Evolving international pacts for tomorrow

14 September 2007

It is now 18 months since the Global Nuclear Energy Partnership (GNEP) was proposed by US president Bush and during this time, it has continued to attract a good deal of publicity and comment, both positive and negative (see GNEP: the right way forward?, link below). The opposition depicts it as a flagrant example of US arrogance, embracing dangerous proliferation-prone technologies whilst claiming to make the world a safer place. Supporters, on the other hand, regard it as a fine example of the USA assuming world leadership in encouraging the world to open up important questions which have been avoided during the ‘dark ages’ of nuclear power since Three Mile Island and Chernobyl, in order to encourage a new era of booming nuclear commerce and international cooperation. The truth, of course, lies somewhere between these two extremes.

It is important, however, to place GNEP within the wider context of a number of other complementary developments taking place simultaneously. Although there is a tendency to pronounce on each of these in isolation, they must be seen as part of a bigger picture.

Firstly, there are the nuclear cooperation agreements that the USA has been working on with India, Russia and other countries. The aim of these is to facilitate nuclear commerce and cooperation in order that restrictions can be removed and the full vision of GNEP realised. India is being brought back into the fold, having been isolated from nuclear commerce by its refusal to sign the Nuclear Non-Proliferation Treaty (NPT), and its subsequent testing of nuclear weapons.

This breakthrough doesn’t please everybody and leaves open the question of what to do with Israel and Pakistan, also non-NPT signatories and (assumed in the case of Israel) effectively nuclear weapons states. Yet something had to be done as the world’s largest democracy could not be left isolated from international non-proliferation arrangements. The solution is certainly imperfect, but the alternative of inaction is much more unpalatable. The bilateral agreement with Russia, which should eventually lead to a similar ‘123 agreement’ (a civilian cooperation pact, named after Section 123 of the US Atomic Energy Act 1954) as with India, outlines a framework for global sharing of nuclear expertise and technical assistance. It fits in well with GNEP as it aims to provide modern, proliferation-resistant reactors to third countries and help develop used fuel solutions, so they have incentives to develop nuclear energy safely and without attendant security risks.

Secondly, there are the initiatives stimulated by both the International Atomic Energy Agency (IAEA) and Russia to develop arrangements and facilities that might guarantee the supply of nuclear fuel and services for bona fide uses, thereby removing the incentive for countries to develop indigenous fuel cycle capabilities. It is clear that GNEP must work within these other arrangements as there are already several approaches under discussion, including developing and implementing international supply guarantees with IAEA participation (for example with the IAEA as administrator of a fuel bank), promoting voluntary conversion of existing facilities into multinational control and creating new multinational, possibly regional, jointly-owned fuel cycle facilities for enrichment, reprocessing and used fuel management. The Russians have already opened a dedicated international enrichment centre at Angarsk but it is future used fuel facilities that are likely to be most attractive to other countries.

Thirdly, there are more specific arrangements in nuclear fuel trade, which are subject to reform. Some of these are included in further bilateral nuclear cooperation agreements, such as between Australia and China, allowing Australian suppliers to help satisfy rapidly-growing Chinese demand. The most important, however, is the future of the suspension agreement that originally imposed antidumping duties on Russian uranium imports to the USA in 1992. The main impact of this, today, is to prevent US utilities from contracting directly with the Russians on uranium enrichment services, something they would very much like to do, in the context of stimulating greater market competition. It is likely that an amendment will be introduced which will allow Russia at least some direct access to the US market, particularly after 2013, when the agreement on downblended highly enriched uranium (HEU) between Russia and the USA expires.

Finally there are other developments in the nuclear fuel cycle that are relevant to GNEP. In particular, there is clearly a move back towards the idea of supplying fabricated fuel as a package, rather than a utility buying uranium, conversion, enrichment and fabrication services separately. New commercial arrangements amongst the ranks of reactor vendors and fuel fabricators in the aftermath of Toshiba’s acquisition of Westinghouse (particularly the reshuffling of the relationships between western and Japanese companies) is leading to stronger partnerships. Big uranium suppliers, notably Kazatomprom with its acquisition of a 10% stake in Westinghouse, are seeking vertical integration to add value to their prime asset, whereas the fabricators are interested in offering a packaged fuel service. This has been generally avoided since Westinghouse burned its fingers very badly in the late 1970s, when it was caught out by rapid uranium price inflation. The Russians, however, have always offered a ‘cradle to grave’ fuel supply service, even taking back the used fuel for reprocessing and/or disposal. For countries acquiring nuclear reactors for the first time, such packaged fuel services are very attractive but they can also fit in with the non-proliferation objectives of GNEP and the other international initiatives, because they obviate the need to establish domestic facilities.

One question is whether GNEP and these other initiatives constitute sufficient underpinnings for a brave new world of nuclear power or whether something else is needed. It is clear that many changes need to be made if nuclear is to fulfil its potential as a vital element in a clean energy future. Many of the institutional and commercial arrangements in the industry have remained frozen in time throughout the long period when nuclear was seen to stagnate. New challenges have emerged, notably the increased focus on non-proliferation and plant security concerns, which have to be addressed.

Indeed, the continued delays at the Yucca Mountain waste repository project suggest that the closed fuel cycle provisions of GNEP are needed more than ever. This is the most controversial element and has been the point at which the US government has not granted all the requested funding. Yet some money has been provided to continue work on advanced reprocessing technologies, aiming to reduce volumes of high-level wastes and simplify their disposal, while the MOX fuel fabrication facility at Savannah River is now under construction. This does not, however, mean that waste repositories such as Yucca Mountain will never be needed – they must still be planned for and developed, but the quantities of material destined for them will be much reduced. In other countries too, there also seems to be a shift in attitudes about the value of used fuel, which could eventually have repercussions for many national waste management programmes. Some facilities currently envisaged as final disposal repositories may only be used for interim storage of spent fuel that will eventually be reprocessed and recycled, hence the trend to retrievability. But this is running some way ahead – the current plan in the USA remains to get Yucca Mountain licensed as a repository for the used fuel that currently exists, as without this final solution it may be hard to license new reactors in the USA.

Another important part of GNEP and the other initiatives is the link with the Generation IV programme and other advanced reactor initiatives. Progress here seems favourable as reactor systems with full actinide recycling as part of a closed fuel cycle will produce very small volumes of fission product wastes without the long-lived characteristics of today’s used fuel, and will have high proliferation resistance. There are already significant quantities of separated civil plutonium, reprocessed uranium and depleted uranium in the inventory and these may well be utilised when new reactor designs become reality. Low and relatively stable fuel prices are already a significant advantage of the current generation of evolutionary reactors compared to alternative fossil fuel generating modes, but the future looks even better.

Finally, GNEP and the other plans should make a contribution to the idea, implicit within the NPT, of the leading nuclear nations spreading the benefits of nuclear technology to other countries.

Steve Kidd is head of Strategy & Research at the World Nuclear Association Steve Kidd Author Info:

Steve Kidd is Head of Strategy & Research at the World Nuclear Association, where he has worked since 1995 (when it was the Uranium Institute). Any views expressed are not necessarily those of the World Nuclear Association and/or its members

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