NEPA. Regulations are critically needed to define the matters which should be considered in applicant's environmental reports and AEC environmental statements, and to define the issues which may be raised properly in contested reactor licensing proceedings. Regulations are also needed to establish standards for the consideration of such issues by the staff, by safety and licensing boards, and by the Commission itself.

A shift in the emphasis from case-by-case adjudication to general rulemaking will facilitate more meaningful participation by interested members of the public. For this purpose, I believe the Commission should publish reports by the AEC staff evaluating the safety or environmental aspects of important proposed rules prior to or contemporaneously with issuance of significant proposed rules for public comment. The Commission should also hold public hearings on its important proposed regulations as a means of encouraging public and industry participation and also as a means of conducting a more meaningful public inquiry into safety and environmental issues of public interest.

2. The time has come to reconsider the question of reorganizing the AEC so as to separate the Commission's regulatory from its promotional and operational responsibilities

The question whether AEC's regulatory responsibilities should be separated from its promotional and operating responsibilities is almost as old as the AEC regulatory program. Underlying the issue have been two persistent questions: whether the public will have confidence in important safety decisions by an agency which has both promotional and regulatory responsibilities; and whether the heads of the agency (in this case, the five commissioners) have the time to carry out both regulatory and operating functions adequately.

Personally, I have never been impressed by the argument that AEC promotional responsibilities have prejudiced its consideration of regulatory questions. As one who spent many years on the regulatory side of the Commission, I know that is not true. But I think the AEĆ, the utility industry and the public at large have paid dearly in loss of confidence in AEC decisions because of the appearance of conflict between regulatory and promotional functions.

In 1957, a Joint Committee staff study concluded that:

"As a longer range view is taken of atomic energy development, however, the strength of the arguments against a separate agency diminish, and tend at some point to be outweighed by the arguments favoring separation. When the day of commercial atomic power arrives, and the atomic industry can operate free from Government assistance, one can see definite advantages in an agency established to regulate that industry which would be independent of the government's manufacturing, producing, and operational efforts in the atomic energy program." (p. 47)

Four years later, the Joint Committee staff undertook a new study of AEC's regulatory program. The staff report of that study was issued in March 1961. I think you will be interested in some quotations from the report:

"3. THE INABILITY TO FORMULATE NEEDED REGULATORY POLICY

"Finally, the Commission, with its heavy promotional and operational responsibilities, has been unable to formulate much needed regulatory policies and standards. As a result, its regulatory actions, on occasion, have been marked by inconsistency and a resulting uncertainty which adversely affects the industry.

"These problems, and the cthers identified in Part IV of this study, have not as yet become critical because the AEC's workload and the peaceful uses of atomic energy have not progressed to the point where cumbersome organization and procedures produce an operational crisis or inadequate protection for the public. However, there is every indication that as the Commission's regulatory workload increases, it will be unable to successfully meet its many-sided responsibilities for the regulation and development of atomic energy. (p. 4)

"(1) DELAY IN ADJUDICATION.-Delay has been a factor in the licensing of both reactors and materials but, perhaps because the caseload is still not high, no great backlog of cases has been built up. Moreover, such delays as have occurred have not as yet actually delayed the completion of any reactors.

"The one case in which an active intervention required an adversary proceeding in reactor licensing, the PRDC case, has been extended over a period of more than 4 years and the end is not yet. Moreover, since a construction permit is involved, there remains the prospect of a contest at the operating license stage if the construction permit is granted but the findings of operating safety are open to dispute. Not only did this case run for a protracted period; in doing so it absorbed a great deal of Commission and staff time. While the PRDC case involved questions for which there was no precedent, the burden on the agency of conducting two or three contested reactor licensing proceedings at the same time would not be easy to estimate. Procedures which are reasonably expeditious and an organization at the decision making level which inspires public confidence seem necessary if the risk of the paralyzing effects of contested cases is to be avoided. (p. 56)

(6 .. The AEC seems also to have found it difficult to devote attention to forward planning for its growing regulatory responsibilities, though this difficulty has stemmed less from the pressure of adjudicatory business than from the preponderant burden of operating and promotional responsibilities. Given the continuing conflict with its operating and promotional responsibilities, the AEČ seems destined to devote insufficient time to regulatory policy unless some change in organization can relieve it of its adjudicatory function. (p. 59)

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"Although continued progress in reactor development can be expected over the next 10 years, the period of commercial exploitation of this great resource is not yet at hand. Advantage should be taken of this period of developmental activity by private industry and government to establish within the present framework of the AEC an organization adequate to meet the current needs and to provide a

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foundation for the creation of an independent agency when largescale development of atomic power makes such a move desirable." (p. 67)

The importance of the safety and environmental questions which must be considered in AEC's regulatory program, and the need for public confidence in the agency's decisions on those questions, are, I believe, so compelling under today's conditions as to require an agency whose appointed heads can devote their full time and energies to the regulatory program and who do not have even the appearance of a conflict in responsibility between that program and any other.

I recognize that difficult questions are presented by a proposal to separate these functions, but there are many possible alternatives and they do not all require a transfer of the regulatory function.

43

REMARKS BY WILLIAM O. DOUB, COMMISSIONER, U.S. ATOMIC ENERGY COMMISSION, BEFORE THE SOUTHERN GOVERNORS' CONFERENCE, ATLANTA, GA., NOVEMBER 10, 1971

FEDERAL-STATE RELATIONSHIPS IN THE ATOMIC ENERGY PROGRAM

Governors of the Southern Governors' Conference and distinguished guests. I was honored when Governor Mandel extended, in your behalf, the invitation to address you today. I was also secretly pleased at the topic I was asked to discuss since I have a special enthusiasm for the subject of Federal-State relationships in the atomic energy program. Having come from "the other side of the fence" as past chairman of the Maryland Public Service Commission, I fell a keen awareness in my new position as a member of the Atomic Energy Commission of the interests of States in Federal programs. The President of the United States recently wrote to the Heads of Executive Departments and Agencies on his very subject. In his letter he stated that: "Absolutely essential to the success of the New Federalism is the closest possible working relationships between the Administration and the officials of State and local governments. The Vice President, in his role as my principal liaison with State and local government officials, has the responsibility for ensuring the effectiveness of these relationships."

The President also wrote in his memorandum that it is his desire that Heads of Federal agencies communicate to the Vice President on a continuing basis their thoughts as to how he might assist them and their Departments in improving relations with State and local government officials. This is my theme. I would hope that my remarks will not be a one-way street, and that I will be able to take back any thoughts or suggestions that you may have which would be useful in improving AEC-State relations.

Recognition is already due the Southern Governor's Conference in its efforts of coordination and cooperation in the atomic energy field. Ten years ago the Conference formed the first Interstate Compact to serve as an instrument to maximize the peaceful uses of nuclear energy on a cooperative and coordinated regional basis. I congratulate you on this tenth anniversary of the submission of the Southern Interstate Nuclear Compact to Congress for its consent and approval and on the establishment of the Southern Interstate Nuclear Board as the executive agency to carry out the objectives of the compact. Certainly the objective of cooperative regional planning in the uses of nuclear energy is a desirable one, particularly with the growing emphasis on environmental problems and controls. By pooling the talents and the resources of the Southern States to foster the use and control of nuclear energy, the SINB has led the way in obtaining regional consideration for the development and use of atomic energy. Now there is also the

Western Interstate Nuclear Compact and it is my understanding that a compact is being considered for the States of the Midwest Governors Conference.

The Commission, as you know, has for some time conducted a program of regulatory cooperation with States. Most of you are familiar with the Commission's authority under Section 274 of the Atomic Energy Act which authorizes the Commission to enter into agreements with States for their assumption of Commission regulatory responsibility over most uses of atomic materials such as radioisotopes. To date, 23 States are conducting regulatory programs for these materials under agreement with the Commission. I don't plan to discuss in detail the provisions of this program, but I would like to acknowledge the good example which it has set for effective working relationships between the Federal Government and the States. We are particularly pleased with SINB's program of encouraging its member States to enter this program. Its success is shown by the fact that 12 of the 23 Agreement States are among the States of the Southern Governors' Conference. We look forward to having agreements with all your member States and Puerto Rico.

Earlier this year, the Honorable Sterling Cole, Federal Representative to SINB, wrote President Nixon regarding this program. In the letter he stated:

"The program is unique in that there is a flow of authority from the Federal to the State Government without financial support. States enter into such agreements because: (1) they have traditionally regulated the health and safety of their citizens and the program can be integrated with State programs for regulating materials presenting similar hazards, as X-ray equipment and radium, (2) they are closer to the public and believe that they can be more responsive to its needs and (3) they become more familiar with the broader health and industrial development problems of atomic energy."

As a follow up to Mr. Cole's letter to the President citing the StateAEC agreement program as an excellent example in the area of Federal-State relations, former Chairman Seaborg wrote to the Governors of all non-Agreement States suggesting meetings between their staffs and the AEC's staff to discuss this program. The response has been excellent, and a number of additional States are currently interested in agreements.

I would like to turn now to the environmental aspect of the Commission's program which has been a matter of increasing interest to the States, and discuss our relationships with the States in this rapidly expanding area. The National Environmental Policy Act of 1969 (NEPA) established a new field of Federal-State cooperation. Under that statute, each Federal agency is required to consult with appropriate Federal, State, and local agencies concerning major Federal actions significantly affecting the quality of the human environment and to prepare a detailed statement concerning the environmental impact of the proposed action. On December 4, 1970, the Atomic Energy Commission published its statement of general policy and procedure for implementing NEPA. In this connection, in February of this year, the Commission's staff met with representatives of States in which nuclear power reactors are located, power reactor suppliers, electrical utilities, architect-engineering firms, and environmental and conser