Government
industry urged to wait on uranium enrichment GAO study urges next increment of enrichment capacity come from existing federal gaseous diffusion plants The General Accounting Office has spoken against having private industry provide the U.S. with additional uranium enrichment capacity in the immediate future. In a report issued earlier this month, GAO—the Congressional auditing agency—says that it is more feasible, more dependable, and less costly to get the next increment of uranium enrichment capacity by adding onto existing government gaseous diffusion plants. However, Dr. Robert C. Seamans Jr., Administrator of the Energy Research & Development Administration (which owns all existing U.S. uranium enrichment facilities), takes a dim view of the report and its findings. The report, prepared at the request of Sen. John 0 . Pastore (D.-R.I.), chairman of the Joint Committee on Atomic Energy, will no doubt be a major factor when the committee takes up S. 2035. An Administration bill, S. 2035 was discussed by President Ford last June. It would, among other things, enable ERDA to negotiate and enter into cooperative arrangements with private organizations that wish to build, own, or operate uranium enrichment plants. Further, it would authorize ERDA to provide various forms of assurances and assistance under the arrangements, and would limit the government's liability to $8 billion if the private ventures fail and the government has to take over. Seamans labels GAO's report "insufficiently complete, accurate, or objective to sustain its conclusion." He also says that the report "does not address fully the President's proposal; omits important considerations that, if taken into account, would lead to different conclusions; understates risks to be assumed by private firms while overestimating potential risks and costs to the government." Further, "its conclusions," Seamans points out, "may prevent [our] ever achieving a private competitive uranium enrichment industry." Current "proved" gaseous diffusion technology should be used by the government for the next increment of en-
richment capacity, GAO says. It contends that the newer gaseous centrifuge process and more advanced processes (such as laser isotope separation) should be held back and used for subsequent increments following the next increment. GAO also says that the next enrichment capacity increment is likely to be the "last-of-its-kind" in the U.S. that uses the gaseous diffusion technology. This supposition is borne
For these reasons, coupled with the fact that UEA requires $2.7 billion for construction alone, GAO believes that it is more attractive to add onto existing government facilities. The cost of addition would be about $2.1 billion, GAO estimates. And it recommends some ways that could aid the addition in times of tightening federal budgets. One method would be to establish a self-financing uranium enrichment en-
This huge gaseous diffusion plant at Portsmouth, Ohio, may be last of its kind out by the fact that only one private consortium has expressed interest in building a plant using gaseous diffusion for the next increment, whereas ERDA has received several proposals for subsequent increments using gaseous centrifuge technology. The report is critical of the one private industry proposal for providing the next enrichment increment. The proposal, offered by Uranium Enrichment Associates (previously a Union Carbide-Westinghouse-Bechtel joint venture and now a Bechtel-Goodyear Tire & Rubber consortium), shifts most of the risks during the construction of its plant and the demonstration of the viability of the plant to the government, says the report. Further, there is a provision that gives UEA the option to turn the project over to the government if long-term financing can't be arranged, if the plant doesn't operate successfully during the first year, or if its customers aren't committed.
terprise as a division of ERDA. It would be financed by reapplying revenues from enriching services paid the government by utilities and others (such as through a revolving fund), or by borrowing from the public or the Treasury. Or, GAO suggests, an independent corporation could be formed with partial private ownership. This corporation also would be self-financing from revenues and could, in addition, obtain funds for improvement and construction programs from the sale of stocks, bonds, and notes. Although GAO is against private involvement in supplying the next enrichment increment, it encourages private ownership of and government-private cooperative arrangements for subsequent increments in U.S. uranium enrichment capacity. GAO does caution, however, that ERDA seek a more equitable sharing of risks by the private enrichers and the government in the meantime. D Nov. 17, 1975 C&EN
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