FEDERAL ENERGY ADMINISTRATION: FEA officials responsible for energy information_ Extension to JCÃE testimony of September 18, 1974. JOHNSON, DOUGLAS M.: Table-Schedule of imports, 1979 through 1985.. MUESSIG, Siegfried: Table: AEC potential estimates-Western United States.. NUCLEAR EXCHANGE CORP. [Charts]: Table: UO, demand.. Yellowcake supply and demand. Historical prices for United States of America... STEPHENSON, J.C.: Letter dated February 22, 1974, to the Commission from J. Allen Letter dated November 19, 1973, to J. Allen Overton, Jr., from S. Muessig, APPENDIXES 1. Joint Congressional Committee on Atomic Energy announces public hearings on proposed modification of restrictions on enrichment of foreign uranium for domestic use. 2. Schedule of witnesses for public hearings on proposed modification of restrictions on enrichment of foreign uranium for domestic use of the nuclear industry- 3. Letter dated August 12, 1974, to Melvin Price from Dixy Lee Ray, Chairman, U.S. Atomic Energy Commission.... Page 108 113 117 65 88 91 39 40, 41 61 87 137 138 139 Enclosures: AEC announces plan to remove restrictions on enrichment of 139 AEC, notice of modification of restrictions on enrichment of 140 4. Statements submitted for the record.. 142 5. Letter dated November 27, 1973, to AEC from Paul C. Bender, Secretary, U.S. Atomic Energy Commission......... 182 6. Comments on original AEC proposal... 185 7. Letter dated September 27, 1974, to Dr. Dixy Lee Ray from Melvin Price, Chairman, Joint Committee on Atomic Energy, with attachment and enclosure_ 8. Letter dated October 25, 1974, to AEC from Paul C. Bender, Secretary, U.S. Atomic Energy Commission_ 232 235 1 } PROPOSED MODIFICATION OF RESTRICTIONS ON ENRICHMENT OF FOREIGN URANIUM FOR DOMESTIC USE TUESDAY, SEPTEMBER 17, 1974 CONGRESS OF THE UNITED States, Washington, D.C. The Joint Committee met at 10 a.m., pursuant to notice, in room S-407, the Capitol, Hon. Craig Hosmer presiding. Present: Representatives Price, Hosmer, Anderson, Hansen, and Lujan. Also present: Edward J. Bauser, executive director; Randall C. Stephens, assistant staff counsel; Norman P. Klug, technical consultant; and William J. Minsch, Jr., special counsel. OPENING STATEMENT OF REPRESENTATIVE HOSMER Representative HOSMER. The committee will come to order. This morning the Joint Committee meets to consider the AEC proposal for gradually relaxing and finally removing the present restrictions on enrichment of foreign uranium intended for use in domestic power reactors. Since this involves a modification to the criteria governing the provision of uranium enrichment services, the Atomic Energy Act requires that before the Commission establishes such criteria, a review period of 45 days elapse while Congress is in session, unless the Joint Committee by resolution in writing waives all or any portion of such 45-day period. On August 19, 1974, we announced the committee's intent to hold these hearings, and on September 11 released a tentative list of witnesses. Subject to objection by any member, I would like to place in the record these two Joint Committee announcements; namely, Nos. 774 and 776,1,2 I would also like to include a copy of the letter,3 dated August 12, 1974, from Chairman Ray to the committee providing the AEC proposal for our review, along with a copy of the AEC press release of August 14, 1974, on this matter. As previously announced, we will begin this morning with an overall statement from the AEC. We will be particularly interested in hearing from the Commission as to what specific plans it has for monitoring the uranium situation to assure the maintenance of a App. 1. 2 App. 2. 3 App. 3. viable domestic uranium industry. This is particularly important now in light of the administration's objective of achieving a national capability for energy self-sufficiency. It is generally agreed that a major expansion of the uranium industry the exploration, mining, and milling will be required if sufficient material is to be available when needed in the 1980's. The long lead time associated with such efforts dictates that this expansion begin now. The committee would like to hear the views of the AEC and other witnesses as to what they expect the impact of the import of foreign uranium will be on the expansion plans of domestic producers. There are two other developments, which I would like to mention, that have a bearing on our discussions. First is the Canadian announcement of September 5 of new policies on uranium exports to protect the supply of the mineral for domestic uses. The second is the announcement by Rio Algom of the sale of 37 million pounds of Canadian uranium to Duke Power and TVA. This concludes the opening statement that was prepared for my use in beginning these hearings, but I would like to say for my own part that I will be very interested to see how it is possible for the witnesses from the Commission that we are to hear from today to come and explain with anything but ambiguity the foundation for these criteria which it proposes simply because there has not been resolved a series of unknowns which necessarily have to become known if any rational policy on importation is to be adopted in these criteria. Now, what am I talking about when I say unknowns? I am talking about the delays in installation of nuclear power that we know are going accumulating around in this country right now. Some people estimate it will total to as much as 30 to 40 million separative work units by 1982. Now, what is going to happen? These utilities who will be delivering feed for enriching under requirements contracts are one thing. They can bring in the feed when they need separative work. But what about the utilities, domestic and foreign, who are tied to firm contracts and will be coming in to AEC and everybody else screaming and hollering that they don't need the separative work too soon and they can't afford to pay the carrying charges on scheduled feed deliveries and sooner than needed separative work and they want some relief? The AEC has not even thought of that problem yet; let alone tried to sketch out some ways that it might solve and that is a request for designing a rational import criteria and for timing its imposition. The plutonium recycle thing is also a requisite. It will not be known for months yet. It introduces something that has to do with the feed situation and, in turn, the raw material in this industry. Then there is the tails assay problem, getting rid of split tails. It is quite obvious to everybody who has a good look at this business that the split tails method of operation is going to have to be scuttled and scuttled as fast as the criteria can be changed to do so. That is going to impose a heavier requirement for feed. What in the world is that going to mean insofar as these importation criteria are concerned? Nobody has said yet what any new tails assay is going to be. Even a fraction of a percentage difference factors out to a large tonnage difference in the amount of U2O, that has to be converted for feed. Then we have another thing that the AEC has failed to address itself to and that is the size of its stockpile. 8 George Quinn sent up here under a covering letter the additional testimony that he was going to furnish us from the June 25th hearing regarding possible operating plans. What we got was a bunch of alternative operating plans. Each one provides for a different mode of operation and provides for different requirements for feed and power in some cases and tails assay in some cases. These are great, big, fat unknowns equivalent to many thousands of tons of feed. We have another big, fat unknown that is going to plop down in the middle of things here and that is the unknown that has been created by the failure of GE, for technical reasons, to be able to get its reprocessing plant on line. How much uranium that is enriched already is going to be tied up in some processable spent fuel elements and therefore has to be supplemented by newly enriched uranium that has to come from somewhere and that can only be enriched if feed goes to the enriching plants to be worked upon? Those are just a few of things that I hope, Commissioner Anders, will be resolved during this hearing. The price for separative work, even, may also have some indirect relationship to feed requirements. One of the things I know that cannot possibly be resolved is simply this: The very drastic problem that is imposed by the fact that we have one-third of the entire Atomic Energy Commission before us here today in the form of one Commissioner, by the fact that you go back 2 years and there is not a face around that was on the Commission level at that time. We have some of the finest people in the world who are operating below the Commission's policy and administrative level at AEC, who are working in the enrichment area and in the raw materials area, but they are the people who carry out the orders and the decisions regarding policy of the Commissioners. We have a bunch of virgin Commissioners. By the time that we get them educated to the point where they know what they are doing, they are gone off someplace and we have a whole new bunch of Commissioners. This has been a constant thing of the dance of the virgins from memory. No wonder we are having difficulties coming up with proper criteria, coming up with a solid enrichment plan. There is no way on God's Earth, when you structure the management of this kind of a business-type activity in the sloppy, diffused way and hand them over to a transient group of administrators, that you can possibly expect these programs to come through in a clear and crystal fashion. Now, with those happy words, Mr. Commissioner, the platform is yours. STATEMENTS OF WILLIAM A. ANDERS, COMMISSIONER; FRANK P. Mr. ANDERS. Thank you very much, Mr. Chairman, for that warm reception. [Laughter.] I don't know if you want to get into a debate of what the definition of a virgin is but since I have been here before I suppose I don't qualify. I have with me today Mr. Frank Baranowski, who will be testifying after me on some details of the proposed policy; Mr. George Quinn, Mr. Bruce Mercer, Mr. Roger LeGassie and Mr. Bob Nininger, who will be pleased to discuss although probably not resolve some of the issues that have been brought up as related to the plan we have before you. Representative HOSMER. I have read your testimony in advance. I want to congratulate you on being able to achieve the grasp of the subject that you have in the relatively short period of time that you have served on the Commission. Mr. ANDERS. Thank you. Mr. Chairman and members of the committee, I am pleased to have this opportunity to appear before you today to discuss the Commission's proposed plan for relaxation and eventual removal of the present restriction on enrichment of foreign uranium in AEC enrichment plants. This restriction was established pursuant to section 161v of the Atomic Energy Act of 1954, as amended, which requires that the Commission, to the extent necessary to assure the maintenance of a viable domestic uranium industry, shall not offer its enrichment services for uranium of foreign origin intended for domestic end use. The restriction is incorporated in the uranium enrichment services criteria adopted by the Commission. Any proposed change in the restriction, as you have pointed out, must lie before the Joint Committee for 45 days while Congress is in session. The purpose of this provision of the act was to help assure that the viability of the domestic uranium producing industry would be maintained during the transition from the purely Government market for uranium for defense purposes in the 1950's and early 1960's to an entirely commercial market. This viability is eminently important for the assurance of an adequate uranium supply to meet the projected rapidly increasing demand for uranium during the late 1970's and beyond. U.S. national security interests also require assurance of adequate domestic uranium supplies. At the time it was established in 1964, the restriction on enrichment of foreign uranium was considered to be a temporary measure. The legislation only requires the maintenance of a viable domestic uranium industry. Early projections of nuclear power growth forecast a more rapid installation of nuclear powerplants and, hence, a larger demand |