Elaine Grossman has published a piece on Nextgov.com titled Former Defense Brass Object to ‘More Restrictive’ Nuclear Trade Policies that is critical of an effort led by John Hamre to question recent deliberations by the Obama Administration. The end result of the talks has the potential to complicate rules for US based organizations that want to sell products and services in the international nuclear energy market.
Here is a sample quote from her article:
Some critics are already questioning, though, why the former national security leaders have set their sights on nonproliferation measures as a chief hindrance to U.S. nuclear sales overseas, when competitors such as France, Russia and South Korea enjoy financial advantages that substantially reduce their prices.
“The problem is not nonproliferation but foreign subsidies of [the] U.S. [industry’s] competitors,” said the congressional source. “That’s the real problem that needs to be solved.”
One gold-standard advocate, Henry Sokolski, questioned the letter’s contention that U.S. nuclear sales to foreign nations must be a principal vehicle for Washington in stanching proliferation.
“You’d think after our wretched experience with civil nuclear programs in Iran, India, Iraq, Pakistan and our past near-calls with Taiwan and South Korea’s programs, this would be the last thing anyone truly opposed to nuclear weapons proliferation would push,” said Sokolski, executive director of the Nonproliferation Policy Education Center.
For readers that have not been following this issue closely, the so-called “gold standard” refers to the highly restrictive agreement made by the UAE to permanently forgo any domestic nuclear fuel enrichment or recycling in return for being granted access to US technology. Interestingly enough, that 123 agreement merely opened the door for a lucrative sale of four reactors by South Korea to the UAE. They needed the US agreement because some (precious few, in my opinion) of the components for the reactors would come from the US.
According to some uninformed politicians, who apparently believe that the US still has a near monopoly on nuclear knowledge, all countries should agree to forgo full access to the lucrative nuclear fuel cycle in return for gaining access to “our” technology. They fail to understand that it has been many decades since the US led the world in nuclear energy technology and they fail to take the step of trying to look at their demands from the other side of the table.
Why would any nation agree to permanently give up access to a useful and rewarding technology like manufacturing commercial nuclear fuel? Why would they agree to stop working on ways to improve nuclear fuel utilization from its current dismal level of just 3-5% of the initial enriched fuel input?
Aside: When viewed from a raw uranium input point of view, the utilization is an even more dismal 0.5% of the initial potential energy of the mined material. End Aside.
I know that if I was advising a negotiating team, I would never suggest that they accept that kind of restriction.
I also reject the politically popular assumption that Iran must be pursuing a nuclear weapon program just because they have access to abundant quantities of domestic oil and natural gas. Nuclear energy is a superior power source with much longer lasting resources. In the short term, producing more domestic electricity with nuclear energy simply frees up more oil and natural gas for export. There are plenty of legitimate reasons for Iran to be developing a completely domestic nuclear energy capability; there is no reason to assume that they are only interested in weapons.
In fact, there are also plenty of reasons for traditional anti-Iran nations like Israel and Saudi Arabia to oppose Iran’s commercial nuclear interests with as much fervor as opposing any weapons interests. They would prefer for Iran to burn its oil and gas rather than selling it into the international market. Everyone who follows energy should know that Saudi Arabia has long competed against Iran in the oil and gas market; not everyone is yet aware that Israel’s recent natural gas discoveries in the Eastern Med have turned that country into a natural gas export market competitor against Iran.
Hamre’s position on the matter was clearly stated in a letter dated April 25, 2013 that he wrote to the President. That letter was cosigned by an experienced group of nuclear energy and national security experts including Senator William S. Cohen, former Secretary of Defense; Dr. James Schlesinger, Former Secretary of Energy, Secretary of Defense, and Director, CIA; Admiral Michael Mullen, Former Chairman, Joint Chiefs of Staff; General Brent Scowcroft, Former National Security Adviser, General James Jones, Former National Security Adviser; Ms. Susan Eisenhower, Chairman Emeritus, Eisenhower Institute and granddaughter of President Dwight Eisenhower, the author of ‘Atoms for Peace’.
Here is the summary of the position stated in that letter:
Consistent with the Atoms for Peace policy framework, America restricts the right of other countries to buy from American nuclear suppliers unless those countries agreed to stringent security procedures and conditions (the so-called 123 process). Historically we have managed this process on a sensible case-by-case basis. If we adopt a much more restrictive approach, we will not prevent countries from acquiring nuclear technology, but instead will encourage nations to turn to suppliers that do not impose difficult standards. The non-proliferation regime is weakened in that circumstance.
We share your Administration’s concern about the risks associated with the potential spread of sensitive nuclear fuel cycle technologies such as enrichment and reprocessing. But as our nation seeks to reduce these risks, we must be careful not to diminish America’s influence in the international civil nuclear marketplace. America’s nuclear industry exports are shrinking, and this is bad for non- proliferation policy.
The U.S. Government must recognize that the U.S. civil nuclear industry is one of its most powerful tools for advancing its nuclear nonproliferation agenda. It is critical to adopt policies that will strengthen that tool. Weakening it will merely cede foreign markets to other suppliers less concerned about nonproliferation than the United States.
My personal feeling is that even the 123 approach is overly restrictive and inhibits America’s ability to compete in the international nuclear energy market and to influence the direction of the world’s energy economy. It adds a substantial regulatory and information protection burden on suppliers that do business in the US that is not added to suppliers from other countries.
Though I have not performed any detailed cost analysis on this, my sense is that the cost impact might be even more important than the presence or lack of government subsidies. Any excessive burdens that the government imposes add costs without providing any corresponding benefit. When those burdens are placed on just some participants in the market, they distort the market.
I added the following comment to Grossman’s piece.
I am not a former “defense leader”, just a retired US Navy commander with a Naval War College diploma whose research focus area was the impact of energy policies on national security policies. I am also a working level lead engineer/analyst at a company that is developing small modular reactors, which we hope to export in larger numbers. Success in the international market will provide a substantial boost to both the US economy and our own bottom line.
It is from that personal perspective that I offer the following response to the “nonproliferation community” as embodied by Henry Sokolski.
The primary problem I have with all efforts to attempt to impose a policy of not selling to any country that will not agree to permanently forgo domestic nuclear fuel production is that it will lock US based suppliers out of the most important energy technology in the world. Not only is nuclear energy a terrific source of energy that provides exceptional employment opportunities, but it is also the only economical replacement for cheap coal that does not generate any greenhouse gases or the more noxious pollutants associated with burning hydrocarbons like SOx, NOx, and fine particulates.
The effort will not stop any country from going nuclear, it will simply remove one source of supply. That may make the effort to produce power plants a little more expensive, and may slow the vital transition away from fossil fuels for central station power production.
The stupidly named “gold standard” is not the only problem being considered for imposition. The administration also seems bent on adding a lot of quite standard components like pumps, valves, and internal core supports designed for light water reactors to the list of items subject to export controls. (Light water reactors are produced by nearly a dozen different countries and have been in use since the mid 1950s.)
Every additional restriction placed on US participation in export markets adds cost to nuclear items, even if the item is designed for the US domestic market. That is because every item that gets added to an export control list is more difficult to design and build due to the expensive task of preventing that item from being exposed to the possibility of “deemed export” by being made available to anyone who is not a US citizen or green card holder.
In today’s well-connected world, it is expensive and time consuming to set up systems that absolutely ensure that emails and web sites are completely protected from passing through foreign territory. It is also more challenging and expensive to staff an engineering organization if no foreign nationals are allowed. The more parts that must be protected, the more expensive the final product becomes. (Perhaps that is Sokoloski’s real goal – to do whatever he can to price nuclear energy out of the market.)
Publisher, Atomic Insights