ML20245B833
| ML20245B833 | |
| Person / Time | |
|---|---|
| Issue date: | 02/08/1979 |
| From: | James Shea NRC OFFICE OF INTERNATIONAL PROGRAMS (OIP) |
| To: | |
| Shared Package | |
| ML20245B786 | List: |
| References | |
| FOIA-89-99, TASK-CA, TASK-SE SECY-79-100, SECY-79-100-01, SECY-79-100-1, NUDOCS 8904260305 | |
| Download: ML20245B833 (7) | |
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February 8,1979 SECY-79-100 l -
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. COlml$ STONER ACTION I From: James R. Shea, Director Office of International Programs Thru: Executive Director for Operation Subjec_t: PROPOSED LICENSE TO EXPORT PARTS AND COMPONENTS TO THE PHILIPPINE NUCLEAR POWER PLANT UNIT NO.1 (LICENSE APPLICATION XCOM-0013)
Purpose:
To make a recommendation to the Comission regarding issuance of the proposed export license.
Review Dates: 60 day period expired January 2,1979.
120 day period expires March 3, 1979.
Discussion: Westinghouse Electric Corporation has applied (Appendix A) for a license to export various nuclear power plant com-ponents, totaling $5.2 million in value, to the Philippines for use in the Philippine Nuclear Power Plant Unit No. 1 now in the early construction stages on'the Bataan Peninsula.
The components proposed for export are listed in Exhibit B of Westinghouse's application. (The components in Exhibit A are not specifically designed for a reactor and Westinghouse has been notified that they are not subject to NRC export licensing requirements.)
Westinghouse has indicated that it wishes to proceed with shipment of the equipment at this time in order to assure continued construction of the plant in an orderly manner, and to avoid an extension of the schedule for operating the reactor by several months, which could increase the costs to the Philippine National Power Corporation by
$3-7.5 million.
Current construction activities have already been disrupted due to the inability to obtain export approval for several '
key items included in the component application (i.e. the waste hold-up tank, the hot laundry shower tank and the I
Contact:
M. R. Peterson, IP (492-8155)
G. G. Oplinger, IP (492-7866) l((
8904260305 890421 PDR FOIA POTTSC HMB9-99 PDR N
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g spent resin hold-up tank). By adjusting construction schedules to " work around" the needed components, it will be possible to continue construction activities at increas-
,o' ingly reduced levels of effectiveness for perhaps several ,
more months. Eventually, however, construction at the reactor site will inevitably' come to a complete halt if the component license and the related license for the com-plete facility (XR-120) are not issued. Westinghouse has indicated that issuance of the component export license will permit construction to proceed at a roughly normal pace until approximately October 1979. By that time a decision may have been made on the facility license appli-cation. It is not clear at this time whether Westinghouse would submit another interim component license application should there turn out to be further delays concerning the facility application.
Westinghouse recognizes that issuance of the facility export license remains subject to considerable uncertainty, but is prepared to accept the financial risk inherent in proceeding with export of the components now and installing them at the proposed reactor site. XR-120 is still under Executive Branch review, and it may be an extended period (e.g. perhaps 6-12 months) before Executive Branch views are submitted to NRC. The staff is also examining the implications for this facility application of the President's January 5 Executive Order concerning environmental effects abroad of major federal actions, including actions providing to a foreign nation a production or utilization facility or a nuclear waste management facility.
The staff has reviewed the analysis submitted by State (Appendix B) recommending issuance of the requested component export license, and concurs in State's finding that the requirements of the Atomic Energy Act, as amended by the Nuclear Fon-Proliferation Act of 1978, have been met and that the proposed export would not be inimical to the comon defense and security or constitute an unreasuncble risk to the health and safety of the pblic.
As the Cocmission is aware, there has been substantial controversy surrounding the suitability of the selected i reactor site and the safety aspects of this project have )
been reviewed by a group of international experts convened !
earlier this year by the IAEA at the request of the Philip- '
pine authorities. The report of this group has not as yet been received by the USG, and final action by the Executive j Branch on this export is cwaitir,g completion of this review. !
In addition, questions have been raised regarding the Con- l mission's authority and respor.sibility to take into account I I
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l health and safety matters that arise in connection with proposed reactor exports.
The staff believes, however, that it is not necessary to
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take a position on health and safety rspects of the pro-posed Philippine reactor export in reaching a decision on this component export, inasmuch as these components (miscellaneous tanks, valves, pumps, etc.) in themselves present no H&S concerns. Nevertheless, issuance of the component license is likely to be perceived by some as signaling a Comission intention to approve issuance of XR-120 eventually, as well as imparting a degree of momentum in this direction. Because of this linkage, the staff has informally made clear to Westinghouse that, in the staff's view, if the component license were issued, this would in no way imply a comitment by NRC to approve the reactor export license application. Westinghouse has indicated it is willing to accept the component license on this basis. Should the Comission approve issuance of the component license, the staff believes that such approval should be accompanied by a reiteration of this disclaimer in writing.
As a related matter, the Commission should be aware that issuance of the proposed component license would establish a precedent in that the Comission has never before approved the export of components to a reactor site on which a facility export license application was pending. While NRC has only licensed component exports since July 1978, NRC was consulted by Comerce on applications for component exports prior to this date but did not provide coments on such applications until facility licenses were issued. In the past, facility export license applications have usually been l
processed in significantly less time than has transpired since Westinghouse first applied for XR-120 in November 1976.
1 Should the Commission approve the Philippines component export, additional reouests for "early" component export licenses in advance of licensing of the facility itself can be expected, especially where lengthy delays in facility licensing occur. This could result in a situation where licensees might, through piecemeal component exports, even-tually receive export approval for many of the components of e complete reactor prior to receiving a facility export license. Component licensing in this fashion would tend to l' increase expectations that the facility licenses would soon i he granted and could raise questions as to whether this would be appropriate licensing precedure and would be consistent with the intent of the Nuclear Non-Proliferation Act.
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On the other hand, since it would be impossible to construct a complete reactor with only "non-facility" components, the Comission would still retain final control over licensing l
l of the key elements necessary for functioning of a reactor under such an approach. (Part 110 defines facilities as nuclear reactors and the following major components of a nuclear reactor: pressure vessels, primary coolant pumps, l fuel charging and discharging machines and control rods.)
All proposed facility exports, of course, must be reviewed by the Commission and meet the six NNPA criteria, while propose.d component exports only need to meet the three componer t export criteria and can be approved by the staff.
In addition, by issuing the licenseea disclaimer with his component license, as discussed further below, the Commission would be able to place itself clearly on record that issuance of a component export license in no way implies that the Commission will act favorably on any related facility export license application.
The staff sees two basic options with regard to the component export. The first is to issue the component license at this time while making clear that this does not mean the reactor will necessarily be approved. This approach would (1) comply with the statutory requirement (Section 126b(1) of the AEA) to issue export licenses when specified criteria are met, (2) allow continuation of preliminary site construction in an orderly manner, thus avoiding intervening financial penalties, worker layoffs and operational delays (assuming the reactor export were to be later approved) and (3) keep options open with regard to a later decision on XR-120. The disclaimer should help to reduce any expectations regarding approval of XR-120 resulting from approval of this license.
On the other hand, approval' of the components in advance of a decision on the complete reactor, even with a disclaimer, is likely to be criticized by those opposed to XR-120 as-inappropriate licensing procedure and as creating momentum toward approval of XR-120. Approval could also result in even greater financial penalties (assuming XR-120 is eventually denied).
A second option is to deny (or defer actfon on) the componert license at this time on grounds that it vould not be sprroprieta for NRC to start the precedent of licensing components in advance of facilities, even uvder the circumstances of the present case, and that the health and safety issues surrounding XR 120 were such that all portions of the proposed export >
including the components, should be addressed when the Commission considers XR-120 itself. ELD ha:; adviseri, however, that the Comission does not appear to have discretion to ,
deny a component license on tuch grounds, since there is nothing in the AEA or the legislative history of section !
109 that would support such a course of action.
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Denial or deferral could also trigger the Presidential override provisions of the NNPA if the 120-day statutory o limit is exceeded without action on the componant license application.
Denial or deferral, which amount to having the same effect, would enable the Commission to take its normal course of combining review of component applications with the related reactor application, including consolidating consideration of the novel H&S issues involved. It would also avoid the risk of setting precedents regarding early component licensing and avoid charges of use of inappropriate licensing procedure.
Denial or deferral would be welcomed by opponents of the reactor export, despite any disclaimers, as indicatir,g that XPel20 would eventually be denied. Assuming the reactor application were later to be denied, denial or deferral of the component license at this time would save money, since it would force Westinghouse to stop work earlier on the Philippines project.
Denial or deferral, however, would also be criticized by those favoring the export and could result in ~~
charges that the Comission had failed to fssue~a license when statutory requirements had been met and the components in question presented no H&S concerns in themselves.
This approach would also cause construction at the reactor site to be interrupted, with resultant financial penalties, worker layoffs and delays in operating the reactor, if XR-120 were subsequently approved. These results could, in turn, have some effect on the Philippine government's relationship with the U.S.
The staff believes that the central issues on which a decision should be based for this case are compliance with statutory requirements and providi6g for a proper address 31 of health, safety, and environmental ratters related to the component and related reactor export. - The staff views as a lesser toncern the possibility that Tssua'nc~e of the componer.t license may~be viewed as establishing a bad precedent and also amount to lncor'ect licensing proceduret. (Any decision araong the options available to tne Commission may be subject to criticism frem various sonr:es, and cost and delsy impli-cations depend critically on whether XR-120 is eventually approved, which is uncertain at this time.)
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. In t:1e view of the staff there are valid considerations favoring both of the above options. On balance, and considering all the factors outlined above, however, the staff recommends issuance of the license with a disclaimer l regarding future approval of the reactor export license, rather than the option of deferral or denial. In making this recommendation the staff gives great weight to the fact that such a qua'ified approval would comply with statutory requiremer ts while, we believe, still adequately preserving the Commission's freedom of action to consider later the merits of the much more significant reactor export and its authority and responsibility to address H&S and environmental issues for nuclear exports in the light of the new Executive Order on Environmental review of exports. As appropriate, in its future review of the reactor export, the Comission will also give careful consideration to the NRC staff's previous comments con-cerning site suitability for the proposed facility. As far as precedent and appropriateness of licensing procedure are concerned, the staff believes that the circumstances of this case are sufficiently unique so that these would not be major concerns. To ensure this is understood, an approval decision should include a statement that, in the Comission's view, this is an unusual situation and approval does not mean it will be approving component licenses in advance of facility licenses for other cases.
Accordingly, the staff believes that Westinghouse should be allowed to continue construction at this time using these components, if they are willing to assume the financial risks involved when there is an explicit lack of assurances that an export license for the reactor itself will be issued.
In view of the unique aspects of this case, the staff has required additional time to ccmphte its ana?ysis and obtain the necessary interoffice concurrences. The staff notes, however, that the applicant N.s contucted IP on several occasions to express their concr as regeroing the urgent reed for the components in the Philippines. Accordingly, the staff believes the proposed expor<. warrants excedltiots Comission review; Because of the sensitive aspects of this case., this paper will not be placed in the PDR until the Comission has completed its yeviw.
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i Recommendation: That the Comission: q
- 1. _ Approve issuance of the proposed export license to Westinghouse;'and l 2. Approve the proposed letter at Appendix C by which Westinghouse will be informed explicitly of the basis on which the license was issued and that the license does not imply in any way that NRC will issue an export license for the complete nuclear reactor or that other component licenses will be approved by NRC prior to the facility licenses to which they relate.
Coordination: NMSS and NRR concur. ELD has no legal objection.
%lr. ,_. i.l ..-ll-9 James R. Shea, Director OfficeofInternationalprograms
Enclosures:
- 1. Appendix A - License Application
- 2. Appendix B - Executive Branch Analysis
- 3. Appendix C - Proposed Letter to Westinghouse Commissioners' corrinerits should be provided directly to the Office of the Secretary by Friday, February 15, 1979 .
Cc, mission Steff Office cor.raents, if any, should be submitted to the Commissioners February 14, 1979 with an information copy to the Office of the Secretary. If the paper is of such a nature that it requires additional time for analytical review and ccmment, the Commissioners and the Sec.retariat should be apprised of when coments may be expected.
DISTRIBUTION _:
tomissioners Comission Staff Office: l Exec. Dir. for Opera.
Secretariat i