Authority 543 55 NATIONAL SECURITY COUNCIL May 29 r 1980 MEMORANDUM FOR - LEON BILLINGS IS - BERL BERNHARDI a FROM JERRY OPLINGER SUBJECT PRC Option's Paper re Non-Proliferation This is a very rough draft thrown together under pressure of time I'm sending it without trying to polish There is much more that could be said this is intended merely to give you a different perspective than you are likely to get in house I hope it's of some use I include a copy of the President's original decision memo on non-proliferation which people tend to forget and love to ignore I'm also including a copy of the original Smith memo which you needn't read -- a quick scan will give you an idea of where this all started I have not tried to deal with the other options in the paper 1 and on reprocessing The essential fact is that we need not move from where we are now nobody is hurting and the existing Presidential guidelines will provide plenty of plutonium for reason able programs If we must move 2 a is a very generous conces- sion and the outer limit of what we can do while retaining a mean- ingful policy 43% Review 5 29 86 1% DECLASSHHED Authority 5'4 3 55 Non-Proliferation PRC Options Paper The inscrutability of the PRC Options Paper results from several things obfuscation poor drafting the skewing of its analysis to support a set of policy pre-judgments and the editing down of a series ofprevious papers to protect positions rather than clarify issues The paper is intended to deal with three distinct issues They are the survivors of a bureaucratic negotiation not a coherent selection of the most important non-proliferation issues before us differences in their importance immediacy and potential consequence are very large I Whether the US should now broadly liberalize its policy on approving the reprocessing of US supplied nuclear fuel and the use of the extracted plutonium in foreign breeder programs II The position we should take with respect to a proposed International Plutonium Storage regime 1P5 I A proposal to issue long-term fuel export licenses instead of single reactor reloads I Reprocessing and Plutonium Use Policy The heart of the Options Paper is the proposal Option that we move now to a sweeping settlement of the continued differences between the U S and other advanced countries on the development of plutonium fuel cycles We would do this by granting them blanket DECLASSIFIED f h i Authority sneer 2 advance approval to reprocess US-origin fuels and use the resulting plutonium in their programs In short we would end the fuel-cycle controversy by surrendering to their views In doing so we would step sharply away from the policies set forth in one of the President's earliest foreign policy decisions of April 1977 copy attached The paper implicitly or explicitly makes essentially three arguments for such a change 1 The need to resolve the political tensions which continued disagreement on nuclear issueS'produces in our bilateral relationship with key allies No assessment is proVided of the relative impor tance of the nuclear issue within the broader relationships there is little evidence that the governments concerned as opposed to their nuclear bureaucracies regard the nuclear issue as critically important or urgent Moreover despite accumulating evidence that the premises underlying the President's original policies are correct and the fact that those policies are not seriously prejudicing foreign nuclear programs the unspoken assumption is that the disagreement must be ended ended now and ended by US capitulation to allied preferences and choices 2 That EURATOM and Japan are our allies that they represent no proliferation threat and that constraining their nuclear energy programs punishes our friends without affecting real proliferation problems What Europe and Japan do does matter not because they are a direct proliferation threat but because what happens there will set an extremely influential example in the rest of the world It will also create large economic pressures to export surplus materials and to recoup large investments by exporting breeder technology and hardware to the rest of the world 5% DEC LASSIFIED 3 Authority 5resolving the fuel-cycle disagreement we can achieve allied cooperation in building a better non-proliferation I gime While the paper scrupulously avoids setting forth an explicit bargain it clearly posits the advantage of accommodating Europe and Japan in order to achieve the objectives listed on pp 5-6 The ambiguity and fuzz surrounding these listed objectives has been sufficiently pointed out in the Bingham Zablocki letter to Smith of May 8 l980 The objectives are loosely described and decisions as to which would be minimally acceptable as a trade-off for the specific and concrete US concessions are left for a later stage after we may be locked into a negotiating process_from which it may be almost impossible to withdraw Specifically the paper calls for us to l Deferral of commitments to commercial thermal recycle for a specified period Thermal recycle is the recycle of reprocessed plutonium in present-day reactors The President is not told how long the deferral should be only commercial recycle is banned everything will then be called research only commitments are prohibited and mere experimenting on any scale may be allowed More important as discussed above the stockpiling of plutonium during the deferral if we permit unconstrained reprocessing of US fuel will create enormous pressures to go ahead as soon as the deferral is over DECLASSIFIED 4 Auihority 5% 3 5g Avoidance of excess national stockpiles of plutonium then u k But the relaxation will create incentives hjust such stockpiles 3 Obtaining from EURATOM controls over spent fuel But we would define them so as to render them ineffective as the price of getting them 4 Continued restraint in the export of sensitive nuclear technology We already have a commitment this would simply confirm it 5 Strengthen supplier state cooperation in dealing with problem countries No specifics are provided This is recognized as a hope not a concrete objective 6 A miscellany of vague motherhood items The paper does not attempt to assess the additional proliferation risks which relaxation of US policy would create and whether even if all of the objectives listed were obtained they would adequately contain those additional risks An understanding of this question requires a quick look at European and Japanese plans Because we lack control over the disposition of materials supplied to EURATOM there is little we can do to affect their breeder programs short of an embargo on further fuel supply Nobody contemplates such an embargo which is why our diminishing share of the European fuel market is not very relevant to the choices before us But the Europeans also plan activities which have large prolif eration implications and which involve the reprocessing of spent fuel we do control France and the UK each plan to build very large reprocessing plants in the next several years which are 223 needed DECLASSIFIED Autho tym 5 to proHECe plutonium for their breeder programs and whose primary purpose is to reprocess spent fuel as a commercial service to other u w bf- gimmick cL r m rm countries Japan is their biggest customer and is putting up the front-end money to build these plants as well as providing a large share of their future business Moreover Japan itself plans to build an additional large reprocessing plant of its own Any one of these three projected plants would more than swamp the projected plutonium needs of all the breeder programs in the world Three of them will produce a vast surplus of pure weapons- grade plutonium amounting to several hundred tons by the year 2000 Not only would that stockpile of separated plutonium constitute a ewe ma v danger in itself it would'drive these nations and those watching their example into the recycle of plutOnium in today's generation of reactors for economic reasons Thus the use of plutonium as a fuel may occur whether or not breeders catch on simply because too much reprocessing and plutonium production takes place in the near future as a means of waste disposal The attached graph shows the maximum projected needs for purposes in Europe and Japan until 2000 and the maximum amount of plutonium presently projected to be reprocessed during the same period The amount of potential US leverage on this problem is not over- whelming but it could be extremely important More than half of the spent fuel which could be reprocessed in the new French and British plants and virtually all of the fuel for the Japanese plant is under US control A rigorous application of our consent rights would deny most of this business make the completion of these plants a much more dubious commercial venture and sharply reduce incentives to complete them DECLASSIFIED 6 Authority 5'4 3 55 The stakes in a decision on liberalizing our control rights are thus very large II Fuel Licensing pp 18-19 Conventional current practice is to issue fuel export licenses for one reactor reload at a time We have told a selected group of countries that we will issue up to five reloads at a time The proposal here is to license for the fuel needs of the entire lifetime of the reactor -- up to 40 years That is an extreme position it gives up the subtle and effective non-proliferation leverage in fuel supply for a period far in excess of our ability to predict the likely future behavior of virtually any country The paper should include a more limited option -- Perhaps a 10- year license and only for countries who have renegotiated their agreement with us to the non-proliferation standards set forth in the NNPA International Plutonium Storage IPS The basic notion here is to set up a decentralized storage regime for separated plutonium under some kind of international control Plutonium would be released for any peaceful purpose The hope is that international involvement would increase the political barriers to misuse But an IPS is also an international distribution regime for plutonium which implies that it is now safe and gives international sanction to its release for national purposes so long as they are declared peaceful The risk is that this would catalyze widespread reprocessing and use of plutonium in any participating country The President in directed that IPS should be discouraged There should be an option sticking with that position DECLASSIFIED Authority 5% 3 5E nvoiutlon or the Paper It should be understood that the positions put forth in the paper represent a considerable degree of compromise Some of the rationale and intention behind it can be judged from the February l6 memorandum attached which represents the strategy Ambassador Smith originally recommended It went much further than the current paper It would have for example made no pretext of attempting to limit reprocessing in Europe and Japan and would have accepted explicitly the proposed lSOO-ton reprocessing plant in Japan as well as the two big plants in France and the UK DECLASSIFIED a a I Authority Eiq is 5 IIurn-H i 1 - --om pg l- o- THE VII-I HOUSE lt'an'i March 2 4 1977 ah av 'tb u- I Presidential Directive 8 TO The Vice President The Secretary of State The Secretary of Defense The Director Arms Control and Disarmament Agency The Administrator Energy Research and Development Administration ALSO The Director of Central Intelligence The Chairman Nuclear Regulatory Commission The Assistant to the President for Energy Policy SUBJECT Nuclear Non-Proliferation Policy It shall'be a principal U S security objective to prevent the spread of nuclear esplosive -- or near explosive -- capabilities to countries which do not new possess them To this end U 5 non- roliferat' policy shall be directed at preventing the develo and use of w Ec to pluto hi lily enric uranium mwyeapbns st ates and at minimizing the global ascumulation these materials 1 Specifically the U S will seek a pause among all nations in sensitive nuclear developments in order to initiate and actively participate in an intensive international nuclear fuel cycle re-evaluation program - IFCEP whose technical aspects shall concern the development and promotion of alternative non-sensitive nuclear fuel cycles This program will include both nuclear supplier and recipient nations 2 For its part the United States Government will -- Indefinitely defer the commercial reprocessing and recycle of plutonium in the U S DS - DECLASSIFIED - E0 13526 See 13 In DECLASSIFIED 1' Autho tym 2 3 4 Qopy for Dr Jessica Tuchman -- Restructure the U S breeder rc-acmr program so as to emphasize alternative designs to the plutonium breeder and to meet a later date for possible commercialisation As a rst step the need for the current prototype reactor the Clinch River project will be reassessed - -- Redirect the funding of U 8 nuclear research and development programs so as to concentrate on the development of alternative nuclear fuel cycles which do not involve access to weapoas useable materials -- Provide incentives in the area of nuclear fuel assurances and spent fuel storage to encourage the participation of other nations in the International Fuel Cycle Evaluation Program Detailed studies of these programs shall be carried out by the NSC Ad Hoc Group established herein and submitted to me as directed in the accompanying memorandum -- Initiate a pregram of assistance to other nations in the develoPment of non-nuclear means 'of meeting energy needs Increase production capacity for nuclear fuels It shall also be U S policy to strengthen the existing non-proliferatio - regizne by encouraging the widest possible adherence to the Non- Proliferation Treaty and to comprehensive international safeguards by strengthening and iniproving the IAEA and by providing stronger sanctions against the violatiOn of nuclear agreements Therefore the U S will announce its intention to terminate nuclear cooperation with any non nuclear weapons state that hereafter -- detonates or demonstrably acquires a nuclear explosive device or terminates or materially violates international safeguards or any guarantees it has given to the United States In order to implement these policies to perform the necessary studies and to coordinate departmental activities in the non-proliferation field I hereby establish an NSC Ad Hoc Group to be chaired by the Departm- - of State and to include the Presidential Assistant for Energy This group shall task forces chaired by the appropriate agencies to perform a1 nong others the tasks detailed in the accompanying memorandum ts-Iigf aka 7a 1' em-Inns Jimmy - ler DECLASSIFIED Authority 5'4 3 55 'f Comr_fnr r Jessica Tuchman The NSC Ad I-loc Group established in PD- is directed to prepare and submit by March 31 a comprehensive list 01' all activitiesy- facilities and technologies related to nuclear power which irivolve direct access to weapons useable materials prepare and submit by April 1 a review of the Fiscal 1973 budget with approPriate recommendations to implement the policies set forth in the accompanying Presidential Directive prepare and submit by April 5 proposed nuclear export policies including a summary of current applications for export of Highly Enriched Uranium and plutonium criteria which should be applied to nuclear exports at the licensing stage a list of criteria and conditions which should be required for new and amended agreements for cooperation and necessary revisions in existing agreements explicit Options covering U S policies on consent to retransfer reprocess reexport and reuse U S -supp1ied fuels Highly Enriched Uranium plutonium and materials irradiated in U S -supp1ied facilities and legislative proposals to implement these recommendations 'prepare and submit by May 1 a detailed study of measures the U S might take so as to be able to o fer nuclear fuel oassurances to nations participating in the International Fuel cycle Evaluation Program including rigorous revised estimates of future nuclear energy demand measures to expand U S enrichment capacity analysis and justification of U S stockpile programs recommendations for appropriate terms and conditions for future toll enrichment contracts assessments of the benefits of declaring an open season on enrichment contracts exploration of international undertakings and agreements and other short and long-term options for providing nuclear fuel assurances and collaborating with other suppliers prepare and submit by May a thorough study of measures the U 5 might take concerning nuclear fuel storage including measures to expand U S spent fuel storage and transportation capacity proposals for meeting the storage needs of those participating in the International Fuel Cycle Evaluation Program analysis of the advantages and disadvantages of international spent fuel storage but not plutonium gtogage Whig 353 H 5 and measures to accelerate the development demonstration and licensing of long-term spent fuel starage both- retrievable and termii-h 600 Supply '500 1400 Gnmpuff'ino i 4'9 Ema Qro ucoo - 306 Demand Metric Tons Plutonium 4r @3683 4h pro ec'hc Puritans2000 a E r Projected Cumulative Plutonium Supply and Demand Situation 3 For Western Eur0pe and Japan - Base Case a a 8 5 4 1 Figure                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu