You may not have noticed -- hardly anyone has -- but Barack Obama's administration is rewriting the rules governing the global trade in civil nuclear technology. The revisions are the most significant in three decades, and the outcome will probably determine whether the anticipated expansion of nuclear power in the developing world -- the so-called nuclear renaissance -- happens without a corresponding spread of nuclear weapons programs.
In 2009, the United States seemed to signal a hard-line approach when it agreed to cooperate with the United Arab Emirates (UAE) on civilian nuclear technology only on the condition that the country not pursue the ability to enrich uranium to make fresh nuclear fuel or to reprocess plutonium from spent nuclear fuel to recycle it in reactors. These technologies, as every casual Iran watcher now knows, are the same as those used to make fissile material for a nuclear bomb. Officials from George W. Bush's administration subsequently described the UAE pledge as the "gold standard" for new nuclear cooperation accords -- known as "123 agreements."
The Obama administration has been more hesitant, saying instead that each new 123 agreement would be negotiated on a case-by-case basis. In other words, the administration would try to replicate the ban on enrichment and reprocessing when possible, while strongly suggesting that the UAE was a unique circumstance. That disappointed many nonproliferation experts -- both within the administration and without -- who believed that Washington was surrendering an opportunity to stem the spread of enrichment and reprocessing technology, even as the president continued to warn of the danger from weapons-usable nuclear material falling into the wrong hands. The gold standard languished in another policy review while the administration continued to negotiate 123 agreements -- until last week anyway, when, according to a report published in National Journal, the State Department made a play for a new 123 agreement with Taiwan.
The Obama administration largely finds itself an accidental architect of the new civil nuclear order. In addition to a new wave of countries seeking nuclear help from the United States, many 123 agreements that were negotiated 30 years ago -- during the last wave of enthusiasm for nuclear power -- will expire between now and 2014. When this flurry of activity ends, the United States will have negotiated more than a dozen nuclear cooperation agreements in a four-year period, many with the most important emerging nuclear powers. Dick Stratford, a senior State Department official, told a conference that he carried around a little list in his pocket because he had trouble keeping all the negotiations straight.
Although the moment is largely one of circumstance, the Obama administration has revealed a distinct philosophical approach, taking a market-oriented approach to discouraging new countries from building their own facilities for enrichment and reprocessing (sometimes called "ENR"). In practice this means exploring how to offer fuel-cycle services at reasonable prices and providing assurances that states that rely on the market, rather than their own capabilities, will not have their supply of fuel disrupted. The thinking goes that the United States can best discourage states from developing their own enrichment and reprocessing capabilities by ensuring that the nuclear industry provides such comprehensive fuel services as part of any agreement to sell nuclear reactors. If that helps U.S. industry and its international partners, all the better. (This is not yet a capability that U.S. industry can provide, particularly in the arena of taking back spent nuclear fuel.) The Obama administration has also supported the creation of separate U.S. and International Atomic Energy Agency (IAEA) "fuel banks" that would provide states that relied on the market a supplier of last resort in the event of a disruption in the supply of nuclear fuel.
Before joining the Obama administration, Deputy Energy Secretary Daniel Poneman outlined a very similar approach in a 2004 article written with three colleagues titled "Making the World Safe for Nuclear Energy." A wag might note that a better goal is making nuclear energy safe for the world, but no matter. The best way to prevent the spread of ENR technology, Poneman and his colleagues argued, was to rely on "market forces … supplemented by government-to-government assurances that fuel services to users not be withheld for any reason other than a material violation of international non-proliferation commitments." This approach was decidedly all carrot and no stick because, Poneman and his colleagues warned, trying to dictate who is allowed to enrich and reprocess and who is not "will almost certainly ignite debates and passions that are more likely to strangle than to promote the prospects of this regime." Attempting to impose ENR restrictions, they concluded, might actually spur proliferation.
Creating market incentives to discourage the spread of enrichment and reprocessing seems like a reasonable thing to do -- except that most states make nuclear decisions on something other than a cost basis. Nuclear power enthusiasts have been no strangers to wishful thinking, starting with claims that nuclear energy would be "too cheap to meter." Government decisions about nuclear power tend to prioritize concerns about sovereignty and keeping technological pace with neighbors. It is not hard to see national nuclear programs as something akin to national airlines -- money-losing prestige projects that barely take market forces into account. Often, aspiring nuclear states look to countries like the United States and Japan as models. If such countries invest heavily in fuel-cycle services, developing states might try to copy them rather than simply become their customers.
That's why others in the nonproliferation community have argued that the United States should use its desirability as a partner in nuclear cooperation as leverage. States are unlikely to forgo ENR programs simply because the United States or others offer cheap alternatives. A little muscle is called for -- and circumstances have offered leverage: With more than a dozen new agreements to be negotiated, the Obama administration has an opportunity to write into many agreements a new, stronger nonproliferation standard.