Why Nuclear Energy Cooperation with Vietnam Serves U.S. Interests

Ted Jones

The following is a guest post by Ted Jones, Director of International Supplier Relations for NEI.

In a piece published by National Review Online, Henry Sokolski and Victor Gilinsky urge the U.S. Congress to oppose the U.S.-Vietnam nuclear cooperation agreementunless Vietnam matches the United Arab Emirates (UAE) in renouncing technologies for uranium enrichment and used-fuel reprocessing (E&R). 

Sokolski and Gilinsky are out of touch with the current realities of nuclear diplomacy and trade.  The inclusion of new nonproliferation requirements in bilateral nuclear cooperation agreements is just one of many tools used by the United States to restrain the spread of E&R.  U.S. insistence on renouncing E&R in bilateral nuclear cooperation agreements will not be persuasive to most countries.  It will also harm multiple U.S. interests – including interests in nuclear safety, security and nonproliferation – which are advanced by U.S. nuclear cooperation and supply.  A few points to consider:

1. U.S. cooperation advances nonproliferation interests.  The authors recommend a “strict, uniform policy” that conditions U.S. nuclear cooperation on a partner country’s renunciation of its rights to uranium enrichment.  But such an inflexible approach would be counterproductive to nonproliferation interests.

In a piece recently published by the Carnegie Endowment, nonproliferation experts Mark Hibbs and Fred McGoldrick examine in detail how the United States should approach E&R in nuclear cooperation agreements and in the Vietnam agreement in particular.  They conclude that

“Using U.S. bilateral agreements as a lever to limit the spread of ENR may sound like a good idea. But for a number of reasons, insisting that all countries legally forgo ENR for all future U.S. peaceful nuclear cooperation agreements risks undermining U.S. nonproliferation interests.”

Hibbs and McGoldrick note that recent U.S. initiatives to deny E&R technologies have succeeded only in provoking widespread opposition from non-nuclear weapons state parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).  Few of these countries have any interest in developing E&R facilities but oppose attempts to deny what they regard as their sovereign rights, which are protected by Article IV of the NPT.  A no-E&R requirement for U.S. nuclear cooperation would open the United States to charges that it is undermining the NPT, and “inevitably diminish U.S. influence within the NPT regime and weaken the already-fragile bonds that hold the treaty together.”

The end result of a universal no-E&R requirement “would be to push the United States out of many nuclear markets,” Hibbs and McGoldrick warn. No other nuclear energy supplier country demands no-E&R terms for nuclear trade, and none is likely to do so.  United States would lose not only exports and jobs, but also the nuclear cooperation agreement itself, which is “an important bilateral legal instrument to influence other countries’ nuclear behavior.”  Without a nuclear cooperation agreement, the United States would lose nine nonproliferation assurances and guarantees from the partner country, including consent rights that other nuclear supplier countries do not require. By precluding U.S. nuclear supply arrangements, the United States would also lose the ability of U.S. personnel to identify potential red flags in the other country’s nuclear energy program.

As Hibbs and McGoldrick note, a universal no-E&R policy would “do nothing” to mitigate the larger proliferation risk posed by clandestine activities.  By insisting on no-E&R conditions, the United States would also encumber its efforts to gain broad acceptance of more useful nonproliferation commitments, such as the IAEA Additional Protocol. 

They conclude that a case-by-case approach to addressing E&R issues in Section 123 agreements is the “realistic and effective” approach to handling E&R in nuclear cooperation agreements, and “may lead to greater overall effectiveness of U.S. civil nuclear energy and nonproliferation policies.”  Applying this approach to the Vietnam agreement, they write:

“Based on what is reported to be in that agreement, it would appear Washington and Hanoi have reached a joint political understanding that Vietnam has no intention of engaging in ENR activities. An agreement along these lines would strengthen the economic and energy ties between Washington and Hanoi, promote U.S. strategic objectives in East Asia, and reinforce the global nonproliferation regime.”

McGoldrick and Hibbs are not alone.  Secretary James Schlesinger, Secretary William S. Cohen and other former national security leaders warned earlier this year that a one-size-fits-all approach would “weaken the non-proliferation regime” by encouraging nations to “turn to suppliers that do not impose difficult standards.” 

Nonproliferation experts Miles Pomper and Jessica Varnum of the Monterrey Institute recently noted that “concerns about a mass rush to enrichment and reprocessing appear to be overblown,” making a universal no-E&R policy a “solution in search of a problem.”  Indeed, only a few countries possess E&R technology and legal transfers have occurred only rarely, and with strict oversight. Since the establishment of the NSG in 1974, no NSG member has transferred E&R technologies to a state that did not already have E&R capabilities. 

2. U.S. cooperation advances nuclear safety.  Citing no evidence, Sokolski and Gilinsky claim that “there is no adequate safety agency” in Vietnam.  In fact, Vietnam has taken deliberate steps to develop its nuclear energy program consistent with the highest safety standards.  Vietnam established the Vietnam Agency for Radiation and Nuclear Safety and Control and the Vietnam Atomic Energy Institute in 2008 as the two main agencies responsible for nuclear safety and security.

Vietnam has worked closely on nuclear safety issues with the IAEA and leading nuclear energy countries, including the United States.  Vietnam’s Ministry of Science and Technology signed a nuclear security cooperation agreement with U.S. National Nuclear Security Administration in 2007.  The following year, Vietnam began receiving technical assistance from the U.S. Nuclear Regulatory Commission (NRC). That assistance deepened in 2009 when Vietnam became a pilot country for the NRC’s New Reactor Assistance Program. Vietnam has also received technical assistance from Japan, Korea and Russia.  Like other countries developing new nuclear plants, Vietnam and its foreign partners are incorporating lessons from Fukushima, including new risk assessments for earthquakes and tsunamis. 

If U.S. suppliers are enabled to export to Vietnam advanced reactor designs and world-class operational expertise, they will further enhance nuclear safety in the country. 

The authors cite nuclear safety is a reason “to be cautious about pushing nuclear power in Vietnam,” but Vietnam’s nuclear energy program is well under way with no “push” from the United States.  And preventing U.S. nuclear cooperation would only harm the interest of nuclear safety in Vietnam.

3. The Vietnam nuclear energy market.  The authors also take aim at the economic benefits of U.S. nuclear energy exports to Vietnam.  They scorn projections of the Vietnam nuclear energy market as “wildly optimistic” but provide no actual evidence to challenge industry and government estimates.  Vietnam’s nuclear energy plans, developed in cooperation with the IAEA and foreign partners, call for 10 GW to 15 GW of nuclear generating capacity by 2030.  The first two plants, supplied by Russia, are scheduled to begin construction next year at a southern coastal site and come on line in 2020.  Two additional plants, supplied by Japan, will be constructed in the same province.  An additional 6-11 plants are planned at up to 8 sites in 5 provinces.  Vietnam has indicated strong interest in partnering with U.S. suppliers.

The authors cite the lack of U.S. nuclear exports to India as evidence that international nuclear energy markets are overstated.  But the reason that significant U.S.-India nuclear trade has not yet occurred nothing to do with India’s market demand or India’s interest in U.S. procurement.  The issue is India’s flawed domestic liability law.  Unique in the world, the Indian law has prevented Indian cooperation with foreign and domestic suppliers alike, and must inevitably be reformed to enable India to achieve its nuclear energy plans.

The potential for nuclear energy exports to Vietnam and other countries is far from the “old saw” claimed by the authors.  That the global market for nuclear energy is very large and rapidly growing is plain in the numbers.  According to the World Nuclear Association, 434 commercial nuclear reactors are in operation around the world.  72 are under construction, and another 167 are planned or on order. 

To maintain U.S. influence over global nonproliferation policy and international nuclear safety, the U.S. commercial nuclear energy sector must participate in these markets.  Without U.S. commercial engagement, the United States would have substantially diminished influence over other nations’ nonproliferation policies and practices. U.S. technology and U.S. industry are a critical engine that drives U.S. nonproliferation policies. A successful nuclear trade and export policy must go hand in hand.

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Insistence on the “Gold Standard” in Nuclear Trade Will Harm U.S. Nonproliferation Goals

Tom Kauffman

The following is a guest post written by NEI's Tom Kauffman. Though Tom now works in NEI's media relations shop, he spent 23 years working at Three Mile Island, seven of those as a licensed reactor operator. 

The authors of the recent Weekly Standard opinion piece “Hucksterism vs. Nonproliferation, Irreconcilable U.S. Nuclear Policies,” (subscription required) insist that the U.S. government condition all of its peaceful nuclear cooperation agreements with other nations on their renunciation of the technologies used for the enrichment of uranium or reprocessing of used fuel. Proponents of this restriction, known as the “Gold Standard,” claim it will raise a higher standard against the proliferation of nuclear weapons. It would in fact have the opposite effect.

Because enrichment and reprocessing technologies can potentially be used to produce a nuclear weapon, it is important to restrain their spread. But proliferation of these technologies through legal nuclear energy trade isn’t an urgent problem. Most incidents of nuclear proliferation have occurred through dedicated military programs. Since the international Nuclear Suppliers Group (NSG) was established in 1974, there have been no legal transfers of enrichment or reprocessing technologies to a country that did not already possess them.

There is a place for restrictions on legal transfers of enrichment and reprocessing, but they must be undertaken multilaterally in order to work. The United States is no longer the world’s dominant supplier of enrichment and reprocessing technologies. Today, countries including Russia, France, South Korea, Canada, China, India and others, supply the majority of nuclear energy technology, equipment and services to an expanding global marketplace. The 46-nation NSG recently adopted tighter restrictions on transfers of enrichment and reprocessing technologies

To restrain nuclear trade partners from producing their own nuclear fuel, the United States is working to increase the reliability of the global fuel supply through fuel banks, and has encouraged its partners to rely on international markets. Where a partner country – such as the United Arab Emirates – has been willing to forswear enrichment and reprocessing within a nuclear cooperation agreement, the United States has properly included that commitment within the bilateral agreement. But U.S. insistence on the “Gold Standard” in all nuclear cooperation agreements is self-defeating for U.S. nonproliferation interests.

Experience has shown that very few nations are willing to accept the “Gold Standard.”  Since the United States opened negotiations for nuclear cooperation agreements with Vietnam and Jordan in 2010, both nations have made it clear they have no interest in forswearing enrichment and reprocessing technologies. As parties to the Nuclear Nonproliferation Treaty (NPT), they have agreed to forswear the right to acquire nuclear weapons in exchange for cooperation in peaceful nuclear energy. They strongly oppose, as a matter of principle, additional demands that they foreswear the right to make nuclear fuel, which they properly regard as a sovereign right that is protected by the NPT. Because other nuclear supply countries do not make the “Gold Standard” demand, Vietnam and Jordan do not need a U.S. cooperation agreement. Both countries have moved forward in partnership with other countries.

By preventing the conclusion of nuclear cooperation agreements, U.S. insistence on the “Gold Standard” has dealt a setback to nonproliferation standards and U.S. influence.  No other nuclear supplier matches the standards of the U.S. Atomic Energy Act and Nuclear Nonproliferation Act of 1978, which include nonproliferation assurances and guarantees not required by other supplier countries. By withholding nuclear cooperation from countries such as Vietnam and Jordan that are developing nuclear energy for the first time, the United States will cede influence over their nuclear energy policies to other supplier countries that care less about nuclear proliferation than the United States.

Insisting on the “Gold Standard” harms other U.S. national interests as well.  As several former defense and national security officials explained in an April letter to the President , U.S. nuclear cooperation advances global nuclear power safety and reliability, U.S. leadership in nuclear energy technology, job creation through export growth, and maintenance of the U.S. manufacturing base for nuclear energy technology and services.

There is no doubt that the use of nuclear energy to generate electricity will continue to grow in the worldwide marketplace for the foreseeable future. Only by engaging in this market can the United States ensure that the expansion of nuclear energy is consistent with the highest standards for nuclear security and nonproliferation. Insistence on the Gold Standard in all nuclear cooperation agreements would have the opposite effect. It would isolate the United States from global nuclear energy development, lowering global standards for nuclear nonproliferation.

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Taking a Closer Look at South Korea, Section 123 and the "Gold Standard" When it Comes to Nonproliferation

Ted Jones of NEI

The following is a guest post by Ted Jones, Director of International Supplier Relations for NEI.

Global Security Newswire recently published an article that quotes Tom Moore, a well-regarded nonproliferation expert at CSIS, that South Korea is a “gold standard state.” Mr. Moore has graciously posted my response to this assessment of South Korea in a blog post at Arms Control Wonk. In my comment, I explain that while it may be correct that South Korea’s domestic development of enrichment or reprocessing technologies is inconsistent with the 1992 Joint Declaration on Denuclearization of the Korean Peninsula, the pact between the Koreas is distinct from the “gold standard.” I argue that conflating the two commitments obscures a critical lesson that the case of South Korea can offer to U.S. policymakers about the “gold standard” as a universal policy:

The important lesson of U.S.-ROK nuclear cooperation is that a Section 123 agreement without the “gold standard” can nonetheless be an essential instrument of U.S. influence on international nuclear security and nonproliferation. The most powerful source of U.S. influence over South Korea’s E&R policies and activities is the U.S. consent right, contained in the current Section 123 agreement, over South Korea’s reprocessing of U.S.-origin fuel. The long-term successor agreement will extend this consent right to used fuel from non-U.S. reactors, and to South Korea’s enrichment and storage of plutonium or highly-enriched uranium. These consent rights, plus 8 other nonproliferation assurances and guarantees, are required in a “standard” Section 123 agreement. It is also important to note that the extensive U.S.-ROK commercial partnerships enabled by the agreement have significantly enhanced U.S. influence over nuclear energy both in South Korea and in markets, such as UAE, supplied by ROK in partnership with U.S. companies. 

As the United States resumes negotiations of the long-term successor agreement with South Korea, plus 6 other renewal agreements set to expire by 2015 and new agreements with Vietnam, Jordan and Saudi Arabia, it is crucial that the consequences of tying U.S. nuclear cooperation to acceptance of the gold standard are clearly understood. Among the 10 agreements, only Taiwan has indicated its willingness to forswear E&R in a Section 123 agreement. Given that Taiwan committed to the United States decades ago never to acquire E&R, its willingness to incorporate its existing commitment into a Section 123 agreement represents little change. Vietnam and Jordan have made clear that they are not interested in negotiating Section 123 agreements that would require them to forfeit E&R rights. Negotiations with both countries began in 2010. Talks with Saudi Arabia began last year, and it is doubtful whether Saudi Arabia will accept the U.S. request to forswear E&R.

The reporter of the Global Security Newswire article, Elaine Grossman, also gives the misleading impression in writing that “other nations have gone in the opposite direction [on enrichment and reprocessing] – most notably the United Arab Emirates.” In fact, no other nation has followed UAE in accepting the “gold standard.” She mentions that Taiwan is “poised to offer a similar pledge,” but neglects to point out that Taiwan already has a decades-old commitment to the United States not to develop enrichment or reprocessing technologies. And Ms. Grossman omits that multiple negotiations of Section 123 agreements remain snagged on the “gold standard” issue. This leaves an impression of an emerging trend of countries forswearing enrichment and reprocessing rights, when in fact the opposite is the case.

Editor's Note: In June 2012, NEI recorded an interview with Dan Lipman of Westinghouse concerning the renewal of the 123 agreement with South Korea and why it was important to the bilateral relationship between the two countries. A few weeks later, Dan returned to the same topic when he was interviewed by Alan Ahn of the Global America Business Institute.

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Swinging the Axe at MOX

One of the most vexing aspects of President Barack Obama’s 2014 budget request (as regards topic of blog, naturally) is the deep cut made to MOX facility construction in South Carolina. This is being built at the Department of Energy’s Savannah River Site and is about 60 percent complete.

But let’s back up. What is the MOX facility? For that matter, what’s MOX? (link to NEI’s member site – you can see the whole thing if you’re a member – but this is the key part)

Shaw AREVA MOX Services is the prime contractor for the design, construction and startup of the Energy Department’s mixed oxide fuel fabrication facility being built at DOE’s Savannah River Site in Aiken, S.C. Under a program managed by DOE’s National Nuclear Security Administration, the MOX plant will help dispose of 34 metric tons of surplus weapons grade plutonium by blending it into fuel for commercial power reactors

And here’s the thing or at least a thing: we share this obligation with Russia, who participated in the megatons to megawatts program to downblend plutonium. This (really great) write-up at World Nuclear Association provides much more detail about the whole program, but we’ll zero in on the MOX facility part:

After environmental and safety reviews, the US Nuclear Regulatory Commission authorized construction of a MOX fuel fabrication plant (MFFF) at the DOE Savannah River site in South Carolina by Duke, Cogema, Stone & Webster.  Construction started in August 2007, by Shaw Areva MOX Services.  It will make about 1700 civil MOX fuel assemblies from depleted uranium and at least 34 tons of weapons-grade plutonium, unlike other MOX plants which use fresh reactor-grade plutonium having around one third non-fissile plutonium isotopes.  US reactors using MOX fuel will need to be licensed for it. The MFFF is designed to turn 3.5 t/yr of weapons-grade plutonium into about 150 MOX fuel assemblies, both PWR and BWR.

Couldn’t happen to a nicer element, could it? It turns plutonium from destructive to constructive in a single pass. The nonproliferation aspect is a considerable upside – in fact, a key point.

NEI’s President and CEO Marvin Fertel called out DOE on this aspect during testimony before the House Appropriations Committee:

NEI supports completion of the MOX fuel facility now under construction at the Savannah River Site in South Carolina.  This facility, which is approximately halfway through construction and in which approximately $4 billion has been invested, is important to U.S. national security and as a demonstration of America’s commitment to nonproliferation.

A little more, on the value of the MOX facility to its many partners (and eventual beneficiaries):

It is estimated that the fuel produced from the MOX project would produce $50 billion worth of electricity and enable the federal government to eliminate the expense of storage and surveillance of the plutonium in the future.  Construction and operation of the MOX plant is the result of years of work and commitments with the Russian Federation, the state of South Carolina, and thousands of workers at the site and across the country.  Each of those parties made commitments on the assumption that the U.S. government is a credible partner capable of fulfilling its arms control and nonproliferation commitments.  Failure to complete this project will validate those critics of the government, and the DOE in particular, who claim it simply cannot complete complex projects, particularly those concerning nuclear materials disposition.

That’s – pretty harsh.

But not undeserved. It’s not just that the MOX facility completes an obligation with the Russians to convert this fuel. Or that DOE is risking a large blow to its reputation. Or even that it impacts workers in South Carolina in the midst of a jobs slowdown. It’s the middle part: “Each of those parties made commitments on the assumption that the U.S. government is a credible partner capable of fulfilling its arms control and nonproliferation commitments.” That’s important. That takes in all the rest.

Now, MOX has a science-y profile that makes it seem a safe project to swing a budget axe at. I get that. But this is not an examination into the love life of caterpillars (which, don’t get me wrong, still might be quite important), the MOX facility is a project with many moving parts – many goals fulfilled in several different important policy areas – and proof that America takes those policies seriously. If it doesn’t, it should – they have an existential dimension that requires a serious, committed response. It’s not a lot to ask for.

Note: Some of our commenters pointed out the MOX facility is only for conversion of U.S. fuel. That is correct – I knew that somewhere in my brainpan, but totally muddled it here. I’ve revised the post to make this clearer.

AREVA has a blog on the MOX facility here. Another good place (along with the WNA article cited above) to learn more about the MOX facility and MOX itself.

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Megatons to Megawatts Reaches Another Milestone

Yesterday brought some happy news from our friends at USEC:

USEC Inc. announced today that the Megatons to Megawatts(TM) program has converted 450 metric tons of weapons-grade uranium from dismantled former Soviet Union nuclear warheads into low enriched uranium fuel to generate clean, reliable electricity in commercial nuclear power plants. The program is now 90 percent complete.

[...]

Megatons to Megawatts is a 20-year, commercially financed government-industry partnership in which 500 metric tons of Russian weapons-grade uranium is being downblended to low enriched uranium for use as commercial reactor fuel. USEC, as executive agent for the U.S. government, and JSC "Techsnabexport" (TENEX), acting for the Russian government, implement the program.

The Megatons to Megawatts program is on track to downblend the equivalent of 20,000 nuclear warheads into nuclear fuel by the end of 2013. The fuel generated to date has the energy equivalent of more than 193 billion gallons of gasoline, which equals more than 17 months of U.S. consumption. In past years, up to 10 percent of the electricity generated in the United States came from nuclear power plants using this fuel.

We've been writing about this program since the very dawn of the blog, and it's always been great to see USEC marching through milestone after milestone on its way to the completion of the project. Just think of it: what other government/industry partnership has transformed a national security threat into a pillar of energy security?

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