Environmentalists Challenge Nuclear Export Program

Three environmental organizations recently filed suit seeking to force the Export-Import Bank of the United States and the Atomic Energy Commission to comply with NEPA requirements in the nuclear export program.¹ The suit raises a potentially significant and so far unlitigated question as to NEPA's applicability to agency activities outside the United States. If successful, the suit might set a precedent for requiring environmental analysis of other international programs, such as foreign aid, which so far have not complied with NEPA.

The nuclear export program consists of a series of interlocking transactions. The AEC negotiates bilateral agreements for cooperation with foreign governments interested in receiving nuclear equipment. The agreement governs the general terms of any future exports, including safety and restrictions on military use required by law. The foreign government may then seek financing for a proposed purchase of nuclear equipment and fuel by submitting an application to the Export-Import Bank. If financing is approved, the foreign purchaser must obtain an export license from the AEC before the transaction can be completed.

Purchase agreements and financing terms generally include provisions for a fuel supply contract with the AEC, financed by the Export-Import Bank. The production of enriched nuclear fuels to operate nuclear reactors is extremely expensive; so far, the United States is the only large scale commercial supplier for non-communist countries. Because the fuel is not totally consumed in operation, it is returned to the United States for reprocessing in AEC facilities. The remaining radioactive wastes are stored under AEC supervision.

Viewed from almost any perspective, the nuclear export program is a major federal activity. The Export-Import Bank authorized $2.35 billion in loans for nuclear related purchases in fiscal 1973, and the agency estimates that in the next five years it will make similar loans amounting to $11 billion. The cumulative value of AEC's foreign enrichment service contracts exceeds $3.5 billion. The AEC has entered into Agreements for Cooperation with 19 countries, including five Agreements completed since January 1, 1970.

The operation of nuclear reactors is associated with numerous significant environmental effects. Major environmental issues surround all stages of the nuclear fuel cycle, including the enrichment and reprocessing of nuclear fuels, the transportation of fuels and waste materials, and the storage of radioactive wastes, as well as operation of the plant itself. For example, the fuel enrichment process requires enormous quantities of electric power, as much as five percent of the reactor's annual output. Since almost 50 percent of the production of U.S. nuclear enrichment facilities is destined for use abroad, a large demand is being placed on domestic energy supplies. Recently, problems have also emerged in the storage or radioactive wastes in federal repositories. These waste materials are expected to remain highly dangerous for thousands of years, and their storage has proved difficult. The AEC has yet to solve the problem of leakage from its Hanford, Washington, site; environmentalists have charged that these leaks threaten eventually to contaminate the Columbia River.

While the need for environmental analysis seems clear, the agencies have so far claimed to be outside NEPA's purview. The Export-Import Bank has not promulgated regulations for evaluating the impact of its projects under NEPA. Bank procedures for review of applications for financial assistance include virtually no environmental input. One engineer from a six-man engineering staff makes a cursory technical review, but no environmental questions are considered.

The AEC views its export licensing functions as entirely different from its domestic licensing, which includes numerous stages for environmental review and public criticism. The AEC contends that it has no basis for judging environmental effects in other countries and that an impact statement would intrude on the sovereignty of the foreign government.

While there is room for debate about congressional intent to apply NEPA to federal actions outside the United States,² sound public policy calls for application of NEPA to a program as large and environmentally significant as [3 ELR 10182] the nuclear export program. This need was recognized in the recent revision of the CEQ Guidelines which requires federal agencies to consider "the positive and negative effects of the proposed action as it affects both the national and international environment."³

Nor are the problems likely to be as great as the agencies have claimed. The AEC, for example, has long been responsible for overseeing numerous restrictions on foreign use of nuclear equipment and supplies. Congress requires foreign purchasers to accept certain safety design features as well as limitations on military applications. Congress even retains a veto over individual contracts.

Moreover, there is no reason to believe foreign governments would resent being informed of the environmental consequences of their purchases. If another source of energy might prove less costly, it seems reasonable to expect that a foreign government would want to know. This is particularly important for purchasers from less developed nations, such as Brazil, Mexico, and Spain, which may lack the expertise necessary to conduct such analysis on their own.

In passing NEPA, Congress recognized "the profound impact of man's activity on the interrelations of all components of the natural environment." It is hoped that the Export-Import Bank, the AEC, and other agencies that have so far refused to analyze the international environmental effects of their programs will recognize this interrelationship, and adopt a policy of full compliance with NEPA in their international actions.

1. Sierra Club v. United States Atomic Energy Commission, Civ. Action No. 1867-73 (D.D.C., filed Oct. 4, 1973). Copies on file with the ELR Digest Facsimile Service (36 pp., $3.60).

2. This issue is discussed by Gary Straussberg, "The National Environmental Policy Act and The Agency for International Development," 7 International Lawyer 46 (1972).

3. Section 1500.8 (a) (3) (i), 38 Fed. Reg. 20550 (Aug. 1, 1973), ELR 46003.