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The original documents are located in Box 52, folder "1975/10/03 - President" of the James
M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 52 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
PA The ww
MEETING WITH THE PRESIDENT
RE: Uranium Enrichment
can from
Friday, October 3, 1975
10:30 a.m.
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October 3, 1975
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FORD i LIBRARY GERALD
form Andrew
THE WHITE HOUSE
WASHINGTON
October 2, 1975
MEETING WITH ROBERT SEAMANS
AND ROBERT FRI
Friday, October 3, 1975
10:30 a.m. (15 minutes)
The Oval Office
From:
Jim Cannon
I.
PURPOSE
To encourage Administrator Seamans and Deputy Administrator
Fri to continue and strengthen their efforts to gain
Congressional acceptance of your June 26 uranium enrichment
proposal.
II.
BACKGROUND, PARTICIPANTS & PRESS PLAN
A.
Background:
Once your June 26 proposal was sent to Congress,
Seamans delegated lead responsibility for follow-up
to an ERDA committee headed by one of his Assistant
Administrators (Roberts). ERDA did not mount an
effective effort to communicate and sell the plan
on the Hill, or to counter the expected initial
wave of negative Congressional reaction.
Domestic Council staff pushed ERDA to undertake a
strong follow-up effort with considerable par-
ticipation by Seamans and Fri. Some progress is
now being made but much remains to be done.
Over the past month:
Seamans or Fri have personally briefed 13 of
the 18 members of the Joint Committee on
Atomic Energy (a summary of members' reactions
previously provided for your meeting with
Senator Baker is again attached at Tab A).
Seamans has now created a project office and
is developing an action plan.
- 2 -
Other developments include:
ERDA negotiations with UEA are continuing with
a draft contract expected by October 15.
The UEA formal partnership agreement with
Goodyear, previously promised by September 30,
is now expected on October 7. UEA indicates
another major industrial firm will also become
a partner within the next few days.
The first draft of the GAO report is poor in
quality and critical of the Administration's
proposal. ERDA, OMB and Domestic Council staff
are working with GAO to get a fair report and
are planning for a quick response to the report
once it becomes available publicly -- to counter
its expected negative impact.
B. Participants: Dr. Robert Seamans, Robert Fri.
Staff: Jim Cannon.
C. Press Plan: Meeting will be announced routinely;
White House Photographer.
III. TALKING POINTS
I would like to have a brief report on your progress in
getting acceptance of our uranium enrichment program.
We knew that a major effort would be needed to explain
and sell the program to the Congress. I am pleased
that (1) you are making good progress, and (2) you
are committed to a strong effort, with considerable
personal involvement in the weeks ahead.
I recognize that there is strong pressure (e.g., from
Senator Baker) to proceed with a Government-owned
add-on diffusion plant and put off private industry
involvement. Though I want planning for an add-on
plant to continue on a low key basis, this should not
interfere with the primary thrust of our plan to have
industry finance and build the next plant.
DATE
UNITED STATES
ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION
WASHINGTON, D.C. 20545
September 26, 1975
To: GLENN SCHLEEDE
DOMESTIC COUNCIL
FROM: HOLLISTER CANTUS
ERDA CONGRESSIONAL RELATIONS
PRESIDENTIAL BRIEFING PAPER CN NUCLEAR FUEL ASSURANCE ACT
Per our telephone conversation this morning, the following information
may be of assistance to you in preparing a briefing paper for the
President on initial Congressional reaction to the proposed Nuclear
Fuel Assurance Act.
EPDA has been pursuing this subject at two levels simultaneously:
our Administrator, Bob Seamans, our Deputy Administrator, Bob Fri,
and our Assistant Administrator for Nuclear Energy, Dick Roberts,
have been briefing the members of the Joint Atomic Energy Committee
individually. As of this morning we have been able to talk to 13
of the 18 members of the JCAE plus Senator Bellmon. In addition there
have been numerous staff-level briefings for non-JCAE staffers.
The general reaction has been two-fold: There is a reluctance on the
part of some of the JCAE members to commit themselves to a position
prior to the release of the GAO study -- presently expected out on
October lst- and a universal recognition of the need for additional
enrichment capacity for the United States. No strong opinions have
been propounded in opposition to the President's proposal as a whole,
although the Chairman, Senator Pastore, has declined to be briefed
and several members have serious concerns for certain aspects of the
plan.
Individual reactions expressed to us have been as follows:
Senator Jackson --- Generally favorable since it fits into his
basic philosphy on the government role in the commercialization of
the synthetic fuels industry. His concern was whether private industry
could raise the required capital without additional financial guarantees.
He was very receptive, as one might expect, to the impact this
industry would have on the employment problem, specifically in the
plumbing and building trades. He is concerned that the so-called
"environmentalists" would seize this opportunity to challenge nuclear
REVOLUTION
growth.
AMERICAN
BICENTENNIAL
FORD LIBRARY "If GERALD
1773-1976
GLENN SCHLEEDE, September 26, 1975
Page 2
Senator Syminaton -- Generally favorable to the plan but has very
great concerns for the growing trend of Government guarantees for
private industry, the potential for proliferation of nuclear
enrichment technology to foreign countries, and the problems associated
with safeguarding nuclear material. The Senator recognizes that the
uranium enrichment "genie" is out of the bottle and therefore, if
the U.S. is to play a role in the formation of regulations and
international agreements to safeguard materials and technology, it has
to be a participant in the world market arena.
Senator Montova -- Somewhat surprisingly, Senator Montoya approves of
the concept of a competitive nuclear fuel enrichment industry. While
tending toward the preservation of the government's role in gaseous
diffusion plants, he had no objection to the comercialization of the
centrifuge technology. He managed to work into the conversation his
belief that the enrichment plants ought to be close to the source of
uranium ore --- like New Mexico? He agrees that all interests will be
best served by prompt hearings. He is not yet aware of which subcommittee
Sen. Pastore will task with this subject. (Sen. Montoya chairs the
Legislative Subcommittee).
Senator Baker - According to his speech before the American Nuclear
Society, he favors the commercialization of the centrifuge technology
after the government builds and operates a centrifuge demonstration
plant ( at Oak Ridge ) In the interim, he stated that the Government
ought to add on to the existing plant (diffusion) at Portsmouth rather
than the UEA proposal. There may have been more of a "home consumption"
element to his speech than a firm commitment to his suggestion. He left
himself some maneuvering room. Nonetheless, his apparent opposition to
the Presidnet's proposal leaves the JCAE Minority in a difficult
position.
Senator Case -- His reaction was one of benevolent neutrality. He may
support the proposal once he has sorted out in his an mind what the
proper level of government participation should be - in this and all
other areas of the private sector industries. He is reassured by the
lack of direct financial involvement on the part of the government
unless there is default or a clear need for the add-on at Portsmouth.
He also expressed concern over the need for clear definition, by ERDA
and NRC, of the roles each will play to ensure the safeguarding of
the technology.
Senator Buckley -- Fully supports the preposal "because of my basic
philosophy which would include the sale by the Government of TVA."
Rep. Price -- Will withhold judgement until after he has seen the
G&O Report. It is likely that Nel will oppose the proposal since he
has fully supported the retention of "this technology built by and
for the taxpayers" within the federal Government.
FORD LIBRARY & DERALD
Pen. Fencalio -- "You will have no problem with me on this one". He
is concerned, however, by the inability of the IAEA to exercise real
control over nuclear materials and technology overseas. He also expressed
GLENN SCHLEEDE, September 26, 1975
Page 3
concern that the Government might be moving too far and tco fast
in the whole area of guarantees. This statement was made the day
after the EIA announcement and SO can be taken with a grain of salt.
Pap. McCormack --- Mike is increasingly concerned by the anti-big business
and anti-energy positions being expressed by the Congress and the
Nader-ites respectively. He sees this issue as another opportunity to
fight the anti-nuclear grawth issue. However, since he is SO busy
elsewhere, he cannot play a significant role on this one. He strongly
suggests that the President commence a series of "fireside energy chats"
addressing the most difficult subjects first and, weekly if possible,
using these chats to educate the public on energy issues ard their
complex interrelationships. He sees this as also a means through which
to focus and control the debates. With regard to this specific program,
Mike indicated that it made more sense to him to make the switch to
comercialize uranium enrichment at the same time we switch to the
centrifuge process.
Rep. Moss -- As a co-sponsor of the request for a GAO audit, John did
not want to comment on the proposal without seeing the GAO study. He
expressed concern over the trend toward big petroleum companies moving
into the other energy areas, such as uranium enrichment. Chet Holifield
is John Moss's mentor on the JCAE and may be guiding his present views.
Pep. Anderson ----- John is one of the most knowledgable members on this
subject. He will lead the charge on the minority (House) side on this
issue. He suggests we continue to brief the members with high-level
but low-profile efforts until the GAO study is out. Then he suggests
we bring out the technical experts to refute the expected unfavorable
report.
Rep. Horton - Frank has done his homework on this issue but is not
committed one way or the other. He expressed concern over the partnership
arrangements in UEA, both as to the extent of foreign involvement and
the personalities involved in the domestic corporations. He suggests
a fixed timetable for the initiation of the "hedge plan"be made public
as soon as possible. He is also concerned over the extent to which the
JCAE would be able to exercise control over all contractual agreements
which impose burdens or obligations on the Government. He is categorized
as neutral/leaning against on this issue. Ed Bauser, former staff director
on the JCAE, has been hired as a consultant to Horton on this program.
Senator Bellmon -- Although not a JCAE member, the Senator is very
current on this proposal through his visits to the centrifuge experiment
at Cak Ridge and a series of briefings by UEA and the centrifuge companies.
He fully supports the program and has spoken to Senator Pearson to urge
that he lead the minority side (Senate) on this issue in the face of
a possible Baker fallout. He reports that Senator Pearson is willing to
do so. ERDA-Pearson discussions have been scheduled.
DERALD R' FORD
NOTES ON MEETING WITH THE PRESIDENT
RE: Uranium Enrichment
Friday, October 3, 1975
10:30 a.m.
Oval Office
Conversation for Follow Up
The President and Seamans estimate the following timetable:
1. The GAO report will take about two weeks.
2. The JCAE will meet in about two weeks to study
the report before they start hearings.
3. The hearings will take at least a week.
The President wants to get a firm commitment from Pastore
on a definite date to start the hearings - hopefully no later
than Monday, November 3rd.
The President wants to call Senator Pastore about setting
a definite date, and wants me to suggest a time for the call
after
a) GAO report is out
b) I have had a chance to talk to Senator
Baker about what Senator Pastore is
willing to do.
The President emphasized we should also keep in close
touch with John Anderson about the hearings, our proposal,
and the legislation.
On the question of when we should make some judgment as
to the viability of the UEA plan, Seamans emphasized we
should do this before the hearings began.
We would not make any public comment on UEA's viability
but our witnesses could be guided by whether we think
UEA can bring together partners and financing.
The President made these points:
1. We believe we have a viable plan for private
enterprize to be bringing into commercial
production, new forms of energy, and we have
put that plan forward.
2. UEA believes they come under that umbrella.
2
3. Other groups producing energy also believe
they come under that umbrella, e.g. with
centrifuge.
4. If UEA cannot meet the standards we have
set we have a responsibility, in terms of
meeting energy needs, to go another route,
i.e. the diffusion add-on at Portsmouth.
Seamans made two important points about UEA's potential
foreign investors:
a) Iran wants assurances that they can have
their own uranium enrichment plant - which
we don't think Congress would in any sense
accept.
b) Japan wants to buy enriched uranium from the
United States, but is not committed to either
UEA, centrifuge, or the United States Government's
production.
Exxon and Signal Unit Propose Facilities
Kan
To Enrich Uranium at Total $1.6 Billion
By
Ag
By WILLIAM M. CARLEY
The Exxon, Signal and Atlantic Richfield-
Staff Reporter of THE WALL STREET JOURNAL
Electro-Nucleonics plants would all use the
By
Two more companies stepped into the in-
gas-centrifuge process. In this process, ur-
WI
creasingly controversial program to build
anium ore that has been refined and turned
said $
huge uranium-enrichment plants.
into a gaseous state is whirled in centri-
Co., I'
The only U.S. plants currently turning
fuges. Gradually, the Uranium-235 atoms
force
out enriched uranium are three facilities
are separated from the more common and
its cc'
owned by the government that were origin-
heavier Uranium-238 atoms. It's the Uran-
ing u
ally built to provide material for the atom
ium-235 that's needed as fuel for nuclear
in ea
bomb. The rapid growth of nuclear power
power plants.
K1
plants, however, has led to heavy demand
The Bechtel-Goodyear plant would use
resul
for enriched uranium that will soon outstrip
the gas-diffusion process, in which gaseous
pudia
production of the government plants.
uranium is pumped through miles of filters
for t]
Both Exxon Corp. and a Signal Cos. sub-
that gradually separate the Uranium-235.
the
sidiary said yesterday that they propose to
While this technology is proven-it's been
1982.
build enrichment plants. Exxon's unit is to
used for decades in the government plants-
II
cost an estimated $700 million and Signal's
it uses immense amounts of electricity. In a
world of power shortages, a plant using less
said,
an estimated $900 million.
electricity would be desirable.
incre
Earlier, a joint venture of Atlantic Rich-
been
field Co. and Electro-Nucleonics Corp. pro-
Proposals to the Energy Research and
"cor.
posed building a $1 billion plant, and another
Development Administration, the govern-
June
partnership, including Bechtel Corp. and
ment agency overseeing the uranium-enrich-
It
Goodyear Tire & Rubber Co., proposed a
ment project, were due yesterday.
cour
bigger, $2.75 billion project.
Exxon's proposal indicated its plant
der
All the proposed plants, however, rely on
would eventually produce 3,000 SWUs an-
uran
nually. An SWU is a measure based on the
legislation that President Ford recently sub-
dam
enrichment of uranium. Exxon said its plant
mitted to Congress. The Ford proposal aims
viola
to switch the enrichment business from a
would begin operating in 1982, producing 1,-
amo.
000 SWUs a year. If the plant proved techni-
government monopoly to private enterprise.
the
cally and economically viable at that level,
But some legislators are beginning to ques-
it would be enlarged to the 3,000-SWU level.
puro
tion the guarantees that would be extended
I
to the companies against certain risks, with
Exxon's announcement on its proposed
man
the government picking up the tal If the
plant said that "governmental assurances
and
government is going to shoulder these risks,
as proposed by President Ford in the (legis-
T
perhaps it should build the plants itself and
lation) are assumed to be available." But
said
reap any subsequent financial benefits, it's
Exxon didn't disclose just what assurances
bur,
been suggested.
it was seeking. The Exxon release did say
ent
its project would be accomplished with pri-
Even if President Ford's proposed legis-
from
vate financing, apparently indicating there
lation gets through Congress, the govern-
$10:
wouldn't be any direct government subsidy.
ment then must decide whether to give
The
But financing details weren't given.
some or all of the proposed ventures the
tra
green light. Another potential stumbling
The Signal Cos. proposal, made by its
block is the technology involved-three of
Garrett Corp. subsidiary, also envisions a
aw,
the four plants proposed by industry would
3,000-SWU plant, with operation beginning in
tioi,
use a technology never before tried in the
1980 and the plant fully completed by 1987.
ing
U.S. on a commercial scale.
Signal said that the plant would be built in
to L.
Texas and that Houston Lighting & Power
Co. and Texas Utilities Services Inc. would
Federal Workers Granted
contract for the output of the first portion of
C
the plant on a long-term basis, with options
Only a 5% Increase in Pay
on the output from the expanded facility.
T.
By a WALL STREET JOURNAL Staff Reporter
The Signal proposal, unlike Exxon's,
WASHINGTON - Federal workers
called for an $85 million government. sub-
0
will get only a 5% pay raise following
sidy. It also called for the government to as-
action by the House.
sume the obligations and operation of the fa-
By a 278-to-123 vote, the House re-
cility should the project prove unsuccessful
I
jected a move to substitute the 8.6% in-
commercially. Of the $900 million estimated
crease recommended by an advisory
capital cost, debt would account for about
said
committee on federal pay for the 5%
85% and equity the remainder. The project,
Co.
boost proposed by President Ford. The
over 20 years, would produce a 17% rate of
sul
Senate had already accepted the Presi-
return, it was estimated.
dent's suggestion, 53 to 39.
Many details of the various proposals, in-
w(1
The pay increase, which affects most
cluding assumptions underlying certain of
LJ
federal employes, including military
the cost estimates, aren't available. To
in
personnel, top officials, judges and
some extent this is due to the fact that the
members of Congress, took effect yes-
government is keeping much of the program
qu
terday.
under wraps to keep the nuclear technology
ga
The advisory committee said an 8.6%
secret. In some cases, however, some of the
F
increase was required to keep federal
companies are keeping even the nonclassi-
workers even with those in private in-
fied material secret, at least for the time
dustry. But Mr. Ford said a 5% raise
being. "We're going to wait and see what
would save $1.6 billion this fiscal year
the government does with the proposals be-
P
FORD
and help fight inflation. In July Con-
fore we release ours," an official at Electro-
gress voted to bring itself under the
Nucleonics said yesterday.
pay-raise plan, which has stirred much
In the meantime the companies are
opposition from the public.
drumming up support, partly by starting
GERALD
LIBRARY
The large votes in both the House
relations campaigns and partly by
and the Senate against an 8.6% increase
lining up investment bankers to help lay fi-
and in favor of the President's more
nancing plans. Signal's financial plans, for
example, have been drawn with the help of
I
modest proposal probably reflect the
lawmakers' fear of angering voters
Kuhn, Loeb & Co., and the Atlantic Rich-
even more.
field-Electro-Nucleonics venture's plans
have been aided by Dillon, Read & Co.
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