1997 Congressional Hearings
Special Weapons
Nuclear, Chemical, Biological and Missile


Statement for the Record

Marvin S. Fertel

Vice President - Nuclear Infrastructure Support and International Programs

Nuclear Energy Institute

U.S. House of Representatives

Committee on International Relations

October 7, 1997

Mr. Chairman, members of the committee, my name is Marvin S. Fertel. I am vice president for Nuclear Infrastructure Support and International Programs at the Nuclear Energy Institute. The Nuclear Energy Institute is the policy-setting organization for the U.S. Nuclear Industry. The Institute has more than 275 companies and organizations worldwide as members, including every U.S. electric utility that operates nuclear power plants and their suppliers, engineering and construction firms, nuclear fuel cycle companies, suppliers of radionuclides and radiopharmaceuticals, consulting firms, labor unions and law firms.

I want to begin by expressing my gratitude to you, Mr. Chairman, to Ranking Member Hamilton and to the other members of this committee, for considering this important issue and the benefits that the United States and the world can accrue from commercial nuclear cooperation between the United States and China. I appreciate the opportunity to address these challenges and opportunities from the nuclear energy industry's perspective.

Foremost, when considering a global market for nuclear technology, it is in every country's best interest that the United States implement a strong nuclear nonproliferation relationship with China. An important first step in forging that relationship is negotiating and implementing an agreement for peaceful nuclear cooperation between the United States and China. This agreement provides a framework within which both trade and non-proliferation initiatives can evolve and succeed. China's commitment toward nuclear non-proliferation and the prospect of peaceful nuclear cooperation already has helped persuade China to join the Nuclear Non-Proliferation Treaty, sign the Comprehensive Test Ban Treaty, cooperate in international efforts to eliminate North Korea's nuclear program and has announced actions related to satisfying the Congressional requirement necessary to complete the 1985 agreement. If the President certifies that China has met congressional conditions for implementing the peaceful nuclear cooperation agreement, it would be in the best interest of the United States--and the world--for the United States to participate in the Chinese commercial nuclear energy program.

Improvements in China's nonproliferation policies over the past decade have brought the prospects for nuclear cooperation closer than ever, and the United States is negotiating with the Chinese government to fulfill the conditions outlined by Congress to permit peaceful nuclear cooperation between the two countries.

The United States has been a world leader in commercial nuclear technology since President Eisenhower's Atoms for Peace program that provided the underpinning of the peaceful application of nuclear technology worldwide. America's nuclear energy program--provides 20 percent of our nation's electricity today and has met more than 40 percent of new electricity demand in the past 25 years. Clearly, the U.S. nuclear program has the most operating experience in the world, and U.S. reactor technology is the most reliable and safest in the world. U.S. technology has been the model for the global use of nuclear energy.

Within the construct of the strategic importance of the U.S.-China relationship, and with full cognizance and commitment to nuclear nonproliferation legal requirements and policy goals, there are significant benefits to the United States and the world from opening trade with China on civilian nuclear technology, services and materials. Those benefits include:

Assuring that China has the safest nuclear program possible by providing them with access to U.S. commercial nuclear technology and U.S. nuclear energy expertise. Achieving nuclear nonproliferation goals which are enhanced if the United States and China are actively engaged in civilian nuclear commerce;

Greenhouse gases and other atmospheric emissions will be reduced in China--and in the global environment--due to a successful Chinese nuclear energy program; and U.S. employment, the U.S. economy and the current balance of trade with China will benefit significantly as a result of commercial nuclear trade between the two nations.

U.S. Trade Would Provide China with Safer, More Efficient and Reliable Nuclear Technology

China has three nuclear plants operating today with a total installed capacity of 2,100 megawatts. Two of China's nuclear power plants are 900-megawatt, French-designed units; the other a 300-megawatt plant designed and built by the Chinese.

China is already planning to build, or is currently building, 4,650 megawatts of new nuclear generating capacity. These plants are of French, Canadian and Chinese designs. China also has indicated its intent to purchase two large nuclear units from Russia. Moreover, China has an ambitious program to expand its nuclear energy program, including plans announced recently to add 20,000 megawatts of new nuclear capacity to the grid by 2010, and a total of 50,000 megawatts of new nuclear energy by 2020--the equivalent of two new reactor orders each year.

So the relevant question is not whether China should develop a nuclear energy program. That question already has been answered. The remaining question is whether the United States, which has developed the most advanced and highly standardized reactor technology in the world, should be the only nation in the world that excludes itself from access to the China market.

The U.S. nuclear energy program is by far the largest nuclear program in the world. Electric utilities operate more than 100 reactors with a generating capacity of about 102,000 megawatts--making nuclear energy our second largest source of electricity (20 percent) after coal (52 percent).

Building upon the industry's extensive experience in operating nuclear power plants, electric utilities and nuclear suppliers working together--with support from the U.S. Department of Energy--have developed standardized, advanced light water reactors that are designed to be safer, more reliable and more efficient than any other existing technology. Earlier this year, two of these designs were certified by the Nuclear Regulatory Commission (NRC), and a third design should be receiving final design approval from the NRC next year.

Current U.S. and new U.S. advanced reactor designs represent the best options for the growing Chinese nuclear program. We believe the most effective way to develop a rapidly growing nuclear program, like that planned by the Chinese, is to use a limited number of standardized reactor designs. This is a model originally developed by the French nuclear program, and one that the U.S. nuclear industry will use as it looks toward future electricity needs. From this perspective, the United States should encourage the Chinese to select a few specific reactor designs and to build "families" of plants using standardized designs as their program moves forward. This approach facilitates effective and efficient engineering, procurement, training, operations and maintenance, and quality assurance programs among the reactor sites. Importantly, a standardized approach more readily facilitates the establishment of an effective regime for regulating a rapidly growing nuclear program.

Clearly, U.S. advanced light water reactor designs represent the best available technology for a standardized nuclear energy program. The safety of the Chinese nuclear energy program will depend, in part, on the use of standardized reactor designs. In those cases were every plant is unique, reactor engineers, regulators and operators must learn different systems, with different features, raising the risk that the complexity of reactor types could increase the likelihood of errors in operation of the plants. This is particularly true in the case of a very rapidly growing program, such as the Chinese are implementing. Given China's impetus to move toward "families" of standardized reactors, unless U.S. reactor technology is integrated into the Chinese nuclear energy program soon, the window of opportunity for providing our technology as the foundation for their standardized plants will close.

Commercial Nuclear Trade Enhances U.S. NonProliferation Goals

Opening commercial trade between China and U.S. reactor manufacturers will enhance achievements in U.S. and global nonproliferation goals. China wants the opportunity to purchase U.S. reactor designs because of their quality, safety and the role that opening commercial nuclear trade will play in continuing to improve U.S.-China relations in nuclear matters. Removing current restrictions against civilian nuclear commerce with China requires the President to provide Congress with a number of certifications related to how well China is satisfying nonproliferation requirements. We are pleased that demonstrated progress is being made by the Chinese in establishing an export control regime and resolving other related nonproliferation issues with the U.S. government. Once the Chinese have satisfied the certification conditions imposed by the Congress, we believe that fully implementing the agreement for cooperation between the United States and China will contribute to both reinforcement of the existing Chinese nuclear nonproliferation infrastructure, and strengthen that infrastructure through future commercial interaction.

The U.S. nuclear industry is fully committed to ensuring the integrity and effectiveness of the worldwide nuclear nonproliferation regime. Clearly, without an effective nonproliferation regime, the benefits that the uses of peaceful nuclear technology provide society--electricity production, medical diagnosis and treatment, agricultural enhancement, industrial applications, and basic research--will be curtailed or lost.

We believe that the current improvements to China's nuclear nonproliferation system are a direct result of the desire of China to have access to U.S. commercial nuclear technology, and to increase competition among potential suppliers. As the nuclear industries in China and the United States begin to work together as partners to further develop the Chinese nuclear energy program, we believe the transfer of operating experience and nuclear safety and safeguard cultures will strengthen the nuclear nonproliferation regime in China.

Nuclear Energy Provides Clean Air Benefits To China

Commercial nuclear technology in China will play a critical role in protecting the environment as that country embarks on a program to develop 500,000 megawatts of electrical generating capacity by 2010, more than double its current electric generating plant capacity. Four percent of that supply, or 20,000 megawatts, is expected to be generated by nuclear energy plants. Nuclear energy will be particularly important to serve major coastal metropolitan centers that are located far from China's vast coal resources, and that already are experiencing poor air quality.

Although the Chinese will generate a portion of their electricity from hydroelectric facilities, they are the world's largest user of coal, and will expand their heavy reliance on indigenous coal supplies for electricity. This expanded dependence on coal will carry obvious environmental consequences in terms of greenhouse gases and other emissions. In fact, China is projected to be the largest emitter of greenhouse gases in the world by 2015.

Nuclear energy plays an important role in avoiding greenhouse gases. Nuclear energy produces no greenhouse gases, such as carbon dioxide, nor any sulfur oxide or nitrogen oxides because nuclear power plants do not burn fossil fuels. Generating 1 million kilowatt-hours of electricity--enough to serve 65,000 homes--using coal produces 230 metric tons of carbon dioxide. Generating the same amount of electricity using oil emits 190 metric tons of carbon and 150 metric tons of carbon using natural gas. Producing 1 million kilowatt-hours of electricity at a nuclear power plant emits no carbon dioxide.

Earlier this year, the Worldwatch Institute issued a report on fossil fuel use and carbon emissions. The group reported that China today accounts for 14 percent of total global emissions of carbon, and that these emissions increased by 27 percent between 1990 and 1996. Clearly, the growth in China's emissions of carbon dioxide, SO2 and NOx will increase as its electricity system grows. These emissions can be reduced, in part, by the increased development of nuclear energy, hydroelectric and other renewable energy sources and conservation and efficiency initiatives.

We believe that the safety and the reliability aspects of U.S. technology provide the greatest certainty that nuclear energy in China will fulfill its role in reducing greenhouse gas and other atmospheric emissions. One has to only examine the importance of nuclear energy toward avoiding carbon dioxide emissions in the United States:

Nuclear-generated electricity avoids the emission of carbon dioxide and accounted for 89 percent of the reduction in carbon dioxide emissions from the U.S. electric utility industry between 1973 and 1996. U.S. nuclear plants reduced total U.S. carbon dioxide emissions by more than 147 million metric tons of carbon in 1996. Without nuclear energy, U.S. electric utility annual emissions of carbon dioxide would have been approximately 30 percent higher.

Clearly, nuclear energy has been a major factor in reducing carbon dioxide emissions in the United States, and it can play an important role in emissions reductions in China.

Trade with China Would Add Thousands of U.S. Jobs, Millions of Dollars in Exports

China represents the largest electricity market in the world, and the export dollars created by reactor orders are substantial. For example, two new French-designed nuclear power plants being built at Ling Ao are worth $2.7 billion to Framatone. A Canadian nuclear plant order at Qinshan is worth approximately $3 billion.

Exporting nuclear power plants and related services involves thousands of U.S. jobs and billions of dollars in export value. For every American 1,000 megawatt nuclear unit, we can expect between $1 billion and $2 billion in exports from the United States. Considering conventional Department of Commerce conversion ratios, this translates into between 15,000 and 30,000 U.S. jobs. These jobs fall in the professional, higher salary classification and in specific manufacturing and equipment product areas.

China is moving forward swiftly with its commercial nuclear program, and these jobs and export dollars will be won or lost over the next few years. In addition to the initial export opportunities, significant jobs and export opportunities are available to provide ongoing plant support services, fuel and other broader program services for countries using U.S. technology. Potential exports to China between now and 2010 just for new plants can be as much as $15 billion, creating about 225,000 job years of work. Clearly, the United States can and should capitalize on this opportunity. Clearly, the economy of our competitors from France, Canada, and even Russia are already benefiting from sales of nuclear technology to China.

Conclusion

Cooperation between the United States and China on commercial nuclear technology cannot and should not proceed until the President has concluded that China has fully met the conditions for certification established by Congress to implement the 1985 agreement for peaceful nuclear cooperation and has submitted those certifications and associated reports to the Congress.

Once the certification requirements are satisfied, however, it is in the best interests of the United States to move forward with implementing the agreement with China for cooperation in civilian nuclear technology. The subsequent interactions between U.S. nuclear energy experts and the Chinese can only enhance their understanding of how to develop and operate a safe nuclear energy program--and how to further strengthen their nuclear non-proliferation infrastructure.

The availability of U.S. technology as China approaches near-term decisions on standardizing its future nuclear power plant program provides an opportunity for creating significant jobs in the United States and improving the balance of trade with China. Finally, U.S. nuclear technology would enhance the safety of China's nuclear energy program while realizing critical environmental and clean air benefits.