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REMARKS BY DR. JAMES R. SCHLESINGER, CHAIRMAN, U.S. ATOMIC ENERGY COMMISSION AT THE ALL-CONFERENCE BANQUET OF THE ATOMIC INDUSTRIAL FORUM-AMERICAN NUCLEAR SOCIETY ANNUAL MEETING, BAL HARBOUR, FLORIDA, OCTOBER 20, 1971

EXPECTATIONS AND RESPONSIBILITIES OF THE NUCLEAR INDUSTRY

It is a privilege for me to be with you this evening at the Joint Meeting of the Atomic Industrial Forum and the American Nuclear Society. I trust that my remarks will be useful to you in casting some light on the environment in which you will be operating in the years ahead. It has been suggested to me that there is some curiosity, even eagerness, regarding my attitudes and what I might say in my first formal expression of views before a large segment of industry. Consequently, if you will permit, I shall dispense with the barrage of compliments, reminiscenses, anecdotes, and clumsy, jests, which are customary on such occasions. Since I wish to limit my remarks to a reasonable time, I shall turn right to the substance.

Despite the wide span of interests in the audience, the focus of my remarks this evening will be nuclear power. Initially, I shall concentrate on my impressions regarding the status of the nuclear industry. Later I shall indicate my views regarding the responsibilities of that industry-and the quite separate responsibilities of the Atomic Energy Commission. Together these should provide a framework of expectations regarding the future. And-hopefully-an understanding of the interplay of rights and responsibilities that should govern our activities.

You will appreciate that I have been in my present position for only two months, so that much of what I will say could be classified under the heading of early impressions rather than a complete and systematic treatment. Nonetheless you should not take these comments lighting on that score. You will also appreciate that I come to the AEC with a primary background in the national security end of AEC's responsibilities. So I am prepared to look for those things that are given emphasis in the weapons program: safety, predictable performance, high reliability, thorough and painstaking component testing, and an extensive program dedictated to quality assurance. With respect to nuclear power these objectives carry clear and necessary implications in regard to the reliability and maintainability of plants, the security of electric power supply, the long-run costs of electric energy. Above all, they relate strongly to the safety of those plants, which continues to be our primary responsibility to the public. The theme of quality assurance is one that you have heard discussed in the past; you will be hearing more about it in the future-and I shall return to it in a few minutes' time.

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I. WHAT IS THE PRESENT STATUS OF THE INDUSTRY?

When I met with some of you in Geneva, my assessment regarding the future of the nuclear industry was optimistic. It continues to be. Some of you may find it difficult to share that optimism-particularly in the atmosphere that has hung over the industry since Calvert Cliffs. Indeed, I can fully understand why many of you are distressed. Still it should be difficult to be other than bullish about the long-run future.

The development and the expected growth of this industry are simply remarkable. What other industry can look forward with the same degree of confidence to a growth rate of roughly 15% per annum. The future is spectacular-the ultimate future. The pace of achievement, however, will depend heavily on two provisos: first, provision of a safe, reliable product; second, achievement of public confidence in that product. Satisfying these provisos will be a demanding task. But it can be done, if we recognize that it is imperative to provide the determination, the resources, and the organization to meet that challenge.

There are two problem areas: first, a set of difficulties, probably unavoidable, reflecting the "growing pains" of the industry, and, second, the state of congestion in the review process. It may be natural to ask who or what is to blame. But that is useless. All bear some degree of responsibility-in failing to take the necessary actions in the light of persuasive evidence of trouble ahead.

Yet, if you are inclined toward gloom, think for a moment about the truly remarkable achievements of the industry in a brief span of time. It is just 18 years since construction started at Shippingport. It is under 17 years since President Eisenhower's Atoms for Peace Message. It is but 15 years since the Commission inaugurated its Power Reactor Demonstration Program. It is but 8 years since Oyster Creek. It is just 5 years since the first order was placed for a 1000 MWe power reactor. In a four-year period, 1963-1967, capacity on order from the industry increased fifteen fold. These are spectacular developments. To draw an analogy, it is similar to the entire history of commercial aviation from Kitty Hawk to the Boeing 747 being compressed into less than a score of years. And in the commercial breeder and the fusion reactor we look forward to, as it were, the veritable space age of nuclear energy.

Perhaps in some respects the pace has been too swift. In any event, no one should be surprised if there is evidence of growing pains. Inevitably there has been a shortage of experienced personnel-eased by the supply provided adventitiously from Admiral Rickover's naval reactors program. It was not inevitable that the shortage be permitted to persist. Utilities have purchased power plants based on financial considerations, paper designs, and paper calculations-without adequate technical knowledge as to what they were buying. Over time, new plant designs have been based upon large engineering extrapolations.

Many of the architect-engineering firms appear not to have assembled the needed resources of qualified personnel to carry a large number of power reactors through to the operational stage. This is the more significant since these firms may be attempting to substitute

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for designers, and for customers who are not sufficiently knowledgeable or demanding to cope with many first-of-a-kind items and within an expanding program. A consequence has been a wide spectrum of uncertainties in costs, schedules, and plant performance—and the need for prolonged test and shakedown periods.

Under these circumstances one should hardly be surprised that there are growing pains, but rather that the industry is already so far ahead. In this connection, neither should you be surprised if the Commission lays stress on disciplined engineering and on quality assurance. This is essential to the long-run success of the industry-and to satisfy the legitimate public concern, which the AEC represents. We will need to be assured that piping is of the highest quality, that pumps work, that valves are properly designed and operate reliably, that welding has been done in accordance with specifications and that radiography confirms this fact. Those in industry who have chided us quite properly— about the AEC regulatory process, know full well that you have reason to blush regarding some of these aspects of quality assurance. Gentlemen, these engineering details are not peripheral; they are the heart of our problem.

The focus of concern should be the likelihood of small accidents, small spills, unplanned shutdowns, power interruptions and associated higher construction and maintenance costs. Potentially these could be the source of far more trouble over the long run that the possibility of hypothetical disasters.

We must of course give careful consideration to these hypothetical accidents, even though their occurrence may have virtually zero probability. But we must insure that such consideration does not unduly divert our limited resources in management and technical personnel from adequate attention to the unglamorous engineering tasks that constitute the heart of the safety problem-and the heart of your commitment to produce reliable power. We regard it as vital that purchasing utilities acquire trained personnel and technical expertise, that they become knowledgeable and demanding customers--to insure that they receive full value for the dollar expended, to avoid power interruptions, to insure that plants can and will be properly maintained, and, among other things, to avoid relying on the Atomic Energy Commission to perform this critical task. Moreover, we are confident that reliable power reactor vendors want nothing more than a knowledgeable and demanding customer.

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II. WHAT IS THE AEC'S ROLE?

There is another aspect to growing pains which casts light on the relationship between the industry and the Commission. Some of you may feel that Calvert Cliffs was a watershed event in other respects-that the Court's decision should have been fought, that by failing to appeal the decision and by issuing regulation in conformity with the court's decision the Atomic Energy Commission was admitting that it was wrong, that the whole set of events was tantamount to the AEC's abandoning the industry. In light of the historical climate in the industry, this is an understandable response. From its inception the Atomic Energy Commission has fostered and protected the nuclear industry. Looking back one can, I think, say that this was the right

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policy for that historical epoch. That policy permitted a new and vital technology to be exploited; it created an industry and then protected the industry as it grew to relative maturity. But that industry, insofar as it involves the exploitation of light water reactor technology, should now be on a self-sustaining basis. Those of you who regard the response to the Calvert Cliffs as indicating a climatic change in the relationship between the industry and the AEC could well be right, though perhaps for the wrong reason. The move toward greater self-reliance for the industry had a certain historic inevitability. Such a process is always painful. It is, however, necessary. One result will be that you should not expect the AEC to fight the industry's political, social, and commercial battles. These are your tasks—the tasks of a self-reliant industry.

The logic is, I think, quite clear. This is no longer an infant industry; it is rapidly approaching mature growth. The history of the tariff is replete with brawling, vigorous industries continuing to demand protection appropriate to the years of early growth, when the stage of infancy had long since been passed.

In this regard the thrust of the Atomic Energy Act of 1954 can readily be misconstrued. The concept of "promoting," implicit in the act, is an elastic one. It can be interpreted, quite properly, to mean that the AEC has responsibility aggressively to develop new or improved technical options which may be exploited for public use. It can be interpreted, quite improperly, I believe, to suggest that the Atomic Energy Commission should indulge in promotional activities on behalf of well-established industrial sectors. Perhaps the phraseology is obsolescent. In any event the word "promotional" has served to confuse some sections of the government, the industry, and the public regarding the proper role of the Atomic Energy Commission in this mature stage of the industry's development.

It is the responsibility of the Atomic Energy Commission vigorously to develop new technical options and to bring those options to the point of commercial application. It is not the responsibility of the Atomic Energy Commission to solve industry's problems which may crop up in the course of commercial exploitation. That is industry's responsibility, to be settled among industry, Congress, and the public. The AEC's role is a more limited one, primarily to perform as a referee serving the public interest. I might add that it is to industry's long-run advantage that the public has high confidence that the AEC will appropriately perform its role in this regard.

In the weeks since I came into this job I have been impressed on a number of occasions by the failure in the industry and in-house properly to distinguish between the role and responsibilities of industry and the separate role and responsibilities of the AEC. In the future I trust the distinctive responsibilities of a government agency will become more sharply etched in the minds of all of us. I have suggested some of my concerns, let me be more precise.

The Atomic Energy Commission does not sell power reactors. We are a by-stander, sympathetic I trust. The selling of power reactors is a concern of the vendors; the decision to buy that of the utilities. The Atomic Energy Commission has issued projections indicating 150,000 MWe installed by the end of 1980. We are interested, of course, but it is a projection not a target of the Atomic Energy Commission. If it

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turns out to be a 130,000 rather than 150,000, or 160,000 for that matter, that reflects, quitely properly, the decisions of industry. They are not our decisions. The AEC's primary responsibility is to assure expeditious reviews of applications-a subject which rightly concerns you and to which I will return.

Again, it is not a responsibility of the AEC to supply power, even nuclear-generated power. I recently read an EEI study seemingly based on the premise that the AEC has a responsibility for power production. I question that premise. Utilities sell power. The Federal Power Commission is the primary agency concerned with power supply. Congress provides the framework. Unquestionably it is the AEC's responsibility to take local power supply conditions into account when an application lies before the AEC. Our new regulations specifically recognize this responsibility, but I underscore that in the existing statutory framework our responsibility is not the overall power supply situation, but rather providing technical options and seeing that the technology is appropriately and safely utilized.

You have every right to demand that the AEC perform its duties efficiently. If extraordinary costs are incurred because of the unduly slow functioning of AEC procedures, that is our problem and our responsibility to solve it. It is not our responsibility, however, if a utility encounters unanticipated costs because of a failure to do its job properly, failure to comply with the procedures, or because of a change in the law. We are sympathetic; we understand your problem, but it is your problem.

Finally-and let me underscore this point-it is not the AEC responsibility to ingore in your behalf an indication of Congressional intent, or to ignore the courts. We have had a fair amount of advice on how to evade the clear mandate of the federal courts. It is advice that we did not think proper to accept. If you regard the legislation or judicial framework as extreme or unworkable, you have a clear remedy through the seeking of legislative relief. We sympathize with the difficulties that you are facing, but we have no intention of evading our responsibilities under the law.

Since these difficulties stem from the enhanced concern about the environment, let me say a few words on that subject. Environmentalists have raised many legitimate questions. A number have bad manners, but I believe that broadside diatribes against environmentalists to be not only in bad taste but wrong. I believe that we shall receive from the responsible environmentalists considerable assistance in resolving our present difficulties. Take air pollution. It is my personal judgment that when all environmentalists, including ourselves, have a chance to assess the contribution of nuclear power to the reduction of sulphur and nitrogen oxides and particulates, that all environmentalists will appreciate the advantages of nuclear power in relation to the real alternatives. I believe the argument over radioactive discharges is pretty well off the boards. Good answers will still have to be provided regarding safety, transportation, and waste management. Moreover, the responsible environmentalists are keenly aware that the present situation can boomerang. If there are power interruptions, brownouts, and blackouts, the environmental movement will pay a severe price along with the rest of us-and that is the situation the environmentalists wish to avoid.

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