PROPOSED CIVILIAN AGREEMENTS FOR COOPERATION WITH JAPAN, DENMARK, IRELAND, AND THE PHILIPPINES TUESDAY, JUNE 25, 1968 CONGRESS OF THE UNITED STATES, SUBCOMMITTEE ON AGREEMENTS FOR COOPERATION, JOINT COMMITTEE ON ATOMIC ENERGY, The Joint Subcommittee met at 10 a.m., pursuant to call, in room H-403, the Capitol, Senator Albert Gore (chairman of the Joint Subcommittee) presiding. Present: Senator Gore and Representatives Price and Hosmer. Also present: John T. Conway, executive director; Edward J. Bauser, deputy director; George F. Murphy, Jr., assistant director; and William T. England, staff counsel. Senator GORE. The subcommittee will come to order. The purpose of this morning's meeting of the Subcommittee on Agreements for Cooperation is to consider four proposed civilian agreements for cooperation recently submitted to the Joint Committee by the Atomic Energy Commission in accordance with the requirements of law. The proposed agreements are with the Governments of Japan, Denmark, Ireland, and the Philippines. (See app. 1, pp. 104, 116, 124, and 132.) Due to the significance of and committee questions about the proposed Japanese agreement, Senator Pastore wrote to the Commission on June 6, 1968, recommending that any action to implement or to bring this agreement into effect be held in abeyance until the committee had had an opportunity to consider the matter. This is one of the primary reasons for today's meeting. (The correspondence referred to follows:) Hon. GLENN T. SEABORG, CONGRESS OF THE UNITED STATES, Chairman, U.S. Atomic Energy Commission, DEAR DR. SEABORG: As you know, unanticipated developments made it im possible for the Subcommittee on Agreements for Cooperation to hold its scheduled public hearing on June 4, 1968 for the purpose of reviewing the proposed superseding agreement for cooperation with Japan. There are several significant features about this proposed agreement, not the least of them being the apparent lack of effective ceilings on the amounts of enriched uranium and plutonium which the AEC may transfer to Japan, which I believe require detailed discussion and consideration. It has long been established policy for the Commission to submit agreements for cooperation to the Committee with specified ceilings on the amount of special nuclear materials which the AEC may transfer to a foreign country. Further, I am disturbed that the Joint Committee was not informed prior to execution of the proposed agreement that the Commission and the Depart 21-713 0-69 -3 ment of State planned to agree to the inclusion in the agreement of some of the rather unusual, if not to say extraordinary, provisions that are reflected therein. Particularly distressing in this regard is the fact that a letter dated March 1, 1968 from the AEC's Assistant General Manager for International Activities, prepared in response to a request by Mr. Conway and purporting to "compare... the features in the proposed new superseding Agreement for Cooperation with Japan with those of other Agreements for Cooperation," neglected to mention, among other things, the following significant items: 1. The above-mentioned apparent departure from the policy of including fixed ceilings on the amount of enriched uranium which may be transferred under the agreement; 2. The above-mentioned apparent departure from the policy of including fixed ceilings on the amount of plutonium which may be transferred under the agreement; and 3. The provision requiring the AEC to supply all of Japan's require ments for enriched uranium for use in that country's merchant marine program. Senator Kennedy's unfortunate and untimely death has, of course, ruled out any question of a Committee hearing on the proposed Japanese agreement this week; out of respect to his memory the Congress will conduct no legislative business during this period of mourning. Moreover, the press of legislative activities makes it impossible to schedule such a hearing next week. Therefore, in view of the fact that the Committee will be unable to convene for a hearing on this matter prior to the scheduled expiration of the statutory 30-day waiting period, I strongly recommend that notification of the Japanese Government under Article XIV (B) of the agreement or any other action to implement or to bring this proposed agreement into effect be held in abeyance until after the Committee has had an opportunity to meet and consider this important matter. I appreciate your cooperation. Sincerely yours, Hon. JOHN O. PASTORE, JOHN O. PASTORE, Chairman. U.S. ATOMIC ENERGY COMMISSION, Chairman, Joint Committee on Atomic Energy, DEAR SENATOR PASTORE: This is in response to your letter of June 6 regarding the proposed superseding Agreement for Cooperation with Japan. This Agreement is, of course, a significant one and, in view of the cancellation of the hearing which had been scheduled, we would be pleased to have a further opportunity to respond to any questions there may be with respect to it. In the meanwhile, it may be helpful if I take this occasion to respond to the specific points which were noted in your letter. It has been the Commission's policy and practice to specify in agreements such as that with Japan a ceiling amount on the quantity of special nuclear material which may be transferred. In the Japanese Agreement, we regard the 161,000 kilograms of U-235 and 365 kilograms of plutonium to be ceiling amounts. The phrase "or such quantity as may be agreed between the Parties in accordance with their statutory and constitutional procedures," which has been added, was not intended by the USAEC to negate the ceiling concept. This position was stated in Mr. Kratzer's letter of October 19, 1967, to Mr. Conway, in which Mr. Kratzer set forth a number of issues which developed during the negotiations and which were subsequently discussed with the Staff on October 20, 1967. The language "statutory and constitutional procedures" was deliberately used since it is the language employed in the final clauses of all our cooperation agreements to reflect the procedures of submission of agreements to Congress under Section 123 of the Atomic Energy Act and it was made clear to the Japanese. who pressed for the addition, that any revision of the ceiling would, on our part, require an amendment of the Agreement and the following of the proce dures of Section 123. I wish to assure you, therefore, that these figures are regarded by us as ceiling quantities, for the revision of which an amendment to the Agreement would be required. Because there would not be any departure from our usual procedures with respect to the revision of ceiling quantities, the matter was not singled out for mention in Mr. Kratzer's letter of March 1. Similarly, the matter of supplying U-235 for fuel in Japan's merchant marine propulsion program was not regarded as a departure from current practice. It is the policy of the United States Government to cooperate with friendly foreign governments in maritime nuclear propulsion plant projects, provided that United States naval propulsion information is not disclosed. Both the 1965 Civil Power Agreement with the United Kingdom and the 1962 amendment to the Additional Agreement with Euratom provide for the supply of U-235 for merchant marine propulsion. Any material provided under the Japanese Agreement for merchant marine reactors would be subject to the ceiling discussed above. The Agreement would be brought into force by the exchange of notes mentioned in Article XIV. We shall be pleased, as you recommend, to provide the Committee the opportunity to meet and consider the matter before the Agreement is brought into force. Cordially, GLENN T. SEABORG, Chairman. Our witnesses this morning will be Commissioner Tape of the Atomic Energy Commission and Mr. Pollack of the Department of State. Commissioner Tape, will you please proceed with your prepared statement? STATEMENT OF DR. GERALD F. TAPE, COMMISSIONER, ACCOMPANIED BY MYRON B. KRATZER, ASSISTANT GENERAL MANAGER FOR INTERNATIONAL ACTIVITIES, ATOMIC ENERGY COMMISSION Dr. TAPE. Thank you, Mr. Chairman and members of the committee. I am pleased to be here today to testify concerning the superseding Agreements for Cooperation with Japan and the Philippines and the amendments to our Agreements for Cooperation with Denmark and Ireland. JAPANESE AGREEMENT With your permission I should like to discuss first the Japanese agreement (see app. 1, p. 104) and then turn to the Philippine agreement and Danish and Irish amendments. The current agreement with the Government of Japan has been in effect for almost 10 years and is scheduled to expire on December 4 of this year. Japan has now entered a period of greatly expanded activity in the nuclear power field, and in anticipation of the expiration of the current agreement, the Government of Japan requested that the new cooperative agreement specifically accommodate its long-term nuclear power plans. Negotiations were accordingly undertaken on the basis of a powertype agreement such as have been concluded over the past several years with Switzerland, Sweden, and Norway, and resulted in the agreement which is now before the committee. JAPANESE ELECTRIC POWER PROGRAM Japan's long-range program for nuclear power production calls for the installation of about 6,000 megawatts by the end of 1975. During the same period installation of about 9,000 megawatts of hydro and 32,000 megawatts of fossil power is anticipated. By 1985, the installed nuclear generating capacity is expected to be 30,000 to 40,000 megawatts. QUANTITY OF U-235 TO BE PROVIDED The agreement which we are discussing today will provide for the enriched uranium which will be required to fuel the reactors to be placed under construction in the Japanese program during the next 5 years. These reactors are set forth in the appendix to the agreement. (See app. 1, p. 115.) As you see there are 13 projects with a total power rating of 6,662 megawatts. Over the life of the agreement, which, as in the case of previous such power agreements, has been set at 30 years, the quantity of U235 required to fuel these 13 reactors has been calculated at 154,217 kilograms. The total of 161,000 kilograms of U235 for these projects and research purposes is the largest quantity provided for in any of our bilateral agreements with individual countries, and is exceeded only by the 215,000 kilograms authorized for the Euratom countries. This illustrates the vigor of the Japanese nuclear power program and provides a means by which the ties between our two countries can be strengthened. While these ties extend beyond commercial interest, it is worth noting that the economy of the United States will benefit from the agreement before us through an export return which could reach $620 million or more. This amount would result from the enrichment services for the material to be provided, and additional benefits can be expected from equipment sales and related activities. MARINE PROPULSION To turn back to the agreement itself, Mr. Chairman, I have already indicated that it would be for a term of 30 years and would provide 154,217 kilograms of 235 for fueling Japan's power program. In addition to electric power projects, it is contemplated that the program will include marine propulsion; and this purpose is specifically mentioned in paragraph A of article VII. The supply of material for this purpose is in accord with U.S. policy to cooperate with friendly governments in civil maritime nuclear propulsion projects. This policy has been reflected in previous cooperation agreements-namely, the Additional Agreement With Euratom, and the Civil Power Agreement With the United Kingdom, both of which provide for the supply of U235 for merchant marine propulsion. QUANTITY OF PLUTONIUM TO BE PROVIDED In addition to providing U235 for fueling and research purposes, the agreement would also permit the transfer of 365 kilograms of plutonium for such purposes. Japan, as others are, is doing work on fast reactors and has requirements to fuel a fast reactor critical assembly. The quantity included in the agreement is intended to meet Japan's short-term needs for this and other research purposes. ADDITIONAL PURPOSE FOR TRANSFER OF SPECIAL NUCLEAR MATERIAL An additional purpose for which special nuclear material could be transferred under article VII of the agreement is for the performance in Japan of conversion and fabrication services. Following the performance of such services, the material could be transferred to another nation or international organization, or returned to the United States. Such provisions have previously been included in our agreements, the so-called third-country fabrication provision being in current agreements with Austria, Canada, Sweden, Norway, the United Kingdom, and Euratom; and the provision for return to the United States in the agreement with Canada. The ceiling quantities of material which could be transferred for the various purposes encompassed by the agreement are 161,000 kilograms of U235, and 365 kilograms of plutonium. These quantities are specified in article IX of the agreement, and I wish to assure the comittee that these quantities will not be changed on the part of the United States, except through an amendment of the agreement under procedures of section 123 of the Atomic Energy Act. The phrase which is contained in article IX, and which reads "or such quantity as may be agreed between the Parties in accordance with their statutory and constitutional procedures," is intended to explicitly require, insofar as the United States is concerned, that any change in the quantities be accomplished through an amendment in accordance with procedures of section 123. TOLL ENRICHMENT As in our other recent power agreements, we have reflected in article VII of the superseding agreement the current policy of the Commission that toll-enrichment be the basic method of providing substantial quantities of enriched uranium for fueling purposes. Except for limited situations, the Commission will thereby be relieved of the responsibility of commercially acquiring the uranium needed for feed material, as is the case when enriched uranium is provided by sale. Following the practice adopted in the recent Australian amendment (see app. 1, p. 80) and Norwegian agreement (see app. 1, p. 88), we have agreed, in connection with toll-enrichment for power reactors, that the Commission will be prepared to furnish the natural uranium required for any particular delivery of enriched uranium upon timely advice that the required natural uranium is not reasonably available to the other party. SALE OR PROVISION OF NATURAL URANIUM The provision of the natural uranium would be in accordance with Commission policy which states that the natural uranium would be furnished by AEC at a charge equal to the sum of the AEC's cost of acquiring such material or the U.S. market price for such material as determined by the AEC, whichever is greater, plus a reasonable charge for the services of procuring and delivering it. In addition to these aspects of supply, the possibility of the Commission's providing enriched uranium by sale, in response to a specific request, has been retained, but such sale would be at the election of the Commission. |