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

on it.

The second point has to do with the fundamental role of the Inter-
national Atomic Energy Agency, and I think you should have
clearly in mind that that role is a single-purpose role formally, that
is to say, it is to avoid diversion by states, not theft by paramilitary
groups, or of terroist groups. In addressing the proliferation prob-
lem, it utilizes only one means of obtaining that objective and that
is inventory control. It does not go into the other aspects of providing
this material, although it does informally provide guidance to mem-



23

bers with regard to maintaining the physical security of these
materials.

With that, Mr. Chairman, I close this informal statement.

Chairman Ribicoff. Dr. Rosenbaum.

TESTIMONY OF DAVID M. ROSENBAUM, NUCLEAR SAFEGUARD

SPECIALIST

Dr. Rosenbaum. I have, Mr. Chairman, already submitted a state-
ment for the record. With your permission, I will just say a few
words to summarize my point of view.

I think the technology and the knowledge of how to make nuclear
weapons is very widespread in the world.

Tens of thousands of students from countries which are potential
manufacturers of nuclear weapons have studied science and engineer-
ing at universities in this country. Many hundreds, perhaps thou-
sands, have been trained in our own national laboratories.

I asked, some time ago for a list, not of all those who have been
trained here in these fields, but only of those who were presently
being trained here in nuclear physics and engineering from certain
countries. No such list exists, as far as I know, and there are no
controls over the dissemination of this sort of knowledge through
training in this country.

There are two separate problems. One is the proliferation of weap-
ons among States, and the other is the proliferation of weapons among
subnational groups.

States have an intrinsically conservative philosophy about this sort
of problem, because they can be retaliated against.

Indeed, so far all of our protective actions about nuclear weapons
have been on the basis of retaliation. Subnational groups which have
no territory, and which might be as small as a handful of people,
have no such fear.

It is not only a question of whether they care about their own well-
being. There may be no one to retaliate against. We see how hard it
is now, for instance, for the FBI to find people on their 10-most-
wanted list, particularly those who style themselves as revolutionaries.
They are frequently not caught for years, even though they are in this
country.

I think, therefore, that our efforts ought to be focused mostly on
the problem of keeping weapons, and the materials to make them,
out of the hands of subnational groups. This is a goal we can share
with almost every country in the world. I heartily support the provi-
sion in this bill for setting up substantial training programs which
we can offer to other governments, to help them safeguard their
own material. I hope that we will also sell them appropriate equip-
ment which we have developed.

No government, however radical, wants to have its own material
stolen by any subnational group. I think if training is done on a vol-
untary basis, we may get a great deal of cooperation from other
governments.

The last thing I would like to say, is that I am very skeptical
about the performance of existing international agencies iii this area.



24

I think that it is a good idea to strengthen them as much as possible,
and I support that, but I think it is a bad idea to delude ourselves
as to how much safety we are going to get through that process.

We ought to face the fact that an agency which is made up of scores
of nations is, by its nature, not very decisive. If one looks at the
IAEA as a model, I do not think it gives one a great deal of comfort,
The questions I think ought to be asked about centralized reprocess-
ing, for example, are: In whose country will it be located? Who will
staff it? Whose nationals will be in charge of the security organiza-
tion? . .

I have been told by U.S. members of international organizations
that they find themselves in the position of having, been sent over as
international civil servants, without any prior briefing at all, but find
that their compatriots from other countries essentially see their role
as defending their own national interests. I think that we ought to
do everything we can to strengthen international agencies in this
area, but we should not delude ourselves by depending too much on
such agencies.

Chairman Ribicoff. Dr. Rosenbaum, your comments are very im-
portant,

In watching international organizations work, I have become in-
creasingly skeptical concerning their effectiveness.

It seems more and more they gang up on the United States, which
supplies the money and the technology, and as you indicate, it has
been my observation too that in most international organizations, the
representatives of the United States are constantly left with egg on
their face, without any instructions, without any supervision, with-
out any basic American policy, and consequently, we find huge sums
of money supplied by the United States being used against U.S.
interests.

This entire field, in my opinion, should be reviewed by this com-
mittee, which has a responsibility in here, and I asked the staff to get
some preliminary data together, and I am pleased to have your com-
ments at this time.

There is a vote going on at the present time, so we will suspend
for 10 minutes in order to vote, and we will be back.

Senator Percy. Mr. Chairman, I would like to comment on your
own very, very important comments. I served as a delegate in the
United Nations in the last 3 months of last year representing the
Congress, and I have served as the delegate to other overseas opera-
tions in international organizations.

I was shocked to find that the Foreign Relations Committee has
not held hearings for 20 years on what our role is in these interna-
tional organizations, particularly the United Nations, and I have
called for such hearings.

We are scheduling them, and we have a cast of witnesses for those
hearings, and we would be delighted to have you testify, Mr. Chair-
man, but certainly the questions that you have put will be put to
these expert witnesses, including the Administration to think through
what our role is in these international organizations.

Chairman Ribicoff. The committee will stand in recess for 10 min-
utes.

[Whereupon, the committee was in short recess.]



25

Senator Glenn. If we could reconvene, I am sorry for the incon-
venience of the delay, but that is something a little out of control.

Mr. Rosenbaum, I do not know whether you had finished your
comments there or not.

Had vou finished vour statement ?

Mr. Rosenbaum. Yes, sir.

Senator Glenn. Fine.

Mr. Willrich, do you have a comment to make ?

Mr. Willrich. Thank you, Senator Glenn. I have submitted a
statement which I would like to have printed in the record.

I would like to summarize from that statement for you, if I may.

Senator Glenn. Please go ahead and present your statement as
you wish.

TESTIMONY OF MASON WILLRICH, PROFESSOR OF LAW,

UNIVERSITY OF VIRGINIA

Mr. Willrich. Mr. Chairman, I welcome the opportunity to assist
in your consideration of the Export Reorganization Act of 1975,
S. 1439. My testimony is limited to the parts of the bill that pertain
to the export of nonmilitary nuclear facilities, material and tech-
nology.

I will first outline the relevant trends in the development of a
worldwide nuclear power industry. Next I will consider the provi-
sions of S. 1439 in the context of U.S. Government organization to
develop and implement a nuclear export policy. Finally, I will out-
line some substantive suggestions for such a policy.

Given international political realities, there are a variety of mo-
tives for national governments to establish nuclear power programs.
These include : low-cost electric power ; increased energy security ;
and creation of a nuclear weapons option.

The economics of nuclear power were strengthened by the world
oil price explosion in 1973-74. A compelling economic case for nu-
clear power can now be made in industrially advanced countries with
relatively large electric power grids. Moreover, the current high oil
price provides an economic rationale for smaller nuclear power re-
actors in a much larger number of countries with relatively small
electric power grids.

Nuclear power can offer increased security of energy supply ba-
sically in two ways: (1), nuclear fuel can be substituted for oil in
electric power generation, thereby diminishing a country's dependence
on the world oil market that has, for the near term at least, been ef-
fectively cartelized by OPEC; (2), nuclear power can be exploited
in ways that will lead to the eventual development of a maximum
degree of national nuclear self-sufficiency. However, in most national
circumstances for the foreseeable future, nuclear independence could
be achieved only if industry in the country involved were able to
acquire and operate sophisticated fuel cycle technologies and if Gov-
ernment were willing to pay a very large ecenomic penalty.

Nuclear power can result in a nuclear weapon option in a large
number of ways. The basic requirement is the availability in the coun-
try concerned of plutonium or high-enriched uranium. Beyond 1980,
the annual plutonium output from nuclear power programs through-
out the world will increase rapidly to hundreds of thousands of



26

kilograms and eventually reach millions of kilograms, assuming
nuclear power forecasts are fulfilled. Yet 5 kilograms, or less, of
plutonium is enough for a bomb capable of destroying a medium-
sized city. Therefore, one of the most challenging energy policy is-
sues is how to manage over the longrun inherent risks of nuclear
weapon proliferation. The risks are twofold: diversion of materials
from nuclear power industries by governments ; and theft of materials
by criminals or terrorists. The widespread use of nuclear power must
not lead to widespread nuclear violence.

It is important to understand that the pursuit of self-sufficiency in
a nuclear power program leads inevitably to the creation of a nu-
clear weapon option. At the same time, nuclear self-sufficiency reduces
external political constraints which might inhibit a government in
exercising that option. Thus, one nation's pursuit of nuclear energy
self-sufficiency may well appear provocative to another.

As of January 1975, over 360,000 megawatts of nuclear power ca-
pacity was operable, under construction or on order worldwide (see
table 1). This figure reflects most of the slippage that has occurred
since the 1973-74 OPEC oil price revolution. Whereas 15 countries
now have operable nuclear power reactors, 30 countries will have
them in 1980. Therefore, the issue is not whether we have nuclear
power, but how we manage it.

While politically irreversible commitments to nuclear power have
been made in a number of countries, the essential nuclear fuel cycle
support facilities — uranium enrichment, irradiated fuel reprocessing,
and fuel fabrication — remains to be worked out. The pattern that
evolves will be critical in determining whether nuclear power develops
worldwide in an economically efficient way and in a way in which
the inherent security risks are effectively managed. A central fact in
this regard is that economic efficiency and international security con-
siderations work together, not at cross purposes.

One pattern of nuclear power development would occur if national
governments were to aim for nuclear efficiency and security. If these
criteria were applied, the nuclear-electric power growth rate would be
determined by particular national economic circumstances. Many
nations would have nuclear power reactors on their territories. How-
ever, economies of scale in fuel cycle operations would be fully ex-
ploited. Large-scale uranium enrichment, irradiated fuel reprocessing
and fuel fabrication plants would be built in a relatively few loca-
tions. These facilities would be large enough to meet the needs of
nuclear power plants throughout an entire region of the world. The
facilities would be multinationally owned and operated and subject
to international inspection by the International Atomic Energy
Agency.

Each nation participating in such multinational nuclear enter-
prises would receive the benefits of an assured supply of nuclear
fuel at least cost. The burden of putting up the capital required for
the venture could be spread proportionately among the participants
according to their entitlements to the output of the facility concerned.
The civilian nuclear power posture of the participating nations
would not appear provocative to each other or to countries outside
the region. Finally, effective physical security against theft of nu-



27

clear fuel could be maintained. Transport of materials in a form that
could be used directly in nuclear explosives could be eliminated by
relocation of fuel cycle facilities, and strong physical security meas-
ures could be incorporated into the design and operation of such cen-
tralized facilities.

The alternative pattern of nuclear power development would emerge
if national governments were to aim for nuclear power independence.
Each nation would, as rapidly as feasible, acquire its own capabilities
in uranium enrichment and/or fuel reprocessing and fuel fabrication.
In most circumstances, these capabilities would not be efficient accord-
ing to commercial criteria, but they could nevertheless provide the
nation concerned with part or all of* its nuclear fuel requirements.

A nation with its own small uranium enrichment capability could
produce low-enriched uranium for use in its reactors and/or high-
enriched uranium for use in explosives. A nation with its own fuel-
reprocessing plant would have control over plutonium that could be
recycled in power reactors and/or used in nuclear explosives. Thus
one country's nuclear power independence may threaten another's
security, turning the latter into an inefficient and insecure path of
nuclear-power development itself.

Furthermore, if nuclear power were to develop along such national-
istic lines, materials that could be used directly in nuclear weapons
would be widely dispersed in a large number of countries. The prob-
lem of safeguards against theft and terrorist use of crude nuclear
explosives would then be much more difficult, perhaps impossible, to
manage. The presence of large quantities of plutonium or high-
enriched uranium in a country could also add a new, frightening
dimension to any domestic political revolution or civil war.

Which pattern of nuclear power development will become preva-
lent — economic efficiency and international security, or economic na-
tionalism and global insecurity? So far. the evidence is conflicting.
Plans for future uranium enrichment ventures- — whether using the
diffusion or centrifuge method — are being formulated mostly on a
multinational basis. This includes British/Dutch/West German co-
operation in the development of the centrifuge with URENCO and
the French-led Eurodif project based on gaseous diffusion. However,
South Africa is pressing ahead with construction of its own enrich-
ment capability based on an undisclosed process. A number of coun-
tries, including India, have build small chemical reprocessing plants,
and larger national facilities are planned in several industrial coun-
tries. However, the Eurochemic plant in Belgium, which is now shut
down, provides a precedent for multinational ownership and opera-
tion of such a facility. Plutonium recycle has not yet begun on a
commercial scale in any country. The decision whether to take this
critical step in the development of nuclear power, and, if so, on what
terms, is now pending in the United States and also in Europe.

In my judgment, the tendencies toward nuclear power development
along primarily nationalistic lines are likely to prevail in many coun-
tries, if not most. But these tendencies are not yet irreversible, unlike
the basic underlying trend toward nuclear power. However, to re-
verse the trends toward nuclear nationalism and resulting economic
inefficiency and political insecurity will require strong and concerted
governmental action.



28

With this background in mind, let me turn to the specific provisions
of S. 1439. In general, the bill seeks to make the U.S. governmental
structure for nuclear export regulation more rational than at present.
Moreover, the bill suggests certain lines of policy development. I will
limit myself to a few important points.

The bill would centralize authority to grant nuclear export licenses
in the Department of Commerce. However, it is unclear whether the
Commerce Department is intended to play a primarily ministerial role
in granting nuclear export licenses, once the other agencies specified
have made their assigned assignments, reviews and findings, or
whether the Department is intended to play a more substantive role
in determining whether proposed nuclear exports are, on balance, in
the national interest. If the latter is the intent, the legislation should
provide explicit criteria to guide the Commerce Department in its
licensing decisions.

The bill would give the Nuclear Regulatory Commission [NRC]
a key role to play in the nuclear export field. Experts would require
a finding of "safeguards" in the recipient country "substantially at
least comparable to" U.S. safeguards. I believe such a finding of
comparability or equivalence should be part of U.S. nuclear export
policy. Nevertheless, it should be recognized that, if taken seriously,
the process of making such a finding would be a delicate and difficult
task. A recipient country might well view such a requirement as an
unwarranted intrusion into a particularly sensitive aspect of its in-
ternal affairs; namely, its domestic security arrangements.

An alternative approach would be to negotiate an international
agreement providing physical security standards and procedures po-
tentially applicable to nuclear power industries worldwide. This has
been proposed by the IAEA Director General and the U.S. Govern-
ment. The proposal should be pursued. If a satisfactory international
agreement could be worked out, including provision for verification
of its observance, then the role of the NRC under section 7(a) of
S. 1439 could be limited to posisble U.S. nuclear exports to countries
that had not joined the international nuclear materials security
convention.

Furthermore, under section 8(a) of S. 1439, the NRC would be
required to prepare a "nuclear proliferation assessment" regarding
nuclear exports that would be deemed "strategically significant," and
the Arms Control and Disarmament Agency [ACDA] would have
an opportunity to comment on the assessment. Presumably most sub-
stantial exports would be deemed strategically significant.

However, NRC would not seem to be in the best position to make
such a nuclear proliferation assessment since its primary mission is to
regulate the domestic U.S. nuclear power industry from the view-
point of health and safety and physical security against theft and
sabotage. The connection of NRC to the network of Federal agencies
dealing with national security and foreign policy matters is much
more tenuous than was formerly the case with the Atomic Energy
Commission (AEC). However, ACDA is charged by statute at least
with responsibility for U.S. arms-control policy formulation, includ-
ing U.S. policy regarding nuclear weapon nonprpliferation. There-
fore, instead an NRC assessment, ACDA might, on request from
NRC, prepare and circulate the nuclear proliferation assessment



29

which could then be taken into account by the NRC is making a safe-
guards finding under section 7(a), or by the Department of Com-
merce in its decision to grant or deny final approval of a nuclear
export license.

It is also unclear to me what effect the proliferation assessment
would have on the government decisionmaking process. Presumably,
the results would be classified. It might be appropriate to require
that the assessments be made available to the appropriate oversight
committees of the Congress, as well as all executive agencies and
departments represented on the National Security Council, if broad
review and participation in these decisions were desired.

An important matter that is unclear to me from my reading of the
bill is the status of toll enrichment services. Would the bill apply to
foreign owned uranium shipped to the U.S. for toll enrichment that
was thereafter shipped abroad for fabrication into nuclear fuel?

S. 1439 avouM also require the NRC to make two safeguards stud-
ies: one would examine the IAEA system and the U.S. system; the
other would investigate the feasibility of "internationalization of all
strategically significant aspects" of the civilian nuclear fuel cycle.

The safeguards study would be unlikely to reveal much in the way
of fresh understanding, since this matter has already been periodically
covered by the former AEC and the IAEA. Obviously, the primary
objectives of the two kinds of safeguards are radically different : the
U.S. system is intended to prevent theft by a criminal or terrorist
group,* and the IAEA system is designed to detect diversion by a
national government in violation of an international agreement.
Moreover, the primary means used to carry out these disparate objec-
tives are consequently very different : the U.S. system uses primarily
a combination of physical barriers and security forces, and, secondar-
ily, a system of materials accountancy, while the IAEA system uses
primarily materials accountancy, based on national systems, and lim-
ited verification through international inspection.

The initial study of the feasibility of internationalization of nuclear
fuel cycle facilities was made in 1945—4:6 in the Acheson-Lilienthal
Report. That historic report concluded that nuclear power must be
developed under a strong international authority with pervasive
licensing control over all phases of the civilian nuclear fuel cycle
from the mine to the radioactive waste management facility. These
conclusions formed the basis for the Baruch plan presented by the
U.S. Government to the United Nations in 1946. Internationaliza-
tion is technically feasible and economically desirable. The political
will is missing, however.

I believe the time for study of this matter has past, and the time
for action has arrived. Accordingly, I would like to conclude this
statement with some specific suggestions regarding the substance of
U.S. nuclear power export policy. Some of these might be incor-
porated into S. 1439, while others might form the basis for United
States foreign policy initiatives.

First : The United States could offer to provide its most advanced
uranium enrichment technology for large enrichment facilities that
would be built outside the United States under multinational owner-
ship and IAEA safeguards. Such an offer was extended in 1971
and again as part of the international energy problem growing out of



30

the Washington Energy Conference in 1974. It must be pursued with
urgency as part of a broader effort to encourage the multinational
ownership and operation of chemical reprocessing, fuel fabrication
and associated nuclear material storage facilities.

Second: In addition to the requirements for IAEA safeguards
under the NPT or under U.S. agreements for cooperation with coun-
tries not parties to the NPT, the United States could adopt the
following nuclear export policy :

(a) Low-enriched uranium LWR fuel: Nuclear fuel containing
low-enriched uranium produced in U.S. enrichment facilities for use
in power reactors in foreign countries would be reprocessed either in
U.S. facilities or in facilities multinational^ owned and under IAEA
safeguards. Plutonium recovered from reprocessing would be stored
until fabricated and fabricated into complete fuel assemblies in a
fuel fabrication facility on the same site as the reprocessing facility.

(b) High-enriched uranium HTGR fuel: High-enriched uranium
produced in U.S. enrichment facilities for use in power reactors i,n
foreign countries would be fabricated into complete fuel assemblies in
the United States and reprocessed either in U.S. facilities or in facili-
ties multinationally owned and under IAEA safeguards. Restrictions
comparable to recovered plutonium would apply to recovered ura-