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

201. Paper Prepared by the Domestic Council and National Security Council Staffs¹

Washington, undated.

NEED FOR A PRESIDENTIAL MESSAGE ON NUCLEAR EXPORT POLICY OR NUCLEAR ENERGY IN GENERAL

I. CURRENT PROBLEMS

A. Growing congressional, press, and public concern about nuclear weapons proliferation.

Concern is focused primarily upon the greater availability of plutonium which is extracted from “spent” fuel elements removed from nuclear power reactors (i.e., referred to as reprocessing). Concern has continued to grow since India exploded a nuclear device in 1974.

B. Growing concern that current U.S. activities to safeguard against diversion of plutonium for weapons purposes is not adequate.

Attention is now focused on exports of nuclear materials and equipment. Some feel that existing controls (detailed below) have been barely adequate for safeguarding reactors and are simply not adequate to guard against diversion of separated plutonium.

C. The U.S. position in the foreign market for nuclear equipment and materials is weakening.

This is resulting from (a) the lack of uranium enrichment capacity, (b) growing strength of foreign competition for nuclear equipment and fuels, (c) uncertainty as to U.S. policy on nuclear exports, and (d) potentially, delays resulting from Nuclear Regulatory Commission (NRC) control of export licenses and growing Congressional review requirements. As the U.S. loses foreign orders to other suppliers, the U.S. also loses its leverage to obtain rigid safeguards agreements.

D. Perception in the media that the Administration is complacent about potential diversion of plutonium from commercial nuclear power plants abroad.

By contract, Canada recently cut off nuclear relationships with India and appears to be imposing strong safeguards controls in connection with its exports.

E. Events immediately ahead will exacerbate the above problems, involving NRC and Congress—particularly with respect to exports to Spain and India. (detailed below.)

II. Existing Measures and Activities to Control Proliferation

A. NPT

Approximately 100 nations have signed the Non-Proliferation Treaty (NPT) foreswearing activities leading to the proliferation of weapons. Several important nations have not signed, including France and India.

B. Bilateral “Agreements for Cooperation” between the U.S. and about 30 other nations importing nuclear equipment and materials from the U.S.

These agreements specify safeguards that are to be maintained.

C. IAEA

International Atomic Energy Agency establishes safeguards standards and has some inspection capability.

D. Supplier Discussions

State Department is leading negotiations with other supplier nations, seeking agreement to impose more rigid safeguards. There has been some success achieved, but no agreement from other suppliers to restrict their export of reprocessing facilities.

E. New International Convention

The U.S. is leading an attempt to gain agreement on a new international nuclear physical security convention.

F. Pressure on Customer Nations

The U.S. brought pressure on the Government of South Korea to cancel its order with the French for a reprocessing plant and is applying similar pressure on Pakistan to forego acquisition of a reprocessing plant.

III. Recent and Upcoming Events Suggesting the Need for Action

A. Nuclear Regulatory Commission (NRC)

The independent NRC now plays a major role in nuclear exports and will attract considerable attention to the international safeguards issue soon.

1. Inadvertently, the final responsibility for approving nuclear exports was allowed to be vested in the independent NRC rather than the Executive Branch. This resulted from the September 1974 law which created ERDA and NRC.

2. The NRC now has before it for approval proposed licenses to export additional fuel for reactors in Spain and India. There appears to be agreement within NRC that additional controls are needed, but there is sharp dispute as to whether additional controls—beyond those in existing agreements—should not be imposed as a condition of the exports. The Commission decision apparently will be accompanied by written opinion, making public the strong views of one commissioner that safeguards in some agreements for cooperation and U.S. vigilance have not been adequate.

B. Congressional

The Congress is asking more questions and tightening controls which will introduce delays and uncertainties. Examples include:

1. In 1974, a law was enacted requiring that all future bilateral “agreements for cooperation” involving significant nuclear exports be submitted to the Congress for a 60-day period of review.

2. Senate Government Operations Committee recently reported a bill (S. 1439) which (a) shifts additional Executive Branch nuclear export responsibility to State Department and the independent Nuclear Regulatory Commission from ERDA and Commerce Department, and (b) makes the Congress the referee in disputes between State and NRC. Bill referred to JCAE and Foreign Relations for 60 days. It could come to a vote this session.

3. The Senate version of the Military Aid Bill includes a prohibition (the “Symington Amendment”) against military assistance to countries which furnish or receive nuclear reprocessing or enrichment facilities not under multinational control and which do not have IAEA safeguards on all nuclear facilities. House-Senate Conferees agreed on June 16 to accept the Symington Amendment with a proviso that restrictions could be waived in specific cases upon a finding by the President of overriding national interest, but Congress would then have an opportunity to disapprove.

4. The ERDA 1977 Authorization Bill was amended on the House floor to provide for congressional review of the first export to any nation that is neither a signer of the NPT nor covered by any agreement for cooperation approved by the Congress under the provisions of the 1974 law listed above.

5. A House International Relations Subcommittee (Zablocki) held hearings on June 10 on an amendment to the Export Administration Act designed to prohibit nuclear exports unless safeguards are tightened.

6. Senator Ribicoff is asking hard questions of the State Department as to whether (a) any U.S. materials were used by India in producing the plutonium used in the device exploded in 1974, and (b) why the U.S. did not respond more vigorously to that event. This whole issue will get even more attention as NRC considers pending export license for India (mentioned in II(a)(1) above).

C. Executive Branch

Dr. Fred Iklé, Director of the Arms Control and Disarmament Agency (ACDA), recently gave a speech revealing his concerns about the adequacy of safeguards to prevent the diversion of plutonium.

D. Other

Presidential candidate Carter outlined his concerns about nuclear exports and proliferation at the same forum in which Iklé’s speech was delivered.

IV. Administration Response Thus Far

A. The Executive Branch has responded to the above in several ways, but the actions (a) have been piecemeal and largely defensive, and (b) appear inadequate in the face of current Congressional and public attitudes. Responses include:

1. Secretary Kissinger summarized U.S. non-proliferation efforts in testimony in opposition to the Glenn-Percy Bill before the Senate Government Operations Committee. ERDA, ACDA, and other Administration witnesses gave supporting testimony.

2. Informal attempts are being made by State, ERDA, and others to limit the scope of restrictions and of congressional review requirements in pending bills (e.g., Military Aid and ERDA Authorization).

3. An Executive Order was recently issued setting up procedures for getting a coordinated Executive Branch position (State, ERDA, DOD, ACDA, and Commerce) on nuclear export licenses pending before the NRC. (State Department notifies NRC of the coordinated Executive Branch position.)

V. Possible Additional Responses

Several ideas have surfaced for possible additional responses to the current situation. Each involves significant issues that require evaluation and decision. Possible actions include:

A. Significant hardening of U.S. attitude on nuclear exports safeguards required before exports are permitted.

There appears to be divided views on this. Some probably will argue that past and current controls are as good as can be achieved and/or that tougher U.S. positions, taken unilaterally will not be effective. Others will argue that anything the U.S. can do unilaterally or in cooperation with others that will help reduce the opportunity for proliferation is worth doing, recognizing the threat. Steps that might be considered to achieve a harder and consistent policy include:

1. Strong public message to other supplier nations (France and Germany) emphasizing the need to curb proliferation and urging them to (a) stop supplying reprocessing or enrichment technology to other nations, and (b) adopting more rigorous safeguards requirements.

2. Move to renegotiate safeguards controls under existing agreements for cooperation as a condition for further exports, particularly giving the U.S. a veto on whether and where U.S.-supplied fuel is reprocessed and resulting plutonium retained.

3. Appoint a panel of experts not now involved in U.S. nuclear export activities to review past and current practices and submit recommendations to you for improvements.

B. Discourage reprocessing (in the U.S. and abroad) until better controls (technological and institutional) can be worked out.

If this policy approach were to be taken, consideration would have to be given to:

1. Expanding storage for “spent” fuel elements, possibly making storage available to other countries.

2. “Buy back” of spent fuel elements from other countries.

3. Finding ways to replace the energy value of the plutonium and unused uranium in the spent fuel elements (which is in the range of 10–30% of the total energy value if reprocessing and recycle of plutonium was permitted).

4. Other incentives to discourage the separation of plutonium through reprocessing.

C. As a means to discourage the spread of reprocessing centers, provide U.S. reprocessing services to foreign countries.

No U.S. capacity in operation now.

1. Assist U.S. industry in demonstrating reprocessing and related technology (plutonium conversion, waste handling, safeguards). Such a program is contemplated in the President’s 1977 Budget for coverage in a 1977 Supplemental Request.

2. Urge or require U.S. firms planning to provide reprocessing services to dedicate a portion of their capacity to serve foreign needs, thereby potentially satisfying foreign needs for many years without the construction of reprocessing plants abroad.

3. Go beyond #2 above by offering to allow other governments to participate in the operation of the first expected reprocessing plant (Barnswell, South Carolina) as a demonstration of the concept of a multinational reprocessing center.

D. Propose international storage for excess plutonium

IAEA has authority to establish repositories for excess nuclear materials. The U.S. could propose that this authority be implemented, that all nations store excess plutonium in such repositories and indicate that the U.S. would participate with a deposit of its excess plutonium.

E. Strengthen IAEA Safeguards

1. Make available advanced U.S. safeguards technology to other nations and the IAEA.

2. Consider further strengthening of IAEA safeguards, expanding the proposal for a $5 million-5 year voluntary U.S. contribution announced by the President on February 26, 1976.

1. Summary: The paper summarized the themes ERDA Administrator Seamans had raised in his and Cannon’s memorandum to President Ford and underscored the need for a Presidential message on nuclear themes.

   Source: Ford Library, James M. Cannon Files, Issues File, 1972–77, Box 24, Nuclear Policy Statement, June–July 1976. Attached as Tab B to Document 200.