Page Material submitted for the record by-Continued Responses to subcommittee questions, submitted by Frank DeGeorge. 1180 1378 Energy Conservation and Power Subcommittee Committee on Energy and Commerce. Staff memorandum re breakdown of DOE conservation and renewable energy budgets. 1344 McEwen, Hon. Bob, a Representative in Congress from the State of Ohio, statement 893 DOE AUTHORIZATION FOR FISCAL YEAR 1982 NUCLEAR ENERGY TUESDAY, MARCH 3, 1981 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY CONSERVATION AND POWER, COMMITTEE ON ENERGY AND COMMERCE, Washington, D.C. The subcommittee met, pursuant to notice, at 2 p.m., in room 2123, Rayburn House Office Building, Hon. Richard L. Ottinger (chairman) presiding. Mr. OTTINGER. The subcommittee will come to order. This afternoon the Subcommittee on Energy Conservation and Power continues its hearings on the impact of proposed budget changes on various programs within the Department of Energy. Today the subcommittee meets to receive testimony from public witnesses on the Department's nuclear energy programs. Last week the subcommittee received testimony concerning the new administration's proposal to eliminate or substantially reduce the budget of numerous programs, such as conservation and alcohol fuels, which offer near-term benefits. The subject of today's hearing is in marked contrast with those prior hearings in that there is both some good news and some bad news. The good news is that we are finally reviewing an administration energy program which reportedly will not be seriously cut, and the bad news, at least from my standpoint, is the nuclear program. It is completely beyond my comprehension why, with electricity consuming only 9.1 percent of our total oil consumption, we should be spending more than 50 percent of the revised civilian energy budget on nuclear energy for electricity production, to say nothing of the $4.5 billion spent on the military side of DOE's nuclear budget. It also raises the question of whether there isn't some lack of confidence on behalf of the industry, and the ability of nuclear energy to survive in the marketplace if we are, indeed, going to deregulate and take away subsidies from all other forms of energy, and increase subsidies for nuclear energy. I understand that some people feel, nevertheless, that in the past few years the nuclear program has operated under severe budget constraints and has not grown in proportion to other energy programs. As a result some nuclear programs, such as the new enrichment facility, are in serious jeopardy. However, increases in the funding for nonnuclear alternatives represented a commitment on the part of the Congress to develop a balanced energy policy which provided both near-term and long term benefits. The new administration's emphasis on technically sophisticated, centralized energy sources disturbs the balance which has developed over the past few years. This threatens to undermine the political structure which supports the existing policy and draws into question the rationale of the administration's energy priorities, if indeed our must urgent need is to reduce dependence on imported oil. So we meet today to hear from representatives of the nuclear industry to discuss the future direction of the Department of Energy's nuclear program, recognizing that because the precise budget figures are not yet known, we are all at a disadvantage in terms of our ability to discuss individual programs. However, there are overriding policy questions, such as the direction of the commercial nuclear waste disposal program, which warrant special consideration. On behalf of the members of the subcommittee, I want to express my appreciation to the witnesses who are appearing today on very short notice to assist the subcommittee in reviewing the direction of the Department's nuclear program. To reassure the witnesses, as well as my colleagues on my left, while my opinions on nuclear energy are clearly skeptical, and I am completely outfront on that, I do not intend to use my own opinions to foreclose the varying opinions that are undoubtedly represented on the subcommittee. We want to hear the best evidence that we can from the witnesses, and I am subject to being persuaded. Does the minority have a statement that they would like to make? Mr. WHITTAKER. No, Mr. Chairman, I don't, but I do appreciate your upfront explanation of your position beforehand. At least we know where the battle lines are. Mr. OTTINGER. I don't think that there was really any doubt, certainly not on the behalf of our first witness, Mr. John T. Conway, president of the American Nuclear Energy Council. Mr. Conway was with the Consolidated Edison Co., where we had friendly jousting on a number of occasions. We are very glad to have you with us, indeed. STATEMENT OF JOHN T. CONWAY, PRESIDENT, AMERICAN NUCLEAR ENERGY COUNCIL, ACCOMPANIED BY ED DAVIS, VICE PRESIDENT Mr. CONWAY. Thank you, Mr. Chairman. On my right, your left, is Mr. Ed Davis, vice president of the American Nuclear Energy Council. It is always a pleasure to come before a committee of the Congress, particularly a subcommittee of the Commerce Committee that has taken such an active role in the nuclear program. I am the president of the American Nuclear Energy Council. It is a trade organization consisting of over 100 companies that are actively engaged in the nuclear industry. The council supports not only nuclear power, but we support energy conservation, and the development of synthetic fuels, solar, fusion, and other longer range energy resources. However, we hold that it is imperative, and vital to the security and economic viabil ity of our Nation, not only of our Nation but the Western world, that we continue to advance the development of nuclear power. In this regard, we are supported by the National Academy of Sciences, that under contract to the United States Government, specifically the Department of Energy, undertook a 3-year study, expended in excess of $3 million, utilized the best scientific and technical brains in our Nation, and came out with the conclusion that for the rest of this century this Nation, if we are going to be in any way independent from the bondage of the Arabs and OPEC nations, must depend upon only two sources of indigenous fuels for our energy needs, coal and nuclear. As President of the American Nuclear Energy Council, speaking on behalf of the members of the American Nuclear Energy Council, in no way do we believe that nuclear power alone can make us independent from the Arab and OPEC nations. We believe it is essential that we move ahead with coal and nuclear in this century, and depend upon both of these if we are going to keep our Nation viable and secure. In the meantime, however, we believe it is essential that we proceed with research and development of other alternatives, solar included, conservation obviously, and any and all other possibilities, so that in the generations to come we can move into renewable sources. However, based on the best scientific data that we have been able to garner, and based upon the studies by the National Academy of Sciences, and others, there is no question but that coal and nuclear must be the dominant sources of our energy for the next two decades. I have submitted to you, in response to your letter, a 16-page prepared statement, and I would be willing to respond to any other questions you might have. Let me, if I may, hit some highlights in that testimony. On page 2, I point out that in the coming year our dependence upon overseas oil could result in anywhere from $80 to $100 billion being spent-dollars leaving this country for the supply of OPEC petroleum products. To place this staggering cost in the framework for easy understanding, I note that at today's stock market prices, General Electric is valued at $11.4 billion; Westinghouse at $1.9 billion; Combustion Engineering at slightly less than $1 billion; McDermott, Inc., which is the parent company of Babcock and Wilcox, at $1.1 billion. This totals out at $15.4 billion. So if you put in perspective that 1-year supply of foreign oil imports, it is practically sixfold in value to these four giant American enterprises that provide jobs for over 700,000 people, and also, obviously, an astounding variety of goods and services at home and around the world. I singled out those four companies for they are the manufacturers of major equipment for electric powerplants, both nuclear and fossil, in America, and also, obviously, they supply equipment for the rest of the world. If the Nation is to meet the goals set forth by both President Carter and President Reagan, it must, in addition to adopting conservation measures, continue the trend toward increased substitution of electricity for oil. These companies that I have mentioned are capable and able to supply the electrical needs of this Nation if permitted to do so. In the nuclear and fossil area, we have cancellations in both nuclear and coal. I was surprised, in going over the records, to find that in a period of time from the figures I have, there were more coal fired plants canceled than nuclear. We tend, at least from my myopic point of view sometimes, to think that it is only nuclear plants that are being canceled. Unfortunately, and to the disadvantage of our Nation, we are not building sufficient baseload electric generating facilities. There are many reasons for that. We have seen what had traditionally been a 7-percent annual growth of electricity, which is compounding and doubling every 10 years, leveling off. In fact, in the last year or two we have seen it come down to as low as 3 percent. There are various reasons for that, part of it is conservation. With the increased cost of electricity, people are definitely conserving. With the admonition and recommendations from our Government and others, people are in good conscience trying to help in the energy shortage and are conserving. However, in our opinion, a major reason for the cutback in electric utilization is the fact that this country is in a recession. We are having people laid off of jobs. We have the automobile workers being laid off, the rubber workers being laid off. In many areas of this country we are seeing a significant cutback in industry, and that is definitely having an effect on our electric usage. The danger we see in the Northeast particularly, but it is equally true in other parts of the the country, is that we are particularly dependent upon the use of oil for the production of electricity. In the New York power pool area, specifically the New York City and Westchester County area, back in 1971 Con Edison was paying $2 per barrel for oil, and in those days it was using somewhere on the order of 50 million barrels of oil a year. I checked this morning, and I am told that the cost of oil today for Con Edison is $43 a barrel. Fortunately, however, it no longer uses 50 million barrels because it has two nuclear powerplants on its system, one owned by the State Power Authority, and one owned by Con Edison. Each of those nuclear powerplants can replace or displace, if you will, 10 million barrels of oil. So there is 20 million barrels of oil that Con Edison, or the New York power pool, otherwise would have to be burning that the two nuclear powerplants at Indian Point are displacing. When you think of the difference between $2 a barrel and $43 a barrel, and multiply that by 20 million barrels per year, you can see a significant difference in the cost to the consumer. One of the plants at Indian Point, before the most recent price increase on oil, was saving on the order of $800,000 per day for the consumer. Indian Point 2 more than has paid for its initial cost. The savings to the consumer have paid for that cost in the first 3 years of its operation. Even though we are not as dependent on the Persian Gulf as the Japanese may be, we have entered into international agreements that those of our allies, if they lose their supply of oil, we would |