255 



Soviet Union is willing to offer toll enrichment services on a long term 

 basis over the life of a power plant remains to be seen. 299 



The French emphasized that they were buying enrichment services 

 from the Soviet Union on a trial basis. An advantage for France was 

 the absence from the contract for any requirement that the material 

 supplied by the Soviet Union be placed under safeguards. France has 

 steadily maintained that because it is a nuclear weapons power, apply- 

 ing safeguards to nuclear fuel imported by its nuclear industry is 

 meaningless. The Soviet Union apparently agrees with the French 

 position. Had the French placed the enrichment contract with the 

 AEO under the AEC-Euratom bilateral agreement, Euratom safe- 

 guards would have applied to the material. Moreover, the Euratom 

 Supply Agency, whose jurisdiction the French have challenged, would 

 have been an intermediary to the transaction. By contrast, the Soviet 

 supply contract bypassed Euratom. 300 



It remains to be seen whether these preliminary signs of a Soviet 

 interest in supplying enriched uranium or enrichment services outside 

 of the Soviet bloc signal a future drive by the U.S.S.R. to penetrate the 

 free world nuclear fuel market. If the Soviets were to do so, the United 

 States would be faced with troublesome diplomatic decisions as to 

 what extent and in what way it would counter such a Soviet move. 



Supply Policy Alternatives 



If present AEC projections for the growth of nuclear power in the 

 United States and abroad are correct, the United States can expect 

 to maintain its dominant position in the world market for enriched 

 uranium and uranium enriching services through the 1970's with its 

 present facilities. If foreign policy interests of the United States 

 warrant preservation of a favorable position in world nuclear com- 

 merce, this country within the next few years will have to make 

 several basic policy decisions and commitments. For example, will the 

 United States decide to make the capital investment in new produc- 

 tion capability needed to sustain its position ? Will the United States 

 continue its present policies of full cost recovery for its enriching 

 services, or will it, if necessary, adopt competitive pricing to compete 

 in the market, or to discourage other nations from building their own 

 enriching facilities? These are some questions that will have to be 

 answered within the next few years. 



Maintaining the Competitive Position of the United States in the 

 World Enrichment Market 

 Whatever may be the ultimate position of the United States in the 

 world's enrichment market, present AEC thinking anticipates that 

 this country will retain a dominant position well into the 1980's. 

 Commissioner Johnson at Geneva in 1971 reported estimates that 

 foreign enrichment would supply perhaps 5 percent of the market 

 by 1975 and rise to about one-third by 1985, still leaving two-thirds 

 of the market for the United States. He was confident the United 

 States would meet these demands : S01 



m Nucleonics Week, vol. 12 (March 18, 1971), p. 2. 



saa 'Nuc 1 ear Industry (April 1971), pp. 40—41. The Soviet Union also has agreed to supply 

 nuclear fuel to Finland and has opened enrichment talks with Sweden and West Germany. 



301 U.S. Atomic Energy Commission, U.S. Claims Capability to Meet Crowing Demands 

 for Uranium Enrichment Services, AEC Press Release No. 0-152, September 8, 1972, p. 1. 



96-525 O - 77 - vol. 1 - 18 



