NJ: In 2007 Obama referred to the NRC as a "moribund agency that needs to be revamped" and that "it's become captive of the industries that it regulates." How do you respond to that criticism?

Klein: I find that a strange statement. I think we are the busiest we've ever been. I think it's a little bit degrading for the men and women who work at the NRC [for Obama] to make a statement like that. It probably just shows a lack of understanding of what we do. For example, we have the license applications for new reactors: 17 for 26 reactors. We have power up-rates. We have license renewal. We have uranium mining. We have enrichment. So, I think we are the busiest we've ever been.... I can tell you from my position as chairman, it is a very dynamic agency.

NJ: Can you comment on whether you're going to stay at your position at the NRC, since it is a presidentially appointed position?

Klein: My term goes until June 30th at midnight 2011, not that I'm counting. The president does have the right to pick the chairman. Historically, Presidents Clinton and [George W.] Bush, when they came in, had existing chairmen in place, and they kept those chairmen. The trend has historically been not to make a change in the chairmanship, and I think one of the reasons for that is regulatory stability. As I've stated before, I hope I'll be based on performance and not other issues that factor in. I think our agency is typically a technical regulator. We are not a political agency.... So I would hope that that would be taken into consideration as the president looks at who he wants in various positions.

NJ: Obama said numerous times throughout the campaign that disposing of nuclear energy in a safe manner will be imperative in nuclear energy's role in this country and that nuclear power is "wrong" and "not working for us right now" because of waste disposal. Do you agree with that assessment?

Klein: In terms of the waste disposal, that's an issue that is more political than technical.... We now have the application from the Department of Energy for Yucca Mountain. And, we're starting our technical review. From our standpoint as a regulator, the stores of spent fuel are safe and secure. It can be done at reactors safely, securely. It is being done today. But I think as a nation we need to look at a long-term, permanent solution. Certainly, Dr. [Steven] Chu, secretary of Energy, will proceed down a path hopefully to resolve that issue. We certainly know that Sen. [Harry] Reid is opposed to Yucca Mountain and that will play in the political arena. Our job as a regulator is to do a technical assessment.

NJ: You have been clear that the NRC does not currently have enough funds to do the proper technical assessment. Can you elaborate on that?

Klein: We have a challenge. We have a mandate by the [Nuclear Waste Policy Act of 1982] that says the NRC should make our determination of the licenses application in three years. We have one year additional if we need it.... We're currently about $36 million short in our '09 funding from what we needed under the continuing resolution. In our 2010, we may also be short, depending on what occurs on the passback as we formulate that budget. So, what I have told our elected officials, we have a dilemma. We have a time line for which we are required to respond and I don't mind being held accountable as we should be, but we also need the proper funding to make our timely decision.

NJ: If Sen. Reid is successful in cutting funding altogether for Yucca Mountain, what are some other ways to dispose of nuclear waste that are not being done now?

Klein: If you look at other countries that have major nuclear programs, most countries recycle their spent fuel. So certainly that's an option. And Dr. Chu has indicated that we need a systematic approach to the fuel cycle, so I think that's a positive sign. For the near term, we will look at the safety and security, but as the nation moves forward to alternatives like recycling, I have cautioned the Department of Energy to make sure they keep the regulator informed on what their plans are, because if there is a recycling plant, it's very likely that we will license that plant, and so therefore we need to move in parallel with whatever decision the Department of Energy proceeds for the nation.

NJ: If Yucca Mountain is taken off the table, do you think this will this be a setback for nuclear power in this country?

Klein: For the near term, if they step back from Yucca Mountain totally, there will be litigation [because] a lot of utilities have paid a lot of money into the high-level waste fund, so currently there is already litigation occurring where the government is having to pay for the temporary storage at these reactor sites. So I think the immediate concern would be -- if Yucca Mountain is totally withdrawn, for example, then I think a lot of state utility commissions will be very vocal in what happened to the money that their citizens paid for the permanent solution to the waste disposal. Long term, it would be a challenge for us in waste confidence.

NJ: You have said that the future of nuclear power will depend on energy legislation. Can you be more specific about what certain types of legislation -- i.e., carbon tax, cap-and-trade -- will influence the role nuclear power fills?

Klein: There are two areas that legislation will have an impact. One is cap-and-trade, what impact the carbon -- whether it's a tax or cap-and-trade -- will have on the utilities' long-term plans. The other issue that is also important is loan guarantees. The request for the loan guarantees swamped the amount available. There is $18.5 billion available currently in the Energy Policy Act of '05, and the request was about $122 billion. Both of those issues will be of interest to the industry.

NJ: A recent International Atomic Energy Agency report said that Iran has enough nuclear fuel to build a bomb. The report explicitly connects having nuclear fuel with the ability to build a bomb, even though Iran hasn't signaled that's what it's going to do with the fuel. How do you react to reports like this?

Klein: In terms of the uranium program, that is one that is a very difficult situation. If you look at a country's nuclear ambitions, very few countries would start off with needing the fuel enrichment capabilities that Iran is doing. They don't have operating commercial reactors now and there is a surplus availability of fuel on the world market. So, from a technical standpoint, it doesn't make sense that Iran is going so robustly with an enrichment program based on their current demand for fuel. Russia has indicated it would sell it. France has indicated it would sell them fuel. That has been a difficult position technically. Iran has also not been forthcoming with the IAEA with their inspections. All of those raise questions as to what is really the Iranian intent. That makes it a very difficult problem, not only for the United States but for our allies and what should we do and what can we do. I think that story is yet to be told. Hopefully, the IAEA will remain vigorous and really encourage Iran to be forthcoming.

NJ: What is your relationship like with the nuclear industry officials in Iran?

Klein: We have no contact at all.

NJ: Is that normal?

Klein: It is not consistent with other countries. For example, most countries that we deal with we have bilateral agreements and we have what we call the 123 Agreements where we can exchange information. Obviously, there are two countries that stand out that we do not have a relationship with -- North Korea and Iran.

NJ: Have you ever been in contact with either of those countries before?

Klein: No.

NJ: Does that concern you?

Klein: As a regulator, we believe that it's very important for all countries that have commercial power to have a strong, independent regulator. So if I could wave my magic wand and say to those two countries, if they are going to have commercial nuclear power -- North Korea it's not clear, but Iran clearly has -- it's very important that they benefit from the knowledge that regulators have for safe and secure operation. So I believe it would be beneficial to the world that if Iran is going to run commercial nuclear power plants, they do it safely and securely. That is, unfortunately, overwhelmed by their dual-use activities.... You have two issues: The commercial side, where they could benefit from a free open and exchange of how to do it right and do it safe; the other aspect, the dual use, is one that complicates that free flow of information.

CORRECTION: The original version of this story included a slight mistranscription of Klein's statement on the budget process.