Washington (Platts)--24Feb2009

Congress is proposing to cut fiscal 2009 funding for the US Department of
Energy's high-level nuclear waste repository program by nearly $100 million
from the fiscal 2008 level in an omnibus appropriations bill that may come up
for a House of Representatives' vote as early as Wednesday.

A House-Senate conference report on the bill, which was posted on the
House Appropriations Committee's web site Monday, indicates that DOE's nuclear
waste repository project at Yucca Mountain, Nevada, would receive $288.39
million for for fiscal 2009, which began last October 1. The allocation is
roughly $98 million below the program's fiscal 2008 level of $386.4 million
and roughly $200 million below the budget request.

The proposed cut comes as DOE is defending its application to construct a
waste repository at Yucca Mountain after the US Nuclear Regulatory
Commission in September accepted the agency's application for a licensing
review.

If the project is licensed, then DOE would construct a network of tunnels
deep within Yucca Mountain to dispose of roughly 70,000 metric tons of utility
spent nuclear fuel and defense high-level radioactive waste.

Both Senate Majority Leader Harry Reid of Nevada and President Barack
Obama, however, have said they do not believe Yucca Mountain is a suitable
site, casting some doubt on the program's future.

The budget cut reflects Reid's promise earlier this year to slash $100
million from the program's funding in the final fiscal 2009 spending bill.
Like other federal programs, the Yucca Mountain project was being funded under
a temporary measure that took effect last year after Congress failed to pass
nine individual appropriations bills before the new fiscal year began.

Some nuclear industry observers of the DOE repository program have been
divided on the program's ability to survive another $100 million cut.

Lake Barrett, a former deputy director of the DOE repository program,
warned recently that another reduction of that magnitude would all but kill
the project. But one nuclear industry official, who did not want to be named,
said he believes the program still would be able to continue its licensing
activities even it its total funding for the year drops below $300 million.
--Elaine Hiruo, elaine_hiruo@platts.com