The Export reorganization act, 1975 : hearings before the Committee on Government Operations, United States Senate, Ninety-fourth Congress, first session, April 24, 30, and May 1, 1975 online

the views of the Executive Branch Departments and Agencies
concerned in order to arrive at appropriate judgments
on specific export license applications.



140

Senator Glenn. I know Dr. Seamans has to leave by 12.

Dr. Seamans. If possible.

Senator Glenn. So perhaps we could wait for your statement just
a moment, Mr. Tabor, and then we could get our questioning here so
Dr. Seamans would be free to leave.

Do you have any time constraint ?

Mr. Tabor. I do, Mr. Chairman, but let's proceed as you wish. That
is fine.

We are trying to get a statement to the White House at 3 o'clock
and we are pressed but let's proceed and I think Dr. Seamans can go
ahead first.

Senator Glenn. Fine.

Dr. Seamans, with respect to the old AEC, and the new NRC, did
they not have the authority under section 103 of the Atomic Energy
Act, to disapprove an export license favored by the President? I do
not see how our bill would change that except to transfer from
ERDA to NRC the safeguard resources needed by NRC to make inde-
pendent judgments. Would you comment on that?

TESTIMONY OF DR. ROBERT C. SEAMANS, JR., ADMINISTRATOR,
ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION

Dr. Seamans. It appears to me that in the previous arrangement
you had the total capability for a review of an individual application
for the licensing, as well as for the final presidential determination,
all in one branch of the Government and it seems to me the situation
is really quite different when one of the elements is separated from
the executive branch and is a third party, third party to both the
executive branch and the Congress. It seems to be quite a different
situation from an organizational standpoint.

Senator Glenn. I would agree completely, from an organizational
standpoint.

I think that was intended in last year's change of organization, in
that the safety monitoring, the safety and safeguards aspects of com-
mercial nuclear energy were very deliberately set apart and given
to the NRC, so that it would be more independent. In the questioning
I had with Chairman Anders here earlier, he reflected the concern
of the whole committee, that perhaps they are given a job now, and
do not have the means to do it, because they are still dependent on
the executive branch through your agency to perform these technical
functions for them.

Is that a fair criticism or do you think that is not true?

Dr. Seamans. First, let me say I am entirely in sympathy with the
existing law and, as I said in my statement, from the standpoint of
domestic licensing, I think this is a good move, and I think that we
are proceeding in a very acceptable manner, in a manner that will
mean an improvement over past practices.

What I was referring to was that part of the licensing that in-
volves foreign sales, foreign distribution, and agreements with for-
eign countries; and it seems to me that there is a very major organi-
zational problem that we now face.

However, I think we can work this out under the existing law. It
is our intention to provide whatever information the regulatory com-



141

mission requests of us. As to the issue of whether they have sufficient
capability or not, I would submit that they must have sufficient capa-
bility, that they can ask the right questions, thus they can judge
whether the information that they are receiving is indeed sound, and
they can, if they wish, run some independent audits, but I think it
would be a great mistake if the NRC were put in a position where
they have to duplicate everything that is already being done and
for* which we in ERDA have a very great capability.

Senator Glenn. Well, AEC, of course, was an independent agency
and the actual research and development aspects of nuclear energy
have now been placed, very deliberately placed under the executive
branch, so they would be more manageable, as far as part of the
overall energy picture goes for the Nation. So, in effect, NRC has, in
inheriting the safety aspects that had sort of lost their independ-
ence^ — independence in terms of technical capability, within the AEC.
We wanted to make NRC the real independent agency they should
be. Let me get on to a little different field here.

You had made a comment in your statement that comparability
of safeguards would be an unworkable standard for international
safeguards.

I think with us looking at this as a world wide problem and with
everyone concerned about it, is this, are we not sort of living in really
one world, as far as nuclear energy goes and if we are to apply
different standards internationally than we apply domestically, would
this not be our weakest link in the international chain, if we had
less than safeguard requirements for overseas sales than we have to
our own people.

Dr. Seamans. I think the matter of comparability was discussed
very well by Dr. Ray in her statement. We should not expect every
other nation in the world to do things in exactly the same way as we do.

I think we obviously have to be sure we have adequate safeguards,
but to feel that everything should be done in a similar fashion as
the United States, I believe, is wrong.

Senator Glexx. Well, I would tend to think if we look at this
as a worldwide problem, it is difficult for me personally to see how
we can really go with different criteria, when any uncontrolled nu-
clear activity affects really the whole world.

It is not a question of can we afford to. As I look at it, it is a
question of can we afford not to apply the same strict standards
throughout the world. I appreciate your comment in your statement
to the effect that we have — by participating in the nuclear spread
around the world — been able to control it to a degree. I think that is
an important factor and you made a very good point of that in your
statement.

We want to keep involved in this whole process, though. We supply.
90 percent of the world's enriched uranium. It is a very high per-
centage of the world's enriched uranium supply.

Dr. Ray. With respect to the world's natural uranium resources,
we have probably less than one third known in uranium or domes-
tically.

Other parts of the world, Australia, South Africa, Canada, make
up the rest of the raw material of the resources that is presently
known, that is uranium ore.



142

When it comes to enriching that uranium for the light water
reactors, which is a predominant but not the only type used around
the world, we at the present time are the major supplier in the
Western World.

Every indication is in the foreseeable future, we will be in a very
highly competitive position, because there are several suppliers that
are now in the process of building the plants.

Senator Glenn. Well, let me ask another question to get on a little
different line here.

I think Mr. Ander's testimony was to the effect that and his state-
ment backs up this, that they feel they actually have the regulatory
power now to license or not to license and in your statement, I believe
you commented that this would accord NRC a de facto right to veto
exports, as though this was some right to be given under this new
bill.

Are we at a variation as to what agency of Government as this
authority ?

I think it was obvious from Mr. Ander's statement he feels he has
that authority now, and this legislation we are proposing would not
give him any more authority than he feels he already has in place
right now under the Atomic Energy Act. Now, do you dispute that ?

Dr. Seamans. No, sir, the actual issuance of the licenses, as I think
Chairman Anders made quite clear, is simply the last act of a long
series of activities that begun with the negotiation of an agreement
for cooperation.

Exports from the United States of nuclear materials are carried
out under an agreement for cooperation, and the exports are subject
to the conditions worked out in that agreement for cooperation. We
are talking about what is in effect the last act after something has
been negotiated by the executive branch of the Government which
has been coordinated among the departments of the executive branch,
developed by ERDA, approved by the State Department, approved
by the President, and approved by the Congress. The actual formal
issuance of that license by itself is not a determination, a determin-
ing act, if you will.

Senator Glenn. Thank you.

Senator Percy. Dr. Seamans, out of consideration for your depar-
ture we will concentrate, if it is all right with the other panelists, on
your testimony first. I do have a number of questions, and I will be
prepared in a few minutes to begin.

Dr. Seamans, on page 3 of your testimony, you assert the United
States is constantly trying to improve the IAEA's effectiveness
through their financial and technologic-politic support.

On page 4, you assert the United States has been in the forefront
of working next, through the IAEA. However, we have to take into
account the testimony we had earlier in these hearings. In my open-
ing statement, I stressed that we were trying to place our emphasis,
not on the changes that have been made and the wild hypotheses
that have been thrown out but on the most constructive possible
approach we can take. Yet when we take into account, doctor, the
testimony — Ikle's testimony, which I followed up in a private meet-
ing with him because I was so concerned with some of the things he
said — it is very clear indeed, that these distinguished witnesses put



143

forth the real possibility for potential theft of nuclear materials by
terrorists. Do you then agree that it is not inconceivable that a well-
organized terrorist group could fashion a bomb?

Dr. Seamans. Well, it is a question that, of course, has come up in
the past, and there have been programs on the TV that have gotten
into this issue and it is certainly possible that persons, terrorist
groups could conceivably design a device and that they could gather
the material but there is still a long way to go before the actual
processing takes place and an effective bomb could be put together.

They are talking about a job that requires a tremendous amount
of skill and detailed knowledge for the processing; it is not just a
question of knowing what the ultimate design should be.

However, I guess one already has to say that, that you cannot
rule out the possibility.

Senator Percy. Taking into account that it could be highly pos-
sible that without any kind of public disclosure, countries in the
Mideast or a country could possibly have a nuclear capability and
taking into account the shock to the world, when it was revealed
that India already demonstrated its capability for processing nuclear
fuel, when you say it would take some time, how long do you feel
for a well-organized, heavily financed terrorist group that could
draw resources from all over the world for its activities?

How long would it take for such a group, when you say it would
take some time ?

Is it a matter of years or could it be done within a year?

Dr. Seamans. I guess my response to that would first be that, as
you are well aware, I have not been on this job more than a few
months.

I have not myself had a chance to visit all of our installations
that are involved in the various processes, the industrial processes,
but I would point out in the case of India, that they have been
involved in nuclear activities for a long time.

I paid them a visit myself in 1965. I went through their various
laboratories at that time, and I know that they have built up a very
strong set of institutions for doing their kind of work, and I very
much doubt myself that a terrorist group hidden somewhere could
do this in a short period of time.

You ask how long am I talking about, I really do not know the
answer to that question, but I must point out the Indian Govern-
ment was working for many years before they developed that
capability.

Senator Percy. Well, of course, we have no idea of how long ter-
rorist groups may have been working on this project, because after
all, there are terrorist groups in the Middle East that have been
there for several decades and that have had available to them certain
resources.

Now, we purposely did not call as witnesses before these hearings
novelists who have written all kinds of scare literature in the field.
We tried to have the most responsible sources we possibly could and
yet Dr. Ikle, Director of Arms Control and Disarmament Agency
for our Government said this.

He testified that it is nov possible for terrorist groups to "put a
skilled team together that could fashion an explosive, should they



144

have obtained the requisite plutonium or enriched uranium" and
certainly the potential and possibility of obtaining it through theft,
which would not take a great deal of time, is highly possible.

We are now looking to you for technical advice, and what is tech-
nically feasible. As we design our safeguards, we have to take into
account the worst possible situation — that is a DOD phrase that is
used in every option available to them — and then our response has
to be in the light of what we think the worst possible situation is.
Is it not possible that there is a potential for theft of nuclear mate-
rials by terrorists, against which we have to guard and protect our-
selves and the world ?

Dr. Seamans. "Well, let me just make a categorical statement that
we certainly have to have a strong safeguards program.

We have in our budget in ERDA a request for a $35 million
increase, going from 1975 to 1976, for this purpose. This will take
us up to a total safeguards program of about $120 million, so we
clearly recognize the importance to this country of having a good
safeguards program, just as we recognize the importance of having
a good international safeguards program.

I might point out that Dr. Ray invited all the countries with
whom we were working in this area to come to this country and
share information in the safeguards area, and we found that quite
a number of countries were interested in knowing this. So it clearly
is important and we want to do everything we can to benefit from
the peaceful advantages of nuclear energy and to minimize the risk.

Senator Glenn. Would the Senator yield ?

Senator Percy. I would be happy to yield.

Senator Glenn. Did any nation refuse to come?

Dr. Ray. We have no refusals.

Senator Glenn. Just another question since you mentioned India,
we had some testimony before that in India, there really had been a
tape-recording of plutonium-measuring devices used by an IAEA
insoeetor that was destroyed as part of the record and that was before
India exploded its nuclear device.

It was used, the obvious inference here is that we were deliberately
misled by them intentionally as to what plutonium was available
and what it was going to be used for.

Would you care to comment on that and whether there is any
indication of why we know that plutonium is not being diverted
from other purposes from India right now, by government or ter-
rorist groups and what are we doing about it and what is IAEA
doing about it?

Dr. Seamans. T would like to have Dr. Friedman answer that
question or we can provide it for the record.

I have heard that this has happened, and I am not familiar with
the specifics.

Senator Percy. I think it may be well to have the question
answered by Dr. Friedman.

Dr. Friedman, could you specifically answer that question: Does
the IAEA have a program of physical security safeguards that its
inspectors or inspections oversees?

Dr. Friedman. The IAEA is developing some expertise in this
area. The IAEA safeguards system is not designed specifically to



145

address the terrorist threat. That is addressed in a different manner.

I think one of your earlier questions alluded to the fact that in
spite of the very intensive and effective IAEA safeguards system,
the problem existed that terrorists might get material together to
develop a weapon.

That problem is addressed in parallel to the IAEA safeguards
system. That problem is addressed by requiring an effective physical
security system to be applied before we will export strategic quanti-
ties of highly enriched uranium or plutonium.

Dr. Ray's solicitation of visitors from other countries was specifically
to show them what we are doing; in this area and it turned out to give
us an opportunity to learn what some of the other countries were
doing and in some cases, they were doing more effective work in some
areas, but I guess this is not the question you originally asked me to
respond to.

Senator Percy. I would really like a very direct answer, a yes or
no answer to my question.

Does the IAEA have a program of physical security safeguards
that its inspectors oversee ?

Dr. Friedman. It is my belief that the answer is no. Dr. Tape
probably can elaborate on that.

Senator Perct. My information is that you are correct and that is
what is disturbing me.

Dr. Friedman. Well, that is why I said the IAEA system was
never designed to address terrorists' activity.

It was designed, and it is extremely effective in addressing the
question of national diversion, as in the India case.

The India case was not a terrorist activity. It was a national, I
will not say, a diversion. It was a national effort to produce a
nuclear explosive device.

Senator Glenn. How do we know that?

Dr. Friedman. How do we know it was a national effort ? They
admitted it.

Senator Glenn. Plow do we know that ? They destroyed the tapes
and records.

How do we know plutonium is not going to other groups ? Because
it is a national project, all of these things are national projects and
that is what we are trying to protect.

They are destroying tapes and records; how do we know that
somebody is not getting material from over there to make a bomb?

We have no way of checking ?

Dr. Friedman. Mr. Chairman, first of all, the testimony that
addressed this subject on Wednesday, I think, I interpreted it as
being a rumor.

I think there may be some more information available and per-
haps again Dr. Tape can address it but we do know, based on the
IAEA inspections and that rumor alluded to an inspection of the
facility which is under IAEA safeguards but based on IAEA ispec-
tions, they have been able to account for all produced plutonium in
the reactor, in the Indian reactor, and that is the only part of that
system which is weapons grade material and that would have to be
reprocessed and that is all accounted for.



146

Senator Percy. But in the light of the testimony we have had as
to the potential that does exist for that, would it not be well for the
IAEA to have a program of physical security safeguards, of inspec-
tors' oversee, considering the relatively modest cost of the program
and the potential damage that would come if we were not tight
enough in this area of safeguards ?

Dr. Friedman. Well, I think we are getting a little over my head
because I can only address the technical question.

I cannot address the policy question but I would say that I per-
ceive a problem in an international organization involving itself in
the internal police responsibility of a state.

I recognize the problem. I think all of us are concerned, and I
think that there may be other ways of addressing the problem, but
it is a real problem which all of us are concerned about.

Senator Percy. But are we concerned about an international orga-
nization becoming too aggressive as against a diplomatic nicety or
are we talking about the preservation of the human race, a concern
and fear that everyone has and everyone shares and it is understand-
able.

I think that the world really looks to the United States to exert
leadership. Although we do not have a monopoly by any means any
more, we recognize we have more knowledge than any other nation
on earth as to what the potential is for peaceful use and the poten-
tial is for the destructive use of nuclear energy.

In view of the potential threat, is there not a strong case to be
made that we really have not done enough, that we have not exerted
our leadership as a country to move the IAEA and its members
toward this objective of adopting a very strong system of safe-
guards ?

Dr. Seamans, I think it might be well if you could pick it up
there.

Dr. Seamans. I certainly agree with the thrust of your question,
that the United States has a very great responsibility in this area.

It is a very important issue, and we could never say we have done
enough; however, I think we have taken our obligations to heart. I
think that in the whole nuclear field, we have recognized that we
cannot close the door on the peaceful uses of nuclear energy and that
the right answer is for us to participate in the IAEA, to participate
on a bilateral basis, to participate with supplier nations and to
follow all of the leads that we possibly can in order to minimize
the risk. I think that Dr. Ray and the people with her and the atomic
energy people have done a commendable job.

I have a very great responsibility for this in ERDA, and I intend
to take that responsibility very seriously and we have got to keep
working at the problem, and we intend to do so.

Senator Percy. Until such time as we have developed a system,
however, in IAEA, is not it reasonable, taking into account the
testimony that we have had and the facts we have had and the
potential danger we know exists, that we take and assert the initia-
tive in suggesting ways to upgrade physical security safeguards in
other countries? We do so on the basis that this is in your national
interests, our national interests, and the interests of the entire world.
We do so and that we take a very aggressive leadership position in



147

issuing proper warnings and doing it in the most effective possible
manner. Is not the world really looking to us for this kind of lead-
ership ?

Dr. Seamans. Yes, and I think it is getting this kind of leadership
myself.

In addition to the international organizations in which we parti-
cipate, I might say heavily, we have our own people, we do go
around and inspect.

"We obviously make use of capabilities that we have around the
world in our own embassies. "We obviously are working closely with
our contractors to improve physical security measures.

As I said before, we must use all of these. Now. possibly the
IAEA could get more heavily into this area. I am not really familiar
enough with the specifics of this, except to note that when different
countries are participating in an international organization, although
we may make recommendations, it is up to the international orga-
nization to decide exactly how it responds; and so there is a limit to
what can be expected at any one time.

Senator Percy. I would like to play the devil's advocate for just
a moment. I have to really put it in that point of reference because
of my high personal regard for our witnesses today, with each of
whom I have had a fine personal relationship and hold in the high-
est esteem, not only as friends, but also your professional confidence
and contributions made in your respective fields through the years.
I think it is our job here to be an advocate for those who are the
most skeptical and would be the most skeptical of the testimony that
has been presented — 11 bells and all is well ; don't worry, things are
going all right — because there are a great many people with whom
we have talked, who have technical and scientific knowledge beyond
that of the membership and staff of this committee, who are con-
cerned, and I think I would be speaking for many of them. On page
5 of your testimony. Dr. Seamans. you say that the policy that has
emerged as a "realistic approach to the real world." I am struck by
that statement, because I think many would argue, and rather effec-
tively, that the real world they see is not quite the same real world
that you have pointed out.

They would point to the fact that there is no international physi-
cal security safeguards system. They would point to the fact that
there is no way to know for certain whether a country to which we
are exporting nuclear materials may in fact be violating the IAEA
materials comparability safeguards by siphoning off small quanti-
ties of highly enriched materials for its future PXE.

I have done the very best job I possibly could have done through
the intelligence sources available to us, and I say that with a basis
for feeling that this has happened, there has been slippage. We do
have far greater potential than is publicly known today for disaster.

They would point to a real world in which they have not. in which