Foreign Relations of the United States, 1969–1976, Volume E–14, Part 2, Documents on Arms Control and Nonproliferation, 1973–1976

140. Memorandum From David Elliott of the National Security Council Staff to the President’s Deputy Assistant for National Security Affairs (Scowcroft)¹

Washington, May 2, 1975.

SUBJECT

• NSSM 209—Future Uranium Enrichment in the U.S.

As you recall, following last summer’s debacle wherein the U.S. had to abort some and discontinue other foreign contracts for enriched uranium to fuel nuclear reactors, the President approved a NSSM to look at the fundamental question of how the U.S. will carry out President Nixon’s commitment to be a reliable supplier of nuclear fuel to the free world.

The basic pending decision is whether the U.S. Government will undertake to build additional enrichment facilities or will we continue to wait for a private company to take on this responsibility. There is one company (UEA) which has evinced interest in getting into this business, but, thus far in the year of negotiations, it has not been able to line up customers to make the venture look viable. UEA is now asking for a variety of government supports to make its private entry feasible.

In the meantime, our international position as a supplier of nuclear fuel is badly eroding. Some examples are: The Brazilians are just concluding a multibillion dollar nuclear deal with the Germans because they no longer view us as a reliable nuclear partner. The British have canceled enrichment contracts with us and placed them with the Russians. France has made a major entry into the international enrichment market by starting construction of a large enrichment plant and may be on the verge of a commitment to a second plant.

We have tried over several months to move the decision to the President as to whether or not the U.S. can afford to persevere in its attempt to establish private uranium enrichment in the U.S. if the transition cost is going to be so great in foreign policy and foreign trade. But we have been held up because OMB or ERDA have, at one time or another, urged delay while the UEA deal is further examined.

ERDA has now concluded that the UEA deal is not worthy of support and proposes that the government commit to build a new plant. We would, at the same time, start taking enrichment contracts (domestic and foreign) again.

I understand that Lynn has asked you to agree to continue the delay in putting the fundamental question to the President, so that negotiation can be undertaken with UEA to ascertain UEA’s bedrock demands. Though cloaking his proposal in the desirable mantel of obtaining complete information for the President, the effect will undoubtedly be further deterioration abroad. And, although OMB speaks of three weeks, ERDA indicates such negotiations with UEA could take months. (The truth of the matter is that the UEA deal would, in any event, have to be so propped up with government support and money that we have already lost the concept of private entry.)

Lynn makes no mention in his memorandum to the President (Tab A) of the foreign policy effect of further delay. Further, he does not mention that Bob Seamans thinks no good purpose can be served by trying to negotiate with UEA because the basic issues are understood. Because of Seamans’s reluctance, OMB wants to turn the UEA negotiation over to Frank Zarb. Moreover, OMB has not even coordinated this idea with Seamans, who is the responsible agency head for carrying out whatever enrichment policy is reached.

Tom Enders would like to suggest to Kissinger that, at the ministerial meeting of IEA on 27 May, it would be very valuable if the U.S. could clarify its policy regarding our position as a world supplier of enrichment services. Enders’s idea and Lynn’s request for more delay are incompatible.

Your options are to press for presentation of this issue to the President now, or to delay further (possibly some months) to see if the UEA proposal can be made more attractive and possibly elicit administration and congressional support. Do you want to call Lynn, or give me guidance on our position on the Lynn paper which presumably we will receive from Rumsfeld for comment before it goes to the President.

1. Summary: Elliott reviewed the administration’s policy on future uranium enrichment within the United States, indicating that the administration faced a choice: either construct additional enrichment facilities or wait for a private company to undertake this work. He highlighted the fact that several agencies had expressed the desire to delay the decision, adding that the National Security Council Staff had attempted to move the question to President Ford for a decision.

   Source: Ford Library, National Security Adviser, Presidential Files of NSC Logged Documents, IF/NS File for the President, Box 20, 7502923, Future Uranium Enrichment in U.S. (NSSM 209). Confidential. Sent for action. There is no indication that Scowcroft saw the memorandum. Tab A, Lynn’s memorandum to Ford, is not attached and not found. NSSM 209 is Document 79.