mr. Chairman, you referred a minute ago to recycling fuel that the Energy Department is looking at. That sounds sort of like a return to the breeder reactor which President Ford suspended in ’76 and President Carter ended a year or two later.

And I understand from the Energy Department that the goal here is to reduce the heat of the waste by extracting plutonium and various other highly radioactive substances, thereby making it possible to put more waste in a smaller area. And they say it will increase the capacity of Yucca Mountain 90 fold or something.

But it still doesn’t add up somehow. If you take it out of this waste it still exists. What – how does that reduce the waste? It just reduces – it just moves it, doesn’t it?

KLEIN: What the plan is that the Department of Energy is looking at is partitioning the waste so that you take things like the uranium and plutonium and you put it back in as fuel. And at the same time you take the long-lived radioactive isotopes – typically they are called transuranics – and other long-lived isotopes and you will put those in a fast reactor spectrum, a different kind of reactor so that you will destroy those and reduce their toxicity over time so that your volume is significantly reduced.

So the plan is partitioning so you’ll end up with probably more low-level waste but that has a shorter time constant that you deal with. And the long-lived waste will be reduced by putting it in a different type of fast reactor spectrum.

NESMITH: Will that fast reactor be a power reactor or does that – or do you just use the extracted plutonium and uranium for power? In other words is that – purpose of that reactor to cool that waste or is it to use it? Seems to me like it still exists somewhere?

KLEIN: What is likely to occur is – and I've not looked at the latest Department of Energy plan, but I do believe that their long-term plan is to use a fast reactor spectrum both for production of electricity and for the reducing of the high-level waste volume.

SWAIN: Five minutes left.

LOBSENZ: Yes, just follow up on the reprocessing issue, in the past the country has done reprocessing mostly for the nuclear weapons program. And these activities have left an immense amount of high-level waste that is sitting at the (INAUDIBLE) sites. And that the DOE program is very expensive in the billions of dollars and at a time when DOE is already spending more billions of dollars on Yucca Mountain, does it really make sense to pursue a whole new reprocessing initiative when DOE still can't get it together on Yucca Mountain? I mean now many billions of dollars do we really want to spend to solve this problem?

KLEIN: That will ultimately be a policy decision that Congress and the American public will have to decide. My job as a regulator is to – if we go down that path we do it right and we do it safe and secure.

But a lot of countries are reprocessing. For example, France currently recycles, Japan is recycling, Russia will recycle, United Kingdom recycles. And so there is a lot of experience in the recycling era. Whether that’s a viable option for the United States will be a policy decision.

There are advantages to do that reducing the volume for the – for the material. A lot of waste that the Department of Energy does have is from the weapons program. We've learned things from the ‘60s and ‘70s that we don’t do today. So I think any program that we start today will be done in a different form than might have been done in the past.

NESMITH: Well, you have how many early site applications form on file now, four, three?

KLEIN: We have three that were in process prior to my arrival and we received another one from the Southern Company about six weeks ago. So we now have four early site permits.

The utilities have a choice, they can do an early site permit and a combined operating license or they can just go directly to a combined operating license. And there are advantages and disadvantage to each, part of that depends on timing But we have four early site permits that we should be ruling on in the very near future.

NESMITH: And you say that there are up to 20 informal expressions of interest?

KLEIN: 29 different reactors.

NESMITH: 29?

SWAIN: What can the public be assured in the three decades since the last plant was constructed as you move forward for approving this. What will fundamentally be different in the design and even the location of these versus what the earlier experience has been?

KLEIN: Well, Susan, one of the things that has occurred, there are a lot more passive safety features in these new designs so there’s less pumps, valves, and components required. The other is just the knowledge that people have learned on the operational aspects of these reactors.

So I think the public should have a high confidence that if these new reactors are built and licensed it will be safe and reliable.

SWAIN: And what about proximity to population centers as the nation builds out?

KLEIN: What I usually tell people when I get ready to retire I want to retire close to a nuclear plant because it will be safe, reliable and my taxes will be lower because of the revenues that they generate. So I would have no problem personally living close to a nuclear plant because you typically have a lot of infrastructure that’s provided because of that and it is, in my view, a clean industry.

SWAIN: Now you’ve spent your life in nuclear engineering, now with just a couple of months under your belt as the nation’s top regulator of nuclear power what keeps you awake at night?

KLEIN: Well, frankly, what still keeps me awake at night is from my last position at the Department of Defense. And what keeps me awake is still how do we stay a step ahead of the terrorists, not just in the nuclear terrorism but in chemical and biological defenses. So those are the things that keep me awake at night.

At commercial nuclear power we just need to be attentive. We cannot become complacent. We need to keep maintaining high standards and as long as I’m the chairman of the NRC we intend to do that.

SWAIN: Gentlemen, we have two minutes, last quarter from you?

LOBSENZ: Well, we've talked a lot about the new reactors, like to go back again to the plants that are running now. Some of them or most of them are actually being – having their license extended for another 20 years. And we are seeing more and more corrosion just sort of equipment fatigue problems at these old plants. I think you probably know at the first energy plant in Ohio where they had a big corrosion hole that almost ate right through the reactor containment vessel.

Is there a concern that, you know, if we keep extending the life of these that like an old car they may give out at some point and we’ll have an accident?

KLEIN: Well I just returned from the Fort Calhoun Station in Nebraska and about the only thing that’s 40 years old in that plant is the license because they’ve replaced steam generators, they’ve replaced the vessel head, they’ve replaced the pressurizer, they’re replacing the turbine generators. So as long as that car is maintained and renovated and maintained then there's not a safety issue.

The NRC does have an aging program that we look at for aging components but as I learned when I was at Fort Calhoun about the only thing that was 40 years old was the license. They’ve replaced a lot of components so there's new pumps, there’s new valves, there’s new pressurizers. So as long as we do our job and proper oversight the length of time should not be a concern because those components that wear out we will be – that will be replaced and we will be watching for corrosion.

SWAIN: Dr. Klein, we're out of time. Thank you very much for being with us today.

KLEIN: Well thank you for having me.

SWAIN: We’re going to take a short break and then be back and talk more with our two journalist guests.

(BREAK)

After a conversation with the chairman of the Nuclear Regulatory Commission, Dale Klein, we are back with our two reporters, Jeff Nesmith of Cox Newspapers; and George Lobsenz, the editor of Energy Daily.

Well, gentlemen, let me ask a politics question since we're so close to the election. Most analysts are predicting that the Democrats are likely to take control of the House. Does the enthusiasm about nuclear energy change with Democrats in the House? Is this a partisan issue at all?

LOBSENZ: Yes, it is. I think the road will get significantly rougher if the Democrats take over one of the Houses of Congress. I mean certainly on these issues like terrorism you can expect the Democrats to be a lot more aggressive with the – with the NRC about asking what they’re doing, what the utilities are doing, how they're going to address these issues. So that’s the kind of discussion that the utility industry really doesn’t want to have too much of.

NESMITH: Congressman Waxman will become chairman of the Government Accountability Committee. He’s – I don’t happen to know what his position is on nuclear power but he’s a very aggressive critic of government regulators.

Congressman Markey will have – he’s third-ranking Democrat I think on the Energy Committee – a vocal critic of terrorism issues, a vocal critic of what he sees as the failure of the NRC to protect the American people from nuclear power and its vulnerabilities.

So I think it could be – I don’t know if it will slow things down but it will be a noisier process probably.

SWAIN: The undertone of the questions that I heard both of you ask was a bit of skepticism about the approach toward the building out of the new power plants. What’s driving that concern for you?

LOBSENZ: Well, you know, there’s a – there's a lot of reasons to build nuclear plants now, the greenhouse issue, obviously, being the one that’s really driving it. I think the questions are more along the lines of – I think if you talk to anti-nuclear groups the amount of money that’s required to build these plants, could we be getting our electricity a cheaper way without the nuclear waste problem; and furthermore that again, we learned with al Qaeda that these reactors are targets.

I personally believe that they’re not as attractive a target for terrorists as you might think. The chairman was right. If you go to one of these plants it’s not easy to, you know, knock a whole in one of those walls or to drive an airplane into it. But, you know, with all the concern about the additional cost and just people’s concerns about it that it’s a problem.

SWAIN: And, Mr. Nesmith, you were asking questions about the tax credits and other things written into the energy bill there. With regard to the financing, how did Congress structure this to entice people into the market?

NESMITH: There are a couple of things that – I believe it’s $2 billion in tax credits – is that the right amount – for the first two plants?

LOBSENZ: I think it’s the first six plants.

NESMITH: Oh, I guess the first two get more and then the next four get less.

And the second major benefit – or there are two more, there are loan guarantees and there’s also a kind of a regulation guarantee …

LOBSENZ: They call it political risk insurance.

NESMITH: Right. So if your plant – if you have a cost overrun because some environmental group gums up the works and you don’t – and you can’t slide through the regulatory process in this new streamlined single application thing they’ve thought up, then you can go to the government and say look, this thing cost me this money, I want – and they’ll pay it back. Again, for the first four plants or whatever, six plants maybe.

And a lot of people are saying that Wall Street is going to say, OK, that’s fine but after that the price isn’t right – after those first few plants. That’s why I was curious about whether it is really economically feasible once this government money is used up.

LOBSENZ: I think Jeff is right. There's a lot of questions on Wall Street about whether they want to invest in a nuclear plant. I think if you talk to the industry they’ll tell you, well, we're going to iron out all the kinks in the regulatory process and building these plants with the first six plants and after that it will be more like a cookie cutter and these plants will be a lot cheaper to build and a lot quicker to build.

I think a lot of people need a lot of convincing on that, particular the money men.

SWAIN: Last question is quick because we're out of time. If you're – if you're Dale Klein what’s the biggest problem you have right now?

NESMITH: I think the biggest problem he has is actually he doesn’t have enough people. The Nuclear Regulatory Commission is understaffed and finding people who have the education or the training to decide – to make the decisions – they’ve got ahead of them and it’s going to be hard.

SWAIN: Agree?

LOBSENZ: I think that’s true but I also think that he is under tremendous politic pressure to license these plants, there's no doubt about it. That will change a lot if the Democrats get elected. But even so, I mean, he has got to make sure that licensing thing doesn’t stretch out or else this whole nuclear renaissance is off.

SWAIN: Thanks for being with us today, appreciate it.

END