Industry Asks More Government Help to Speed Program

TO bolster free-world defenses, the Administration last week urged Congress to rewrite the Atomic Energy (MacMahon) Act to give U.S. allies more atomic-weapons information, more nuclear material. But to many U.S. businessmen, a stronger atomic defense is only one side of the coin. They want some equally drastic changes in the U.S. atomic-energy program to develop commercial power for use throughout the power-hungry world. While AEChairman Lewis L. Strauss maintains that the commercial program is clipping right along, experts in Congress and industry disagree; they insist that commercial nuclear power must be sped up, or else the U.S. will fall far behind other nations.

The main argument is over how much help the U.S. Government should give private industry. AEC's position is that nuclear power for peaceful purposes should be largely a private venture, with AEC supplying only limited funds. Originally, businessmen supported the idea, lest nuclear energy grow into a giant public-power program. Now their position has changed. Even the stoutest private-power men feel that the program needs a strong infusion of Government aid because commercial nuclear power is so new, so complex and so costly that private companies cannot carry the burden alone. Says President Newton I. Steers Jr., of the Atomic Development Mutual Fund, Inc. (assets: $45 million), a onetime AEC official and longtime private-power advocate: "There isn't a reactor manufacturer in the U.S. who doesn't favor Government assistance to get them over the hump."

The big hump is the fact that conventional U.S. power is so cheap--and nuclear power so expensive--that the U.S. itself has no pressing domestic need for a crash program. Thus, AEC orients its program toward the laboratory, has considered well over 100 different ways of producing nuclear power, and is concentrating on small experimental reactors to test the most likely methods. AEC hopes to foster an industry producing possibly 95 million kw. of nuclear power by 1980, or 25% of the estimated total power demands of the U.S. But U.S. industry is learning, to its sorrow, that there is a vast gulf between atomic power in the lab and in commercial quantities. Costs have shot up to the point where they discourage even the richest companies.

The one large nuclear power plant completed to date, the 60,000-kw. station built by Westinghouse Electric Corp. for AEC and the Duquesne Light Co. of Shippingport, Pa. (TIME, Nov. 25), is a major milestone for the U.S. --and a perfect example of the cost problem. Westinghouse's original cost estimate was $37.8 million. The plant will ultimately cost about $100 million. The Government paid 95% of the bill to get it operating; the power produced is so expensive that AEC also pays a heavy subsidy to make it marketable.

There is no such heavy Government aid for the sixteen privately sponsored plants, which comprise the bulk of the program. Builders are largely on their own, working under fixed-price contracts with risk of heavy losses. As a result, one small experimental plant is completed, only four are under construction. Two others have been contracted for, but negotiations with AEC for another five are poking along, and four more have been canceled.

Even the biggest companies find the going rough. General Electric originally put a price of $45 million on the Dresden (Ill.) nuclear power plant (180,000 kw.) abuilding for Chicago's Commonwealth Edison Co.; costs already exceed that by an estimated $20 million. By the time it is finished, G.E. will be $80 million in the hole on its nuclear program, including a smaller 5,000-kw. plant it built at Pleasanton, Calif, to get experience. G.E., like the others, thinks that if it could build three big plants in a row, it could learn enough to produce competitive power. But G.E. has no plans at the moment. As one reactor builder says: "Private industry has found that there is no money in atomic energy and no prospect of making any money."

Result: U.S. industry is not getting the experience it needs. Says Westinghouse Vice President Charles H. Weaver: "We should accumulate 100 units of operating experience by the end of 1964. But by the end of 1957, we had accumulated only about one unit of experience. And it will not be until 1962 at the earliest that we start getting any substantial operating experience."

For U.S. consumers, the lag in the commercial nuclear program is no great worry. With plenty of coal, oil and gas, the U.S. can afford to wait. But what may not be economic for the U.S. is often economic for other nations with less resources. Britain, whose conventional-power costs are estimated at double those in the U.S. (7 1/2 mills per kw-h), needs nuclear power right now; so do many other nations. Britain is going ahead under a nationalized program to build the actual power plants. It has been operating its Calder Hall plant, half again as big as Shippingport, for more than a year, is building three more with better than 200,000 kw. and a fourth with 500,000 kw., v. only 180,000 kw. for the biggest U.S. plant.

By 1964, say Britons, domestic nu clear energy will total 6 million kw., v. only 1.6 million for the U.S. The British have also landed a contract for a $72 million, 200,000-kw. power plant in Italy, expect to sew up at least five other foreign contracts totaling about $500 million by the end of 1958. Target for 1967: the bulk of the business from Europe's six-nation Euratom combine, whose purpose is to build a common nuclear power grid of 15 million kw. Russia is reportedly building a 150,000-kw. plant for Czechoslovakia, a 100,000-kw. plant for East Germany, and two 400,000-kw. plants for herself--all to be completed by 1960.

By contrast, U.S. manufacturers have only eight power-plant contracts around the world, most of them small. In addition to costs, AEC tightly restricts sales of enriched uranium, needed for U.S.-designed plants, refuses to guarantee foreign nations all they need; Britain, on the other hand, gives a lifetime fuel guarantee with each contract. Still another complaint is insurance. British underwriters have banded together to form the British Insurance (Atomic Energy) Committee to write a plan for insuring foreign nuclear plants. The U.S., while it has finally developed a joint Government-private insurance program for domestic reactors, has no plan to extend coverage to prospective customers abroad.

There is little doubt among nuclear experts that the U.S. must push ahead much faster than AEChairman Strauss is willing to go. Last week, AEC was trying to work out a compromise plan to supply more funds to private industry for research and development. The need is bigger than that. One comprehensive plan was laid out recently by Willis Gale, chairman of Chicago's Commonwealth Edison Co., which will operate the big Dresden power station in 1960. Chairman Gale dismisses the public- v. private-power argument by prefacing his plan with the suggestion that Government aid go both to public and private power combines in roughly the same proportion as their share of current U.S. electric output. He wants a big increase in the number of big nuclear power plants, wants utilities to put the same amount of money in each plant as they would in big conventional plants. But until nuclear power becomes competitive with present power, he wants the Federal Government to make cash contributions to pay most of the difference between nuclear-and conventional-power construction costs. Says Gale: "The only way our country can achieve competitive nuclear power is through the building of a series of full-scale plants like Dresden. Our program must be accelerated."

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