June 3 (Bloomberg) -- The U.S. Energy Department submitted an application seeking to build and operate the nation's first permanent repository for used nuclear fuel at Yucca Mountain, Nevada.

The 17-volume application was filed today with the Nuclear Regulatory Commission, David McIntyre, a commission spokesman, said in an interview. The energy department has said the underground facility could begin accepting waste as early as 2017 from shutdown reactor sites and the nation's 104 operating reactors.

``Basically, we are rolling up our sleeves and going to work,'' McIntyre said.

The project, estimated in 2001 to cost $58 billion, has been delayed by funding problems, legal challenges and allegations of falsified quality checks. The department initially agreed to take waste from commercial nuclear power plant owners by 1998, and the owners have sued the agency for failing to meet that deadline.

It is a ``major milestone for the nation,'' Steve Kraft, senior director of used fuel management for the Nuclear Energy Institute, told reporters on May 29. ``Frankly, it's past time.''

More than 56,000 metric tons of waste is currently stored at 120 sites in 39 states, according to the department. Yucca Mountain could store 70,000 metric tons of waste at the site 100 miles (160 kilometers) northwest of Las Vegas.

Opponents of the project, including Senate Majority Leader Harry Reid of Nevada, have vowed to prevent it from ever being built. Reid, a Democrat, has helped to cut Congressional funding for the project, in an effort to slow or stop its development.

More Storage Needed

The department has asked Congress to expand the amount of waste that can be stored. More space for spent fuel will be needed if companies go forward with plans to build new reactors. The commission, which oversees reactors as well as nuclear waste, is expecting applications for as many as 34 new units by 2010.

Interest in new nuclear power has surged after Congress offered incentives in 2005 legislation, and because of the looming threat of federal climate change legislation that could give emissions-free nuclear plants an advantage over traditional fossil-fuel facilities that emit carbon dioxide.

Senator Barbara Boxer, a California Democrat, is leading debate this week in the Senate on a federal climate plan.

``Congress needs to address the role of nuclear power in its climate change aspirations,'' Christine Tezak, senior vice president for Stanford Group Co., said in a May 30 telephone interview. ``And between Boxer's bill and this license application, that may start to happen.''

Alternatives to Yucca

Reactor owners need offsite storage to build new units, Kathleen Cantillon, spokeswoman for Exelon Corp., owner of the largest fleet of U.S. commercial reactors, said last week. ``We're not going to build a new site and store waste on the site. We need it to go to the government.''

She said her company has been in talks with the state of Texas about having some sort of interim or permanent facility for waste there. Exelon is exploring building new reactors at a site about 130 miles southwest of Houston.

``We think there are alternatives to Yucca,'' Cantillon said in a May 29 telephone interview. ``We're not kind of holding our project hostage to Yucca.''

The Bush administration in 2006 proposed resuming government-funded reprocessing of spent nuclear fuel in an effort to reduce the amount of waste that would ultimately require permanent storage. That program, known as the Global Nuclear Energy Partnership, has been criticized by members of Congress because of its costs and potential proliferation concerns.

Presidential Candidates

Senators Barack Obama and Hillary Clinton have expressed opposition to Yucca Mountain. Both Democratic presidential candidates have questioned the science done to prove the site is capable of holding the waste without threatening the surrounding environment.

Senator John McCain of Arizona, the presumptive Republican nominee for president, in a speech last week said an international repository for nuclear waste could make Yucca Mountain ``unnecessary.''

Kraft, whose organization represents owners of all U.S. reactors, said there is a need for a repository here.

The application will be subject to a 90-day review by regulators of whether it is complete, McIntyre has said. The agency has three years to review the full application, and can notify Congress if it needs a fourth year.

``We would expect to need that,'' he said.

To contact the reporter on this story: Tina Seeley in Washington at tseeley@bloomberg.net.

Last Updated: June 3, 2008 11:27 EDT