A joint statement gave specific mention to the Russian and NTI fuel bank proposals as well as proposals from Germany, Japan, the UK and US.

The statement described the approaches as “effective means of addressing the expanded need for nuclear fuel services, while taking into account the … risk of proliferation.”

What stole the headlines, however, was the statement of support for the efforts of the Nuclear Suppliers Group to curb the trade in enrichment and reprocessing technologies. More on this later.

Road to 2010

In the same week another statement was released by the UK government laying out it’s nuclear agenda. The title Road to 2010 refers to the Review of the Nuclear Non-Proliferation Treaty scheduled for May 2010

The ‘nuclear question’ of our age is, therefore: how do we, collectively, ensure that access to civil nuclear power can be securely enhanced without risking further proliferation.

Road to 2010, July 2009

It says that the UK plans to play a “leading role” in multilateralisation. It also says the government will present its own proposal, called the Nuclear Fuel Assurance, to the IAEA in September 2009.

The document also revealed the government’s plans for a 33 million-USD Nuclear Centre of Excellence to provide research into making the UK’s fuel cycle proliferation-resistant and to provide information to other countries that request it.

Both documents can be read here.

I think I can safely say there is a mood of excitement in the industry. Listening to the presentations I got the sense that the assembled engineers and physicists have been waiting 30 years for the trends that are now being seen.

The line shows nuclear energy as a percentage of electricity generation and the bars show gross production of nuclear energy (Source: WNA)

Nuclear energy grew rapidly in the 1970s and 80s but tailed off after the Chernobyl disaster in 1986. Whilst “public acceptance” is still a barrier to growth, improved efficiency and safety combined with the western world’s hunger for low-carbon energy is causing a sea change.

Robert Vance of the Nuclear Energy Agency, a sub-organisation of the OECD which monitors the nuclear energy market, said that he expected an additional 600 nuclear reactors to be built by 2050 as a low projection, and 1,400 as the high. There are currently 439 reactors in operation worldwide generating around 15% of the world’s electricity.

Most of this increase is expected to come from China and India, but Vance expects growth to happen “all around”, including in new nuclear countries like Thailand, United Arab Emirates and Algeria.

Climate Change

One of the main reasons for this forecasted growth is concern about global warming. Nuclear energy is seen as part of the solution and western governments are increasingly open about this.

Vance points out that in terms of reducing carbon emissions the following actions would have equivalent results: installing 650,000 wind turbines, deploying a billion cars that run at 20 miles-per-gallon, converting a desert nine times the size of Washington state to forest, or building 500 nuclear power plants. His point is clear.

The height of the bars shows nuclear power as a percentage of overall electricity generation. The width denotes the amount of electricity generated in each country (Source: WNA)

Michael McMurphy, CEO of Areva NC, said: “nuclear is no longer a word that we have to mumble in shame anymore, even in the US”. He also pointed out its growing acceptance in the environmentalist camp. Apparently former Greenpeace CEO Patrick Moore and Tony Kreindler of the Environmental Defense Fund are both friends of nuclear these days.

Nuclear Cooperation

There has been some alarm in the nonproliferation regime about the mushrooming of “nuclear cooperation deals” around the world. There is thought to be 30 countries seriously considering nuclear power as an option.

Steve Kidd of the World Nuclear Association does not think there is any need for alarm. For a start, he argues, people underestimate how long the process of starting up a nuclear programme takes. “I think in reality the number of new countries by 2020 will be less than 5, it might only be 2 or 3. By 2030 it could potentially be a lot more … it’s a very long-term business.”

In terms of the nature of these nuclear cooperation deals Kidd says that they mostly represent “a prelude to the offer of reactor technology.” He adds: “there might be an agreement to fuel those reactors for the first 5 or 10 years.”

It does not seem that we are talking about offers to supply “sensitive” enrichment or reprocessing technology, however. The sense I am getting from the industry is that for the vast majority of planned nuclear programs, it would not make economic sense to enrich fuel indigenously. More on this later.

Tariq Rauf, a long-term player in the multilateralisation debate, in interview with me at the IAEA

As head of verification and security policy coordination at the IAEA he was part of the Expert Group that made recommendations on strategies to multilateralise the fuel cycle and he has written articles on the subject for Arms Control Today and the IAEA Bulletin.

I have posted the full interview (25 minutes) because it was all relevant. He has a very interesting take on the Group of 77 objection to the fuel bank proposals and on export controls.

Uranium enrichment is but one stage in the “front end” of the nuclear fuel cycle – the process by which uranium gets from the ground into a nuclear reactor. Apart from the actual mining, it is the most profitable stage.

Estimated enrichment market shares (2008)

The current market is dominated by four companies: Areva (France), USEC (USA), TENEX (Russia) and URENCO (a consortium of Germany, the UK and the Netherlands). Each owns around a quarter of the market.

It is estimated that the facilities they control, together with the remaining national facilities, provide enough enrichment capacity to supply the world’s reactors until 2030. This is despite forecasted growth in nuclear energy, although predictions of growth vary quite a lot.

Enrichment is a highly technical and expensive process which demands great expertise and practical experience. For these reasons the majority of countries with nuclear energy programmes choose to buy their LEU from foreign sources.

A fine line

Supplier states are, understandably, keen to protect their commercial interests. It is quite telling that all but four of the multilateralisation proposals have come from one of the six supplier states, and some are really no more than business propositions.

Forecasted global enrichment capacity for 2015 (tSWU/yr)

Most of the proposals, but some more than others, balance a fine line between not affecting the commercial interests of supplier states and assuring a fuel supply to client states. The latter is considered vital by the majority of IAEA members who face an energy security risk if any of the supplier states choose to stop supply, as Russia’s gas company did in early 2009.

Whilst all of the proposals claim in some way to guarantee fuel on a non-discriminatory basis and to guard against politically-motivated cut offs, many countries are not convinced.

Devil in the detail

At the board meeting this week members of the Non-Aligned Movement and Group of 77 pointed out that any country supplying fuel for the IAEA to distribute could easily claim a cut off was non-political when this wasn’t the case.

This clash of interests is likely to plague the proposals right down to the finer details. The question of whether to price the fuel bank LEU competitively is likely to be controversial.

Even if the IAEA manages not to tread on the toes of fuel suppliers, there is no way it could claim not to have an impact on the companies providing enrichment technology. This is a potential battle waiting to be fought.

More than 30 countries expressed opinions about the two proposals put to the board, in a closed meeting at the International Atomic Energy Agency (IAEA) on Thursday.

The meeting room where more than 30 states spoke out about the proposed fuel bank

It was thought that certain parties, including US envoy Geoffrey Pyatt and IAEA head Mohamed ElBaradei, had hoped the Board would agree to proceeding with the drafting of detailed plans for the implementation of two fuel bank proposals.

Instead the board agreed that the Secretariat should continue its research into fuel bank proposals but not to a high level of detail, prompting suggestions that the proposals had “stalled”.

A statement from the USA, which has been one of the main advocates of a nuclear fuel bank, said: “we are very close to success in establishing two mechanisms that will help to realise the full economic potential and environmental contribution of peaceful nuclear energy.”

But the mood of optimism was repeatedly stymied by rumours emerging from the board room.

One anonymous source present at the meeting said: “it will never float – they’re [developing nations] politicising it already,” whilst another described the response of some nations as “very skeptical”.

No proper assurance

A joint statement from the Non-Aligned Movement and Group of 77, organisations of mainly developing nations, said that members were not prepared to endorse the proposals at this stage and raised a number of concerns with them.

It reiterated both groups’ “rejection of any attempts aimed to discourage the pursuit of any peaceful nuclear technology on the grounds of its ‘sensitivity’ “. It also said its members would oppose any attempts to “hamper research and development and international cooperation in the field of peaceful nuclear activities.”

The statement from US envoy Geoffrey Pyatt made it clear that the proposals should not be seen as veiled attempts to restrict countries from developing their own fuel cycles. He stressed the purpose was “to expand, not to restrict, access to the peaceful use of nuclear energy.”

A number of concerns were also raised in the joint statement about the “fuel assurances” offered in the proposals. One pointed out that an assured supply of low-enriched uranium alone would not be sufficient in the case of a supply cutoff as different reactors require the fuel to be in different forms before it is used.

The official Chairperson’s conclusion will come out tomorrow, but one conclusion is clear: multilateralising the fuel cycle is not a case of deal or no deal. It is likely to take years, perhaps decades, of “consultations and discussions” before a solution is found.

But there are a handful of countries that seem to slip through the net even if a flexible approach is taken. The proposals heard at the Board Meeting today focus on providing incentives for countries to buy nuclear fuel from foreign sources instead of developing their own enrichment technology.

Iranian ambassador Ali Asghar Soltanieh

So what about Iran which has a highly developed enrichment program and will soon be able to produce plutonium as well? The incentive is going to have be strong indeed to encourage Iran to give up the technology it has painstakingly built up over the years.

Speaking forcefully at a press conference on Wednesday Iranian ambassador Ali Asghar Soltanieh said: “Iran is master of enrichment technology. These are the facts that a couple of western countries should cope themselves with this reality … They are unhappy about these facts, it is their problem. This is a reality.” Listen to an extract here.

Left by wayside

Other nations who seem to have been left at the wayside in the current proposals are those that have not signed the Nuclear Non-proliferation Treaty (NPT). These include Israel, Pakistan, North Korea and India.

It Is generally assumed that such countries would not be allowed to benefit from the services of a fuel bank. In an agreement between Kazakhstan and Russia, who are commercial partners in the Russian-proposed International Uranium Enrichment Programme, it is stated that only countries who fulfill their NPT obligations would be eligible.

The IAEA expert group in its report, Multilateral Approaches to the Nuclear Fuel Cycle, wrote that the possibility of including non-NPT states in a fuel bank arrangement needs more consideration. So far this does not seem to have happened.

The implication is that multilateralising the fuel cycle is a forward-looking measure that seeks to prevent other countries getting into the same position as Iran or North Korea. This is to be applauded, but it does overlook some of the most glaring nuclear risks.

You will find a designated page above called “proposals” or you can just click here.

Also, for anyone who is really keen and wants to look at my sources (other than websites, which are bookmarked in my delicious account) you can do so here.

Dr Mohamed ElBaradei prepares to deliver his opening statement to the IAEA Board of Governors

He was not radical. The proposals he put to the Board were both to do with fuel assurances – providing a stockpile of low-enriched uranium (LEU) as a back-up for countries that have supply fears.

He was careful to stress that the proposals were not intended to be a move to multilateralise any facilities or to deny any Member States the right to enrich uranium.

An Agency LEU bank should not be confused with separate , but complementary, proposals by myself and others for eventual multilateral control of the nuclear fuel cycle. I remain a firm believer in the ultimate goal of multinational control of the fuel cycle … [but] that would, in my view, require the agreement of all states, in the context of disarmament negotiations, on a universal and equitable mechanism to convert current and future enrichment and reprocessing facilities into multinational facilities.

Dr Mohamed ElBaradei, 2009

He admits that the fuel bank proposals fall short of his ultimate aim. But Dr ElBaradei is a man known, sometimes resented, for his cautious and diplomatic style.

Providing fuel assurance, as a fuel bank would, has always been the first step in his plan for multilateralisation. Cautious as it was, his statement clearly flagged up the likelihood of future progress towards this goal: “a number of other proposals are being developed for future consideration”.

He also presented the governors with a copy of the German proposal – a much further-reaching plan involving the creation of collectively-owned enrichment facilities on international territory.

Nevertheless, one has to wonder how far a fuel bank would further the cause, even if it passes the Board of Governors. Here’s why:

• There is still some ambiguity as to how use of a fuel bank would affect the recipient nations’ right to produce its own fuel. If this right was not affected it’s not clear that the fuel bank proposals would aid non-proliferation at all. If nations were required to waive this right they may be put off from using the fuel bank at all.
• It does not deal with the possibility that any Member State could, as North Korea did, back out of the Non-Proliferation Treaty (NPT).
• The two countries offering LEU for the fuel bank – the USA and Russia – could in theory decide to stop future supplies if they disagree with the way the fuel bank was being run. There is also the issue of where the fuel bank is to be located. Surely the host country could have the power to expel the IAEA at any time.
• The US and Russia, the two countries who made the current proposals, possess the largest nuclear arsenals as well as the largest share of the market for supplying LEU. Some will see the proposals as a continuation of the disproportionate influence of the nuclear states that appears to be upheld by the NPT. One journalist I was speaking to from an Arabic news outlet said she believed the US’s involvement in the proposal was enough to get some states to oppose it.

The two proposals will be discussed on Thursday and are bound to raise a number of interesting questions.

Click on the the links below for some audio excerpts from the statement:

Fuel Assurances

Iran

North Korea

Syria

What I find interesting is the US’s choice of bargaining chip. Once upon a time weapons and aircraft were the main currency in middle-eastern diplomacy; today it seems it is nuclear reactors and fuel.

Still from 2004 video allegedly showing Sheikh Issa Bin Zayed Al Nahyan, brother to the crown prince of Abu Dhabi, torturing a man

UAE, like many other Islamic countries, is embarking upon an ambitious civil nuclear programme. Last year the government allegedly invested $100 million in an agency to oversee the completion of three commercial nuclear reactors by 2020.

US cooperation with the fledgling nuclear programme was agreed in January 2009 on condition that the UAE promised not to transfer sensitive technologies to a nuclear weapons programme or to any other country.

Pinkie Promises

Despite working closely with the IAEA in developing its nuclear programme, UAE has been accused in the past of having lax export control laws.

Companies operating in the Gulf nation are suspected of shipping sensitive technologies to other countries, including Iran – a nation with which UAE has close trade ties.

Clearly there are strategic reasons for a US–UAE cooperation pact, but one should not underestimate the strength of trade interests either. Within days of the agreement being signed, French President Nicolas Sarkozy brokered a similar deal.

Indeed, France has made provisional nuclear cooperation deals with many Islamic countries including Libya and Algeria

The sharing of civilian nuclear [technology] will be one of the foundations of a pact of confidence which the West must forge with the Islamic world.

President Nicolas Sarkozy

French and US companies dominate around 50 percent of the uranium enrichment industry. In terms of market share the US is also the world leader in civil nuclear technologies.

The next few years are likely to see the further mushrooming of nuclear cooperation pacts, all signed on a bilateral basis and spurred on by trade interests.