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The original documents are located in Box 5, folder "Nuclear Policy Review: September 7,
1976 (1)" of the White House Special Files Unit 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 5 of the White House Special Files Unit Files
at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
washington
Trudy,
Just so we'll be prepared₁I
asked the messengers to run off
10 copies of the naclear pepx paper
overnight. They will have it first
thing in the morning. I assume
Jim then will have decided how to
staff it.
E.
9/7
8:15
Glenn
look 3 cope,
conn memo is
saving redome = - -
Hlenn wacking
well 4 NSC
+OMB
8:20
9/8/70
CONT
IDENTITY
THE WHITE HOUSE
WASHINGTON
September 7, 1976
DECISION
MEMORANDUM FOR:
The President
FROM:
Robert Fri
act
SUBJECT:
Nuclear Policy Review
The Nuclear Policy Review Group that you established on
July 19 has completed its analysis. You directed that the
review examine three interrelated issues:
1. What should be U.S. policy on nuclear exports,
safeguards, and related matters to reduce the potential for
weapons proliferation?
2. What should be the U.S. policy on reprocessing
spent fuel from commercial power reactors to recover
plutonium and unused uranium, and on the development of the
U.S. reprocessing industry?
3. Are U.S. plans for handling and storing nuclear
waste adequate?
Working in collaboration with thirteen interested agencies,
we have developed several recommendations and options for
your consideration. There is general agreement that the
proliferation threat is sufficiently serious to warrant a
change in U.S. nuclear policy. In most cases, there is also
agreement among your advisers on major recommendations,
although some important if secondary differences remain.
There is, however, a divergence of view on the central
direction that your nonproliferation policy could take, and
more specifically on the nature of your endorsement, if any,
of reprocessing to recover plutonium.
DECLASSIFIED
E.O. 12356, Sec. 3.4.
MR 98-30,*5; NState letter 7/2/98
CONF IDENTIAL
By lit NARA, Date 10/19/98
CONFIDENTIAL
-2-
To present these issues to you in an orderly way, you have
before you:
1. This memorandum, which provides necessary back-
ground, presents major options requiring your decision,
and recommends next steps.
2. Tab A, which contains three short option papers on
which we need your decision to resolve secondary issues.
3. Tab B, which briefly describes other recommendations
on which all your advisers concur.
4. Tab C, which contains agency views.
BACKGROUND
The problems addressed in this memorandum arise from the
nature of the nuclear "fuel cycle." The nuclear fuel cycle
begins with mining of natural uranium. The amount of
fissile material in natural uranium--the isotope U-235--must
be increased to produce fuel for U.S.-type nuclear power
reactors; this step is called enrichment. Fuel assemblies
are fabricated from the enriched uranium and burned in a
reactor. The resultant spent fuel is stored temporarily at
the reactor site.
After burning in a reactor, nuclear fuel contains a mixture
of plutonium, slightly enriched uranium, and radioactive
waste products. This spent fuel must be cooled for several
months at the reactor site. The unresolved issue is what
disposition should be made of it thereafter.
Industry has long assumed that the spent fuel would be
reprocessed to recover the plutonium and uranium, which
would be recycled into new fuel, thus reducing the amount of
fresh enriched uranium required. The radioactive wastes
separated during reprocessing would be prepared for per-
manent disposal. However, the desirability of reprocessing
is open to question, and other technologies for handling the
spent fuel may be available.
CONFIDENTIAL
CONFIDENTIAL
-3-
The major concern in reprocessing is the recovery of
plutonium, which is both extremely carcinogenic and the
principal material needed to make nuclear explosives. The
plutonium is inaccessible while it remains in spent fuel,
but once separated in a reprocessing plant, plutonium could
be diverted for a national weapons capability or seized by
terrorists.
On the other hand, the plutonium and uranium in spent fuel
contains residual energy value, and recovering it could
extend the U.S. fuel supply for current reactors by 50%. If
no more natural uranium is discovered, the added fuel would
be important to the U.S. reaching its targets for installed
nuclear capacity by 2000. However, the economics of re-
covering the energy value are uncertain, and could at best
reduce by 2% the cost of generating electricity in the U.S.
A. International Considerations
The oil embargo has made nuclear power a more attractive
energy option. Indeed, it has been our policy to help other
countries decrease their dependence on imported oil. The
emergence of nuclear power as an alternative to oil imports
both accelerates demand for nuclear power worldwide and
stimulates commercial opportunities for nuclear supplier
nations.
These and other forces create powerful incentives for the
spread of reprocessing, and hence separated plutonium.
Chief among these forces are:
Legitimate interests in an assured supply of
nuclear fuel.
The fast breeder reactor, which ultimately
requires plutonium for its operation. France
will soon start to build a commercial breeder.
International competition among suppliers, which
can lead to sale of enrichment and reprocessing
facilities as an inducement for reactor sales or
as a commercially profitable venture in its own
right.
Desire for a nuclear weapons option.
CONFIDENTIAL
CONTYDENTAL
-4-
The U.S. has acted to control proliferation of weapons
material. For many years we dominated the market for nuclear
reactors and fuel, and we used this influence to impose
restraints on our customers. In so doing, we have:
Promoted the international safeguards system to
detect any diversion of sensitive nuclear material.
Induced many nations to foreswear nuclear weapons
through the Nonproliferation Treaty (NPT), and,
through the NPT, to accept international safeguards.
Refused, since 1972, to distribute technical informa-
tion on reprocessing.
Developed common conditions that all suppliers
will apply to their nuclear exports to limit the
possibility of proliferation.
However, several countries remain outside the NPT and we
have remaining differences with both other suppliers and
many consumers as to how far we can go to restrain the
spread of sensitive technology and material. France, the
FRG, and Iran feel we have already taken too rigorous a
stand.
Although we have made progress, we are losing our leverage
to make more. Our role as a reliable supplier, the main
lever for our nonproliferation strategy, has eroded.
We remain the dominant enrichment supplier, but
our future order books have been closed since mid-
1974.
As other suppliers have entered the field, our
share of the reactor market has dropped from 80%
to 55%, and there have been virtually no signifi-
cant U.S. reactor sales in the past year.
We do not offer reprocessing services, and it
is possible that reprocessing capacity outside
the U.S. will be available to service all non-U.S.
spent fuel by 1985. Several major industrial
COVEDENTIAL
CONFIDENTAL
-5-
nations currently plan to operate commercial
reprocessing facilities, but the only one now
in operation is a plant in France. Small, non-
commercial facilities have been constructed in
several countries, notably including India, which
could not have produced its nuclear explosive
without such a facility.
B. Domestic Considerations
There are no commercial reprocessing facilities now operating
in the United States, and none are likely to operate until
the Nuclear Regulatory Commission (NRC) makes the "GESMO"
(Generic Environmental Statement on Mixed Oxides) decision,
expected in 1977. This decision will determine whether or
not plutonium recycle can be licensed in the U.S. Industry
is also concerned about the uncertainties of licensing the
first reprocessing plants, even if GESMO is approved.
Although this regulatory problem is frustrating, it is not
clear that the U.S. needs to build reprocessing capacity
rapidly. The economics of the technology are uncertain, and
even if favorable, would produce only a 2% reduction in the
cost of generating electricity. The energy content of the
spent fuel is not needed to fuel current reactors for several
more years. ERDA has deferred until 1986 an Environmental
Impact Statement on commercialization of the breeder, and so
plutonium is not required now for this technology. There
are, of course, proliferation risks associated with repro-
cessing that should be resolved before its widespread use.
These economic and regulatory uncertainties surrounding
reprocessing lead us to believe that government investment
or guarantees may be required to stimulate initial construction.
The U.S. does not have a nuclear waste disposal capability.
Although some of the basic technology is known, it was not
until the past year that a comprehensive program for de-
veloping waste disposal technology was conceived. It is now
hoped that the first waste repository will operate in 1985.
CONFEDENTAT
CONFIDENTIAL
-6-
MAJOR POLICY OPTIONS
The major issue facing you is a directional one-what
should be the U.S. position on the use of reprocessing
internationally and domestically. Although reprocessing is
not the only nonproliferation issue, it is of central
substantive and symbolic importance as the technology that
creates plutonium. As a result, its acceptability is the
point on which many people divide, including your advisers.
Before presenting the options, we briefly describe the
nature of the tradeoff involved and the importance of your
decision.
First, the nuclear industry and utilities want a decision on
reprocessing. The industry stresses its benefits and
generally promotes the technology. Utilities appear to be
more concerned about eliminating uncertainty, and therefore
place more emphasis on taking some stand on reprocessing
than on precisely what that stand is.
Public, press, and Congressional views show concern over
reprocessing, and over nonproliferation generally. The
Congress has extreme problems with the course of our non-
proliferation policy, and has made several proposals to
tighten sharply and abruptly our policy, often in ways that
could disrupt our nonproliferation efforts. Simultaneously,
the press has taken an editorial interest in the subject,
generally to deplore past inaction and occasionally to com-
mend one or the other of the new proposals made in Congress
or elsewhere. As a result, there is considerable sentiment
for a forceful nonproliferation initiative domestically, and
this sentiment is by no means on the liberal fringe.
Congressman John Anderson is actively seeking nonprolifera-
tion legislation, and the Wall Street Journal encouraged us
to defer reprocessing for a number of years.
In contrast to the domestic view, our international stance
toward nonproliferation argues for some moderation. We are
party to thirty bilateral agreements for nuclear coopera-
tion, and our obligations under these Presidential agree-
ments cannot be taken lightly. Other countries, mostly our
allies, also supply nuclear reactors and fuel services,
CONEIDENTIAL
GONFIDENTTAL
-7-
and the forging of common supplier policies is central to
the worldwide control of proliferation. A radical toughening
of our current policy could undercut the evolution of common
supplier policies, since some other suppliers would regard
such a stance as politically unrealistic, and possibly as an
opportunity to further their own commercial interests at our
expense.
Notwithstanding the difficulty of striking the delicate
balance between the "tough" stance some seek domestically
and international realism, we believe it is crucial to do
so. The U.S. remains, uniquely in the world, the leader in
nuclear policy. Unless we are prepared to embark on a
responsible but aggressive policy of nonproliferation, it
is unlikely that others will.
Your advisers agree on certain steps that we believe you can
take to exercise nuclear policy leadership. Specifically,
we should:
Develop, with heavy U.S. backing, more rigorous
international controls over plutonium inventories,
more effective safeguards against diversion of
this material, and tighter security to prevent
theft.
Negotiate actively to persuade our nuclear
customers to defer or foreswear national repro-
cessing, and to accept more rigorous safeguards and
inventory controls.
Be prepared to invoke sanctions when our safeguards
agreements are broken.
Beyond these steps, you have four alternate major policy
directions open to you.
1. Accept that reprocessing is inevitable, and undertake
a program designed to lead to its use only under carefully con-
trolled conditions worldwide. In this option, you would
take the stand that plutonium recycle is essentially with us,
and the need is to control its development. Since we still
CONFIDENTIAL
CONFIDENTIAL
-8-
have some time before reprocessing becomes a commercial
activity, we would urge the world to use this time to ensure
reprocessing develops safely in selected, stable countries.
In the meantime, we would favor a go-slow posture toward
recycling internationally.
To implement this position, you would support (including
Federal assistance) the operation of a first commercial
reprocessing plant and associated recycle facilities in the
U.S We would use this facility to demonstrate new inter-
national controls and to gain experience needed for a U.S.
reprocessing industry. Internationally, we would work
toward a system of assured fuel supply for all countries
agreeing to tougher controls, and we would offer incentives
to other countries (e.g., offer to purchase their spent
fuel) to support this alternative to national reprocessing.
2. Adopt a more conservative stance on reprocessing,
not accept its inevitability, and mount a major program to
determine how to reprocess safely. This stance could lead
to the same result as Option 1, but the tone of your position
on reprocessing would be significantly different. You would
state that economic interests should not dominate nonpro-
liferation goals, and point out that there is little urgency
in developing plutonium recycle. Therefore, you would take
the stand that reprocessing should not go ahead unless
demonstrably safe means to do so are available, or unless
acceptable alternate technologies not involving separated
plutonium cannot be developed. Until these conditions are
satisfied, the U.S. would oppose the use of plutonium as a
fuel internationally. Under this option, we would support
operation of a first U.S. plant to answer the outstanding
questions relative to safeguards and economics, and would
offer near-term incentives of assured supply to other
nations, as in Option 1.
3. Oppose the use of reprocessing, and take a very
tough line in doing so. This option would, if successful,
produce a completely different result from either Option 1
or 2. We would view reprocessing as a serious danger, and
would oppose its use. As an alternative to reprocessing, we
CONFIDENTIAL
CONFIDENTIAL
-9-
would attempt to develop new technologies to get the energy
value from spent fuel without separating the plutonium;
failing this, we would be prepared to dispose of spent fuel
without regard to its value. In any case, we would not have
to face the plutonium problem.
4. Pursue our existing policies. We would continue to
resist the spread of national reprocessing, but do so within
the framework of existing supplier and consumer agreements,
and selectively toughen our stand with countries like India.
In general, we would avoid dramatic unilateral initiatives,
engage in intensive but usually unheralded diplomatic efforts,
and expect the domestic controversy to pass. Since we would
approve of reprocessing, although not in some nations, we
would support its development in the U.S.
Considerations affecting your decision among these options
are:
Option 1: Accept Reprocessing
Is in keeping with the views of other responsible
suppliers, although Canada favors a tougher stance
against reprocessing, and the FRG and France a
somewhat more liberal one.
Some nations (like Brazil and perhaps Pakistan)
will proceed with national reprocessing ventures
to fulfill nationalist ambitions, although we
could anticipate that many nations would go along
with our position.
Should receive favorable reaction in some quarters
of the Congress, press, and public, but would not
go far enough in the eyes of domestic critics who
believe that the proliferation risks of reprocessing
outweigh its energy or economic advantage, at
least for several years.
Is compatible with development of breeder reactors
by allowing a technology important to the breeder
to advance, but at a measured pace.
Would resolve many of the fuel cycle uncertainties
affecting U.S. nuclear power.
CONFIDENTIAL
CONFIDENTIAL
-10-
Commits the U.S. to a technology program that
could cost $1 billion through 1985 (assuming an
NRC decision favorable to recycle), and involves
starting up an existing commercial plant at
Barnwell, South Carolina. However, half of the
cost is for a nuclear waste facility that must be
built in any event to demonstrate waste disposal
technology.
Commits the U.S. to offer incentives (e.g., fuel
buy-back) that could have a cumulative cost of
$200 million by 1985 and $2-5 billion through
2000.
Option 2: Conservative Stance
Is a variant on Option 1 that has not been presented
to agencies for their formal views. ERDA, FEA,
Commerce, Defense, and State have indicated their
support of Option 1, but have not yet had the
opportunity to consider Option 2. Their views
will be obtained.
Might strengthen our position slightly with suppliers
other than France, and with most consumer nations.
Would be more favorably received than Option 1 by
most of Congress and the press.
Avoids explaining why you support reprocessing in
the face of uncertain economics and proliferation
risks.
U.S. industry might be less inclined to proceed
with private investment in reprocessing than under
Option 1.
Does not substantially change the program or costs
adopted under Option 1, and could produce the same
results.
Is recommended by the Director of your Nuclear
Policy Review Group.
CONFIDENTIAL
CONFIDENTIAL
-11-
Option 3: Oppose Reprocessing
Would enhance our ability to persuade sensitive
countries such as Korea, Pakistan, Republic of
China and Iran not to acquire reprocessing
facilities by removing the arguments that we were
seeking to deprive them of a capability we were
exploiting ourselves.
Would be unlikely to dissuade France and the
United Kingdom and possibly others from proceeding
with their reprocessing plans to which they
already are committed.
Would have the U.S. forego a known technology
(reprocessing) in return for pursuing alternates
whose viability has not been demonstrated.
Would deprive the U.S. of employing a reprocessing
facility as a test bed for developing new safe-
guards techniques.
Could be quite popular in some sectors of Congress,
the press, and the public.
U.S. private sector reprocessing capability would
fold, utilities might slow down nuclear reactor
orders, and the breeder would be called into
question.
Incurs roughly about the same costs as Option 1,
but to develop alternative technologies.
Is supported by ACDA, CEQ, and EPA.
Option 4: Business As Usual
Continues sound existing policies, but on a
business-as-usual approach that does not deal with
the currently perceived threat of proliferation
through reprocessing.
Could take some credit for progress already made.
CONFIDENTIAL
CONFIDENTIAL
-12-
Other nations, who already view us as overreacting,
would be reassured by our steadiness.
Essentially unacceptable in Congress and by most
of the press and the public.
Little or no cost would be incurred.
None of your advisers recommends it.
DECISION
Option 1 (Accept Reprocessing)
Option 2 (Conservative Stance)
Option 3 (Oppose Reprocessing)
Option 4 (Business As Usual)
NEXT STEPS
To implement the option you select, as well as the recom-
mendations contained in Tabs A and B, steps must be taken to
lay the groundwork for announcing your decisions.
1. The NSC and Domestic Council should prepare one or
more Presidential messages announcing your new initiatives.
(One possibility is for you to announce your international
policy in a speech at the U.N. General Assembly on September 27.)
2. The Secretary of State should enter into appro-
priate consultations prior to your message.
3. We believe that the credibility of any statement
that you make on sanctions will be tested in public eyes by
what the Administration actually does on problems immed-
iately before us, especially regarding India, Taiwan, Egypt,
and Israel. We recommend that the NSC be directed to recom-
mend to you our stand on each of these problems before any
statement is made.
CONFIDENTIAL
CONFIDENTIAL
-13-
Steps also need to be taken to implement your decisions. We
recommend that a Nuclear Policy Council be established for
this purpose. (Tab A presents options for organizing this
Council.)
1. The Council should be directed to prepare imple-
mentation plans as soon as possible.
2. State, ERDA, Commerce, and the Nuclear Policy
Review Group strongly believe that, until we open our
enrichment order book, we have very little leverage with
other countries. We note that even if NFAA is passed this
year, it will be 6 months until Congress approves the con-
tracts and 12 months more before UEA has secured enough
orders and a power supply to enable it to commit finally to
construction. We strongly urge that you establish a policy
that can be announced at the time of final action on NFAA,
and that allows the U.S. to offer more binding assurances of
enrichment supply to other countries than we now can. The
Council should be directed to prepare options for your
consideration on this problem.
Approve
Disapprove
Tab A contains other issues requiring your decision, and you
will find the place to indicate your decision at the end of
the brief discussion of each issue in Tab A.
Tab B describes other actions on which your advisers all
concur. Please check below your approval for us to initiate
these actions.
Approve
Disapprove
Tab C contains agency views.
CONFIDENTIAL
CONFIDENTIAL
TAB A
OTHER ISSUES FOR DECISION
This Tab presents three issues requiring your decision.
Retroactivity of Restraints
Issue: By what means should the U.S. attempt to apply
new export restraints to existing agreements for nuclear
cooperation?
Our agreements for nuclear cooperation impose restraints
on the cooperating nation designed to limit the possibility
of proliferation. In all new and amended agreements, tighter
restraints than those negotiated on old agreements need to be
applied. These largely pertain to controls over reprocessing,
explicit exclusion of peaceful nuclear explosives, etc.
However, only three new agreements are being negotiated and
as few as three amendments are expected in the next five years.
Few of our 30 existing agreements contain all of the restraints
we would prefer to apply to future agreements. Thus, the
tighter restraints will have little effect unless also applied
to existing agreements.
The issue for decision is, therefore, the nature of our
policy for applying restraints retroactively. We do not
consider that a policy of no retroactive application to any
preexisting agreements is proper or feasible. However, to
apply restraints retroactively will produce difficult problems
for our partners, since it is difficult to enforce new conditions
without appearing to be in material breach of preexisting
intergovernmental understandings.
There are two options open to you:
1. Unilaterally insist on retroactivity. Under this
approach, new restraints would be immediately applied to all
licenses for nuclear exports, and provisions made to accord
the President authority to exempt specific licenses from them.
No new materials or reactors could be exported in the absence
of a specific Presidential exemption, unless the other government
agreed to the new terms. After 18 months, we would apply still
more rigorous conditions. The Presidential exemption would
become increasingly hard to exercise and, at some future
DECLASSIFIED
E.O. 12356, Sec. 3.4.
MR 30, #6; NSC letter 7/21/98
CONFYDENTIAL
By let NARA, Date 10/19/98
CONFIDENTIAL
-A2-
time, would effectively expire. Meanwhile, we would seek to
negotiate the restraints retroactively into existing agreements,
using the prospect of a licensing cutoff as a lever.
The effect of this option would be to place in jeoparady
exports to at least EURATOM, the IAEA and Argentina, and
possibly to others, including Switzerland, Brazil, India,
Portugal, South Africa, Spain, Japan and Finland. As the
restraints tighten, it would become increasingly difficult to
deal with EURATOM, the IAEA, Canada, Argentina, Brazil and
India.
Thus, this option:
Would penalize both nations of concern (e.g. India)
and our allies (e.g. EURATOM).
Does not put as severe pressure on some nations of
particular concern (e.g. Korea and Republic of China).
Would likely raise the serious difficulty that imposi-
tion of these new controls places us, in spirit if not
legally, in material breach of existing agreements.
Could penalize several supplier nations, some of whom
could otherwise provide reprocessing services as a
way to avoid the further spread of national facilities.
Could produce a massive shift of nuclear trade elsewhere,
since other suppliers would not adopt such standards.
On the other hand, it could be argued that this approach
imposes desirable nonproliferation controls and, since several
are not found in any of our existing agreements, they can only
be effectuated unilaterally. If you concurred, you would be
perceived by some as taking an admirably tough stand on
proliferation.
None of your advisers concur in this option, but it has
strong support among some members of Congress (notably Senators
Percy, Glenn, Ribicoff, and Symington.)
2. A strong initiative on retroactivity. As an alternative
to insisting on immediate retroactivity, you could adopt a
strategy having the following major components:
CONFIDENTIAL
CONFIDENTIAL
-A3-
Apply new restraints, generally consistent with
the recently adopted Supplier Guidelines, but not
so rigidly couched as to compel us to contravene
existing agreements.
Direct the Secretary of State and the Administrator
of ERDA to organize a major diplomatic effort aimed
at upgrading existing agreements to at least the
level of the restraints indicated ábove.
Seek, through appropriate international undertakings
and negotiations, retroactive application of even more
rigorous restraints that clearly go beyond the terms
of existing agreements.
In contrast to the first option, we would negotiate for
these restraints, rather than try to impose them unilaterally.
Moreover, how hard we press would be a function of the degree
to which there is supplier agreement. It is believed that
this option would offer a firm yet workable framework that
would enable the U.S. to preserve its influence with a variety
of nations, although it must be recognized that we can encounter
difficult negotiation problems. This overall approach would
have the virtue of signifying a generally tougher U.S. line.
At the same time it would not deprive us of the opportunity to
extend our cooperation and influence to a number of supplier
or consumer states not meeting our preferred tests. Such an
effort also could focus on restraints which other suppliers
might accept if they can be convinced that they suffer no
commercial disadvantages.
However, the inherently greater flexibility of this
approach also can draw some domestic criticism, even though
it may penalize us economically by clearly placing our new
restraints beyond FRG or French practice. Some private inter-
venors before the NRC can be expected to press the Commission
to adopt as criteria some of our longer-term stated goals in
approving current licenses. Thus, success of this strategy
may depend on the degree of public confidence that we are
pursuing diligently a major diplomatic initiative to tighten
constraints, whether they apply to new or preexisting
arrangements.
CONFIDENTIAL
CONADENTIAL
-A4-
Your advisers all concur in this option. We believe
it would have the support of Senators Pastore and Baker, and
Representatives Anderson, Price and others.
Please indicate your decision below:
Option 1: Unilateral Imposition
Option 2: Strong Initiative
Your decision on the above options will determine the
basis for our cooperation with the Joint Committee on Atomic
Energy on the nonproliferation bill they are writing. Based
on your recent meeting with Senator Pastore, it is our under-
standing that we should communicate your decision to them and
attempt to work out an acceptable bill. If you approve, we
will proceed along these lines.
Approve
Disapprove
Domestic Program
Issue: When, and to what extent, should you announce
a program to develop reprocessing technology in the U.S.?
If you select Major Policy Option 1, 2, or 4, some
program to develop reprocessing in the U.S. would be required.
Heretofore, you have not decided to spend Government funds on
reprocessing to attain purely domestic objectives. However,
we believe a .S.-based capability is needed to further the
international policies recommended in this Review. Specifically,
such a program is needed to:
Provide a test bed for demonstrating safeguards.
Provide a basis for Japanese participation in
multinational investment in reprocessing, and
for cooperation with United Reprocessors, a
European group.
Explore technologies other than reprocessing
for getting the energy value from spent fuel.
CONFIDENTIAL
CONFIDENTIAL
-A5-
In the course of creating this capability, we would
achieve objectives of domestic benefit, by:
Resolving remaining technical and economic
uncertainties of reprocessing.
Demonstrating the solidification of nuclear
waste at near-commercial scale.
Determining if large reprocessing plants have
major economies of scale.
To meet these purposes, facilities and programs costing
as much as $800 million through 1985 may be required. Specifically,
we might need:
To license the AGNS reprocessing plant at Barnwell,
South Carolina; it was constructed at private
expense.
To build a facility to convert plutonium nitrate
(the liquid AGNS product) to solid plutonium
oxide; the cost would be $175 million, but it
would be operated on a cost recovery basis.
To construct a waste disposal facility; the cost
would be $300-500 million.
To construct a prototype line to fabricate
recovered fuel (mixed oxide fuel) ; cost would
be $15 million (assuming use of an existing
building), and the private sector would build
a commercial facility later.
To undertake alternative technology and large
plant design programs; cost would be around
$50 million.
The issue is when, and to what extent, to commit to and
to announce these facilities now. The considerations are:
GESMO: The conversion facility is subject to
NRC's GESMO finding.
International negotiation: Since at least IAEA
and Japan are involved, they should be consulted
on the program before major design work begins.
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AGNS: We must negotiate with AGNS our liability
if we encourage its operation; we think our costs
will be nothing, but we cannot be sure. Further-
more, support to AGNS (owned by Gulf, Shell, and
Allied Chemical) could be seen as a bailout to
industry unless we incur little or no cost. Any
announcement before November could be sensitive.
Waste disposal solidification: It is desirable
to announce commitment to demonstration, but
costs are large.
Budget review: None of the above facilities have
been considered by OMB as part of the overall budget.
The size of the two main facilities has not been
finally decided, nor have negotiations been conducted
to determine how much, if any, of the cost might
be borne by the private sector.
There appear to be two options.
1. Commit publicly now to a detailed program. You would
announce all the actions explicitly.
Pro
- Sets the clearest basis for a domestic support
of both international and domestic policies
- Would be a clear decision endorsed by industry
- Would be solid backing for the waste disposal
program.
Con
- Forces the hand of IAEA and Japan somewhat
- Could reduce our leverage with AGNS
- May commit to a funding level before the
program details are worked out.
- Could be criticized as AGNS bailout and
preemption of GESMO.
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This was the only option presented for agency vote.
State, ERDA, FEA, and Commerce favor it. ACDA, CEQ, and EPA
oppose it.
2. Commit generally now, but save specific proposals
until later. You would outline the purposes of the program,
commit the Government generally to assuring that the program
objectives will be met, but observe that the extent of
government support, the timetable, and other details need
to be worked out. We would anticipate specific actions in
next year's budget.
Pro
- Gives time to negotiate, firm up program details,
and conduct budget review
- Sidesteps AGNS and GESMO problem.
Con
- Not as strong as Option 1 in committing a
domestic program in support of international
goals.
This option, favored by OMB, was not presented for agency
vote.
The Nuclear Policy Review Group concurs in the general
approach of Option 2, provided that the commitment to the
program is clearly supportive of your international policies.
Negotiations should proceed to firm up program details, and
be concluded by the time your budget is presented in January.
This variation of Option 2 is listed below as Option 2A.
Please indicate your decision.
Option 1: Detailed commitment
Option 2: General announcement
Option 2A: Firm commitment, but
without details
CERALD
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Management Structure
Issue: How should you ensure top level direction of
the implementation of your nuclear policy decisions?
Your nuclear policy decisions will require a major
implementation effort, and very close coordination of
domestic and international programs. The Department of
State, ERDA, and ACDA are the agencies mainly involved.
Defense and the CIA have a smaller role, but should be kept
informed of progress.
The Nuclear Policy Review Group that has prepared this
decision paper recommends you establish a Nuclear Policy Council
to implement your decisions embodied herein. There is dis-
agreement over its membership and reporting relationship.
1. Membership. There are three options.
a. Appoint the Deputy Secretary of State, the
Administrator of ERDA, and the Director of ACDA as a Nuclear
Policy Council, charged with implementing initiatives approved
by you. This three-person Council would be supported by a
small (two or three professionals) full-time staff, headed
by a senior Executive Officer. The staff should represent
the elements of the agencies charged with implementing your
nuclear policy.
b. Same as above, but drop ACDA.
C. Use the NSC Undersecretaries Committee
(State, ACDA, NSC, Defense, CIA, Joint Chiefs of Staff)
augmented by ERDA and Domestic Council representation.
The Nuclear Policy Review Group recommends Option 1.a. as
the most direct way to implement your policy.
ERDA recommends Option 1.b. (drop ACDA). However, ACDA
plays an important role in this area and it seems difficult
and unwise to ignore them.
State recommends Option l.c. (NSC Undersecretaries
Committee). However, this Committee does not normally oversee
the programmatic implementation of decisions, includes agencies
not intimately involved in the main implementation tasks, and
does not have staff from all the affected agencies. It should
of course be kept informed, and, since the Committee is chaired
by the Deputy Secretary of State, a direct channel of communication
exists.
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Approve:
Option l.a.
Option 1.b.
Option l.c.
2. Reporting Relationship. Regardless of membership
of the Council, it should report to you through advisers
representing both the domestic and international aspects of
the program. All agree that, on the international side, it
should be through the Assistant to the President for National
Security Affairs.
There is dispute on the domestic side of this joint
reporting relationship. Your options are to have the Council
report through:
a. The Assistant to the President for
Domestic Affairs, as recommended by
the Nuclear Policy Review Group, State,
ACDA, EPA and ERDA.
b. The Energy Resources Council, as recommended
by Commerce and FEA. (FEA recommended that
the Council be a subgroup of the ERC.)
The main difference is that the first option would
require reporting through an element of the White House staff,
and the second would not.
Approve:
Option 2.a.
Option 2.b.
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TAB B
AGREED NONPROLIFERATION INITIATIVES
Policy on Restraints
We have reviewed several possible revisions to our policy
of bilateral restraints, applied to our agreements for nuclear
cooperation; and have concluded that we should reaffirm as
clear policy objectives the London Supplier Guidelines as
restraints over retransfer of material, replication of techno-
logy, and physical security. We believe, however, there is
a need for a clearer, and in some cases firmer, U.S. restraints
that ensure proper international controls of sensitive facilities
and materials, and that give us leverage over the decision to
create and potentially use separated plutonium.
The matter of shaping these restraints is a delicate one.
They cannot be so rigid that they foreclose cooperation with
nations whose nuclear policy we seek to influence, even if, for
example, they are not parties to the NPT. They should be
susceptible to application by all suppliers, since constraints
are enhanced if everyone imposes them equally and may prove
ineffectual if they do not. And they must recognize that nations
with an existing reprocessing capability present a different
problem from those who have no such capability. With these
factors in mind, we recommend that in new and amended agreements,
and as a goal for common supplier acceptance, that the U.S.:
a. Reaffirm the Suppliers Guidelines as a mininum
requirement.
b. Adhere, in addition to the above minimum requirement,
to the following publicly-articulated criteria to be considered
in the review of new and amended agreements.
Whether nonweapon recipients are NPT parties, or
are clearly planning to adhere to the Treaty or
are prepared to submit to full fuel cycle safeguards
(as well as physical security) in the interim pending
NPT adherence, and
Whether they are prepared to foreswear or postpone
for a substantial period the establishment of national
DECLASSIFIED
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reprocessing or enrichment activities*, or (for
nations having these capabilities) are prepared
to consciously shape and schedule their reprocessing
and enriching facilities to foster nonproliferation
needs by delaying until economic needs are real and
by satisfying the requirements of others where feasible
by accepting spent fuel for reprocessing or alteration
through a multinational or binational approach*, and
Whether they are prepared, in principle, to participate
in an international storage regime under which excess
spent fuel and separated plutonium would be placed
in IAEA storage and custody pending use. (From our
standpoint, spent fuel is better than the storage of
separated plutonium since the latter assumes reprocessing.)
It would be understood that these would be significant
criteria that you would take into account in your review of
new agreements or amendments to these agreements, and that
departures from these standards would require your personal
approval.
Should you approve these criteria for public use, you
probably will be commended for taking a tougher nonproliferation
stance. However, some may favor an even tougher stance. Thus,
the problem of public presentation is a tricky one, given our
desire to preserve flexibility to deal with non-NPT countries
(notably Egypt and Israel) in selected cases when it is in our
nonproliferation interest. We believe this problem can be
resolved in the preparation of the final text for any address
that you may give.
Sanctions
Your advisers believe that the U.S. should communicate
more convincing signals to the world community that we would
view either a material violation of any nuclear safeguards
agreement, or a further spread of nuclear weapons, as an
extremely grave development. Although Secretary Kissinger
has made this clear publicly, the relatively restrainted USG
*
We would seek in all new agreements the necessary veto
rights to enable us to carry out these agreements.
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reaction to the Indian situation called into question our
attitude toward the sanctions question. Obviously, our
entire nonproliferation policy will be impaired if a potential
diverter judges that it is relatively immune from sanctions.
We recognize that some initiatives in this area could
prove to be seriously counterproductive by further aggravating
the political polarization between suppliers and recipients
and unduly limiting to U.S. flexibility. Also, to be meaningful,
any sanctions policy must gain multinational support, thus
meriting close continuing consultation. Most of your advisers
recommend that you issue a statement making the following points,
which strike a balance between a vigorous U.S. posture and the
need for attracting multilateral supplier support, without
excessively alienating key recipients.
No nonproliferation and safeguards regime is likely to
succeed if a potential violator judges that his acquisition of
a nuclear explosive will be received with indifference by other
nations. Fortunately, this is not the case, and we believe
that it is clear that nuclear safeguard undertakings enjoy a
very special sobriety and status among nations.
For its part, the United States would regard any
material violation of a nuclear safeguards agreement,
such as a detected diversion, to be an extremely
serious affront to the world community.
Any further nuclear proliferation, regardless of
whether it is under the guise of developing a
peaceful nuclear explosive device, would undoubtedly
greatly enhance global and regional instability
and bring the world closer to a nuclear holocaust.
Accordingly, if any state materially violated a
safeguards agreement to which we are a party, we
would, as a minimum, immediately cut off our nuclear
fuel supply and cooperation. Moreover, regardless
of whether we, ourselves, are a party to a safeguards
agreement, we would judge a material violation of
any safeguards agreement, and particularly one with
the IAEA, to be of such grievous concern to warrant
immediate reexamination and broad consultations
with all suppliers and consumers to discuss the
nature of the punitive or remedial actions that should
be taken collectively.
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We also recommend that the U.S. diplomatically: (a)
seek supplier agreement to press for an IAEA decision to
direct the curtailment or suspension of nuclear assistance to
a state violating Agency safeguards; (b) seek a multilateral
agreement to suspend or terminate cooperation with any additional
nonnuclear weapons state hereafter acquiring or testing a
nuclear device regardless of whether a safeguards violation is
involved (while recognizing the difficulty of gaining adherence
from certain key suppliers, particularly France), and (c)
systematically reinforce its position on sanctions in its
contacts with other nations.
Before any U.S. statement is issued, we recommend that
the Department of State consult with a broad spectrum of
countries to encourage the issuance of comparable statements.
If you make this statement you will be perceived as
strongly supportive of nonproliferation, although some foreign
nations may judge us as too menacing while some at home may
criticize you for not taking even a tougher stand.
ERDA would favor tougher public statements indicating that
U.S. nonnuclear as well as nuclear cooperation will be
jeopardized by a safeguards violation. Your other advisers
feel that this reduces our flexibility too much.
Storage, Safeguards, and Physical Security
1. Storage. Your advisers favor promotion of a new
regime, under which spent fuel or excess national stocks of
separated plutonium would be placed under IAEA custody pending
use. Such a regime could reinforce IAEA safeguards against
diversion by reducing worrisome national stockpiles. The U.S.
has approached other suppliers and the IAEA Secretariat endorsing
this concept. Although many problems would have to be resolved
to bring the concept to fruition, preliminary Congressional and
working-level supplier nation reactions are sympathetic.
Actual implementation, however, will depend on broad supplier
and consumer support.
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We recommend that you give your strong public support
to the concept, and that:
You announce that the U.S., in principle, is prepared
to place its own "excess" civil designated spent fuel
and separated plutonium under IAEA custody, pending
U.S. need, if a generally satisfactory and broadly
applicable regime can be developed and established.
You also announce that the U.S., in principle, is
prepared to submit a special grant to the IAEA for
the purpose of helping establish the regime (if
needed) and offer to provide a U.S. storage site.
You state that henceforth consumer willingness, in
principle, to participate in such a regime will be
adhered to as an important criterion for conclusion
of new and amended U.S. agreements.
Since the proposed U.S. pledge to participate in the
regime may bring some pressure to bear on the U.K., France
and others, the Department of State should consult with these
nations, and State and ERDA should consult with key Congressional
leaders prior to proposed announcement to verify that there is
no serious opposition.
If you approve the pledge you may get credit for taking
a statesmanlike step that serves to demonstrate that the U.S.
itself is prepared to accept the same constraints it is urging
on others. Some others, however, may view the pledge as
premature.
All agencies agree with these recommendations. Dr. Ikle
favors a cautious approach.
2. International Safeguards. To help preserve the
efficacy of the IAEA system, your advisors believe that major
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U.S. support and some redirection in the Agency's program are
required to keep pace with the growing quantities of weapons-
usable materials that are becoming available. A greater
proportion of the safeguards effort will need to be devoted
to surveillance techniques to compensate for the inherent
measurement uncertainties in material accountancy that are
involved when large quantities are involved.
Accordingly, we recommend that the U.S.:
Sponsor together with the IAEA, demonstrations in
this country to design new techniques to optimize the
effective application of safeguards to sensitive
facilities.
Offer one or two of ERDA's national laboratories to
serve as "sister" institutions to support the IAEA
technical Secretariat.
Promptly explore whether more effective IAEA
procedures and rights for surveillance during construction
and shutdown periods are technically warranted and are
negotiable.
Exercise leadership in augmenting scarce IAEA
resources for needed staff and operating budget.
In this regard, we recommend that you direct a
reexamination of how the U.S. can better contribute
to the IAEA, including possible ways to augment the
staff of inspectors.
Your endorsement of this idea would be consistent with
past U.S. policy. However, ways to augment IAEA funding
staffing will require careful study.
3. Physical Security. International (IAEA) safeguards
rely on material accounting surveillance and inspection, and
containment techniques, all designed to detect diversion of
nuclear material from authorized use. Physical security
measures, designed to protect sensitive materials, are the
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responsibility of each nation's domestic authorities. Current
trends of international violence and terrorism clearly
demonstrate the urgency of effective physical controls.
The U.S. is the world leader in promoting effective physical
protection of civil nuclear materials and equipment. In this
regard, the principal nuclear suppliers have recently agreed,
as a matter of national export policy, to require of customers
adequate physical security. An international convention on
physical protection has been discussed with interested countries
with only lukewarm response.
On the whole, we believe this is an area where progress is
being made. We should continue to press for upgrading standards
worldwide. Accordingly, your advisers recommend that the U.S.:
Pursue the international convention by taking diligent
soundings about the real prospects of broad inter-
national support.
Continue to promote broad collaboration in the area.
For example, seek to develop a close association on
physical security measures with the European
Community, recognizing their potential for framing
common nuclear standards.
Your approval of this activity would represent an endorse-
ment of an ongoing, noncontroversial activity.
Information on Diversions
Our current capability is unsatisfactory for: (1) detecting
diversions or attempted diversions, and (2) tracking the world-
wide buildup of nuclear capabilities. We recommend two actions
to correct these situations.
Timely Detection
IAEA safeguards are frequently criticized as not susceptible
to timely reporting of possible violations. This is a potentially
serious problem, as weapons-grade material like separated
plutonium can be fashioned rapidly (weeks to months) into an
explosive.
We recommend that all new U.S. supply commitments should
ensure that we receive timely information on effectiveness of
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IAEA safeguards in a cooperating state. In future agreements,
we should insist on being continually satisfied regarding
effectiveness of IAEA safeguards, particularly on sensitive
facilities, and we should shape our veto rights to achieve this
objective. In some such cases, the U.S. should supplement IAEA
inspectors with a U.S. presence should that prove essential to
assure proper safeguarding.
Proliferation Intelligence
U.S. tracking of worldwide stocks of plutonium and highly-
enriched uranium can be significantly improved. We commend the
recent study of this subject by the Defense Department (Deputy
Secretary Ellsworth) and urge its recommendations be promptly
evaluated and quickly implemented. "User" agencies should be
directly involved.
Incentives
Offering incentives is essential to move other nations to
our view of reprocessing and to accept our export restraints.
We currently lack leverage in world nuclear markets, especially
due to lack of uranium enrichment capacity. Consequently, if
you approve an option to contain the spread of reprocessing
(Major Policy Options 1 or 2), we recommend improving incentives
with nuclear consumer and supplier nations and with all nations
in nonnuclear energy cooperation.
Consumer Incentives
As incentives for nuclear consumer nations to forego develop-
ment of national reprocessing, we recommend that the U.S.:
Offer to nations (those outside Europe and Japan and
preferably NPT parties) that accept our tougher
reprocessing conditions, an opportunity for the U.S.
to acquire their spent fuel, with compensation in
cash or fresh, low-enriched fuel. The amount of
compensation would be determined at the time the other
nation was ready to reprocess its fuel, and would
be based on terms that would avoid economic disadvantages
to the consumer. (This arrangement would be analogous
to the formulation recently discussed in Iran by
Secretary Kissinger. However, it could be viewed by
some countries as a constraint rather than an inducement.)
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Offer to these nations assistance in arranging
for spent fuel storage in the U.S. or overseas,
in anticipation of the IAEA storage regime.
Extend an offer for immediate fuel exchange at
a negotiated price to nations in highly sensitive
areas where even the presence of spent fuel appears
worrisome (India, for example).
Assure, for nations accepting our restraints policy,
enrichment supply under USG guarantee, subject to
capacity limits, covering both regular enrichment
services and additional services required to implement
our fuel exchange agreements. This assurance would
extend to private sector enrichment plants, in which
these nations would be invited to invest.
Guarantee provision of enrichment services to
implement our fuel exchange agreements.
Supplier Incentives
To help induce cooperation of other suppliers and Japan,
we should:
Approach the FRG and France to offer tie-in agreements
whereby we would guarantee enrichment services at non-
discriminatory prices to their reactor customers and/
or offer separative work contract opportunities to
European enrichers in connection with U.S. reactor
sales if they move significantly closer to our general
constraints policy on reprocessing. This guarantee
could be subject to capacity limits.
If interest is expressed in such arrangements, invite
suppliers' (as well as consumers') investment in U.S.
private sector plants in return for assured supply
for tie-in sales.
Seek binational arrangements with Japan leading to
jointly sponsored reprocessing of their fuel, perhaps
in a regional plant, and encourage cooperation among
European suppliers to pursue the United Reprocessors
venture (France, Germany, and the U.K.) as a model
for multilateral plants.
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We should also communicate in a general way publicly
the need to develop an arrangement with other suppliers for
neutralizing competition for fuel cycle services and facilities.
This idea requires further study before presenting it formally
to other countries, and such study should proceed immediately.
Meanwhile, exploratory talks with other suppliers could begin.
Finally, your endorsement of a strategy favoring the
constrained spread of reprocessing would also entail your
seeking other suppliers' agreement to a two-year moratorium
on the transfer of sensitive technology. A moratorium, if
agreed to, would help cool off the existing concerns and would
buy time to undertake the diplomatic initiatives we otherwise
suggest. All of your advisers favor pursuing the moratorium
idea. If we decide to publicly announce endorsement of a
moratorium we would be obliged to hold advance consultations
with the other suppliers, some of whom strongly favor pursuing
this matter on a confidential basis.
Enrichment Capacity
Absence of uranium enrichment capacity in the U.S. calls
into question the foregoing initiatives. To support a policy
of incentives for nuclear consumers and suppliers, we need new
enrichment capacity. This is a fundamental precondition of
really credible fuel exchange guarantees. The more attractive
and reliable we make our enriched uranium supply, in concert
with other suppliers, the more likely our success in containing
national reprocessing.
Accordingly, depending on the status of the NFAA at the
time of a Presidential statement on nonproliferation, we
recommend that you:
Call on the Congress to pass the NFAA in view
of its central importance to your nonproliferation
policy.
Restate the earlier Presidential pledge that the
USG will honor any enrichment contract made in the
U.S., public or private.
Commit publicly to construction of added capacity at
ERDA's Portsmouth, Ohio, plant.
Nonnuclear Technology Incentives
The U.S. has engaged in an aggressive domestic program
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to develop new energy supplies from nonnuclear sources.
In principle, U.S. results are always available for sharing
with others. We recommend that collaboration on nonnuclear
technologies be focused on nations that are prepared to
accept our policy on nuclear export restraints.
CEQ has recommended that you initiate an international
initiative of collaboration on energy conservation to reduce
demand, particularly for nuclear (fission) power, while
accelerating development of solar and fusion energy.
For purposes of this review, we believe that benefits
could also be achieved near-term by providing selected
countries with: (a) assistance in energy systems analysis
and assessment of energy development strategies; and (b)
technological help in developing indigenous fossil energy
resources.
We recommend that you assign to ERDA and the Department
of State responsibility for a joint, detailed review of the
cooperation possibilities in these areas, emphasizing countries
of proliferation concern, with a report of action recommendations
to you in ninety days.
Alternative Technologies
If you accept Major Policy Option 3--oppose the use of
reprocessing--your program for recovering the residual energy
content of spent fuel would be directed toward research into
alternate technical approaches not involving the separation
of plutonium. (And even if reprocessing is pursued, many of
these alternate technology programs would be initiated.)
Internationally, participants in our regime of foregoing
reprocessing could obtain equitable access when these technologies
are developed, and could obtain spent fuel storage under inter-
national auspices in the interim. If the alternative technology
program were unsuccessful, the U.S. could support a throwaway
cycle or reexamine the desirability of reprocessing.
The elements of the approach would be:
A U.S. program initiated immediately, of construction
of spent fuel storage capacity, probably initially at
Savannah River. The U.S. would make the storage
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capacity available at no charge. The fuel owner
would pay for transportation.
A vigorous program of examining alternative
technologies would be launched immediately.
The U.S. would invite cooperation of other
states, both suppliers and consumers, in this
assessment.
The U.S. would announce as U.S. policy that
when any technical approach makes it feasible
to extract economic benefits from spent fuel
compatible with nonproliferation objectives,
there would be equitable access to such
benefits for any fuel deposited in IAEA
repositories or in the U.S.
This approach also would share the following common
features of other Major Policy Options: (a) a U.S. option
program to acquire spent fuel from selected countries as an
alternate to national reprocessing; (b) active U.S. assistance
in promoting a spent fuel storage regime; (c) a program of
guaranteed enrichment supply for nations agreeing to our
restraints; (d) U.S. efforts to coordinate its fuel cycle
programs with other suppliers in the interest of promoting
nonproliferation objectives.
Nuclear Waste Management
The Nuclear Policy Review examined the waste management
program now underway, and, in general, found it to be soundly
conceived.
The target date of 1985 for initial operation of
a disposal facility is a desirable objective, and
it is attainable if given a high priority. The
proposed facility supports the major policy options,
including the throwaway option and the retention of
foreign waste if that proves necessary.
It is essential that the program produce by 1978
an initial demonstration of waste solidification,
canister design, repository design, and the avail-
ability of stable geologic formations. NRC criteria
for assessing a repository site should be available
at the same time.
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The initial repository should be licensed by NRC.
The prinicpal actions required are to ensure that all
agencies act to meet the 1978 and 1985 dates. To this end,
the Administrator of EPA has agreed to propose "generally
applicable standards" for permanent storage of high-level
waste by December, 1977. In addition, we recommend that:
1. The Director of OMB designate a project coordinator
for the entire effort, and that the Federal Coordinating
Committee for Science, Engineering and Technology be designated
to provide the coordinator with independent technical advice.
2. The Administrator of ERDA be directed to publish a
final Generic Environmental Impact Statement on the program
by late 1977.
GERAUG
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UNITED STATES ARMS CONTROL AND DISARMAMENT AGENCY
WASHINGTON
September 3, 1976
OFFICE OF
THE DIRECTOR
MEMORANDUM TO THE PRESIDENT
SUBJECT: ACDA Position on Nuclear Policy Review
I strongly recommend the domestic and international
Option 2:
-- defer and discourage reprocessing;
-- provide for storage of spent fuel; and
-- vigorously pursue alternative technologies
for recovering the energy value in such
fuel without separating the plutonium.
You are well aware of the intense public and
Congressional concern over reprocessing. A major
thrust of your Administration's nonproliferation
efforts has been to head off reprocessing in countries
such as Korea, Pakistan, Israel, Egypt and the Republic
of China.
This is because reprocessing reduces plutonium
to a form highly vulnerable to theft or seizure and
quickly usable in nuclear explosives, as we saw in
India. The output of one commercial size reprocessing
plant would furnish enough nuclear explosive material
for several thousand atomic bombs per year. There
is no reliable way to prevent plutonium from being
captured by a government willing to violate its
safeguards agreements, and then being converted into
nuclear weapons in a time shorter than we could
probably react.
In these circumstances, a decision now to assist
and accelerate reprocessing in the United States by
With
E.O. 12356, Sec. 1.3 (at) )
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GERALD
By KBH NARA, Date 9/10/92
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a $1/2 billion Federal investment to permit operation
of a reprocessing plant constructed by Allied Chemical,
Gulf, and Royal Dutch Shell, could have obvious domestic
political repercussions. This would be especially true
since the current public proceedings by the Nuclear
Regulatory Commission on whether or not to permit the
use of reprocessed plutonium in US reactors will not
be concluded for at least another year.
More importantly, such a decision would seriously
undercut our efforts to head off reprocessing in other
countries, who look more to what we do than what we say.
The option I am recommending would avoid this risk and
directly support our international efforts, including
our call on the London Suppliers' Group to examine
alternatives to national reprocessing.
Such alternative technologies exist, but require
further development and demonstration. While we are
working on them, we can well afford to postpone the
recovery of the potential energy value in spent reactor
fuel. The report makes it clear that the economic
benefits to reprocessing -- if any -- are small and
uncertain. There is no question that we have sufficient
uranium to fuel all US reactors likely to be built in
the next 15-20 years. By providing spent fuel storage
facilities (which are considerably less costly than
reprocessing facilities) we would both be setting an
example for other countries and relieving our own
utilities of their most immediate problem -- the need
to remove the accumulated spent fuel from their reactor
sites.
You, Mr. President, should be the first to establish
the principle of proliferation safety -- that commercial
technologies can and must avoid access to weapons-usable
material. You can direct our superior technological
capabilities to this end and remove a major security
risk from the nuclear energy picture. And, with the
force of a powerful American example, you can lead the
world in the same direction.
Comments. on other issues are attached.
Fed C. Thee
Fred C. Ikle
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ATTACHMENT
ACDA Position on Other Issues and Recommendations
in Nuclear Policy Review
In keeping with our recommendations about reprocessing,
we attach very high priority to the recommendation that you
support, through approaches at the highest level of other
supplier governments, our efforts to secure a two-year mora-
torium by such suppliers on transfers of sensitive technology.
The other central issue in the Review is how we should
tighten our nuclear export controls, which is also the prin-
cipal subject of the legislative proposals in this field
currently being discussed with Congress. We consider the
restraints proposed on page 13 of the Review as desirable,
except that we oppose any formulation that would accelerate
reprocessing or provide reprocessing services involving the
return of separated plutonium or mixed oxide fuel to third
countries, since these products are too readily convertible
to use in nuclear weapons. We endorse the recommendations
on sanctions, and generally prefer the "strong initiative on
retroactivity" described at pages 17-18 to unilateral insist-
ence on retroactivity, but believe judicious use of licensing
leverage can also further our objectives.
With respect to the incentives discussed at page 22, we
disagree with the recommendations which would encourage co-
operation in establishing early additional reprocessing
facilities in Europe or Japan.
We are in general accord with the recommendations on
Material Storage (although the stress should be on spent fuel
storage, and you might wish to study further the wisdom and
scope of the suggested U.S. voluntary offer), Safeguards and
Physical Security, Sanctions, Waste Management, Other Initia-
tives, and Next Steps. With respect to the organizational
recommendation on organization of Executive Branch supervision
of nuclear policy matters, we recognize that other arrange-
ments would also be workable, so long as they gave an appro-
priate voice to this Agency on matters affecting our non-
proliferation efforts. We believe the question of whether
the UN General Assembly would be a good forum for announcing
your international decisions would be highly dependent upon
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the nature of your decisions and the extent to which they
may appear coercive and discriminatory rather than cooperative
and self-restraining.
Finally, while the report rightly focusses on the partic-
ularly pressing problems of reprocessing and plutonium,
nuclear weapons can also be made with highly enriched uranium.
Since most power reactors use only slightly enriched uranium
(2-3%), the related nonproliferation problem is primarily one
of controlling the spread of enrichment facilities and tech-
nology (which could also produce highly enriched uranium),
and of meeting foreign fuel needs through enrichment services,
involving low enrichment. For this purpose, we well as for
providing fresh fuel as an alternative to reprocessing and
avoiding waste of our uranium resources, the prompt expansion
of uranium enrichment capacity in the United States is indis-
pensable, and we endorse the recommendations on this subject
on page 23. We also recommend a separate review of our policy
on the export of highly enriched uranium itself, and intensified
diplomatic efforts to prevent the spread of enrichment technology.
We have not commented on the annex to the report, which we
have not seen in the final form.
CONF IDENTIAL
CONFIDENTIAL
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
WASHINGTON; D.C. 20500
September 2, 1976
MEMORANDUM FOR
The President
SUBJECT: Nuclear Policy Review
I am in general agreement with the recommendations of your Nuclear
Policy Review Group. They have done an excellent job of clarifying
a very complex topic and identifying major decision points. The
following paragraphs include my specific comments on major points in
their report to you, in the order in which they were raised.
I fully endorse the recommendation to strengthen IAEA controls, safe-
guards and physical security as it applies to sensitive materials, while
cautioning that this recommendation should be accompanied by additional
attention to improvement of U.S. assurance of safeguards effectiveness
as suggested under "Other Initiatives" in the Group's report.
With respect to the options presented on the retroactive application of
restraints, it would appear that immediate and unilateral application
would not serve our best interests and therefore I favor the strategy defined
which calls for broader application of restraints through a three component
approach. Since there have already been diplomatic efforts to gain
acceptance of stronger restraints, there should be special attention given
to an explanation of how your policy now represents a new (and more
intensive) initiative in this area.
The Group's report includes two extensive discussions of options for
reprocessing--both internationally and domestically--that require your
decision. I support the general philosophy that reprocessing can not be
effectively halted worldwide and that the option that calls for the U.S. to
oppose reprocessing is not a realistic approach for the U.S. at this time.
However, in the option defined as "Controlled Spread of Reprocessing" there
is an important element of restraint that needs to be emphasized. In order
to strengthen this option I believe the proposal for a two-year moratorium
on transfer of sensitive technology should be accompanied by the
additional point that work on alternative technologies will be pursued
during this period in order to develop a better assessment of the applicability
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of these technologies to any future reprocessing capabilities that may be
established. If one of these technologies, despite some of the pessimistic
views on their long-term viability, should prove to be attractive it could
be pursued as a reprocessing option for non-nuclear weapons nations for
which there would be some concern about the availability of sensitive
materials. Thus, the incorporation of continued technology development
in this option provides an additional buffer between the supplier and
consumer nations that is supportive of our non-proliferation objectives.
I also support the domestic reprocessing option that includes govern-
ment assistance to the development of limited reprocessing capacity in
the U.S. but again with an effort to explore alternative technologies for
use on the domestic scene as well as internationally. This would not
include demonstration of the technology without further careful evaluation
of the costs and expected returns from the options that are then available.
The waste management question, while not an issue in the non-prolifer-
ation area is nevertheless an important, and possibly decisive, issue
of national concern and should also be accorded a high visibility
in your messages on nuclear policy. I am in agreement with the assess-
ment of the Nuclear Policy Review Group on waste management. In
particular, as chairman of the Federal Coordinating Council for
Science, Engineering and Technology I will be prepared to convene a
group within the council to provide the necessary technical coordination
and independent technical advice to the Project Manager as recommended
in the Group's report. My suggestion is that you authorize a separate
statement with respect to the organization of this group in order to give
additional support to our determination that the necessary preparatory
work be carried out to ensure a sound program of waste management that
is sensitive to environmental and social concerns.
Finally, I should note my strong support for an expanded U.S. role in
providing assistance to other nations in the development of other non-
nuclear and advanced energy technologies including conservation. It
is my recommendation that responsibility for review of cooperative
possibilities in these areas and the development of possible new initiatives
be assigned to this office in coordination with the Department of State
and ERDA since this is a multiple agency matter and requires the close
contact and coordination of the Executive Office if it is to be effectively
implemented.
Hfuyford
H. Guyford Stever
Director
CONFIDENTIAL
EXECUTIVE OFFICE OF THE PRESIDENT
COUNCIL ON ENVIRONMENTAL QUALITY
722 JACKSON PLACE, N. W.
WASHINGTON, D. C. 20006
September 3, 1976
Dear Mr. President:
This letter provides the comments of the
Council on Environmental Quality on the report of
the Nuclear Policy Review Group. The Council has
participated actively in this effort and we have
been impressed with the leadership that Bob Fri has
provided.
We believe that you should view nuclear policy
in broad perspective. U.S. nuclear policy (both
domestic and international) is part of a broader
U.S. policy to provide adequate supplies of safe,
reliable energy at reasonable costs. It is also
part of a broader arms control and disarmament
policy. Moreover, these policies and our overall
environmental quality objectives should be consis-
tent. We believe that it is important for you to
view the decisions before you in this context,
particularly the decision on whether or not to go
ahead with the reprocessing of spent fuel from
nuclear reactors.
Although countries with nuclear weapons ambi-
tions, but without such capability, undoubtedly see
reprocessing as a direct route to achieving their
goal, the driving force behind reprocessing is the
desire by the United States and other countries for
a reliable, economical supply of energy. Viewed in
this light - as a technology whose value rests
primarily on its ability or inability to provide a
safe, reliable and economic fuel supply - repro-
cessing can be compared even-handedly with other
energy development strategies, both nuclear and
non-nuclear.
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From an energy supply standpoint, the U.S.
does not need to commit to reprocessing now. The
economics of reprocessing appear to be questionable
at best. From a resource perspective, our uranium
supplies are more than ample through the end of this
century, and likely beyond then. Moreover, reprocessing
brings safeguards problems for which effective solutions
have not been demonstrated.
In contrast, an opportunity exists to take the
initiative and aggressively explore alternative
routes to satisfying our long term energy needs. We
recommend a two pronged approach.
First, the United States should explore alter-
native technologies for recycling spent reactor
fuel. Some of these technologies appear promising
and could permit recovery of the residual energy in
spent fuel without separating weapons-grade pluto-
nium. This would have the effect of opening up new
energy development options without losing ground on
the non-proliferation front, and without closing
the door on eventual use of existing technologies.
Second, we recommend that you initiate a U.S.
effort to organize a major world-wide commitment to
energy conservation, solar, and nuclear fusion
technologies. These non-fission alternatives are
safer, environmentally superior and, in the final
analysis, may be more reliable and economical than
those which rely on reprocessing. Such a commit-
ment could enable the world to meet long term
global energy needs without permanent reliance on
fission power. They offer the only long term
possibility of reducing the connection between energy
supply and nuclear weapons proliferation.
With respect to non-proliferation, we agree
with the concern that any U.S. government decision
to support reprocessing - as a demonstration or as
a commercial operation - signals to the world a
U.S. belief that reprocessing is an acceptable
technology. We share the concern that such a message
would greatly damage U.S. non-proliferation efforts.
We believe that such a decision is unnecessary and
unwise at this time.
-3-
Reprocessing is unnecessary now because there
is little energy related justification for it.
We believe it is unwise because we have been
persuaded that the proliferation risks of such a
commitment are extremely grave. The world reaction
to India's detonation of a simple device, made
possible by reprocessed plutonium, testifies to the
great fear that this technology generates. The
proliferation of nuclear weapons as armaments and
as terrorist tools is, in our judgment, a certain
concomitant to the proliferation of nuclear fuel
reprocessing.
We also believe that alternatives to present
fission technologies have not been adequately
evaluated to determine if they could meet our
energy needs and present fewer risks to our non-
proliferation objectives. We believe this is
essential before a U.S. commitment to reprocessing
is made.
We strongly urge that you aggressively pursue
the development of technological alternatives to
reprocessing, and that you defer any U.S. com-
mitment to reprocessing. We also strongly support
the various international initiatives on improving
controls on nuclear facilities and materials, and
the domestic initiatives on tightening U.S. export
conditions, recommended in the Task Force Report.
We believe these latter initiatives should be
pursued regardless of your decision on reprocessing.
We believe that this course presents the opportunity
for the U.S. to establish itself as a bold leader
in developing safe and reliable energy technologies.
Equally important, we can take this step without
losing the chance to return to existing technologies
if new ones do not prove feasible. Finally, we
gain time and credibility internationally to move
forcefully to stem the spread of national repro-
cessing facilities.
-4-
We have the time we need to take this bold and
important step now. But we will not have it for
much longer. We believe that the benefits could be
enormous, while the risks are modest.
Respectfully,
Russ Peterson
Russell W. Peterson
Chairman
The President
The White House
Washington, D.C. 20500
DIPARTMENT OF COMMERCE
THE SECRETARY OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
CONF IDENTIAL
September 3, 1976
MEMORANDUM FOR THE PRESIDENT
SUBJECT: Nuclear Policy Review
We have reviewed the Nuclear Policy Review Decision
Memorandum prepared by the Task Force headed by Bob Fri
and believe it sets out sufficient background and analysis
on which you can make a decision on this important subject.
We also believe the realistic alternatives have been
adequately posed. I believe the Task Force, and Bob Fri
in particular, have done an outstanding job.
Before giving you our position on the various
recommendations and alternatives posed in the Memorandum,
I would like to note my personal belief that there is no
more important issue facing the nation and the world than
the issue of proliferation of nuclear weapons grade materials
without adequate safeguards. In this regard, I would have
liked to have seen a bolder, more sweeping plan than that
presented to you.
On reflection, however, it is clear that our leverage
is not unlimited. Other industrialized countries either
have or are gaining the necessary capability to build their
own enrichment or reprocessing plants and export nuclear
fuel services to others. Some emerging developing countries
may also soon have such a capability. At the same time,
it will require a major act of political will on our part
to build the necessary nuclear fuel services capacity
which will provide credibility to the assurances of adequate
fuel services we would offer to those who are either parties
to NPT, adopt adequate safeguards or agree to impose restraints
similar to ours. If you decide to proceed, therefore, your
announcement will have to give a sense of urgency to the
Congress as well as the international community. And, I
believe it will be this sense of urgency, of first steps
soundly taken, that will give impetus to the perforce
limited initiatives set out.
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Having noted these caveats, I believe, nevertheless,
that you should proceed with the maximum possible force
of leadership. In this regard, I believe it is at the
United Nations General Assembly that the initiative should
be launched. We should be able to attract adequate press
and media coverage, and any adverse international comments
would probably assist you domestically.
There follow below our positions on the recommendations
and alternatives set out in the paper:
A. Storage, Safeguards and Physical Security
We agree with the recommendations on storage,
safeguards and physical security. It makes sense
to provide for IAEA custody of excess plutonium
(including US "excess" civil designated spent fuel
and plutonium), to strengthen the IAEA safeguard
system, and to attempt to achieve treaty agreement
on international guidelines for physical security
as well as rapid measures to recover lost or stolen
materials.
B. Restraints (U.S. Conditions on Nuclear Exports
under New Bilateral Agreements or Amendments to
Existing Agreements for Nuclear Cooperation)
We agree with the recommendations on restraints.
It is important in this respect to come up with
export restraints which have some realistic possibility
of being effective in connection with the end objective
of reducing proliferation. Effectiveness in turn depends
on the willingness of other supplier nations to adopt
similar restraints. At the same time, there must be
some flexibility. We believe that the recommendation,
which would be based on the recently agreed Supplier
Guidelines, strikes the necessary balance.
C. Sanctions
We agree with the initiatives to (1) seek a supplier
agreement to press for an IAEA decision to direct
curtailment or suspension of nuclear assistance to
a state violating IAEA safeguards, (2) seek a multi-
lateral agreement to suspend or terminate cooperation
with any additional non-nuclear weapon state (NNWS)
hereafter acquiring or testing a nuclear explosive
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device, and (3) announce that violations of
safeguards agreements would warrant immediate
reexamination of our overall relations with the
violating state as well as concerted international
action to consider collective sanctions. We believe
this is as far as we can go without disrupting our
other international interests.
D. Application of Restraints to Existing Agreements
on Nuclear Cooperation
We believe that, of the two options proposed, the
first, unilateral imposition of new export restraints
on countries with which we already have agreements
of nuclear cooperation, would have serious repercussions
on our foreign relations. It would also penalize a
number of supplier nations, whose cooperation we need
if we are to be successful in any non-proliferation
policy, and might cause a massive shift of nuclear
trade elsewhere. We therefore support a strong
initiative which would be based primarily on the
currently agreed Supplier Guidelines but with Presidential
authority to override a negative NRC finding in exceptional
cases. (Option 2). The approach would also include
a strong diplomatic initiative aimed at upgrading
existing agreements consonant with the Supplier Guidelines.
While the approach will have to be sold to the Congress,
we believe we can be successful if we work at it. At
the same time, Congressional confidence in this approach
will depend on their perception of our sincerity in
undertaking a major diplomatic initiative to negotiate
the necessary amendments to existing agreements. Your
direction to the State Department and ERDA in this
regard must, therefore, be unequivocal.
E. International and Domestic Options on Reprocessing
We believe the first set of options to contain the
spread of national reprocessing capability and provide
USG assistance to demonstrating the commercial feasibility
of reprocessing makes more sense economically and
technologically and is more realistic from an inter-
national point of view. First, technologically, we
believe that alternative technologies are unlikely to
prove feasible between now and the year 2000 and that
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an accelerated effort to develop them will be
unlikely materially to change this assessment.
Secondly, we believe that a U.S. decision not
to go forward with domestic reprocessing will
have only marginal effect on restraining other
supplier nations with reprocessing capability.
Thirdly, we have a better chance of negotiating
internationally appropriate restraints if we take
the lead in developing technology which is likely
to prove feasible in closing the nuclear fuel
cycle and then offer internationally to provide
nuclear fuel services to countries which adopt
our restraint policy. Fourthly, our ability to
develop fully a nuclear option using known domestic
uranium resources will depend in large part on
closing the fuel cycle; if alternate technologies
are unlikely to achieve this result between now and
the year 2000, we will in essence create a major
impediment to the development of U.S. nuclear
electric generating capacity. We do not believe
the argument to the contrary that additional U.S.
uranium resources will be discovered if the economics
are right will materially alter this conclusion.
I should note, however, that, if our primary
goal is non-proliferation, the fuel assurance portion
(whether through reprocessing or enrichment services)
will be all important. Why should a consumer nation
at the behest of the U.S. agree not to acquire its
own nuclear fuel capability (whether through enrich-
ment or reprocessing) if the U.S. or another supplier
country does not provide fuel services assurances?
However, we should note that U.S. assurances
will take considerable resources. The Memorandum
only offers fuel services to countries other than
those with which we have fuel exchange agreements
to the extent of capacity. Our present enrichment
capacity is inadequate to make assurances to other
countries credible. The recommendations on the
Nuclear Fuel Assurances Act are therefore critical.
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In sum, we believe we must at a minimum go
forward with Barnwell and design of a 3000 MTU
plant in conjunction with the contained spread
international option if we are to make any progress
at all in achieving the following two objectives:
(1) reduction of proliferation, and (2) maximum
development of the U.S. nuclear energy alternative
in accordance with your energy policy.
Finally, it seems to me that if you decide to
proceed with this set of options, we should offer
the Barnwell demonstration as an international
venture, perhaps under the aegis of IAEA. Such a
proposal would have the benefit of demonstrating
to the world our commitment to develop internation-
ally technological solutions to maximize the energy
content of spent nuclear fuel with appropriate
proliferation and environmental safeguards.
F. Waste Management
We agree with continuing the present waste manage-
ment program coordinated by OMB.
G. Other Initiatives
It makes sense to continue to expand our non-nuclear
energy assistance to other nations and improve our
own assurance of safeguards effectiveness.
H. Nuclear Policy Organization
We believe a major thrust of the initiative involves
energy policy as well as security policy. We there-
fore suggest the reporting mechanism for the Nuclear
Policy Council be through the Energy Resources Council
and the National Security Council rather than through
the Domestic Council and the National Security Council.
The ERC meets as a body more often and has the appropri-
ate membership for this purpose including relevant mem-
bers of the Domestic Council. The ERC also has under
its aegis a Nuclear Subcommittee which is charged with
developing the all important domestic nuclear decision
schedule which must support any initiative you take in
this area. This type of organization would be more
consistent with the procedures already in place in
connection with other energy policy matters.
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I. Next Steps
We agree with the next steps outlined in the
Memorandum.
I believe the above outlined initiative would be
very much in the interests of the country and the world.
To give it credence will require your personal leader-
ship. I very much urge your agreement to proceed.
If you decide to proceed, we shall of course have
to pay particular attention to how the initiative is
coordinated with the various Congressional bills, one
of which I understand may come to the Floor of the
Senate as early as September 16.
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Elliot L. Richardson
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& DEVELOPMENT )
UNITED STATES
ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION
WASHINGTON, D.C. 20545
USA
SEP 7
1976
The President
The White House
Dear Mr. President:
As I stated in my letter to you of June 9, 1976, I believe there is
a need for the United States to undertake major initiatives to reduce
the risk of proliferation of nuclear explosive devices and to meet
our domestic energy needs by resolving uncertainties that now pose
impediments to closing the nuclear fuel cycle. The nuclear policy
review which Bob Fri's Task Force has undertaken at your direction
provides recommendations for your decisions on these important policy
issues.
As discussed in more detail below and in the enclosure, we generally
support the Task Force recommendations and urge their adoption.
I believe that your decision on these matters should be driven by two
principal objectives:
To assure that we are able to exert maximum international
influence toward the nonproliferation of nuclear weapons
and safeguarding of nuclear materials, and
To assure the viability and continued growth of domestic
nuclear power.
We can accomplish our nonproliferation objectives only if we are in
a position to influence other nations, particularly the supplier nations.
Our leverage in these matters depends on our credibility as a nuclear
supplier, which in turn requires that we take action now to:
Increase our uranium enrichment capacity, as you have proposed
in the Nuclear Fuel Assurance Act;
Establish a reprocessing capability; and
Implement an effective and responsible waste management effort.
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Positive action in these areas is also compatible with our domestic energy
needs and objectives. It would restore the confidence of the energy
industry and the general public in the viability and acceptability of the
nuclear option. This is essential since nuclear energy, together with
coal, must meet the majority of U.S. electrical energy needs for the
remainder of this century.
The most important decision is whether to proceed with a U.S. reprocessing
initiative now, or defer reprocessing until a later date. We recommend
that you adopt Option 1 of the Task Force, which would enable the government
to take an active role in assisting industry to develop and demonstrate
reprocessing. In supporting this recommendation, however, we would point
out that Federal assistance beyond that contemplated by the Task Force
may be required for success.
The key to achieving our international nonproliferation objectives is the
demonstrated capability of the U.S. to provide complete fuel cycle services
to discourage non-supplier nations from developing their own reprocessing
plants. It is essential also to obtain cooperation of the other nuclear
supplier nations in adopting similar nonproliferation policies. As you
know, a number of other countries are committed to reprocessing; a decision
to defer reprocessing in the U.S. would cripple our efforts to influence
these countries in view of their continued commitment to nuclear power
as an essential ingredient of their own efforts toward energy security.
Reprocessing could extend by as much as 50 percent the amount of nuclear
capacity which can be supported by a given resource base through recycle
of valuable uranium and plutonium. Reprocessing is also needed to provide
the initial fuel for the breeder reactor, a near commercial reality (early
1980's) in several European countries. Without reprocessing, the breeder
must be discarded as an energy option.
In the recommendations on both international and domestic reprocessing,
an option is proposed that the U.S. could forego reprocessing in lieu of
developing alternative technologies. ERDA is strongly of the opinion that
there are no viable alternative technologies to reprocessing at this time.
In summary, we believe that proceeding with reprocessing (Option 1) is
the minimum approach which together with an expanded enrichment capacity,
would permit the U.S. to exercise effective influence in the international
sphere, and to meet its domestic needs.
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The President
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Our detailed comments on the specific Task Force recommendations are
presented in the enclosure to this letter. There are two matters of
concern to us in the international nuclear policy area that deserve
highlighting. First, we believe that the role of IAEA should be much
more clearly articulated before any U.S. commitment is made to place
U.S. plutonium under its control. Second, we believe that efforts
to improve the quality and effectiveness of the international safeguards
system must go even further than those recommended by the Task Force.
Respectfully yours,
Robert C. Seamans, Jr.
Administrator
Enclosure:
As stated
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ENCLOSURE
DETAILED COMMENTS ON SPECIFIC RECOMMENDATIONS
ERDA comments on specific recommendations of the Task Force are presented
below. Headings and titles follow those of the Task Force Report.
International Nuclear Policy
A. Materials Storage, Safeguards and Physical Security
ERDA agrees with the Task Force recommendation for an IAEA storage
program for sensitive materials, further development of physical
security systems, and significant re-enforcement of IAEA safeguards.
However, we wish to emphasize strongly our conviction that the U.S.
must initiate strenuous efforts to redirect the international safe-
guard system toward a higher level of quality and effectiveness in
light of the accelerated growth of nuclear power worldwide and the
implications for the spread of nuclear explosive devices.
B. Restraints and Sanctions
We agree with the Task Force recommendations on restraints and
sanctions. We recognize that, to be meaningful, any sanctions
policy must gain multinational support. On the other hand, we urge
that your statement on sanctions be firm and explicit that a
material violation of a safeguards agreement will call into question
the entire range of our associations with the violating state (rather
than simply our nuclear supply relationships).
C. Existing Agreements and Export Licensing
We do not believe that unilateral insistence on retroactive
applications of restraints as a condition of supply is a viable
approach. While we recognize that such mandatory retroactivity has
a certain appeal to many here at home, we feel that it would not
preserve the necessary flexibility required to achieve our non-
proliferation goals. We therefore recommend adoption of a strong
(but not mandatory) initiative on retroactivity. It should be
emphasized, however, that success in renegotiating existing agreements
will be critically dependent on the nature and scope of the supply
incentives we are prepared to offer.
D.
Alternatives to National Reprocessing
The Task Force presents two options on reprocessing: (1) contain
NA Senctions. authorize NATIONAL Disclosure SECURITY
Subject
the spread of national reprocessing, or (2) develop alternatives to
reprocessing. ERDA's strong recommendation here is for Option 1--
to contain the spread of reprocessing--as the most effective action
we can take to ensure that proliferation of nuclear materials will
be kept to a minimum.
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In implementing Option 1, we should be prepared to aggressively pursue
a wide range of activities to provide real alternatives to countries
who would otherwise wish to independently undertake the development of
their own national reprocessing centers. These activities should include
cooperative ventures to establish fuel centers serving regional needs
with U.S. involvement to ensure appropriate operation of such centers;
international cooperation in pursuing solutions to the management and
disposal of nuclear wastes; assistance in development of indigenous
uranium supplies in other countries; and assurances of availability
from the U.S. of complete fuel cycle services, including enrichment.
Our major concern with Option 2--develop alternatives to national
reprocessing--is that it fails to recognize the ongoing reprocessing
needs and plans of other nuclear-oriented nations. If the U.S. defers
reprocessing, it will only serve to weaken our bargaining strength in
obtaining effective international controls on proliferation.
The Domestic Fuel Cycle
A. Domestic Reprocessing
The Task Force identified two options for closing the domestic nuclear
fuel cycle: (1) assist industry to gain experience with reprocessing, or
(2) develop alternative technologies. ERDA strongly endorses Option 1
as a vital first step in developing and demonstrating the technological,
economic, safeguards, and licensing bases for fuel reprocessing and recycle.
ERDA favors Option 1 in that it:
(1) Provides the U.S. with greater credibility as a supplier
in the international nuclear market to support our role
in limiting proliferation,
(2) Provides the U.S. nuclear industry and the public with
a positive basis for renewed confidence in nuclear power
through the expeditious closing of the fuel cycle, and
(3) Assures maximum utilization and benefits of the unused
energy content of spent nuclear fuel, thus expanding this
critical national resource.
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(4) Provides a technology base and fuel supply for the breeder.
(Without reprocessing, the breeder must be discarded as an
energy option, since the breeder uses plutonium as its fuel).
We view Option 1 as representing the minimum program necessary
to meet U.S. international objectives and domestic energy
requirements. As described in the Task Force report, Option 1
involves completion of a privately-owned reprocessing demonstration
facility (AGNS), with government-owned waste solidification
and plutonium conversion facilities. Option 1 contemplates
government support for only the design phase of a larger (3,000
ton) reprocessing plant. In our judgment, a more extensive
commitment to a larger plant may ultimately prove necessary.
ERDA's technical judgment is that Option 2--develop alternative
technologies--does not represent a viable option. At the present time,
there is no evidence that available technological alternatives provide
significant international safeguards improvement or practical potential
for closing the fuel cycle. The only viable option to proceeding
with reprocessing is to defer reprocessing and store spent fuel elements
for possible reprocessing at some later time.
B. Waste Management
We concur in the recommendation of the Task Force that the domestic
waste management program be given a high priority in support of closing
the fuel cycle in a timely manner. We agree with the recommendation that
a project coordinator be identified for the overall effort in order
to obtain the appropriate interagency actions necessary to keep the
program on schedule.
Other Initiatives
1. Assist Other Nations with Non-Nuclear and Advanced Energy Technologies
We concur with the Task Force recommendation that ERDA and State
undertake a review of possibilities for cooperative development
programs with other countries.
2. Improve U.S. Assurances of Safeguards Effectiveness
a. Proliferation Intelligence
ERDA concurs in the recommendations regarding better proliferation
intelligence.
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b. Timeliness
ERDA endorses the Task Force recommendation regarding the need
for timely information on the effectiveness of IAEA safeguards.
3. Improve Organization of U.S. International and Domestic Nuclear Policy
and Program
ERDA concurs with the need for improved oversight of international
and domestic nuclear policy and programs, and we also believe that
a nuclear policy council would be an organizational improvement.
In our judgment, however, the lead agencies are State and ERDA.
While ACDA obviously has an important mission in this area, our
interpretation is that oversight of the implementation of your
international initiatives would be primarily the responsibility of
the Department of State. The structure and role of such a council
deserve further consideration.
CONFIDENTIAL
UNITED
STATES.
AGENCY
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
PROTECTION
WASHINGTON, D.C. 20460
SEP
3
1976
THE ADMINISTRATOR
MEMORANDUM FOR THE PRESIDENT
SUBJECT: NUCLEAR POLICY REVIEW
The purpose of this memorandum is to present our views on the
recommendations and alternative courses of action developed by the
Nuclear Policy Review Group. I appreciated very much the opportunity
to assist in the resolution of a problem of such vital importance to
both the U.S. and international security. I would also like to
congratulate Bob Fri and his staff for the amount of work accomplished
in such a short time, and for their fairness in considering divergent
views concerning this complex and controversial subject.
EPA supports those recommendations which would improve the organi-
zation of the International Atomic Energy Agency and its safeguards
capability. We also concur with the recommendations to strengthen
international restraints and sanctions against proliferation. These
important initiatives should be undertaken immediately. We fully
endorse the concept of strengthening our existing nuclear bilateral
agreements, but we recognize the need for some flexibility in the
application of retroactivity to these agreements (Option 2).
The Policy Group has submitted two reprocessing issues for your
consideration. If you believe that you must make an immediate
decision on reprocessing, we would recommend Option 2 for both issues,
i.e., oppose spread of reprocessing internationally and discourage
domestic reprocessing in favor of development of alternative tech-
nologies. However, we believe that it is premature for you to make
either of these reprocessing decisions at this time. A decision now,
could reduce U.S. bargaining power to foster international commitment
to non-proliferation. We recommend, instead, that you pursue a two
step process. First, you would take a major new initiative seeking
world agreement on more effective safeguards and non-proliferation
restraints. As an indication of U.S. credibility in this effort,
and to belie any charge that commercial advantage was being sought,
you would suspend further domestic reprocessing work indefinitely,
thereby also indicating that this could be part of any international
2
agreement. The reactions of other countries to your initiatives would
then provide you with more information for the second step of selecting
the most feasible strategy for resolving the reprocessing issue. Our
recommended approach would provide you with maximum flexibility to make
subsequent decisions on reprocessing. Any decision to support either
international or domestic reprocessing, at least without first improv-
ing the present inadequate safeguards systems, would be viewed with
alarm by everyone concerned with proliferation of plutonium.
With respect to EPA's role in the nuclear policy area, we have
significant responsibilities concerning environmental standards for
the management of nuclear waste. As indicated on page 33 of Mr. Fri's
paper, we have agreed to accelerate our schedule in order to publish
Fundamental Criteria and draft Generally Applicable Standards by
December 1977. This should enable us to promulgate final standards
no later than June 1978 which is consistent with the schedules of the
Nuclear Regulatory Commission and the Energy Research and Development
Administration. We support the recommendation for the establishment
of a Nuclear Policy Council headed by a senior Executive Officer. In
fact, we recommend that this Council, rather than the Director of the
Office of Management and Budget, designate the project manager for
waste management in order to minimize fragmentation of future efforts.
In conclusion, we have appreciated very much the opportunity to
assist the Nuclear Policy Review Group. We will be happy to provide
whatever further assistance may be appropriate.
Russell 2000les E. Train
FEDERAL
ENERGY
FEDERAL ENERGY ADMINISTRATION
WASHINGTON, D.C. 20461
INGV
ADMINISTRATION
SEP 3 1976
OFFICE OF THE ADMINISTRATOR
MEMORANDUM FOR THE PRESIDENT
FROM:
FRANK G. ZARB
Job
SUBJECT:
DECISION PAPER ON NUCLEAR POLICY
Although the Nuclear Policy Review Group has done an
admirable job under extremely tight deadlines, I have
serious reservations concerning its recommendations and
general direction. In addition, I do not believe the
initiatives presented in the review group's decision
paper provide an adequate basis for a major Presidential
statement announcing new unilateral United States policy
in this area. This position is based on several key
shortcomings in the recommendations:
-- The proposed policies are not sufficient to
control proliferation.
-- There is inadequate consideration of the
tremendous difficulty of implementing the
proposed initiatives worldwide.
-- The paper gives inadequate attention to the
effect of our international posture on domestic
nuclear energy development.
-- The cooperation of other supplier nations is
critical, but as yet unknown. There is no
assurance that the past marginal support of IAEA
programs by other nations can be improved significantly
as a result of these policy recommendations.
It is true that nuclear power must expand dramatically
both at home and abroad as an energy resource. However,
the possible diversion to weapons use of nuclear fuel
materials must be prevented, both for national security
reasons and to ensure further development of our domestic
nuclear program. A continuation of current approaches will
not be acceptable either to the public or to decision-makers.
-2-
I support the view that the Administration should take
some action on this matter at this time. Nuclear power
and nonproliferation are of such great importance to this
nation and the rest of the world that I feel it imperative
for us to take a more deliberative approach that will stand
public scrutiny not only as a viable policy, but also one
that can contain the problems of proliferation effectively.
FEA's positions on the specific issues presented in the
paper are as follows:
Application of restraints policy to existing agreements.
-- FEA prefers option 2 (strong initiative on retro-
activity), but sees implementation problems with
either option.
International position on reprocessing.
-- FEA supports option 1 (control spread), however,
implementation of this option depends critically
upon the U. S. obtaining full cooperation from
all supplier nations. Analysis to date has not
determined whether or how U. S. can obtain such
cooperation.
Domestic reprocessing.
-- FEA strongly endorses option 1 (assist reprocessing),
since this is a necessary step towards control of
international reprocessing.
Waste management.
-- FEA concurs with expedited implementation of
planned program.
Other initiatives.
-- FEA concurs with all recommendations, but urges that
the proposed Nuclear Policy Council serve as a sub-
group of the ERC.
Next steps.
-- Direct the Nuclear Policy Council to develop concurrent
proposals for strengthening international controls
and obtaining the necessary full cooperation from
all supplier nations. Such proposals would be
viewed as a major initiative justifying a Presidential
statement on these issues.
OF THE INTERIOR
United States Department of the Interior
OFFICE OF THE SECRETARY
March 3, 1849
WASHINGTON, D.C. 20240
September 3, 1976
Memorandum
To:
The President
From:
Secretary of the Interior
Subject: Nuclear Policy Review Decision Memorandum
We have collaborated with your Nuclear Policy Review Group under the
direction of Mr. Robert Fri and have reviewed the draft of the decision
memorandum being prepared for you. In our judgment, this decision
memorandum adequately sets out the issues and appropriate options for
your decision.
Our specific responsibilities in the Department of the Interior, as
they related to the issues and options presented in the decision
memorandum, concern (1) adequacy of domestic uranium resources and
reserves and (2) waste disposal.
Our knowledge of the present domestic uranium resource and reserve
base indicates supply limits for a nuclear fuel capacity based
exclusively on burner reactors. Also, our understanding of potential
geologic hosts indicate that secure disposal of radioactive wastes,
though attainable, will be a challenge to accomplish by 1985.
A decision in favor of reprocessing technology would augment uranium
resource supply and would result in a lower level of radioactive waste
for ultimate disposal. Further implications of your decision, which
I appreciate are immense, are beyond the expertise and responsibilities
of my Department.
I'm Kleppe
AMERICAN REVOLUTION 1776-1976 INFONTENNIAL
T
CONFIDENTIAL
NUCLEAR
STATES
UNITED
Commission
UNITED STATES
WE
NUCLEAR REGULATORY COMMISSION
*****
WASHINGTON, D. C. 20555
CHAIRMAN
September 3, 1976
The President
The White House
Dear Mr. President:
The Nuclear Regulatory Commission welcomes the invitation to give you
its views on the non-proliferation alternatives developed in the Nuclear
Policy Review.
The Commission fully supports the fundamental conclusion of the report,
that the United States should take strong new initiatives to inhibit the
potential for the spread of nuclear weapons capability among the nations
of the world. We believe that initiatives are particularly desirable to
deal with risks associated with the disposition of plutonium in the
international community. Increasing numbers and growing quantities of
national plutonium stockpiles progressively increase the risk that some
of this material might be diverted to nuclear explosives programs.
There are no instant solutions to foreclose such an eventuality: the
factors bearing on national nuclear programs throughout the world are
diverse and complex; the limitations on this country's ability to compe1
action by others are real; and it should be frankly recognized that no
"safeguards" regime provides absolute guarantees against diversion to
weapons use, especially where separated plutonium is involved.
Positive steps are nevertheless feasible, as well as necessary. The
Commission supports the review group's recommendations for strengthening
the international safeguards regime and improving recipient-country
physical security arrangements, along with appropriate provisions for
U. S. and international sanctions. In addition, we support the recom-
mendations in the study than an IAEA regime be established to place
national stockpiles of civilian plutonium --preferably in the form of
spent fuel -- and highly enriched uranium under direct IAEA custody,
although there is considerable work which needs to be done to bring such
a system into being. While such a system would make a valuable con-
tribution to our non-proliferation objectives, it cannot provide a
complete answer to problems involved in protecting the material against
sudden diversion.
SUBJECT TO GENERAL DECLASSIFICATION SCHEDULE OF
EXECUTIVE ORDER 11652 AUTOMATICALLY DOWNGRADED
NATIONAL SECURITY
AL TWO TEAR INTERVALS AND DECLAOSIRIED ON DEC. 01
1982
INFORMATION
Unauthorized Disclosure Subject to
(insert year)
Criminal Sanctions.
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KBH 2/24/89
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Mr. President
-2-
Beyond these immediate measures, the Commission supports vigorous
pursuit -- in cooperation with other supplier countries -- of additional
restraints in international nuclear commerce. Those restraints could
include international agreements to supply only to NPT parties (or,
alternatively, countries that have placed all of their nuclear activities
under IAEA safeguards), and to require that recipient countries participate
in an IAEA storage regime for spent fuel and separated plutonium. Moreover,
internationally agreed restraints should include a requirement that
recipient nations not expand existing small-scale reprocessing or
enrichment facilities, and that recipient nations not having such
capabilities forego their development.
We believe that the basic goal of U.S. policy, as it relates to reprocessing
in other countries, should be to inhibit the initiation of reprocessing
programs in countries that do not yet have them. Furthermore, to the
maximum extent possible, we should seek the integration of ongoing
reprocessing programs in non-nuclear weapons states into an acceptable
international regime that will be designed with the overriding objective
of inhibiting the spread of nuclear explosives capability.
We believe that a key to achievement of United States non-proliferation
objectives lies in a stable and predictable nuclear export policy.
There is particular need in this regard for a revised legislative framework,
which would establish sensible and clear criteria to guide NRC's export
licensing determinations and recognize the role which the Executive
Branch must properly play in the export licensing process. We are
prepared to cooperate with the Executive Branch in an accelerated effort
to formulate legislation to establish appropriate criteria to govern the
licensing of nuclear exports. In our view, such legislation should, at
the same time, permit latitude on the part of the President to authorize
exports where the overriding national interest warrants. In framing the
standards, it is important that they be both sound and workable, and
that they not require repeated recourse to a Presidential national
interest determination.
We believe that criteria modeled on the London supplier guidelines would
provide a sound basis for U.S. export licensing legislation. Those
guidelines also provide a framework for seeking, in conjunction with
other suppliers, more stringent requirements for the future. While the
provisions of existing agreements for cooperation should be taken into
account in charting future United States policy, we would urge that
United States policy also provide for reexamination of existing agree-
ments.
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Mr. President
-3-
The Commission supports the recommendation in the report to improve
United States intelligence on nuclear proliferation. Current and
complete information on worldwide nuclear developments is essential to
informed export licensing judgments. As a necessary "user" of such
information, the Commission requests the full cooperation of the
Executive Branch in ensuring that needed information will be fully and
regularly available to the Commission. The Commission also supports the
recommendation that a Nuclear Policy Council be established to implement
international and domestic nuclear policy initiatives. We recommend
that the Commission be associated with this Council in a consultative
role.
The analysis of domestic fuel cycle options in the review group's report
addressed the major issue of domestic reprocessing. With respect to
this issue, the Commission, as you know, is presently engaged in rule-
making concerning wide-scale plutonium recycle in light water reactors.
In addition, license applications for particular fuel cycle facilities
are under review by our agency. Since we should not prejudge or appear
to prejudge any matters pending before us, we have refrained from
commenting on the recommendations in this portion of the report. We do
note that our staff has recently published a detailed environmental
study of a broad range of nuclear fuel recycle options, including prompt
recycle, delayed recycle, and no recycle. An additional staff study of
safeguards considerations will be published in the near future. We will
be giving careful consideration to all options contained in the environ-
mental statement.
The Commission appreciates having been given the opportunity to participate
with the Nuclear Policy Review Group in addressing these issues, which
we view as vital to the future security of this country and the in-
ternational community.
Respectfully,
Marcus Marcus A. Rowden Rowden
Marcus A. Rowden
Chairman
CONTIDENTIAL
THE SECRETARY OF STATE
WASHINGTON
CONFIDENTIAL
September 6, 1976
EXDIS
MEMORANDUM FOR: THE PRESIDENT
From:
Henry A. Kissinger If
Subject:
Nuclear Policy Review and
Non-Proliferation Initiatives
I wish to take this opportunity not only to
transmit my Department's response to the nuclear
policy report, but also to offer my personal
recommendations on the international aspects of
your policy choices, their public presentation,
and their diplomatic implementation. The State
Department has participated actively in the
formulation of the foreign policy elements of this
study. I strongly concur in the review group's
emphasis on the international basis for your
nuclear policy, and I believe it of central impor-
tance both that we maintain consistency between
their expression and execution and that we ensure
broad multilateral support for the positions you
take.
Attached are the specific State Department
positions, which I fully endorse, on the proposals
and options prepared by your interagency group.
I concur in the report's recommendations for
effective diplomatic consultations and action, in
which we played an active role in developing and
which we are prepared to undertake as soon as you
give your approval. I need hardly emphasize that
the more advance notice of proposed policies and
statements we give our nuclear partners and allies,
the more likely they will be to provide the support
so necessary for the success of our non-proliferation
policies. Therefore, this memorandum specifically
seeks your early authorization for proposed diplomatic
approaches, on the basis of which you could refine
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- 2 -
the international policy elements of your eventual
public statement.
Non-Proliferation Objectives
In reviewing and developing further our nuclear
policies, it is essential for the US to:
1. Ensure that our non-proliferation policies
are cast in the framework of our overall foreign
policy interests and close relationships with nuclear
partners and allies.
2. Retain multilateral support for our non-
proliferation policies, without which our political
relationships will be set back and our non-proliferation
efforts will be rendered ineffective.
3. Develop a policy which marries the restraints
which we require with the incentives we can offer.
4. Prevent our non-proliferation efforts from
being distorted by international commercial competition.
5. Make domestic decisions which will effectively
support, rather than undercut, the primary objective
of deterring nuclear proliferation.
Meeting Policy Objectives
This Administration can justly claim credit for
the concerted and productive US efforts to develop
strengthened and uniform nuclear safeguards and
controls, through bilateral discussions with such key
suppliers and consumers as France and Iran and multi-
lateral consultations in the London meetings of major
nuclear suppliers. The US has achieved significant
non-proliferation results through high-level,
confidential diplomacy, consistent with our broad
foreign policy interests and relationships. At the
same time, we have openly advocated strengthened
nuclear safeguards and controls, in public statements
and testimony to the Congress. But domestic pressures
have substantially increased for fuller public
expressions of what we have pursued privately and for
visible improvement and strengthening of our policies.
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It therefore continues to be necessary to make
choices as to what balance is to be struck between
diplomatic imperatives and public perceptions of a
vigorous, coherent nuclear policy. We should make
no apologies for past performance, but we should
also not hesitate to stake out new territory.
The fundamental need to meet the non-proliferation
objectives set our above leads, in my view, to the
following policy choices and presentational require-
ments which are consistent with but often carry further
the group's recommendations:
1. New conditions of nuclear supply, however
desirable, should not be imposed by the US unilaterally,
but rather pursued and adopted multilaterally. I must
stress that a unilateral approach will damage us
politically, with our allies and partners, and will lead
the US to lose both commercially and in non-proliferation
terms, as other less committed nations pre-empt the
nuclear market. It should be recognized that if the
suppliers, many of whom are also our allies, do not wish
to follow a US initiative voluntarily, then we will
either have to coerce them or jeopardize our non-
proliferation policy. Clearly, we should not select a
strategy which could so easily trap us in such a dilemma.
At the same time, we should continue to make best
diplomatic efforts to make non-proliferation gains, as
I believe we have in our proposed nuclear agreements
with Egypt and Israel and in our current negotiations
with Iran. I believe that a strong public statement
could be built around the crucial importance of multi-
lateral consensus in nuclear safeguards and controls,
the need for this country not to isolate itself and
lose its non-proliferation influence, and your
determination to pursue a responsible nuclear export
policy while obtaining strong international support for
our non-proliferation efforts.
2. It is essential to offer non-proliferation
inducements in the areas of fuel buy-back and exchange,
working in concert with other suppliers. Nuclear
consumers, particularly those of proliferation concern
who already enjoy less constrained agreements, will
not voluntarily accept new restraints unless it is
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CONF IDENTIAL
- 4 -
demonstrably in their interest to do SO. I therefore
strongly endorse the review group's recommendations
for assured and equitable front-end fuel services in
exchange for spent fuel, which is at the heart of our
current negotiating approach with Iran.
3. Nuclear consumers will become less disposed
to relying on the US if we arbitrarily impose more
stringent conditions on nuclear agreements after their
terms have been mutually agreed. We must therefore
ensure that the NRC licensing procedures are responsive
to national policy as executed by the President, within
legislative requirements. Nuclear export licenses
should not be used as a lever for obtaining new
constraints from countries which live up to their
obligations to us. NRC procedures should be perceived
instead as a means of predictably implementing our
policies of providing inducements, such as guaranteed
reactor fuel supply, for countries accepting effective
non-proliferation constraints.
4. We should move to engage other major nuclear
suppliers in intensified and multilateral efforts to
ensure that uranium enrichment and reprocessing
facilities are located in supplier nations. To achieve
this, it is necessary to prevent commercial competition
from leading to proliferation of such sensitive nuclear
facilities. While I support the review group's
important recommendations for joint supplier fuel-service
support for reactor sales, I recommend that you set a
long-term framework for effective supplier coordination
of fuel assurances, by calling for an examination by
interested nations of an "international nuclear fuel
bank" concept, as described in the second section of
my Department's position paper, which would combine fuel
storage and supply arrangements under international
guarantees. With your approval, I will ask my deputies
to work with Bob Fri in integrating this new element
into your nuclear policy statement.
5. In this essential multilateral context, I
conclude that a limited domestic reprocessing decision
would serve our non-proliferation and foreign policy
objectives. In so doing, however, it would be desir-
able to provide for appropriate foreign participation
and essential to identify the proposed program as an
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CONF IDEN TAL
- 5 -
"experiment," without prejudging its outcome. I can
support the demonstration project associated with the
"assist reprocessing option" presented by the review
group, subject to what I believe are necessary
presentational and policy precautions elaborated in
the attached position paper, designed to reinforce
our overriding non-proliferation interests.
6. I agree that you should seize the opportunity
to press for rapid Congressional approval of the
Nuclear Fuel Assurances Act, as a crucial means for
expanding US enriched uranium capacity needed to
provide credible non-proliferation inducements. In
addition to providing greater US enriched uranium
capacity to meet foreign needs in the near-term, we
should redouble our efforts to develop more efficient
and controllable forms of enrichment technology which
could very substantially reduce the cost of enriched
uranium and expand available supplies. This would
permit us to shape an international system which could
offer a combination of the "carrot and stick" required
to bring about a regime which might dramatically slow
the spread of national reprocessing in non-supplier
states.
7. Nuclear policy message and management. Your
review group has suggested the UNGA as a possible forum
for your nuclear policy statement. I believe that the
UNGA would be an inappropriate forum for you to discuss
our new non-proliferation policies which will inevitably
convey a tougher approach toward constraints. Even if
tempered by offers of inducements, such a message would
likely be viewed by the majority of your audience as
restrictive, discriminatory, and targetted against the
countries they represent. Nevertheless, if you choose
to address the General Assembly on this subject, I
would urge that you focus on the cooperative elements
of these policies, such as the recommended international
spent fuel and plutonium regime and our interest in
exploring an international nuclear fuel bank concept.
I believe that, in any event, you should reserve for a
receptive US audience (or in a message to the Congress)
the stronger aspects of our policies, as well as any
decision to proceed with domestic reprocessing. As a
subsidiary consideration, I am not convinced that a new
bureaucratic layer -- the proposed Nuclear Policy Council
-- will enhance management effectiveness. You
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might consider using instead existing interagency
committees, such as the specially constituted Under
Secretaries Committee described in the attachment,
to coordinate US nuclear policies.
Proposed Diplomatic Approaches
Your review group has identified the important
need for diplomatic consultations prior to, and
actions following, your nuclear policy statements.
I believe that your statement will afford a signifi-
cant opportunity to catalyze multilateral support
for the safeguards, physical security, restraints,
incentives and sanctions components of our nuclear
policies. Pursuant to the review group's recom-
mendations for next steps, I propose that you
authorize:
1. Rapid, advance consultations with the IAEA
and my counterparts in Canada, France, the FRG, Japan,
UK and USSR on the broad nuclear policy initiatives
you desire to announce; and incorporation into your
nuclear policy message of the results of these advance
consultations by the NSC and the Department, working
with the Domestic Council.
2. Exploration of your new nuclear policy
proposals (including, if you approve, our recommendations
for fuel pooling and an international nuclear fuel
bank concept) with other supplier and consumer states,
prior to my development of the comprehensive negotiating
plan suggested by your review group.
3. Active pursuit of our standing proposals for
an export moratorium on reprocessing facilities and
technology, use of supplier-based reprocessing services,
and international plutonium management, in the framework
of the London nuclear suppliers' meetings, consistent
with your nuclear policy decisions.
4. Accelerated interagency review of technological,
economic and commercial alternatives for maximizing
use of enriched uranium incentives, under effective
controls, to support policies of greater non-proliferation
restraint.
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Recommendations:
1. That you authorize the diplomatic approaches
and follow-on actions proposed above.
Approve
Disapprove
2. That you direct incorporation in the Presidential
message of the international nuclear policy elements I
have described above, consistent with your decisions on
the recommendations of the nuclear policy review group.
Approve
Disapprove
Attachment:
State Department Positions on Nuclear Policy Report
CONF IDENTIAL
CONFIDENTIAL
STATE DEPARTMENT POSITIONS ON
NUCLEAR POLICY REPORT TO THE PRESIDENT
1. Non-Proliferation Restraints. The Department
generally supports a firmer policy on restraints in US
nuclear cooperation which stresses cooperation with NPT
parties or ccuntries accepting full safeguards and with
countries prepared to forego or restructure their re-
processing options. We also support an approach which
makes a clear distinction between (1) cooperation under
new and amended agreements and (2) cooperation under
existing agreements. For both categories of recipients,
we would underscore the general need for a multilateral
approach. US leadership in non-proliferation is important
and consistent with our past policies and recent
initiatives in forming the London Suppliers' Group. But
excessively stringent or rigid unilateral US policies
will at best have limited benefits, since we no longer
dominate the international nuclear market and will not be
able to obtain new restraints without concerted supplier
actions.
On the more specific restraint recommendations:
For negotiating new or amended US nuclear co-
operation agreements, we strongly support the recom-
mendation that the US apply these restraints as non-
binding criteria for engaging in new or expanded nuclear
cooperation. We should recognize, however, the importance.
of gaining common supplier policies on these restraints,
and be prepared to state that we will apply them as
conditions as soon as other suppliers agree to do the
same. The President's public statement would make this
basic approach explicit. We support the Review Group's
conclusion that new restraints should not be mandatory
requirements in the absence of multilateral agreement.
(In this connection, the options on "retroactive
sanctions" must be seen as possible elements of a
legislative strategy that must be accomplished in co-
ordination with the Congress.) Even with a Presidential
override, such a unilateral policy could impair our
flexibility in pursuing non-proliferation objectives
with specific suppliers and recipients.
-- For cooperation under existing agreements, we
strongly endorse the proposal to use diplomacy and a
strategy of inducements to persuade the many key target
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countries in this category to voluntarily renegotiate
existing agreements with new restraints. In addition,
in connection with our attempts to find an acceptable
compromise with the JCAE on its Nuclear Export Bill, we
see merit in the recommendation that NRC use the agreed
London Supplier Guidelines as criteria in granting
export licenses under existing agreements. But even
with the proposed Presidential override, we are concerned
that such ar. approach could be viewed as an attempt by
the US to impose these guidelines retroactively, to the
detriment of our relations with a number of major allies
and our overall credibility as a supplier. Finally, we
oppose the imposition of new restraints as a condition
of further US supply until common supplier agreement is
achieved on this point. Even then, such a course of
action would contravene the legal terms of our inter-
national agreements, thereby risking adverse legal, foreign
policy, and even non-proliferation consequences.
As a fundamental point for recipients in both
categories, we would emphasize the vital link between
gaining new restraints and offering attractive inducements
through fuel buy-back and exchange, and possible leasing.
All such inducements should be coordinated with other
suppliers, since uncoordinated inducements may look to
other suppliers as a US attempt to preempt a larger share
of nuclear fuel and realted reactor markets. In parti-
cular, the more attractive and reliable we make our en-
riched uranium supply using existing and planned facilities
within the broad framework of the Nuclear Fuel Assurances
Act, the more success we will have in obtaining effective
restraints on reprocessing. The President's public state-
ment should relate inducements to restraints to the degree
of specificity judged feasible in light of our ability to
consider offering new fuel supply or service arrangements.
These issues are discussed further below in the context of
our recommendations regarding alternatives to national
reprocessing.
In general, nuclear consumers will become less disposed
to relying on the US if we arbitrarily impose more stringent
conditions on nuclear agreements after their terms have
been mutually agreed. We must therefore ensure that the
NRC licensing procedures are responsive to national policy
as executed by the President, within legislative require-
ments. Nuclear export licenses should not be used as a
lever for obtaining new constraints from countries which
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live up to their obligations to us. NRC procedures
should be perceived instead as a means of predictably
implementing our policies of providing inducements,
such as guaranteed reactor fuel supply, for countries
accepting effective non-proliferation constraints.
2. Alternatives to National Reprocessing. The
Department supports the first option, "contain the
spread of national reprocessing." We share the Review
Group's recognition of the need for strong and specific
US initiatives to achieve an international fuel-exchange
regime based upon:
-- inducements for recipients, in the form of
assured and equitable front-end fuel services in exchange
for their spent fuel; and
-- inducements for suppliers, in the form of joint
fuel-service support for reactor sales in non-nuclear
weapon states, in exchange for withholding sensitive
nuclear technology from further spread under national
control.
The Department supports the steps recommended to
further these objectives. However, we further recommend
that the President call for the exploration by interested
nations of an "international nuclear fuel bank" concept,
through which the potential benefits of plutonium recycle
would be shared under international controls, while the
reprocessing activities incidental to achieving those
benefits would be confined, initially to a few major
supplier countries, but eventually include a few carefully
sited multinational plants. The Department has developed
further proposals for making significant forward movement
in establishing an effective fuel exchange regime. These
proposals are consistent with but go further than the
review group's recommendations in relating restraint re-
quirements to fuel inducements. With the President's
approval, the following approaches would be integrated into
the fuel-exchange elements already presented in the nuclear
policy report:
-- As a matter of national policy, the President
would express:
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(i) For recipients accepting our tightest non-
proliferation restraints, notably no national reprocessing
and enrichment facilities, US willingness to acquire some
or all spent fuel of US origin, at the customer's option,
in exchange for fresh enriched uranium under attractive
terms (i.e., guaranteed feed and enrichemnt services)
(ii) For recipients who do not agree to renounce
national reprocessing and enrichment facilities but are
not constructing such facilities now and are prepared to
place all spent fuel under internatioral storage, future
enrichment guarantees at market rates but repurchase of
spent fuel only at US option.
(iii) For recipients unwilling to accept our
restraints in new or amended agreements, including
storage under international auspices, US insistence on
a purchase or exchange option for US supplied or derived
spent fuel. All suppliers would be urged to offer such
options.
-- To lend multilateral impetus to the foregoing
arrangements, the President would express publicly US
readiness to explore with interested supplier nations
possible arrangements for pooling fuel-exchange capa-
bilities through such means as tie-in fuel sales, cross-
investment in enrichment and reprocessing facilities,
joint enrichment and reprocessing facilities, joint
enrichment guarantees, spent fuel storage as needed to
support such arrangements, and an eventual international
fuel bank.
Finally, the Department supports the Review Group's
recommendations for strengthened fuel assurances, in-
creased enrichment capacity which could support fuel
exchange arrangements, and an appeal for passage of the
NFAA as an essential ingredient in our non-proliferation
strategy. It strongly supports strengthened high-level
diplomatic approaches to other supplier governments, on
a confidential basis in the first instance, seeking a
one-to-two year moratorium on exports of sensitive
facilities and pursuing possible fuel pooling arrange-
ments as a means of minimizing commercial competition
in fuel cycle services.
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3. Domestic Reprocessing Options. The Department
is not in a position to make a comprehensive judgment
on the domestic benefits of the various reprocessing
options presented in the report. As the report notes,
the economic benefits of domestic reprocessing are
uncertain and possibly marginal.
From the point of view of our international and non-
proliferation interests, domestic decisions on reprocessing
and recycle may have an important impact in two respects:
-- A perception internationally that the US has taken
a decisive step toward plutonium recycle may make national
reprocessing appear both more respectable and more
economically attractive. We could argue that such a step
is justified because of the size of the US nuclear program,
but it is not clear whether this would overcome such perceptions,
particularly when announced as a Presidential initiative.
-- The possession or lack of a US reprocessing
capability may have an important effect on our ability
to negotiate workable joint fuel-exchange arrangements
with other suppliers.
Negative international perceptions could probably
be reduced to an acceptable level if the US were to
begin a limited program, but only if its size, sub-
stance, and rationale were consistent with a larger US
non-proliferation program which received general
international credence. In sum, our domestic and inter-
national choices must be part of an integrated whole.
Provided that an international policy along the
lines we have recommended is also adopted, the Depart-
ment can support adoption of Option 1, to "assist
industry to gain experience with reprocessing, with
certain modifications, along the following lines:
-- The program should be identified from the out-
set as experimental in nature without prejudging its
outcome, and its content should justify this description;
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--- We do not object to a demonstration project as
proposed, consisting of Government support for the AGNS
plant plus design of a larger plant with no near-term
commitment to construct this second facility;
-- The possibility of substantial Government involve-
ment in any second plant should, however, be held open;
-- There should be aggressive pursuit of alternative
technologies to reprocessing and recycle as an element
of the program;
-- The program should explicitly allow for financial
participation by other nations (both suppliers and con-
sumers) and joint exploration of service arrangements,
but should specifically exclude service commitments or
technology transfers except as part of agreed arrangements
among suppliers.
-- The program should be presented as an integral
part of our overall strategy, with emphasis upon its
potential role in improving safeguards, supporting joint
fuel-exchange arrangements, developing alternative
technologies, and possibly as a future element of an
international fuel bank.
-- The program should be reviewed at the end of
two years to assess the economic and technological
benefits of reprocessing in the light of what has been
learned, and the advisability of proceeding with con-
struction of a plant beyond AGNS, in the light of pro-
gress made toward an international fuel-exchange regime.
4. Strengthened Sanctions. We support a publicly
articulated sanctions policy along the lines proposed
as a means of balancing our non-proliferation and over-
all foreign policy objectives. The proposed approach
includes at least automatic cut-off of US nuclear supply
if our safeguards are clearly breached, reaffirms the
seriousness with which the US would view any safeguards
violations, and stresses the need for consultations
among suppliers and consumers to determine what collective
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actions should be taken. We do not believe that a US
policy should go further than these steps, either in
terms of incorporating explicit non-nuclear responses
or in terms of adopting more rigid lateral policies.
The Department will consult in advance of a public
statement with other countries, and in particular seek
to elicit comparable statements from other key suppliers.
We will also pursue diplomatic efforts to gain multi-
lateral supplier support for IAEA-related initiatives
in this area and seek supplier agreement to curtail
nuclear cooperation with any non-nuclear weapons state
hereafter testing a nuclear device, regardless of whether
safeguards obligations are violated (recognizing that
it is unlikely that France would agree).
5. IAEA Storage Regime: We support promotion of
this concept, with particular near-term emphasis on
storage arrangements for spent reactor fuel. A Presi-
dential statement endorsing this concept and expressing
a willingness of the US to participate, can provide
impetus to our on-going diplomatic efforts in the context
of the London Suppliers' Group and in the IAEA to trans-
late the international storage objective into reality.
We will consult in advance of such a statement with key
suppliers and the IAEA Director General. In both public
statements and private consultations, when discussing
the role of such a storage regime for separated plutonium
we should be wary of appearing to condone national
reprocessing.
6. Strengthened IAEA Safeguards. We support the
proposed program to sponsor safeguards demonstrations
for sensitive facilities, offer an ERDA laboratory to
support development of new techniques, and explore
possibilities for greater US contributions to improving
agency capabilities. The Department is prepared to seek
cooperation from other suppliers and recipients in rein-
forcing our initiatives, and believes that a public
statement surfacing these proposals would be useful in
this connection.
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7. Strengthened Physical Security. We support a
policy of strengthening and standardizing physical
security over nuclear materials. We have made significant
progress in establishing physical security guidelines
for suppliers to follow as result of the London Suppliers'
understandings. Before going beyond these agreed standards,
the US should first seek to bring its own national stan-
dards up to these levels. The concept of an international
convention -- which has been proposed internationally in
1974 and again in 1975 in the UNGA and explored diplomatically
with other suppliers and in the IAEA context -- could be
mentioned as part of an overall nuclear policy statement.
But it should be recognized that the prospects for strong.
mandatory provisions as well as early negotiation of such
a convention are limited.
8. Waste Management. We support the review group's
recommendations on waste management, but further recommend
that the US publicly propose the pursuit of international
R&D initiatives in this field. We also propose that specific
attention be given to the question of whether the US could
accept foreign waste, if we ever entered into an inter-
national reprocessing service program.
9. Non-Nuclear Technologies. The Department supports
these proposals and will work with ERDA in studying pos-
sibilities. However, we do not see substantial opportunities
emerging which could provide an effective near-term deter-
rent to smaller countries desiring to obtain nuclear power
plants. In the proper context, on the other hand, initiatives
in non-nuclear energy cooperation may be helpful in dis-
suading certain countries from acquiring sensitive
nuclear facilities, such as reprocessing plants. In
formulating and implementing any such program, we should
draw upon the efforts we are making in the IEA and in
CIEC to cooperate with LDCs in the energy field. Of
particular importance might be the US proposal for an
International Energy Institute which we are discussing
within the IEA and CIEC, following up the various pro-
posals we made at the UN Seventh Special Session.
10. US Safeguards Effectiveness. We support the
proposals for assuring the effectiveness of US safe-
guards, with the understanding that upgraded intel-
ligence efforts should be responsive tc our broader
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non-proliferation policy needs and not injurious to the
IAEA. We would also seek other supplier support for
fall-back bilateral safeguards and work with them to
gain timelier access to IAEA safeguards information.
11. Public Statement. The Department does not
believe that the UNGA would be an appropriate forum
to discuss new non-proliferation policies emphasizing
tougher constraints. While the drama and worldwide
scope of a Presidential UNGA address are positive
factors, such a message would likely be attacked as
restrictive and discriminatory by the less developed
countries, even if balanced by offers of inducements.
On the other hand, a domestic message, perhaps to the
Congress, would present an opportunity to underline
both the safeguards and constraints inherent in our
nuclear policies and the experimental character of
any domestic reprocessing program. If the President
nonetheless selects the UNGA as the forum for a state-
ment on nuclear policy, the Department would recommend
that he emphasize the cooperative aspects of our non-
proliferation policy.
12. Nuclear Policy Organization. Rather than
the proposed Nuclear Policy Council including State,
ERDA and ACDA, we believe that consideration should be
given to continuation of the existing NSC/VPWG mechanism
or a specially constituted Under Secretaries Committee
reporting to the President through the NSC and the
Domestic Council. Instead of establishing another
bureaucratic layer, the Department favors the option
of an Under Secretaries Committee as the most flexible
and coherent means of effectively representing the
interests of the domestic and foreign policy agencies.
Whatever the institutional arrangement, the Department
of course welcomes the review group's support of its
lead responsibility (in coordination with other
relevant agencies) in the diplomatic and foreign policy
elements of US nuclear policies.
September 4, 1976
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