249 



Economic benefits: Important economic benefits are realized from 

 the sale of enriched uranium abroad. While prices charged by the 

 United States do not include profit, they are calculated to recover all 

 costs of production including amortization, interest on the govern- 

 ment's investment, and a factor for contingencies. The foreign sales 

 have helped to provide a cash benefit to the U.S. Treasury and to 

 amortize facilities built initially for defense purposes. 



Foreign exchange: Foreign sales provide an important source of 

 foreign exchange. To help redress a serious balance-of-payments 

 deficit, the United States must look to the export of products based 

 on advanced technology and heavy capital investment where U.S. 

 superiority cannot be easily offset by labor cost differentials and other 

 factors favoring foreign products. 



DISADVANTAGES TO THE UNITED STATES 



.: ■ .■•■:■■ ; v . : ' - - . - '. ; • :-,..;• ■• •:■: o* *■ 



Supplying enrichment services to foreign customers also has several 

 dra wfoacks : ' 



Commitment of public capital: Enrichment technology is very ex- 

 pensive in capital -investment.' A policy of long terni commitfnertt to 

 supply enrichment services to foreign customers carries with it an 

 implied obligation to make whatever future public or private invest-' 

 ment will be necessary to expand or build new enrichment plants. 



Commitment of fossil fuel: Enrichment plants in the U.S. require 

 large amounts of electricity, most of which is generated in conven- 

 tional powerplants that burn fossil fuels. 283 Not only is this fuel in 

 essence exported, but additional land is strip mined in the United 

 States for the benefit of electricity users abroad. 



Implied responsibility for misuse of exported fuel: Although en- 

 riched uranium suitable for fuel for most contemporary commercial 

 nuclear power plants cannot be used directly to fabricate an atomic 

 explosive, it would be a very desirable material for clandestine enrich- 

 ment facilities to process into weapons grade materials. If the United 

 States freely supplies enrichment services in the world market, what 

 would be its responsibilities in the eyes of the world were some of that 

 material to be illicitly diverted to weapons manufacture ? In Section V 

 it was noted that materials were supplied according to the terms of 

 bilateral agreements which initially gave the United States unusual 

 authority to inspect use of materials supplied by it. Later this author- 

 ity was transferred through trilateral agreements to the Interna- 

 tional Atomic Energy Agency. Presumably, once the Nonproliferation 

 Treaty is fully implemented, the IAEA will have full responsibility 

 for safeguarding nuclear fuel materials, including enriched uranium, 

 as discussed in Section XI. Nonetheless, if enriched uranium supplied 

 by the United States does find its way into wrong hands, will it be 

 sufficient for the U.S. to simply shift the responsibility to the IAEA ? 



."-"' EVOLUTION OP U.S. SUPPLY POLICY 



A point of departure for the U.S. nuclear fuel supply policy was 

 established on August 8, 1955. On that date, the opening day in Geneva 



283 Admiral Rickover, who heads the AEC's nuclear power program for naval propulsion, 

 estimates that the enrichment services required for a nuclear fuel loading requires about 

 600 million kilowatt hours of electricity, which would require about 500,000 tons of coal 

 to generate. 



