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

95 percent of our licensing is quite straight forward and does not
involve a clearance at all. This is because we have gotten Federal
guidelines from the various departments automatically to license ex-
ports of say computers of up to such and such a strength or such and
such a size head. This reserves the hard cases, 10 or 12 percent of the
cases for real investigation and considered decision. It is these hard
cases which are delayed, but this bill would impose the requirement
of a written signoff on all matters, thus creating the possibility of
additional delavs.



156

Senator Glenn. You point out very properly the complicated na-
ture of this, and to my way of thinking, that makes the case for the

bill.

It argues on the passage of the package, because what is a business-
man to face, if he does not have somebody to guide him through the
regulations and criteria he must face as an individual from the out-
side, with nowhere to turn, and someone with expertise in the Depart-
ment of Commerce that can lend their expertise to help solve this
mass of bureaucratic complex regulatory area, he needs someone as a
lead agency to help him through this thing if we are going to con-
trol it.

Senator Percy has a time restraint, and before you start here, Dr.
Tape, we are getting late today.

Would you rather proceed today, as soon as we are finished here,
or would you rather be the lead witness ?

Dr. Tape. I would like to proceed today, because some of the
points that were raised, have me on the edge of my chair, and I would
like to respond.

Senator Glenn. I saw you a little agitated back there.

We will wind this up as fast as we can and get on to your testi-
mony. The hour is getting late, and we will not be able to run too
much longer.

Senator Percy ?

Senator Percy. Thank you.

Dr. Ray, I do not know whether to address you as a professor, or
as Chairman of the Commission, or Assistant Secretary of the De-
partment of State, or what, but you have been in a very unique role,
and have a unique opportunity.

Would you care to comment on the way you see the decisionmaking
powers of NRC now, how independent they should be by the statute,
as provided, from the Executive or Congressional dictates to them,
and whether they really should not have the facilities to make these
licensing decisions right on their own?

Dr. Ray. Senator Percy, with respect to domestic activities, I
completely agree with you. That was a point which in all of our testi-
mony in support of the Energy Reorganization Act, we made quite
clear.

It is an essential requirement for independent regulatory body
to be able to have final authority over matters in safeguard and secur-
ity areas, et cetera, but when it comes to a matter of international
activities, it puts it into a different form. While I agree fundament-
ally that nuclear safeguards is a world-wide problem, nevertheless,
we do live in a world of sovereign nations and we cannot dictate what
other nations can do. Our system of Government does delegate for-
eign policy responsibilities to the Secretary of State, and when it
gets into the international activities in the nuclear field, we feel
it is essential that those international responsibilities remain in the
executive branch, and, therefore, subject to the overall policy direc-
tion of the Secretary of State and the President of the United States.

Senator Percy. When you say we cannot dictate to other nations,
is it not putting it somewhat different than that though. As a con-
dition precedent to our providing technological knowhow and ex-
perience and sharing knowledge, and providing materials and equip-
ment, et cetera, don't we have a perfect right to say, "these are the



157

conditions under which we will provide this? Now, you can either
turn it down or accept it, but that is the condition under which we
will provide it, and no other conditions will prevail."

Dr. Ray. That is what happens in the Agreements for Coopera-
tion, the conditions under which things will be exported, the require-
ments for safeguards, the requirements for inspection, the require-
ments for physical security are all spelled out.

In fact, we do do that, and that is the reason we do not have
Agreements for Cooperation with certain countries, because we have
not been able to work out an arrangement that is satisfactory to us.
I think if one looked closely at the existing Agreements for Coop-
eration, one would find these things are in fact spelled out, and any
export must take place under the conditions required by those agree-
ments.

Senator Percy. Would you agree it is desirable to expand the num-
ber of signatories of the NPT ?

Dr. Ray. That has been the cornerstone of our policy, and as I
presented last September at the last annual meeting of the IAEA
on behalf of the United States, we fully supported and encouraged
further signatories to the NPT.

Furthermore, we pledged U.S. support to the IAEA, in further-
ance of their desire to improve the international safeguards, and to
help the IAEA to develop standards for better physical security
systems.

Senator Percy. Is it possible, and I am sure that you would take
that position, but is it possible, or advisable to try to develop some
sort of inducement to increase the number? For example, could a
concessional rate be given on export-import loans to finance U.S.
reactor sales to XPT members, provided, of course, the recipient
countries have competent safeguards?

Dr. Ray. I believe we should be doing everything we can to give
every inducement to countries to encourage them to become members
of the Xonproliferation Treaty, and to encourage them to develop
their nuclear power programs in responsible fashion.

I believe that is best done by working cooperatively with them,
and in finding better ways to implement the requirements of the
NPT to which we pledge assistance for peaceful programs, and that
we should be giving a good deal more attention on how best we can
assist them, rather than trying to put up barriers.

Senator Percy. When you say we should be doing everything we
can. I accept that as including then every possible inducement to
make it so attractive. It may cost us a little something, but it will also
cost us something if we do not offer ever}* inducement.

Dr. Ray. I would go even further. Senator, and say the more we
can do to assist a country develop a stable economic base, and that
means having a dependable supply of energy, because energy is
fundamental to business, to stabilize any economy, the more we can
do to assist, the less likely other countries will be drawn towards
wanting to develop their military capabilities, because the more stable
the world is, and the less threatened countries feel, the better safe-
guards we will have.

Senator Percy. Last week an expert witness testified that we must
intensify our efforts to encourage the multinational ownership and



158

operation of chemical processing, fuel fabrication, associated nuclear
material, storage facilities.

Do you agree that this is important?

Dr." Ray. It is a little more complex question than can be answered
easily yes or no.

I think we have to recognize that fuel fabrication is already being
done, domestically, in a number of countries.

Fuel reprocessing is already a fact in various countries. Various
countries already within their own domestic capability, either can
or are separating plutonium, reprocessing fuel, and so on.

To the extent that it is possible, I believe that it is both econom-
ically sound, and also will provide for better safeguards, to have
the countries cooperate on a regional and multi-national basis, both
in the reprocessing, as well as in the fabrication and enrichment-
business.

That is most likely to come about, I think, as it becomes clear it is
economically advantageous to do so.

Senator Percy. Is it not true that very few countries are engaging
in the process that you described though ?

Dr. Ray. Fabricating their own fuel? No, quite a few are.

For each of these situations, fuel fabrication, reprocessing, and
enrichment, it would be quite possible to provide to you a country-
by-country breakdown as to which countries are in fact already doing
it, either on a large or a small scale, and which countries have the
capability internally to do it.

We have that information that can be provided, if you want it.

Senator Percy. I think it would be helpful to have that supplied
for the record.

(The material follows :)

URANIUM ENRICHMENT
EXISTING CAPABILITY

Country Location Process Capability/comment



United Kingdom Capenhurst Gaseous diffusion. ._. 400,000 SWU/yr. for power reactor fuel.

France Pierrelatte do __ Small, for defense purposes.

U.S.S.R (3 plants) Built for defense purposes. Since 1968,

have offered toll enrichment services for



China (P


eoples


Republic of)






power reactoi
Probably small,


fuel,
for defense


purposes.


PLANNED AND PROJECTED CAPABILITY AND DEVELOPMENT PROGRAMS


Country


and/or


organizations


Location


Process


Comment







URENCO (United Kingdom, Capenhurst, United Gas centrifuge Project capability of at least 2,000,000

Netherlands, and West Kingdom. SWU/yr by 1980.

Germany).

Eurodif (France, Belgium, Rhone Valley Gaseous diffusion.... Project capability of 4,700,000 SWU/yr by

Spain, and Italy). 1979 and 9,300,000 SWU/yr by 1981.

Japan Gas centrifuge and Modest development program.

gaseous diffusion.

West Germany Karlsruhe Separation nozzle.... Small pilot plant built in 1967; viability of

process to be determined in late 1970's.

South Africa Valindaba A stationary walled 5,000,000 SWU plant planned to be in partial

centrifuge using operation! n 1984 with full operation in

UF« in H 2 . 1986.

Other Various locations Rotary plasma, Studies and small developmental program.

(laboratory scale). laser isotope,
possibly other
processes.



159

FOREIGN' LIGHT WATER REACTOR FUEL FABRICATION FACILITIES



Capacity (tons

Country Plant Owner U02/year)

Belgium Dessel_._ MMN 200

France FBFC Franco-Beige de Fabrication de 200

Combustibles.

Do SICN SICN... 50

Do SICREL SICREL NA

Do Eurofuel Eurofuel.. NA

Do Romans CERCA 80

West Germany RUB.. Reaktor Brennelemente Union.. 550

Do Alkem.. . 45

Do BBR.__. NA

Do Nuklear Brennstoff NA

Do KRT 220

Italy Bosco Marengo Fabricazoni Nucleari 200

Do Saluggia Coren 60

Do. LFCEC Wenese 20

Japan Yokosuka JNF 560

Do Tokai Mura Nuclear Fuel Industries 40

Do Tokai... Mitsubishi 420

Netherlands Interfuel Interfuel 30

Sweden. Stockholm ASEA Atom 50-100

Do Vasteras do 50-100

Do do 350

United Kingdom Springfields BNFL 400

Spain ENUSA NA

1 Excludes Communist bloc countries.

FUEL REPROCESSING
EXISTING CAPABILITIES, PRODUCTION SCALE

Capacity (metric tons,
Country Facility Type of fuels U/Year)



United Kingdom British Nuclear Fuels, Ltd., Metal, low enrichment 2,500.

Windscale Works. 1

France La Hague. do 800.

Marcoule 1,000.

Russia ? ? ?.

Belgium Eurochemic-Mol Metal and oxide, low enrich- 75 low enriched; 1.25 higher

ment, and metal, high enriched (plant shut down
enriched. in mid-1974).

India Trombay Metal and oxide, low enrich- 100.

ment.

China (Peoples Republic of) ?._ ? ?.

1 Modification was made at Windscale plant for processing low enrichment oxide (LWR type) fuels; this part of plant is
scheduled for 1975 startup.

PLANNED CAPABILITIES, PRODUCTION SCALE

Year
Country and/or organization Facility Type of fuels available Capacity metric tons U/year

United reprocessors, a loose mar- La Hague (France). .. UO2, low enrich- 1976-80 Startup at 100 in 1976, increasing
keting and technology exchange ment. to 800 by 1980, by modification

organization among France, to existing plant.

Germany, and United Kingdom.

Windscale (United do 1981 800.

Kingdom).

KEWA (Germany) do 1984 1,600.



160

PROJECTED CAPABILITY, SMALL SCALE PLANTS, AND DEVELOPMENT ACTIVITY



Country Facility Type of fuels Comment



Argentina . . Ezliza Research reactor Small pilot plant.

Belgium Eurochemic plant, M0L_. UO2, low enrichment Consideration is being given to restart

of this plant under Belgium owner-
ship and expand its capacity to 300
MTU/yr.

France La Hague, Fontenay Breeder (U -Pu oxide) Small pilot plant.

Germany WAK, Karlsruhe Breeder, UO, 200 kg/day pilot plant in operation.

KFA, Juelich Graphite 2 kg/day pilot plant, scheduled to start

1977.

India Tarapur UO., low enrichment Small plant, startup imminent.

Italy.".. ... EUREX-I-Salugga U0 2 and metal Small pilot plant.

ITREC-Rotondella Thorium/uranium Do.

Unnamed . . U0 2 , low enrichment 500 MTU/yr plant projection 1985.

Japan PNC, Tokai-Mura do Small plant, scheduled startup 1975.

do Large plant being considered.

Spain Juan Vigon Center Research reactor Small pilot plant and plutonium chem-

istry laboratory.

Sweden U0 2 , low enrichment 500 MTU/yr plant being considered.

United kingdom . Dounreay Advanced fuels, breeder, etc... Pilot plant in operation.

Other Several other countries have expressed

interest in construction of plants for
reprocessing of LWR fuels. However,
very little work is underway and it is
expected that they would have to
rely on technology of others. France,
particularly, appears to be interested
in building such plants, and market-
ing technology.



Senator Percy. What obstacles do you find, and how can Congress
help you overcome them to encouraging multinational ownership
and operation of chemical processing, fuel fabrication, et cetera?

Dr. Ray. I think the very best thing that can be done is to strength-
en the United States position in the IAEA, strengthen our coop-
eration with the International Atomic Energy Authority, and pro-
vide for more funding. Like every other body, IAEA is strapped for
finances. Finally we should provide for an easier mechanism for
getting our expertise available to IAEA.

I am sure that Dr. Tabor will think of other things, but in my
mind, the greatest advantage would be working through the inter-
national organization.

Senator Percy. I am tempted to ask how you are getting along in
the bureaucracy, as against running your own show.

Dr. Ray. It is different. I will say it is different.

Senator Percy. It might be an undiplomatic question.

Senator Glexx. The Chairman rules vou are permitted to take
the fifth.

Senator Percy. I might ask Secretary Tabor how he feels to be the
Acting Secretary of the Department of Commerce, but I will not
ask that.

Very much in line with the chairman's questioning. I would like
to just take a moment for the record, to quickly summarize now
what Secretary Tabor has indicated :

First: The'NRC licenses exports of the nuclear materials and
nuclear facilities, ERDA licenses exports of nuclear technologies, the
State Department licenses exports of products and technologies,
specifically design, or products of nuclear weapons, and the Com-
merce Department licenses exports of all other nuclear technologies,
including components, even though these may be important compo-
nents of reactors.



161

If these components constitute substantially less than a complete
reactor, the Commerce Department licenses those.

Commerce also licenses nuclear propulsion equipment and tech-
nology, and in issuing such licenses. Commerce consults not only with
NRC, but with EEDA. At least two agencies then are consulted
with, and if we take into account DOD's advisory role, we count
another agency.

In line with the Chairman's question, I put it to you again, does
not this seem a rather diffused organizational structure? As you
stated, it is somewhat confusing. Is there, for instance, some help
needed to unscramble it, is there a formally established interagency
committee whose task it is to attempt to coordinate these multi-
organizational tasks, and is that in existence right now?

Mr. Tabor. Let me say it is a pleasure to be here, and I have bene-
fited from the thoughtful interchange between both the Chairman
and yourself. Dr. Seamans and Dr. Ray.

Second : With regard to whether there is presently a formal struc-
ture to coordinate the items that are dealt with in the bill — the
nuclear matters, the munitions, and the trading with the enemy mat-
ters — to the best of my knowledge, and I will ask my general counsel
for Domestic and International Business to comment, there is not a
formal structure.

There is a formal structure for all the items which are now in
Commerce, where there is, I believe, an interagency Operating Com-
mittee, and an Advisory Committee on export policy which includes
private sector representation. The Operating Committee has two
levels; the Secretarial level of Defense, Commerce and AEC, which
is now ERDA. and a working level, that deals with a great range of
products, other than the munitions, nuclear powerplant, and trading
with the enemy titles.

Third : In responding to the desirability of the act ; following up
the Chairman's questions, I think one of our great concerns is that
in the present structure, the responsibility for issuing an export
license is clearly in Commerce.

We have to consult, but we have that final responsibility of issuing
the license. I believe in fixed responsibility. "When you have two
people responsible, no one is responsible.

As I perceive the proposal in the bill, you take, say in munitions,
all of the authority formerly in the Secretary of State, and transfer
it to the Secretary of Commerce, but say he cannot implement this
responsibility unless the Secretary of State says so.

I am afraid that what you are doing here is under the guise of
administrative simplification, making two people responsible for one
decision. I notice the Chairman is shaking his head. Still I think, for
example, in the negative case, where NRC, or ERDA says no. we still
have to make a decision, and we are likely to make a decision that
fully respects the negative, and your bill requires that. But suppose
they say yes.

Senator Glenn. And State says no, it will be no.

Mr. Tabor. No, under your bill, as I see it, if we were concerned
with a munitions export, we would go to State. If they sign off, then
we can license the export. If we exercise the substantive decisionmak-
ing power to say yes, and we also have the full authority and power



162

that was formerly the Secretary of State's, we might have to develop
a full substantive capability equal to what State has in order to know
whether we were exercising our responsibility properly.

Senator Glenn. Will you yield just a moment?

You would be responsible for coordinating all of the activities,
not determining whether it is a foreign policy matter, or whether
the Department of Defense is involved, or whether the Nuclear
Regulatory Commission said this is a bad one, and we should not go,
because nobody will tell us what they will do with the plutonium.
As we see this, however, you will be coordinating the aspects. But if
other people will object, NRC objects, DOD, State, you will not
grant the license, obviously.

The line of your questioning, I gathered was that you were trying
to make nuclear decisions, nobody envisions the Department of Com-
merce doing that. That is the last thing we have in mind with this
bill.

Mr. Tabor. But I am concerned that the act does not make it that
clear, Mr. Chairman. It says there are transferred to the Secretary,
and the Secretary shall perform such functions of the Nuclear Regu-
latory Commission as were formerly in the AEC. It also transfers
similar powers to the Secretary of Commerce from State and other
agencies.

As it relates to the exports of arms, the act does not say the Secre-
tary of Commerce is a coordinator. It says that the Secretary of
Commerce must undertake these activities, and we would feel account-
able to do just that. We are not just a coordinator according to the
act.

Even if we get a sign off from State as is required, I do not think
we can say we have no responsibility under the act. Thus, it requires
us to develop a substantial capability enabling us to make a respon-
sible decision which is also being made in the other place. I think
that is a problem.

Senator Percy. What we have is a common objective here to guar-
antee that the national interest in nuclear and nonproliferation 3,nd
diversion is preserved. When we started these hearings, we said we
are orbiting this piece of legislation to start the debate, to just chal-
lenge whether or not what we have now is adequate, but we have no
pride of authorship in it.

It was developed as a result of talking to a great many people,
including members of the Administration, but we would really wel-
come alternate proposals if the Reorganization Act of 1974 is not,
in your judgment, the best way to reorganize ourselves, then we can
have a counter-proposal, or an alternate piece of legislation that
would either improve what we are doing, or ratify everything we
are doing is now as perfect as we can set it up, and take into account
all of the dangers that have been brought out in the expert testimony.
We just feel in this field we should be absolutely certain that we are
organized as best we can to do the most effective and efficient job
taking into account all of the safeguards that are needed and neces-
sary. We would welcome very much any suggestions right now, or
that you or any member of the Administration would like to put
forward as we give consideration to this and go into markup on the
legislation.



163

Mr. Tabor. Well, we must obviously reflect on this in depth. There
are only three options : One is that you leave the responsibility for
policy decisions where they are; another is that you transfer respon-
sibility to Commerce ; and a third is that you do both. I think that,
with all due respect, the draftsman of the bill has done both. If we
are to carry out that kind of responsibility in the Department of
Commerce, and be responsible, then I think we must develop a ca-
pability for that kind of substantive decision, which will parallel to
a high degree the substantive capability in the other departments.

Senator Glexx. The Senator from Illinois has indicated he has
had as one of his objectives to get discussion started, and I think we
have succeeded pre-eminently in that regard. I, in fact, know that
the time is getting away from us, and I have many more questions,
but we will have to end your testimony.

Dr. Tape is here, of course, and I do appreciate this very much.
I think it has been very, very instructive as an interchange, and one
that we are going to have to continue.

We will have other witnesses testify too, and we would appreciate
very much your cooperative activities in the future, and we appre-
ciate your statement here this morning, and we look forward to
more of it.

Dr. Ray. Mr. Chairman, Mr. Vest would like to comment.

Mr. Vest. I want to bring out a point of fact, when we talk about
munitions control, as I take it, the objective of the legislation is to
prove how we manage the flow within the nuclear and nonprolifer-
ation area.

When we are dealing with the Office of Munitions Control, that
category, which involves nuclear weapons, design, equipment, et
cetera, it is only 1 percent of the activity of the Office of Nuclear
Controls, so that we are talking about an activity which goes to a
much broader scale, to the world of export of weapons, which is a
very serious policy matter indeed, but it is only what we are talking
about in a direct sense, it is one percent, so, therefore, we will be
creating duplication, because if that whole area has to be transferred
to Commerce, it is massively duplicated.

Senator Glexx. Thank you very much.

[The prepared statements of Dr. Robert C. Seamans, Administra-
tor, Energy Research and Development Administration, and of Mr.
John K. Tabor, Acting Secretary of Commerce follow :]



164

STATEMENT OF DR. ROBERT C. SEAMANS

ADMINISTRATOR,

ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION

Thank you for the opportunity to express my views on U.S. nuclear export
programs and policies. I would like to begin with a brief review of our
international nuclear policy, but I will also outline our views on a few
key aspects of the proposed Export Reorganization Act of 1975.

A realistic approach to U.S. policy must begin with the recognition that
nuclear energy is a two-edged sword. The atom has proven to be a viable
source of low cost electrical energy which is assuming an increasingly
important role in meeting the world's energy needs. However, we cannot fail