Internationalizing the nuclear fuel cycle

The rising demand for energy, especially in Asia, has made it all but inevitable that a surge in the construction of new nuclear reactors will occur over the next 20 years. That will pose issues regarding the building of new uranium enrichment and reprocessing facilities or the expansion of existing facilities.¹

The question of assuring nuclear fuel supply is already on the table, as are the perennial questions of what to do with spent fuel and whether to exploit for power generation purposes the plutonium that’s contained in it. Getting the answers right will be a crucial test for public policies–in the United States and elsewhere.

The fact that nuclear energy can be exploited both for weapons and civil purposes has presented a dilemma that hasn’t been resolved since the dawn of the atomic age. Uranium and plutonium can provide abundant, carbon-free energy but also are the basis for producing the most destructive weapons ever invented. Two interconnected concepts that might resolve the dilemma were advanced in the 1946 Acheson-Lilienthal Report, which proposed eliminating nuclear weapons and creating an international authority to manage the peaceful uses of nuclear energy. Eliminating the few nuclear weapons that existed in the late-1940s would have been relatively easy to do as a technical matter. But conflicting national objectives at the time made the task impossible.

This vision of a nuclear-weapon-free world wasn’t discussed seriously again until 1986, when President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev met at Reykjavik. They failed to reach an accord to eliminate nuclear weapons, but they successfully accelerated a trend toward many fewer warheads in the U.S. and Soviet/Russian stockpiles.

In 2006, on Reykjavik’s twentieth anniversary, a meeting was held at Stanford University’s Hoover Institution to discuss whether Reagan’s hopes could be rekindled. That meeting led to an extremely influential January 2007 Wall Street Journal article by Reagan’s Secretary of State George Shultz, former Secretary of State Henry Kissinger, former Defense Secretary William Perry, and former Georgia Democratic Sen. Sam Nunn. It endorsed “setting the goal of a world free of nuclear weapons and working energetically on the actions required to achieve that goal.”

That article–and a similar op-ed a year later–drew attention to the proliferation risks of the nuclear fuel cycle and urged that they be reduced. And so today, the dilemma faced by the authors of the Acheson-Lilienthal Report has resurfaced, again in the context of a nuclear-weapon-free world.

The spread of nuclear know-how

Efforts to block the spread of enrichment and reprocessing capabilities have fallen short for four main reasons:

• Easy access to the basic technologies required for entry into the field;
• Determined states acquiring their own enrichment and/or reprocessing capabilities to reduce energy dependence, conserve energy resources, or to manage nuclear wastes;
• No combination of incentives and threats short of military action suffice to dissuade nations intent on exploiting these technologies;
• Many states with no current intention of building nuclear weapons and no special animosity toward the United States reject the idea that some nations are entitled to enrichment and reprocessing facilities, while others are not.

The Bush administration has tried to make such a two-tier system work, offering assurances of reliable nuclear fuel supplies as an incentive to keep non-nuclear-weapon states from developing a full nuclear fuel cycle. During a February 2004 speech at the National Defense University, President George W. Bush proposed seven steps to block nuclear proliferation, including that the Nuclear Supplier’s Group (NSG) refuse “to sell enrichment and reprocessing equipment and technologies to any state that doesn’t already possess full-scale, functioning enrichment and reprocessing plants.”

The administration tried to obtain the agreement of NSG members to this new rule but ran into strong opposition from countries (e.g., Canada) that insisted on maintaining the option to develop their own fuel-cycle capabilities. Currently, the administration has modified its policies to fit with a criteria-based approach proposed by France and accepted by all other NSG members. This would permit transfers of enrichment technology and equipment under certain specified conditions. But the NSG still hasn’t agreed on new guidelines to transferring sensitive nuclear technologies.

Controlling and internationalizing the fuel cycle

There have been several proposals for establishing internationally controlled fuel banks to provide reliable nuclear fuel supplies to all nations that comply with their nonproliferation obligations but encounter difficulties in obtaining nuclear fuel. Such fuel assurances, however, don’t respond to the “entitlement” motivation of some nations. To address that, a mechanism that gives any nation that wants it at least some form of vested interest in one or more major elements of fuel-cycle services is required.

Internationalizing uranium enrichment could be the best way to control the spread of fuel cycle technologies. The lower costs of nuclear fuel provided by large, modern centrifuge facilities should help to discourage the construction of small, high-cost, nationally owned enrichment centers. It would be far less expensive for nations and companies to take part ownership in a multinational facility, perhaps leasing centrifuges under “black-box” conditions, where sensitive know-how remains secret, rather than building their own. Such joint ventures could be commercially attractive and so, in contrast to the “top-down” approach of government initiatives, a “bottom-up” approach relying on economic incentives would become a major motivator.

In the United States, three multinational uranium enrichment facilities are already in the works:

• Lea County, New Mexico. This facility will be the first centrifuge plant in the United States. It’s being built by LES, owned by Urenco, and will go online in 2009. A formal treaty between Britain, Germany, and The Netherlands established Urenco in 1971, and it’s a joint enterprise from top to bottom. Urenco is a model for other regions of the world to emulate in establishing their own multinational uranium enrichment facilities, but it’s not a suitable instrument for satisfying consumer nations with respect to ownership and management.
• Idaho Falls, Idaho. French AREVA is constructing this centrifuge facility. Both it and the New Mexico facility will feature “black-box” technology.
• Wilmington, North Carolina. A U.S.-Japanese joint venture, this plant will be built by GE-Hitachi Nuclear Energy and its subsidiary, Global Laser Enrichment, of which Cameco, a Canadian firm, has a 24 percent stake. It will use Australian Silex laser technology and is expected to be in operation on a commercial scale by 2012. Unlike Urenco, GE-Hitachi and AREVA are both classic multinational corporations, meaning many nations potentially could become shareholders but not necessarily share in the operations of the enrichment venture.

A fourth new U.S. plant will be built by the U.S. Enrichment Corporation (USEC) in Piketon, Ohio, which by 2012 will deploy 11,500 machines. It will use U.S. technology, the only plant in the country to do so. Currently USEC’s new facility is not multinational but it would have a major impact on international opinion if the new plant was opened to meaningful participation by consumer nations. This could convince the world that Washington is serious about internationalizing the fuel cycle. USEC’s congressional mandate (from when it was privatized in 1996) states that domestic enrichment facilities are in the nation’s public interest, but there’s nothing in the mandate suggesting that the public interest wouldn’t be served by a multinational facility on U.S. soil.

A few large enrichment facilities (about one per continent), as opposed to many small facilities around the world, should help to contain the spread of nuclear weapon capabilities, as the participation of several nations in ownership and management should deter cheating. But for this plan to work, ownership and management of enrichment facilities must be open to non-nuclear consumers, giving them a stake and a say in their running and fewer incentives to build their own.

In such situations, where the partners may not be equally advanced in enrichment technology, or even on very good terms with each other, the technology almost certainly will not be shared among all the owners and managers, or with International Atomic Energy Agency (IAEA) inspectors. This problem has been resolved in the past by keeping key technologies secret and with an on-site inspection system developed for centrifuge plants known as “Limited Frequency Unannounced Access,” which gives inspectors unannounced access to the centrifuge cascade hall under specified conditions. This system should be adopted by all states involved in a multinational enrichment enterprise.

How to proceed

The United States should propose that as of a given date, all plans for new commercial uranium enrichment facilities should be based on the presumption that they’ll be multinational and that all low enriched uranium produced by such plants will be subject to IAEA or similar safeguards (which should include “Limited Frequency Unannounced Access”). After that date, the NSG should give preference to such facilities when considering selling enrichment equipment and technology. In addition, existing commercial facilities or those under construction that aren’t already multinational should be encouraged to convert to such ownership, under the same safeguards conditions.

The first proposal is a variation on an NSG guideline that calls for suppliers to encourage recipients to accept, as an alternative to building their own plants, supplier involvement and/or other appropriate multinational participation in their facilities. The second would require decisions to be taken jointly by government and private industry in the United States and elsewhere. It would mean that USEC would create a joint venture out of its planned new enrichment facility. AREVA and GE-Hitachi might also be encouraged to enlarge their plans to include additional partners.

An equally important component of this course of action would be a U.S.-led effort to encourage China, Japan, and Brazil to open their existing enrichment facilities to multinational ownership and management–not an easy task. Russia, however, has already embarked on this course at its Angarsk facility in Siberia and has advocated for a network of multinational enrichment centers. During Russian President Dmitri Medvedev’s May visit to China, he signed an agreement to help build the fourth stage of a Chinese enrichment plant. China might see commercial advantages in replicating Moscow’s Angarsk initiative as part of a network of multinational centers. Japanese firms have many joint nuclear energy ventures with U.S. and European companies, including the GE-Hitachi enrichment project. Brazil and Argentina already are engaged in a modest degree of nuclear cooperation. Reportedly, the presidents of the two countries will meet on September 6 to establish a new joint company, whose tasks will include uranium enrichment.

It should be noted that in order to achieve real economies of scale these facilities should be much larger than current plans call for. But as the demand for nuclear power grows, so will the demand for uranium enrichment, and these plants, even as currently configured and planned, can help to establish the norm of multinational ownership and management.

In the near-term, there’s little chance that India or Pakistan will give up their enrichment facilities, which are used primarily for their weapons programs. But two potential developments could change this outlook over the mid-term:

1. a growing coalition of nuclear weapon states and others that are willing to move toward a nuclear-weapon-free world, which could change current expectations about the future salience of nuclear weapons in defense strategies;
2. a global movement toward multinational enrichment facilities. India and Pakistan might be persuaded to participate in such global programs and eventually agree to place their sensitive nuclear facilities under safeguards and join in an internationally controlled nuclear fuel cycle.

The most difficult question is whether multinational enrichment facilities should be encouraged in potentially unstable areas in return for rolling back incipient nuclear weapons programs. The test case is Iran. Tehran stated on May 8 that it’s ready to consider “establishing enrichment and nuclear fuel production consortiums in different parts of the world–including in Iran.” This should be explored through appropriate channels.

Regional enrichment facilities located in unstable areas could prove to be a practical option for meeting the nuclear fuel needs of countries in those areas. Consumer countries would be heavily involved in ownership and management, but the technology would be “black-boxed.” It’s a model that would answer the entitlement argument, but any facility located in violence-prone areas will have proliferation risks of its own. An alternative is a Saudi proposal for a multinational enrichment plant to supply Middle East-based reactors. The facility would be located outside the region, possibly in Switzerland.

The economic and nonproliferation case for large, regional enrichment facilities may still not be persuasive to interested parties without a new deal between the current possessors of advanced nuclear technologies, including weapons capabilities, and those nations that are still considering their nuclear options. Here, we return to the insights of the Acheson-Lilienthal Report, which was an effort to forestall the rise of the two-tier world in nuclear energy. That effort failed, but it’s still most likely true that states that believe they have the right to own uranium enrichment plants in principle may be more willing to partner in multinational facilities if the nuclear-armed states make a serious commitment to disarm. In that case, the very small number of states that insist on developing nuclear weapons could be more easily isolated and their decisions possibly reversed. Iran and North Korea already have been influenced by international pressure, and such pressure would be more effective with an end to the two-tier system.

Thus a solution to the dilemma posed by the dual-use nuclear fuel cycle depends on embedding it in a broad commitment to full disarmament by the major powers. The best, but not the only, way to move forward in this area is to engage the United States and Russia in a commitment, at the highest levels, to work jointly toward a world free of nuclear weapons. The two countries could then follow this up with specific programs to reduce their strategic nuclear forces below the levels specified in the May 24, 2002 Treaty of Moscow–which allows 1,700-2,200 operationally deployed strategic nuclear warheads on each side by the end of 2012. Other nations, of course, have a major stake in any serious effort to move toward a world without nuclear weapons. That effort should no longer simply be a bilateral U.S.-Russian affair, as comparable attempts were during the Cold War. Accompanying this effort should be a parallel program, worked out by supplier and consumer countries, to make multinational ownership and management of uranium enrichment facilities a globally accepted norm. This part of the overall effort should, if at all possible, be accomplished before 2010. That is when the next conference to review the implementation of the NPT takes place. The last conference, in 2005, ended in acrimony and failure. If the next one is a repeat of the last, whatever residual impact the treaty regime still has after years of erosion will be gone for good.

¹ I acknowledge, with thanks, the invaluable help that many people gave me in writing this article. They include Chaim Braun, Sidney Drell, Amitai Etzioni, Mark Fitzpatrick, Geoffrey Forden, Charles Forsberg, Subrata Ghoshroy, Daryl Kimball, Pierre Goldschmidt, Laura Holgate, Fred McGoldrick, Marvin Miller, Pavel Podvig, Burton Richter, Geoffrey Rothwell, Harry Rowen, Larry Scheinman, Andy Semmel, James Timbie, and Frank von Hippel. The way in which the article has turned out is my responsibility.