foreign public, and that our principal interest was in the protection of contractors who were carrying out our responsibilities in a foreign

country.

So if that policy were carried forward into this new venture, it would indicate, I suppose, that our primary concern should be for the protection of our contractors and ourselves against liability for the foreign occurrence.

Of course, whether insurance is available or not is one question. The legal situation in the country involved is another.

If we were to assume a legal situation where the existing International Convention on Liability, which now applies to reactors and which channels liability to the operator of the reactor so that only he is liable, and establishes a limitation of liability, if that kind of convention were expanded to cover the Plowshare program, then we would have little concern that we or our contractors would be under any financial risk.

So I think we need to look at the situation as it evolves internationally, and in the individual countries, to see what we need to do to protect ourselves in contracting.

Representative ANDERSON. Is there any explicit provision in the Atomic Energy Act to prevent transfer by the Commission of one of these peaceful devices to a foreign country or foreign user?

Dr. TAPE. Let me say first, Mr. Anderson, that certainly there is an exclusion against the transfer as such of these devices.

We have been using "nuclear explosive device" as the terminology here to be consistent with our terminology in the Plowshare program and consistent with the language in the Nonproliferation Treaty.

The term "atomic weapon" appears throughout the act more commonly than does the term "nuclear explosive device," but we construe the term "atomic weapon" to cover this nuclear device. Furthermore, nuclear explosive device is specifically referred to in the act.

Mr. HENNESSEY. Yes, section 92 of the act prohibits transfer of the nuclear explosive devices.

Representative ANDERSON. It would follow, then, that it is your interpretation of the act as it is presently written that these services that we have been talking about, nuclear explosion service, could be made available to foreign countries only under circumstances where the Commission retains complete custody and control of the device at all times? Dr. TAPE. That is correct.

Representative ANDERSON. Thank you, Mr. Chairman.
Senator AIKEN. Mr. Chairman.

Representative HOLIFIELD. Yes, Senator Aiken.

Senator AIKEN. I have been a little disturbed at this conversation. Do you mean you are going to furnish the means for oil companies to conduct exploration and development programs in foreign countries? Do you mean that?

Dr. TAPE. Senator Aiken, if I could rephrase this, and perhaps talk to the question in the following way. We are talking about making available to various companies-they may be oil companies, gas companies, and so on, either in foreign countries or in our own country—

these nuclear explosion services, which would assist them, for example, in the stimulation of a gas field to produce more gas than they might otherwise be able to recover from that field. This is the type of experiment that we did with the Bureau of Mines and the El Paso Natural Gas Co.

Senator AIKEN. In what foreign countries?

Dr. TAPE. In New Mexico.

Senator AIKEN. That is not a foreign country, until the Mexicans take it back.

Dr. TAPE. I notice you have a gentleman across the table who might take isssue.

Senator AIKEN. Is it, Tom?

Representative MORRIS. We want to stay with you.

Dr. TAPE. The point I was trying to make is that thus far we have done one such experiment, and it has been in our country. We have several others under consideration in this country.

NON PROLIFERATION TREATY

The Nonproliferation Treaty provides that this type of service shall be made available to other countries under certain conditions of the treaty, and so on, and it is in that context that I am saying that this service could be made available.

Senator AIKEN. It shall be made available?

Dr. TAPE. It shall be made available.

Senator AIKEN. I am afraid the Nonproliferation Treaty has lost a vote.

Isn't the 272-percent depletion allowance we give those fellows enough, and is it necessary to close every little rural post office in the United States so that we will have money enough to do this?

Do you furnish the personnel to supervise these explosions in foreign countries?

Dr. TAPE. Senator, the services which shall be made available, that part of the obligation for the Government, for the Atomic Energy Commission, will be made on what amounts to a cost-reimbursable basis.

In other words, the cost for such services are reimbursed.

Senator AIKEN. You mean our personnel-we will be reimbursed for the full amount of their salaries plus all expenses connected with the job?

Dr. TAPE. Yes, the appropriate overhead and other costs that go with such charges would be included.

Senator AIKEN. So you are not going to give it to them free?
Dr. TAPE. Oh, no.

Representative HOLIFIELD. NO. That has been explored, I might say, Senator.

This area of cost to the United States was explored before you arrived. It has been testified by the witnesses that any peaceful explosive or any other peaceful use of atomic energy that is supplied by the AEC to our domestic people or to foreign countries will continue

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on the same basis that it has been in the past. We will obtain the charges or the cost necessary to the furnishing of that service, unless it might be in the nature of an experimental event, such as the Gasbuggy event, in this country, in which it was deemed to be in the national interest. This is the same as we have participated in the building of reactors in this country under the second and third round reactors, where we did go in with commercial companies on a partial contribution basis, and where we thought it was in the interest of furthering the art.

But as a commercial device, if and when a commercial device is developed-Mr. Hosmer and I both explored this at some length-any such furnishing under the terms of article V of the treaty would be done without cost to the taxpayers of the United States.

Senator AIKEN. You say under the terms of the Nonproliferation Treaty we would be required to furnish these services? Representative HOLIFIELD. Let us read it.

Each Party to the Treaty undertakes to take appropriate measures to ensure that, in accordance with this Treaty, under appropriate international observation and through appropriate international procedures, potential benefits from any peaceful applications of nuclear explosions will be made available to non-nuclear-weapon States Party to the Treaty on a non-discriminatory basis and that the charge to such Parties for the explosive devices used will be as low as possible and exclude any charge for research and development. Non-nuclear-weapon States Party to the Treaty shall be able to obtain such benefits, pursuant to a special international agreement or agreements, through an appropriate international body with adequate representation of non-nuclear-weapon States. Negotiations on this subject shall commence as soon as possible after the Treaty enters into force. Non-nuclear-weapon States Party to the Treaty so desiring may also obtain such benefits pursuant to bilateral agreements.

This is what happens now. We have bilateral agreements with many nations now in which we do make available to them the peaceful applications of atomic energy.

So it is no departure from custom.

Senator AIKEN. Are not these explosions classified as research? Don't we pay the cost?

Dr. TAPE. We have been paying the full cost of these at the beginning, Senator. In more recent times, where we have had joint projects in developing certain applications, we have shared the cost. Senator AIKEN. Is this another case of medical therapy licensing? Dr. TAPE. No, I would not put it in that category.

Senator AIKEN. It sounds like it.

But it would apply to any country that is signatory to the Nonproliferation Treaty. That would include Iran and Indonesia and other countries which are large oil producers.

Dr. TAPE. As indicated by the chairman, the treaty language refers to our making available these benefits to the parties. This is a positive commitment.

Let me inject here, Senator, that I think this is a very positive feature of the Nonproliferation Treaty, because there are many who believe that the ultimate application of this type of technology will be of extreme importance to the economics of the development of many nations around the world.

The point here is that if we preclude them from using and having available such services, it means they have only one other recourse, and that is to try to develop it themselves, and this we do not want. We do not want them developing the nuclear explosive devices on their own behalf, and therefore the appropriate direction to take is one of making available to the world such services by those who have already developed this technology.

Senator AIKEN. I think I understand your position, but under the Nonproliferation Treaty, could Russia conduct explosions in Texas, for instance?

Why not?

Dr. TAPE. In principle, I suppose you could say if this country went to the Russians and asked for certain services, they might consider it. I don't look upon this as a very likely situation.

Senator AIKEN. No, I would not think it would be practicable, but under the treaty, that could be done?

Dr. TAPE. In that particular case, I think I should also add that the Soviet Union would not be obligated to do so under the Nonproliferation Treaty. In this case, we happen to be a nuclear weapon power, and we therefore have the technology and capability, so the obligation would not be there.

Senator AIKEN. I came in at an inopportune time, I think. I was at the telephone when Mr. Anderson asked the question, so inadvertently my resistance gave out.

Representative HOLIFIELD. Senator, we have been protecting you in your attitude.

Senator AIKEN. Very well.

I just want to make sure it is not another case of medical therapy.

EXPERIMENTAL ACTIVITIES CARRIED ON ABROAD

Representative HOLIFIELD. With respect to the saving clause in the last sentence of H.R. 18448, is it your understanding of this bill that experimental Plowshare activities carried on abroad by the AEC are also subject to the bill's requirement for an agreement of cooperation? Dr. TAPE. Mr. Chairman, I again would like to ask legal counsel's advice here. I believe it is not required in that sense. I think we may find this desirable.

Representative HOLIFIELD. You would have to have a contract, or there would have to be an international agreement of some kind, would there not?

Mr. HENNESSEY. It has been our understanding, Mr. Chairman, that we do have authority, under section 31 (b) of our present act, to engage in research and development activities involving nuclear explosive devices, and that authority would extend to conducting experiments outside the United States, which might involve some kind of cooperative arrangement with a foreign country.

Representative HOLIFIELD. Would it not be impossible for you to proceed on any basis to deal with a foreign country in this field without proper clearance through the State Department and this committee?

Here is a Government agency in this country dealing with a foreign nation or foreign entity subject to the laws of a foreign nation.

Certainly the treaty does not prohibit, as far as I can see, resort to the normal methods of relations with foreign nations.

Dr. TAPE. The point I was trying to make was a differentiation between requirement of law, as contrasted with information, discussion, and so on.

The Commission has not studied this particular question, Mr. Chairman; however, my own personal belief is that one might start with one research type experiment in such a situation. If it leads to good results and interest on the part of the country, then we are immediately into the more general situation of extensive applications that we are talking about here today.

I am inclined to believe we ought to have one pattern covering both types of applications. That makes sense.

Representative HOLIFIELD. Let us assume that country X in the Middle East comes to the AEC and wishes to have a Gasbuggy experiment. Would that, or would that not, be a matter of concern to this committee, because we are the ones who authorize the funds for the device, and the research and development for the device. Also, would it, or would it not, be a matter of concern to the State Department?

The exports of most materials go forward under some type of international agreement or treaty or quota arrangement or tariff arrangement. Certainly in this instance, in view of the fact that custody would remain in the hands of the AEC, it would seem to me that this would be a matter that you would want to explore pretty carefully before setting up any procedure.

Dr. TAPE. Yes, and I am not taking issue with the points you are making here, Mr. Chairman. It is just a question of whether or not, as Mr. Hennessey says, we believe that the present situation requires the formal agreement.

My point that I made later was that this gets one into two different procedures for working outside the country. It may be as a practical matter that we should adopt the one requiring an agreement and stay with one procedure for all cases.

Representative HOLIFIELD. I hope that the Commission would study

this.

Dr. TAPE. I would like to study it, because I have not discussed this with my colleagues.

Representative HOLIFIELD. We are looking into the future, at this time. As a member of this committee, I would not want to be authorizing exprimental projects in foreign countries on an open basis, by passing this act.

I would expect that the committee would still retain its interest in the expenditure of funds, and in the program that it has now. Of course, we would recognize the treaty, I think, the same as you would recognize it.

As long as an agency of the U.S. Government has custody and control of these items, it certainly gives us, I think, all the protection we need.