Lowenstein, Robert, Assistant Director, Regulations.. Page 93 103-144 125 126 105-116 Bloch, Edward J., Assistant General Manager for Operations- 122, 126-127 142-144 Ohlke, C. C., Assistant to Assistant General Manager for Operations-- STATEMENTS OF WITNESSES (BY ORGANIZATION OR 143 144-147 161-162 General Public Utilities Corp., A. F. Tegen, president_ 148-154 State of Pennsylvania, Hon. John P. Saylor, Representative in Congress. 94-102 ADDITIONAL MATERIAL INSERTED IN THE RECORD Premium costs for all currently operating power reactors required to have financial protection (table). 121 President's statement of October 10, 1963, with respect to inventions resulting from Government-sponsored research. 109 APPENDIXES Appendix 1: Proposed legislation submitted by AEC with supporting material__ 165 Appendix 2: Joint Committee press release announcing omnibus hearings- 171 171 Appendix 4: AEC General Counsel's opinion on applicability of Price- 173 Appendix 5: AEC press release regarding Office of Economic Impact and 180 Appendix 6: Correspondence regarding "practical value" findingAppendix 7: Petition for issuance of a rule finding that certain reactors have "practical value". 180 194 Appendix 8: Material relating to AEC production cutbacks____ 196 Appendix 9: Data relating to the introduction of new contractors at AEC 199 242 Appendix 11: AEC-JCAE correspondence relating to Price-Anderson amendment.. 243 245 Appendix 12: Statements for the record on the omnibus bill_ Appendix 15: "Expanding Use of Coal by the Electric Utility Industry,' Appendix 16: AEC responses to questions submitted by the Joint Com- Appendix 18: Letter from the National Association of Manufacturers con- 248 249 250 257 262 262 AEC OMNIBUS BILLS FOR 1963 (H.R. 7300, S. 1795) WEDNESDAY, JULY 17, 1963 CONGRESS OF THE UNITED STATES, SUBCOMMITTEE ON LEGISLATION, Washington, D.C. The subcommittee met at 2 p.m., pursuant to call, in room AE-1, the Capitol, Hon. Chet Holifield (chairman of the subcommittee) presiding. Present: Senators Pastore, Hickenlooper, and Aiken; Representatives Holifield, Price, Aspinall, Hosmer, Bates, Westland, and Anderson. Also present: John T. Conway, executive director; Edward J. Bauser, assistant director; Jack R. Newman, staff counsel; and Robert L. Hart, GAO consultant. Representative HOLIFIELD. The subcommittee will be in order. The Subcommittee on Legislation of the Joint Committee on Atomic Energy begins public hearings today on H.R. 7300 and S. 1795, the AEC-proposed omnibus bills for 1963. The bills contain two provisions, one to amend the Atomic Energy Act of 1954, and the other to amend the EURATOM Cooperation Act of 1958. Section 1 of the bill would amend the Atomic Energy Act so as to authorize the Commission to require performance bonds of persons licensed to engage in the waste disposal business. Section 2 of the bill would amend the EURATOM Cooperation Act to increase the amounts of U235 and plutonium which could be furnished to Euratom by sale or lease. Without objection, we will insert in the record at an appropriate point copies of H.R. 7300 and S. 1795, and a comparative bill showing the proposed changes in existing law. We will also insert in the record an analysis of the bills prepared by the Atomic Energy Commission. (The bills and supporting documents follow:) [S. 1795, 88th Cong., 1st sess.] [H.R. 7300] A BILL To amend various sections of the Atomic Energy Act of 1954, as amended, and the EURATOM Cooperation Act of 1958, as amended, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Atomic Energy Act of 1954, as amended, is amended by adding thereto the following new section: "SEC. 111. WASTE DISPOSAL LICENSE BONDS.-The Commission is authorized, by rule, regulation or order, to require that persons licensed to receive waste byproduct, source or special nuclear waste materials from other persons for the purpose of packaging, storage or disposal, file with the Commission bonds in such 1 amounts and on such conditions as the Commission may prescribe, to reimburse the Commission for any expense which it may incur in the event that it shall remove from the premises of such a licensee and dispose of any byproduct, source or special nuclear waste materials which the licensee fails or refuses to remove from such premises or dispose of in accordance with the conditions of his license or any rule, regulation or order of the Commission." SEC. 2. Section 5 of the EURATOM Cooperation Act of 1958, as amended, is amended to read as follows: "SEC. 5. Pursuant to the provisions of section 54 of the Atomic Energy Act of 1954, as amended, there is hereby authorized for sale or lease to the Community: Seventy thousand kilograms of contained uranium 235 Five hundred kilograms of plutonium Thirty kilograms of uranium 233 in accordance with the provisions of an agreement or agreements for cooperation between the Government of the United States and the Community entered into pursuant to the provisions of section 123 of the Atomic Energy Act of 1954, as amended: Provided, That the Government of the United States obtains the equivalent of a first lien on any such material sold to the Community which payment is not made in full at the time of transfer." U.S. ATOMIC ENERGY COMMISSION, DEAR SENATOR PASTORE: We have transmitted today to the Speaker of the House of Representatives and the President of the Senate, Commission proposals in the form of a draft bill which would amend the Atomic Energy Act of 1954, as amended, and the EURATOM Cooperation Act of 1958, as amended, in several particulars. The proposed legislation is attached as appendix A, an analysis of the legislation is attached as appendix B, and a comparative bill is attached as appendix C. Specifically, the proposed legislation would I. Amend the Atomic Energy Act of 1954, as amended: "SEC. 1. Amend the Atomic Energy Act of 1954, as amended, to add a new section 111 to provide for waste disposal license bonds." II. Amend the EURATOM Cooperation Act of 1958, as amended: SEC. 3. Amend section 5 of the EURATOM Cooperation Act of 1958, as amended, to increase the quantity of contained uranium 235 and plutonium available for sale or lease." With respect to the Atomic Energy Act of 1954, as amended, the proposed amendment would not affect any budgetary requirements. With respect to the EURATOM Cooperation Act of 1958, as amended, since the proposed legislation provides for the sale or lease of special nuclear materials abroad, the budgetary effect of this legislation would be to provide revenues to the Government rather than expenditures. The proposed legislation would not require any increase in Federal employment. The Bureau of the Budget has advised that the enactment of this proposed legislation would be consistent with the administration's program. Sincerely yours, APPENDIX B GLENN T. SEABORG, Chairman. Analysis of Draft Bill To Amend the Atomic Energy Act of 1954, as Amended, and the EURATOM Cooperation Act of 1958, as Amended, and for Other Purposes 1963 OMNIBUS LEGISLATION Section 1. Amendment to add a new section 111 to the Atomic Energy Act of 1954, as amended, to provide for waste disposal license bonds. The proposed amendment would add a new section 111 to the Atomic Energy Act of 1954, as amended, to authorize the Commission to require bonds of commercial waste disposal licensees in order to provide assurance that funds other than the Government's would be available for removal and disposal of radioactive waste materials at such time as the licensee may terminate commercial operations. The purpose of this new section is to provide to the Commission specific authority to require commercial waste disposal licensees or applicants for such licenses to furnish the Commission with performance bonds. Requiring the furnishing of such a bond will assure that sufficient funds are available through a surety to package, remove, and dispose of radioactive waste materials that might be left at a waste disposal licensee's premises in the event such licensee terminates commercial disposal operations and gives up the license either voluntarily or as a result of Commission action. Commission experience has indicated the desirability of requiring performance bonds of waste disposal licensees. In two instances, the Commission made arrangements for the removal and disposal of radioactive wastes from commercial waste disposal licensees' storage areas when the licensees failed to do so. The costs to the Commission for disposing of the waste in these two instances were $4,200 and $113,000, respectively. Some of the money has since been reimbursed to the Commission, and legal action is pending to collect the remainder. Section 182 of the Atomic Energy Act provides authority for the Commission to require applicants for licenses to show evidence of financial responsibility. To require waste disposal licensees or applicants for such licenses to show evidence of financial responsibility to remove radioactive wastes from their business premises, in the event their licenses are terminated, is impractical. A majority of the seven licensed commercial waste disposal licensees are small businesses with no large capital reserves. Such licensees could not be expected to maintain sufficient available funds to pay for waste removal in the event of license termination, because of the variable amounts of radioactive wastes that may be in their possession at any one time and because of the high cost of removal of such wastes. A performance bond based on the maximum estimated amount of radioactive wastes expected to be on the licensees' business premises at any one time appears to be the only practical method of assuring that adequate funds are available to clean up the premises in the event of a license termination. It is our opinion that the Atomic Energy Act does not now provide to the Commission the requisite authority to require such a performance bond. The proposed method of establishing the penal amount of the bond would be determined on the basis of the Commission's experience in removing and disposing of the radioactive wastes in the two instances which have occurred. This amount would be based on costs for packaging waste materials at the premises of the licensee, transporting the wastes from the premises to the nearest Commission authorized land or sea burial site, and burial or disposal. It has been estimated that the annual premium for such a bond would amount to approximately $10 to $15 per $1,000 of the penal sum. The added cost of premiums for surety bonds is not likely to be a decisive economic factor which would discourage the entry of new businesses into the field or lead present licensees to withdraw from the waste disposal business. Section 2. Amendment of section 5 of the EURATOM Cooperation Act to permit the Commission to distribute by sale or lease additional quantities of contained uranium 235 and plutonium under an agreement or agreements with EURATOM. Section 5 of the EURATOM Cooperation Act of 1958, as amended, presently authorizes the Commission to transfer 30,000 kilograms of contained uranium 235 and 9 kilograms of plutonium under the United States-Euratom Agreements for Cooperation. The proposed amendments to section 5 authorize the Commission to transfer 40,000 additional kilograms of contained uranium 235 and 491 additional kilograms of plutonium. In order to distribute special nuclear material to a group of nations, the Atomic Energy Act requires not only that agreements for cooperation, as provided in section 123, and an international arrangement as provided in section 124, be in force, but also that Congress authorize the distribution (sec. 54). A Presidential allocation is also necessary. For purposes of presentation in this analysis the proposed amendments are treated separately. A. CONTAINED URANIUM 235 The initial amount authorized in 1958 was 30,000 kilograms of contained uranium 235 for use in the United States-Euratom joint reactor and research and development programs which were established and were to be carried out in accordance with the provisions of an agreement for cooperation entered into with Euratom pursuant to the provisions of section 123 of the Atomic Energy Act, as amended. When it became apparent that programs within the Community that were not covered by the existing United States-Euratom Agreement for Cooperation would require additional quantities of special nuclear material, an additional agreement for cooperation was concluded with Euratom in 1960. However, the net amount of uranium 235 to be transferred under the additional agree ment was to be charged against the net amount of 30,000 kilograms of uranium 235 available under article III of the 1958 Agreement for Cooperation, since the joint program uranium 235 requirements were not as great as had been expected. The results of a recent forecast (prepared by the AEC staff and confirmed by Euratom) of enriched uranium requirements for known Community projects, which Euratom has been requested or is expected to be requested to supply indicate that the 30,000 kilograms of uranium 235 will not be sufficient to satisfy these projected requirements. When the anticipated enriched uranium needs of the joint reactor (based on 20-year fuel supply contracts for the SENN, SENA and KRB power reactors) and research and development programs and for research and development activities outside the joint program are combined with the needs of projects which Euratom has been requested to supply or is expected to supply under our additional agreement, the total exceeds the present ceiling of 30,000 kilograms. Further, this total does not take into account the additional quantities of enriched uranium required under supply arrangements which we may enter into for (a) contemplated substantial power increases for many, if not all, of the large power reactors and (b) possible fuel fabrication in the Community rather than the United States. Upon determining the need to increase the amount of enriched uranium available to Euratom an analysis was undertaken with Euratom to define the level of future needs. From this study a forecast of cumulative uranium 235 requirements in the Community through 1970 has been developed which indicates approximately 68,400 to 81,400 kilograms of contained uranium 235 will be needed by that date for an installed nuclear power capacity of 2,100 to 2,500 electrical megawatts. Since there will be in operation by 1965 Community power projects involving 921 electrical megawatts and requiring an estimated 30,100 kilograms of uranium 235, the additional 1,200 to 1,600 electrical megawatts of installed nuclear capacity expected to materialize during the period to 1970 will require an estimated additional 38,300 to 51,300 kilograms of uranium 235. The forecast was based largely on the following considerations: 1. While it is generally agreed there will be no successor program to the joint United States-Euratom reactor program, a key element in further United StatesEuratom cooperation under the additional agreement, and the future acceptance of enriched uranium reactors in the Community, would be the availability of uranium 235. There is keen competition between the exponents of enriched uranium and natural uranium gas-cooled reactors in the Community, as evidenced by the recent contests between these groups for Euratom budgetary support of their respective reactor concepts. If U.S. manufacturers, with their enriched uranium systems, are to stay in the competition, the management of Community utilities and member state governments must be assured of the continued availability of adequate quantities of enriched uranium from U.S. sources. The foreign utilities feel they must have a long-term enriched fuel supply guarantee at a considerably earlier stage in project planning than their domestic counterparts. 2. During the first 5 years of the existence of Euratom, five big reactors with an installed capacity of 1,100 electrical megawatts have materialized, of which all but one involved enriched uranium reactors. It would seem reasonable to anticipate that at least another 1,000 electrical megawatts of installed power involving enriched uranium reactors will materialize in the next 5 years. 3. In arriving at the expected installed nuclear capacity of 2,100 to 2,500 electrical megawatts by 1970, it was assumed that at least 50 percent of the forecasted installed capacity will involve U.S.-developed type reactors requiring enriched uranium fuel, which according to the current rate of acceptance of U.S. reactors in the Community is a reasonable assumption. 4. At a time when U.S. enriched uranium reactors appear to have established a strong competitive position in the Community, it is important to avoid any action which would imply a lack of confidence that the current rate of acceptance of U.S. reactors in the Community will be maintained. 5. To provide Euratom the quantity of enriched uranium required to satisfy what appears to be reasonable and realistic requirements of the Community for the next several years, it would appear necessary to increase the currently authorized amount of uranium 235 which can be transferred to Euratom by at least 40,000 kilograms. (It should be noted that this does not necessarily mean that the entire 40,000 kilograms of uranium 235 would come from U3O, of U.S. origin. In the event that toll processing of foreign supplies becomes our policy, Euratom may provide a part of the U3Og. In addition, if the estimated requirements should prove significantly high, the United States would retain the right, under our long-term fuel supply policies, to reduce its commitments to the extent Euratom failed to make firm supply contracts within a given time period.) |