I think that while this is not a substitute for telling the customer exactly

ESTABLISHMENT OF CHARGE FOR ENRICHING SERVICES

Mr. CONWAY. You have not come out and said what your prices are going to be. You said $30 will be the ceiling. Presumably you can come with any other figure below that. You have not been willing to say at this time what you will charge.

Mr. ABBADESSA. It is not a question of not being willing. It is a question that we are working very hard at studying the many different ways of operating these plants. We are looking at something involving a price for many years. There are a lot of unknowns, there are a lot of complications, and at this time we simply are not in a position to set a price.

The Chairman has testified we hope within a period of about 6 to 8 months to be able to come out with a price list.

Mr. CONWAY. Can't you change your price every 6 months according to your criteria?

Mr. ABBADESSA. Once we have established a price list, we would continue to study the demands; we would continue to study the different methods of operating; we would take a look at the price list; would be able to adjust the price list if necessary.

Mr. CONWAY. Really whatever price you are setting you are not going to have to live with for 30 years.

Mr. ABBADESSA. No; however, the ceiling is $30 subject to escalation. I think it is very important that we set a ceiling that will reasonably assure us over a 30-year period that the Government can recover its cost and this is what we have tried to do.

Dr. SEABORG. Yes. That we have done.

DECLASSIFICATION OF PLANT DIFFUSION INFORMATION

Representative HOSMER. If I might make one observation in connection with this security classification: After over 20 years of fissionable material production and after over 20 years of advancement in weapons techniques and efficiency, and with the number of people seriously making speeches about the matter of overkill and things like that, it would appear to me that the security implications of an ongoing production rate are considerably diminished over that which they were at the time in the beginning when this severe classification was established.

Dr. SEABORG. That is right. But it is a matter of reviewing those security implications against the value of this in a sector of the civilian economy. In that review we have to take into account the views of other agencies in the Government.

Representative HOSMER. You have probably got the devil scared out of everybody anyway. It would not change much if some of these figures were disclosed now that we are shifting over into a period of commercialization of this material rather than militarization of it. Thank you, Mr. Chairman.

Chairman HOLIFIELD. Some of the members have stated that they want to be on the floor at this time. So we will adourn until 10 o'clock tomorrow.

(Whereupon, at 12 noon, Tuesday, August 2, 1966, the committee adjourned to reconvene at 10 a.m., Wednesday, August 3, 1966.)

URANIUM ENRICHMENT SERVICES CRITERIA AND

RELATED MATTERS

WEDNESDAY, AUGUST 3, 1966

CONGRESS OF THE UNITED STATES,

JOINT COMMITTEE ON ATOMIC ENERGY,

Washington, D.C.

The Joint Committee met at 10 a.m., pursuant to recess, in room AE-1, the Capitol, Representative Chet Holifield (chairman of the Joint Committee) presiding.

Present: Representatives Holifield (chairman), Price, Morris, Hosmer, and Bates; and Senator Pastore.

Also present: John T. Conway, executive director; Edward J. Bauser, assistant director; Leonard M. Trosten, staff counsel; George F. Murphy, Jr., national security affairs; James B. Graham, technical adviser; Jack Rosen, staff consultant; and William T. England, professional staff member.

Chairman HOLIFIELD. The committee will be in order.

This morning the committee will continue its questioning of AEC witnesses concerning Dr. Seaborg's testimony yesterday and related

matters.

We will first discuss the toll-enriching criteria and contracts and the AEC's post-1968 policies on lease and sale of uranium. (See app. 4, p. 315.)

Thereafter, we will afford the AEC an opportunity to brief the committee on the contents of the AEC's letter dated August 1, 1966, concerning uranium reserves and requirements. This letter is in response to the Joint Committee's request for comments on a report by the National Coal Association on this subject. (See p. 44.)

If there is time this morning, we will also discuss the matter of safeguards against diversion of fissionable material to unauthorized uses. (See apps. 8 and 6, pp. 346 and 489.)

The committee does not plan to hold hearings this afternoon, again due to important activities on the floor. If necessary, we may resume hearings tomorrow morning at 10 a.m.

Good morning, Mr. Quinn, I believe Mr. Conway has a question for

you.

NEED TO RESUBMIT CRITERIA IF AEC OFFERS ENRICHING SERVICES BEYOND PRESENTLY AVAILABLE CAPABILITY

Mr. CONWAY. During the discussion yesterday on the criteria, there were a number of questions raised with regard to them. I think there is a very important question that the Commission should be prepared to answer, and that is: Does the AEC believe that the criteria submitted to the committee must be amended and resubmitted to the Joint Committee before the AEC offers services beyond presently available capability?

STATEMENT OF HON. GLENN T. SEABORG, CHAIRMAN; ACCOMPANIED BY JAMES T. RAMEY, GERALD F. TAPE, SAMUEL M. NABRIT, AND WILFRID E. JOHNSON, COMMISSIONERS; AND R. E. HOLLINGSWORTH, GENERAL MANAGER; JOHN P. ABBADESSA, CONTROLLER; GEORGE F. QUINN, ASSISTANT GENERAL MANAGER FOR PLANS AND PRODUCTION; MYRON B. KRATZER, DIRECTOR, DIVISION OF INTERNATIONAL AFFAIRS; JOHN V. VINCIGUERRA, ASSISTANT GENERAL MANAGER FOR ADMINISTRATION; HAROLD L. PRICE, DIRECTOR OF REGULATION; JOSEPH F. HENNESSEY, GENERAL COUNSEL; WILLIAM J. MINSCH, JR., OFFICE OF GENERAL COUNSEL; AND RAFFORD L. FAULKNER, DIRECTOR, DIVISION OF RAW MATERIALS, ATOMIC ENERGY COMMISSION

Mr. QUINN. I believe our response to that, Mr. Conway, was that before the Commission would be able to contract for services beyond available capability, as we defined it yesterday, we would have to approach the Congress for authorization for additional facilities.

Mr. CONWAY. Yes, but again I would like to get back to this point. Each year you will be, presumably, receiving from industry, requests for long-term guarantees of material. Against that you will be running a record of what your available capability will be. That may vary also from year to year.

Mr. QUINN. That is correct.

Mr. CONWAY. In the Commission's discussion you talked about your improvement program.

NEED FOR ADDITION TO GASEOUS DIFFUSION PLANT CAPABILITY

Mr. QUINN. The improvement program is a method by which additional capability can be incorporated into the existing plant. In prior years we have incorporated these types of improvements and the funds necessary to pay for such improvements were included in our annual budget request.

In connection with future contracting for enriching services, we are going to have to presume, if we enter into long-term contracts, that power can be added to the plants as necessary to take care of the increase in demand. And funds for paying for these power costs would be included in our annual budgets.

Mr. CONWAY. You may get to a point then where the amount of services being requested will exceed your present available capability, at which time presumably you will be coming in and requesting congressional authorization and appropriations for additions to your diffusion plants.

Mr. QUINN. That is correct. We will have to keep a running record of this and keep up-to-date projections of what kinds of requests we can expect in the future. At such point in time as it appears necessary, with adequate leadtime, to acquire new facilities, and if it is decided at that time that the Government should build such facilities, we will come forward with an authorization request.

Mr. CONWAY. Is it your point, however, that you will not contract or agree to provide additional material beyond your available capability unless the Congress has authorized and appropriated the necessary moneys for additions to your capability?

AEC PRECLUDED FROM MAKING COMMITMENTS BEYOND EXISTING

CAPABILITY

Mr. QUINN. We believe that the language of the criteria would preclude the Commission from making any commitments beyond what the existing plants could produce.

Mr. CONWAY. Do you think it would be a good practice, at least on an annual basis, to submit to the Joint Committee your existing, known available capability as compared with your known commitments at that time?

Mr. QUINN. Yes, sir. This can be done. We will have current records on this.

Chairman HOLIFIELD. Mr. Abbadessa.

Mr. ABBADESSA. Mr. Chairman, I think it probably goes even further than that. The GAO recommendation, which we agreed yesterday was a reasonable one, would cover our outstanding commitments, our estimated additional commitments that we know about, and our annual appraisal of what our maximum enriching capability is. So I think with those three pieces of information reported to the committee annually, we will have a long enough leadtime that we won't face the problem of oversubscribing, so to speak, our contractual commitments and committing the Congress to additional facilities.

Mr. CONWAY. From a practical point of view, it may not arise, but I can visualize two possibilities. No. 1, as you are working up to your known capability, suddenly you are hit with an unexpected heavy military demand or requirement which may exceed at that point your amount of available capability over and above what you may be committed to.

No. 2, one could visualize heavy damage to one of your plants that would put it out of commission and would then put you in a position where you could not meet your commitments.

I don't think, from a practical point of view, those will arise, but those are two possibilities.

Mr. ABBADESSA. That is correct. I would say that if we got to those types of items, we would probably be facing reprograming actions, which would come to the committee. In any respect, however, we would still have the requirement to keep the Joint Committee fully informed. If we had something of such an unusual nature, the Commission would certainly come to the committee.

URANIUM RESERVES AND REQUIREMENTS

Chairman HOLIFIELD. I see that you have brought your charts this morning.

Mr. ABBADESSA. Yes, sir.

Chairman HOLIFIELD. Would you like to set them up now and give us the explanations that we were asking for yesterday.

Dr. SEABORG. Perhaps if Mr. Faulkner went ahead and presented the information on these charts, that would be the most efficient way of doing it.

Chairman HOLIFIELD. Yes.

Mr. FAULKNER. All right, sir. This first chart shows the relationship between estimated domestic uranium requirements and reserves on a cumulative basis through 1980.

(The chart referred to follows:)