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Key Issues Nuclear Energy History US Atomic Energy Commission on Nuclear Power

United States Atomic Energy Commission
Report on the Need for Nuclear Power

Our technological society requires ample sources of energy. Although large, the supplies of fossil fuels are not unlimited and, furthermore, these materials are especially valuable for many specific purposes such as transportation, small isolated heat and power installations, and as sources of industrial chemicals. Reasonable amounts should be preserved for future

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Comparison of estimates of fossil fuel resources with projections of the rapidly increasing rate of energy consumption predicts that, if no additional forms of energy were utilized, we would exhaust our readily available, low cost fossil fuels in a century or less and our presently visualized total supplies in about another century. In actual fact, long before they become exhausted we will be obliged to taper off their rate of use by supplementing them increasingly from other sources.

In contrast, our supplies of uranium and thorium contain almost unlimited amounts of latent energy that can be tapped provided "breeder" reactors are developed to convert the fertile materials, uranium-238 and thorium-232, to fissionable plutonium-239 and uranium-233, respectively. Successfully done, this will render relatively unimportant the cost of nuclear raw materials so that even very low-grade sources will become economically acceptable.

The use of nuclear energy for electric power and, less immediately, for industrial process heat and other purposes is technically feasible and economically reasonable. In addition to its ultimate importance as a means of exploiting a large new energy resource, nuclear electric power holds important near-term possibilities: as a means of significantly reducing power generation costs, especially in areas where fossil fuel costs are high; as an important contributor to new industrial technology and to our technological world leadership; as a significant positive element in our foreign trade; and, potentially, as a means of strengthening our national defense.

In view of the above we have concluded that: Nuclear energy can and should make an important and, ultimately, a vital contribution toward meeting our long-term energy requirements, and, in particular, that: the development and exploitation of nuclear electric power is clearly in the near- and long-term national interest and should be vigorously pursued.

The Role of the Federal Government
The technological development of nuclear power is expensive. The reactors are complex, and operating units, even of a scaled-down test variety, must of necessity be large and costly. Furthermore, nuclear power does not meet a hitherto unfilled need but must depend for marketability on purely economic advantages that will return the development investment slowly. Hence, the equipment industry could not have afforded to undertake the program by itself. The Government must clearly play a role.

An early objective should be to reach the point where, with appropriate encouragement and support, industry can provide nuclear power installations of economic attractiveness sufficient to induce utilities to install them at their own expense. Once this is achieved the Government should devote itself to advanced developments designed to meet long-range objectives, leaving to industry responsibility for nearer-term improvements. Gradually, as technological maturity is reached, the transition to industry should become complete.

Thus, the proper role of Government is to take the lead in developing and demonstrating the technology in such ways that economic factors will promote industrial applications in the public interest and lead to a self-sustaining and growing nuclear power industry.

The Present Situation
Accordingly, in keeping with national policy, and with the responsibilities assigned to it by the Atomic Energy Act, the Atomic Energy Commission has conducted and encouraged a vigorous program directed toward the development and extensive exploitation of nuclear energy for civilian purposes, with emphasis on nuclear electric power. About $1.275 billion has been expended by the AEC to date on the civilian power program. This program has included both research and development and a "power demonstration"' program, involving aid in the construction and operation of practical reactors on utility grids. Several reactor types are under development. Most highly developed are "converter" reactors that produce less fissionable material than they consume; much less far along are "breeder" reactors that produce more than they consume.

In one segment of the power demonstration program, Commission-built and -owned "prototype" reactors are operated by utilities that buy the steam; in another segment, utilities are given research and development assistance in designing and constructing their own reactors and, for a few years no charge is made for the lease of Government-owned nuclear fuel. Six sizeable reactors of the more highly developed types are in successful operation on utility grids (the two largest without AEC assistance); seven more will be completed by the end of 1963; a few others are under construction or nearly so. Experience has shown that nuclear electric power is readily achieved technically but difficulties have been met in developing a technology that is economically competitive with conventional power generation methods. Happily, in recent years these difficulties have been progressively overcome.

Certain classes of power reactors, notably water-cooled converters producing saturated steam are now on the threshold of economic competitiveness with conventional power in large installations in high fossil fuel cost areas of the country. Foreseeable improvements will substantially increase the areas of competitiveness.

Technical Considerations
Saturated steam reactors, however, have certain inherent limitations. They produce relatively low temperature saturated steam which limits their efficiencies and requires the use of large, expensive turbines; they are only moderately effective converters. Consequently, converter concepts utilizing other moderators and coolants and promising improved economics and fuel utilization are being actively pursued with encouraging results; early competitiveness seems assured for some of them. All of these are "thermal" t reactors. They include the "spectral shift" reactor, the high temperature gas-cooled reactor, and the sodium-graphite reactor. All have relatively high efficiencies and excellent economic promise. The first two will have excellent conversion ratios; indeed they may eventually be made to breed in the thorium-uranium cycle. The sodium-graphite reactor can achieve quite high temperatures, has good safety features and helps develop the liquid sodium technology necessary for fast breeders. The heavy water moderated reactor also shows promise of high conversion ratios but present designs are not so attractive economically as other types in the United States. The organic-cooled and -moderated reactor may have application for process heat. Some of these should be carried to the stage of operating prototypes during the next several years, and some will reach the full-scale operational phase by the early 1970's. Operating reactors of these types will help accelerate the industry, will increase operating experience and will help provide plutonium needed for the breeder program.

Although much technical progress has been made, breeder reactors have not yet reached an economically useful stage of development. Even when they do, they will not, initially at least, make new material fast enough to provide the fuel for new plants at the rate required if nuclear power is to increase its proportional share of the national electric power load. Hence, even after breeders become available, it will be necessary to fuel some portion of the installations with uranium-235 until such time as improved breeding gains and reductions in the relative rate of growth in power consumption enable the breeders to be self-sufficient. For the thermal reactors used to make U-233 from thorium, this need can be met by substituting U-235 for U-233 in some of them, at a sacrifice in fuel produced. A similar procedure would, however, be uneconomic in the "fast" reactors required to breed plutonium. Hence, in the transition stage, which will last for many decades, fast breeders that burn as well as make plutonium will probably be augmented by thermal converters both for economic reasons and because it is important that the combination of breeders and converters reaches an overall net breeding capability, or very nearly so, while relatively cheap fuel supplies are still available.

In our opinion, economic nuclear power is so near at hand that only a modest additional incentive is required to initiate its appreciable early use by the utilities. Should this occur the normal economic processes would, we feel, result in expansion at a rapid rate. The Government's investment would be augmented many fold by industry. Equipment manufacturers could finance major technical developments, thus reducing the future need for Government participation.

Continuation of the Commission's present effort, with some augmen-tation in support for the power demonstration program, and with program adjustments to give added emphasis to breeders, would, we believe, provide industry with the needed stimulus to build a significant number of large reactors in the near future, would bring nuclear power to a competitive status with conventional power throughout most of the country during the 1970's, and would make breeder reactors economically attractive by the 1980's.

Under these conditions, we estimate that by the end of the century nuclear power would be assuming the total increase in national electric energy requirements and would be providing half the energy generated. This rate of progress, projected into the next century, would be an important step in conservation of the fossil fuels and, unless breeders lagged the converters much more than we predict, would raise no problems in nuclear fuel supplies.

Under conservative cost assumptions, it is estimated that by the end of the century the above projected use of nuclear power would result in cumulative savings in generation costs of about $30 billion. The annual saving would be between $4 and $5 billion. High cost power areas would no longer exist, since, in the absence of significant fuel transportation expenses, the cost of nuclear power is essentially the same everywhere. This would be an economic boon to areas of high cost fossil fuels and, by enabling them to compete better, should increase the industrial potential of the entire country.

More generally, the introduction of nuclear power technology on a significant scale would add to the health and vigor of our industry and general economy. Technical progress would assist the space and military programs and have other ancillary benefits. Our international leadership in the field would be maintained, with benefit to our prestige and our foreign trade. Nuclear power could also improve our defense posture; it would not burden the transportation system during national emergencies; furthermore, the "containment" required for safety reasons could, if desired, be achieved at little, if any, extra cost by underground installations, thus "hardening" the plants against nuclear attack.

A substantially lesser program would sharply reduce these benefits. Too great a slowdown could result in losing significant portions of industry's present nuclear capability thereby seriously delaying the time at which it would assume a major share of the development costs.

On the other hand we do not believe that a major step-up in the whole Commission program is appropriate. Taken as a whole, support of the scientists and engineers engaged in developmental work is about adequate and, in view of the country's other needs, it would seem unwarranted to increase appreciably such manpower in this field.

To summarize we have concluded that the nuclear power program should continue on an expeditious basis. Commission support should continue with added emphasis on stimulating industrial participation. The program should include: (1) early construction of plants of the presently most competitive reactor types; (2) development, construction and demonstration of advanced converters to improve the economics and the use of nuclear fuels; (3) intensive development and, later, demonstration of breeder reactors to fill the long-range needs of utilizing fertile as well as fissile fuels.

An important corollary area is the development of economical chemical reprocessing methods whereby useful fissile and fertile materials are recaptured from used fuel assemblies and the fission products are removed. Another important line of work concerns the ultimate storage or disposal of the large amounts of radioactive fission products that will be generated when a major power industry comes into being.

An overriding consideration is that of safety. Not only must inherent safety be assured in fact but its existence must be conclusively demonstrated to the public. With adequate technical improvements and the accumulation of satisfactory experience, it should be possible gradually to remove many of the siting restrictions in force today, thus permitting plant locations closer to the large load centers.

Possible Construction Program
A composite construction program for the next dozen years might entail the following: (1) the construction and placing into operation of seven or eight power-producing prototype reactors, approximately half of which would be advanced converters and the rest breeders; most of their cost would probably be borne by the AEC; (2) assistance, as necessary, to industry in the construction of 10- 12 full-scale power plants of improving design as time goes on; hopefully, industry will concurrently bear full costs of many more of well proven design.

This construction would, of course, be backed by specific development programs directed at the more advanced reactor types, especially breeders, and by research and development related to the underlying technology.

Legal, Financial and Administrative Matters
Careful attention must be paid to several legal, financial and administra-tive questions, among them (1) private ownership of special nuclear materials and related policies on fuel pricing and "toll enrichment"; (2) policies relating to the raw material and other supporting industries; (3) licensing and regulation, including reactor siting criteria.

The commission has recommended that private ownership of special nuclear materials be authorized at an early date, thus permitting the free play of normal economic forces and minimizing economic distortions of the technology. To prevent sudden dislocations such ownership should not be made mandatory for a decade or so.

The Commission further believes that a policy of "toll enrichment" or equivalent should be adopted. Industry could then buy its raw materials on the open market, use privately owned plants to prepare them for enrichment, and depend upon the Government only for the actual enrichment in the diffusion plants. This service should also be extended to our friends abroad, subject to proper safeguards against diversion for military use.

Before and during the period of transition to private ownership the value set by the Commission on enriched uranium for lease or sale should, as at present, be determined by the actual cost, with appropriate allowances for depreciation and other indirect expenses. The Commission has recom-mended that prices for the purchase of plutonium be in accordance with its  "near-term" value as a reactor fuel. We believe that consideration should be given to scaling the price in accordance with the content of fissionable isotopes. The same pricing policies should apply to purchases abroad of plutonium made from uranium enriched in the U.S.

The Commission's contracts with uranium miners and processors expire at the end of 1966. Since it seems probable that the requirements for new uranium for weapons, the dominating use to date, will decrease in the next decade, careful planning is necessary to so guide further procurement that the uranium industry will be kept viable during any slack period before civilian power creates another large demand. With this in mind the Com-mission is planning to offer the industry a "stretchout" program under which an AEC commitment to purchase additional material after January 1, 1967 would be used as an incentive to induce industry to delay until after that date delivery of part of the uranium presently under contract. If successful, this program would result in a leveling-off process that should carry through the period of slack use without injuring the industry substantially or resulting in an unreasonably large surplus.

The Commission intends to continue and extend encouragement to the industrial activities ancillary to the major equipment industry. Many that could start on a small scale are already well underway. There are, however, a few activities, such as the chemical separation of used fuels, that are attractive to industry only on a fairly substantial scale and for which there will be little private business until civilian reactors have operated for an appreciable period. Strong encouragement is being given to private industry to embark in these fields with some prospect of success. As rapidly as a private capability comes into being the Commission should withdraw from all such work deriving from industry and should utilize private plants to fill its own requirements except, perhaps, for those related to materials for weapons.

Recognizing that simplifying and streamlining licensing and regulatory procedures can be a major help in encouraging the utility industry to adopt nuclear power, the Congress and the AEC have been taking steps in this direction. A major step is the recent enactment of laws that will reduce greatly the number of mandatory public hearings for reactor licensing. The Commission is studying means of simplifying its own licensing procedures by reducing the volume and complexity of administrative processes. Further operating experience should reduce the time and effort required for techni-cal analysis and review.

Objectives for the Future
Clearly: The overall objective of the Commission's nuclear power program should be to foster and support the growing use of nuclear energy and, importantly, to guide the program in such directions as to make possible the exploitation of the vast energy resources latent in the fertile materials, uranium-238 and thorium. More specific objectives may be summarized as follows:

1. The demonstration of economic nuclear power by assuring the con-struction of plants incorporating the presently most competitive reactor types;
2. The early establishment of a self-sufficient and growing nuclear power industry that will assume an increasing share of the development costs;
3. The development of improved converter and, later, breeder reactors to convert the fertile isotopes to fissionable ones, thus making available the full potential of the nuclear fuels.
4. The maintenance of U. S. technological leadership in the world by means Of a vigorous domestic nuclear power program and appropriate cooperation with, and assistance to, our friends abroad.

The role of the Commission in achieving these objectives must be one of positive and vigorous leadership, both to achieve the technical goals and to assure growing participation by the equipment and utility industry as nuclear power becomes economic in increasing areas of this country and the world at large.