Meeting Iran’s nuclear fuel supply needs

By Dina Esfandiary, Ariane Tabatabai | June 5, 2014

During the latest round of nuclear negotiations between Iran and six world powers, high-level discussion focused on Tehran’s “practical needs,” or how much fuel the country requires to keep its domestic nuclear energy program running. It’s a sticking point in talks. Iran’s negotiating partners—the United States, Russia, China, Britain, France, and Germany, or P5+1—say that Iran receives all the fuel it requires for its program from foreign providers, and therefore doesn’t need to enrich uranium on its soil. But Iran’s government believes that relying on external supplies would make the country vulnerable, and insists that it needs to be self-sufficient—a goal that causes consternation in the West. Whether or not Tehran is accurate in its assessment, it will have to be satisfied for a deal to come off.

Does Iran really need to be self-sufficient in nuclear fuel? Its insistence on having an indigenous enrichment program has often been dismissed in the West as an issue of national pride. It’s important not to discount pride as an element of any agreement— after all, Iran’s negotiators will need to take home a deal they can stand behind. But Tehran’s concerns extend beyond just nationalism. Reliance on other countries for energy is a dicey strategic prospect, as the United States knows only too well. And Iran has been cheated a number of times.

When negotiators discuss Iran’s practical needs, they are specifically referring to the Arak heavy water reactor and the Bushehr civilian nuclear power plant. Plans for the development of future power plants also have to be taken into consideration.

The United States says Iran doesn’t need an indigenous enrichment program because Russia, the supplier for Bushehr, will meet Tehran’s enriched uranium needs. Russia agreed to help Iran complete the power plant at Bushehr in 1992, and committed itself to providing enough fuel for its first ten years of operation beginning in 2011. There is no clause regarding further fuelling of Bushehr after 2021, or guaranteeing the fuel for potential additional power plants built with Russia’s help.

If Arak’s reactor is converted to run on low-enriched uranium (which will depend on the final form of a deal), then it and the Bushehr plant will need a total of at least 100,000 separative work units (SWU) of enrichment capacity per year, an amount beyond the capacity of Iran’s current 19,000 available centrifuges. (Not all of them are in use; there are a great deal more available than in operation.)

To achieve a capacity of 100,000 SWU, Tehran would have to drastically expand the number and efficiency of its centrifuges, something it cannot do in the immediate future. According to recent production data from the Natanz Fuel Enrichment Plant, Iran’s IR-1 centrifuges have achieved an average annual output of about 0.78 SWUs per machine. If each of Iran’s estimated 9,000 currently operating centrifuges  produces an average of 0.78 SWUs per year, their total output over one year would be 7,020 SWUs, or 585 SWUs per month. If there were no increase in the number or efficiency of its centrifuges, it would take more than 14 years for Iran to produce enough fuel for its facilities.

But reliance on Russia or other foreign suppliers to acquire enough fuel is a genuine concern in Tehran. In Vienna during the last round of talks, an Iranian official said: “We don’t want to be dependent on Russia for the lifetime of Bushehr.”

Part of Iran’s concern stems from the fact that it has been swindled before. In the 1970s, Tehran helped create Eurodif to establish an enrichment facility in France that would sell the enriched uranium to the five partner countries then involved. Iran’s participation was suspended after the 1979 Islamic Revolution; it never received any enriched uranium and had to wait a decade to be reimbursed. In the 1980s, Iran wanted to build a reactor powered by indigenous uranium. It informed the International Atomic Energy Agency, which inspected it and agreed to help Iran under its Technical Assistance Programme. But after US intervention, the agency pulled out. More recently, Iranian officials attributed Bushehr’s delayed start-up to Russian foot-dragging and politicization of the issue. (Observers from other countries have made the same observation.)

Moscow, moreover, has a history of manipulating energy supplies for political ends. It used the suspension and threat of suspension of gas supplies to put pressure on its neighbors, including Ukraine. That means it is reasonable for Tehran to have concerns about Russia’s trustworthiness as a partner on Bushehr. And unlike some other countries, Iran doesn’t have the option of turning to multiple foreign providers, and doesn’t believe that it is likely anyone will come to its rescue if Russia doesn’t deliver.

Part of Iran’s claim that it can’t trust the P5+1 is undoubtedly bluster—ultimately, there is no precedent of a foreign provider reneging on a contract to deliver enriched uranium fuel. But it’s clear that Tehran has genuine and reasonable concerns as well. For the negotiators to reach a final agreement on enrichment, Iran’s fear of being cheated again needs to be understood and addressed; otherwise they won’t be able to sell the deal back home.

Negotiators can start by making it clear to Tehran that it needn’t fear becoming the victim of a broken fuel contract. Iran, for its part, will have to accept some vulnerability in its foreign supply—particularly since, at the moment, it is still legally and technically unable to fuel Bushehr on its own.

But there also needs to be a mechanism to guarantee Iranian supply. If the timeline of the potential nuclear deal with Iran is 15 to 20 years, which is what the P5+1 is calling for, then practical needs after 2021, when the current fuel contract with Russia runs out, will have to be addressed.

Iran will have to accept that it can’t fully avoid reliance on foreign fuel suppliers. But the West must also understand Iran’s supply concerns. Tehran may not be correct in its assessment of its own practical needs, but as long as it believes it is, its fears have to be addressed for a final deal to be reached.

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