Secretary Moniz's Remarks at the 2015 Carnegie International Nuclear Policy Conference -- As Delivered

Thanks, Bill. I had not expected my Fall River heritage to feature in the introduction. But as most of you could just imagine, it was a great pleasure working with Bill over these last years, and our paths will cross more here I'm sure to Carnegie. But to be honest, they cross more often than I had thought still back in some of the old haunts, and Bill did a --did a great job, as you -- as you know.

I know this conference is looking at a very broad variety of nuclear topics, from security of the fuel cycle to vulnerable materials around the world to nuclear deterrence. The Department of Energy has a similarly broad portfolio of all things nuclear, even as we lead in areas like clean energy technology and basic physical science research. But about two-thirds of our budget is devoted to advancing America's nuclear security and cleaning up the legacy of past nuclear arms development.

President Obama's January 2015 Nuclear Security Strategy stated that no threat poses as grave a danger to our security and well-being as the potential use of nuclear weapons and materials by irresponsible states or terrorists. And that threat, as people here know very well, is not static. The last quarter-century has witnessed dramatic shifts in the global nuclear security environment.

* The Cold War has ended, but thousands of nuclear weapons and large stockpiles of weapons-usable materials remain.

* Geopolitical instability and sources of potential conflict persist, especially in countries and regions with an active and, indeed, often growing terrorist presence.

* New technology and manufacturing processes continue to emerge, sometimes without a full understanding of the potential security risks that they may involve --dual-use items, 3-D printing, you name it.

The concerns about climate change and rising demand for clean energy, on the one hand, risk increasing dislocations and, on the other, have led in many areas to growing interest in nuclear power and fuel-cycle development,--including research reactors. Consequently, an increasing number of countries with little to no experience in nuclear technology will be faced with the task of safely and securely managing nuclear facilities and protecting nuclear materials, including spent nuclear fuels.

Finally, the emergence of additional nuclear-capable or nuclear-threshold states, such as North Korea and Iran, is challenging the fundamental principles of the global nuclear nonproliferation regime.

Our National Nuclear Security Administration, NNSA, headed by our undersecretary and administrator for nuclear security, Frank Klotz, who I believe is here somewhere, is tasked with ensuring that America's nuclear weapons remain safe, secure and effective without testing, while working to combat proliferation, secure vulnerable materials, prevent nuclear terrorism and respond to potential nuclear disasters. Further, our naval nuclear propulsion program ensures reliable operation of the Navy's nuclear-powered fleet, including 73 submarines and 10 aircraft carriers.

Our Office of Nuclear Energy, organizationally under the undersecretary for science and energy, is working to support the next generation of advanced nuclear reactors, including small modular reactors, while ensuring that our current fleet has the technology needed to remain safe and efficient, and advancing viable, consent-based nuclear waste solutions.

The work on nuclear fuel cycles clearly intersects the nonproliferation agenda, and collaboration between nuclear energy and NN, in fact, is both essential and quite active. And the weapons cleanup program that I referred to earlier in the budget is under the undersecretary for management and performance.

All I wanted to emphasize there is that this broad nuclear agenda at DOE engages all three undersecretaries: NNSA, science and energy, management and performance. And that's why recently we established, and I personally chair, a new Nuclear Policy Council that provides a venue for senior folks at DOE to exchange ideas on crosscutting nuclear issues and to charge appropriate policy development.

Let me turn to the nuclear fuel cycle. As we work to fulfill the global demand for affordable, reliable and carbon-free energy, nuclear energy clearly has an important role to play here in America and around the world. Today it accounts for more than 80 percent of carbon-free electricity in the United States, and last year the United States' nuclear fleet produced 90 percent of its maximum generating capacity, the highest level ever recorded. However, we also have to consider carefully the nuclear fuel cycle, both from a national security perspective and also from the energy security perspective.

Let me start with national security. I know that the P5+1 negotiations with Iran are on the minds of many here, and I can't say much specific about this now, but I did spend all of last week in Switzerland as part of the U.S. delegation, headed by Secretary John Kerry, to the Iranian nuclear negotiations. These negotiations --again, led by State and the White House --draw upon other agencies in their areas of expertise, and not surprisingly that includes the Department of Energy. DOE is able to draw upon a vast scientific and technical expertise base from across our national laboratories and other sites. So I just wanted to emphasize that, frankly, while, you know, our role has become more visible over the last --over the last month, I just want to emphasize that the department has been engaged all throughout these negotiations, providing extensive technical advice and input to underpin our negotiating position. Almost 10 labs and sites, in fact, have been called upon in supporting the various positions that the United States is called upon to analyze in these negotiations.

For example, DOE has done analyses of Iran's nuclear fuel cycle in order to provide technical recommendations on topics like enrichment, R&D and breakout timelines. Similarly, the Arak reactor and the plutonium pathway to a weapon has been analyzed. The analysis is rigorous and central to the discussions because we need to be very clear, and the international community needs to be very clear, about what we are getting in technical dimensions of a possible agreement. On the Iranian side, I want to emphasize that Dr. Ali Salehi, head of the Atomic Energy Organization of Iran, also joined the talks, in effect putting the heads of both countries' nuclear organizations at the table.

That's all I can say about the negotiations at this point. But our engagement in these talks is, again, just one example of the department's deep involvement in the security of the nuclear fuel cycle. And as you know, the discussions will resume within days.

Of course, nonproliferation is only one piece of the nuclear fuel cycle. These efforts go hand in hand with the Department of Energy's work to increase the energy security of nuclear energy as well.

The U.S. has in force 22 civil nuclear cooperation agreements with 49 partners, fostering the development of over 70 gigawatts of clean nuclear power worldwide. These agreements not only facilitate access to the safest and most advanced civil nuclear technology commercially available, but ensure that transfers of U.S. technology are consistent with U.S. nonproliferation commitments and the highest safety and security standards.

And linking back to the nonproliferation discussion, we work through these agreements to encourage our partners to rely on the global market to fuel these reactors rather than pursuing indigenous enrichment and reprocessing capabilities. DOE backstops these agreements with physical fuel assurances through the American Assured Fuel Supply, a bank containing 17 metric tons of LEU fuel which U.S. partners may draw upon in the event of a supply interruption. These measures contribute to the security of the fuel cycle and the energy security of our partners.

Ukraine offers an important example of how diversity increases security. There's been widespread coverage regarding Ukrainian reliance on Russian natural gas and, of course, European reliance on gas as well. But what many don't realize or think about is that Ukraine relies upon nuclear power for half of its electricity and, of course, the nuclear fuel for those reactors was 100 percent sourced in Russia, supplying Russian-origin reactor technologies.

When Ukraine gained independence from the Soviet Union, the only manufacturer of fuel suitable for their reactors was Russia -- a situation that is replicated in a number of other countries. So after independence in 1991, U.S. experts from the Department of Energy began working with Ukraine to address its lack of fuel market options for its Soviet-designed reactors, which represent approximately half, again, of the country's total electricity generation. In 1999, the Ukrainian government formally requested U.S. assistance to develop additional nuclear fuel supply options, which led to a formal agreement in 2000 to qualify a U.S. vendor as an alternative nuclear fuel supplier.

The government chose Westinghouse through a competitive process to design and manufacture the fuel assemblies. The research went forward with little fanfare as Westinghouse, U.S. national lab personnel and their Ukrainian counterparts worked together to design a Western fuel assembly that could work in a Russian-designed reactor with Russian and Western fuel.

In 2005, we began testing assemblies in one reactor at the South Ukraine Nuclear Power Plant. By 2009, Westinghouse fuel began commercial qualification side by side with Russian fuel. And by 2014, all of the Westinghouse commercial assemblies had operated successfully without issues.

The research and development cost was around $70 million over the lifetime of the project, but the return on that investment is many times over that initial investment. Today, Ukraine has an alternative vendor for its nuclear fuel. Other countries with Russian- designed reactors have a viable and reliable choice of vendors. And Westinghouse has the opportunity to finalize contracts abroad, and this could mean an increase in U.S. manufacturing jobs.

Russia's influence over Ukraine's access to nuclear fuel is only part of the energy security equation. Nuclear waste was, in many ways, equally important. If Russia stopped removing the used fuel, after a period of time Ukrainian reactors would not be able to operate due to a buildup of used nuclear fuel.

Another outcome of the agreement with Ukraine is a contract with another U.S. company, Holtec International, to build a used fuel storage facility inside Ukraine. The construction cost for the Holtec facility is estimated at about $300 million, meaning the facility will pay for itself in less than two years. An in-country storage facility, again, gives Ukraine an option: the option to pay Russia to take back used fuel or to store that used fuel locally, diversifying its options.

This reminds us of the importance of making progress on the disposition of nuclear spent fuel and high-level waste. Russia's willingness for spent fuel return of Russian-origin fuel can be an important nonproliferation advantage, basically an approach to what is sometimes called fuel leasing, while additionally providing them potentially competitive advantage. So we need to diversify not just supply, but in this case we need --we need diversification of nuclear waste disposal as well. And that, of course, remains a challenge in many parts of the world, including the United States.

The bottom line is that the Ukraine example of what two countries can do to realize substantial security of supply and energy security market enhancements is an important one.

When talking about Russia, it's important to remember our larger strategic relationship. At the Department of Energy this relationship is rooted in science, and science historically has been a vehicle of collaboration, even when political relationships have been difficult. And there have been significant difficulties. However, we hope that our shared trust and expertise in science will allow us to continue at least some of our nuclear security work with Russia, despite the current political climate, and hopefully to resume more activity should circumstances allow.

As a major nuclear power, Russia remains an essential element of the global effort to address the threat posed by nuclear terrorism. Despite current differences, we are ready to continue to work as partners in areas of mutual interest. For example, we have worked with Russia to eliminate over 2,000 kilograms of HEU from over a dozen countries around the world. Earlier this year, NNSA, the Russian Federation, Kazakhstan and the IAEA cooperated to return 36 kilograms of Russian-origin HEU spent fuel from Kazakhstan to Russia, and last fall we worked together to remove HEU from Poland --all of this happening, obviously, at a time of great tension.

As we look forward in the 21st century, we must continue to drive international cooperation around nuclear security irrespective of complicating factors. Ultimately, it's in all of our interests to ensure that we reduce the threat of nuclear terrorism and proliferation. The United States will continue to work with Russia in the areas that we can, and I hope that our Russian counterparts will commit to a meaningful dialogue going forward.

Let me return to the Department of Energy's nonproliferation efforts more broadly. Today I'm very pleased to announce the release of a new report titled "Prevent, Counter and Respond: A Strategic Plan to Reduce Global Nuclear Threats." I believe there will be copies out back and on our website within minutes.

For the first time, in a single document, the department is articulating our programs to reduce the threat of nuclear proliferation and nuclear terrorism, including where we see the programs heading over the next several years. And I want to congratulate Frank Klotz and Madelyn Creedon, and especially Anne Harrington, for bringing this together. I think it's an important step in our ability to articulate what are the dangers, what are the risks, what are the needs, what are the priorities as we go forward.

I'll note that this report is in response to the Secretary of Energy Advisory Board's --SEAB's --Task Force on Nuclear Nonproliferation, as was the formation of the DOE Nuclear Policy Council that I mentioned earlier. I will note that SEAB is chaired by John Deutch, the Nuclear Security Subgroup is headed by Brent Scowcroft, and the Nonproliferation Task Force is chaired by Al Carnesale, so it's a pretty good lineup of people who know something about the nuclear security issues.

The report describes NNSA's strategic approach to build and sustain the capabilities required to prevent, counter and respond to nuclear proliferation and nuclear/radiological terrorism. This defense by other means strategy is built around three pillars that are laid out and elaborated considerably in the report.

* Preventing non-state actors and additional countries from developing nuclear weapons, and preventing nonstate actors from acquiring radiological materials.

* Second, countering the efforts of both proliferant states and nonstate actors to acquire, develop or deliver the materials needed for a nuclear device.

* And third, responding to nuclear or radiological terrorist acts or accidents.

The report, as I said, is now available outside the auditorium and for download from our website, so I won't go into much detail here. I hope it will inspire some conversation over the rest of this important meeting. But I do want to lay out one important piece of both the report and our strategy towards funding and managing our nonproliferation, counterterrorism and emergency response functions.

Our FY 2016 budget request, which went to the Congress in February, proposed the transfer of the nuclear counterterrorism and incident response and the counterterrorism and counterproliferation programs from the weapons activities of NNSA to the defense nuclear nonproliferation appropriation. This realignment we feel will concentrate funding for reducing global nuclear dangers in one place. It will also consolidate funding for critical R&D to support counterterrorism, emergency response and nonproliferation initiatives.

The restructuring cuts redundancies across programs, strengthens complementary missions, and we think provides greater clarity on the the totality of the program and the funding requirements. So we think this change just makes sense. Together, these programs execute one of NNSA's enduring missions: to limit or counter the spread of weapons of mass destruction, advance technologies that detect the proliferation of weapons, eliminate or secure inventories of surplus materials, provide a trained response to incidents worldwide, and address hostile nations or terrorist groups that may acquire nuclear devices.

In moving to close my remarks, I'll emphasize that as you all know, the president has made eliminating and securing nuclear materials, reducing nuclear stockpiles and increasing global cooperation a pillar of his foreign policy. Last summer in Berlin, the president echoed the vision he first put forward in his 2009 Prague speech, calling on the global community to secure vulnerable materials, decrease the number of nuclear weapons, and build a sustainable and secure nuclear energy industry.

A critical driver of our nuclear security agenda has been President Obama's vision, and particularly the Nuclear Security Summit process that he launched in 2010. As the president has said himself, what's been most valuable about these summits is that they are resulting in concrete actions that make the world a safer place. The first summit was held in Washington with 47 delegates, including 38 heads of state or government, the largest number convened by a U.S. president since the 1945 U.N. Conference on International Organization. In 2012, the second summit was held in Seoul. And the third summit was held in The Hague in 2014. And President Obama has announced that he will host a fourth summit in the U.S. in 2016.

One of the largest commitments made at a Nuclear Security Summit was the pledge by the United States and Japan to remove and dispose of all HEU and separated plutonium from the Fast Critical Assembly in Japan. The joint project involves the elimination of hundreds of kilograms of sensitive nuclear material to help prevent unauthorized actors, criminals or terrorists from acquiring them.

Earlier this month I hosted Dr. Toyoshi Fuketa, commissioner of the Japanese Nuclear Regulation Authority, at DOE Headquarters to talk about how we can continue to move this towards completion. Our very positive discussion was the result of over a dozen meetings between U.S. and Japanese teams since the Hague summit last year, during which our experts have tackled and overcome a host of challenges. Indeed, we are still hoping that we will be able to launch the return of this --of this material in 2016.

I use this example to demonstrate our commitment to making these these summits action-based meeting with clear deliverables coming out.

I'll also note one other part of the Hague summit that was interesting: a new approach to highlighting the nuclear challenge for leaders, namely a tabletop exercise involving radiological sources. We need to keep thinking creatively about how we elevate the priority of these nuclear security challenges, and that I thought was one eye-opening exercise for leaders from many, many countries.

In closing today, I'll note that we covered a fair number of the topics on the nuclear security agenda, but today at least not the maintenance of a safe and secure and effective nuclear stockpile in the absence of testing. I know that Administrator Klotz will participate in a panel this afternoon and I'm sure will engage you in those --in those discussions, in how the Department of Energy's technical capabilities allow for a stockpile that is safe, reliable and effective without testing.

Later this year, we will also be reflecting more on what I think is a remarkable achievement for our national security, namely the new paradigm that was established nearly 20 years ago called Science-Based Stockpile Stewardship. It is absolutely foundational to a no-test regime. The United States remains committed to ratifying and entering into force the Comprehensive Nuclear-Test-Ban Treaty, which will lay the groundwork for a world with diminished reliance on nuclear weapons, reduced nuclear competition, and eventual nuclear disarmament. And I encourage you all to stay for that discussion that Frank Klotz will be engaged in as well as other exchanges at this conference.

So let me again say thank you to Carnegie for hosting this important conference, and thank you all for your dedication to these critical issues. Thank you.

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