Mr. DINGELL. I would hope that you would review the very excellent document done by Mr. McCullough in GAO. I do confess that you gentlemen are most able and I have great respect for you. My basic concern remains. Even if the situation is well in hand and is good, it would not take very much to shift it from the good side where the public interest is being served, to where there is a bunch of outside contractors making a good living telling you how the regulation should be issued with perhaps very mischievous and dangerous conditions.

Mr. O'LEARY. Mr. Chairman, Mr. Fygi would not let me get away with it.

Mr. DINGELL. I have great respect for Mr. Fygi, but Mr. Fygi does not tell you what the ground of your authority is or what the pros in the pipeline industry are.

Mr. FYGI. I would not concede that point too quickly.

Mr. DINGELL. I gather if you intend to make a formal review of this document and source material on which this is based you might very well find yourself using as much of your attorney time as if you had done the research and prepared the document ab initio.

Mr. FYGI. There is always the risk of that in such an undertaking.

Mr. O'LEARY. Mr. Chairman, I refuse to concede the difference other than the difference between profane and sacred, between lawyers, on the one hand, and economists, on the other. We must have a single rule for these professions.

Mr. DINGELL. Maybe we can just get Mr. Fygi another lawyer and let him do this kind of work and let MIT conduct more learned documentation elsewhere.

Mr. O'LEARY. Mr. Fygi already has 480 associates or some large number, Mr. Chairman.

Mr. DINGELL. Gentlemen, the Chair thanks you all. You have been most patient.

The subcommittee will stand adjourned. The Chair does observe that Mr. Tashjian ought to be here when Mr. Bardin appears. Mr. O'LEARY. I think that would be a good idea.

Mr. DINGELL. That hearing will be Thursday next.

The subcommittee will stand adjourned until Thursday next. [Whereupon, at 1:15 p.m., the subcommittee adjourned, to reconvene at 9:30 a.m., Thursday, February 22, 1979.]

DEPARTMENT OF ENERGY

OF ENERGY

AUTHORIZATIONS

(FISCAL YEARS 1979 AND 1980) AND ENERGY EMERGENCY PREPAREDNESS

THURSDAY, FEBRUARY 22, 1979

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ENERGY AND POWER,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D.C. The subcomittee met at 2 p.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. John D. Dingell, chairman, presiding.

Mr. DINGELL. The subcommittee will come to order. Today the subcommittee inquires into the request of the Department of Energy for budgetary support for its uranium enrichment activity. We are delighted to welcome George S. McIsaac, Assistant Secretary for Resource Applications, accompanied by Mr. Stanley Weiss and Mr. William R. Voigt.

Mr. MOORHEAD. Mr. Chairman, I have a statement of Congressman William H. Harsha that he desires to have submitted for the record.

Mr. DINGELL. The Chair was advised that Mr. Harsha wished to be present. If it is his wish and your wish that it be inserted in the record, without objection, it will be inserted at this point as though read.

STATEMENT OF HON. WILLAM H. HARSHA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO

Mr. HARSHA. Mr. Chairman, I appreciate this opportunity to present my views to the Subcommittee on Energy and Power on the Department of Energy (DOE) budget for fiscal year 1980. I have a special interest in the authorization for the gas centrifuge enrichment plant at Portsmouth, Ohio, and will limit my remarks to the merits of that project.

Last year the Department of Energy reduced its initial budget request from $220 million to $105 million and revised the time schedule for the Portsmouth plant based on a reassessment of the enrichment program. Under that modified schedule, the construction of the shell of the first process building would get underway as originally planned, and machines and auxiliary equipment for the first centrifuge train, representing one-eighth of the first process building, would be procured. A startup capacity of 2.2 million separative work units (SWU's) would be in place by the end of 1988. Procurement of the balance of the centrifuges would be deferred to later years.

The DOE plan is to add enriched uranium production capacity in increments of 1.1 million SWU's per building at a rate to meet future demand after 1988. If demand exists, the full complement of 8.8 million SWU's will come on line in 1994. This committee reported out an authorization of $220 million for this plant for fiscal year 1979, which was not enacted into law, but $150 million was appropriated.

I understand that the DOE budget request for fiscal year 1980 is $220 million in authorizations and $322.7 million in appropriations. I strongly support this level of funding at the very least. This request, on its face, appears to be a commitment to increasing the production of enriched uranium which will enable the United States to reopen its order books and, thus, become a reliable source of this fuel for foreign countries. At the same time, I caution this committee to carefully scrutinize the effect of DOE's current policy on the enrichment capacity of this country. There are several issues that must be carefully addressed in assessing the administration's policy on this project.

I understand that DOE's revised production plans for fiscal year 1979 through fiscal year 1990 would provide for approximately 295 million SWU's, including the stockpile now on hand. According to a recent DOE estimate, representing a downward revision, demand over the period will be approximately the same amount. The point to be made is that U.S. supply may not be adequate to meet the demand estimated by DOE and that there is little or no margin for error. Furthermore, it is unclear whether there is sufficient ability to increase capacity for new customers or expanded demand by existing customers.

Thus, the question is whether DOE is scheduling and funding the Portsmouth project at a level consistent with long-term demand. Sound policy requires both the capability to respond to possible adverse developments, such as the cutoff of Iranian oil.

Another key consideration is the need for flexibility to market nuclear fuel aggressively to control proliferation. This committee is well aware that the Nuclear Nonproliferation Act of 1978 requires the United States to take such actions as are necessary to be a reliable supplier of nuclear fuel. Clearly, the rate at which we increase fuel production will affect out reliability and our credibility.

If we appear to lag in expanding production, then other nations will look elsewhere for their supply. The present DOE policy is to reduce the stockpile to about 14 million SWU's. This will have an adverse effect not only on the proliferation of nuclear materials, but also on our balance of trade in terms of the volume of export of nuclear fuel and reactors.

Recent events in other policy areas suggest the need for more clear direction in U.S. conduct of foreign affairs. The United States should not add needlessly to any confusion in the area of nuclear nonproliferation by failing to carry out national policy. Mr. Chairman, I urge this committee to take a hard look at the DOE request for the Portsmouth gas centrifuge enrichment plant and approve the administration's budget request as a minimum starting point. It is important not only for the people in my district but for the entire country as well.

Mr. DINGELL. Mr. McIsaac, we are delighted to welcome you back before the committee. If you will identify yourself fully for the record, we will be happy to receive your statement.

STATEMENT OF GEORGE S. McISAAC, ASSISTANT SECRETARY, RESOURCE APPLICATIONS, DEPARTMENT OF ENERGY, ACCOMPANIED BY WILLIAM R. VOIGT, JR., DIRECTOR, OFFICE OF URANIUM RESOURCES AND ENRICHMENT, DOE

Mr. McISAAC. Thank you, Mr. Chairman.

I am George McIsaac, Assistant Secretary of Energy for Resource Applications. I am accompanied today by only Mr. William Voigt, who is Director of the uranium enrichment program of the Department of Energy and the national uranium evaulation program. Dr. Weiss, my deputy, is unfortunately stuck at the Philadelphia airport at this time. I do not think he will be getting here today but we will proceed as best we can.

Mr. Chairman, I have a two-part abbreviated statement. I have already submitted, as I think you are aware, a rather lengthy and detailed statement with regard to the Department of Energy budget submission on these programs.

If I might I would like to first proceed with a very short summary of our uranium enrichment program statement and then entertain questions which you and other members of the committee might have for us on that portion of the program and then following, as you might wish, I would like to enter a short statement with regard to the uranium resource assessment program, and then entertain questions on that.

Mr. DINGELL. I think that will be fine. To expedite the matter, without objection, your full statement will be inserted in the record. We will recognize you for the summaries you indicated you wish to give.

Mr. McISAAC. Mr. Chairman, after the Postal Service the enrichment of uranium for light water atomic energy powerplants is the largest Government-operated oriented production enterprise in the United States. The revenue resulting from this enrichment service should approximate $1.3 billion in fiscal year 1980.

In the fuel enrichment process, Mr. Chairman, we operate three large gaseous diffusion plants at the present time.

These gaseous diffusion plants are being upgraded and improved as a result of the CUP and CIP programs from the current base capacity of roughly 17.2 million separative work units per year to 27.3 million separative work units-SWU's-per year. This is a program which has been previously authorized and funded and will be completed roughly by the end of 1981.

These programs, the cascade uprating and cascade improvement programs will incorporate the latest advances in gaseous diffusion technology.

I would like to mention, Mr. Chairman, that included in this budget is the program for continuing our development of the gas centrifuge enrichment process. This is a process that will further increase the capacity of our uranium enrichment service facilities as well as offering us the opportunity, with the application of this new technology, to dramatically decrease the electrical power requirements for the enrichment process.