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MONOPOLIZING THE FUEL SUPPLY: THE GNEP, GNPI AND FUEL BANK INITIATIVES

Nuclear Monitor Issue: 
#653
19/03/2007
Article

(March 19, 2007) One of the most urgent problems the nuclear community has to 'solve' before a relapse of nuclear energy is possible is the proliferation issue. Nuclear energy makes the nuclear bomb possible in many ways: know-how and skills, materials, technologies, processes and methods. The difference lies only in the intention.
One of the ways the nuclear society wants to 'solve' this is to monopolize the nuclear infrastructure and technology and restrict access to nuclear fuel. Internationally several initiatives are currently being developed.

But all these initiatives are undermining Article IV of the Non proliferation Treaty-- and with that the entire NPT, because Article IV is the 'carrot' in the NPT-'stick'.
Even if proposals to limit the accessibility of technology and nuclear fuel could somehow be brought into force, it would still not result in eliminating the proliferation risks associated with a (foreseen) large expansion of nuclear power.

(653.5788) Laka Foundation - Some of the global (potentially armed) conflicts in recent years (Iraq, North-Korea and currently Iran), are a direct result of nuclear power programs. Proliferation of nuclear technology is a major problem and control is not able to solve that problem, as ElBaradei IAEA Director-General stated in 2004: "The technical barriers to mastering the essential steps of uranium enrichment - and to designing nuclear weapons - have eroded over time, which inevitably leads to the conclusion that the control of technology, in and of itself, is not an adequate barrier against further proliferation".

Enrichment
Enriched uranium fuel is required by almost all nuclear reactors in use around the world today. However, as we all know, enriched uranium is also used in nuclear weapons. The difference between bomb fuel and reactor fuel is the level of enrichment.

Because the technology used to enrich uranium to the levels used to fuel power plants is essentially the same as the technology required to produce highly enriched uranium for nuclear weapons -- the difference lies mostly in the time required to enrich the fuel -- any technology used to enrich uranium fuel for power plants is inherently "dual-use." Since Article IV of the nuclear Non-Proliferation Treaty ensures access to peaceful uses of nuclear technology for non-nuclear weapon states, the technology for uranium enrichment must be permitted to all states under the current nonproliferation regime. Countries like Iran could therefore, in principle, develop their enrichment technology up to a certain point under the cover of a "peaceful" nuclear energy program before dismissing the peaceful-use pretense and rapidly developing nuclear weapons -- a scenario often described as a "break out."

Following India's nuclear test of 1974, concerns about such a "break-out" scenario led many states that possessed enrichment technology to band together to form the Nuclear Suppliers Group (NSG- currently about 45 member states) and create stringent rules for themselves to prevent the transfer of sensitive (enrichment) technology. The 2006 US-India nuclear agreement breaks those rules: India is not a signer of the NPT and thus does not comply under the rules of the NSG and should therefore be excluded from nuclear dual-use technology transfer. It was feared that the US-India agreement would set a precedent, and indeed recently Russia signed an agreement with India for the construction of nuclear reactors and China may also seek similar exemptions for Pakistan.

Since developing, maintaining, and operating enrichment facilities is quite expensive, for decades recipient states were mostly content to buy their fuel from NSG members. However, recent events -- including the attacks of Sept. 11, 2001, the revelation of A.Q. Khan's black market trade in nuclear technology, North Korea's nuclear test, and suspicions about Iran's nuclear ambitions -- have raised worries that a future political crisis could interrupt the steady supply of nuclear fuel. This, further, has led to concerns that more countries will pursue enrichment technologies themselves, to ensure a continued supply of fuel.

GNPI
Many hope that this clear proliferation danger (the spreading of enrichment technology) can be addressed by giving states that currently forego indigenous enrichment capabilities incentives to continue doing so, by strengthening guarantees that supplier states will not cut off fuel shipments for political reasons. "Multilateralization" of certain aspects of the fuel cycle may have the potential to address this issue. The city of Angarsk gives the most concrete example of such a proposal to date. Angarsk is a city of about 270,000 in southeastern Siberia, Russia, and the home of the Angarsk Electrolyzing and Chemical Combine, a plant created to enrich uranium for the Soviet nuclear program. Throughout its history, the plant has been a restricted area - closed to all foreign visitors. On November 28, 2006, however, the Russian news agency ITAR-TASS reported that the Russian government had decided to remove the Angarsk plant from its list of restricted areas. Soon, according to the report, Angarsk will become the site of the world's first "international uranium enrichment center" (IUEC). The aim of the center is to provide a guaranteed supply of uranium fuel for countries which do not enrich uranium themselves, including for countries under international sanctions such as Iran, India and others. In February it was announced that Russia and Japan were close to signing an agreement allowing Japanese reprocessed uranium to be sent to Russia for enrichment. Although Japan has an enrichment plant, the plant's capacity is only a fraction of Japan's total demand. Furthermore, Angarsk is re-enriching Urenco's depleted uranium to natural levels. Many see this as dumping nuclear waste in Russia.

Interested states will (in theory) be able to ensure their access to nuclear fuel from the Angarsk IUEC by meeting "established non-proliferation requirements" in exchange for assured access to the fuel produced by the center. Russia envisions its IUEC will have "equal, non-discriminatory membership for all," "transparency," and "involvement of the IAEA in [the fuel center's] activities," but otherwise the details of the arrangement remain vague. In any case, Russia will retain exclusive control of all sensitive enrichment technology, so the exact nature of "membership" remains an open question. It could mean anything from a contractual relationship to some role in physically managing the facility. It is also unclear how such a facility, situated in Russian territory, will provide any further assurance that nuclear fuel shipments will not be interrupted.

The IUEC in Angarsk is the first specific proposal resulting from Russian President Vladimir Putin's Global Nuclear Power Infrastructure (GNPI), an initiative announced on January 25, 2006, that aims at establishing a network of international centers (it is unclear whether they will all be based in Russia) to provide nuclear fuel cycle services, including uranium enrichment, on a non-discriminatory basis and under the supervision of the IAEA. GNPI is one of two major "multilateral" fuel cycle initiatives in development today; the other is the United States' Global Nuclear Energy Partnership (GNEP).

GNEP
Unveiled by the Bush administration February 2006, the Global Nuclear Energy Partnership (GNEP) is advocated by the US through which the country (and international partners) would develop a fuel services program to supply developing nations with reliable access to nuclear fuel in exchange for a commitment to forego the development of uranium enrichment and plutonium reprocessing technologies.
The proposal set off strong protests in anti-nuclear and non-proliferation camps, because it reintroduced the reprocessing of spent reactor fuel to the U.S. nuclear landscape.

Although much attention so far is focused on reprocessing as an important issue of the GNEP-initiative, monopolizing nuclear infrastructure (and supplying fuel) is an important incentive of the program. (for more on GNEP see Nuclear Monitor 642)
In January 2007, 11 communities (all in the US) have been awarded a total of US$16 million in study grants by the U.S. Department of Energy to be used to determine if they would be suitable sites for the GNEP.

Welcoming local and regional authorities are just part of what senior Harvard nuclear researcher Matthew Bunn describes as a large and "unwieldy coalition" that has kept the GNEP proposal afloat despite serious questions about its technical feasibility, concerns over its potential to spread nuclear weapons material, doubts that nuclear "have-not" nations will submit to a Western fuel and technology monopoly and a lack of funding from Congress. That coalition includes the national nuclear labs, which see the potential for billions in research funding, and some players in the industry, who hope for lucrative contracts as part of GNEP and the general growth of the nuclear power industry that they expect will accompany it.

GNEP is instituting a global two-tier fuel cycle regime in which (1) only fully trustworthy states (which in the current political situation means: allies of the U.S.) will be able to operate enrichment and reprocessing facilities, and all other countries will be guaranteed access to nuclear fuel and reactors in exchange for their commitment not to pursue development of fuel cycle facilities of their own; and (2) developing "proliferation-resistant" reprocessing and fuel recycle technologies that, unlike the conventional PUREX process, do not produce "separated plutonium." (see article: "Proliferation-resistant reprocessing")

Essentially, GNEP would be a more complete sharing of technology among a very limited set of partners, while GNPI would be a very limited sharing of responsibility with any interested countries. Both, however, promise to supply nuclear fuel to all countries which agree to forego pursuit of enrichment capabilities.

GNEP attempts to address the flip side of NSG members' attempts to keep enrichment technology from spreading: fears among recipient states that such proposals are thinly veiled attempts to revoke their "inalienable right" to peaceful nuclear technology. These fears may even be spurring more countries to pursue nuclear enrichment technology, in hopes that they can achieve significant capability before any new international agreement solidifies and locks them out of the club. Tellingly, all "multilateral" fuel cycle initiatives put forward at a Special Event organized at the IAEA General Conference in 2006 were proposed by actual or potential nuclear suppliers.

Fuel Bank
Unsurprisingly for proposals pushed by current nuclear suppliers, most such initiatives aim to create backup-only supplies that would be available only in the event that the existing market for nuclear fuel fails and thus would not affect prices on the nuclear fuel market. In September 2006, the Nuclear Threat Initiative, a US public charity founded by Ted Turner and former Senator Sam Nunn, pledged US$50 million to the IAEA (on the condition that one or more member states contribute an additional $100 million in funding) to help create a low-enriched uranium stockpile to support nations that make the sovereign choice not to build indigenous nuclear fuel cycle capabilities. Such a stockpile is referred to as the IAEA Nuclear Fuel Bank.

Rather than producing fuel like Russia's IUEC, the fuel bank would simply store a reserve which would assure a back-up supply ("at competitive market prices") for power reactors throughout the world on a non-discriminatory, non-political basis. This would reduce the need for countries to develop their own uranium enrichment technologies at a time when concerns about nuclear proliferation are growing. Both the US and Russia have announced their willingness to make nuclear material available for a fuel bank, under such a scheme. An IAEA administered fuel bank was a key proposal made by an Expert Group in 2005, tasked with finding options to improve controls over fuel enrichment, reprocessing, spent fuel repositories and spent fuel storage.

If the idea moves forward, the IAEA will decide how the fuel bank will operate and, presumably, who would have access to the fuel and which consortiums are producing the fuel, and de-facto are controlling the enrichment market.

Monopoly
The fact that most such initiatives are simply backup proposals -- combined with the questionable benefits of "multilateralization", the general indifference of countries that purchase nuclear fuel toward such proposals, and the historically rare interruptions of nuclear fuel supply -- means it is unlikely they will deter countries truly interested in pursuing their own enrichment capabilities. Upon close examination, GNEP and GNPI are not even truly multilateral initiatives -- Russia will maintain control of the nuclear technologies used under GNPI, while the United States and existing nuclear suppliers will do the same under GNEP.

The status of have's and havenot's was formalized in the Non Proliferation Treaty but these initiative are a further step and actually undermine the NPT's, Article IV ('free access to nuclear energy technology for peaceful purposes') and with that the entire NPT, because Article IV is the 'carrot' in the NPT-'stick'.

These proposals to create national or international monopolies on the nuclear fuel cycle are very unlikely to be acceptable. The implication of these proposals is, in effect, that certain countries can be trusted with the fuel cycle while no one else can.
And the use of punitive sanctions or (the threat of) military intervention in order to enforce restrictions on access to fuel cycle technologies, would add greatly to the unacceptability of such proposals. These kinds of actions would further increase the discriminatory nature of these strategies. Specifically, the five acknowledged nuclear weapons states, which are also the five permanent members of the Security Council, along with their allies would be shielded from any negative consequences. The embracing of "preemptive" military strikes by powerful states like the U.S. and Israel (which have both demonstrated their willingness to carry out such a policy in defiance of international opinion), further erodes the acceptability of such proposals.

Apart from all other arguments, nuclear power is a very unattractive option if the direct result of that option, the proliferation of nuclear weapons, is restrained by increased regional tension, sanctions that most directly hurt ordinary people, and a heightened risk of conventional war.

Sources: Eric Hundman: "Nuclear Fuel Supply Proposals Aimed at Weakness in Nonproliferation Regime" published on http://www.worldpoliticsreview.com/articles/428/nuclear-fuel-supply-prop...,

21 December 2006 / "US plan for nuclear cartel faces reality check", MSNBC, 24 January 2007 / Brice Smith, "Insurmountable Risks", Brice Smith, IEER, 2006 / IAEA Bulletin, September 2006 / Nuclear Threat Initiative, at http://www.nti.org / Press Release by Green Action (Kyoto), Citizens' Nuclear Informaton Center (Tokyo) and Ecodefense (Moscow), 28 February 2007
Contact: Laka Foundation, Ketelhuisplein 43, 1054 RD Amsterdam, The Netherlands.
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