ML19331B198

Forwards 770425 Enrichment Policies, by AIF Fuel Cycle Conference in Kansas City,Mo,To Be Identified as Exhibit 9. ASLB & Parties Informed

ML19331B198
Person / Time
Site:	Midland
Issue date:	06/02/1977
From:	Hoefling R NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD)
To:	ACE-FEDERAL REPORTERS, INC.
References
NUDOCS 8007280786
Download: ML19331B198 (5)

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, Docket Nos. 50-329 and 50-330

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Dear Sir:

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r y a y S&t h GT This letter transmits three copies of an exhibit that the NRC Staff ~ QGd%j,

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a wishes to have marked as Staff Exhibit No. 9 for. identification in'#f"MpC the Midland proceeding, Docket Nos. 50-329, 50-330. The Exhibit f~s 'MM'h entitled " Enrichment Poldcies" authored by William R. Voigt end,j.$Jhr

, dated April.~25, 1977..It consists of 4 pages. ~Please place this :#Gil '

Exhibit with the other Staff exhibits which have been marked for.

PG7 identification in this proceeding. The Staff has infomed the

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Licensing Board and the parties that it wishes to have this

.',&h particular document marked as Staff Exhibit No. 9 for identification. ~

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Thank you.

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Richard K. Hoefling t

Counsel for NRC Staff

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Frederic J. Coufal, Esq.

Harold F. Reis, Esq.

Dr. J. Venn Leeds, Jr.

L. F. Nute, Esq.

Dr. Emeth A. Luebke R. Rex Renflow, III, Esq.

Myron M. Cherry, Esq.

Steve Gadler Judd L. Bacon, Esq.

Atomic Safety and Licensing Hon. Curt T. Schneider Board Panel Mary Sinclair Atomic Safety and Licensing Docketing & Service Section Appeal Board

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4 STAFF EXHIBIT NO. 9 n

ENRICllMENT POLICIES William R. Voigt, Jr.,' Director Division of Uranium Resources and Enrichment U. S. Energy Research and Development Administration at

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Atomic Industrial Forum Fuel Cycle Monference '77 Kansas City, Missouri April 25, 1977, cppreciate the opportunity here today of speaking to a group that is so acutely

.snsitive to the critical issues facing the front-end of the light water reactor usi cycle.

As you are all aware, President Carter's April 20 energy message.

ioted that although the United States will eventually make exte'nsive use of

olar and other non-controversial energy sources, it will have to rely, for at tecst the next two decades, on the conventional sources now at hand:

oil, natural Tes,. coal, nuclear power, and hydroelectic power.

To support the front end of the midad nucleaf fuel cycle, President Carter further noted that the U.S. will expand ito uranium enrichment capacity and will resolve the uncertainties about'the extent

' domestic uranium resources.

Bob Nininger, of my staff, has talked to 9ou briefly 13 morning about the U.S. uranium resources and supply situation, as ERDA sees t.

What 1 want to discuss with you now is the U.S. uranium enrichment situation.

fha cornerstone of all our enrichment planning is constuction of additional anrichment capacity.

This additional capacity is essential to permit ERDA to cccomplish two major objectives:

First, to allow long-term operation of our enrichment complex in a

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manner which conserves our limited uranium resources and to permit continued operation of near optimum nuclear fuel production economics.

ERDA plans to continue the current 0.20 percent transaction tails assay through at.Icast the early 1980's (no increase earlier than calendar year 1981); but in any case will not increase the transaction tails assay above 0.25 percent.

In this way, we will be able to maintain enrichment customer transactions close to the economic optimum tails assay and provide a reasonable attainable market increase for the uranium mining industry.

The second major objective of the additional capacity is to permit the U.S. to again open the enrichment services contract order book.

President Carter announced in his April 20 energy message that the U.S. is prepared-to enter into negotiations for new contracts for enrichment services.

With respect to foreign sales, he said that legislation would be proposed

.to Congress;that will guarantee the sale of enrichment services to any country which agrecs to comply with the United States' non-proliferation objectives.

In this way, he would seek to restore confidence in our ability and willingness to supply enriched uranium services in the world market.

The additional enriched uranium capacity will provided a means by which we NUULhe rfWLBcc cef f er new enrichment..scrvices contracts.

i fs l President Carter also took the Aprti 20 energy message as the means to announce the decision to use centrifuge technology for the additional enriched uranium production plant, rather than the proven gaseous diffusion technology. An ERDA review of the demand for enrichment services has indicated that with projected slippages in demand and an adequate enriched uranium stockpile, the provision of additional increments of enrichment capacity can be delayed for a few years.

This delay, coupled with the state of the develop-ment and engineering of the centrifuge technology, which Ewin Kiser will describe for you in the subsequent talk, permits us to choose this energy conserving and more operationally flexible technology for the next increment of enrichment capacity, as well as for later capacity additions.

Since the

• gas centrifuge plant will use less than 7 percent of the electrical power required for a gaseous diffusion plant, the gas centrifuge technology provides the means of conserving on the order of 2600 MWe.

This more efficient utilization of energy eliminates the need to otherwise build 3900 MWe of dedicated electrical generating plants, including reserves, that are needed for a gaseous diffusion plant and permits dependence upon system power for

.. t he.. mod e s t energy needs.

While no final decision has been made, prudence and planning ficxibility suggest that we should at least preserve the possibility that future increments of U.S. enrichment capacity could be carried out entirely by the private sector. Therefore, we have initially structured the centrifuge enriched uranium plant project to provide for three private participants to be involved.

Private participation in our program would have the opportunity to p.rovide inputs to the ERDA/ Architect-Engineers for the process and process building designs cud would construct and operate three of the four process modules, under ERDA contracts.

The plan, as we currently envision it, would provide for the initial centrifuge module to be constructed and operated without private industry involvement in order to provide ERDA with the assurance that it must have for achieving early production goals while also establishing a reference which can guide the private participant's efforts on the remaining modules.

We expect that the three subsequent modules will be constructed by the private participants in a sequential manner.

ERDA would exercise overall management responsibility through the private participant, for the construction and.

operation of these three production modules.

Ilowever, each of the three'pri-vate participants would be contracted to have direct responsibility for the management of specific design and construction activities associated with, as well as, operation of a specific module.

We have recently requested five participants in our Industrial Access Program who have demonstrated the interest and capability for centrifuge enrichment to provide us with their detailed evaluation of the feasibility J

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-3 cf ERDA's concept and to provide com=ents on major program considerations that ERDA may have overlooked.

We would expect that the resultant ERDA Centrifuge Enriched Uranium Plant would provide for direct industry participation in the utilization of gas centrifuge technology in a manner that would provide the experience necessary for them to provide follow-on enrichment capacity without government assistance, if that were to be deemed desirable in the future.

Recognizing that some U.S. and foreign utilities have become contractually overc,ommitted for their enrichment needs because of slippages in reactor Schedules, reductions in generating capacity requirements, and for other ERDA will not of f er an open season like we did in 1975, but will

reasons, consider providing contract relief on a case-by-case basis. Utilitics will be given the opportunity to demonstrate to ERDA that they are f acing a severe consequence because of their enrichment services contracts with ERDA. We will assess the various customer situations against certain criteria on a case-by-case basis to determine the manner and degree to which cont,ract adjustments might be provided.

The basis for those determinations and the criteria to be used are under development.

With respect to ERDA again opening the enrichment services contract order book, we are currently reviewing the contracting terms and condit, ions to determine whether greater flexibility may be of fered in contracting for coditional services.

This review is concentrating on three major factors:

First, our national non-proliferation objectives aimed at reducing or' preventing the spread of nuclear explosive capabilities, including the 1

cooperation of other supplier nations;

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Second, the government's desire not to preclude the evolution of a private cnrichment industry in the U.S.; and Third, the desirability of maintaining a reasonable balance between enriched uranium supply commitments and actual demand for such fuels.

The final decisions on whether the contract terms and conditions need to be changed and if so to what must await the outcome of this overall review..

The extent to which ERDA is willing to accept enrichment services contracts is also currently being reviewed. The ultimate contracting capability that ERDA can support will depend on many interrelated fsetors.

These factors include the timing of the transaction tails assay change, the degree to which the transaction tails are increased, the desired enriched uranium stockpile level, the schedule or availability of additional enrichment capacity level, and the degree to which the U.S. and foreign utilities seek and are provided with contracting relief.

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. I To recapitulate what I have said he.Ie today:

President Carter's April 20 bnergy message puts increased importance on the front-end of the light water reactor fuel cycle's ability to support the essential nuclear energy option in the U.S.

The additional enriched uranium capacity will pacmit continued efficient operation of ERDA's enrichment complex, provide a reasonably achievable market for the uranium mining industry, a'nd enable ERDA to meet a number of future requirements for enrichment Services.

I Gas centrifuge technology has reached the stage of develop-ment and engineering such that it has been chosen for the next and subsequent increments of snrichment capacity, essentially due to its energy-conserving and nore operationally flexible capabilities.

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