care of continuity through the No. 2 job. The disadvantage is the one that I mentioned earlier; if the man is not a military officer on active duty, the possibility that he does not have the close contact and relationship with DOD problems which a man coming from the services on active duty could bring to the job. So, on balance we feel that the job can best continue to be filled by a military officer on active duty. Representative PRICE. I am sure you are familiar with the reasons for the establishment of the Division of Military Application. That was part of the compromise that resolved the question of military versus civilian control of atomic energy. It was conceived in Congress and finally ended in a birth. Do you see any necessity to continue the Division of Military Application in the same manner in which it is continuing now?

Mr. BLOCH. You mean continued as it is now?

Representative PRICE. Yes. It is more or less a military organization within the Commission, itself. I think it has accomplished a great deal.

Mr. BLOCH. It is a mixture of civilian and military staff, and I think it is very effective. I don't think it would be as effective unless we did have military personnel assigned to it. So, our conclusion was that with respect to the job, the director's job, or the assistant general manager that we are proposing, that it was in everybody's interest to continue to have it filled by a military officer on active duty, provided that appropriate recognition were given to the status of the job and to the type of individual that we think should fill it.

I think it has worked very well. Of course, since he is appointed by the Commission, the Commission certainly is conscious of the element of civilian control.

Representative PRICE. I think it has been a very effective part of the atomic energy program. It is important that the military assign to it the best possible personnel. It is very important that we have the best personnel there, because it is what the name implies, a liaison between the Department of Defense and the Commission. But it is more than that. They have a voice in the military application of atomic energy, and that is still a very important part of the program. Mr. BLOCH. As the committee knows, this job, if anything, is growing as far as problems and complexity are concerned.

Representative PRICE. I think the military has supplied good men in the past. I think that they should continue to do so in this program. Mr. BLOCH. I think they will.

Representative PRICE. We have had high quality officers in charge of the Division of Military Application, and I hope that the military will continue to supply this high caliber officer personnel to the direction of this division.

Mr. BLOCH. We are sure they will. As I indicated, the DOD does support this proposed legislation. It should facilitate their being able to attract good men to the job.

Representative PRICE. DOD does concur?

Mr. BLOCH. The language which we understand is in the final process of clearance through the Bureau now, has been cleared and concurred in by the Department of Defense.

Representative PRICE. Are there any further questions, Mr. Hosmer.

Representative HOSMER. I would just like to know if there is not something else you would like to have changed in the act that you are thinking about. Not anything like abolishing the Joint Committee or anything like that? [Laughter.]

Mr. BLOCH. We will probably be up later with other problems and proposals.

Representative PRICE. Does the staff have any further questions? The committee will recess, then, subject to the call of the Chair. Thank you very much.

Mr. BLOCH. Thank you, sir.

(Whereupon, at 11:40 a.m., Tuesday, August 15, 1967, the committee recessed subject to the call of the Chair.)

AEC OMNIBUS LEGISLATION-1967

THURSDAY, AUGUST 24, 1967

CONGRESS OF THE UNITED STATES,
JOINT MEETING OF THE SUBCOMMITTEES ON

COMMUNITIES AND LEGISLATION,

JOINT COMMITTEE ON ATOMIC ENERGY, Washington, D.C. The subcommittees met at 10:10 a.m., pursuant to notice, in room AE-1, the Capitol, Senator Henry M. Jackson presiding.

Present: Senators Pastore, Gore, and Jackson; Representatives Holifield, Young, and Anderson.

Present also: Senator Baker; John T. Conway, executive director; Edward J. Bauser, assistant director; Leonard M. Trosten, staff counsel; George F. Murphy, Jr., national security affairs; and William T. England, professional staff member.

Senator JACKSON (presiding). The committee will come to order. Today's hearing involves two different pieces of legislation.

The first is a proposed amendment to the AEC's omnibus bill (S. 1901; H.R. 10627). (See app. 6, p. 184.) The amendment, which the AEC submitted to Congress on August 22, 1967 (see app. 12, p. 206), would increase by 1,000 kilograms the amount of plutonium which the AEC is authorized to transfer to Euratom. This would involve an amendment to the Euratom Cooperation Act of 1958.

The second bill which we shall consider today, S. 2220, H.R. 12087 (see app. 14, p. 217) represents an AEC proposal to amend the Atomic Energy Community Act of 1955 to authorize an extended period of financial assistance to the cities of Oak Ridge and Richland, and the Richland School District. The AEC submitted this proposed legislation to Congress on July 28, 1967, together with a report as required by section 91d. of the Community Act. (See app. 14, p. 217.)

Today's hearing is being conducted by the Subcommittee on Legislation, and also by the Subcommittee on Communities insofar as the matter of extended financial assistance to Oak Ridge and Richland is concerned.

We will take up the Euratom matter first.

STATEMENT OF DR. GERALD F. TAPE, COMMISSIONER; ACCOMPANIED BY HOWARD C. BROWN, JR., ASSISTANT GENERAL MANAGER; JOSEPH F. HENNESSEY, GENERAL COUNSEL; AND R. GLENN BRADLEY, DIVISION OF INTERNATIONAL AFFAIRS, ATOMIC ENERGY COMMISSION

Dr. TAPE. Mr. Chairman, I would like to address myself to the bill you referred to, having to do with the additional plutonium for the Euratom program.

I have a short statement which I would like to read.
Senator JACKSON. All right, sir.

AUTHORIZING TRANSFER OF ADDITIONAL PLUTONIUM TO EURATOM

Dr. TAPE. Mr. Chairman and members of the committee, I am pleased to be able to testify on this legislative proposal, which would amend section 5 of the Euratom Cooperation Act to permit the transfer to Euratom of 1,000 kilograms of plutonium in addition to the 500 kilograms already authorized for transfer for peaceful purposes. Euratom has made this request for additional plutonium as a result of its analysis of the availability of and requirements for plutonium in the community through 1970.

This legislation would authorize the distribution of plutonium under contracts with Euratom, as needed, to supply specific project needs, as in the case of the initial 500 kilograms of plutonium. The material would be used principally in the Community's research and development program on fast breeder reactors. In fact, the bulk of the additional material will be used to provide expanded fuel loadings for those fast reactor experimental facilities to which most of the currently authorized 500 kilograms have been allocated. These program projections represent logical and expected developments in the Community R. & D. effort. The results of the work in the Community will be available to the United States through fast reactor information exchange arrangements with Euratom and the member States.

PLUTONIUM REQUIREMENTS AND SUPPLY

A careful analysis has been made of the requirements for and availability of plutonium for civil research and development purposes in the United States, and in those countries which would be expected to obtain their plutonium requirements from the United States. The plutonium available for these purposes during the 1967-70 will be obtained from a combination of sources, for example, AEC production reactors and civil power reactors. This analysis indicates that the Euratom requirement can be met without adverse effect on our ability to meet U.S. requirements for plutonium.

POSSIBILITY OF OBTAINING PART OF SUPPLY FROM PRIVATE U.S. SOURCES

Euratom has been exploring the possibility of obtaining privately owned plutonium from licensed operators in the United States. Such arrangements would be accomplished under article V of the Additional Agreement for Cooperation. This article provides for the transfer, pursuant to the agreement, of materials, equipment, and devices be

tween authorized private parties under the jurisdiction of the United States and those within the Euratom Community.

The current base price of $43 per gram for plutonium supplied by the AEC is related to the cost of AEC production of plutonium. Since future supplies of plutonium will be from a combination of sources, the AEC sale price will reflect the cost to the AEC of the plutonium from these various sources and, thus, may be different from the current base price. The actual price for AEC-supplied material would depend on the relative contributions of the various sources of plutonium and may be adjusted from time to time within the 1967-70 period.

The price for any plutonium obtained by Euratom from private U.S. sources would be the result of negotiations between Euratom and the private source. The extent to which Euratom's requirements would be obtained from these sources would depend on the cost to Euratom of the material and the quality of the plutonium desired by the Community for specific applications. In addition, we would expect that Euratom's acquisitions from the private operators could not exceed 50 percent of Euratom's requirements. The remaining Euratom requirements would be obtained from the Commission. Although there is no present Government requirement for plutonium of the quality produced in the U.S. civilian reactors, such a requirement conceivably could develop. It is also possible that the price of plutonium produced in these plants might be economically attractive in comparison with plutonium from other sources. This arrangement would afford the United States the same opportunities as Euratom to obtain the possible benefits of material produced in the civilian reactors. A further aspect of our understanding with Euratom and the private operators is that no more than 75 percent of any one operator's plutonium would be made available to Euratom, thus providing an opportunity to all private operators to share in the sale of plutonium.

SAFEGUARDS TO APPLY TO MATERIALS

Transfers of plutonium to Euratom under this legislation will be pursuant to the additional Agreement for Cooperation with Euratom and subject to the safeguard provisions of the agreement under which Euratom applies its international safeguards system. This system is reviewed carefully by AEC and we are satisfied that it is an effective

one.

Mr. Chairman, that completes my prepared statement. I shall be glad to attempt to answer any questions you may have.

I have with me Mr. Joseph F. Hennessey, our General Counsel, and Mr. Glenn Bradley of our Division of International Affairs.

ROLE OF EURATOM UNDER PROPOSED NONPROLIFERATION TREATY

Senator GORE. Does your recommendation envision a possible enlargement of the role of Euratom in the event we and other nations achieve a nonproliferation agreement in Geneva?

Dr. TAPE. Senator, I am hesitating because I don't quite know the thrust of your question. But let me start and perhaps if I have not hit it, you can ask me a further one.

The particular issue before us today has to do with the transfer of an additional quantity of plutonium, namely, 1,000 kilograms over