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FY 1977 - 11/26/75 - ERDA Background Book (2)
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FY 1977 - 11/26/75 - ERDA Background Book (2)
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The original documents are located in Box 10, folder "FY 1977 - 11/26/75, ERDA
Background Book (2)" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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 10 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library
Issue Paper
Energy Research and Development Administration
1977 Budget
Issue #6: Nuclear Fuel Reprocessing and Recycle Support
Statement of Issue
To what extent should ERDA increase its involvement in and responsibility for nuclear fuel reprocessing?
Background
Reprocessing of spent nuclear fuel discharged from Light Water Reactors (LWRs) is planned to (a) recover
valuable uranium and by-product plutonium which can be reused ("recycled") as fuel in power reactors and (b)
process the radioactive waste material into a form for ultimate disposal. (See the attached diagram which
describes the entire nuclear fuel cycle, including the reprocessing and recycle stages. ). Eventually part of
the plutonium recovered from LWR fuel must also be used as the initial fuel for the breeder reactor (1990's).
The basic technologies used in this reprocessing were developed and demonstrated by the AEC in associa-
tion with their nuclear weapons production activities although there are significant differences in the reprocessing
of commercial spent fuel. Development of these technologies by the AEC ceased in the mid-60's when a commercial
nuclear fuel reprocessing plant, the Nuclear Fuel Services (HSF) plant in West Valley, New York, began operation.
At that time, there were two additional plants under design and construction which led the AEC to conclude
that a private competitive reprocessing industry was assured.
The following series of events has led to the virtual paralysis of that industry:
-
In the summer of 1971, the NFS plant shutdown for an expansion. Due to this expansion, the
plant will now require a new operating license from NRC which has the NFS plant caught in the
same regulatory process as a new plant nearing completion.
GERALD
The 1971, Allied Gulf Nuclear Services (AGNS) commenced construction of a commercial reprocess-
ing plant planned for operation in 1976. The initial cost estimate for the plant was $90
FORD
million. The AGNS plant has already cost over $250 million and the estimate to complete the
fuel reprocessing complex is now $800-900 million. This overrun is due to poor estimating and
LIBRARY
new regulatory requirements which result in additional and expensive steps in reprocessing.
2
- In July 1974, an AEC regulatory decision preventing the shipment of plutonium (Pu) in a nitrate form
resulted in the necessity for an additional step at the reprocessing site (the conversion of liquid Pu
nitrate to solid Pu oxide). This adds about $150 million to the capital cost of a reprocessing plant.
- In July 1974, a small reprocessing plant built by General Electric at Morris, Illinois, at a cost of
$80 million was completed, but cannot be operated because of technical problems which are not shared
by the NFS and AGNS plants.
- In January 1975, CEQ recommended that NRC not make a decision on the use of plutonium-uranium mixed
oxide fuels in nuclear plants (i.e., plutonium recycle) until the NRC supplemented the Generic Environ-
mental Impact Statement on Mixed Oxide Fuels (GESMO) with an additional study of alternate ways of
safeguarding plutonium against theft. In April 1975, NRC provisionally decided to accept this
recommendation from CEQ and on November 12, 1975, announced its final acceptance of it. Completion of
the Environmental Impact Statement review and hearing process on safeguarding plutonium will delay to
mid-1977 the NRC's final decision on whether to permit plutonium recycle. This NRC decision effectively
prevents the start of any work on the Pu conversion facility by the AGNS organization. The AGNS complex
cannot be completed and operated until after NRC's final Pu recycle decision is made. However, part of
this complex, the separation facility, could be licensed to operate but it would be of no value to AGNS
to operate only this part.
- The NFS plant licensing could also be delayed by the provisional NRC decision resulting in the plant's
operation slipping from 1979 to 1983 but this plant is less critical because of its smaller size.
In summary, no reprocessing plants are now operating or are able to operate.
For the shorter term, there is an option to nuclear fuel reprocessing, namely storage of spent fuel in
water-cooled basins. However, current storage capacity is limited. To prevent nuclear power plants from
shutting down due to lack of reprocessing capacity spent fuel capacity must be expanded. Utilities are making
plans for these expansions. This storage of spent fuel is not a realistic option for the longer term since
spent fuel cannot be safely stored in water indefinitely. Thus, on safety grounds, we will need fuel repro-
cessing within 10-20 years. In fact, there are probably economic and other benefits for achieving fuel
reprocessing earlier than this (within 10 years).
GERALD
The problem currently preventing industry from developing reprocessing is one of uncertain economics
resulting from (a) the total uncertainty on whether Pu recycle will be permitted by NRC; (b) the degree of
FORD
regulated constraints on plants if recycle is permitted; and (c) the questions now being raised regarding
LISTRAY
the performance and cost of the technologies involved in reprocessing.
3
These uncertainties present very large obstacles to any private corporation investing additional money in
the present AGNS plant or new money in subsequent plants required to keep up with the growing nuclear power
industry. Since NRC will not license until after 1977 a Pu conversion facility, AGNS will not spend any more
on building additional facilities at the AGNS plant. The AGMS organization has proposed that ERDA build, own
and operate separate Pu conversion ($150M) and waste solidification ($500M) facilities adjacent to the AGNS
reprocessing plant. These facilities, which are essential to bring the AGNS plant into operation, would not
have to be licensed by NRC if they were built as ERDA demonstration plants. AGNS would then license and
operate the separation facility (already 90% completed) and would plan to buy the ERDA facilities and obtain
NRC licenses after these facilities attain operating status.
AGNS has been led to expect a decision on this in the FY 77 budget. If there is no decision or any indication
of a decision in the near future, they are likely to moth-ball the completed plant which would delay any demon-
stration of reprocessing by another two years. If the decision is not to participate in a joint porgram at the
AGNS plant, the AGNS owners indicate that they would close down the plant and lose the $260 million already sunk
into the plant.
It is the difficulties facing the AGNS complex--all deriving from new regulatory constraints and uncertainties--
that have caused reprocessing to become an immediate issue requiring this Administration's attention. The AGNS
situation is new,typifying this industry's problems and the whole future of reprocessing in this country.
Complicating further ERDA's dealing with the AGNS situation are the tentative proposals made to ERDA by other
potential reprocessors which are seeking support but have not developed programs or constructed facilities as
far along as AGNS'.
The issues facing the Federal Government are:
Is Reprocessing Beneficial to the Nation? Over the past three months, three different studies were initiated
under contracts to ERDA and NSF's Office of Energy R&D Policy to evaluate the economic benefits on Pu recycle under
these uncertainties. The consensus of all three studies, based on assuming very high (but realistic) costs for
reprocessing and recycle to provide adequate safeguards and environmental protection, is that reprocessing nuclear
fuel and recycling uranium and plutonium in LWRs would be beneficial to electricity consumers in this country.
However, these benefits are small, from $2 to $4 billion over the next 20 years (0.5% of the nation's elec-
tricity bill). These small benefits do not justify a very aggressive attempt by industry, Government or both
to establish a reprocessing industry in this country. However, there are other benefits to having a reprocessing
capacity in this country which may transcend the direct savings to consumers:
- Reprocessing spent nuclear fuel reduces the radioactive waste material to a form which can be managed
and disposed of in a more environmentally sound fashion than disposing of fuel assemblies directly.
- The existence of an active reprocessing capacity in this country assures us a stronger worldwide position
in establishing adequate nuclear safeguards by virtue of our complete understanding of the technologies
involved and the ability to service foreign reprocessing needs when necessary.
- The lack of wide-scale uranium and plutonium recycle in 1985 would increase the demand on the uranium mining,
milling and enrichment industries by 15% over what is currently being projected. These industries are now
claiming that they may not be able to expand rapidly enough without some Government support in order to
meet current projected demands. Increasing this demand will surely result in more uncertainty about their
ability to expand and therefore increase pressures on the Government to help their financial expansion,
or potentially the slowing down of projected nuclear power growth due to lack of adequate uranium supply.
- One dollar of capital invested in reprocessing is equivalent, in terms of energy eventually generated,
to about $2 of capital invested in mines, mills, and enrichment plants. Thus, reprocessing reduces
the financing requirements of the whole nuclear industry.
- If there is an assured method for caring for spent nuclear fuel (e.g., reprocessing it) one of the
bigger removed. uncertainties faced by utilities in their decision to buy nuclear powerplants will have been
When should a Reprocessing Capacity be available? The long construction lead-times combined with the present
regulatory and economic uncertainties indicate that the private sector alone will not be able to develop repro-
cessing and recycle capacity by 1985 which would result in the loss of the economic benefits previously mentioned
but more importantly--would lead to higher demands for uranium mining, milling, and enriching capacity.
5
Should the Government become involved in Reprocessing? The private sector might be able to overcome the
present obstacles to their financing reprocessing endeavors and develop an industry on their own, but it would
develop over a much longer time schedule than would be required to avoid some of the disadvantages associated
with not having reprocessing and recycle by 1985. Beyond this, the possibility is large that without some
U.S. Government involvement the industry would never overcome the present regulatory and technical uncertainties
and no capacity at all would be developed. This situation could initially result in the shutting down of some
on-line power reactors and could eventually lead to the Government performing all the fuel reprocessing which
then would be required for waste treatment and disposal, a potential $20 billion program (cost recoverable
over time).
What U.S. Government activities are appropriate in Reprocessing? There are demonstrated technical and
regulatory uncertainties facing any prospective private reprocessor. Both of these uncertainties translate
into economic (i.e. the cost of reprocessing) uncertainties. Coupling this economic doubt with the recent
major losses and potential losses of investment by companies entering the business, has led prospective
investors in reprocessing to be very wary of investing $1 billion in a reprocessing plant.
The U.S. Government could play the role of stimulating the private sector to perform their function
of building reprocessing capacity by attempting to remove these uncertainties which could be done in a
number of possible ways:
(a) Demonstration and licensing of commercialsized facilities.
- Providing direct subsidies to the constructors of the first separations, conversion, waste
solidification, and fuel refab plants (i.e. demonstrating plant licensing, performance and
costs) by creating jointly funded Government/Industry ventures to build these or by giving
direct grants to reprocessing plant construction.
- Providing industry with some risk coverage through guarantees against subsequent regulations
preventing Pu recycle or plant operation.
- Providing an assured market by being willing to buy some amount of the plutonium product.
(b) Incentives to industry to achieve future required capacity levels.
- If a demonstration plant program does not sufficiently remove the uncertainties faced by
the reprocessing industry, some additional financial support to subsequent plants may be
required to achieve future production capacity levels. This type of potential future support
is not included in the current ERDA request.
6
- There is simply not enough information at hand to make a judgment as to the degree or nature of
any such Government assistance in the context of the FY 77 budget.
Alternatives
#1. Let private industry resolve the nuclear fuel reprocessing problems themselves (i.e. decide that
the Government has no direct responsibility for assuring the development of a reprocessing industry).
Rely upon spent fuel storage until regulatory uncertainties are clarified and economic incentives
lead industry to proceed without Government support.
#2. ERDA request. Initiate a $1B cost-shared ERDA/industry program to demonstrate complete nuclear
fuel reprocessing, waste solidification, and fuel refabrication capability in commercial-scale
facilities. ERDA determine the extent of its participation after evaluating competitive responses
by industry to requests for proposals issued by ERDA in FY 1976. ERDA could support multiple
facilities for each technology or a single comprehensive recycle project. (If facilities are wholly
owned by ERDA, no NRC license would be required. If facilities are cost-shared, an NRC license
would be required.) In addition to funds for supporting R&D, include $97M of BA in FY 1977 budget
for ERDA/industry joint programs.
#3. OMB Recommendation. As in Option #2. ERDA issues requests for proposals in FY 1976 which would allow
industry to identify on a competitive basis the support industry believes it needs to proceed with
the construction of commercial-scale fuel recycle demonstration facilities. However, Option #3 would
differ from Option #2 in the following ways:
- No funds would be included in the ERDA's FY 1977 budget for the ERDA/industry joint program
(although a contingency of $67M BA would be included in the overall President's budget).
Depending upon evaluation by ERDA and OMB of the industry responses to the ERDA RFP, a decision
would later be made on whether to submit an amendment to ERDA's FY 1977 budget.
- For each phase of the reprocessing process (i.e. plutonium separation, plutonium nitrate to oxide
SEPALD
conversion, mixed oxide fuel fabrication, and radioactive waste solidification) there would be no
more than one demonstration facility.
The RFP would be written broadly to permit industry to respond with other possible support mechanisms
such as financial guarantees, purchasing plutonium produced in reprocessing plants or Government
coverage of future regulatory requirements (rather than focus mainly on ERDA support and partial
ownership of demonstration facilities as in Alternative #2).
7
- No funds would be included for a fuel recycle technology training facility.
#4. The U.S. Government takes primary responsibility for financing, building and operating the first
2-4 reprocessing plants with private sector involvement as contractors in these plants on a time
scale consistent with assuring that all needs for fuel reprocessing capacity are met.
Analysis
July 1 to Sept.
1975
1976
30, 1976
1977
1978
1979
1980
1981
Budget Authority/Outlays
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
($ Millions)
Alt. #1
--
--
16.5
12.5
3.8
3.8
29
25
18
20.
14
15
9
10
5
CA
Alt. #2 (Agency req.)
--
--
16.5
12.5
3.8
3.8
135
69
200
100
200
200
200
300
20C
200
Alt. #3 (OMB rec.)
--
--
16.5
12.5
3.8
3.8
35
30
9
10
9.
9
8
8.
7
7
(Contingency Allow.)
--
--
--
--
:
--
(67) (19) (100) (50) (100) (100) (100) (150) (100) (100)
Alt. #4
--
--
18.0
13.8
4.0
4.0
1000
850 2000
180
2000
470
2000
755
2000
880
*
Following a review by ERDA and OMB of industry's response to the RFP's an amendment to ERDA 's FY 77 budget could
be submitted to authorize this allowance, if required.
A detailed comparison of these alternatives is attached, see Alternatives Evaluation Table.
The ERDA program, Alternative #2, has not yet been clearly defined by ERDA. ERDA has not evaluated
the various forms of Government assistance previously mentioned before selecting their approach and, in fact,
gives all indications that they are not quite certain of this approach themselves. For these reasons ERDA
must put much more effort during FY 76 into analyzing how to proceed in the reprocessing area in FY 77.
ERDA, however, is requesting authorization ($97M) to contract with potential reprocessors after the RFPs
are returned at the beginning of FY 77. This $97M is the minimum ERDA feels will be required by industry and
is directed primarily at the waste solidification portion of reprocessing complexes where a Government role is
more needed. Although ERDA does not now have a clear idea of how the $97M would be spent by major activity,
ERDA believes that the $97M would give substance to any Presidential statement regarding support of the nuclear
option. However, OMB staff feels that the inclusion of the $97M in ERDA's budget is unjustified until the
program is better defined.
8
Agency Request. Alternative #2. In order to demonstrate that the U.S. Government is serious about solving the
nuclear fuel reprocessing problems and in order to have the authority to sign agreements immediately after
evaluating the RFP's, ERDA feels it necessary to authorize funds in FY 77 for their cooperative programs in
reprocessing. The details of these programs will be defined by requesting proposals from industry for joint
ERDA/industry owned and operated reprocessing facilities.
OMB Recommendation. Alternative #3. OMB staff concludes that in order to take full advantage of the potential
national benefits of nuclear fuel reprocessing this country should have reprocessing capacity developed by the
mid-1980's. The capacity should be owned, built and operated by the private sector. In order to assure that
the private sector can do this, the uncertainties (regulatory, economic or technical) now impeding them must
be removed in a timelymanner and at the least cost to the U.S. Government. The nature of the support required
has not been adequately analyzed yet by ERDA to justify the U.S. Government committing to any particular method
of support (i.e. simple financial risk minimization or direct subsidization). ERDA should proceed to solicit
expressions of interest from industry followed by requests for proposals to find out the specific Government
support required by industry. ERDA and OMB can then review the industry response and determine whether to submit
an FY 77 budget amendment. In the meantime, the Administration could state its support for the national
objective of assisting industry in closing the nuclear fuel cycle by citing (a) the increased R&D and conceptual
design funds provided (including R&D on commercial waste management discussed in Issue #7) and (b) the plan to
request proposals from industry for demonstration projects.
The point has recently been made strongly with the nuclear industry that if they fail to support the
Administration on private uranium enrichment, ERDA would be forced to divert funds to expanding the Government's
uranium enrichment plants. Within a constrained overall budget for nuclear programs, there would not be enough
funds available for major Administration initiatives on reprocessing and commercial waste management. By
refraining from committing now to a definite dollar level for reprocessing demonstration plants, we would be
exerting continued pressure on the nuclear industry to support the Administration's private uranium enrichment
plan.
9
Alternatives Evaluation
ERDA
Industry Cost
Effect on Develop-
Public, Utility
Alter-
Costs
& Responsibility
ment of U.S. Repro-
Effect on
Effect on
& Congressional
native
($ M)
Sharing Potential
cessing Capacity
AGNS Plant
Waste Mgmt.
Perception
#1
175
Industry accepts
Reprocessing never
AGNS would
No LWR wastes
Public utilities
responsibility and
sufficient to meet
probably
available for
perceive this as Gil
cost of building
current light water re-
fold.
experimental
indication of U.S.
all facilities.
actor needs. Potentially
purposes until
Government's Tack of
not available for adequate
late 80's.
interest in nuclear
waste disposal or breeder
Delays (10 years
power, therefore, more
needs.
or so) answering
uncertainty over its
waste disposal
future and less our-
issues.
chase of nuclear.
#2
500-
Management re-
Depends greatly on future
AGNS would
LWR wastes avail-U.S. Government is
1000
sponsibility and
negotiations with industry
have to
able for ERDA
genuinely concerned
costs shared by
and U.S. Government de-
compete for commercial waste
about the nuclear
industry and U.S.
cisions. Potentially
U.S. Govern-disposal R&D
option. Larger
Government.
could meet all economic
ment
program.
management role of
requirements.
support.
ERDA compared with #3
preferred by Congress.
#3
0 - - 1000
Would be evaluated
Same as #2
Same as #2. Same as #2.
U.S. Government per-
(If finan-
by end of FY 76.
ceived as genuinely
cial guaran-
Presumably less
concerned about the
tees of plant U.S. Government
nuclear option.
operation
involvement could
Completion
were effec-
be achieved than
guarantees and risk
tive costs
in Option #2 and
reduction method
could be
management res-
disliked by Congres:
zero but the
ponsibility for re-
GERALD
since U.S. Govern-
U.S. Govern-
processing would
*
ment is liable but
ment would clearly lie in the
incur liability private sector.
FORD
has little control
over industry
of up to $1B.)
LIBRARY
decisions.
10
ERDA
Industry Cost
Effect on Develop-
Public, Utility
Alter- Costs
& Responsibility
ment of U.S. Repro-
Effect on
Effect on
& Congressional
native
$ Million
Sharing Potential
cessing Capacity
AGNS Plant
Waste Mgmt.
Perception
#4
12,500
No industry involve- Meet all reprocessing
AGNS would
Same as #2
ment with the excep- needs, economic or not.
Congress probably
be sup-
tion of the oper-
oppose due to sub-
ported.
ation of the now
sidy to industry
completed portion
concerns.
of AGNS.
GERALD 1348017 R. 1080
The Nuclear Fuel Cycle
Nearly all of today's commercial nu-
gaseous at conditions near room tem-
There the uranium and reactor-
clear power plants utilize Light Water
peratures and pressures. There are
produced plutonium will be separated
Reactor (LWR), meaning that these
two UF. conversion plants operating in
from the highly radioactive fission
reactors use ordinary water as a cool-
the U.S.
products generated while in the nu-
ant.
Uranium hexafluoride is then sent
clear power plant. The radioactive
The production of power from re-
to a uranium enrichment plant.
wastes, converted into a solid, will
actors, however, is only one link in
Once the desired enrichment is con-
then be shipped to a Government
a series of interrelated steps known
ducted, the material is shipped to a
repository. The recovered uranium
as the nuclear fuel cycle.
fuel fabrication plant. There, the en-
will be converted again into the hexa-
The first step in the nuclear fuel
riched uranium is converted to uran-
fluoride gas and reinserted into the
cycle is the mining of uranium ore
ium dioxide, UOs, formed into pellets,
enrichment plant for re-enrichment.
from the earth. The ore is shipped to
and placed in zirconium tubes. The
The extracted plutonium, which is
a mill where uranium concentrate is
tubes are assembled into bundles
also a fissionable material, can be
produced. This uranium concentrate
and sent to nuclear power plants.
used as fuel in a nuclear power plant.
is often referred to as yellowcake,
Seven domestic companies are in-
If use of the plutonium is granted by
whose chemical symbol is U3O8. There
volved in the fabrication of nucelar
the Nuclear Regulatory Commission,
are 14 mills presently operating in the
fuel.
it would be sent to the fuel fabrication
United States. The yellowcake is then
After the fuel is used in the nuclear
plant. There it would be mixed with
sent to a converter where it is con-
power plant, it is discharged and
uranium and formed into pellets for
verted into uranium hexafluoride, or
cooled in a large water basin at the
nuclear fuel. This process is known
UF... Uranium hexafluoride is the only
plant. The spent fuel will then be sent
as plutonium recycle.
simple form of uranium that can be
to a chemical reprocessing plant.
THE NUCLEAR FUEL CYCLE
STEPS
URANIUM MINES
CONVERSION
ENRICHING
CONVERSION
& MILLS
TO UFs
TO FUEL
PLUTONIUM
RECOVERED
URANIUM
REACTOR
REPROCESSING
FORD
WASTE STORAGE
BY-PRODUCTS
GERALD
Issue Paper
GERALD
A.
Energy Research and Development Administration
1977 Budget
FORD
Issue #7: Commercial Waste Management
LIBRARY
Statement of Issue
Should ERDA significantly accelerate its Commercial Waste Management program for the storage and disposal of
commercial nuclear wastes?
Background
The management, storage and ultimate disposal of radioactive wastes from commercial nuclear plants has been
identified as the major drawback and problem associated in the public mind with the use of nuclear power plants.
The technical community likewise feels that waste management is the largest unresolved problem associated with
nuclear power but they see it as a problem which can readily be solved.
In 1970 the Federal Government, through the regulatory powers of the Atomic Energy Commission assumed ultimate
responsibility to store and dispose of commercial radioactive wastes on a full-cost recovery basis. Because these wastes
were known to be so hazardous and long lasting, the Commission determined that it was in the public interest to
have the responsibility for the disposal and long term management of these wastes rest with the Federal Government
instead of in the private sector.
The Atomic Energy commission had attempted to solve the problems of commercial radioactive waste disposal
several times in the past. These attempts included proposals for interim surface storage and long term underground
storage in a variety of locations. These attempts failed for a number of reasons which included technical and
political problems with the specific sites chosen. The proposed ERDA program is a large scale departure from the
previous AEC attempts to solve this problem.
ERDA has proposed a large increase in its Commercial Radioactive Waste Management R&D program for FY 1977, (ERDA's
FY 1977 budget request is for $90.6 million BO compared to $14.4 million BO for FY 1976). The objectives of the
Commercial Waste Management program are to provide for the research, development, and demonstration of technologies
for (1) long-term isolation and storage of commercial high-level radioactive wastes (either directly from reactors
or from nuclear fuel reprocessing plants); and (2) the long-term collection, management and storage of other forms
of radioactive wastes (such as airborne norble gas wastes).
The proposed ERDA program is directed at solving the technical problems involved in the management and storage
of these wastes. These problems include:
2
- The fact that the radioactive streams from nuclear fuel reprocessing plants using current technology
contain fractions of highly toxic radioactive isotopes such as cesium, strontium, plutonium, curium and
americium which:
a. represent direct health hazards from their high-level radioactivity
b. can cause genetic changes in humans
C. will emit quantities of heat for long periods of time
d. will remain toxic for up to 100,000 years or more.
- The necessity for processing the acid liquid radioactive waste streams leaving reprocessing plants into
more stable and manageable waste forms such as calcined powders, concretized compounds, or glass-like
compounds.
- The requirement to develop and test containers to store the processed wastes.
- The question of whether or not to develop interim storage facilities which are environmentally acceptable,
protect against public health risks and are defensible against attempts at willful dispersion.
- The task of finding and developing sites and facilities for ultimate radioactive waste disposal in whatever
form of waste packaging ERDA determines to be the most stable. Sites chosen for ultimate waste disposal
will either be:
a. geologic (e.g., mined cavities, man-made structures in geologic formations)
b. sea-bed (e.g. deep sea floor disposal)
C. ice sheet (burial in large ice formations).
Such sites must be geologically stable over the period of radioactive "life" of the disposed isotopes (at
least 100,000 years) and must be inaccessible and defensible. (Future technology improvements in fuel reprocessing
may reduce this time to about 1,000 years.)
The development of adequate means to store and ultimately dispose of commercial radioactive wastes is of central
importance to the future of the nuclear power industry.
- As pointedout above, waste management is cited as the key public concern about nuclear power.
3
- The decisions on the waste form and delivery schedules for these wastes from reprocessing plants must be
made early so as to remove another uncertainty facing the potential private sector owners of reprocessing
plants. The lack of reprocessing capacity due to technical, regulatory and economic uncertainties, one of
which is the waste form issue, is presenting the nuclear industry and the Government with major problems.
ERDA, the NRC and EPA all have responsibilities in the management of radioactive wastes, but thus far no
clear-cut federal strategies or agreements coordinating the activities of these agencies have been formulated.
The Council on Environmental Quality, which has the responsibility to review Federal programs effecting the
environment and to recommend policies to improve environmental quality, has recommended the establishment of an
Interagency Task Force on Radioactive Wastes to develop a comprehensive Federal strategy of dealing with radio-
active wastes and to draft interagency agreements for its implementation. It is essential that this be done as
soon as possible to avoid a great deal of program overlap among the agencies and to satisfy all National Environ-
mental Policy Act (NEPA) requirements in an organized timely fashion. The latter will avoid the possibility that
one agency will be enjoined against proceding with the fulfilling of its waste management responsibilities until
another agency completes an EIS.
Alternatives
#1. Greatly accelerate ERDA's current commercial waste management R&D program. This includes a major
program to find and begin the development of multiple terminal storage sites for commercial
radioactive wastes. (Agency req.)
#2. Allow ERDA to accelerate its current program but limit the number of proposed drillings to half the
number of sites requested by ERDA until further program development and planning has been done by ERDA.
(OMB rec.)
#3. Continue ERDA's current program. Request further study of the economic, technical and legal-
political questions involved in this issue before any expansion is permitted.
GERALD
R.
FORD
4
Analysis
July 1 - Sept.
1975
1976
30, 1976
1977
1978
1979
1980
1981
Budget Authority/Outlays
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
($ Millions)
Alt. #1 (Agency req.)
13.2 11.4
16
14
4.8
4.2
120
91
113
96
128
110
132
115
133
125
Alt. #2 (OMB rec.)
13.2 11.4
16
14
4.8
4.2
85
66
75
70
100
80
100
90
100
100
Alt. #3
13.2 11.4
16
14
4.8
4.2
18
17
25
20
25
25
25
25
25
25
Analysis
ERDA's FY 77 budget request for commercial waste management provides for a greatly accelerated R&D and demon-
stration program to develop acceptable methods of radioactive waste disposal on a time schedule to keep pace with
the growth of the nuclear, industry and to answer public conerns about the ultimate disposal of nuclear wastes.
The major component of ERDA's proposed FY 77 program is a greatly expanded terminal storage program (BO in
FY 76 was $4.6M and Bo request for FY 77 is $50.5M). The objectives of this program are to survey via drilling
many terminal storage sites in nine different geologic formations thorughout the country in order to demonstrate
the existance of acceptable terminal storage sites. ERDA justifies this approach on the following basis:
- Multiple sites in different formations will reduce the risk of delay from technical difficulties with any
one particular site or rock type.
- Reduce the risk of technical failure (which has already contributed to the failure of two AEC proposals).
I
- Will utlimately deploy, starting in 1987, nuclear wastes to a number of sites (5) through out the country
thereby minimizing the political objections to the location of such wastes at any particular site.
- Locates storage facilities at or near fuel cycle facilities and nuclear plant concentrations thereby reducing
the cost, risk and vulnerability in transportation.
OMB agrees that it is very important to resolve quickly the question of how commercial wastes will be
stored and ultimately disposed of because:
- The ultimate public acceptability of nuclear power will, in large measure, be determined by the
acceptable resolution of the waste disposal question.
5
- It is important to accelerate this program and therefore the solution of this problem in FY 77; because:
(1) it is the only portion of the nuclear fuel cycle where the Government has sole responsibility to solve
the problem through regulatory and programmatic actions and (2) the solution of this problem will greatly
reduce the uncertainties associated with nuclear power and by so doing accelerate its development in accord
with the President's goals.
Although we agree with the necessity to solve quickly and finally the commercial wastes problem, we do not
believe that it is necessary to support fully ERDA's accelerated FY 77 program for the following reasons:
- ERDA's program calls for a large scale drilling program in nine geologic formations in at least 50 locations,
the initiation of in-situ experimentation with simluated high-level wastes in two different rock types, and
the initiation of pilot plant site selection investigations in the Southwest and Northeast United States.
The drilling program is to lead to the demonstration of five terminal storage demonstration facilities.
OMB believes that expensive in-situ experimentation and the commitment to pilot plants should follow a
much more extensive geologic and economic evaluation designed to limit the number of sites and to better
plan for the location and operation of the demonstration facilities.
- ERDA's planned demonstration program is not accompanied by any analysis of the costs, either short or
long term of operating these demonstration facilities or a risk analysis which demonstrates the cost-
effectiveness of developing five alternative locations for waste disposal. ERDA should be required to
fully evaluate the anticipated costs of these demonstration facilities before selecting among alternatives
and committing future resources to them.
- ERDA's proposal does not answer the questions of whether or not these waste facilities will require
surveillance. If they do, large costs to provide such surveillance are likely. Moreover, the ERDA proposal
does not answer the legal-political and moral questions of whether this society should impose the burden of
surveillance upon tens of thousands of succeeding generations who will receive no benefits from them.
At this time, the final form the nuclear wastes will have to take for perpetual storage is unknown, and ERDA
is undertaking R&D to solve this problem. NRC is expected by next year to define, by regulation, the final
permitted form of wastes. ERDA's storage site demonstration program should be timed and structured so that the
decisions on sites and waste forms are compatible. ERDA, therefore, should be required to further plan its proposed
program so that potential problems of timing and coordination with its own research and the NRC are avoided.
6
Agency Request. Alternative #1. ERDA believes that a major integrated R&D site survey and demonstration program
is necessary now to solve the political and physical problems of the nuclear industry. Past failures in finding
suitable sites leads ERDA to support the need for multiple site drilling and the necessity of demonstrating three
terminal storage facilities.
OMB Recommendation. Alternative #2. While recognizing the need to move quickly in this area, the ERDA program
does not represent a comprehensive plan to answer the political, legal, economic and moral issues implicit in the
management of commercial wastes. Alternative #2 provides for a large scale ERDA program which will require that
ERDA develop a comprehensive plan before committing itself to many in-situ experiments and a terminal storage pilot
plant demonstration program. This alternative permits a significant expansion in drilling in different geologic
formations since the information generated by this drilling will be an important input to the development of a
program plan and to the delayed selection of other in-situ experiments and pilot plant demonstrations.
An Interagency Task Force on Waste Management should be formed immediately and jointly chaired by OMB and CEQ.
This Task Force would develop a comprehensive Federal waste management strategy, to coordinate the activities of
NRC, ERDA and EPA and to draft, as soon as practicable, interagency agreements which clearly define the agency
roles and their regulatory and NEPA (EIS) responsibilities needed for timely implementation of that strategy.
GERALD
H.
Issue Paper
Energy Research and Development Administration
1977 Budget
Issue #8: Light Water Reactor (LWR) Technology Program
Statement of Issue
Should ERDA initiate a five-year, $300 million technology program to improve the performance of existing
Light Water Reactors (LWRs) and to reduce construction times for new LWRs?
Background
LWRs which became commercially available in the mid-1960's, are supplied by four U.S. manufacturers. LWRs now
produce 8.3% of U.S. electricity requirements and are projected to produce over 30% by 1985. In the mid-1960's,
as the private sector began marketing LWRs in large quantities, AEC terminated all related R&D with the exception
of reactor safety research. This safety research is now being conducted by NRC ($105M in FY 77) but no U.S. Govern-
ment activities towards improving the performance of LWRs are now being conducted.
Plant Performance:
Plant performance of LWRs as measured by their capacity factors (the ratio of the energy actually produced to the
energy that could have been produced had the plant operated at 100% power all year) has been poor (57% in
1973 and 1974). Low capacity factors have been largely due to forced outages resulting from component failures of
many kinds (e.g. pumps, valves). Since nuclear fuel is much cheaper than fossil fuel, any improvements in nuclear power
plant capacity factors will result in very large benefits to electricity consumers due to the direct replacement of coal
and oil by nuclear. In addition, increased nuclear plant capacity factors reduce the nuclear capital cost required to
produce a kilowatt hour of electricity. This reduced cost could save upwards to $1 to $2 billion/year around 1985 in
new plant construction.
Projected industry expenditures by manufacturers of nuclear plants and equipment on programs to increase
capacity factors will total around $150-$200 million per year through 1985. However, the Electric Power Research
Institute (EPRI) which is responsible for most of the R&D on operating reliability performed by utilities--the
chief corporate beneficiary of any improvements in LWR performance--recently started a program in this area thaterALD
will spend only $4.2 million in 1975.
Plant Licensing and Construction:
Nuclear power plant licensing and construction now requires from eight to ten years. Due to the large capital
costs of these plants and the interest on capital during construction, reduction in the time required for plant
licensing and construction would result in major savings--approximately 45% of the total plant cost is in interest
costs and escalation during construction. For example, reducing a plants licensing and construction time
GERALD
and
ADVERIT
2
by one year could save over $40 million and for the 150 plants now under construction this would mean a net
savings of $8 billion.
In the OMB review of ERDA's FY 76 Energy Amendment it was decided not to embark on a large ERDA program
in LWR Technology in FY 1976, until an extensive analysis was completed which would identify more clearly the
reasons for the present low capacity factors in LWRs, why the market place incentives are failing to provide
improved capacity factors, and what the Government should do, if anything, to remedy this problem.
The ERDA analysis has been completed and has found among other things that:
-
The majority of the forced outages of nuclear plants, over 90%, were due to the failure of components
outside the nuclear portion of the plant, (e.g. steam generators, turbines and valves).
-
Improvements by 1% in LWR capacity factors may have only marginal significance to an individual utility
but represents a potentially greater aggregate amount of energy than can be made operable in the next
decade by any advanced technology efforts and might well equal the effectiveness of all conservation
efforts.
-
Between 70-80% of the $100-200 million of the R&D done by manufacturers of nuclear plants and components
are aimed at short-term payoffs (e.g. the removal of licensing problems, the demonstration of compliance
with new safety pollution control requirements) rather than at improving the performance of a plant that
would have payoffs extending throughout the life of the plant.
-
Pressure on utilities to cut costs, including maintenance, to boost short-term profits can adversely
affect LWR reliability.
-
Regulation of the nuclear reactor designs subtly deters innovation and product improvement which could
lead to better plant reliability by virture of the fact that it is simpler to license a design that
already has a license than a new design.
-
State utility rate regulation at present provides a negative incentive to provide more capitally intensive
but better performing nuclear plants because capital costs are not automatically passed through to con-
sumers, unlike "fuel cost passthroughs."
-
Licensing and regulatory problems have resulted in 50% of the total delays to nuclear plants under
construction.
3
-
The engineers and constructors of nuclear plants, architect-engineering firms, are conducting almost
no R&D aimed at improving construction times, e.g. offsite system construction and modularization,
since a large source of their income comes from custom-designed and built plants which require specialized
engineering skills.
-
The market mechanisms have failed to bring the desired allocation of resources to this problem from the
private sector because an individual equipment manufacturer cannot capture enough of the overall benefits
of an R&D effort in order to compensate for the costs of that R&D. Most of these benefits would accrue
to the utilities which, to date, do not effectivelly evaluate performance in their purchasing decisions.
-
Improving LWR reliability is one of a limited number of actions which can increase near-term domestic
energy supply, a major goal of the President's energy policy.
ERDA's proposed program will address R&D problems not now being worked on by private industry. It will
cooperate and cost share with industry and to the maximum degree possible all R&D will be performed by industry
on contract from ERDA and not by ERDA or in ERDA laboratories. The ERDA program is designed to:
-
Improve plant performance (e.g. collect and evaluate data, test key components, improve basic technologies
important to pumps, valves).
-
Reduce plant licensing and construction time (e.g. develop modularization techniques ; support licensing
of nuclear plants manufactured at land-based shops and sited off-shore on barges; improve nuclear plant
designs to reduce construction time).
Alternatives
@yes
#1. Continue the present Government policy of having ERDA conducting no LWR R&D.
#2. Permit a small number of ERDA programs, only those with the greatest potential benefits which are not
likely to be performed by the private sector and which will not interfere with the competitive environ-
ment now existing in the manufacturing of nuclear power systems and components.
#3. Initiate a large R&D program in the LWR technology development area with programs that have benefits
but which because of their broad scope could possibly interfere with the industry's competitive
environment.
4
Analysis
July 1 - Sept.
1975
1976
30, 1976
1977
1978
1979
1980
1981
Budget Authority/Outlays
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
BA
0
($ Millions)
Alt. #1
3
2
--
--
--
--
Alt. #2 (OMB rec.)
7
5
2
2
10
8
9
9
10
10
10
10
10
10
Alt. #3 (Agency req.)
7
5
2
2
52
40
41
45
41
41
41
41
41
41
Any improvements in LWR performance will bring large benefits to the consumers of electricity. However, the
recognition that many existing regulatory and economic impediments to individual manfacturer's ability to sell
better (i.e. higher performance) products to utilities raises doubt as to what extent the R&D performed by ERDA
would ever be used by manufacturers to improve their products. The institutional situations which result in this
phenomenon are the nuclear industry market structure and the existance and method of utility rate regulation. ERDA
has no program investigating these but FEA has ongoing programs aimed at identifying ways to alter these institutional
disfunctions. If these attempts are successful they may be far more fruitful than an R&D program in ERDA.
What product improvement is being worked on by industry will bring some benefits at some time in the future. ERDA's
analysis implies that these benefits would be lost if ERDA does not procede with its program. In fact, these
benefits are delayed, not lost. ERDA has not analyzed the extent or implication of this delay but rather assumes
that the benefits are all lost in their justification of this program. NRC is to reform its licensing process to
reduce the regulatory caused by construction delays by standardizing review formats, attempting to issue standard
plant licenses and by issuing more limited work authorizations which permit early plant site construction. ERDA's
statutory responsibility to increase energy supply efficiencies is alone not a justification for initiating this
program.
However, since Government regulation at all levels is in part responsible for the delays in improvements to nuclear
power plant performance; since there are large potential benefits associated with relatively small R&D expenses in
this area; and since ERDA will probably be able to get very favorable cost sharing arrangements with industry in
this area, the U.S. Government is justified in performing a limited amount of LWR technology R&D.
Agency Request: Alternative #3. Initiate a large program in LWR technology covering many different kinds of R&D.
OMB Recommendation: Alternative #2. Limit the R&D programfor four well selected projects so that the program's
success can be more effectively measured. Select only those high return projects which are applicable to all
5
manufacturers of a particular product; those projects in fields that may already have a manufacturers association
through which the work could be performed and where cost sharing interest is highest. This alternative also will
provide a test of the transferrability of ERDA sponsored R&D into product improvements and would further demon-
strate the Administration's interest in seeing nuclear power play its proper role in this country's energy future.
R.
Issue Paper
Energy Research and Development Administration
1977 Budget
Issue #9: Employment Levels for ERDA
Statement of Issue
Should ERDA's personnel ceilings be increased?
Background
ERDA was created out of AEC, the Office of Coal Research, and certain functions from Interior, EPA and NSF.
Like AEC, ERDA operates through intensive use of contractors. About 7600 Full Time Permanent (FTP) government
employees now manage a $5B program and over 90,000 contractor employees at Government-owned facilities.
In recognition of organizational needs and FY 1976 program growth, ERDA's authorized FTP ceiling has been
increased from an initial allowance of 7155 to the present total of 8052 (+897).
Alternatives
#1. Provide the additional personnel requested by ERDA (1976: +505 FTP; 700 Total) (1977: +1040 FTP: +1311 Total).
(Agency Req.)
#2. Provide additional personnel closely tied to workload increases and management improvements (1976: +235 FTP;
+325 Total) (1977: +491 FTP; +575 Total). (OMB Recommendation.)
#3. Require ERDA to adhere to current ceiling in view of overall budget stringency.
Analysis
July 1 - Sept.
1975
1976
30, 1976
1977
1978-81
Budget Authority/Outlays
BA/0
BA/0
BA/0
BA/0
BA/0
($ Millions)
Alt. #1 (Agency req.)
158
(*)
(*)
209
213
Alt. #2 (OMB rec.)
158
183
48
200
204
Alt. #3
158
181
47
193
195
Position Ceilings
FTP
Total
FTP
Total
FTP
Total
FTP
Total
FTP
Total
Alt. #1 (Agency req.)
7550
8016
8557
9403
8557
9403
9092
9903
9092
9903
Alt. #2 (OMB rec.)
7550
8016
8287
8917
8287
8917
8543
9267
8543
9267
Alt. #3
7550
8016
8052
8592
8052
8592
8052
8592
8052
8592
*
No amendment has yet been requested by ERDA to cover the cost of the additional 505 positions requested
in FY 1976.
2
ERDA's FY 1977 program will grow 20% in total costs compared to FY 1976 (which grew 25% over FY 1975).
This growth is made up of both increasing efforts in established programs and expansion into new areas such as
conservation, nuclear fuel recycle, radioactive waste management, and synthetic fuels.
Growth in new areas is particularly personnel intensive because of the need for careful program definition
and planning. Also, the new areas frequently require smaller, more numerous contracts than established programs.
Agency Request: Alternative #1. ERDA strongly believes that it needs additional staff to carry out its
program responsibilities. As part of its response to the budget cutback exercise, ERDA has identified a
minimum request of 607 FTP positions.
OMB Recommendation. Alternative #2. Our detailed recommendations are summarized in the following table
and discussed briefly.
GERALD R FORD
3
Summary of ERDA Request and OMB Recommendations
1975
Present
ERDA Request Increases
OMB Rec. Increases
Actual
Ceiling
1976
1977
Total
Minimum
1976
1977
Total
Nuclear energy
505
532
30
25
55
30
20
15
35
Fossil energy
201
380
--
50
50
33-
--
37
37
Conservation
138
142
40
51
91
40
15
20
35
Advanced energy
185
279
47
90
137
58
11
17
28
(Physical research)
( 63)
( 68)
( --)
( 7)
( 7)
(NA)
--
--
--
(Controlled thermonuclear
fusion)
( 59)
( 75)
( 10)
(30)
( 40)
(NA)
( 5)
( 5)
(10)
(Geothermal energy)
( 13)
( 46)
( 29)
(NA)
( 1)
( 2)
( 3)
(Solar energy)
( 42)
( 75)
(24)
(31)
( 55)
(NA)
( 5)
(10)
(15)
Environment & Safety
237
246
27
38
65
25
15
20
35
National security
274
296
23
29
52
23
--
10
10
Staff offices (e.g. General
Counsel, Controller, Inspect.)
522
635
43
60
103
52
10
5
15
Administration (e.g. Admin.
services, management infor-
mation, procurement)
525
585
99
122
221
115
23
30
53
Field offices
2772
2831
124
10
134
124
28
27
55
Energy Research Centers
779
779
50
--
50
50
10
20
30
Other programs (e.g. weapons,
guards and inspectors, Tech-
nical Information Center)
1322
1347
22
60
83
57
3
5
8
Total Full-Time Permanent
7457
8052
505
535
1040
607
135
206
341
Synfuels
100
50
150
GERALD
235
256
491
4
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Nuclear energy
532
30
25
55
30
15
10
35
The increases of 15 (FY 1976) and 10 (FY 1977) are for increased workload for program growth recommended
in the budget in the areas of nuclear fuel cycle and light water reactor technology. These increases include
offsets of -5 (FY 1976/77) for the space nuclear systems program reflecting program decreases.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Fossil energy
380
--
20
20
33
--
37
37
The increase of 37 (FY 1977) is primarily for growth in the demonstration plant program that will result
from the construction of the Clean Boiler Fuel plant, and the design of six additional plants. Additional
personnel are also expected to be utilized in the expanded In-Situ Technology program and in the formation
of a Process Evaluation office.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Conservation
142
40
51
91
40
15
20
35
The increase of 15 (FY 1976) is for the Office of the Assistant Administrator, for his Office of
Planning and Evaluation, and ofr increases in other divisions. The increase of 20 (FY 1977) is for program
growth recommended in the budget: transportation, energy storage, and buildings.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Physical research
68
68
75
7
N/A
--
--
--
No increases are recommended. Program growth is minimal. Changes in program mix can be handled by
reassigning existing staff.
1948017 GERALD 3
5
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Controlled thermo-
nuclear fusion
75
9
3
40
N/A
5
5
10
The recommended increases of 5 (FY 1976) and 5 (FY 1977) reflect the need for increased staff capabilities
in the areas of contract management, proposal review and program planning. The CTR program has grown rapidly
and this growth will continue through FY 77. The increases in personnel are recommended to keep pace with the
growth in the program.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Geothermal energy
46
10
19
29
N/A
1
2
3
An increase of 1 slot in FY 1976 and 2 in FY 1977 has been allowed recognizing the modest acceleration
of the overall program and the anticipated increase in research and development of advanced concepts and the
administration of the loan guarantee program. Recognition has also been given to the status of contractual
and correspondence activities.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Solar energy
75
24
31
55
N/A
5
10
15
An increase of 5 in FY 1976 and 10 in FY 1977 has been allowed recognizing the overall acceleration of
the solar energy program, and in particular, expanded efforts in the research and development of solar heating
and cooling technology, the development of solar thermal electric technology, the research and development
GERALD
of photovolair technology, and the technical and economic assessment of solar resource potential. Recognition
has also been given to the backlog in correspondence and contractual activities.
FORD
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Environment & safety.
246
27
38
65
25
15
20
35
The increases recommended provide for additional personnel in: the Office of the Assistant Administrator
for planning and evaluation activities; the Division of Biomedical and Environmental Research for contract
award and monitoring to keep pace with recent rapid growth in the contract research program; the Division
of Operational Safety to carry out high priority environment, health and safety programs at ERDA facilities
which came from other agencies and to assure ERDA's compliance with applicable occupational, environmental,
health and safety regulations; and, in the Division of Environmental control technology to begin high
priority work on environmental control technology monitoring.
6
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
National Security
296
23
29
52
23
--
10
10
The recommended increase is for the Division of Military Application Reflecting program growth in the
lase isotope separation and laser fusion programs.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Staff offices
635
43
60
103
52
10
5
15
The 1976 recommended increase of 10 is for an expansion of the internal review program to emphasize
comprehensive management and program type audits. The 1977 recommended increase of 5 is for the General
Counsel's office in view of new legal workload connected with energy commercialization.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Administration
585
99
122
221
115
23
30
53
The 1976 recommended increase of 23 is for (1) 10 for Administration Services, primarily for unexpected
workload resulting from split headquarters location; (2) 8 to improve facilities and major construction
management; (3) and 5 for additional telecommunications facilities due to split headquarters location. The
1977 recommended increase is for additional procurement staff reflecting growth in workload in new energy
programs.
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Field offices
2831
124
10
134
124
28
27
55
GERALD
R.
The recommended increase of 55 reflects program growth as field offices are involved in administering
FORD
almost all ERDA programs. ERDA is presently conducting a study of its headquarters field office structure
which may result in a request by ERDA for additional positions in the field later this year.
AVENUIT
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Other programs
2126
72
60
132
107
13
25
38
The recommended increases of 13 and 25 reflect fossil program growth in the Energy Research Centers
(10 and 20) and power reactor growth in Idaho (3 and 5). No increases were provided for technical
information or EEO.
7
Present
FY 1976
FY 1977
Total
Minimum
FY 1976
FY 1977
Total
Ceiling
Request
Request
Request
Request
Recom.
Recom.
Recom.
Synthetic Fuels
Commercial
Demonstration
Program
--
--
--
--
--
100
50
150
There is currently pending Administration supported legislation to provide an incentives program for
the commercial demonstration of technologies to convert coal, oil shale, and other domestic resources to
synthetic fuels. These 100 additional personnel will be needed by January 1, if the legislative approval
proceeds on schedule. The additional 50 will be required for program growth in 1977.
GERALD
0801
OTHER ISSUES
Fossil Energy: Coal Demonstration Plant Program
1977
Total Est.
Funding Thru
Original
ERDA
OMB
Fed. Cost
FY1975
FY1976
ERDA Reg.
Rev. ERDA
Ceiling Case
Rec.
FY1978
Per Plant
Clean Boiler Fuel Demo.:
BA
13
30
30
30
30
30
15
91
(one plant)
BO
3
14
31
24
24
31
24
Gasification Demos.:
BA
-
20
113
73
73
57
100
100-150
(four plants)
BO
-
10
46
39
39
36
30
Advanced Demos.: /2
BA
13
5
20
12
12
5
35
100-200
(two plants)
BO
-
-
6
5
5
5
18
Total Demo. Program: /3
BA
26
62
178
130
130
100
165
BO
3
27
99
84
84
80
92
/1 During the transition quarter, the program is estimated to receive a total of $17 million (BA) and $8 million (BO).
12 A second liquefaction project and a direct combustion demonstration project.
13
The columns do not add because the total includes technical support subprogram not broken out above.
ERDA Request: The general objective of the Coal Demonstration Plant Program is to demonstrate on a near-commercial
scale (1/5 to 1/10 commercial size) selected second-generation (advanced technology) processes for coal utilization,
either by converting it to a clean liquid or gas, or burning it directly in an advanced combustor which can remove
poetntial pollutants. Through full Federal funding of each demonstration project's design and 50% cost-shared
GERALD
funding with industry of the construction and operation, the program is aimed at accelerating private industry's
development programs to prove the technical, economic, and environmental viability of each process.
FY 1976 activities include the continuation of the Clean Boiler Fuel demonstration (coal to liquid fuel) begun in
FY 1975 and the startup of design efforts on two gasification demonstration plants (one high-Btu pipeline gas and
one low-Btu utility fuel). For the Clean Foiler Fuel demo, ERDA has received a cost-sharing commitment from a
consortium of companies called Coalcon. Although appropriations for this project were received in both FY 1974
and FY 1975 and ERDA signed a contract in January 1975, Congressional authorization was only formally requested in
the FY 1976 budget. Though the fully Federally funded design of the Coalcon demonstration is expected to be
completed during FY 1976, there is currently great uncertainty about whether/how the Coalcon consortium will agree
to proceed to the construction stages during FY 1977.
2
The FY 1977 ERDA funding request would provide for the following activities:
- Final design, equipment ordering, and most construction of the Coalcon Clean Boiler Fuel Demonstration Plant
scheduled for operation in 1980.
- Initiation of two projects and the continuation of two other plants to demonstrate the production of
gaseous fuels from coal.
- Initiation of conceputal design of two "advanced" process demonstration plants: a second coal-to-liquid fuel
process (liquefaction) which is more advanced than the Coalcon process; and a plant to demonstrate a method
for directly and cleanly burning coal (i.e., fluidized bed combustion).
- Seek Congressional authorization to proceed with all four gasification plants and the second coal-to-liquid
fuel advanced demonstration. Congressional authorization is considered necessary to attract industrial
cost-sharing commitments (despite fully Federally funded design phases), and would permit rapid acceleration
of effort if circumstances merited it.
The impact of FRDA's revised request over its original request would be to delay completion of construction of the
third and fourth gasification plants and the second liquefaction plant by three to nine months in the 1981-82 time
period.
OMB Recommendation: The recommended funding level ($30 million below revised request) provides for continuing
and initiating work requested by ERDA for the Clean Boiler Fuel demonstration and for two gasification demonstra-
tion plants. The conceputal design effort on advanced processes for liquefaction and direct combustion of coal,
and the design of two additional gasification demonstrations would not proceed as rapidly as requested. FY 1977
Congressional authorizations would only be sought for two gasification demonstration plants. There are three
factors that were considered in arriving at the recommended level:
The Synfuels Commercial Demonstration Program will be initiating its first projects in FY 1977,
BERALD
of which several are expected to be coal gasification projects. The more orderly phasing contained
&
in the OMB recommendations will insure that the Synfuels Commercial Demonstration and the Coal
0903
Demonstration Programs do not overlap in the type of processes demonstrated, will not over-commit or
prematurely commit private sector participants, and will minimize the possibility of any shortages of
engineers, manufacturing capability, and construction workers. Although the recommended level will
result in a delay (possibly of one year) in expanding the Coal Demonstration Plant Program, it will
increase the probability of a smooth start for the Synfuels Commercial Demonstration Program.
3
The advanced liquefaction and direct combustion processes proposed for the Advanced Demonstrations
are still in the pilot plant R&D stages. It is unnecessary and possibly unproductive to dedicate
a demonstration plant to either of these processes. until the R&D work is further along, and a
comparative analysis of several different technologies is undertaken. The funding provided within
the recommended level is sufficient to continue and enlarge such an effort.
The management of this program has been in a constant state of change since its inception in
early 1974. It is still unknown whether or not the contract provisions or cost-sharing incentives
in use by the program are adequate to achieve the original objectives, or need to be changed
possibly because of the introduction of the Synthetic Fuels Commercialization Program. The program's
progress during FY 1977 will settle many of these questions but commitment, with Congressional concurrence,
to five new demonstrations may foreclose our utilizing the answers. Consequently, it is recommended
that Congressional authorization be requested only for the two gasification demonstrations farthest
along.
As the Coal Demonstration Plant Program's management becomes more experienced, and the role of the program vis-a-vis
the Synthetic Fuels Commercial Demonstration Program is further clarified, it is expected that major growth will
continue. The FY 1978 funding projection assumes that the three demonstrations delayed under the FY 1977 recommenda-
tion will be approved in FY 1978.
4
Fossil Energy: In-Situ Technology
FY 1977
Orig.
ERDA
OMB
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
Rec.
FY 1978
Oil Shale:
BA
4
14
26
21
21
21
21
0
4
10
16
12
12
12
12
Coal:
BA
6
5
15
15
15
5
5
0
2
4
10
10
10
5
5
ERDA Request: The In-Situ Technology program is involved in developing coal and oil shale resource extraction
techniques that do not require conventional mining and surface ore processing. These in-situ technologies process the
resource in-place underground (i.e., in-situ) by drilling, fracturing the rock, injecting air/oxygen, initiat-
ing combustion, and extracting liquid/gaseous fuels. ERDA's funding request provides for:
-
Continuing three cost-shared field tests to develop modified in-situ techniques on both eastern and
western oil shales;
-
Expansion of the eastern gas-from-shale experiments, and the detailed design of a large-scale western
gas-from-shale test facility;
GERALD
-
Development of three major coal in-situ gasification processes by executing three additional field
tests, constructing a pilot plant, and performing additional technical studies.
OMB Recommendation: Oil shale is the country's third largest domestic energy resource and the only one to
remain almost entirely unexploited. It now appears that world energy prices are high enough and that production
from other domestic resources is so constrained that it will soon be profitable for the private sector to engage in
large-scale oil shale development utilizing well-known mining and surface refining techniques. In-situ oil shale
techniques are being developed by both private industry and Government because they potentially offer the opportunity
to produce shale oil/gas with less waste, less water use, and less labor than the surface refining approach. ERDA's
request appeared consistent with the progress the program has achieved and the potential benefits of in-situ
technology. On the other hand, the in-situ coal gasification program has not yet achieved the results that would
warrant the widely diversified projects in the FY 1977 request. The in-situ coal gasification budget has to be viewed
in the context of advanced coal mining R&D program with which it might compete, and at its recommended level this
program represents about 10% of the Federal coal mining R&D effort. Given its limited potential near and mid-term
benefits, no greater level can be justified at this time.
5
Synthetic Fuels Commercial Demonstration Program
1977
Funding Thru
Original
ERDA
OMB
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
Rec.
FY 1978
Administration:
BA
--
(3)
--
--
--
10
10
B0
--
(3)
--
--
--
10
10
Construction Grants:
BA
--
600
--
--
--
--
--
B0
--
--
--
--
--
7
23
Revenues:
BA
--
-1
--
--
--
-5
-12
B0
--
-1
--
--
:
-5
-12
Loan Guaranty:
BA
--
1500 *
--
--
--
--
--
B0
--
--
--
--
--
--
--
Price Guaranty:
BA
:
1000 *
--
--
--
:
--
B0
--
--
--
--
--
--
:
Net Total:
BA
--
3102
--
--
5
-2
B0
--
2
--
12
21
*
This BA represents borrowing authority.
The Synthetic Fuels Commercial Demonstration legislation currently pending before Congress would create a major
new energy program within ERDA. This program would provide a variety of financial incentives (loan guaranties,
price guaranties, and construction grants) in order to encourage the construction of about 15 plants by the early
1980's with a total production capacity of 350,000 barrels per day of synthetic fuels. The passage of the $6
billion loan guarantee legislation is expected to occur in the next few weeks, and ERDA has agreed to reprogram
$3 to $5 million for administrative expense during FY 1976 to initiate promptly this effort. ERDA has not yet
formally requested any FY 1977 funding, but based on the Interagency Synfuels Commercialization Task Force Report
some tentative recommendations and decisions can be made now:
Taking into account program support and fossil energy activities already in-place at ERDA, it is
estimated that the program can be adequately administered by a staff of 150 with a salaries and
contract budget of $10 million.
6
Assuming passage of the proposed Construction Grant legislation along with an advance appropriation of
$600 million, then at least one project will be started in FY 1977 resulting in outlays of $7.0 million.
The proposed Loan Guaranty Program provides for creation of a revolving fund in Treasury and the
collection of loan guarantee fees (up to 1% per year of outstanding guarantied debt). Consequently,
it is estimated that $5.0 million in revenues will be collected by ERDA during FY 1977.
The Loan Guaranty and Price Guaranty amounts shown for budget authority represent the limits on borrowing
authority that ERDA will have to cover possible loan defaults and price guaranty payments.
GERALD
R.
FACT SHEET
Program Budget Estimates - Synthetic Fuels Commercial
Demonstration Program
Estimating the exact expected cost and corresponding budgetary
authority necessary for the commercial demonstration program
is complicated by the long-term nature of the synthetic fuel
plant construction and operation (25-30 years) and by other
significant uncertainties including:
the future foreign/domestic market prices of oil and
gas
the cumulative effect of inflation over this time frame
the overall success/failure rate of the plants.
In view of theseuncertainties and the need to develop "best
possible" estimates for the program, a rigorous financial
analysis effort has been completed. This analysis included:
detailed plant cost estimates for the various tech-
nologies
detailed social infrastructure development cost
estimates based on estimated increases in population
in a locality attributable to the synthetic fuel plants
use of a series of computerized cost modesl for each
plant type with flexibility to change plant mixes to
evaluate differing programs and the capacity to estimate
capital as well as operating phases for each plant
the capability to alter key assumptions for future market
prices, inflation rates, plant and operating costs and
the cost of energy resources used by the conversion
technologies.
In the process of developing budgetary estimates, numerous
program cost scenarios were estimated by changing assumptions
for the market price of oil, inflation rates, cost of coal
resources. Extreme scenarios were calculated based on pessi-
mistic assumptions, e.g., market price of oil $7 per barrel.
As a result of the many differing calculations, recommended
budgetary requests have been formulated that are adéquate for
the program and will be ample to cover most unforeseen
GL8A10 FORD TRANK
2
contingencies. The estimates are for the full term of the
program and unless extremely adverse developments occur, the
authorizations will be adequate to complete the program. It
must be recognized that the budgetary authorization estimates
do not represent actual cost to the government but rather
reasonable estimates of funding authority necessary to
implement the program.
Authorizations
Exhibits 1, 2 and 6 show the individual plant cost estimates by
type of plant including social infrastructure costs and the
estimated number to be included in the commercial demonstration
program. The basic assumptions used in developing these
estimates are enumerated on the Exhibits. The requested levels of
funding authorizations for loan guaranties, price guaranties
and construction grants are shown at the bottom of the Exhibits
and derived directly from the plant cost and operating estimates.
Except for the most unusual circumstances, the following author-
ization levels will be adequate to allow execution of Phase I
of the Synthetic Fuels Commercialization Program:
Loan Guaranty
$6.0 billion
Price Guaranty
4.5
Construction Grants
.6
Total Budgetary Authority
$11.1 billion
Section 103 of Senate ERDA Authorization bill (S. 598) provides
an adequate loan guaranty authorization of $6 billion for the
Phase I program. In addition, an authorization request for
price supports and construction grants will be necessary since
a number of the plants in the proposed program involve these
incentives.
$400 million of the $6 billion authorization will be reserved
for the guaranty of municipal debt for necessary social infra-
structure development caused by substantial increases in
municipality population because of a synthetic fuel plant.
Under this proposal the ERDA Administrator would be given the
authoirty (under Section 103) to guaranty minicipal bond issues
that are necessary to finance the construction of needed basic
municipal facilities (e.g., sewers, water, public safety) to
service the influx of new population caused directly by the
synthetic fuel plant. A detailed description of this proposal
is contained in the Social Impact Assistance Fact Sheet.
GERALE FOCO LIBRARY
3
In order for the government to proceed with the complete pro-
gram, the requested authorizations are neede prior to the
exeuction of any agreements with the private sector. However,
certain plants can be initiated with only a loan guaranty
authorization.
While the total authorizations requested for the program exceed
$11 billion, the actual cost to the government of the program
is expected to be a small fraction of the requested authorization
because:
most loan guaranties are expected to be repaid and
at least a portion of any defaults will be covered
by fees charged for the loan guaranty and sale of any
project assets that are recovered.
actual price guaranty payments are likely to be
significantly lower than the requested authorization
if the world price of oil continues to increase which
is likely.
Costs to the government will be incurred for the construction
grants up to $600 million and for expenses to administer the
program estimated at $10-$15 million annually. Overall, for
the 20 to 30 year life of the program, it is anticipated that
it will cost the government about $2. billion (Exhibit 5).
Borrowing Authority/Appropriatior Approach/Estimates
Although there is a possibility that guaranties will never
result in the expenditure of Federal funds, the ERDA Adminis-
trator must have the full authority to outlay funds in the
very unpredictable circumstances when they may become needed
in order to make the recommended guaranties credible and
effective. To accomplish this purpose, it is proposed that
the ERDA Administrator be empowered with a limited, renewable
authority to issue notes or other obligations to the Treasury
should payments be required, either because of a default on a
guaranteed loan or because of price guaranty payments that may
arise subsequent to completion of the commercial demonstration
plants.
The authority to borrow from the Treasury to make payment, if
required for price and loan guaranties, was selected in favor
of no specific appropriation authority or an advance appro-
priation arrangement for several reasons including:
FORD
4
It is important for the ERDA Administrator to have a
clear-cut authority to make payments on defaults in
advance to remove the uncertainty on thepart of
investors about the timeliness of payment and/or the
USG intent to pay.
Default or price guaranty payments are not likely to
occur for a number of years.
The precise amount
such payments are difficult to
estimate
and
may if favorable conditions
result in the future.
In view of these factors, giving the ERDA Administrator
limited authority to issue debt, if and when the need arises,
is the most expeditious and efficient means of financing the
program. Repayment of ERDA's debt held by the Treasury would
be accomplished through subsequent specific Congressional
appropriations.
The Administration will transmit to the Congress separate
appropriation requests for the borrowing authority consistent
with the terms of the Budget Reform Act.
The following basic factors were considered in assessing the
amount of borrowing authority needed:
Time-phasing of projects starts over the 1976-1978
period.
Likelihood of projects simultaneously defaulting on
loan guaranties and likely cost of default to the
government.
The future market price of oil and gas and the resultant
rate of revenues, if any, and/or price guaranty
expenditures.
The 20 to 30-year economic life of the synfuel projects.
The need for flexible and credible program administra-
tion as well as periodic accountability to the Congress.
After analyzing these factors, it is recommended that $1.5
billion in loan guaranty borrowing authority be provided to
cover loan default costs. Debt outstanding under this authority
could not exceed $1.5 billion at any time. Outstanding debt
would be repaid by the ERDA Administrator by obtaining specific
appropriations. This amount is 25% of the gross Federal loan
5
guaranty liability (Exhibit 3). Although default costs could
exceed 25%, it is very unlikely that this would occur before
Congress had the opportunity to repay ERDA's debt to the
Treasury. The $1.0 billion borrowing authority recommended
for price guaranties will provide for about 3 years of price
guaranty payments under the very pessimistic assumption that
oil prices fall to $7 per barrel. Should recent trends
continue for the price of oil, it is unlikely that any price
guaranty payments will be made.
Construction grants are different from loan and price guaran-
ties because they will require budgetary expenditures. A
straightforward appropriation request will be made for this
incentive. Consequently, even though construction grant out-
lays are not anticipated during FY 1976 because of the lead
time in incurring construction costs, the full appropriation
of $600 million is requested so that the Administrator can
enter into contractual agreements during FY 76 even though
outlays will be spread over a number of subsequent years.
In summary, the following borrowing authorities and appro-
priations are recommended to be enacted:
Loan Guaranty
$1.5 billion
Price Guaranty
1.0
Total Borrowing Authority
$2.5 billion
Construction Grants
$ .6 billion
Total Appropriations
$ .6 billion
The program's five-year projections for construction grants,
administrative costs, and guaranty fees are shown in Exhibit 4.
Exhibit 1
Phase I Program Budget Authorizations
($ million, statistics include 7% annual inflation)
Plant Type
Number Scheduled
Total Capital
Construction Phase
Operation Phase
for 1976-1978
Invested
Loan
Construction
Price
Guaranty
Grant
Guaranty
High BTU Gas
3
2,700
2,000
-
-
(regulated)
Shale Oil
2
2,100
1,050
-
900
(unregulated)
Utility/Industrial Fuel
2
1,300
650
-
3,600
(unregulated)
Utility Industrial Fuel
2
1,000
-
-
500
(regulated)
Biomass
5
1,200
900
-
-
(regulated & unreg.)
Social/infrastructure asst.
400
CONTINGENCY
1,000
100
-
TOTAL BUDGET AUTHORIZATION REQUESTED
6,000
600
4,500
Specific Key Assumptions:
- Assumes recommended incentives of 50% loan guaranty for unregulated utility/industrial fuel, and oil shale plants; 75%
loan guaranty for biomass and high-BTU gas plants; and price guaranties for shale oil and unregulated utility/industrial
fuel. Should higher than recommended percentages for loan guaranties be necessary, the Contingency Reserve could
accommodate.
- All statistics include 7% annual inflation rate for capital and operating costs.
- Total project investment is based on a 7-year development schedule for all plants, except for biomass conversion which
are expected to be completed in à 3-year period. Plants are assumed to have a 20-year operating life.
- Investment totals do not include costs of such auxiliary developments as coal mines, roads, pipelines, etc., which,
if they occur, could be accommodated by the Contingency Reserve.
- Loan guaranty statistics refer to the gross Federal commitment. The cost of an actual default will be less depending
on the number of defaults if any, the timing of the default and the amount of recoverable assets.
- The contingency amount for loan guaranties and construction grants provides for construction delays, extraordinary
inflation, different plant mixes, increased incentives, etc.
- The price guaranty statistics were calculated assuming that the market price for shale oil rises at 7% per year from a
1976 base of $7 per barrel, and for utility/industrial fuels, the price rises from a base of $9 per barrel. The
statistics further assume that no revenues accrue to the government even if market prices exceed the guaranty level.
Synthetic Fuels Commercialization Program Budget
Exhibit 2 - Individual Project Statistics 1/
Plant
Size
Loan 3/
Construction
Price 4/
Type
(bbl/d)
Investment 2/
Guaranty
Grant
Guaranty
Shale Oil
50,000
1000
500
-
450
High-Btu Gas
40,000
870
650
-
-
Utility/Industrial
Fuel
Regulated
25,000
460
-
230
-
Unregulated
25,000
610
300
-
1800
Biomass
6,000
230
170
I
-
i/ Data are rounded and a detailed cost analysis is available in the Synthetic Fuels Commercialization Task
Force Report, Volume III.
2/ The 7% annual inflation rate is included, and the projects are all assumed to start in 1976.
3/ Presumes recommended incentives of 50% loan guaranty for unregulated utility/industrial fuel, and oil
shale plants; 75% loan guaranty for biomass and high-Btu gas plants; and price guaranties for shale
oil and unregulated utility/industrial fuel.
4/ Contingent costs for price guaranties were estimated assuming that the price of shale oil rises at 7%
per year from a 1976 base of $7/bb1 and for utility/industrial fuels, the price rises from a base of
$9/bb1; and further assuming that no revenues accrue to the government even if market prices exceed the
guaranty level.
Synthetic Fuels Commercialization Program Budget
Exhibit 3 - Possible Outlay Schedule for Price Guaranty Payments
1/
($ millions)
Total
Payments
Thru
1982
1983
1984
1985
1986
1987
1988
1989
1990
2005
Payments to Unregulated
Utility/Industrial Fuel Plants
$9 Oil Scenario:
50
109
166
233
229
225
220
215
209
3600
$11 Oil Scenario:
34
71
106
144
134
123
111
98
84
1100
Payments to Oil Shale Plants
3/
$7 Oil Scenario:
167
153
137
120
102
83
63
41
18
900
$9 Oil Scenario:
58
35
12
-
-
-
-
-
I
105
$11 Oil Scenario:
-
-
-
-
-
I
I
-
-
0
1/ Calculations assume 7% per year inflation in capital and variable operating costs; projects start according
to the schedule of Exhibit I.
No payments are assumed to accrue to the government even if oil and gas prices exceed the synthetic fuel
price guaranty level.
3/
Oil and gas prices are presumed to rise at 7% per year from a 1976 base of $7 per barrel for oil and $1.65
per MMBtu for gas. The $9 and $11 scenario have proportionately higher bases, but same inflation rate.
Synthetic Fuels Commercialization Program Budget
Exhibit 4: Five-year Budget Projections for the 350,000 bbl/day Program 1/
(annual outlays, $ million)
FY 1976
T.Q.
FY 1977
FY 1978
FY 1979
FY 1980
FY 1981
Loan Guarantee 2/
-
-
-
-
-
1
I
Price Guarantee 2/
-
-
-
-
I
-
I
Administration
2.5
1.5
10
15
15
15
15
Construction Grant 3/
-
-
7
15
25
42
67
Project #1
Construction Grant
-
-
-
8
17
29
48
Project #2
Total Outlays
2.5
1.5
17
38
57
86
130
Loan Guarantee Fees
(1)
-
(5)
(12)
(20)
(31)
(39)
Net Total Outlays
1.5
1.5
12
26
37
55
91
Budget authority apprepriations are needed in FY 1976 of $600 million for construction grants,
and subsequent appropriations, $15 million per year, may be necessary to fund administrative
expenses.
2/ Neither payments for loan guarantee defaults nor price guarantees are anticipated during this
period.
3/ Construction grants of 50% are expected to be given to regulated utility/industrial fuel producers.
Exhibit 5
Anticipated Total Cost to Government (FY 76 thru 2005)
350,000 bbl/day Program
($ million)
Fiscal Years
Fiscal Years
Total Cost of Program
Financial Incentive
'76-'81
1982 - 2005
FY 76 - 2005
Loan Guarantees
-Defaults (2 plants) /1
-
$ 1000
$ 1000
- Fee collected by
Government (Revenue)
(1% annually-debt
outstanding) /2
$ (108)
(720)
(828)
Price Guarantees
(assumes $11 oil scenario)
-
1,100
1,100
Construction grants
258
242
500
Administrative
(assumes $10-$15
million annually) L3
74
240
314
TOTAL COST TO GOVERNMENT/4
$ 224
$ 1862
$ 2086
/1
From Exhibit 1, 12 plants require $6 billion in loan guarantees. If two plants default then,
at most, $1 billion would be lost.
/2
See Exhibit 4 for Fiscal Years '76-'81. Calculation for 1982-2005 assumes average annual
outstanding debt over the 24 years of $3 billion.
/3
FY 76-81 statistic from Exhibit 4, and FY 1982-2005 assumes $10 million/year for 24 years.
/4
Fees are subtracted from outlays.
GERALD FORD
7
Solar Energy: Fuels From Biomass Program
Orig.
ERDA
FY 1975
FY 1976
Req. ERDA
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
0.6
5.8
9.6
8.1
8.1
5.5
5.5
0
0.1
2.7
7.4
5.9
5.7
3.6
3.6
ERDA Request. The fuels from Biomass Program involves the conversion of organic matter (biomass) into useful clean
fuels. Biomass sources being considered include crops produced from agricultural and foresty operations, marine
crops derived from man-made kelp beds, and agricultural, animal and forestry wastes. ERDA believes that biomass
technologies can offer a broad range of energy products (i.e., liquid, solid, and gaseous fuels, as well as
electricity), and that the program could result in th eproduction of 0.5 Quads by 1985, and 3 Quads by the year
2000.
OMB Recommendation. OMB recognizes the potential of biomass as a long-term energy sources and its potential
versatility in providing different fuel forms. However, there remain significant technological and environ-
mental uncertainties (such as land-use constraints) which must be resolved before this program can be signi-
greater emphasis on the identification and resolution of environmental constraints.
ficantly expanded. The OMB staff recommendation allows for continued applied research experiments, but places
GERALD ?
8
Solar Energy: Agricultural and Industrial Process Heat Application
FY 1977
Orig. ERDA
ERDA
FY 1975
FY 1976
Req.
Rev. ERDA
Ceiling Case
OMB rec.
FY 1978
BA
0.5
2.0
6.7
6.7
6.7
3.5
6.5
0
0.2
1.5
5.9
5.1
5.1
2.6
4.6
ERDA Request: The Agricultural and Industrial Process Heat program explores the potential of solar energy for
agricultural applications such as green houses and crop drying and industrial heat processes such as food process-
ing, pulp and paper, chemcials, lumber and plastics. The agricultural applications will be implemented in conjunctio
with USDA. ERDA estimates that this program could produce 0.05 Quads of energy by 1985, and 1.0 Quad by the year 200
OMB Recommendation: This program could produce a useful contribution by the year 2000, but only a negligible
contribution by 1985. Hence, continued funding is recommended but at a lower level more commeasurate with the
program's payoff relative to other higher priority solar programs (e.g., solar thermal electric and photovoltaics).
SEHALD
9
Sojar Energy: Technology Support and Utilization
FY 1977
FY 1975
FY 1976
Orig. ERDA
ERDA
Req.
Rev.ERDA
Ceiling Case
OMB rec.
FY 1978
BA
1.4
4.0
14.8
10.2
10.2
9.8
9.8
0
1.0
2.4
2.6
7.6
7.6
5.8
5.8
ERDA Request: The Technology Support and Utilization program supports the other technical solar programs. This program
has three elements: (a) solar energy resource assessment, which uses the existing capabilities of other Federal agencie
to collect, analyze and disseminate information on the resource base for solar technologies, (b) start-up costs for
the Solar Energy Research Institute (program costs are contained in the technical solar programs), and (c) technology
utilization and information dissemination, which collects, analyzes and disseminates technical and economic data for the
solar programs and provides for solar energy workshops, conferences, and seminars. Approximately one-half of the
request is for resource assessment, one-third is for information services, and the remainder is for the Solar Energy
Research Institute.
OMB Recommendation: OMB staff believes that uncertainties concerning the accessible and recoverable resource base for
wind, ocean thermal, and biomass technologies require an expanded program for resource assessment. However, further
growth in information services is not appropriate until significant results from the solar energy research, development,
and demonstration programs are available.
GERALD
FORD
10
ENVIRONMENTAL CONTROL TECHNOLOGY
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
8.3
10.5
40.9
17.3
17.3
17.4
18.0
0
7.2
9.8
33.0
15.0
15.0
15.2
16.0
ERDA Request. The revised ERDA request would provide for an expanded high priority program of environmental
control technology assessments in the non-nuclear energy area. In addition, the ERDA proposal would provide for
continuing efforts in the development of long-range nuclear waste control options such as sea-bed disposal. Another
element of ERDA's program is to continue the decommissioning of ERDA facilities which have been contaminated by
radioactivity at the FY 76 level of $6.1M (outlays).
OMB Recommendation. The Division recommendation would support ERDA's decision to continue the decommissioning of
contaminated facilities at the FY 1975 level. The recommendation would provide for a reduction of $1.2M (to $2.8M
outlays) for environmental control technology studes in non-nuclear energy systems. The Division feels that this
will be adequate if ERDA follows OMB guidance, (given in last year's Budget Review and in the Spring Planning Review),
and does not engage in hardware or technology development. This program is to be limited to the conduct of paper
and measurement studies along with maintaining an oversight role. Environmental control technology development
is to be left to the other ERDA division's having direct responsibility for energy systems development.
The Division also recommends that an ERDA Military Applications Division request to investigate the feasibility
of using very deep (20,000 to30,000 feet) cavities created by using Peaceful Nuclear Explosives (PNE) for
perpetual storage of nuclear fuel reprocessing wastes be included in the Environmental Control Division's Technology
budget. This is recommended because:
- The Environmental control Technology Division is carrying out research into other long-term options for
perpetual storage of nuclear fuel wastes and the proposed application of PNE's can be evaluated and tested
in coordination with the ongoing effort to develop a number of long range perpetual storage options.
The objective of this program is to monitor the development of energy technologies and assess the need for the
development environmental controls for these technologies. In meeting this objective ERDA's Division of Environ-
mental Control Technology will coordinate with EPA to determine what EPA standards will be applicable to ERDA's
technologies and to determine what environmental controls will be required to meet these standards.
FUSION POWER
The next two issues cover ERDA's Fusion Power program which supports two, fundamentally
different, approaches to the production of fusion power. These two are:
- Magnetic Confinement
- Laser Fusion
Support for both of these approaches has grown rapidly since FY 1975. (See attached issue
papers).
The Magnetic confinement approach to achieving fusion power involves the heating of hydrogen or
deuterium tritium gases to extremely high temperatures (between 100,000,000 - 500,000,000 °k).
At these temperatures, the gases, which have become plasmas (highly ionized gases) will sustain
fusion reactions and thereby release neutrons.
The problems of this approach to achieving fusion involve: 1) confining the plasma at the
needed temperature for a long enough time to achieve the fusion reaction; 2) finding ways to
make use of the neutrons which are released to produce power.
ERDA's Magnetic Confinement Fusion Program is planned to: demonstrate scientific feasibility
between 1977-1979; operate an experimental electrical power reactor by 1985 and to demonstrate
a near commercial power reactor by 1995-1997.
This program is dependent upon the development and use of increasingly larger and more complex
devices. Each device will require the solution of difficult engineering and scientific problems.
Laser approach to Fusion Power production has been developed within the Military Applications
Division. The approach involves the bombardment of a small pellet containing an appropriate
thermonuclear fuel with high powered laser beams. The implosion (a rapid compression) of the
pellet causes a fusion reaction to occur thereby releasing neutrons.
GERALD ADVERTY FORD
12
The Laser approach has important applications for military weapons or for industrial uses.
Additionally, the Laser Fusion reaction can be used directly to build a power reactor.
Also the neutrons released can be used to "breed" fissile material for other reactors.
The Laser Fusion Program is, at this time, not as tightly planned as is the magnetic confine-
ment program. Scientific breakeven (energy output equal to energy input) is expected in
FY 1981-82. And, at this time the program is forecasting a Demonstration Power Plant for
the Mid 1990's.
Although the use of fusion reactions to produce power is highly attractive, there are very
significant scientific and technical problems which must be solved before it can be counted
on to supply energy to the economy in an economic way. Moreover, there is considerable
concern within the scientific community that both approaches are being "pushed too fast" and,
that important scientific problems should be solved before ERDA commits itself to the
solution of the engineering problems which must be solved before power reactors can be produced.
The Division's recommendations as discussed in the following pages:
- recognize the necessity of supporting these two approaches to fusion because:
-- no assured path to fusion power exists for any fusion concept
-- fusion is a very attractive long-term energy option.
- provide for a relative slowing of both fusion programs. The effect of this slow-down
will be to: defer commitment to the development of larger scale fusion devices;
and defer efforts for the immediate solution of currently understood engineering and
technical problems.
GERALD
13
CONTROLLED THERMONUCLEAR FUSION
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
125.3
176.4
383.8
320.6
307.6
288.6
307
0
95.5
146.0
272.9
235.0
214.0
214.0
306
ERDA Request. The Controlled Thermonuclear Fusion (CTR) program is aimed at developing and demonstrating the
production of energy using the magnetic confinement appraoch to nuclear fusion. The program is very tightly
planned and the major milestones in the program are designed to achieve operation of a near-commercial demon-
stration reactor in the mid-late 1990's. Intermediate steps in the program plan include the production of near
reactor level hydrogen plasma in the late 1970's, the production of substantial quantities of thermal energy in
the first fusion test reactor in 1981 and the production of electrical energy in mid-late 1980's. Three approaches
to magnetic confinement fusion are supported by the program: low-density closed systems (Tokamak devices); high-
density closed systems and open systems (magnetic mirrors).
This program has grown rapidly since FY 1974 when outlays were $56M. The program has evolved from a major physics
research program into an advanced research and development effort requiring larger and larger experimental
devices: for example, the Princeton Large Torus (the largest Tokamak device in the United States) is scheduled to
go into operation in December 1975 at a total cost of $13M; by comparison the Tokamak Fusion Test Reactor (the
next major step in the development of fusion reactors) which was authorized in the FY 1976 budget is scheduled to
go into operation in 1981 at a total estimated cost of $215M. The program will, according to the program plan,
begin a major engineering effort designed to solve the technical problems associated with the development of fusion
reactors (e.g. super-conducting magnets, materials development, power supply development). This engineering program
is expected to grow rapidly both in absolute size and relative to the overall CTR program. (FY 1976 outlays $31.1M,
FY 1977 $68M.)
The ERDA ceiling case request would: (1) delay the start-up of the super-conducting magnet program for one year;
(2) delay the start-up of the Tokamak Fusion Test Reactor (TFTR) by three months; (3) cause the delay in the start-
up of a major experimental device (PDX) by about one year. ERDA contends that the overall effect of the ceiling
case request would be to slip the schedule for the demonstration of fusion power by two to three years. Thus, the
Experimental Power Reactor demonstration would slip to the late 1980's (from the mid-1980's) and the demonstration
of the near-commercial reactor would slip to the late 1990's (from the mid-1990's).
14
OMB Recommendation. The Division recommends accepting the ERDA ceiling case levels for outlays ($214M) but
recommends reducing budget authority by $19M below ERDA's ceiling case (to $288.6M) for the following reasons:
1. Scientific feasibility of the fusion process has not yet been demonstrated. The recommended levels will
permit large scale scientific experiments to continue while delaying the start-up of the major engineering
support program until more is known about the fusion process. Serious questions have been raised in the
scientific community about the rapid rate at which the fusion program is being moved into a major
engineering effort. The delays caused by the reduced budget levels will permit more scientific knowledge
to be developed before committing large amounts of resources to solving engineering problems.
2. Experience will be gained from the start-up and operation of the Princeton Large Torus device (PLT) which
can be used in the final design of the Tokamak Fusion Test Reactor (TFTR).
3. The delays caused by the recommended budget levels are relatively minimal in light of the long development
and lead times expected before the experimental power reactor and the near-commercial demonstration reactor
are available. (Experimental Power Reactor delays from 1985 to 1987; Near-Commercial Demonstration Reactor
delayed from 1995 to 1997.)
GERALD
?
GYOS
15
LASER FUSION
GESALD
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
18480D
BA
64.4
91.4
126.6
109.7
99.5
94.8
101
0
55.9
83.6
112.8
98.8
89.8
87.9
94
ERDA Request. The objectives of ERDA's laser-induced fusion programs are to demonstrate the applications of this
technology for military (e.g. nuclear weapons research) as well as civilian use (e.g. creation of a laser-fusion
electric power reactors). Another objective of this program is to explore the possible use of electron beams as
alternative means of inducing fusion.
The revised ERDA budget request would provide a $15M increase in outlays over the FY 76 level. The program would
be directed toward expansion of ongoing work in alternative laser system development, the start-up of a large CO₂
laser facility at Los Alamos Scientific Laboratory (LASL), and expansion of support for non ERDA contractors in:
the industrial sector (KMS-Fusion, Inc.) (2) universities (principally University of Rochester); and (3) non-proft
research organizations.
OMB Recommendation. The OMB recommendation would force a stretchout of the major CO₂ laser facility to be built
at Los Alamos Scientific Laboratory. In addition, the effect of this recommendation would be to reduce support
for outside contractors and to slow growth at the National laboratories.
The Division recommendation is $4.0M in BA and $1.8M less in outlays than ERDA's recommended approach to reach the
OMB revised planning ceiling. The difference is found in the reductions made to stretchout the development of the
CO₂ laser device. The total estimated cost of this device has increased by $31.9M to $54.5M since its initial
design. Because this facility can be built sequentially, and because of the scientific and technical problems
encountered by ERDA in attempting to develop this system within estimated costs, the Division recommendation is
to: (1) permit construction to begin on needed support facilities; (2) require that ERDA re-study the proposed
laser system in order to establish and cost-out a development program which will allow the phased procurement of
the laser modules to be used in attaining the desired highlaser power output (100 kilojoules).
The effect of the recommended level will be to slow the rate of growth of this program which has grown rapidly
since FY 75. This slowdown is acceptable, however, in the Division's view because of: (1) the many technical
uncertainties associated with the laser approach to achieving fusion; (2) the program is not expected to achieve
16
significant net energy gains before the mid-1980's. The Division also recommends that ERDA be required to
analyze the alternatives available to it in developing a wider base of external research support for this
program (i.e., the use of universities or industries). Such alternatives include, for example, the building
of two or three large scale national user facilities as compared to following the present policy of supporting
a multitude of smaller facilities at universities and in industry, as well as in Government laboratories.
GERALD
R.
CHOS
17
LIQUID METAL FAST BREEDER REACTOR (LMFBR) PROGRAM
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
REV. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
487.8
489.9
705.7
677.0
668.0
655.3
682.0
0
461.7
429.4
609.1
584.8
577.4
575.3
643.0
ERDA Request. The ERDA request is broken down as follows (outlays):
LMFBR technology
372.4
438.1
413.8
406.4
404.3
418.6
Clinch River Breeder
Reactor (CRBR) demon-
stration project
57.0
171.0
171.0
171.0
171.0
224.4
Total
429.4
609.1
584.8
577.4
575.3
643.0
The LMFBR program has been the largest single U.S. energy R&D effort. It has the objective of developing a reactor
which will greatly extend our uranium fuel resources. Commercial operations will probably begin in the 1990's. The
ERDA request assigns high priority to increasing the momentum of the LMFBR development program by proceeding with
the construction of the Clinch River Breeder Reactor demonstration plant for completion by 1983. The CRBR will
demonstrate licensability, maintainability, and operability of LMFBRs. The CRBR is currently estimated to have a
total cost of $1.950B, of which the utilities will pay $250M. In addition, the ERDA request provides for support
of an extensive technology program on LMFBR fuels, physics, safety and components.
OMB Recommendation. OMB staff essentially agrees with the high priority of the LMFBR program and has made only
relatively minor reductions to the technology programs where the rate of growth over FY 1976 appears excessive.
Concerning the CRBR project, OMB staff recommends proceeding with the construction phase at the pace requested by
ERDA. The CRBR has had a major cost overrun and will not make much progress on demonstrating the economics of
LMFBRs (because of the relatively small size). However, the CRBR will provide a focus for the LMFBR technology
program and will begin the process of commercialization. In addition, ERDA has made a major effort to improve the
management of the CRBR project by establishing a management team on-site in Oak Ridge.
GERALD
R.
0303
LIBRARY
18
OTHER FISSION REACTOR R&D
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
87.2
123.9
195.0
188.2
158.3
118.6
100.0
0
76.5
94.9
167.7
163.0
128.0
107.8
105.0
ERDA Request. ERDA is supporting several backup concepts (i.e. LWBR, MSBR, GCFBR) which could possibly be developed
in case the LMFBR encounters serious problems. In addition, ERDA is conducting R&D on the HTGR (particularly on fuel
recycle) which, until recently, was viewed as a prospective near-term commercial alternative to current light water
reactors. However, all commercial contracts have now been terminated and the prospects for commercial support are
very uncertain. The ERDA request is broken down as follows (outlays):
Light Water Breeder
Reactor (LWBR)
37.9
42.6
42.6
42.6
36.6
35.0
Molten Salt Breeder
Reactor (MSBR)
4.1
4.9
4.9
4.9
3.9
4.0
Gas Cooled Reactors
(GCFBR/HTGR)
26.8
30.2
30.2
30.2
29.2
27.0
Light Water Reactor
Technology
5.3
40.2
40.2
20.2
8.0
10.0
Supporting activities
(e.g. dry cooling towers,
desalting studies)
17.3
27.1
24.3
21.3
21.3
23.0
Other capital equip-
ment
CEVALO
3)
3.4
22.8
20.8
8.8
8.8
6.0
0803
19
OMB Recommendation.
LWBR - Commplete the demonstration of Admiral Rickover's LWBR concept in the Shippingport reactor (initial
operations 1976). Hold the development of advanced LWBR concepts to the FY 1976 level because the
economics are doubtful and commercial interest minimal.
MSBR - Continue as a low-level technology effort which addresses the resolution of key technical problems.
The MSBR is a very marginal backup to the LMFBR at this level of funding. If could be considered fo
termination.
Gas Cooled Reactors - Hold to the FY 1976 level of activity until the commercial future (if any) of the High
Temperature Gas Reactor (HTGR) is better known. Unless solid commercial interest (i.e. contracts for
construction of power plants) can be rekindled within the next six months, Government support of the
HTGR and the Gas-cooled Fast Breeder Reactor (GCFBR) should probably be terminated at that time.
Although the HTGR has potential advantages over light water reactors (use of thorium fuel, less thermal
pollution, process heat applications), these advantages will not be realized unless significant reactor
capacity is built before the introduction of breeder reactors. Without firm indications of commercial
support, the Government should not proceed with the very expensive ($1B) task of developing and demon-
strating difficult HTGR fuel reprocessing and waste management technology.
Light Water Reactor Technology - Covered in Issue #8.
Other - Hold to ERDA revised ceiling case which maintains a reasonable level of effort.
20
HTGR and LMFBR Fuel Cycle Research and Development
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
HTGR BA
15
17
28
28
28
18
20
0
12
16
24
24
24
17
18
LMFBR BA
5
5
8
8
8
8
10
0
4
4
7
7
7
7
9
ERDA Request. The increase in funding for HTGR fuel cycle research and development is to initiate design studies
for an HTGR Recycle Demonstration Facility and to increase hot cell testing of full and laboratory scale components
for this facility. The LMFBR recycle funds provide for the establishment of objectives, goals and schedules for
the development of a commercial LMFBR reprocessing and recycle industry. The increase in FY 77 is to complete a
program management plan and initiate a facilities requirements study.
OMB Recommendation. Considering the recent cancellation of all orders for HTGR power plants the initiation of
design of a large fuel recylce facility is unjustified at this time and may never be justified unless the HTGR
becomes a commercial success. The LMFBR funds requested by ERDA are required to assure the orderly development
of LMFBR reprocessing and recylce technology essential if there is to be widescale use of LMFBR's at the turn
of the century.
21
REACTOR SAFETY FACILITIES
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
--
--
34.6
33.3
33.3
33.3
5.0
0
--
--
25.7
24.7
24.7
24.7
7.4
ERDA Request. Pursuant to the Energy Reorganization Act of 1974, ERDA and NRC have signed a memorandum of under-
standing which provides that ERDA will fund the completion of two reactor safety facilities being constructed at
ERDA's Idaho test site. NRC will fund the experimental program for the two facilities. The facilities in question
are the Loss of Fluid Test (LOFT) facility and the Plenum Fill Experiment. Both of these facilities will conduct
experiments relating to loss of reactor coolant accidents which involve the critical safety issue for current
generation light water reactors.
OMB Recommendation. The two facilities in question will conduct experiments which are of urgent importance to
NRC's light water reactor safety program. We recommend approval of the revised ERDA request.
2.
NUCLEAR SAFEGUARDS RESEARCH AND DEVELOPMENT
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
7.5
19.6
33.7
33.7
33.7
25.5
25.5
0
6.9
14.7
31.3
31.3
30.8
25.3
25.5
ERDA Request. This program, which represents less than 20% of ERDA's safeguards spending, should be rapidly
expanded for the following reasons:
- This program is ready to move from a study, analytical phase to a demonstration, test, and evaluation phase
(with respect to methods of safeguarding plutonium and other special nuclear materials (SNM) from theft
and sabotage).
- Safeguards problems must be solved in coordination with breeder reactor and plutonium recycle development
to demonstrate effective, economical solutions.
Continuation of 1976 levels of effort are programmed for the following reasons:
- Analysis of potential safeguard threats
- Development of physical protection measures for special nuclear materials (SNM) which involves:
--establishing standards for protection, and
GERALD
P.
--developing technology for meeting standards.
FORD
- Development of SNM control and accountability systems.
LIBRARY
- Development of secure SNM transportation systems.
A $10M increase is requested for demonstration of safeguards measures at the following types of facilities:
1/ The balance of ERDA's safeguards program involves improving safeguards at ERDA facilities,
improving ERDA transportation safeguards, and improving safeguards systems on nuclear weapons.
23
- Sandia Research Reactor $1.4M.
- Putonium Handling and Storage (Hanford) $1.0M.
- Plutonium Processing and Recovery (Los Alamos Scientific Laboratory) $4.4M.
- Power Reactor (to be determined) $3.2M.
OMB Recommendation. We agree with ERDA's assessment of the importance of the problems in this area. However, we
do not recommend that full amount requested by ERDA. We recommend a level of $24.8M. Our recommended reductions
are as follows:
- Development and demonstration of further physical protection measures (such as Intrusion Detectors, Entry,
Control Systems, and remotely operated barriers) (-$5M).
- Related capital equipment (-$1M).
Our reasons for the above reductions are as follows:
- The need for accelerated R&D in physical protection is doubtful in view of the following:
--ERDA just reduced its estimate of the expected physical threat from terrorist groups.
--Physical protection measures are now well developed and much work in other fields is applicable to
SNM physical material protection.
- Savings can be realized by improved coordination between ERDA and NRC.
--Part of ERDA's demonstration program may be wasted because NRC expects to issue its regulations in
advance of ERDA's related planned demonstrations.
--ERDA and NRC has not signed either an interagency agreement or a memorandum of understanding. They
have not even exchanged budgets. (We will request ERDA and NRC to produce an interagency agreement
for our review--prior to Congressional budget hearings if practicable.)
24
-
Of the four demonstrations proposed by ERDA only two are high priority. The research reactor can
demonstrate reactor safeguards. The LASL facility can demonstrate fuel reprocessing safeguards. Any
power reactor demonstration should be coordinated with NRC, be in the private sector, and include cost-
sharing. NRC believes that complete demonstrations are not required and that demonstrations should focus
on problem areas.
FORD is LIBRARY
25
LASER ISOTOPIC SEPARATION
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
22.4
33.5
53.1
43.8
43.8
43.8
40.0
0
18.6
28.2
46.7
39.7
39.2
39.2
40.0
ERDA Request. ERDA believes that it should accelerate the development of technology for using lasers
perform
uranium enrichment and to recover plutonium. Compared to other uranium enrichment techniques, laser isotopic
separation facilities offer the potential of (a) being smaller and less expensive; (b) consuming less electrical
power, and (c) utilizing uranium resources more effectively. ERDA's program has the objective of proving technical
feasibility by FY 1978, constructing a pilot plant in thelate 1970's, and constructing a production plant by the
late 1980's.
OMB Recommendation. We believe that laser isotopic separation is a very promising concept with high potential
benefits in the form of reduced cost for uranium enrichmentand more efficient use of uranium fuel resources.
We therefore recommend approval of the revised ERDA request.
GERALD
26
0808
OTHER URANIUM ENRICHMENT R&D
18788
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
53.2
59.8
113.7
113.7
113.7
93.2
82.0
0
62.0
59.0
77.7
77.7
77.7
66.4
77.0
ERDA Request. The ERDA request is broken down as follows (outlays):
Process Development
R&D
47.3
68.8
68.8
68.8
66.4
59.0
Facilities
Centrifuge Demon-
stration
Facility (Total
est. cost $100M;
FY 1977 BA$38M)
--
6.7
6.7
6.7
5.4
18.0
Prior year projects
11.7
2.2
2.2
2.2
2.2
--
Process Development R&D. ERDA requests a major.increase to accelerate the development of advanced centrifuges,
process systems manufacturing methods and plant operating procedures to assure that all aspects of the centrifuge
technology are ready for use by the private centrifuge corporations now finalizing plans to own, build and operate
centrifuge enrichment plants on a production level.
Centrifuge Demonstration Facility. ERDA requests this facility, TEC=$100M (a) to provide the first production
cascade (TEC=$50M) to use the Set III advanced design centrifuge machines and (b) to provide a test bed,
(TEC=$30M) for the design and initial testing of the next generation, Model IV, machines and (c) to retool the
existing manufacturing lines (TEC=$20M) at Oak Ridge to be able to produce the Set III machines required in the
first production cascade. The production cascade will be completed in the middle of 1981 and the Model IV machine
test bed completed in late 1981.
27
OMB Recommendation.
Process Development R&D: An increase in R&D on centrifuges is required to prepare the technology for the
imminent use by the private sector but the 32% increase requested is not warranted considering the fact that
part of ERDA's plan for privatizing this technology calls for the private sector to begin to do R&D of their
own at some point in time. OMB recommends reducing the ERDA requested increase of $18.7M to $10M.
Centrifuge Demonstration Facility: Set III centrifuges may be used by some of the first private sector enrich-
ment plants scheduled for operation between 1982-1986, and a cascade process demonstration would reduce the risks
(mostly abosrbed by the Government) associated with machine failures in large plants so OMB recommends approving
the First Production Cascade and the Retooling of the existing Set III machine manufacturing lines. Model IV
performance testing should not be started now but can wait until the private enrichers develop this more advanced
machine themselves. Thus, we recommend approval of $50M out of the requested $100M facility project.
PERSE
f.
FORD
LISSARY
28
Biomedical and Environmental Effects
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev.
ERDA
Ceiling Case
OMB Rec.
FY 1978
ADDREIN
BA
163.8
193.3
281.3
223.7
223.2
190.8
191
0
148.6
173.3
241.3
209.8
209.7
189.9
190
ERDA Request. ERDA's Biomedical and Environmental Effects program is composed of six elements: Health Studies,
Biological Studies, Environmental Studies, Physical and Technological Studies, Analysis and Assessment and Education
and Training. This program conducts basic and applied biomedical and environmental research to support all of ERDA's
technology development programs. The program has experienced rapid growth since FY 1974 (FY 1974 outlays, $116M)
when the program was almost entirely directed toward research on nuclear-related problems. The fifty percent growth
in outlays from FY 1974 to FY 1976 is due, in large measure, to the need to undertake research into non-nuclear
energy related health and environmental problems (e.g. problems associated with new and improved technology for
coal use and conversion, oil shale use).
ERDA's FY 1977 budget request (ceiling case) would provide for large increases in outlays for all the program element:
in nuclear (14% increase in outlays), non-nuclear (83% increase in outlays), and supporting research (20% increase in
outlays). ERDA justifies the proposed increases on (1) the need to answer unresolved questions regarding the effects
of nuclear energy on man and the environment (especially plutonium): (2) the need to quickly determine the nature of
the threat represented by the hazardous elements associated with the use of non-nuclear energy sources. ERDA's
proposed FY 1977 budget would also provide for a large scale-up of its environmental studies program with particular
emphasis on marine and atmospheric effects of energy production and use.
OMB Recommendation. The OMB recommendation provides for a $13M increase in outlays for this program for FY 1977.
This increase will allow needed high priority research on non-nuclear energy-related biomedical and environmental
questions to expand. The recommended level will hold nuclear research relatively level. New initiatives can be
undertaken, however, within the recommended level if ERDA further reprograms funds in its long-term nuclear re-
search programs away from lower priority nuclear studies and into higher priority areas such as nuclear fuel cycle
environmental problems.
The Division feels the recommended level is adequate to support ERDA's needs in this area because:
29
- The program has grown rapidly in fiscal years 1975 and 1976. Moreover, this growth has been in high
priority non-nuclear areas. The nuclear program, already large in FY 1974, has grown as well. The
FY 1977 recommendation would carry forward this large program.
- There is considerable flexibility within ERDA's budget to reprogram out of lower priority nuclear-
related areas into high priority areas. For example, long term animal experiments can be expanded
by adding new pollutants. Other shorter term experiments, can be easily ended and effort reprogrammed
into high priority areas.
- There are apparent overlaps between ERDA's proposed programs and other agencies for example: NIH in
the health research; EPA in health effects and environmental effects; the Department of Interior in
environmental effects, NOAA in environmental effects. The effect of this mark will be to force ERDA
to eliminate lower priority work duplicative of other agencies.
30
BASIC ENERGY SCIENCES
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
184.9
206.7
290.8
237.5
234.6
224.0
233.0
0
168.5
184.7
256.8
214.5
213.5
201.6
220.0
ERDA Request - ERDA's program in basic energy sciences is aimed at improving the understanding of fundamental
physical phenomenon underlying advancement in all areas of energy technology. ERDA has requested
major increases in the areas of Material Sciences and Molecular, Mathematical, and Geosciences
while requesting only minor increases for Nuclear Science. ERDA believes its request represents
a balanced basic research program capable of supporting all other ERDA energy R&D program areas.
Achievement of better balance over the next several years between nuclear and non-nuclear basic
research is given high priority by ERDA.
OMB Recommendation - ERDA's desire to achieve an overall balance in the Basic Energy Sciences Program was reviewed
and found to be essential in order to advance from the rather narrow mission orientation inherited
from AEC to the broader mission orientation of ERDA. In order to move toward such a balance while
maintaining the desired fiscal constraints, the OMB recommendation includes a reduction in the
Nuclear Science area to partially offset a small expansion of the Materials Sciences and Molecular,
Mathematical, and Geosciences areas. The overall recommended increase over FY 1976 is 9% which
maintains the overall program activity at about the FY 1976 level considering the effect of
inflation. The OMB recommendation also includes a $5 million addition to the Bates Linac, a $13
million natural gas to coal steam plant conversion at Holifield National Laboratory and a $2-1/2
million modification to the High Flux Beam Reactor at Brookhaven to increase the neutron flux.
31
Production of Enriched Uranium
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
593.2
981.4
1335.6
1307.6
1234.6
1335.6
1058.0
0
535.7
891.6
1230.6
1202.6
1128.3
1230.6
1260.0
Related Revenues
*
-562.5
-591.5
- 579.9
- 579.9
- 629.9
- 629.9
- 943.0
ERDA Request. The ERDA request is broken down as follows (outlays):
Electric power for production plants
532.3
704.0
676.0
606.0
704.0
768.0
Other uranium production costs
123.6
137.5
137.5
136.6
137.5
116.5
Facilities
Capacity expansion program
(Total estimated cost $1.4B)
205.3
352.3
352.3
352.3
352.3
321.7
Other facilities
30.4
36.8
36.8
33.4
36.8
53.8
*Offset both BA and Outlays
ERDA has suggested a reduction of $98 million in their uranium production costs in order to meet their FY 77
outlays ceiling. In order to achieve this reduction in uranium enrichment production, the power level to ERDA's
enrichment facilities would be cut by 1000 megawatts (MW) from 5,610 MW to 4,610 MW.
This proposed reduction in enrichment production would result in a production loss in FY 77 and, therefore, a
reduction in ERDA's enrichment stockpile of 2.5 million separative work units, SWUs. This stockpile provides an
insurance that ERDA will be able to meet its contracted future enrichment deliveries against the temporary breakdown
of, or power reductions to, the enrichment plants. This stockpilewill be used as an inventory to support the start
32
up of the anticipated private enrichment plants if the President's Nuclear Fuel Assurance Act passes the
Congress. ERDA maintains that the 2.5M SWU stockpile loss will be made up by the recent slip in nuclear power
plant orders and the consequent slip in enrichment delivery schedules.
The 1000 MW power reduction will require a payment to the utilities supplying ERDA with power of $30 million
in contract demand charges for power not delivered. The future revenues lost for the $98 million reduction in
FY 77 is the market value of the SWUs lost, about $190 million at $76/SWU.
ERDA also adds $50 million to the uranium enrichment revenues in FY 77 in order to reach its ceiling. This will
be accomplished by an 8% increase in ERDA's toll enrichment charge. If the legislation to increase the present
charge for fixed commitment contract holders to $76/SWU passes the Congress it should not be difficult to raise
this to $82/SWU in FY 77 which would be necessary to achieve the $50 million revenue increase.
OMB Recommendation. ERDA's suggested increase in FY 77 enrichment revenues can be achieved and should be accepted.
However, the reduction in uranium enrichment porudction will result in a permanent decrease in the enrichment
stockpile of 2.5M SWUs and should be rejected. This stockpile loss cannot be regained by the slippage in nuclear
power plant orders alone. This is due to the fact that the need for enrichment will increase due to the delay in
the approval of plutonium recycle by an amount equivalent to the decrease in this need resulting from power plant
slippage. This stockpile loss reduces the assurances of continuous enrichment supply from ERDA's plants which will
contribute to the total level of uncertainty now existant in the nuclear industry which is significantly slowing
its development. This stockpile loss will also reduce the ability of private enrichment plants to mee their early
contracts and may thus deter utilities from ordering from them and jeopardize the President's proposal to create
a private enrichment industry. For these reasons, OMB recommends no reduction in ERDA's uranium enrichment production
for FY 77.
Since the uranium enrichemnt capacity expansion programs are essential to meeting future enrichemtn requirements
already committed to by ERDA as well as to developing a reasonable stockpile of SWUs, OMB and ERDA agree that this
expansion should go forward as planned, despite the cost growth.
33
WEAPONS MATERIALS PRODUCTION (AND RELATED WASTE MANAGEMENT)
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
298.3
381.1
565.3
565.3
488.5
526.8
423.5
0
276.2
341.2
465.2
460.2
399.2
428.9
493.6
ERDA Request. This program produces special nuclear materials (SNM) for the weapons program, for reactor programs,
for the space programs, and for various other applications including medicine and research. This program also
manages wastes from the production of SNM. Increases are requested to:
- startup Richland Chemical separations plant to reprocess N-Reactor fuel,
- increase efforts in reprocessing non-production fuels,
- expand research in radioactive waste processing and disposal,
- maintain operations in view of expected inflation of 9.6%
- construct radioactive waste management facilities.
The ERDA revised request does not change, except for a $5.0M stretchout of a waste calcining facility now under con-
struction, reflecting the high priority ERDA assigns to this program. The ERDA ceiling solution identifies the
following further reductions:
- Production:
--Close N-power reactor (See Issue # 9 )
- $36M (partially offset by a loss of $27M of revenues)
--Reduce Capital equipment purchases
- 5M
--Reduce supporting services (con-
struction design, environmental
impacts, etc.)
- 6M
- Waste Management
-- Research and development
- 14M
34
OMB Recommendation. We recommend acceptance of all reduction identified by ERDA for production, except for
closing N-Reactor (see Issue #11), because the reductions do not seriously affect program objectives.
We also recommend accepting the reduction to Waste Management R&D. ERDA waste presents a serious long-term
problem, but in our view a solution to this problem is not urgently required now because ERDA waste is well
contained for the present. Also, waste management solutions identified under the expanded commercial waste
management program will be available to help solve the problem of ERDA waste.
Finally, we recommend additional reductions in these programs for repricing to allow a 7.5% inflation factor
rather than 9.6%.
- Production
$-4M
- Waste Management
-2M
GERALD R. FORD
URANIUM RESOURCE ASSESSMENT
35
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
8.1
18.8
46.3
46.3
46.3
36.3
40.0
0
6.8
14.8
38.0
38.0
37.5
30.0
40.0
ERDA Request. ERDA has requested a substantial increase in its program to evaluate the extent and availability of
domestic uranium resources. The first comprehensive ERDA report will be completed by 1980, with an initial evaluation
report in 1976. The ERDA program is important in order (a) to identify likely sources of uranium for current nuclear
power plants and (b) to assist planning for the pace of development of fast breeder reactors. The funding increase
provides for expanded geologic drilling and implementation of a nationwide aerial and stream sediment survey.
OMB Recommendation. Although OMB staff supports the objectives of this program, we are concerned at the size of the
funding increase requested. We have recommended an $8M reduction which will result in a slight slowdown in the
program's pace.
ayos
LIBRER
36
Peaceful Nuclear Explosives (PNE's)
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
Fossil
BA
2.7
1.1
1.3
1.3
1.3
--
--
0
2.7
1.1
1.3
1.3
1.3
--
--
Nuclear Explosives
Applications
BA
--
--
4.0
2.3
--
--
--
0
--
--
3.0
1.7
--
--
--
Control Technology BA
--
--
--
--
--
1.3
1.3
0
--
--
--
--
--
1.0
1.0
Total
BA
2.7
1.1
5.3
3.6
1.3
1.3
1.3
0
2.7
1.1
4.3
3.0
1.3
1.0
1.0
ERDA Request. ERDA has requested $1.3M under the fossil program to further evaluate the 1974 Rio Blanco gas
stimulation PNE test. Further study would involve systems studies concerning rock mechanics and void formation
This work would be useful to a future gas stimulation PNE Program.
ERDA has requested 3.0M in outlays to reinstate a PNE program for the following purposes:
1. To respond to requests from other countries for aid in using PNE technology. ERDA considers this
a treaty obligation under the nulcear non-proliferation treaty, because the treaty requires them
to make the "benefits" of PNE technology generally available.
2. To reduce asymmetry in PNE technology with the USSR.
3. To "keep open all options with respect to energy and resource problems solutions."
This program would:
- investigate the feasibility ofstoring hydrocarbon liquids in cavities created by nuclear explosives.
37
- investigate the feasibility of utilization of very deep (20,000 to 30,000 feet), PNE produced
cavities for permanent disposal of nuclear fuel reprocessing wastes.
- develop a better understanding of the explosion effects and migration of radioactivity, and
- provide for support of U.S. role in international PNE affairs.
ERDA's revised request continues Rio Blanco evaluation and a slightly lower level of effort on PNE development.
The National Security Council supports at least part of ERDA's request.
OMB Recommendation. We recommend no funds for the fossil program. We recommend that approximately $1M be
budgeted in the waste management program for deep rock technology.
Our reasons are as follows:
1. The highest priority evaluations of Rio Blanco have been completed. This technology is not
RERALD
viable at this time and will not be viable until economic, technical and public acceptance
R.
problems are solved. The proposed research will not contribute significantly to solving
these problems.
FORD
LIBRARY
2. We dot no agree that the U.S. has a treaty obligation to develop PNE technology except where
we expect net benefits for us or for other countries. We agree that the U.S. should participate
with other countries in evaluating feasibility for specific applications. However, we feel that
ERDA weapons labs now have a sufficient technological base and that ERDA's international program can
handle this.
3. The ERDA weapons program is sufficiently large to assure an adequate technological base for future
PNE initiatives. A PNEverification program is budgeted for separately.
4. We would prefer not to see a separate PNE program because its sponsors would serve as an advocate
for PNE technology within ERDA. There would be little incentive to evaluate this technology
competitively with other technologies available to accomplish program objectives. We would prefer
to see PNE technology as a resource to be draw on by (for example) the fossil program and the
waste management program; therefore, we recommend that PNE funds by budgeted by using divisions.
38
HIGH ENERGY PHYSICS
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
149.9
176.9
250.3
240.9
240.3
200.0
231.0
0
171.9
177.6
215.0
201.0
194.5
191.4
195.4
ERDA Request -
ERDA has requested authorization of a major construction project (PEP - a 15 GeV X 15 GeV
positron-electron colliding beam facility costing an estimated $78 million) and small
operating increases across the board to maintain a constant level of research in the
High Energy Physics Program. Construction of PEP has been given the highest priority of
several new facilities recommended by the High Energy Physics Advisory Panel. Dr. H. G.
Stever, the President's Science Advisor, has also given a high priority to the construction
of this new research facility.
OMB Recommendation - The construction of PEP would provide the facility necessary to followup several major
discoveries that have been achieved in the past year while minimizing the outlay usually
required for a facility of this type by utilizing the existing facilities associated with the
Stanford Linear Accelerator. Nevertheless, in our view, initiation of this project can be
postponed until 1978 in view of OMB overall guidance covering new construction starts in the
present fiscal climate. (This facility will be included in the 1978 authorization bill which
will go forward in February.) Our recommendation agrees with last year's Director's Review
decision on this issue which allowed the facility in 1978 and also provided for shutdown of
the ZGS facility at Argonne National Laboratory in 1979. Congress has recommended
additional funds in FY 1977 to initiate the PEP project. OMB recommends that these additional
FY 1977 funds be deferred to FY 1978 if enacted. Part of the large BA increase is due to
$5.5 million computer for Fermilab, which OMB staff feels is justified.
CERRED
?.
FORD
39
Space Nuclear Systems
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
29.4
39.3
50.4
40.0
38.7
34.2
33.0
0
34.4
37.2
44.9
36.0
35.0
32.3
34.0
ERDA Request.
ERDA's revised request provides for the following reductions (Outlays - $ in millions)
Unmanned free swimming submersible
-3.8
Fuel Form Fabricating capabilities
-2.4
North American Air Surveillance Network (DEW Line)
-1.3
Thermionic Conversion
-1.5
Capital equipment
-1.0
Total reduction
-10.0
OMB Recommendation. We recommend acceptance of ERDA's reductions. Their impacts are as follows:
- The impact of the reductions to the UFSS program and to fuel form fabrication capabilities will postpone
delivery of an isotopic power supply for the unmanned research submarine for two years. However, related
work will continue and an improved technology should be available at that time. The postponement will not
affect the program objective, but will require operation for two years with a conventional power source.
- The impact of the reductions or the Air Force DEW Line program is to postpone by one year a study of the
use of isotopic power supplies for possible unmanned DEW line stations. This will not have a serious impact
because DEW Line improvements are not imminent.
- The impact of the reductions to the thermionic program is to postpone demonstration of the technology
for one year.
In addition to the reductions provided by ERDA, we recommend the following:
REBALD,
Radioactive Waste Utilization
-1.2
FORD
Conversion technology
-1.5
LIBRARY
- 2.7
40
The impact of the radioactive waste utilization reduction would be to eliminate ERDA's program to use radio-
active wastes for such purposes as sewage sterilization and self-lumnious light sources. This program is of
low priority because of uncertain economics and political and public acceptance problems.
The impact of the thermionic conversion technology reduction would be to continue this program at the $1M program
level, funding only thermionics. This would postpone ERDA's plan for demonstration of thermionic technology.
In our view, this technology, which could enhance the efficiency of fossil fuel generation, is not ready for a
demonstration. When this program is ready for demonstration it should be transferred to another ERDA division
so it can compete with other energy systems. Two other initiatives in this category are not recommended. A
Zirconium hydride technology initiative is not recommended because this system does not appear ready for commercial
application. A thermo electric materials initiative should be funded under advanced research.
GERALD
?
41
PROGRAM SUPPORT
FORD
AB78817
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
Program Direction
BA
155.0
190.9
220.9
210.0
210.0
199.1
203.0
0
155.1
183.7
220.7
209.6
204.1
199.0
203.4
Supporting
Activities
BA
31.3
52.0
176.3
115.0
86.2
49.9
49.5
0
30.8
48.3
89.1
67.4
61.7
48.5
50.9
ERDA Request/OMB Recommendation.
Program Direction. The ERDA request provides for the following increases (Millions of $) :
Activity
Budget Authority
ERDA Request
OMB Recommendation
FY 76
FY 77 Req.
FY 77 Rec.
Personnel
137.0
152.9
150.3
- See Issue #9.
-See Issue #9.
Travel
7.0
8.2
7.7
-Personnel increases and
-Reflects personnel increases.
management improvements.
Contractual Services
35.7
38.9
36.9
-Personnel increases and
-Reflects personnel increases.
management improvements.
Other
11.2
10.0
4.2
-Completion of phase-
-Disallows computer as not
funded building improve-
needed before 1978. Deletes
Total
190.9
210.0
199.1
ment. New computer.
headquarters improvement funds
Supporting Activities. ERDA feels strongly about the manpower initiatives and the general purpose laboratory
facility initiatives below and may be expected to challenge our recommendation for no new funds in these areas.
ERDA may also appeal our reduction to the requested growth rate in the public awareness program. The ERDA request
provides for the following new initiatives and program accelerations (Millions of $) :
42
Program
Budget Authority
ERDA Request
OMB Recommendation
FY 76
FY 77 Req.
FY 77 Rec.
Community operations
7.6
7.5
6.4
-Support payments for Roane
-Not allowed since special
and Andèrson Counties are
need not demonstrated.
added (+0.8).
-Increase allowed less $.3
-Support levels for Los
for expected state aid
Alamos and Oak Ridge are in-
increases in New Mexico.
creased in accordance with con-
tractual commitments (+0.8).
-Contingency funding related -Accept reduction.
to possible impacted aid
shortfalls is deleted (-1.7).
Security investigations
12.3
10.0
10.0
-Downward change in personnel
-Agree with change. No further
clearance standards. (-2.3)
reduction recommended (for
safeguards reasons).
Information Services
-Public awareness
2.9
5.3
3.2
-Expanded public awareness
-Moderate increase allowed for
program (+2.4)
price increases.
-Technical information
7.4
8.9
8.4
-Expanded technical infor-
-Partof program growth re-
mation program (+1.5)
cognized for new energy data.
General systems studies
(planning function)
10.8
12.0
10.0
-Additional studies (+1.2)
-Reduction recommended. Studies
should be redirected to
higher priority areas.
General Technology
Transfer
1.8
2.0
2.0
-Continue Commercialization
-No change
methods study.
Manpower development
--
3.2
0.7
-New manpower information
-Allowed. ERDA needs to
BERALD
evaluation program (+0.7).
monitor and use this data.
R.
-New technical training
-Not allowed. Necessary
FORD
program for ERDA con-
technical training should be
trator employees (+2.5M)
funded through programs.
EEO Assigned
facilities
LISSANY
2.0
2.3
2.0
-More frequent inspections
-Not allowed per cross-cutting
(0.3).
Director's Review on contract
compliance.
43
Program
Budget Authority
ERDA Request
OMB Recommendation
FY 76
FY 77 Req.
FY 77 Rec.
Construction Planning
7.2
10.0
7.2
-Increase required because of
-Reflects reductions to
and Design
planned extensive building
building program
programs.
throughout budget.
General Purpose
Laboratory Facilities
--
53.8
-Construction to upgrade Govern-
-Not allowed on grounds
ment owned research laboratories
of low priority and
and production facilities.
because of OMB's
-Los Alamos
16.0
overall policy of con-
-Brookhaven
11.5
straint on new con-
-Berkeley
8.0
struction. Also, we
-Livermore
9.3
recommend such improve-
-Oak Ridge
5.0
ments be funded in
-Richland
4.0
programs, so that they
can compete with pro-
gram objectives for
funds.
Total
52.0
115.0
49.9
FORD
44
OPERATIONAL SAFETY
FY 1977
Orig.
ERDA
FY 1975
FY 1976
ERDA Req.
Rev. ERDA
Ceiling Case
OMB Rec.
FY 1978
BA
4.4
6.5
10.2
10.8
10.8
8.6
6.0
0
3.8
6.0
9.7
7.6
7.6
6.0
7.0
ERDA Request. The ERDA Operational Safety Program: Conducts safety studies and develops safety, health and
environmental regulations for ERDA facilities; conducts an aerial radiological monitoring program, and has
responsibility for administering the financial assistance program to limit radiation exposure resulting from the
widespread use of uranium mill tailings for construction purposes in Grand Junction, Colorado. Under Title II of
P.L. 92-314, ERDA is authorized to pay 75% of these costs.
The revised ERDA request provides for an expansion of its safety studies (to bring all ERDA facilities into
compliance with applicable health, environmental and safety studies) and aerial radiological monitoring program.
In addition, ERDA has requested an additional $3M of Budget Authority for the Uranium Mill Tailings program.
OMB Recommendation. The Division recommends supporting the safety studies and aerial monitoring programs at the
FY 76 level. This will allow ERDA to conduct necessary safety studies by shifting to high priority facilities
which ERDA has recently absorbed from other agencies.
The Division also supports the request for an increase in BA ($3M) and outlays ($600M) for the Uranium Mill Tailings
program.
GERALD
it.
FORD
LIGHTS
16
F.
Major Programmatic Issues
Based on the OMB critique of ERDA's energy R&D
strategy and priorities, and considering the
merits of individual programs, the major energy
R&D issues between ERDA and OMB arise from:
ERDA's excessive emphasis on lower potential
payoff technological options such as solar
heating and cooling, geothermal and certain
solar electric options such as wind energy
and ocean thermal power. (See Issues #3 and #4.)
ERDA's emphasis on Federal involvement in
new conservation technologies particularly
improvements in end-use technologies which
are, to a large extent, stimulated through
the price mechanism. (See Issue #5.)
ERDA's recommended acceleration of develop-
ment of the longer-range payoff technologies
of solar electric and fusion considering that
they are well behind in the development cycle
of their chief competitor, the LMFBR. (See Issue #3.)
ERDA's call for a substantial Federal role in
developing technology related to advanced
oil and gas recovery, on which the petroleum
industry is spending upwards of $100 million
annually. (See Issue #1.)
ERDA's proposal for a substantial Federal
role in developing technology related to
improving the reliability of conventional
nuclear reactors. (See Issue #8.)
The proper Federal role in assuring the
development and commercialization of
technologies needed to complete the nuclear
fuel cycle, i.e., fuel reprocessing, waste
management. (See Issues #6 and #7.)
As noted above, there is a continuing issue regarding the proper
Federal role in development and demonstrations. ERDA continually
presses for a larger Federal involvement than OMB staff consider
justified. In part, this is due to heavy Congressional pressure
for large aggressive Federal programs, e.g., solar heating and
cooling; conservation. ERDA has not been in a position to resist
these pressures, because they have failed to conduct adequate
agency-wide resource allocation and planning that would
demonstrate conclusively the marginal payoff of certain popular
technological approaches.
17
G. Summary of Federal Energy R&D Funding
The attached tables summarize the direct energy
R&D funding in the major R&D agencies: ERDA,
NRC, DOI, EPA, NSF, and NASA.
The tables make it clear that the formation of
ERDA effectively consolidated energy R&D activities
with about 90 % now taking place in ERDA.
The figures in the following sections summarize
ERDA's R&D by major program area and activity.
GENAL R. 1020
Table 5
Summary of Federal Energy R&D Funding
Budget Authority
($ Millions)
(OMB Rec.)
Program Area
FY 1975
FY 1976
FY 1977
FY 1978
Direct Energy R&D:
Non-nuclear R&D:
(619)
(795)
(910)
(1155)
Fossil Energy
TOTAL
393
505
538
737
ERDA
335
435
473
672
DOI
52
65
65
65
NSF
5
4
--
--
NASA
1
1
--
--
Solar
TOTAL
51
94
126
;
147
ERDA
40
89
126
147
NSF
10
3
--
--
NASA
1
2
--
Geothermal
TOTAL
34
34
49
50
ERDA
28
31
49
50
NSF
6
3
Conservation
TOTAL
48
78
99
120
ERDA
31
71
99
120
NSF
14
4
--
--
NASA
3
3
--
--
Environmental
Control
TOTAL
93
84
98
101
ERDA
8
10
18
18
EPA
82
58
59
61
NRC
3
16
21
22
Nuclear R&D:
( 937 )
(1147)
(1617)
(1690)
Fission
TOTAL
748
880
1233
1282
ERDA
691
781
1116
1160
NRC
57
99
117
122
Fusion
TOTAL
189
267
384
408
ERDA
189
267
384
408
DIRECT ENERGY R&D TOTAL
1556
1942
2527
2845
ERDA TOTAL
(1322)
(1684)
(2265)
(2575)
Non-ERDA TOTAL
( 234)
( 258)
( 262)
( 270)
Supporting R&D:
Environmental
Effects
TOTAL
232
250
245
247
ERDA
164
193
191
191
EPA
49
38
34
36
NSF
19
19
20
20
Basic Research
TOTAL
304
330
364
379
ERDA
185
207
224
233
NSF
119
123
140
146
SUPPORTING R&D TOTAL
536
580
609
626
ERDA TOTAL
(349)
(400)
(415)
(424)
Non-ERDA TOTAL
(187)
(180)
(194)
(202)
1/ This summary is restricted to major R&D agency programs: ERDA, NRC, DOI, EPA, NSF, and NASA. Programs
in such agencies as DOD, DOC, DOA, and DOT have negligible energy R&D funding.
TABLE 6
Summary of Federal Energy R&D Funding
Outlays
($ Millions)
Program Area
FY 1975
FY 1976
FY 1977
FY 1978
Direct Energy R&D:
Non-nuclear R&D:
(281)
(680)
( 835 )
( 989 )
Fossil Energy
TOTAL
172
408
510
627
ERDA
148
352
444
563
DOI
19
52
64
64
NSF
4
3
2
--
NASA
1
1
--
--
Solar
TOTAL
31
67
94
124
ERDA
15
65
91
123
NSF
15
1
2
--
NASA
1
1
1
1
^eothermal
TOTAL
24
33
43
45
ERDA
20
32
42
45
NSF
4
1
1
--
Conservation
TOTAL
26
62
81
91
ERDA
17
55
78
90
NSF
6
4
2
--
NASA
3
3
1
1
Invironmental
Control
TOTAL
28
110
107
102
ERDA
7
10
16
16
EPA
19
87
75
65
NRC
2
13
16
21
Nuclear R&D:
( 859)
( 984 )
( 1360 )
( 1555 )
Fission
TOTAL
708
754
1058
1155
ERDA
654
673
958
1043
NRC
54
81
100
112
Fusion
TOTAL
151
230
302
400
ERDA
151
230
302
400
DIRECT ENERGY R&D TOTAL
1140
1664
2195
2544
ERDA TOTAL
(1012)
(1417)
(1931)
(2280)
Non-ERDA TOTAL
( 247)
( 264)
( 264)
Supporting R&D:
Environmental Effects
TOTAL
163
230
254
248
ERDA
149
178
190
190
EPA
4
40
47
38
NSF
10
12
17
20
Basic Research
TOTAL
246
266
324
366
ERDA
168
185
202
220
NSF
78
81
122
146
SUPPORTING R&D TOTAL
409
496
578
614
ERDA TOTAL
Non-ERDA TOTAL
{ ( 317)
( 92)
{ 363)
{ 392)
( 410)
( 133)
186)
( 204)
FORD
LIBRARY