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

whatsoever to move as the AEC did, and certainly no need to
move before the Proposed Findings were even issued.

Not only is there an insufficient analysis in the Pro-
posed Findings of why program activities should be undertaken,
but the appraisal of the adverse impact of deferring such
actions is completely unbalanced, in particular because it is
cast in terms of countries which have existing fuel requirements
to be met, as opposed to countries which have not yet embarked
upon a nuclear power program. For example, in discussing the
adverse impact of a moratorium on U.S. political interests
abroad, the focus is entirely on the hardship on foreign utilities
which might have to shut down or reduce the operation of central
nuclear power stations (120) , but it is obvious that these
represent only a part of U.S. commitments to date,
and many of the proposed actions, i.e., enrichment service
contracts with Iran, are with countries which do not now have
nuclear power generating capacity and which may not have such
capacity for the next decade. Likewise, in terms of the impacts



47 / S. Rep. No. 94-8, 94th Cong., 1st Sess. (February 13, 1975)

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330



on an importing country's ability to produce nuclear power
(120-123) , the emphasis is again on start-up delays and
substitution costs. But it seems highly unlikely that a
deferral of only several months could cause significant
start-up delays of reactors scheduled to be coming into opera-
tion sometime in the 1980 's or that substitution of fossil
fuels would be a problem for any but the handful of countries
which are already heavily commited to nuclear power.

The other purported adverse impacts on the public interest
are presented by ERDA in an equally one-sided manner. To raise
the foreign policy bugaboo of Soviet interim supply of enriched
nuclear fuel (121) seems designed simply as a scare tactic,
since the assumptions of availability of Soviet enrichment
on short notice and absence of administrative delay are assump-
tions which, as far as the Proposed Findings indicate, have
no basis in fact. As to the impact on U.S. economic and com-
mercial interests, even the Proposed Findings concede that a
decrease in nuclear exports "would have little effect on the
overall U.S. balance of payments position" (125). And, the
argument that suspension of program activities would "destroy
foreign confidence in the dependability of the U.S. as a sup-
plier of vital energy material" (126) seems a rather drastic
result to occur from a several month suspension of activities
to carry out a policy review. 48_/ one is necessarily forced to
ask whether the AEC's suspension of enrichment contracting
for various periods in the past (30-31) 49/ — suspensions



4~87 It should be noted generally that .broad conclusory statements
of this sort, with no factual support — and the Proposed Findings
are permeated with them - simply do not suffice to carry the
weight of ERDA's argument that "business as usual" is the proper
course to follow.

49/ See generally Statement of Dr. Dixy Lee Ray before the Joint
Committee on Atomic Energy, Hearings on Uranium Enrichment, 93d
Cong., 2d Sess. (August 6, 1974).

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331



of several months — had this effect, and, if they did
not, one must ask why a suspension for a NEPA review would.

Finally, contrary to ERDA's gloomy assumptions, it may
be that deferring or modifying program activities could have
some beneficial effect on the public interest — a possibility
that is never alluded to in the Proposed Findings. ERDA's
NEPA review of nuclear export activities is not the only
governmental review of such activities which is currently under-
way. The study of national and international safeguards
mandated by Section 14 of the Export Administration Act Amendments
of 1974 50/ is soon to be released and may well contain im-
portant suggestions for restructuring current policies and
practices. This spring, moreover, Congress has begun yet another



50/ Section 14 of the Export Administration Act Amendments of
T974, Pub. L. No. 93-500, 88 Stat. 1552 (October 29, 1974), calls
upon the President

"to review all laws, regulations issued
thereunder by the Atomic Energy Commission
the Department of Commerce, and other
Government agencies, governing the export
and re-export of materials, supplies,
articles, technical data or other infor-
mation relating to the design, fabrication,
development, supply, repair or replacement
of any nuclear facility or any part there-
of, and to report within six months to the
Congress on the adequacy of such regulations
to prevent the proliferation of nuclear
capability for non-peaceful purposes. The
President is also directed to review domestic
and international nuclear safeguards and
to report within six months to the Congress
on the adequacy of such safeguards to prevent
proliferation, diversion or theft of all
such nuclear materials and on efforts of
the United States and other countries to
strengthen international nuclear safeguards
in anticipation of the Review Conference
scheduled to bo held in February, 1975,
pur.uant to Article VITI, r.oction 3 of the
Treaty on the Non-Proliferation of Nuclear
Weapons . "



332

intensive review of our export activities, and Senators
Percy, Ribicoff and Glenn have introduced a bill in the
Senate, S.1439, which seeks to rationalize the current export
licensing scheme so as to reduce safeguard risks. 51 / As
Senator Ribicoff said in introducing such bill, "Unless some-
thing is done - and done quickly — to reverse this trend
[of nationalism and commercialism in reactor sales] , the spread
of nuclear weapons and the threat of nuclear blackmail may
be irreversible." 52 / And, pursuant to Article VIII (3) of the
NPT, a comprehensive review conference is scheduled to be
held this May in order to "review the operation of [the] Treaty
with a view to assuring that the purposes of the preamble and
the provisions are being realized."

In light of the current, ongoing reviews of the nuclear
export problem, and in light of the substantial public concern
with regard to the regulation of the international nuclear
power fuel cycle, 53 / there may well be a substantial public
interest in modifying or deferring program activities in the
interim period. Indeed, in recognition of the need to resolve
some of the problems associated with the burgeoning world
nuclear economy, numerous members of Congress have urged a slow-
down or modification of export activities, as in the public

5T7 See 121 Cong . Rec . S. 5960-5964 (daily ed. , April 15, 1975)

52/ 121 Cong . Rec . S. 5962 (daily ed. , April 15, 1975).

53/ See, e.g., the New York Times , March 12, 1975, at 34, col.l.
(editorial on Reactor sales to Iran) ; The Washington Post ,
December 19, 1974, at A14 , col.l (editorial on nuclear safe-
guards in the Middle East) .

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333

interest at this time. Thus, for example, Senator Hartke of

Indiana, focusing on transportation, reprocessing and waste

storage problems alone, stated during Congressional debates

last summer on proposed amendments to the Atomic Energy Act of

1954:

"There are major unresolved questions with
regard to transportation hazards involved
in the sale or grant of nuclear power plants
to foreign countries.

"Until these issues are thoroughly reviewed
by the Congress, I would urge the adminis-
tration to hold off on signing any inter-
national agreements for the sale or grant
of nuclear power plants." 120 Cong . Rec .
S. 12127 - S. 12128 (July 10, 1974).

And, in introducing a resolution (S.J. Res. 51) to defer a
proposed loan by Eximbank to support the sale of a 600-MWE
nuclear power generating system to South Korea, pending com-
pletion of the Presidential safeguards study under the Export
Administration Act, Senator Stevenson of Illinois recently
stated:



"Deferral of final approval of this trans-
action until the Executive Branch and the
Congress have had an opportunity to assess
the adequacy of U.S. and international
efforts in preventing unrestricted nuclear
proliferation is essential.

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334

"U.S. laws and regulations are now under-
going extensive scrutiny to determine their
adequacy in preventing proliferation and
non-peaceful nuclear capability. The
recently created Nuclear Regulatory Com-
mission, which is intended to regulate the
construction, operation, and use of nuclear
reactors and materials, and the Energy
Research and Development Authority, which
is intended to play a role in U.S. assisted
nuclear development, have yet to become
fully organized and operational.

"Under these circumstances, it would be
folly for the United State to proceed at
this point with subsidized assistance for
the development of nuclear capability in
South Korea. ..."
121 Cong . Rec. S.3364 (March 7, 1975). 54/

Secretary of State Kissinger stated before the United
Nations General Assembly last fall:



"Heretofore the United States and a
number of other countries have widely
supplied nuclear fuels and other nuclear
materials in order to promote the use
of nuclear energy for peaceful purposes.
This policy cannot continue if it leads
to the proliferation of nuclear explosives.
Sales of these materials can no longer
be treated by anyone as a purely com-
mercial competitive enterprise."
Department of State Press Release
No. 373 (September 23, 1974).



54 / This transaction was in fact withdrawn by Eximbank. See
T21 Cong . Rec . S.3598 - S.3599 (March 11, 1975) (Statement of
Senator Stevenson) .

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335



If these words are to be taken seriously, it cannot by any
stretch of the imagination be deemed in the public interest
for the United States to proceed to promote and foster nuclear
power development on a worldwide scale on a "business as usual"
basis during the interim period. Such an approach, as Secretary
of State Kissinger emphasized, serves neither the world com-
munity's nor our own purposes.

* * * *

In conclusion, based upon the critique set forth above,
we do not believe that the Proposed Findings, as currently
presented, provide an adequate basis under NEPA for decision-
makers to determine whether, and if so, how to proceed with
nuclear export activities pending release of the final Program-
matic Statement. We urge ERDA to proceed at once, in cooperation
with other responsible agencies, to fully revise the Proposed
Findings in form and substance in accordance with the recom-
mendations contained herein and to recirculate them in
proposed form prior to making any final determination
concerning continuation of program activities. Only in this
way can ERDA fulfill its commitments and meet its re-
sponsibilities under NEPA.

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336



If you have any questions regarding the comments set
forth herein, please do not hesitate to contact the undersigned.

Very truly yours ,



£^_v<




c



Eldon V. C. Greenberg

Counsel for the Sierra Club,

Environmental Defense Fund,

National Parks and Conservation Association

Natural Resources Defense Council, and

Friends of the Earth



-46-



337

Senator Glexx. Senator Percy has— I think you have commented
somewhat on this earlier so maybe we can keep this one very, very
brief. On page 10 you state :

It is plain that the IAEA system, as presently constituted, is not sufficiently
ahle to deal with the full range of risks associated with fission power develop-
ment.

Yesterday a witness finally admitted that IAEA had no enforc-
ible, visible security standards. "What ways do you think IAEA is
deficient ?

We have covered that a little bit, but you may wish to make an
additional comment on that.

Mr. Greexberg. I think it is clear that the IAEA is deficient inso-
far as it does not set mandatory physical security standards.

One of the other points that I made in my written testimony is
that there is a problem inherent even with the accountancy system
as it is now structured. And that is that, as civilian nuclear power
programs grow in size, the IAEA accountancy safeguards system
will tend to become less and less able to pick up diversions which
are small in terms of percentage, but which may be strategically
significant.

So, as we are talking about greater and greater growth in the
nuclear industry worldwide, we are talking in a sense about a less
efficient system to detect diversions.

Senator Glenn. Let me just ask you one other question, then we
will end this. We have gone longer than I had anticipated, but it
has been very interesting. Let me ask you one more question.

Why is it that you think that ERDA rather than NRC is prepar-
ing an environmental statement on the U.S. nuclear power export
program? Should NRC have this responsibility? Are you satisfied
with this? Would you comment on that whole procedure as to what
you think of it ?

Mr. Greexberg. The division of responsibility between ERDA and
XRC came about — with regard to the impact statement — as a result
of the division of responsibility in the Energy Reorganization Act
of 1974, which left the authority for agreements for cooperation,
for safeguards and so forth within ERDA.

I think if legislation such as S. 1429 had been passed, vesting
much more authority in NRC as far as the nuclear export process
were concerned, then NRC would have been the more appropriate
agency to carry out this analysis. From an overall regulatory stand-
point I think it would be desirable to have an agency such as NRC
rather than ERDA carry out an environmental review of this na-
ture. The problem has been that agreements for cooperation, safe-
guards and so forth are the responsibility of ERDA under present
law.

Senator Glenn. Are you satisfied with the way those impact state-
ments have been going now ?

Mr. Greexberg. The draft impact statement, which is required by
order of the Federal District Court here in Washington to be issued
sometime early this summer, has not yet been released, and thus we
are not really able to evaluate yet the adequacy of ERDVs effort in
this area.



338

Senator Glenn. Thank you very much.

Mr. Knight. Senator ?

Senator Glenn. Yes.

Mr. Knight. Perhaps I should have said this before Senator Percy
left, but I would just like to state, briefly, on behalf of Friends of
the Earth, our position on nuclear power. I think it was miseharac-
terized. We do oppose nuclear power. We have taken this position
based on an analysis of the risks and the benefits that we see inherent
in the technology and the position of the technology in the whole
energy situation of

Senator Glenn. To clarify this you oppose nuclear power in any
form either domestically or abroad. Is that correct ?

Mr. Knight. The position of "Friends of the Earth" is to oppose
continued growth of the nuclear power industry, and specifically
light-water reactor technology in the United States.

Senator Glenn. Do you propose shutting nuclear plants?

Mr. Knight. No; we are supporting a position to postpone the
construction and licensing of any new 7 ones, except those that are
nearing completion, and to hold the line where we are until certain
questions that we feel are critical have been satisfactorily answered.

Senator Glenn. What questions are those ?

Mr. Knight. The questions of how we are going to manage the
wastes, whether w y e can adequately safeguard nuclear materials,
whether the safety systems installed on nuclear reactors today are,
in fact, proven and effective.

I remember you were at the joint hearing with the Joint Commit-
tee on Atomic Energy and you got into this with Dan Ford a bit.
I think these are some of the issues that we feel are necessary to be
decided before further use of this technology goes on. I think that
the dangers involved with the terrible and long-range toxicity of
radioactive materials mandate that these questions be answered, and
also that other alternatives be examined, before we embrace this tech-
nology as the vanguard of our energy supply.

Senator Glenn. OK.

We appreciate both of you being here very much. You had excel-
lent testimony. If you have any other statements feel free to submit
them to us.

Mr. Greenberg. We would be most happy to. Thank you, Mr.
Chairman.

Mr. Knight. Thank you.

[The prepared statement of Mr. Greenberg, with an appendix
follows :]



339

TESTIMONY OF
ELDON V. C. GREENBERG*
ON BEHALF OF THE
SIERRA CLUB, NATURAL RESOURCES DEFENSE COUNCIL,
ENVIRONMENTAL DEFENSE FUND, FRIENDS OF THE EARTH,
AND NATIONAL PARKS AND CONSERVATION ASSOCIATION, ON
S. 14 39, THE EXPORT REORGANIZATION ACT

OF 1975,
PRESENTED ON MAY 1, 19 75
BEFORE THE
SENATE COMMITTEE ON GOVERNMENT OPERATIONS



'Center for Law and Social Policy
1751 N Street, N.W.
Washington, D.C. 20036
(202) 872-0670



340



SUMMARY OF POSITIONS



In the following testimony, the Sierra Club, the Natural
Resources Defense Council, the Environmental Defense Fund,
Friends of the Earth, and National Parks and Conservation
Association set forth their position that there is a need
for legislation such as S.1439 for at least five reasons:

(1) No independent non-promotional agency has had

an effective check over safeguards procedures to which the
United States commits itself;

(2) There has been complete reliance on the IAEA
system of international safeguards which, as presently
constituted, is not sufficiently able to deal with the
full range of risks associated with fission power de-
velopment;

(3) The authority for issuance of export licenses
has been split over several agencies;

(4) There has been a lack of substantive review in
the export licensing process; and

(5) There has been a lack of procedural safeguards
in the export licensing process.

In light of such circumstances, the environmental groups
urge a rationalization and strengthening of the United States'
nuclear export licensing process, in particular, by the trans-
fer of safeguards authority out of a promotional agency such
as ERDA and into an independent, regulatory body. With regard
to S.1439, they further express the following views:

(1) Licensing authority should be centralized in
the Nuclear Regulatory Commission and not the Department
of Commerce;

(2) Controls over the negotiation of bilateral Agree-
ments for Cooperation should be strengthened;

(3) The safeguards criteria should be expanded to
include the concept of "adequacy", and other review criteria
should be specifically set forth;

(4) Consideration should be given to relating United
States' safeguards requirements to international safeguards
requirements ;



341



(5) Provision should be made for appropriate public
participation in the export licensing process;

(6) The role of the Arms Control and Disarmament Agency
in the export process should be expanded;

(7) Any training program established by the Nuclear
Regulatory Commission should include health, safety, and
environmental controls; and

(8) Safeguards studies under S.1439 should be
coordinated with other federal studies.



342



TESTIMONY OF ELDON V.C. GREENBERG

ON BEHALF OF THE SIERRA CLUB,
NATURAL RESOURCES DEFENSE COUNCIL,
ENVIRONMENTAL DEFENSE FUND, FRIENDS OF THE
EARTH, AND NATIONAL PARKS AND CONSERVATION ASSOCIATION,
ON S. 1439, THE EXPORT REORGANIZATION ACT OF
1975, PRESENTED ON MAY 1, 1975
BEFORE THE SENATE COMMITTEE ON GOVERNMENT OPERATIONS



I am Eldon Greenberg of the Center for Law and Social
Policy, a public interest law firm. I appreciate the invita-
tion to appear before the Committee today to provide the advice
of the Sierra Club, the Natural Resources Defense Council ("NRDC"),
the Environmental Defense Fund ("EDF"), Friends of the Earth ("FOE"),
and the National Parks and Conservation Association ("NPCA") with re-
spect to the Energy Reorganization Act of 1975, S.1439 (the "Bill"). :
have acted as counsel to these groups (except FOE) in a lawsuit
which has led to the preparation by the Energy Research and
Development Administration ("ERDA") of an environmental impact
statement on the United States nuclear power export program
( Sierra Club, et al . v. Energy Research and Development
Administration, et al ., D.D.C., Civil Action No. 1867-73), and
I have been asked by them to coordinate the presentation to this
Committee today of their views on the important issues of
national policy raised by the Bill. I will focus this morning
on the provisions of the Bill relating to the export of nuclear
equipment, technology and fuels becuase I understand that the
risks inherent in such exports are of particular concern to the
Committee and the major object of the proposed legislation.



343



-2-



The environmental groups are all non-profit membership
organizations deeply concerned and knowledgeable about the
consequences of fission power. Their combined membership ex-
ceeds 275,000 persons throughout the United States and abroad. 1/
They have taken an active role in the public debate surrounding
the growth of commercial fission generating capacity by means
of litigation, testimony, comments to regulatory bodies, and
informational and educational programs designed to provide the
public with data relevant to issues posed by fission power de-
velopment and to stimulate informed public discussion with respect
to such issues. And, in particular, they have been concerned
with the international implications of the spread of fission
power as an energy source.



1/ The Sierra Club, whose principal place of business is
at 220 Bush Street, San Francisco, Calif. 94104, has a member-
ship of approximately 150,000 persons, including persons residing
in 67 foreign countries. NRDC, whose principal office is at
15 West 44th Street, New York, N.Y. 10035, and which has additional
offices in Washington, D.C. and Palo Alto, Calif., has a member-
ship of approximately 20,000 persons, including members residing
in eight foreign countries. EDF, whose principal place of business
is 162 Old Town Road, East Setauket, N.Y. 11733, has a membership
of approximately 57,000 persons and a 700 member Scientists'
Advisory Committee, including members residing in 18 foreign
countries. FOE, whose principal place of business is 529 Commercial
Street, San Francisco, Calif. 94111, has a membership of 20,000
persons and is affiliated with "sister organizations" in twelve
foreign countries. NPCA, whose principal office is 1701 18th Street,
N.W. , Washington, D.C. 20009, has a membership of approximately
45,000 persons, including members residing in 65 foreign countries.



344



-3-



The importance of rationalizing our regulatory framework
and asserting greater control over nuclear export activities
cannot be overemphasized. The wisdom of a commitment to fission
power as an energy source is being called increasingly into
question 2/ , and recent events, most notably the test of a nuclear
explosive device carried out by India in May, 1974, and the
promises made in June 1974, by ex-President Nixon to supply
nuclear power generating systems and enriched fuels to Egypt and
Israel, have provided dramatic illustrations of the problems
associated with the spread of fission power. Given the current
lack of scientific knowledge, regulatory competence and political
stability worldwide, the environmental groups have serious misgivings
about proceeding to promote fission power development at this time.



2/ At the Twenty-Third Pugwash Conference on Science and World
Affairs, held in Aulanko, Finland, from August 30 through September 4,
1973 — a conference attended by 108 distinguished scientists from
twenty-nine countries and six international organizations - a
working group assigned to deal with the problem of "Radioactive
Pollution of the Environment in the Context of the Energy Problem",
issued a Report evaluating the problems of and alternatives to
fission energy. This Report reached the following basic con-
clusion :

"Owing to the potentially grave and as yet unresolved
problems relating to waste management, diversion of
fissionable material, and major radioactivity releases
arising from accidents, natural disasters, sabotage or
acts of war, the wisdom of a commitment to nuclear
fission as a principal energy source for mankind must
be seriously questioned at the present time."

The Continuing Committee of Pugwash adopted the same basic
conclusion, further emphasizing that:

"Every effort should be made to develop alternatives
[to fission power] by greatly accelerating research
on potentially cleaner energy sources, and by reexamin-
ing the relation between genuine, sustainable needs for
energy on the one hand, and projected demands on the