Washington (Platts)--5Mar2009

US Energy Secretary Steven Chu told a Senate panel Thursday that the
Obama administration would abandon the federal government's decades-old plan
to store spent nuclear fuel at Yucca Mountain, Nevada, and will instead have
temporary open-cask storage sites at nuclear plants across the country.

Chu made his remarks in testimony to the Senate Energy and Natural
Resources Committee, which is in the process of writing a broad energy bill.

Asked Senator John McCain, an Arizona Republican, whether President
Barack Obama had taken Yucca off the table, Chu replied by saying "that's
true."

"I think the president has been clear--I support his position--that
Yucca Mountain is not an option," he said. "I think it's a new administration,
a fresh look is really in order."

Although the US has spent many years and nearly $10 billion developing
Yucca Mountain, Chu told the panel that the scientific understanding of how
geological repositories work has grown substantially in the 25 years since
Yucca was selected, adding "we can do a better job."

The secretary said the administration plans this year to assemble a group
of experts to determine the best way to reduce the volume of nuclear waste and
dispose of it. In the meantime, Chu suggested that spent fuel could continue
to be stored safely at reactor sites.

Chu was sharply questioned by panel members, especially McCain, who said
the US utility industry would be reluctant to build new nuclear plants if the
waste-disposal issue were not resolved.

"Nuclear power has got to be an integral part of America's energy future
if we're going to reduce carbon emissions," said McCain.

Alaska Senator Lisa Murkowski, the senior Republican on the committee,
also questioned the wisdom of announcing an end to the Yucca Mountain project
before an alternative is in place.

"If I were looking to advance a new nuclear facility, this comment
from the administration that we are starting the process...would be very
disconcerting," she said.

Murkowski asked Chu to make the speedy resolution of the nuclear waste
issue a top priority. Murkowski spokesman Robert Dillon later said the
senator, along with other Republicans, will likely introduce amendments to the
energy bill that could require the administration to reconsider Yucca
Mountain.

The committee is expected to consider the bill and amendments in the last
week of March.

--Jean Chemnick, jean_chemnick@platts.com