Foreign Relations of the United States, 1958–1960, Volume III, National Security Policy; Arms Control and Disarmament, Microfiche Supplement

337. Memorandum From Lay to the NSC¹

Washington, June 19, 1958

SUBJECT

• Peaceful Uses of Atomic Energy

REFERENCE

• NSC 5725/1

The enclosed Semiannual Report by the Atomic Energy Commission and the Department of State on the Implementation of NSC 5725/1, for the period December 1957–June 1958, is transmitted herewith for the information of the National Security Council.

The Atomic Energy Commission advises that the enclosure is classified SECRET only because of paragraphs 54 and 55, which were furnished by another agency and were so classified. The remainder of the Report is unclassified.

Discussion of the enclosed Report will be scheduled on the agenda of an early Council meeting.

James S. Lay, Jr.
Executive Secretary

cc: The Secretary of the Treasury

The Director, Bureau of the Budget

The Chairman, Atomic Energy Commission

The Chairman, Joint Chiefs of Staff

The Director of Central Intelligence

Enclosure

Semi-Annual Progress Report

SEMIANNUAL PROGRESS REPORT BY THE ATOMIC ENERGY COMMISSION AND THE DEPARTMENT OF STATE ON THE IMPLEMENTATION OF NSC 5725/1—PEACEFUL USES OF ATOMIC ENERGY

1. This report summarizes significant events during the period December 1957–June 1958 under NSC 5725/1, “Peaceful Uses of Atomic Energy,” dated December 13, 1957. Because many of the items relate to several sections of the policy paper, the information is not keyed to specific paragraphs.

SUMMARY EVALUATION

2. U.S. leadership in peaceful uses of nuclear energy was affirmed during the reporting period when the European Atomic Energy Community (EURATOM) requested U.S. cooperation in considering whether a joint nuclear program might be developed to install within the Community by 1963 sufficient U.S.-type enriched fueled reactors of proven design to supply 1,000,000 kilowatts of electric power. The EURATOM program ranks with the establishment of the International Atomic Energy Agency (IAEA) as one of the most important projects to be undertaken within the framework of the President’s Atoms-for-Peace program. It is presently in the final stages of negotiation.

3. Other significant developments include new offers of assistance to the International Atomic Energy Agency; steady advances in controlled thermonuclear research paralleling those in the United Kingdom; development of an equipment grant program similar to the research reactor grant program; continuing assistance to other nations in the development of national programs; negotiation of a comprehensive power Agreement for Cooperation with Japan, and the increasing scope of U.S. preparations for participation in the Second United Nations Conference on Peaceful Uses of Atomic Energy.

4. Meanwhile, Great Britain has revealed a “stretch-out” in the phasing of its massive nuclear power program, the target date for completion being moved from 1965 to 1966. There are indications of further slippage in the Soviet program. A 40-stage gaseous diffusion isotope separation pilot plant is reported to have begun operation in France in December 1957. Interest in nuclear propulsion for commercial vessels has increased, particularly in Japan, West Germany, Norway, Sweden, and France. U.S. firms maintained their dominant position in the foreign market for research reactors, but neither the U.S. nor any other country announced any new expert sales of nuclear power reactors during the reporting period. U.S. firms, however, are bidding on several projects abroad.

5. The initial five year U.S. power reactor development program has undergone a number of modifications during the past four years. New experimental power reactors have been added to the program; research and development on materials, processes and advanced concepts have been expanded; and cooperative industrial efforts have materialized as an important part of the program. Considerable experience in the design and construction of power reactors has been gained during these fours years of concentrated effort and we are beginning to accumulate necessary operating experience. In short, the AEC and United States industry as a whole have gained a considerable degree of sophistication in power reactor technology. This record of accomplishment has kept the United States in a position of world leadership in this field.

6. As the initially defined period of the United States power reactor development program draws to an end, Commission re-evaluation of its objectives and plans, made with particular awareness of the increasing importance abroad of nuclear power, resulted in its determination that the following objectives are desirable and feasible:

a. Achievement of competitive nuclear power in the United States during the next ten years.

b. Achievement of competitive nuclear power in friendly foreign nations during the next five years through a comprehensive program of assistance, clearly defined and vigorously pursued.

c. Fortification of the position of leadership of the United States in the eyes of the world and the peaceful applications of atomic energy, particularly with regard to power.

7. EURATOM. The incentives to be offered the Euratom Community under the joint program being developed with the United States (see pars. 35–39) will require consideration as to their adaptability to other areas of the world. On the part of Euratom it will be necessary to obtain full support from the operating utilities within the six member countries, and Euratom also plans to establish a mutually beneficial relationship with the International Agency and with the O.E.E.C. Negotiations will be undertaken upon the request of Euratom to integrate existing U.S. bilateral agreements with member States into a comprehensive agreement with the Community.

8. In the course of negotiations with Euratom a special arrangement was developed for safeguarding materials supplied to Euratom by the U.S. under the proposed joint program. Under this arrangement the U.S. will receive all of the guarantees and assurances required by the Atomic Energy Act that none of these materials shall be used for other than peaceful purposes. In addition, the principles which will be used in establishing and implementing the Euratom safeguard system must be mutually acceptable, the U.S. will assist Euratom in establishing their system, there will be frequent and continuing consultation to assure that the system is operating effectively under the agreed upon principles, and the U.S. has the right to terminate the cooperative program if the system is not operated in accordance with these principles. These principles also will be compatible with the safeguard provisions of the International Atomic Energy Agency.

9. It is anticipated that this special safeguards arrangement, made with the multi-national organization Euratom, may draw criticism from other nations which have different safeguards provisions in their agreements for cooperation with the United States. Also, Mr. Sterling Cole, Director General of the IAEA, expressed the opinion that the IAEA should have the responsibility for safeguarding the material supplied to Euratom by the U.S. It is the judgment of the Department of State and the Atomic Energy Commission that the special arrangement with Euratom is entirely adequate and will provide the U.S. with assurance that none of the material will be used for any military purpose. The close ties of these countries to the U.S. through NATO and the traditional support of the U.S. for institutions, such as Euratom, which foster European unity justify this special arrangement. Further, it is recognized that inspection of the program by the IAEA is politically infeasible at this time.

10. As a result of the discussions with Mr. Cole, the U.S. has proposed, and Euratom has agreed, that (a) the IAEA shall have the right of first option to purchase any special nuclear material, produced in reactors fueled with materials obtained from the U.S., which is in excess of the need of Euratom for such material for peaceful uses; (b) Euratom is prepared to consult with an exchange experiences with the IAEA with the objective of establishing a safeguards system reasonably compatible with that of the IAEA. In addition, there has been an exchange of letters between the United States and Euratom concerning the language contained in the Memorandum of Understanding on Safeguards and Controls recognizing that such language provides for verification, by mutually approved scientific methods, of the effectiveness of the safeguards and controls system applied to nuclear materials from the other Party and fissionable materials derived therefrom. Further, Euratom has advised the United States that in the event of the establishment of an international safeguards and controls system by the International Atomic Energy Agency, the United States and Euratom will consult regarding assumption by that Agency of the safeguards and control of fissionable material utilized and produced in implementation of the program contemplated by the Memorandum of Understanding.

11. Safeguards. Favorable results of the feasibility study of tamper-proof instruments to reduce manpower requirements are expected in June, but the numbers, recruitment, and training of sufficient personnel for a world-wide inspection system remains a formidable problem. No difficulties have been encountered by Commission teams that have inspected the start-up and initial operation of the six U.S.-built reactors now in use abroad, although the over-all question of inspection remains potentially a serious political problem.

12. If the Agency is unable to acquire special nuclear materials on financial terms and conditions more favorable than are available to Members through other sources, principally the United States, the IAEA will have difficulty in competing with bilateral programs. By law, the U.S. can make special nuclear material available to the Agency only on terms comparable to those offered domestic users in the U.S.

13. Although the IAEA is progressing with the tedious tasks of organization, firm U.S. leadership will be required to assure that the Agency moves into its programmatic phase as soon as possible.

14. Bilateral Agreements. The United States’ bilateral program, inaugurated in 1954, is about complete; and it is not anticipated that many more important bilateral agreements will be negotiated. The emergence of regional groups and the International Agency will require a reassessment and possible modification of the bilateral program in order to be assured that the institutional approach most beneficial to the interests of the United States is given priority. Such a re-assessment will have to take into account the bilateral programs of other nations, such as the U.K. and Canada.

SUMMARY OF ACTIVITIES

15. United States Domestic Program. The power reactor development program of the United States has moved ahead on a broad front both from the standpoint of technology developments and industrial participation. Progress has been made in the whole range of effort, from laboratory research on new materials and processes to construction and operation of large-scale commercial nuclear power plants. Particularly important is the continued promise of the boiling water and pressurized water family of power reactors. A new and promising type of power reactor is being developed which uses organic fluids for cooling the fuel elements, avoiding corrosion of fuel elements and the problems of induced radioactivity in the coolant.

16. As of this time there are seven power reactor experiments and one completed prototype power reactor in operational status in the United States. The prototype plant, the Shippingport Atomic Power Station, at its designed rating of 60,000 electrical kilowatts net, is producing more electricity than any other individual reactor in the world.

17. Experimental operation of these plants has, in the main, been very gratifying. Three of the boiling water reactors, EBWR, BORAX–IV, and VBWR (a private project) have performed far above their designed ratings, indicating a potential for capital cost reductions. In addition, successful operation of several of these plants has relieved much of the serious concern once felt about certain operating characteristics. Operation of the Organic Moderated Roaster Experiment, for example, thus far, shows no evidence of fouling of heat transfer surfaces and gives added confidence that the cost of makeup for the organic material can be acceptably low.

18. The civilian power effort has clearly advanced to much firmer ground as a result of this encouraging operating experience and the direction of development required to achieve economic nuclear power can now be charted with more certainty.

19. It has become clear that the achievement of economically competitive nuclear power in the United States will require a continued aggressive program including design, construction, and operation of successive generations of nuclear power plants of the same basic type. Several generations of plants must be built in order to gain the experience which will lead to cost reductions through engineering improvements. The fact that these plants are expected to be economically competitive in other countries (with higher power costs) before this goal is achieved in the United States provides an economic incentive for a certain amount of integration of our domestic development program with our foreign assistance program in the nuclear power field. The building of some “middle generation” plants in other countries can provide progress towards the goal of economic nuclear power in the United States for the lowest government cost. The principal activity in U.S. efforts to facilitate the building of reactors based on U.S. technology in other countries has been the negotiation of an arrangement with Euratom to provide assistance in the building of one million electrical kilowatts of nuclear power to be in operation by 1963 in those countries.

20. It is recognized that power reactor technology which is most advantageous for the United States may have certain limitations or disadvantages when applied to the design of nuclear power plants for other countries. The principal example of this problem is the possible reluctance of other countries to become heavily committed to power reactors which require partially enriched uranium if this fuel is available only from the U.S. This factor is considered in the planning of the U.S. power reactor development program. However, all U.S. studies have continued to show that real advantages of flexibility of design, compactness, higher performance, and resulting lower power costs can be obtained from the use of partially enriched fuel rather than natural uranium. Meanwhile, these advantages are becoming better recognized by the program planners in other countries. Moreover, the successes experienced by the U.S. in the execution of its experimental reactor program have added confidence to the U.S. approach. Reactor designs requiring partially enriched fuel also are receiving more favorable consideration as a result of U.S. policies on the supply and prices for enriched fuels.

21. It is expected that all of the power reactors being developed by the United States will be suitable for export in varying degrees. The projects include development of fuel cycles based on both source materials (uranium and thorium) and all fissionable materials considered applicable as fuel (U–235, U–223, and plutonium). The “exportability” of most of the designs being developed by the United States will be further improved by development and demonstration of technology for recycling plutonium. Thus, many systems which require partial enrichment of the core might be operated on an initial charge of partially enriched fuel, plus a natural uranium feed stream which is enriched with recycled plutonium. The development of plutonium fuel technology has expanded. Construction of laboratories for further expansion in plutonium fuel development has been initiated. Construction of a Plutonium Recycle Test Reactor also has started at the Commission’s Hanford facilities.

22. The power reactor program has continued to explore power reactor designs which could operate on natural uranium. Pursuant to Public Law 85–162, extensive design work was performed on natural uranium gas-cooled, graphite moderated reactors. In addition to use of natural uranium cores, consideration was also given to designs using partially enriched cores. It was concluded that with present technology, there is a significant economic advantage to the use of partially enriched uranium fuel in this type reactor.

23. Development work on heavy water moderated power reactors which would be operable on natural uranium proceeded in accordance with previous plans, but no acceptable proposal was received from industry for carrying out design and construction of a demonstration plant. Design work conducted to date has been inconclusive with respect to the economic promise of this system with natural uranium fuel, although indications are that it would have minimum penalty in ultimate performance and costs compared with partially enriched systems. Additional work, including construction of a Heavy Water Components Test Reactor, is planned. Work on several of the cooperative projects under the Power Demonstration Reactor Program also is pertinent to the evaluation of heavy water moderated reactors which might be operable on natural uranium fuel.

24. The Commission has reiterated its policy of taking the initiative to assure that desirable and necessary power reactor prototypes are built as justified and permitted by the status of pertinent technology, if such projects are not undertaken by industry on its own or through cooperative projects with the Commission. To this end, funds have been requested for construction of an experimental prototype gas-cooled, graphite moderated reactor using slightly enriched uranium and for further design effort on a heavy water moderated reactor of sufficient size and proper design to be operable on natural uranium fuel. It continues to be the policy of the Commission to give industry every opportunity to participate and bear or share the cost of these projects.

25. Contracts have been negotiated for construction of the Sodium Graphite Reactor at Hallam, Nebraska, one contract being with Atomic International for construction of the reactor and one with Consumers Public Power District for other parts of the plant and for operation of the total plant.

26. Design and construction of this plant depend upon data derived from experimental operation of the Sodium Reactor Experiment at Santa Susana, California. Initial difficulties with the SRE having been largely overcome, it now appears that design work on the Consumers plant may proceed. Accordingly, in February, an architect-engineer (Bechtel Corp.) was selected to perform preliminary design.

27. In addition to its positive steps to assure timely completion of plants for which it has assumed primary financial and technical responsibility, such as the PWR and the Hallam Plant, the Commission takes a positive interest in expediting construction of plants being built as cooperative projects or as entirely privately financed plants. In these cases, Commission action must take the form of expediting research and development supporting or pertinent to individual projects, assuring adequate liaison and flow of information, and prompt handling of matters related to the Commission’s regulatory and licensing responsibilities.

28. Prior to the advent of nuclear fission, naturally occurring radioisotopes were scientific curiosities whose scarcity and expense limited their usefulness to such things as radium therapy and luminescent watch dials. Today, with the potential availability of tremendous amounts of radioisotopes of all the elements, these materials are rapidly taking their place as one of the more important tools of industry, medicine and agriculture.

29. The strides which have already been made in the utilization of radioisotopes are evidenced by the fact that it is conservatively estimated that industrial uses alone are resulting in annual savings in this country of greater than five hundred million dollars. When this is considered in conjunction with the immeasurable benefits that even now accrue to millions of people through the diagnostic and therapeutic use of radioisotopes to alleviate human suffering, it is evident that in this modern genei we indeed have one of the most, if not the most, important peacetime benefits of atomic energy.

30. In spite of these accomplishments, we are far from satisfied. The industrial savings mentioned above can be attributed almost exclusively to use of radioisotopes in thickness gauging, flow and level control, and industrial radiography. There are in fact hundreds of other ways in which radioisotopes can bring about benefits and savings equal to or greater than those already realized. Even in such areas as thickness gauging and process control, in which radioisotopes have already proven their worth manyfold, the surface has only been scratched. All major industrial effort involving carbon and hydrogen containing materials—and these cover organic chemicals, petroleum products, plastics, rubber, etc.—can expect to use radioactive carbon and hydrogen safely and efficiently in process control techniques that will result in untold savings. To a greater or lesser degree, the same may be said of the use of radioisotopes in almost every other industrial effort.

31. The potential of radioisotopes as a source of power in atomic batteries and luminescent sources has hardly been touched. The life, stability, mobility, and dependability of batteries and light sources using radioisotopes makes their utility almost unlimited.

32. Perhaps the most exciting general industrial application of radioisotopes, and certainly the one which seems to have the greatest potential impact on the entire industrial effort, and on the economy of the nation, is the utilization of massive radiation (million to billions of curies) from these radioisotopes to bring about, on an industrial scale, chemical and physical changes which either cannot be accomplished by other means or which can be accomplished by other means only expensively or inefficiently. Such things as the pasteurization or sterilization of feeds to retard decay, the formation of new linkages in plastics or rubber to bring about desirable changes in properties, the modification of the conditions of petroleum cracking to make that process cheaper and more efficient, the sterilization of drugs and medical supplies, the control of biological and botanical pests, and the development of new and improved strains of plant life, to name but a few, should, within the next few years do much toward making man’s life longer, healthier and more enjoyable.

33. In view of the impressive progress which has already been made in the application of radioisotopes and radiation, in recognition of the tremendous potential good which can result from the use of these materials, and with the knowledge that the other major nations of the world—particularly Britain and the U.S.S.R.—are making great strides in this field, the Commission has established an Isotope Development Program to accelerate these applications. This program, which is budgeted in FY 1959 at 6.6 million dollars, through work in Commission laboratories and through contracts for work in academic and industrial laboratories, will attempt to discover new uses and to make it possible for industry and science to exploit the already known uses of radioisotopes. In addition to its own program in this field, the Commission is working closely with the Quartermaster Corp of the Army in the design and construction of a two megacury Co–60 irradiator for use by the Quartermaster Corp in its program of large scale pilot irradiation of food at its Food Irradiation Center at Stocton, California.

34. Project PLOWSHARE, which has been in progress at the University of California Radiation Laboratory since 1957, investigates potential peaceful uses of nuclear explosives. During this year it will pass from the study phase to that of active experimentation. A survey is now underway to verify the feasibility and desirability of the Alaska Harbor Project announced on June 9, 1956. Cancellation or change in location could be forced by insoluble problems of safety, danger to wild life, lack of material, economic benefit, or engineering infeasibility; but to date no problems appear to be insoluble and it seems that the project will be fired in 1960. Other industrial applications of seemingly great promise are under investigation and it seems probable that one or more specific experiments will be made in 1959. Among these applications are: oil recovery from shales or tarsands, mining, production of aquifers for improvement of water supply or flood control, power production, and scientific experimentation in seismology, geology and special chemical reactions. No one of these applications has yet been proven feasible but all appear to justify further experimentation. The production of useful isotopes has also been the subject of theoretical study, laboratory work, and small-scale field experimentation. This work will continue. The AEC is also taking steps to establish cooperative relationships with industry for the prosecution of some of these experiments. These steps will include requests for legislation where necessary. It appears that the first cooperative venture will be an experiment in petroleum recovery.

UNITED STATES FOREIGN PROGRAM, REGIONAL AND INTERNATIONAL ORGANIZATIONS

35. EURATOM. The European Atomic Energy Community (EURATOM) came into being on January 1, 1958, and in February the President approved in principle a joint U.S.-EURATOM program based upon, the following courses of action:

a. Participation by the U.S. on a lean basis in financing the capital costs of nuclear reactors capable of producing approximately 1 million kilowatts of electricity;

b. Supplying the necessary special nuclear material to fuel the reactors;

c. Entering into arrangements with regard to reactor fuel cycles reasonably consistent with those offered in the U.S. domestic program;

d. Extending the present U.S. direct program of fuel cycle development and testing;

e. Establishing a 10-year cooperative program of research and development;

f. Assisting in the establishment of a training program, arranging for the exchange of technical information, and establishing a liaison office at EURATOM headquarters;

g. Continuation by the U.S. of a strong program of research and development on advance reactor types, basic reactor technology, etc., and providing such information to EURATOM for use in meeting long-term objectives.

36. Within this framework, a Joint U.S.-EURATOM Working Party has held discussions in Europe and in Washington, and has developed a detailed program now under consideration within the Executive Branch prior to submission to the Congress. This program may be outlined in the following manner:

a. The proposed program will have as its objectives, (1) the bringing into operation by 1963, within the Community, of large-scale power plants using nuclear reactors of proven types, on which research and development has been carried to an advanced stage in the United States, having a total installed capacity of approximately one million kilowatts of electricity and under conditions which would approach the competitive range of conventional energy costs in Europe; and (2) the initiation of a joint research and development program centered on these reactors;

b. The total capital cost, exclusive of the fuel inventory of the nuclear power plants, is estimated not to exceed $350,000,000. These funds would be provided for by the participating EURATOM utilities and other European sources of capital, such financing to be arranged with the appropriate assistance of EURATOM. Up to $135,000,000 would be provided by the United States Government to EURATOM in the form of a long-term line of credit to cover a portion of the capital costs. These funds would be re-lent by EURATOM for the construction of nuclear power plants covered under the program;

c. In addition, in order to reduce the risks in operating costs to a point where the widespread participation of the European utility industry is assured, the United States, for a ten-year period of operation, would guarantee ceiling costs for the fabrication of the fuel elements required under the program as well as a fixed life for the fuel elements;

d. The proposed joint research and development program, which is for a 10-year period, would be centered on the improvement of the performance of the reactors involved in the program and at a lowering of fuel cycle costs. During the first five (5) years, the financial contribution of the Community and the United States would amount to about $50,000,000 each, with the sum required for the second five (5) year period to be determined at a later date;

e. Technological and economic data produced in the program would be made available freely to the industries within the Community and the United States and the widespread dissemination of the information would be assured;

f. Under the terms of the program, the United States would sell to the Community, a net quantity of 30,000 kilograms of contained U–235 in uranium to cover the fueling and other requirements of the program over a twenty year period. An initial operating inventory of 9000 kilograms would be sold on a deferred payment basis. The balance would be paid for on a current basis. The International Atomic Energy Agency would have the right of first option to buy, at the announced fuel value price in effect with the United States at the time of purchase, any special nuclear materials produced in reactors fueled with materials obtained from the United States which are excess of the Community’s need for such material for peaceful purposes. If IAEA does not exercise this option, the United States would be prepared to purchase such materials on the same terms;

g. The United States and the Community would recognize their mutual interest in assuring that the materials received from the United States, as well as special nuclear material produced therefrom, are used only for peaceful purposes, and an arrangement to accomplish this objective compatible with the provisions of the Statute of the International Atomic Energy Agency would be developed;

h. The United States will process in its own facilities, under the same terms and conditions as are offered to U.S. industry, spent fuel elements from reactors to be included in the program.

37. The Joint Working Party has finished its task, and the EURATOM Commission and Council of Ministers have approved the program. After final approval within the Executive Branch and after Congress has approved an international arrangement between the U.S. and EURATOM, the program will be incorporated in an Agreement for Cooperation under Section 123 of the Atomic Energy Act of 1954. In addition, the following legislative steps will be necessary:

a. Authority to enter into long-term arrangements for the purchase of plutonium and the reprocessing of material;

b. Authorization for the distribution of special nuclear material, for the joint research and development program, and for the fuel cycle.

38. It should also be noted that a Presidential allocation of additional U–235 to cover the requirements of the EURATOM program will be necessary.

39. A total of $140,000,000 in authorization and funding will be required. Maximum cost of the fuel cycle arrangements is estimated at $90,000,000 over a 10-year period with the first expenditures probably coming in 1962. The first 5-years of the joint research and development program is estimated to cost the U.S. approximately $50,000,000 with EURATOM also making available approximately $50,000,000. In 1959, $25,000,000 obligational authority is required—$10,000,000 for fuel cycle funds and $10,000,000 in research and development money with $2,000,000 expenditures in the latter item expected in FY 1959. Other loans and credits in paragraphs 35 and 36 would not require new money authorization.

40. International Atomic Energy Agency (IAEA)—Steady progress was made on recruiting a staff for the Agency. Its 1958 calendar year budget is $4,000,000. The program is expected to expand rapidly in 1959; therefore, the budget will increase. Estimates running as high as $12,000,000 were discussed at the April Board meeting but the budget to be presented to the IAEA Conference in September is expected to be somewhere between $6,000,000 and $9,000,000.

41. The agenda for the second IAEA General Conference scheduled for late September 1958 is now being prepared. Meanwhile, the first program project of the Agency, a survey of nuclear developments and opportunities in Latin America, began in May. The international team selected by the IAEA is headed by Dr. Norman Hilberry, Director, Argonne National Laboratory, and includes representation from the Organization of American States.

42. The Agency has signed an agreement with the United Nations establishing its autonomous relationship with that organization and is negotiating similar agreements with the specialized agencies of the U.N. A draft Agreement for Cooperation with the United States is under negotiation.

43. With the formal offer by member States of special nuclear, source, and other materials, the Agency now has significant materials resources. These include the 5,000 kg contained U-235 offered by the U.S. and the U.S.-matching offers for the 50 kg and 20 kg pre-offered respectively by the Soviet Union and the United Kingdom. Canada, India, Ceylon, South Africa, Norway, and Portugal have made various offers of material to the IAEA.

44. New U.S. offers of assistance were made to the Agency during the reporting period: (a) cost-free services for limited periods of 20–30 expert consultants; (b) matching contributions, up to $125,000, to a fellowship fund for training abroad; (c) the allocation of 120 fellowships for training in the U.S. at an estimated cost of $840,000, and (d) two mobile radioisotope laboratories. Additionally, the AEC has requested $2,000,000 in FY 1959 funds to implement previous offers of a research reactor and radioisotope facilities.

45. European Nuclear Energy Commission (OEEC). The European Nuclear Energy Agency (ENEA), operating under the OEEC Nuclear Steering Committee, came into being February 1, 1958. At ENEA’s request, the United States will provide technical and consultative assistance for the $12 million pilot chemical processing plant to be built at Mol, Belgium. This is a joint project of 12 OEEC Members under a convention establishing the European Company for the Chemical Processing of Irradiated Fuels (EUROCHEMIC).

46. As a country associated with the work of the OEEC, the United States is following with interest other OEEC programs, such as the security convention now in the process of ratification; the drafting of third party liability legislation, and feasibility studies regarding the use of Iceland’s natural steam fields in connection with a heavy water production plant.

47. Organization of American States (OAS). Drafting a statute for the Inter-American Nuclear Energy Commission continues. The first IANEC meeting is planned for early 1959. We believe it would be desirable that a second Inter-American Symposium on the Peaceful Uses of Nuclear Energy be held in late 1959 or 1960 in a South American country under the aegis of the new Commission. The Department of State and the U.S. Atomic Energy Commission have agreed that full participation by the United States should be extended if such a Symposium is held.

48. Puerto Rico Training Center. The Puerto Rico Nuclear Center, which is operated by the University of Puerto Rico for the AEC, is intended to serve as a regional nuclear training center for Latin America. Initial operation of the center, in facilities made available by the University, and using some $300,000 worth of nuclear equipment provided by the AEC, has proceeded successfully. Some 50 students, mostly from Puerto Rico, have now been trained in radioisotopes techniques, and the first course in nuclear engineering is in progress.

49. The principal facilities of the Nuclear Center will consist of a research reactor and associated laboratories, to be located at the Mayaguez Campus. The design of these facilities is in progress and contracts for their construction are expected to be awarded by the end of FY 1958, with completion scheduled in FY 1960. The cost of these facilities is estimated at $3 million. An additional $500,000 has been requested in the FY 1959 budget for a medical radioisotopes laboratory to be located at the San Juan Campus.

50. Upon completion, the Puerto Rico Nuclear Center will be able to accommodate upwards of 100 students annually in various phases of nuclear training, plus a number of research associates. Annual operating costs of the Center at that time will be in the vicinity of $1 million. To serve its regional purpose, the Center must attract qualified students from Latin America. Although the students trained to date have been largely from Puerto Rico, there is encouraging evidence of interest in the Center throughout Latin America, and applications from the Latin American Republics are being received in increasing numbers. This interest was demonstrated by the attitudes and statements of scientists from a number of the Republics who participated in the Symposium on Health Physics in Biology and Medicine held at San Juan May 26–28 under the joint sponsorship of the University of Puerto Rico School of Medicine and the Commission. Their favorable comments about the Center are considered particularly meaningful in the light of certain other recent political events in South America.

51. Asian Nuclear Center. A tentative plan has been prepared for a more modest Asian Nuclear Center involving $6 million in capital costs and $4 million in operating expenses for the first three years. This plan is based on the assumption that the Philippine Government will cooperate with the United States in establishing the Center and donate land adjacent to the University of the Philippines in Quezon City for the Center.

52. Plans call for coordination of the proposed Center with the national Philippine nuclear energy program to avoid duplication or overlapping of facilities. Instruction and training would be related to the limited technological resources prevailing in most of the Asian nations which it is anticipated would use the Center, and primary emphasis would be placed on medical agricultural applications of nuclear energy.

MAJOR COUNTRY PROGRAMS

53. USSR. Recent reports indicate the USSR nuclear power program is slipping further below the goal announced in February 1956 of installing 2,000 to 2,500 electrical megawatts of nuclear power during the 6th five-year plan ending in 1960. The May 1957 Soviet report to the United Nations outlines a program totaling only 1,400 EMW involving three large and four small experimental nuclear power stations and no target dates were given.

54. Several recent Russian articles mention only one large station under construction in 1957 and, as late as April 1958, U.S. visitors were still being denied visits to the “large Soviet nuclear power stations” on one pretext or another. There is some evidence to show that the Soviets may have only about 700 EMW installed by the end of 1960, this being based on the completion of two pressurized water reactors of 100 EMW each, one 200 EMW graphite moderated water-cooled reactor, and four experimental stations.

55. However, it also is possible that the USSR is building dual-purpose reactors optimized for plutonium production that are not included in its “peaceful purposes” program. The USSR has never identified its atomic energy production sites. Therefore, one should not discount the possibility of the USSR achieving something closer to its announced 1956 goals via the dual-purpose reactors than is indicated in the estimated 700 EMW based on what the Soviet chooses to show Western visitors at this time.

56. United Kingdom. A British White Paper issued in April moved the completion date for the U.K. 5–6,000 megawatt nuclear power program from 1965 to 1966. It also indicated that a substantial proportion of new generating capacity required in the U.K. between now and 1966 would come from coal-fired stations.

57. Significant bilateral activity between the U.S. and U.K. continued. U.S. consultants made available under the U.S.–U.K. agreement for cooperation were responsible for many of the recommendations relating to health and safety standards and procedures contained in the official Fleck Committee Report on the Windscale Accident. U.S.–U.K. study of the properties of graphite under in-pile conditions has been proposed and is under consideration.

58. The technical exchange of information on gas-cooled and fast-breeder reactors has raised the problem of reconciling the different policies relating to the disseminating of information which prevail in the two countries. Under U.K. policy, information developed with public funds is sold; under U.S. policy such information is disseminated without cost to the recipient.

59. The UKAEA has concluded bilateral agreements with several European Countries and is presently negotiating an agreement with Japan. Close U.K. cooperation with Canada and Australia has continued. Three British firms submitted bids on the S.E.N.N. project to be financed by the World Bank in Italy (six U.S. firms also submitted bids). It is expected that the construction of a full-scale nuclear power plant for AGIP-Nucleare, a publicly owned utility in Italy, by a British Consortium, will proceed on schedule, although no firm contract has yet been signed.

60. France. The French program has expanded greatly. France has appropriated 235 billion francs for its second five-year program as compared with a total of 148 billion francs spent by the Commissariat a l‘Energie Atomique since its establishment in 1945. The new five-year plan includes: (a) expansion and enlargement of present research facilities and setting up of more research centers; (b) construction of new research reactors and of several prototype reactors for nuclear power and marine propulsion; (c) increased production of natural uranium, plutonium and thorium (the French plutonium separation plant begun in 1955 was reported completed in May 1958); (d) an isotope separation facility either alone or in cooperation with other European countries. A French gaseous diffusion pilot plant went into operation at Saclay the last week in December 1957.

61. Japan. Negotiations were completed with Japan on a comprehensive bilateral Agreement for Cooperation which provides for a total net amount of 2,700 kgs. of contained U–235 for use in several research reactors, three experimental power reactors and a full-scale power reactor. The Agreement, which will run for a period of ten years, will supersede and incorporate a research bilateral Agreement for Cooperation which has been in effect with Japan since December 27, 1955. Japan’s first research reactor, built by an American firm, commenced operating in August 1957; a second research reactor is presently under construction under contract with an American firm.

62. The Japanese have stated that the first stationary power reactor to be purchased from the U.S. will be an experimental water-cooled, enriched-uranium-type of 15–20 electrical mw to be completed in 1961. Interest in nuclear marine propulsion has increased rapidly, stemming principally from Japan’s position as a leading maritime nation and shipbuilder. There are tentative plans to complete two 40,000-ton tankers (20,000 HP) in 1965 and 1966, but these and other reactor projects were not sufficiently firm to be accepted by the U.S. as part of the 7,000 kgs of U–235 originally requested by the Government of Japan for inclusion in the proposed comprehensive bilateral.

63. Negotiations between the U.K. and Japan are still under way on a bilateral agreement. The Japanese have stated that they intend to purchase a 150 mw Calder Hall-type power reactor from the U.K.

64. Argentina. Based on their success in building an Argonaut-type reactor in their own country and fabricating the fuel elements for it, the Argentines have indicated an interest in building this type of reactor for export at a price under $100,000.

65. New Fuel Policies. In March, the Commission authorized the transfer of U–235 enriched up to 90 per cent for both research and materials testing reactors providing individual core loadings do not exceed 8 kg of U–235 and that comprehensive safeguards contained in power bilaterals were in effect or agreed to by the cooperating nations. This action will make more flexible the cooperation with nations desiring to improve their nuclear training and development programs by making their reactors more efficient and economical. U.S. manufacturers experienced considerable difficulty in fabricating sound 20 per cent elements.

66. In May, the Commission granted domestic producers of uranium ores and concentrates the right to make private sales of these materials in the United States and abroad, all sales being subject to Commission licensing. This action enables U.S. industry to compete for the growing foreign and domestic market for nuclear fuel. Adequate safeguards must be in effect for sales of more than 1,000 kg to any one nation. Where such safeguards are not contained in an Agreement for Cooperation, a cumulative limit of 100 kg of normal uranium to a single foreign consignee and a cumulative limit of 1,000 kg for any one country will be in effect. This will enable foreign users of small quantities of uranium to continue to purchase from the U.S. source material needed for basic research, medical, and general industrial application.

67. Agreements for Cooperation. During the reporting period, comprehensive agreements with Spain and Italy came into force, superseding previous research bilaterals. Ecuador and Nicaragua ratified their research agreements. After protracted negotiations, a comprehensive power agreement was concluded with Japan and awaits ratification. It authorizes the transfer of 2,700 kg of U–235 over the 10-year life of the agreement. Ratification of the Venezuelan power agreement has been delayed following the change of government in that country.Sweden has negotiated an amendment to raise the U–235 authorization to 200 kg. Denmark will seek either a power agreement or major amendments to its present research accord. Brazil has requested an amendment to its research agreement to increase the U–235 authorization from 6 to 12 kilograms. Brazil has not ratified its power agreement which is a separate accord from its research bilateral.

68. The United States now has 41 bilateral agreements in effect with 39 nations and the City of West Berlin. (Switzerland has 2 agreements.) Of these, 12 are for power and 29 for research. An Agreement Status Table is attached as the Appendix.

69. Research Reactors. The Republic of China, the University of Palermo, Italy, and the University of Geneva, Switzerland, have signed contracts with U.S. manufacturers for research reactors and Brazil’s University of Minas Gerais plans to buy a research and training reactor. Twenty-five U.S. commercial research reactors have been or are being built or contracted for in sixteen nations.

70. Eight reactor grants of $350,000 each were committed during the reporting period to Austria, Belgium, China, Greece, Israel, Italy, West Germany, and Sweden.

71. Equipment Grant Program. The Commission has approved a program of equipment grants ranging from “package” research laboratories and subcritical assemblies to relatively minor items of equipment important to many underdeveloped countries. So far in FY ’58, $121,000 has been committed for radioisotope training equipment in Lebanon and Ecuador and for the two IAEA mobile radioisotope laboratories. It is expected that any FY 58 funds remaining after research reactor grant commitments have been completed will be obligated for equipment grants.

72. Education and Training. Between February 1949, when foreign nationals were first admitted, and June 1958, the Commission has provided training for 255 foreign nationals in the Oak Ridge Institute of Nuclear Studies Course in Radioisotope Techniques. Due to the excellence of the course and its resultant international reputation, the demand for increased enrollment has been such that the Commission has recently expanded its facilities to accommodate 48 instead of 32 persons per course. The International School of Nuclear Science and Engineering, which was established at Argonne National Laboratory as a part of the Atoms-for-Peace program, has enrolled 328 foreign nationals in the first seven courses. Students for the 8th Session are now being selected.

73. The Equipment Grant and Education and Training programs will contribute directly to extending the impressive benefits of isotope and radiation applications to the under-developed areas of the world. Under the equipment program, emphasis is being placed on items such as teletherapy units, facilities for growing plants in gamma radiation fields to induce mutations, and isotope research and training laboratories. A special request has been received from the Chairman of the Indian Atomic Energy Commission to provide training and practical experience to a number of qualified Indians in the radiation preservation of food. This request will be accommodated.

74. Controlled Thermonuclear Research. The United States and the United Kingdom continue to cooperate closely in pursuing a vigorous research program in the area of controlled thermonuclear reactions. In January, there was a major joint release which embraced practically all data declassified in the field on that date. Both countries are planning major demonstrations of this research at the Geneva Conference in September.

75. Information. A workshop for librarians in charge of the gift technical libraries distributed to European and Middle East nations under the Atoms-for-Peace program, held in Geneva in May, was well attended and favorably received. Additional libraries have been donated to the IAEA, Poland, and Honduras. The exchanges of classified information, classified discussions, and the dissemination of unclassified information continued to increase. Visitors from other nations to U.S. installations and U.S. atomic energy industry were averaging about 70 per month.

CONFERENCES, EXHIBITS AND MISSIONS

76. Geneva Conference. The United States, as in 1955, plans to make a significant contribution to the second United Nations Conference on Peaceful Uses of Atomic Energy in Geneva, September 1–13, 1958. Approximately 900 abstracts were submitted to the UN Conference Secretary General. It is expected that the U.S. will be allocated about 150 oral presentations at the Conference sessions.

77. Through May 15, 1958, the United Nations reported acceptance of the following number of papers from the countries indicated: USSR—158; United Kingdom—199; France—163; West Germany—65; and India—63.

78. Construction is well advanced on the comprehensive technical exhibit which demonstrates the latest and most significant advances in nuclear science and technology in the United States. It will include the controlled thermonuclear section previously referred to, two operating research reactors, and detailed demonstrations of many other aspects of peaceful research and uses. The Commission also is coordinating and will participate in a trade-fair-type commercial exhibit in down-town Geneva concurrently with the Conference. It is expected that about 45 U.S. firms will be represented at the latter exhibit.

79. The total cost of U.S. participation is estimated at $4,600,000 of which some $3,300,000 will be represented in the construction and operation of the exhibits. While the exact total of Conference Representatives and Advisors has not been determined, the total number of people scheduled to be in Geneva officially for the United States is about 600, including a number of guides and clerical help to be hired in Geneva.

80. Other Conferences and Exhibits. U.S. scientists will participate at the Fifth International Electronic and Nuclear Exposition and Congress in Rome, Italy, during the latter part of June. There also will be a large U.S. Atoms-for-Peace exhibit there. The Commission provided data and materials, including a small operating training reactor, for nuclear exhibits in the U.S. Pavilion and in the Science Section of the Brussels World Fair.

81. Missions. At the request of the nations involved, the Commission sent teams to New Zealand in March and to Australia in June, to hold discussions and seminars with a view to assisting the development and administration of nuclear energy programs in those countries. The New Zealand mission was most favorably received but it reported to the Commission that lack of coordination between the Government and the universities is hampering the progress of the New Zealand program. The Australian Mission is still abroad. There are four U.S. experts on the IAEA International Mission which began a South American survey in May. (See paragraph 41.)

82. USAEC Scientific Representatives. In cooperation with the U.S. embassies, the Commission Scientific Representatives in London, Paris, Buenos Aires, Tokyo, and Chalk River, Canada, have continued to render services in connection with the expanding technical cooperation in the areas under their respective jurisdictions. Their work is proving especially useful in evaluating the technical progress in many countries, assisting and participating in the work of the U.S. delegations such as those at the NATO meeting in Paris in December, the EURATOM and OEEC discussions, the Windscale investigation program, and the various Atoms-for-Peace missions.

83. Foreign Trade. An interesting development in the foreign trade activities of the U.S. atomic energy industry is the emergence of joint ventures with industrial concerns in other countries, notably in Europe and Japan. These range from cooperative sales arrangements to the formation of separate companies jointly owned by an American and a foreign firm. In some cases, they involve reciprocal licensing rights.

84. These cooperative business arrangements appear to offer U.S. industry a good chance for getting its share of international atomic energy business, particularly if the rapid development of nuclear industry in highly industrialized nations diminishes the prospects of U.S. firms, acting independently, selling appreciable numbers of complete nuclear power plants abroad.

Appendix

Agreement Status Table

June 3, 1958

DIVISION OF INTERNATIONAL AFFAIRS

From: Program Review and Analysis Branch

STATUS OF AGREEMENTS FOR COOPERATION AS OF APRIL 1, 1958

Cumulative Number of Countries	Country	Score of Exchange	Effective Date
1	Argentina	Research	July 29,1955
2	Australia	Research and power	May 28, 1957
3	Austria	Research	July 13, 1956
4	Belgium	Research and power	July 21, 1955
5	Brazil	Research	Aug. 3, 1955
6	Canada	Research and power	July 21, 1955
7	Chile	Research	Aug. 8, 1955
8	China, Republic of	Research	July 18, 1955
9	Columbia	Research	July 19, 1955
10	Cuba	Research	Oct. 10, 1957
11	Denmark	Research	July 25, 1955
12	Dominican Republic	Research	Dec. 21, 1956
13	Ecuador	Research	Feb. 6, 1958
14	France	Research and power	Nov. 20, 1956
15	Germany, Federal Republic of	Research and power	Aug. 7, 1957
	Germany: City of West Berlin	Research	Aug. 1, 1957
16	Greece	Research	Aug. 4, 1955
17	Guatemala	Research	Apr. 22, 1957
18	Israel	Research	July 12, 1955
19	Italy	Research and power	Apr. 15, 1958
20	Japan	Research	Dec. 27, 1955
21	Korea, Republic of	Research	Feb. 3, 1956
22	Lebanon	Research	July 18, 1955
23	Netherlands	Research and power	Aug. 8, 1957
24	New Zealand	Research	Aug. 29, 1956
25	Nicaragua	Research	Mar. 7, 1958
26	Norway	Research and power	June 10, 1957
27	Pakistan	Research	Aug. 11, 1955
28	Peru	Research	Jan. 25, 1956
29	Philippines	Research	July 27, 1955
30	Portugal	Research	July 21, 1955
31	South Africa	Research and power	Aug. 22, 1957
32	Spain	Research and power	Feb. 12, 1958
33	Sweden	Research	Jan. 18, 1956
34	Switzerland	Research	July 18, 1955
	Switzerland	Power	Jan. 29, 1957
35	Thailand	Research	Mar. 13, 1956
36	Turkey	Research	June 10, 1955
37	United Kingdom	Research and power	July 21, 1955
38	Uruguay	Research	Jan. 13, 1956
39	Venezuela	Research	July 21, 1955

SIGNED AND IN RATIFICATION PROCESS AS OF APRIL 1, 1958

Cumulative Number of Countries	Country	Scope of Exchange	Date Signed
*	Brazil	Power	July 21, 1957
40	Costa Rica	Research	May 18, 1956
41	Iran	Research	Mar. 5, 1957
42	Iraq	Research	June 7, 1957
43	Ireland	Research	Mar. 16, 1956
**	Peru	Research and power	July 19, 1957
702

SUMMARY:

In Effect: 29 research and 12 power agreements with 39 countries

Signed: 4 research and 2 power agreements with 4 additional countries

1. Source: Transmits Department of State-AEC semiannual report on NSC 5725/1, “Peaceful Uses of Atomic Energy.” Secret. 34 pp. NARA, RG 59, S/S–NSC Files: Lot 63 D 351, NSC 5725.

702. *Will [illegible in the original]. [Footnotes in the table are in the original.]

     **Will [illegible in the original] present Research Agreement.