government responsibility to help with the competitiveness of the businesses in their home countries, to continue research and development. as you go more towards piling and especially towards deployment that becomes increasingly a larger responsibility to -- really the responsibility of the private sector to decide what they want to invest in. having said that, there have been policies in the united states that go back a century or more that do help beginning industries start off. this has been part of the tradition, if you think about going back again, about 100 years, and the beginning oil industry in the united states. there were incentives to help early investments and develop this, that are continuing, but

certainly those incentives were there to spur new technologies. there were incentives in the airplane industry, lots of things in how to help the semi conductor industry. but in the last analysis, i think the most effective programs are ones which can guide and stimulate private investment. senator bingham and murkowski i think are supportive of sort of a seeded-like program, loan program. but in addition to that, there are other things that we can do which can actually again just help guide those investment choices. mostly what we want to do in my opinion, what we'd like to do is guide the investment choices that could really stimulate high technology manufacturing in the

united states. there's no reason why we cannot be competitive with any country in the world. germany remains competitive in high technology manufacturing. i believe they have higher labor costs than we do, and we're at least as innovative and inventive as any country in the world. i would say more so. >> my only response would be i think the market makes a better decision -- a better decision-making process than the government based on the record. it's not the taxpayers eamon any at stake. it's the stockholders eamon any at stake with the winners and losers. i think personally that's the way it ought to be. secondly, the historical comparison made might not work now because we weren't drowning in debt when those loans were made. today we're drowning in debt and we just can't keep going in having headlines that half a billion or a billion dollars are lost again to the taxpayer. my time has more than expired,

mr. chairman. thank you. >> senator staph know. >> thank you, chairman. welcome secretary chu. let me indicate first that i appreciate the efforts in working with us on a clean energy manufacturing strategy. it's clearly leading the recovery for the country. our efforts, the chairman and i championing the 48c and the loan program you mentioned where ford is actually now bringing jobs back from mexico because of their efforts around advanced batteries and retooling. we're seeing jobs come back from a number of countries because we're focused there. i would encourage you to continue that and use the tools available. i want to talk specifically today, though, about a very, very important project i believe for the country and certainly for michigan, and that's the facility for rare isotope beams project that michigan state won a very rigorous competition as you know, a number of years ago.

they're at a critical point. we're coming into the fifth year of funding on this national project. it's a core piece of our research for the united states research infrastructure with broad benefits to science, homeland security, medicine, industry. not only would the project develop the next generation of nuclear physics workforce as you know, but it will create thousands of jobs and really address our u.s. competitive ngs and energy security. so we have to move forward. if we don't, other nations will. and they will be the ones attracteding the best and the brightest scientists and researchers, not the united states. as you know -- i've talked to you numerous times about this as have my colleagues in michigan. you've heard from the scientific community. i'd like to hear from you today what is the department of energy's level of commitment to this project? >> well, senator, yes, you certainly have talked to me many times, same which i think the

entire michigan delegation it feels. we agree with you that efrib is a worthy scientific project. what we're trying to do is to try to figure out within the constraints of the nuclear physics budget in the office of science, how to best ap eight all the precious dollars. so the question is precisely that, and ultimately it's going to be the nuclear physics community that will be deciding what to do. so -- it's not targeted after efrib, it's targeted at the entire nuclear physics program. we think nuclear physics as is high energy physics are important parts of the department of energy portfolio. but the budget has said that we have constraints. we also need to use our budget in the office of science to help

on the mission oriented research that could lead to energy solutions and lead to more competitive america in the near term. we recognize the value of the michigan state project. we have asked for a budget that's the same level as what was appropriate last year. we will continue this. but in the end we need -- the nuclear physics community at large to comment on all the projects, not projects, but the program in general. >> mr. secretary, let me ask you to clarify this. the president has indicated support for this in his budget. it's not the level that will allow them to proceed as they have been planning to be able to break ground this year which is critically important. this is going into the fifth year of commitment in the united states on this particular project. they've been through numerous

reviews -- competitive reviews and in fact come out with stellar recommendations in the past. so i'm very concerned about wha review process and whether this is just an effort to slow down or stop progress on this incredibly important project. so can you describe the review process and how does this fit with the fact that there is, in fact, a commitment in the president's budget to continue this? >> the fact there is a commitment in the project means precisely what you just said. we're not prepared to abandon this project. the review project -- the review will not be review of just this, and i want to make that clear. we have three large projects, but we have a large nuclear physics program as well. and within the constraints of our budget we need the nuclear

physics community to tell us what they value the most. and this panel of review is not going to affect what happens in fy 13. >> so, it's not affecting what's happening in fy 13. and so that means the project and funding moves forward for this year. >> we requested -- it depends on what congress does. we've requested the same amount of fy 13. that was ap eighted. >> as a member of the budget committee and moving forward with the appropriations committee, it's my intent to make sure we do everything possible to make sure we have the full commitment to be able to move forward with this project. i hope the department is going to keep its commitment going into the fifth year of a very important, not only science

project but economic development project that's going to create over a billion dollars in economic activity and makes no sense to me why as we go into the fifth year that we're having this conversation when those conversations were conducted at the very beginning of all of this and priorities were set, decisions were made, dollars were spent. and now we go into the fifth year. it's in the budget. it seems to me we ought to be talking about what we need to break ground and to be able to move forward with this rather than another evaluation. i'm all for evaluations, but this project has been evaluated and evaluated and, in fact, has come out with stellar reviews every step of the way. i would hope that the department will keep its commitment thank you, mr. chairman. >> senator paul. >> secretary chu, thank you for coming today. as you know we're in the midst of a great recession with 12

million people out of work. i'm very concerned about 1200 jobs in particular, though, in paducah, kentucky. they work for a nuclear enrichment plant there that's been in operation for many years. over 50 years we've accumulated 40,000 cylinders of uranium, uranium waste sitting on the ground. something has to be done with it. 14-ton canisters of uranium. we'd like to enrich them. if we were able to enrich them you can save these 1200 jobs. these 1200 jobs in likelihood will be lost if the company goes under if we're not allowed to enrich this uranium. it's my understanding it's under your discretion whether to wren itch this uranium. >> senator, i see it as not matter -- first, this company usec which is running the

paducah plant, for them they say it's going to be a business decision, we're talking about depleted uranium and whether they'll use the enrichment facility to generate the uranium. and what they are asking for is government assistance to say we have some depleted uranium. we can give it to them and have them enrich it. it's certainly true, we're very concerned about those jobs. we're also concerned of a number of other things, because in order to provide the funds to allow this to go forward, we would, for example, be using -- we would have to be essentially putting some of our uranium that we have on the open market. we have to do this very carefully because we have a

commitment that any use of our uranium, u.s.-owned uranium onto the open market might have an ef fact on the uranium markets that would affect the miners. >> if we allow this to happen, it doesn't cost the taxpayer anything. the payment for enriching it comes from the proceeds of the sales of the uranium. >> it does, but you have to take that a little bit further because the market for uranium has changed after fukushima, as you well know. the japanese have had the reactors down for a number of months, and it's going to be -- as they bring them up, it's going to be quite slow. the germans have decided they're going to bring down the reactors more quickly than they had thought possibly. so the market for uranium and for reactors has changed over the last couple of years. >> if you're concerned about how much you sell, could you not increase your stockpile, and as you increase your stockpile, then sell it over time?

>> but the way we see it, this is a very complex process. the way we see it, we're going to be giving -- we'll be using taxpayer money to pay for the usec services. that will keep the paducah plant running. in the end, let's pose there's a glut in the market of uranium, the value is not as high. and then in the end the taxpayer has to foot that bill. so the analysis -- for example, the cbo's office smaker. in fact, it could be a big liability so we have to work through all those things. >>she the uranium there has a value of $4 billion and that would be returned to the taxpayer if we were to e enrich it. you've got a lot of problems here. we've got 50 years of waste and we're providing you with an alternative that brings money back to the treasury and helps you get rid of a waste problem. we have i think 700,000 tons of uranium that's a waste product

now sitting on the ground. many in the administration say you're a green administration, you're for recycling. we're giving you a chance here to save jobs, not on some kind of loan program, save jobs, existing jobs and recycle something and cut the amount of uranium waste in half. these are all problems we face. if we do nothing -- and i believe you have the power to save these jobs and this is on you basically. these 1200 jobs are yours to save if you don't save them. if you don't, it's going to cost the taxpayer. it's $100 mim eun a year to put things into cold storage there, also $100 million a year because someone has to guard the uranium. the surveillance cost all come out of the company now. i think this is a win-win solution for the taxpayer. you know i'm not a big fan for expending new taxpayer dollars. the taxpayer dollars here come out of the sale of the uranium. if we temporarily raise the limit which you're allowed to do

under the law, that's under your discretion, talking 1% of the world market. i don't think we're talking about affecting the price in a significant degree if we were allowed to do that. >> just very quickly in closing, first the gao report came out several years ago before fukushima. so there was a sea change in prospects for the demand of uranium because of fukushima, because of the german decision, because of the slower startup of the japanese who are still trying to figure out to what extent they're going to be starting all their reactors. i would be a little surprised, very surprised if their analysis of three years ago would be the same -- >> there's a brand new one, june 13, 2011, nuclear material, doe's depleted uranium tales should be a source of revenue for the government. that's the one i'm talking about, $4 billion. >> i'd be happy to meet with you as i've i understand kaefted in a letter. >> i want it to be said for the record these 1200 jobs are 1200

jobs that you could save with a stroke of the pen if you choose to do so. this isn't $500 million or billions of dollars being spent on something where we might get jobs and we haven't, we've lost it. these are 1200 existing jobs? a long-standing nuclear trade that our defense considerations for why we have to enrich uranium. it's not a purely open market, we don't sell it to just anybody. there are strict controls on this market. i think it is something where the government could do something that cost no money. i hope you'll help us there. the 1200 families in paducah are sitting there listening to you today. they know you have it in your power to save their jobs. i hope you'll consider this. it doesn't cost the taxpayer anything ultimately because the proceeds will come out of the sales of the uranium. >> if the sales keep at a certain price. again, senator, i'd love to talk to you at length about this. we've thought deeply. but it could -- we also see a potential hundreds of millions

of dollars' liability in the future and we have to work through that as well. >> senator cantwell. >> thank you, mr. chairman, secretary chu, thank you for visiting the hand ford site and the bit plant specifically. you know it is one of the most complex and largest contaminated sites in the world, and our concerns about making sure we continue to get cleanup done in a timely fashion is of critical importance, not just to the state of washington but to the nation. are you confident with this level of funding that we will have that plant open and operational in 2019? >> senator, again, within the budget constraints, we're essentially working hard to keep the environmental management budget essentially went down .7%, but essentially flat.

we are trying very hard to make some tough decisions. there is a protection of the columbia river, the waste plant -- the tanks and wtp. so we first feel that we're going to meet all of our legal obligations for fy 13 with this budget. but as you know and i spoke to you about this, there was an ideal funding profile for the plant which called for more aggressive spending this year, next year and the following years. just like in a commercial building, when you build a building, you don't mess around. if you got an engineer, you build it and build it very quickly. that funding profile is not in the cards anymore because of our budgets. so because of that we know that

there's a risk. but on the flip side we're also have to prioritize and we have to make sure that the waste tank farms are cared for as well. so it's a tough decision. as you well know, we take these responsibilities very seriously. >> so 2019, that's your -- >> we can't say right now, but because there's -- we're working through some of the issues. we have a plan -- a program for testing, for example, the so-called pulls jet mixing that perhaps two or three years ago we felt that -- we determined with the defense board and others, it would be prudent to go through more comprehensive testing. we acknowledge that. these are some of the issues on

this very, very complex, in my complex nuclear project that the world has undertaken, let alone the united states. >> i couldn't agree more. that's why when some of the questions have been mentioned about the plant, what about issues brought up by whistle-blowers. obviously, once the plant goes operational, it's too hot to fix structural issues. so -- >> i think we've worked very hard, the deputy secretary and i have worked very hard to make sure that we have essentially our a-team in place in the direct oversight of the -- of the contractors. abecko, dealt knudsen is an outstanding manager, a long track record.

we worked to talk him into doing this. we have a lot of respect for. dave huizenga, again, superb manager person who is -- so all the way up and down the chain we have put in place what we believe is a very good team, and because of the importance of this project, a lot of these discussions go right into my office. i've spoke ton the coo, are head contractor, riley abecko probably now four times in my office on making sure that he, too, has an a-team as the contractor and from my discussions with the people on the ground, they say that abecko has always been doing their job in trying to get the right

people there. >> thank you for that level of detail, because i think that is what it takes. i've often said make the secretary for life so we don't change horses in the stream. can i get your viewpoints on whether we can dispose of military waste first? what we don't want is for it to become a de facto site for 90% of the storage. a blue ribbon commission was in here a few weeks ago, senator domenici, my colleague, talking about this, i've tried to follow up whether the waste isolation plant in new mexico might be an ideal place for hanford waste. so do you agree with him on keep separate the civilian and the nuclear waste issues. i think they're -- that we -- it would be prudent to treat it differently, and we are considering -- i'm not sure where in the status, but the --

first it's for low-level radioactive waste, and so one would need to do some studies to make sure that that would be safe for the high level waste. so we'd need to do something along those lines, but i'm glad you pointed out whip, because this is a success story that's been there operating for about a dozen years. there have been no incidents. the local people are, feel confident we're running this isn't a very safe way, and it's good for the local economy. it's good for the economy of the state of new mexico. and so, again, this is something where we can show that we can develop repositories for nuclear waste, which has the acceptance of the local people. >> if i could get more follow-up on the details of that i'd appreciate it and also on the

1,000 acres we're trying to get shifted over from doe, shifting over acreage to the local community for energy parks in general. it's a proposal moving its way through. if we could follow-up on both of those, thank you. thank you, mr. chairman. >> thank you. senator ritsch? >> thank you. secretary chu, first of all let me say for the record that, and i know this falls on deaf ears, but, and this is simply a philosophical disagreement, but your budget request for 3.2% increase for the year yet decreases the nuclear component by 10% and i find that particularly discouraging as we look to the future. i know that that is not the administration's position that nuclear is our future. i do. a lot of other people do and i suppose that's not going to change until the administration changes at some point in time.

for the record, take my objection to the decrease, while increasing other of the boutique-type energy production systems that you have. i want to ask particularly about one part of that. i noticed that in the budget you increased -- or you decreased the fuel cycle research and development by 10.8%. and yet yesterday when you were in georgia you announced that there was going to be a new $10 million advanced nuclear innovative cross-cutting research and development for advanced nuclear reactor in fuel cycle technologies. a little inconsistent. one hand asking for a 10.8 million dollar decrease and yet yesterday you said there was going to be new funding. what is this new funding? i didn't quite -- that came out kind of gray. >> okay. so in the first -- i have been

very supportive of nuclear since i walked in office. >> i understand that, and i believe, but i also understand you're carrying the add main strimain -- administration's waters. >> in terms of the fuel cycle, we believe that first as was pointed out, that the technologies for fuel recycling today, we don't think are economically viable, and not proliferation resistant. there are other examples of, so this is the purex methods that the u.s. develops and areva uses. as we've seen especially in the japanese experience that's well over budget. they believed a $6 billion, it's north of $22 billion today, still not operational.

this is the rakashu plant. also processes we think have promise, they have good laboratory experiences and we went up and did the next step and it didn't quite work as well as we thought it would in order to be -- it is more -- it's not pli proliferation proof but more proliferation resistant. not to say we're going to abandon that. in fact, i'm personally getting very interested in why it's not working. so in my little spare time i'm trying to figure out if i can help them, but never mind that. >> you may resolve that -- >> well, it's going to be up here, not in a garage. i don't think the nrc would like me experimenting in my garage, but i would say that this isn't -- it doesn't open up -- it still doesn't mean we shouldn't be looking for other good ideas, because we are very interested in, if nuclear is

going to be part of this century's mix, we would like to not use 1% of the fuel. energy content of the fuel, to generate a certain amount of electricity if we can use 20%. 20 times more, so you have a similar -- you got 20 times more electricity. so this is hanging out there and we would like to develop that. >> we're all in agreement of that. >> right. so we do feel that it does make sense to invest in new technologies. we're going to have to come back a little bit and try to figure out why some of these earlier ones don't go into the mini pilot scale. >> the one question i had, why was the announcement made in georgia, since as you know the inl in idaho has one of its strong missions the actual work that you've described? >> well, i happen to be in georgia and, you know, yes, i

can't be in two places at once. that happened to be georgia and oak ridge i. can take the message back to the idaho people that this $10 million is coming? >> oh, we announce competitive bids and idaho is free to compete with that money. >> mr. secretary, my time is up, but you and i had a discussion at your confirmation hearing about the, about the contract for cleanup at the laboratory, you weren't familiar but promised to get up to speed on that. i have questions on that from the budget which is really not very clear as to where we're headed with that. if you'll take those questions for the record i'd appreciate it. >> sure. >> thank. >> thank you. senator udall. >> good morning, mr. secretary. i can speak for senator ritsch. i know he would volunteer his garage if you need it.