Still the Most Nagging Headache

Despite a lack of public anxiety, demonstrated by the gutting of the oil conservation bill that finally passed the House last week, energy continues to bulk large in headlines in the U.S. and abroad. It remains the industrial world's most nagging long-run economic headache. Last week President Ford moved to increase U.S. production of nuclear fuel, Britain celebrated the start of oil production under the North Sea, and a new study indicated that the money piling up in the treasuries of the 13 members of the Organization of Petroleum Exporting Countries will remain a severe and highly unsettling problem for the rest of the world throughout the 1970s. Details:

End of a Monopoly?

Ever since the beginning of the nuclear age, the U.S. Government has had a monopoly on the domestic manufacture of basic atomic fuel: enriched uranium.* But the Government's three enrichment plants at Oak Ridge, Tenn., Paducah, Ky., and Portsmouth, Ohio, cannot keep pace with the demands of proliferating nuclear power plants; the output of enriched uranium has been booked for the next 25 years. If the U.S. is not to lose the lion's share of the lucrative nuclear-fuel market to foreign newcomers--the U.S.S.R., France and others--the Federal Government must either build at least ten more enrichment plants or encourage private industry to do the job. Last week President Ford decided to ask Congress to give permission for private companies to produce and sell nuclear fuel.

Ford had in mind both ideology and costs. By the year 2000, perhaps 50% of the nation's electricity will be generated by atomic reactors, up from 5% today. Free-Marketeer Ford clearly does not want the Federal Government to retain a strangle hold over so great a portion of energy supplies. Moreover, to build ten new enrichment plants by 1990 would require a capital investment of about $30 billion. The President believes the Government has better uses for its money, especially since private industry wants to get into the nuclear-fuel business. Bechtel Corp. and Goodyear have already proposed one plant, and several other companies, including Exxon, Arco Electronucleonics and Garrett Research, have indicated interest in building others. As an important side benefit, federal experts say, private companies can compete abroad for nuclear contracts more effectively than the Government.

Still, the legislation will have to be carefully designed if it is to get through Congress. Ford will first have to satisfy critics who fear that private industry might be lax about safety and security procedures in manufacturing and shipping the fissionable materials. But the situation is not quite as worrisome as it sounds. To use nuclear fuel in bombs would involve almost impossible effort and expense. Also, the Nuclear Regulatory Commission, which closely supervises all processes and shipments, will apply the same tough security and safety regulations to all future plants.

Money is much more of a problem. The Government has underwritten research and development to date, and Congress will insist that it be reimbursed for its past expenses. Thus private companies will probably be charged a 3% royalty on sales for use of the still highly classified technology. What bothers some Congressmen much more is defining how far the Government should guarantee a private company's investment in enrichment plants. Says Joint Atomic Energy Committee Chairman Senator John Pastore: "If private enterprise comes in, private enterprise has to share the risk." Exactly how much risk private companies will finally assume must be worked out by the Administration and Congress.

* Natural uranium comes out of the ground with a .7% content of U-235, an easily fissionable material. Enrichment for fuel involves increasing the proportion of U-235 to about 3%; for nuclear weapons, the material must be enriched to 90% or more.

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