Chairman HOLIFIELD. This letter of the National Coal Association will be inserted in the record at this point, as will be the answering letter which the Commission has given us. (The correspondence referred to follows. Text resumes on p. 59.) Hon. GLENN T. SEABORG, CONGRESS OF THE UNITED STATES, Chairman, U.S. Atomic Energy Commission, DEAR DR. SEABORG: The Joint Committee has received the attached letter from the National Coal Association concerning the adequacy of uranium and thorium reserves. Attached to the NCA's letter is a report entitled "Atomic-Fuel Reserves How Serious Is the Shortage?" The Committee would appreciate the Atomic Energy Commission's comments on the NCA's letter and report. In particular it would be helpful to have the Commission's views on the summary and conclusions of the report appearing on page 10. Thank you for your assistance. JOHN T. CONWAY, NATIONAL COAL ASSOCIATION, Hon. CHET HOLIFIELD, Chairman, Joint Committee on Atomic Energy, DEAR CHAIRMAN HOLIFIELD: Recently-acquired information has enabled us to translate uranium reserves into terms of power output. Using this information, we have prepared an analysis of the extent to which atomic power growth will be limited by shortage of uranium. A special report on this subject is enclosed. We believe it contains factual information which is extremely reassuring with respect to the future growth of the coal industry. We further believe the situation requires careful attention of the Joint Committee on Atomic Energy. To illustrate: The known domestic reserves of low-cost unranium as of January 1, 1965, amounted to some 145,000 tons equivalent to about two billion tons of coal. That would be enough to supply the electricity requirements of this country for only a few years, even without taking into account the future expansion of these requirements. We believe the problem of uranium reserves, aggravated by the recent spate of atomic power plant sales, calls for serious consideration by the Joint Committee on Atomic Energy. For example, should the Government endanger our security by permitting continued disposal of uranium from the stockpile, without keeping a supply adequate not only for future weapons needs but also for the atomic navy of the future? We believe the scarcity of atomic fuel reserves, as compared to the reserves of coal, warrants thorough consideration in the determination of the Government's future course of action. We hope you will find time to study the enclosed special report. We are sending copies of this letter, and copies of the special report, to the other members of the Joint Committee on Atomic Energy and to the chairman and members of the Atomic Energy Commission. Sincerely, STEPHEN F. DUNN. SPECIAL REPORT NATIONAL COAL ASSOCIATION, ATOMIC-FUEL RESERVES-HOW SERIOUS IS THE SHORTAGE? Proponents of atomic power frequently state that atomic fuels represent an inexhaustible reserve of low-cost energy, one that will supply mankind for thou sands of years to come. But many knowledgeable persons, including representatives of the Atomic Energy Commission, warn of an impending atomic fuel shortage unless substantial new reserves of uranium are found in the near future. What is the situation? After studying publicly-available authoritative information, the NCA staff has concluded that known reserves of low-cost uranium and thorium are very limited and that atomic power cannot replace coal as the major utility fuel for decades to come, unless unexpected large discoveries are made very soon. The basis for our conclusion is set forth in this report. BACKGROUND Many authorities speak of "uranium ore" when they really mean "concentrates resulting from uranium ore." There is a great difference. To provide better understanding of the relationship between atomic fuel reserves and consumption presented in this report, an explanation of the differences between the as-mined uranium ore and the material used as fuel in the atomic power plant is appropriate. Uranium-235 is the "burnable” fuel in light water reactors—the sort now being built for commercial power production. While only a small quantity of this fuel is needed to produce the heat energy at a power plant, many tons of uranium ore must be processed to produce it. The uranium rock is mined, crushed and the resulting powder is leached twice in acid baths, and uranium oxide (U,O,) is precipitated in concentrate form known as "yellowcake." One short ton of raw uranium ore yields about five pounds of yellowcake; or stated another way, it is necessary to mine 400 tons of uranium ore to produce one ton of yellowcake. Yellowcake is then converted to a "feed material” through another chemical process; 100 pounds of yellowcake produces about 85 pounds of "feed material,” which contains only 0.7 per cent of “burnable” fuel, uranium–235 (U-235). The remaining 99.3 per cent of the feed material is uranium–238 (U-238), a “fertile” rather than a "fissionable" isotope. Since the reactors now being used for power generation in the United States require enriched uranium, that is, fuel in which the percentage of U-235 is about 2.5 per cent, a fourth processing, enrichment, is necessary. In this enrichment step, performed in one of three billion-dollar plants owned by the Government, the uranium is converted to a gaseous compound and pumped through a series of porous barriers, or sieves, which gradually enrich the mixture to the required 2.5 per cent of burnable U-235. While uranium ore is the beginning and uranium-235 is the final fuel, uranium reserves are specified in terms of one of the intermediate products of the processing-yellowcake. The extent of the reserves on a world-wide basis has been published and will be discussed later in this report. But, in order to be able to compare the reserves with the fuel requirements of future atomic plants, it is necessary first to establish the amount of atomic fuel, in terms of yellowcake, required for some unit of electric generation, say, per megawatt. The necessary data to make this determination are not readily available from published literature. However, Rafford L. Faulkner, director of the Atomic Energy Commission's Division of Raw Materials, said in a speech at Moab, Utah, May 6, 1966, that on the average each electrical megawatt (1,000 kilowatts) of installed atomic generating capacity requires about one short ton of yellowcake for the initial loading; and without plutonium recycling, 0.20 ton of yellowcake is required per megawatt per year as additional fuel. If the plutonium is recycled, the additional yellowcake requirements after start-up amount to about 0.15 ton per megawatt per year, Mr. Faulkner stated. What is "plutonium recycling"? When the enriched fuel, described previously as a mixture of 2.5 per cent U-235 and 97.5 per cent U-238, is used in a light water reactor (the kind being sold today-Oyster Creek, Dresden 2, etc.), the U-235 is the burnable fuel. But in the "burning" process, a small amount of the mixture is converted to plutonium, which can be recovered through chemical reprocessing of the used fuel element. Since this plutonium, like U-235, is burnable, it theoretically can be substituted for part of the new U-235 required to keep the atomic power plant going. The technology to do this is not available today, but is expected to be in the near future; therefore we have assumed in all our calculations on the availability of reserves, that such recycling will be practiced. From Mr. Faulkner's figures, then, and assuming plutonium recycling, we determine that over the expected 30-year life of an atomic power plant, operat ing at 80 per cent plant factor, 5.5 tons of yellowcake will be required per megawatt of capacity. FUEL DEMAND VERSUS KNOWN RESERVES Using this estimate of 5.5 tons of yellowcake required for each megawatt of generating capacity, we can evaluate the known reserves of atomic fuel as expressed in tons of yellowcake. The European Nuclear Energy Agency (ENEA) made an exhaustive study of the uranium and thorium reserves and in August, 1965, published its findings under the title "World Uranium and Thorium Resources." ENEA listed the reserves under categories of "reasonably assured" and "possible additional" reserves in three price ranges: $5 to $10 per pound of yellowcake, $10 to $15 per pound, and $15 to $30 per pound. The uranium reserves, as estimated by ENEA, are shown in Table 1 of this report. However, while the ENEA study shows the U.S. uranium reserves of reasonably assured yellowcake at $5 to $10 per pound to be 195,000 tons, the Atomic Energy Commission's most recent annual report shows that as of January 1, 1966, the United States had such reserves amounting to only 145,000 tons. The differ ence is probably accounted for by the substantial quantities of ore which have been mined since the data were obtained by ENEA plus the fact that ENEA included 20,000 tons possibly recoverable as a "by-product from phosphate operations." Another atomic fuel, thorium, like uranium, occurs in nature and is fissionable (i.e., it will burn in an atomic reactor). At present, it is used only as a fuel for research reactors which are either built and operated by the AEC or largely subsidized by the Government. While thorium has not been found suitable for use in commercial atomic plants, the reserves are of possible importance, and the ENEA study of these reserves is summarized in Table 2. How do the known reserves of atomic fuel compare with the future demand based on the estimated growth in electric power generation, and assuming this growth will be shared by fossil and atomic fuels? The situation on uranium is illustrated graphically in Table 3, wherein we have (a) assumed that the total atomic generation capacity will be 10 million kilowatts1 by 1970, and (b) that each year thereafter the atomic share of new generating capacity2 will be 10, 20, 40, or 60 per cent of the total new thermal generation installed each year. The horizontal lines on the chart indicate some of the more significant levels of reserves of uranium shown in Table 1. The points at which the sloping growth lines cross the reserves lines indicate the year in which the reserves reach full commitment. Examination of the chart indicates the following: a. Even if the capacity of atomic plants installed after 1970 amounts to only 10 per cent of the total new thermal plants estimated, all the "reasonably assured" reserves of low-cost uranium ore (between $5 and $10 per pound of yellowcake) will be committed by 1975. b. If the atomic installations amount to 20 per cent of the new plants, all the "reasonably assured" reserves available at less than $15 per pound of yellowcake will be committed by the year 1978. · c. The claim by some experts that new plant installations will be "taken over" by atomic fuel after 1970 is refuted by the line showing that if the takeover amounts to 60 per cent, all known uranium reserves (including reasonably assured and "possible additional" reserves) in the United States, available at less than $30 per pound of yellowcake, will be committed by about 1986. As is indicated in Table 2, the "reasonably assured" reserves of low-cost thorium in the United States are less than uranium. While the ENEA reports indicated that the "possible additional” thorium reserves may be greater than now known, the usability of thorium in the type of power plant now being built is dependent upon the development of technology unknown today. Therefore, since they cannot now be used, no attempt has been made to chart the exhaustion of thorium reserves. The problems involved in utilizing thorium are illustrated by the following statement taken from FPC's 1964 National Power Survey: "Thorium available in a natural state is mostly composed or thorium isotope 232 (Th−232), which generally does not fission but which is fertile and can be 1 If announced construction schedules are maintained, there will be slightly over 10 million kilowatts of nuclear capacity in operation by the end of 1970. * Private communication from leading equipment manufacturers. were based on FPC predictions, corrected for replacements. The computations converted to uranium isotope 233 (U-233), which can fission and release energy. However, considerable time and effort may be needed to develop processes to cope with the radioactivity which accompanies U-233 before that material can be utilized at low cost." HOW MUCH MORE URANIUM WILL BE FOUND? It is sometimes said that vast new quantities of uranium will be found with a resumption of efforts to find it. Is this assumption a reasonable certainty? The European Nuclear Energy Agency, in its 1965 study of world reserves, made this statement: "As surface prospecting has already been extensive in the Western United States, it is doubtful that many outcropping uranimum deposits remain to be discovered. In the future, new districts will be more difficult to find, exploration will be deeper and more costly and mining costs will be generally higher, because of the greater depths of the deposits." Speaking before the Joint Committee on Atomic Energy this year, Richard D. Bokum II, president of United Nuclear Corp., said: "If our projections are correct and the utility companies continue to buy reactors on the basis that they bought them for the last nine or ten months, sometime in the mid 1975's if you give a thirty year life of these reactors, all the reserves that this country now has including the Government stockpile will have been committed . "I am not trying to consider myself just as a mining company, looking at it from a narrow point of view. I am looking at it from the utility industry point of view, through the utility industry eyes to where they are not putting up a hundred million dollars worth of money and are not assured of a supply for thirty years I don't really see any problem with Government stockpiles. I think we will need all the uranium we can get hold of. Anybody who does not believe this is not realistic in the face of what has happened in the last nine years." + Questioned as to his opinion on how much additional ore might be found in the United States, Mr. Bokum replied: "I say that a very high percentage of the ore in this country I believe has been already discovered." WILL WE IMPORT URANIUM? The "reasonably assured” reserves of low-cost uranium in the free world, as reported by European Nuclear Energy Agency, have been noted previously. The U.S. has about 30 per cent of the total; Canada about 32 percent; South Africa (which cannot speed up production because uranium is a by-product of gold mining) about 21 per cent. While Canada has large supplies of uranium in excess of its own needs, it is the only country in that position, and its supplies will hardly be adequate to take care of European and Japanese needs for a long period. The combined uranium needs of the rest of the free world are expected to exceed those of the United States. Again quoting Mr. Faulkner of AEC : "Although substantial reserves of uranium are known abroad, production capacity is limited. This is particularly true of South Africa which has almost one-third of the known non-Communist world reserves. Furthermore, taking into account reactors using both natural and enriched uranium, foreign needs (excluding Communist countries) are expected to exceed U.S. requirements, so that we ought not to place substantial reliance on meeting domestic needs through imports." The "Financial Post," published in Toronto, Canada, carried in its issue of April 30, 1966, an article titled "Great Uranium Hunger may be Bigger than Expected." After quoting Eric H. Smith of General Electric Co. as saying, "We are not concerned with a possible uranium shortage," the article discussed the contrary view of D. H. L. Buntain, of Burns Bros. & Denton, Ltd., Toronto. Mr. Buntain's view can be summarized as follows: If utilities building atomic power plants insist on dedication of a 20-year supply of fuel, then by 1978 the free world will need to find additional atomic fuel supplies equal to about half of the "reasonably assured" reserves presently believed to exist. The following excerpt from "Nuclear Industry” for May, 1966, further indicates that there is a growing world-wide awareness of the impending shortage : "Reports to Nuclear Industry from abroad confirm that organizations who have been testing the uranium market in the U.S., and in Canada and South Africa as well, have found that price quotations have risen sharply in the last year, particularly in the last six months, and that in general, producers are reluctant to enter even moderately long-term fixed price contracts except at prices that would have been considered high a year or so ago." URANIUM FROM THE SEA Sometimes the claim is made that uranium in unlimited quantities will be available from the sea at $20 a pound. This arises out of a study published by some British scientists. The ENEA report discusses the British study in the following terms: "It has been shown that uranium can be extracted from sea water, and research carried out in the last few years in the United Kingdom, at and under the auspices of the Atomic Energy Research Establishment at Harwell, has led to estimates of the cost of extraction of less than $30 per lb. Other estimates based on preliminary analysis of the Harwell work, however, indicate costs in excess of $100 per lb." [Emphasis supplied.] GOVERNMENT STOCKPILE—WHAT HAPPENS TO IT? From foreign and domestic sources, the AEC has purchased approximately twice as much uranium as is available from "reasonably assured" domestic sources. The purchases from foreign sources were made under contracts signed before enough domestic reserves were found to meet defense needs. Undisclosed amounts of the uranium purchased by the AEC have been used to make weapons and to fuel atomic-powered naval vessels. About 40,000 tons more will be purchased from domestic mines before the purchase program is over. At present, utilities lease this material from the AEC and pay for the amount consumed at the government's purchase price (without any increase to cover the interest charge for years of Government ownership). In a few years, under the private-ownership law enacted two years ago, this leasing will end. The question then will be: Will the AEC continue to sell uranium from the stockpile to utilities, and if so-how much and at what price? The latest published position of the AEC on this is Chairman Glenn T. Seaborg's statement during the 1964 hearings on private ownership of uranium : "As I mentioned earlier, after toll enriching begins, the AEC plans to sell enriched uranium in a manner which does not jeopardize the uranium-producing industry and does not impose on the nuclear power business the historical cost (including interest) of material purchased for defense purposes. Nor should this material be sold at a price that could be called a subsidy for nuclear power. Furthermore, the AEC should neither hold indefinitely a large uranium inventory in excess of Government needs nor dispose imprudently of this valuable national resource. Beyond 1969, in the light of recent optimism regarding the cost of nuclear power and the resulting increased probability of rapid growth in uranium requirements in the 1970's, there are indications that the demand for uranium and the probable market price should support significant sales of AEC stocks, perhaps starting in 1975," It is assumed that the AEC will retain enough uranium to meet foreseeable weapons needs-including a comfortable margin to cover technological developments. Presumably, also, the AEC will keep a long-term supply for existing atomic submarines and ships and for the nuclear-powered navy that Congress is insisting be built. Whether this will leave any uranium, over and above existing commitments to domestic and foreign power plants, only the AEC can say. If there is any left, it would seem that the AEC should add the carrying charge represented by the interest rate on the national debt, for the time between acquisition and sale; otherwise, the Government will suffer a net loss. The question of mineral stockpiles has stirred controversies in the past. Whether the Government will make a profit or suffer the "interest" loss on uranium stockpiles is not known, but excerpts from the Joint Committee's report on the AEC's fiscal year 1967 appropriation authorization bill show the matter will receive attention: "Since 1946, the AEC has spent approximately $5.4 billion to purchase uranium from domestic and foreign sources. The vast bulk of this material has been used in connection with the military aspects of the atomic energy program. However, an increasing amount is being used for civilian applications, primarily in central station nuclear powerplants. |