Congressional debate over terms of future 123 agreements

The UAE agreement is now fueling a debate in Washington as to whether or not similar conditions should apply to all future US 123 agreements with nations that want to start nuclear programs.

The debate has significance since several more 123 agreements will be considered in the near future, with nations such as Vietnam, Jordan, and possibly Saudi Arabia. Some of these nations (e.g., Jordan) have significant uranium reserves that they may desire to exploit someday, which may make them reluctant to give away any future enrichment rights.

Pros and Cons

The arguments for requiring new nuclear nations to give up rights to enrichment and reprocessing, as a condition of any 123 agreement with the US, are as follows:

• Unlike power reactors, enrichment and reprocessing facilities can potentially give those nations access to weapons-useable nuclear materials, and could greatly shorten the time required to develop a weapon, if they ever chose to do so.
• Given the mature, well-established, competitive world industry for uranium enrichment services (with multiple enrichment facilities in several developed nations), there will not be a need for developing countries to establish enrichment or reprocessing facilities.
• It would not make economic (or practical) sense for a new nuclear nation with a small number of power reactors to develop enrichment or reprocessing capability and construct those expensive facilities. Thus, any desire to do so would be suspect.
• Holding all nuclear entrants to such high standards would strengthen the international community's arguments against less cooperative nations such as Iran.

There are, however, many arguments against requiring terms similar to the UAE agreement for all future 123 agreements. These include:

• Such a (US) policy would have little effect since there are several developed nuclear nations, including France, Russia, China, and South Korea, competing in the world nuclear market that will not make such demands on potential customers.
• Few new (developing) nations would be willing to surrender rights granted to them under the NPT, especially given that most nuclear supplier nations will make no such demands.
• If (as a result) few such nations enter into 123 agreements with the US, the US will lose influence over those nations' nuclear power programs, which would stem from their dependence on US technologies, and our involvement with their reactor operations.
• It is possible that such nations would instead turn to suppliers with less safe reactor designs, and a lower level of experience and/or excellence in reactor operations.
• Without an absolute no-enrichment requirement, the US may (on a case-by-case basis) be able to successfully negotiate 123 agreements that are stronger (stricter) than agreements offered by other nuclear supplier nations. With an absolute no future enrichment requirement, most nations will almost certainly instead enter into agreements with other supplier nations, which may make few if any demands.
• If a 123 agreement with the US is in place, and the US therefore has influence and involvement with a country's nuclear program, the US may be better able to convince that nation to not engage in fuel cycle activities in the future.
• There are other ways to limit enrichment activities, including actions by the Nuclear Suppliers Group and ensuring that a reliable and adequate supply of enrichment services exists in the world market.
• Finally, requirements for entering into an agreement with the US that are much stricter than those required by other suppliers will likely result in US reactor and nuclear technology companies being shut out of much, if not most, of the market in the developing world. In addition to any negative safety or proliferation impacts, this will have a significant negative economic and employment impact in the US.

House Bill

A bill, H.R. 1280, which essentially requires the same terms as the UAE agreement for all future 123 agreements, has been introduced in the House. It has passed the Foreign Affairs committee and is now being debated in the Rules committee. It may soon be voted on by the full House.

In addition to prohibiting enrichment or reprocessing facilities at any point in the future, the bill requires:

• Limited access to facilities, equipment or materials by 3rd country nationals (personnel of a separate nationality to both the US and the developing nuclear nation).
• Implementation of chemical and biological (weapon) production and stockpiling conventions.
• Implementation of an export control system.
• Cooperation with the US in preventing state sponsors of terrorism gaining access to weapons of mass destruction (WMDs).
• A ban on (non-humanitarian) assistance to nations that have not signed the NPT.
• Joint congressional approval for any changes or additions to the terms of new 123 agreements.
• Liability protections for US nuclear suppliers similar to those given under the Convention on Supplementary Compensation for Nuclear Damage (i.e., more protection than India is offering).

Tauscher - Poneman Letter

On January 10 of this year, Undersecretary of State for arms control and international security Ellen Tauscher and Deputy Secretary of Energy Daniel Poneman wrote a letter to key congressional committee leaders. The letter stated that an administration internal policy review has concluded that future 123 agreements should be made on a case-by-case basis, and that the administration would not seek the same requirements agreed to by the UAE for all future agreements.

The letter gave many of the reasons listed above (and argued elsewhere) as to why an absolute no-enrichment-requirement for all 123 agreements would not be good policy. The letter also discussed other actions that may or are being taken, including strengthened enrichment activity guidelines agreed to by the Nuclear Suppliers Group, nuclear fuel reserves, fuel leasing arrangements, and progress towards establishing a Nuclear Fuel Bank.

On the basis of the above-referenced letter, it appears that the administration will not be in favor of the House bill. The bill also faces a very uncertain future in the US Senate.

Additional Thoughts

I find some encouragement in the fact that even the non-proliferation side now appears to have accepted that power reactors in developing countries do not present a significant proliferation risk, and that the focus should be on enrichment and/or reprocessing facilities. I've always believed this, since spent power reactor fuel is at least as hard to convert into weapons material as raw uranium ore. The widely held belief that Iran's enrichment activities (independent of nuclear power plants) constitute a proliferation risk further supports this principle.

Now, the debate seems to have shifted to what is the best way to prevent such fuel cycle facilities from popping up in more countries. Given that there is ample enrichment capability in the (developed) world, any such limitations should not significantly hold back the deployment of nuclear power.

The administration and others have argued that new nuclear states are likely to be reluctant to give up enrichment rights granted to them under the NPT, since they have uranium reserves and may want to complete the supply chain, or they don't fully trust the current supplier nations to reliably supply the needed enrichment services. I would add a psychological/political reason. Policies that restrict fuel cycle facilities (or nuclear technology in general, or even nuclear weapons) to a set of existing "advanced" nations implies a notion that "we are civilized enough to responsibly handle this technology, but you are not." Such notions tend to produce negative or contrary responses from most people (or nations). They will be very inclined to opt for the suppliers who do not make such (condescending?) demands, especially given that the right to fuel cycle technology is enshrined in the NPT, which they willingly signed.

Also of note is the fact that natural gas prices in the U.S. are currently very low (~$2/MBTU) and may stay relatively low for some time. This may limit the prospects for new nuclear here in the U.S. This makes access to international markets-where natural gas prices are much higher-even more important to the U.S. nuclear industry. Small modular reactors (SMRs) in particular, are an area where the U.S. may be able to take the technological lead and reestablish leadership in the world nuclear industry. A healthy market for those SMRs, however, would be necessary.

Conclusion

It seems to me that policies like those outlined in H.R. 1280 would not provide any of their intended benefits unless there was an agreement between all nuclear supplier states to follow those policies. Without such an international agreement, all H.R. 1280 will do is harm the US nuclear industry, and have significant negative economic and employment impacts here at home.

H.R. 1280 may even have negative worldwide impacts in terms of nuclear safety as well as nuclear proliferation, since it will result in most, if not all, nuclear entrant states forging agreements with other nuclear supplier states instead. Those other states are likely to be willing to enter into nuclear supply agreements that have less stringent requirements than what the US would be likely to negotiate, on a case-by-case basis, in the absence of H.R. 1280.

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