major programmatic activities. It also highlights four important points. 1. In the first category in chart II are the programs with major increases. These include production of nuclear materials for use as fuel in civilian power reactors; development of the liquid metal fast breeder reactor (LMFBR); nuclear safety, which covers the research for safe operation of light water and breeder reactors; regulation activities; including licensing, standards, and operations; research in controlled thermonuclear fusion; and waste management. These high priority activities, which represent some 25 percent of total costs, receive 70 percent of our requested increase. These activities are provided an increase of 24 percent over their 1973 levels and, for the most part, are related to the peaceful uses of nuclear energy. 2. In the second category are programs for which we have provided smaller increases, essentially cost-of-living adjustments. These include physical research, biomedical and environmental research, weapons production and weapons R. & D., naval reactor development, and operational program direction. 3. Major program activities that are reduced below the 1973 levels are shown in the third category. These activities are weapons testing, civilian reactor development other than the LMFBR and nuclear safety efforts, space nuclear systems, isotopes development, the Plowshare program, and our support of education and training in nuclear science and engineering. 4. Apart from our operating expenses, the chart shows a substantial increase is provided for plant construction. The requested increase of $88 million, about 35 percent over the 1973 level, is mainly for six projects now under construction. An increase of $33.5 million is requested for construction of the full-scale prototype test facility that will permit operation for testing purposes of the prototype nuclear propulsion plant that will be used in the new Trident class of missile submarines. The other five projects increased are the two projects under the Cascade improvement program for a total of $27 million, the two gas centrifuge projects for a total of $13 million, and the fast flux test facility for $12 million. These decisions for increases and reductions have been made in an endeavor to balance carefully our overall fiscal constraints with the national commitments and other important obligations that we are expected to discharge. We have taken and are continuing to take aggressive action to increase significantly the flow of revenues to the Federal Government. These actions place particular emphasis on revenues from foreign sources. Such efforts are intended not only to help in the funding of AEC needs, but more importantly, to make a positive contribution to reducing this Nation's balance of payments deficit and the Federal Government's interest costs. Our major revenue-producing activity relates to uranium enrichment. Anticipated revenues in fiscal year 1974 from this source are $580 million, and the cumulative value of already signed uranium enriching contracts for future deliveries is now about $10 billion. Total revenues estimated in the 1974 budget are $692 million. Of this amount $362.8 million are from domestic sources and $329.2 million are from foreign sources. Measured in terms of program costs, about 48 percent of what we are proposing to undertake in fiscal year 1974 represents defenserelated activities. These activities, in large measure, reflect commitments to other Government agencies. They involve the production of weapons to meet Presidentially approved stockpile objectives, the operation of production reactors, and the development of advanced cores and nuclear powerplants for submarine and surface ships. As shown by chart III, our defense-related activities for the past few years have shown a downward trend when measured as a percentage of total program costs. Mr. Chairman, the balance of my prepared statement is rather lengthy and deals with these items I have highlighted in a bit more detail. With your permission, I will submit the remainder of the prepared testimony for the record. Mr. EVINS. The full statement of the chairman may be included in the record. [The statement follows:] The foregoing are some of the highlights. The balance of the statement consists of brief summaries of each of the Commission's major programs for fiscal year 1974. NUCLEAR MATERIALS The nuclear materials program consists of our nuclear materials production activities, as well as our waste management and operational safety activities. Operating costs for these activities total $540.8 million in fiscal year 1974, an increase of $107.1 million or 25 percent over the 1973 level. Plant and capital equipment obligations for the nuclear materials program total $205.3 million, an increase of $96.5 million or about 90 percent over the 1973 level. PRODUCTION ACTIVITIES Fiscal year 1974 operating costs for the production of special nuclear and other materials for military programs and for civilian applications total $523.6 million, which is approximately $98.9 million above the 1973 estimate of $424.7 million. Production activities include the operation of gaseous diffusion plants for the enrichment of uranium and the operation of production reactors and chemical separations plants, primarily to produce plutonium-239 and tritium. Other activities include the interim management of radioactive wastes generated in processing irradiated fuels from production and other Government reactors, the recovery of plutonium and uranium from unirradiated scrap, source materials activities, and process development programs directed towards development of the gas centrifuge technology for uranium enrichment and improved safety and efficiency of operations. An increase of $71.8 million is associated with the production of enriched uranium to meet increasing civilian nuclear power demands. About $56.5 million of this increase provides for additional electric power to run the gaseous diffusion cascades as well as for higher power costs in fiscal year 1974. We plan to increase cascade power under our existing supply contracts by about 800 megawatt years as a part of the plan we announced last year to increase our uranium enrichment capability. A significant portion of the balance of the increase is to process feed material for the diffusion plants to permit operating at these higher power levels. The estimate for feed material in fiscal year 1974 is $17.5 million, an increase of $9.5 million or about 120 percent. Increased emphasis is being placed on development of the gas centrifuge process for uranium enrichment. Operating costs will be $20.6 million, an increase of $5.6 million or 37 percent. This effort relates to determining the reliability and producibility of centrifuges suitable for installation in an uranium enrichment plant. The fiscal year 1974 revenues from uranium enrichment customers are estimated at $580 million as compared to $391 million in fiscal year 1973. This $580 million includes the estimated 1974 portion of a $320 million sale of separative work to the Japanese and $160 million related to the planned revisions in our toll enriching contract provisions that we submitted to the Joint Committee on Atomic Energy on January 18, 1973. Operating costs for production of plutonium and other reactor products increase $27.3 million and provide for the continued operation of three production reactors at Savannah River and the N reactor at Richland. Steam generated by the N reactor is sold to the Washington Public Power Supply System and is estimated to provide revenues of $17.5 million in fiscal year 1974. Plant and capital equipment obligations for nuclear materials production are estimated at $201.7 million of which $184.6 million is for construction and $17.1 million is for equipment. Construction obligations totaling $115.7 million are being requested for continuation of our Cascade improvement program which was partially authorized and funded in fiscal years 1971, 1972, and 1973. This amount includes $70.0 million for process equipment modifications at our gaseous diffusion plants and $45.7 million for production support facilities. In fiscal year 1974, $6.0 million is being requested to begin design work on the Cascade uprating program; $5.9 million for a new purge cascade at the Oak Ridge gaseous diffusion plant; and $3.3 million for improvements to the cooling tower fire protection systems at the three gaseous diffusion plants. Construction obligations also include $15.9 million for the gas centrifuge component test facility at Oak Ridge and $7.0 million for the completion of Component Prepararation Laboratories at multiple sites. Operation of these facilities is vitally important to obtain the data required to permit an economic assessment of the gas centrifuge as a candidate for new uranium enrichment capacity. The balance of our construction obligations of $21.8 million includes seven projects at various sites for storage of radioactive wastes, improved air filtration, plant liquid effluent control, processing of existing radioactive fuels from the Rover project, and control of atmospheric pollution. General plant projects are estimated at $9.0 million. OPERATIONAL SAFETY The operational safety program's estimated operating costs for fiscal year 1974 are $2.2 million. These funds will provide for the operation of the AEC radiological surveillance system at AEC sites and other locations; the AEC portion of the AEC-State of Colorado agreement for the uranium mill tailings remedial action program; as well as safety studies and development of operational safety guidelines. WASTE MANAGEMENT Operating costs for the waste management program are estimated at $15.0 million in fiscal year 1974, an increase of $7.6 million over the fiscal year 1973 estimate of $7.4 million. The fiscal year 1974 estimates provide for engineering studies aimed at the development of improved techniques for solidification and long-term storage of radioactive waste; operation of solid waste burial grounds; and research and development on methods of long-term storage or disposal of radioactive waste. We will also carry out research and development programs to develop improved methods of controlling airborne particulate material by use of air filters and filtration systems, decontaminating and decommissioning AEC sites and facilities, and transporting radioactive materials. The major effort supported by this program is the development of a Federal repository to be ready in the early 1980's for storage of solidified high-level radioactive commercial waste. Our plan is to provide by that time a retrievable surface storage facility using proven technology for handling high-level radioactive materials. Wastes stored in this facility would be fully retrievable for additional treatment at a future date. A separate program objective is to locate a geologic formation, probably bedded salt, and initiate plans to design and establish pilot scale operations to evaluate permanent disposal of high-level waste in the formation. Waste placed in the pilot facilities would be fully retrievable until satisfactory completion of all studies. WEAPONS PROGRAM A total of $883.3 million, an increase of $15.6 million, is being requested for the operating costs of the weapons program. This amount includes $878.9 million for weapons activities and $4.4 million for nuclear materials security. Plant and capital equipment obligations for the weapons program are estimated at $191.7 million, an increase of $23.1 million over 1973. WEAPONS ACTIVITIES Weapons activities include the production of nuclear weapons and surveillance of stockpiled weapons, as well as continued research, development, and testing activities at levels to permit the Commission to meet its responsibilities for national security and to support the four safeguards under the limited nuclear test ban treaty. The estimate for weapons production and surveillance of $425.5 million is an increase of $12.3 million, or about 3 percent, over the 1973 level, and is in support of the DOD stockpile requirements as approved by the President. The research and development budget of $277.4 million is an increase of $14 million, or about 5 percent, and will provide resources at about the same level as in fiscal year 1973. Within this level, we plan to place increased emphasis on the laser-fusion activities at our weapons laboratories. The testing budget is $168.5 million, a decrease of $10.2 million, or about 6 percent, from fiscal year 1973. This funding provides for our underground test program at the Nevada test site at a small dollar reduction. The balance of the reduction in testing is associated with our supplemental test site activities on Amchitka Island where we are concluding rollup operations. This was the site of the successful proof testing of the Spartan warhead for the ABM system. The weapons activities budget includes $114.6 million for construction line items and $76.5 million for capital equipment. The construction line items include $63.8 million for projects partially funded in prior years consisting of $25 million for projects related to fire, safety, and adequacy of operating conditions at various locations; $35 million for classified facilities at undesignated sites; and $3.8 million for a laser fusion laboratory at our Lawrence Livermore Laboratory. The requests for new projects are $9.7 million for a high energy laser facility at the Lawrence Livermore Laboratory with a total estimated cost of $20 million; $1.7 million for acid waste neutralization and recycle facilities at the Oak Ridge Y-12 plant; $12 million for production facilities for artilleryfired atomic projectiles at various locations; and $10 million for weapons production, development, and test installations projects at various locations throughout the weapons complex. General plant projects total $17.4 million. NUCLEAR MATERIALS SECURITY The fiscal year 1974 estimate of $4.4 million for nuclear materials security is essentially the same level as 1973. This program is directed toward developing safeguards against the loss or diversion of any special nuclear materials. Fiscal year 1974 funding will provide research and development related to materials accountability, physical containment, surveillance, and transportation. NAVAL REACTOR DEVELOPMENT PROGRAM Operating costs in fiscal year 1974 for the naval reactor development program are estimated at $154.2 million, an increase of $4.4 million over 1973. During fiscal year 1974, a high level of effort will continue on the design and development of improved nuclear propulsion plants and reactor cores suitable for installation in naval vessels ranging in size from small submarines to large combatant surface ships. Development of an advanced core with longer life for application to nuclear-powered guided-missile frigates and high-speed submarines will continue. An increased level of effort will be directed toward the development of a submarine propulsion plant for the Trident submarines. Plant and capital equipment obligations are estimated at $64.1 million, including $59.1 million for construction projects and $5 million for capital equipment. This funding includes $57 million for construction of a full-scale prototype test facility to permit operation and testing of the nuclear propulsion plant to be used in the new Trident class of missile submarines. The total estimated cost of the project is $125 million of which $56 million was authorized and appropriated in fiscal year 1973. CIVILIAN REACTOR DEVELOPMENT PROGRAM The fiscal year 1974 estimate for the civilian reactor development program is $320.8 million, an increase of $27.7 million over the 1973 level. This increase reflects our continued heavy emphasis upon the development of a high gain breeder reactor which continues to be AEC's highest priority energy program. The 1974 estimate includes $148 million for the LMFBR base program and $20 million for the LMFBR demonstration plant. These amounts represent an increase of $28.2 million or 20 percent over the 1973 levels. Our major commitment is the successful demonstration of a liquid metal fast breeder reactor by 1980. We are moving ahead on the first breeder demonstration plant and are pleased that all principal participants for the plant have been selected. Important progress is also being made in the breeder technology efforts including the engineering and construction of the fast flux test facility (FFTF). Through the demonstration plant program, in conjunction with our base technology engineering and safety efforts, we expect to develop the know-how to enable industry to begin large-scale commercial introduction of the fast breeder in the 1980's. Other research and development includes work on the light water breeder reactor (LWBR), which is to demonstrate the capability for breeding in a pressurized water reactor through the design, fabrication, and actual power operation of a breeder core. The LWBR demonstration core is well along in manufacture and is scheduled to begin operation in 1975. We are continuing to provide R. & D. support for gas cooled reactors at about the 1973 level. This program includes the advanced converter high temperature gas cooled reactor, the thorium utilization program, and the gas cooled fast breeder reactor. The molten salt breeder reactor, however, is being phased out in fiscal year 1973. The request for "Nuclear Safety" is $66 million, an increase of about $13.5 million or 26 percent above fiscal year 1973. Emphasis is being given to the development of design oriented technology and large-scale testing for obtaining data appropriate to safety considerations. In addition to providing safety technology for reactors and test facilities, this program provides an important source of information for independent assessments by AEC regulatory groups. We are requesting $49.3 million for our "Technology and Engineering" activities. This work provides base data from fundamental research to establish engineering feasibility for important areas of the civilian reactor development program; for the development and demonstration of large economic dry cooling towers; for work on the Pacemaker; and for the development of nuclear energy sources for the desalting of water and other industrial processes. We are requesting $112.6 million for plant obligations and $22.5 million for capital equipment obligations. The request for plant includes $87.8 million for the FFTF and $5 million for the sodium pump test faciliy. We are also requesting $19.8 million for three new construction projects in support of the LMFBR program, an emergency process waste treatment facility, and general plant projects. APPLIED ENERGY TECHNOLOGY The applied energy technology program includes three subprograms: general energy development, isotopes development technology, and application of underground explosions. Total operating costs for fiscal year 1974 are estimated at $8 million, a reduction of $6.2 million from the 1973 level. GENERAL ENERGY DEVELOPMENT In accordance with the expanded authority provided to the Commission in fiscal year 1972 by the Congress in amending section 31 of the Atomic Energy Act, our activities to develop new energy technologies are centered in the general energy development program. The 1974 request is $2 million and will provide continued development effort on energy storage and superconducting underground transmission. The energy storage work is directed principally toward the development of advanced battery systems for possible use in load-leveling for central electric power generating stations to increase the efficiency of these costly facilities. ISOTOPES DEVELOPMENT TECHNOLOGY Operating costs for "Isotopes Development Technology" are estimated at $2.2 million, a reduction of $3.7 million from the 1973 level. This request provides for the continued development of the radioisotope powered artificial heart. Beginning early in fiscal year 1974, phase 3 of the artificial heart program will be initiated. This effort provides for the design, fabrication, and testing of a |