INDUSTRY
Setting the Stage for Industrial Atoms If industry is to make full use of atomic energy, it needs: financial stimulus, freer access to d a t a , patent protection O E E D S OF INDUSTRIAL ATOMIC ENERGY
Have been planted. How they will take root and whether their growth will be strong or stunted depends largely on the climate surrounding their development. Few applications of atomic energy have as yet any demonstrated profit ability. Looking at the present environment, the recent report of the McKinney panel on peaceful uses of atomic energy finds that investment required in research and development frequently appears to b e large and the time needed for completion lengthy. Growth of a private atomic industry, t h e report adds, will be influenced by government action in offering direct and indirect financial inducements, in incentives from patent policy, in dis semination of technical data, and in providing protection from the risks of nuclear plants.
Helping to Foot the Bill The Atomic Energy Act passed in 1954 authorizes the Atomic Energy Commission to carry much of the load i n putting nuclear energy to peaceful application. But the act suggests, also,
that AEC activities should encourage and promote industrial research and development. The ways in which AEC, and other government agencies, use available financial devices can have a significant impact on speeding the development of industrial applications. AEC can provide assistance in four principal ways: • It can provide research and serv ices to industry. • It can buy research outside of its own plants and laboratories. • It can guarantee prices or waive charges. • It can provide training, patents, and information. The ways by which the commission uses these methods is largely for it alone to decide. Ideally, says the McKinney panel, research and development activities done by AEC would be devoted to exploring the frontiers of atomic energy. But to do this, industry must have the interest and facilities to pick up and develop new ideas. Until this industrial capability exists, AEC research programs must lend a hand
with work which would not otherwise be performed. One difficulty with this arrangment: Private work will not get done unless it gets priority over the military and civilian programs the AEC is carrying on for its own purposes. No basis for setting up priorities of this type is defined in the law. The willingness of the Government to do industrial research and what it charges for its services have a substantial influ ence on the cost of atomic develop ment. The work it does would other wise have to be done at industry's expense. AEC can foot the bill of atomic development, too, by paying for research in privately owned plants and laboratories. As a consequence, the key to much industrial development has been AEC money. Three of the five proposed demonstration power plants are being negotiated on the basis of indications that AEC will give contracts to their sponsors. Besides contracting for research in private plants and laboratories, the Government can also contract for other services and materials. AEC, for instance, has arranged to buy uranium ore and processed feed materials, and
5ν Steps T o w a r d [ a Full-Grown, C o m p e j u V e . Â t o m i c i t î d
Freer access to technical information
Establishing b a c k g r o u n d of d a t a n e e d e d for insurance a g a i n s t m a j o r risks
Return o f patents o n peaceful uses to normal patent system '§^^f^>?H^
Free m a r k e t for uranium ore and special nuclear materials
Private ownership o f nuclear materials
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INDUSTRY the commission's orders have stimulated growth of a sizeable radiation instrument industry. "This is a useful but hazardous device,** the McKinney panel points out. For one thing, it can inject the pattern of AEC and military needs onto the development of private atomic industry»· In addition, it can encourage the construction of plants too large for private demands or not adaptable to the needs of future civilian markets. Moreover, it burdens AEC with the responsibility of being in a position to exert influence on private ventures—a position that might well make AEC overly cautious. Although the report agrees that AEC should provide financial assistance when it is essential to private participation in projects, it cautions that "it may b e unsound to encourage private enterprise to focus its attention on commission needs not compatible with the ultimate direction of peaceful uses."
no private patents to some private patents. "Return of patents on peaceful atomic applications to the normal system," says the panel, "must be the objective." Meanwhile, further clarification by the AEC of its patent policy is needed, it continues, because absence of clear statements or ambiguity in administration can retard development of nuclear energy. For instance, AEC has tentatively taken the position that access to some information does not bar individuals from obtaining patents on future developments that are privately financed. This policy, however, is contained only in proposed regulations and, says t h e panel, has not been widely publicized. Many potential participants are n o t aware that they can get access to classified information without impairing their
nuclear materials, it can wield a considerable financial influence on privately operated reactors. The "buy back" price paid for plutonium and uranium-233, says the panel, "could make or break the economics of a plant." Since AEC can guarantee prices for only seven years, private investors cannot forecast when a change in prices might make their operations suddenly uneconomic. Furthermore, the price schedule for these materials is now classified. The McKinney panel feels that such a powerful financial device should not b e hidden from public scrutiny and suggests that this information b e publicly published. As with uranium ore, the panel believes that the Government must look forward to establishment of a free market and private ownership of special nuclear materials. In anticipation of that course, it adds, there should be a continuing review of present policy of Federal ownership.
Loosening Up on Fuel Prices Another trick in AEC's financial bag is authority to guarantee prices for production of uranium, thorium, and special nuclear materials in order to encourage and make economic a domestic uranium mining industry. T h e resulting price stability of ore incidentally benefits anyone needing the same materials for industrial use. Looking forward to the goal of a free market, the panel suggests an alternative for satisfying military ore requirements: tonnage guaranties. Uranium ore producers would begin to have a free market, yet have the assurance that the Government would be active in that market to a definite extent. AEC has power, also, to distribute by-product materials, such as radioisotopes, with or without charge. Selling such materials for medical research at 20% of cost has had a stimulating effect; the panel believes that the same policy might be extended to benefit other fields of scientific and agricultural research.
Patents in Transition Patents, too, provide a stimulus for private investment. At the present time, atomic energy is in a transition from complete government domination to substantial private participation in its applications and from a period of 1064
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N e e d for Adequate Insurance
Uranium ore is trammed from t h e mines on the Colorado Plateau to ore bins outside in small mine cars subsequent patent rights. Therefore, the panel's report adds, "the commission should announce its complete interpretation of patent provisions promptly, not on a piecemeal basis." Nevertheless, the panel thinks that a complete review of patent provisions in the Atomic Energy Act can wait until 1959, when the compulsory licensing provisions of the law expire. There are other and more important policy issues requiring prompt attention now. Special nuclear material is also government dominated; now such material is vested exclusively in federal ownership. Private investors can own plants but not the material needed to run them. Availability of materials a n d charges for using them are controlled by AEC. This policy is designed to protect both national security a n d public safety. Because AEC is the only buyer of
Like any other industrial operation, use of atomic energy creates hazards. For nuclear energy, however, these range from minor health risks to employees to the potentially catastrophic dangers resulting from a runaway reactor. The former can be covered well enough and at reasonable rates by private insurance companies; the latter poses a serious problem. N o absolutely safe reactor has yet been conceived. Although every precaution is taken, some unforeseen malfunction might lead to widespread radiation damage and ruinous financial loss. Yet because experience with reactor accidents is meager and many reactors now being built are still of an experimental design, the background information needed t o measure potential risks is lacking. How, then, can liability be covered by insurance? In hearings before the Joint Committee on Atomic Energy, many witnesses testified that inability to obtain insurance could be a significant obstacle in financing atomic plants. There is urgent need, the McKinney panel points out, for better data on the risk problem; AEC should step u p its program in the two or three years remaining before the first full-scale power plants come into operation t o get this information.
INDUSTRY
Provides research and services Contracts for development work and materials Guarantees prices for ore and nuclear materials Waives charges on fuel; provides isotopes at less than cost
The panel is hopeful, however, that private insurance firms can overcome the barriers to providing adequate coverage. A federal insurance program wall probably be unnecessary and, in stifling private efforts to meet the problem, might prove more of a threat than a benefit to private efforts.
Industry Needs Information Besides providing financial aid and ownership incentives, the Government can remove one other road block hindering industrial development of nuclear energy: Industry needs freer access to information. The present system of information control shrouds industry's efforts in many ways: • B e c a u s e companies cannot b e sure that they are aware of all classified information in their field, they never know when their development work might b e made obsolete by declassification of that information. •Progress is slowed because relatively few people can be kept in touch with classified problems. • Lack of coordination between AEC and Defense Department classification systems doubly hinders release of information, gives added staying power to both systems. • Contractors with full access to information about their projects gain an advantage over outsiders. • A s activity in connection with nuclear applications spreads, a growing segment of the economy gets tied u p in the abnormal confines of a security system.
Industry's dilemma when faced with the problems of dealing with information controls is pointed up by a survey made by the McKinney panel. The panel reached two conclusions from answers t o questions it asked companies and other organizations with experience in dealing with the government's information control policies: Industry believes that progress in industrial u s e of atomic energy will b e accelerated if more information is made available i n useable form; and the rigid requirements of the present system cause delay, inefficiency, and increased costs. The panel found numerous complaints about the frustrations of getting access to classified information. Even with an access permit it is difficult to know what material is available or where to find it. Investment decisions cannot be arrived at without complete information concerning the prospects of success. Over half the responses to the panel's questions suggested that at least some information in addition to what is already published is needed to speed up application of atomic energy, especially information regarding fuel fabrication and processing, fuel cost data, and reactor technology. A number of comments were received about the indirect costs resulting from the inefficiency of the present security system.
Resolving the Dilemma Complicating the information problem, of course, is the paramount importance of military information to
the nation's defense. Vital defense technology must remain undisclosed, even though there is a close interrelationship between it and tectmology needed for industrial application of atomic energy. By law, information relating to the design and manufacture of weapons, production of nuclear materials, and use of those materials to produce energy is restricted and controlled from its conception. Only after it is "born" classified can it be considered for public release. "As long as any atomic information remains under control," says t h e McKinney report, "its development and applications will suffer serious handicaps." Furthermore, "the concept that information is born classified is not compatible with expeditious action" and should be hmited to nuclear weapons. The panel recommends that AEC "remove all reactor technology from the restricted category" leaving specific military applications to b e protected by defense classification. In addition, it suggests that t h e AEC should b e required to compile both classified and unclassified information on a continuing and current basis so that important data does not pile up in obscure documents but reach.es the people who need and are entitled to use it. AEC is now involved in most present research in the entire nuclear field. It supports basic research and finances and controls almost all applied research. Development of atomic energy to its full role in the economy, however, requires more effort than the commission alone can expend. Industrial lielp is essential. If private enterprise is to participate, it needs encouragement. It must be assured that it will not have to compete with superior government facilities or duplicate their work in its research efforts. It needs information with which to gage the wisdom of its investments. It needs competitive incentives—such as patents—to stimulate that investment. The burden of development must be shared—with government efforts directed to frontier exploration or to whatever other area of promise is not receiving attention. And between industry and Government a two-way flow of information is essential. • MARCH
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