Nuclear Islands: International Leasing of  Nuclear Fuel Cycle Sites Christopher E. Paine Nuclear Program  Natural Resource...
<ul><li>The “legal withdrawal”  and “illegal breakout” scenarios </li></ul><ul><li>A state can withdraw from the NPT and I...
<ul><li>The NPT-compliant  “virtual weapon state”  – a logical culmination of fully vindicating national Article IV “right...
<ul><li>Universal application </li></ul><ul><li>Encompass all sensitive nuclear  fuel cycle facilities in all states, star...
<ul><li>No interference with commercial market </li></ul><ul><li>I mprovements should not impede normal functioning of int...
<ul><li>Establish new freestanding  “International Nuclear Fuel Association” (INFCA ) alongside IAEA </li></ul><ul><li>Con...
<ul><li>States joining INFCA must ratify and implement new AP-SNF agreeing to additional nonproliferation assurance measur...
<ul><li>IAEA would retain responsibility for –  </li></ul><ul><ul><li>setting safeguards requirements </li></ul></ul><ul><...
Natanz Gas Centrifuge Uranium Enrichment Plant (Iran) Area Leased by the International Nuclear Fuel Cycle Association
INFCA’s Certification Authority -  1 <ul><ul><li>INFCA leased-area contracts would set forth requirements related to:  </l...
<ul><li>In the event of initial Board rejection of a certification request, four possible responses :  </li></ul><ul><ul><...
<ul><li>Capital assets in the Leased Areas would be owned and operated by commercial entities, including: </li></ul><ul><u...
Multi-State URENCO Enrichment Plant (Netherlands) Area Leased by the International Nuclear Fuel Cycle Association
Multi-State URENCO Enrichment Plant (United Kingdom) Area Leased by the International Nuclear Fuel  Cycle Association
Electrolyzing Chemical Combine (AEKhK), Angarsk, Irkutskaya Oblast Perimeter Security Barrier Gas Centrifuge Cascade Build...
Lanzhou Gaseous Diffusion Uranium Enrichment Plant (China) Area Leased by the International Nuclear Fuel  Cycle Association
<ul><li>Customers would order enrichment services from enrichment facility operators and fuel fabricators, just as they do...
<ul><li>INFCA activities could be financed by a modest tariff on the market price of SWUs, or by an annual facility fee  <...
<ul><li>INFCA Proposal is  compatible with perceived Article IV “right”  under the NPT to “fullest possible exchange” of p...
<ul><li>Removes “peaceful atom” cover story from  economically non-viable efforts  to deploy SNF in support of prospective...
<ul><li>Requires and promotes  international nuclear cooperation and transparency  regarding inherently sensitive activiti...
END
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Nuclear islands 12 10-10

  1. 1. Nuclear Islands: International Leasing of Nuclear Fuel Cycle Sites Christopher E. Paine Nuclear Program Natural Resources Defense Council Presentation to USKI/CSIS Workshop on Nuclear Fuel Cycles and Nuclear Security December 10, 2010
  2. 2. <ul><li>The “legal withdrawal” and “illegal breakout” scenarios </li></ul><ul><li>A state can withdraw from the NPT and IAEA safeguards and divert to military purposes nuclear technology and materials previously declared for peaceful use </li></ul><ul><li>Undeclared facilities </li></ul><ul><li>Small gas centrifuge and laser enrichment plants can be hidden from inspectors and national technical means of surveillance for a considerable period </li></ul><ul><li>Covert SNT acquisition and production </li></ul><ul><li>National fuel cycle programs can provide cover for importation and domestic manufacture of sensitive nuclear technologies for military purposes </li></ul>
  3. 3. <ul><li>The NPT-compliant “virtual weapon state” – a logical culmination of fully vindicating national Article IV “rights” to nuclear fuel cycle technology </li></ul><ul><li>Low -confidence and/or untimely capability for detecting diversion from bulk-handling facilities </li></ul><ul><li>Current and future civil fuel cycle capabilities under autonomous national control are a formidable barrier to global elimination of nuclear weapon stockpiles </li></ul>
  4. 4. <ul><li>Universal application </li></ul><ul><li>Encompass all sensitive nuclear fuel cycle facilities in all states, starting with uranium enrichment facilities </li></ul><ul><li>Non-discriminatory </li></ul><ul><li>Control regime should apply with equal rigor to weapon- and non-weapon states – this is justified by broad reach of terrorist/criminal diversion threats, &quot;vision” of verifiable nuclear stockpiles elimination </li></ul><ul><li>Strengthen IAEA authority and safeguards </li></ul><ul><li>Improvements should strengthen, rather than diminish, the IAEA’s safeguards role and functions </li></ul>
  5. 5. <ul><li>No interference with commercial market </li></ul><ul><li>I mprovements should not impede normal functioning of international commercial market for nuclear fuel services </li></ul><ul><li>Objective is enduring NP assurance, not facility management by an “international authority” </li></ul><ul><li>Primary responsibility for safe operations & environmental compliance should remain with operating company and relevant regulatory authorities </li></ul><ul><li>Durable Nonproliferation Assurance is a required cost of nuclear energy for peaceful purposes </li></ul><ul><li>This cost should be recovered in the price of nuclear fuel through a modest tariff on fuel cycle services </li></ul>
  6. 6. <ul><li>Establish new freestanding “International Nuclear Fuel Association” (INFCA ) alongside IAEA </li></ul><ul><li>Conduct enrichment (and later reprocessing) activities only within long-term “Internationally-Secured Leased Areas” (ISLAs) controlled by INFCA </li></ul><ul><li>ISLA contracts would endure for entire life-cycle of a civil nuclear fuel cycle facility, through end of decommissioning, even if a state withdraws from NPT </li></ul><ul><li>INFCA would certify legitimate producers and track certified end-uses of critical components for enrichment and reprocessing </li></ul>
  7. 7. <ul><li>States joining INFCA must ratify and implement new AP-SNF agreeing to additional nonproliferation assurance measures. </li></ul><ul><li>States that have not ratified both the proposed AP-SNF, and the IAEA’s existing INFCIRC/540 (“Additional Protocol”), could not receive fuel cycle services from states that have agreed to the AP-SNF. </li></ul><ul><li>Similarly, states that adhere to the AP-SNF agree not to accept fuel cycle services from any state that has not agreed to it, and the Additional Protocol. </li></ul>
  8. 8. <ul><li>IAEA would retain responsibility for – </li></ul><ul><ul><li>setting safeguards requirements </li></ul></ul><ul><ul><li>conducting safeguards inspections </li></ul></ul><ul><ul><li>enforcing safeguards agreements at INFCA sites </li></ul></ul><ul><li>INFCA would not assume any existing IAEA functions </li></ul><ul><li>IAEA would have assured immediate access to all facilities in leased areas through permanent INFCA-controlled portal. </li></ul><ul><li>Full cooperation with IAEA would be a continuing condition of INFCA membership </li></ul>
  9. 9. Natanz Gas Centrifuge Uranium Enrichment Plant (Iran) Area Leased by the International Nuclear Fuel Cycle Association
  10. 10. INFCA’s Certification Authority - 1 <ul><ul><li>INFCA leased-area contracts would set forth requirements related to: </li></ul></ul><ul><ul><ul><li>Civilian ownership and management of fuel cycle facilities </li></ul></ul></ul><ul><ul><ul><li>Safeguards access and physical security </li></ul></ul></ul><ul><ul><ul><li>Enrichment level, plant capacity and configuration </li></ul></ul></ul><ul><ul><ul><li>Permissible inventories of feed materials and enriched/separated products stored on site </li></ul></ul></ul><ul><ul><ul><li>Observance of existing international standards and conventions for ES&H. </li></ul></ul></ul>
  11. 11. <ul><li>In the event of initial Board rejection of a certification request, four possible responses : </li></ul><ul><ul><li>Abandon proposal and rely on international market </li></ul></ul><ul><ul><li>Modify project design to meet INFCA concerns </li></ul></ul><ul><ul><li>Defer proposal (if assessed as premature in the context of requestor’s civil nuclear program) </li></ul></ul><ul><ul><li>Reject INFCA judgment and press ahead </li></ul></ul><ul><ul><li>Last option triggers exclusion from legitimate nuclear market; risks INFCA finding that SNF without a nonproliferation assurance contract threatens international peace and security. </li></ul></ul>
  12. 12. <ul><li>Capital assets in the Leased Areas would be owned and operated by commercial entities, including: </li></ul><ul><ul><li>Private (e.g. USEC, GE-Hitachi) </li></ul></ul><ul><ul><li>State-owned corporations (e.g. ROSATOM) </li></ul></ul><ul><ul><li>Mixed single-state/private ownership (e.g. AREVA) </li></ul></ul><ul><ul><li>Mixed multi-state public/private enterprises (e.g. URENCO) </li></ul></ul><ul><li>INFCA Secure Leased Area setup is compatible with many forms of ownership/management, except by military forces or internal security agencies, which would be prohibited. </li></ul>
  13. 13. Multi-State URENCO Enrichment Plant (Netherlands) Area Leased by the International Nuclear Fuel Cycle Association
  14. 14. Multi-State URENCO Enrichment Plant (United Kingdom) Area Leased by the International Nuclear Fuel Cycle Association
  15. 15. Electrolyzing Chemical Combine (AEKhK), Angarsk, Irkutskaya Oblast Perimeter Security Barrier Gas Centrifuge Cascade Buildings
  16. 16. Lanzhou Gaseous Diffusion Uranium Enrichment Plant (China) Area Leased by the International Nuclear Fuel Cycle Association
  17. 17. <ul><li>Customers would order enrichment services from enrichment facility operators and fuel fabricators, just as they do today </li></ul><ul><li>INFCA would ensure that all financially-solvent, IAEA-compliant members have an available source of enrichment and fuel-fab services </li></ul><ul><li>Should unlikely market breakdown threaten to strand an INFCA member-in-good standing- </li></ul><ul><li>--INFCA would manage LEU reserve buffer stocks—so-called “fuel banks”—and assign or “reserve auction” fulfillment of orders for nuclear fuel services to member supplier enterprises. </li></ul>
  18. 18. <ul><li>INFCA activities could be financed by a modest tariff on the market price of SWUs, or by an annual facility fee </li></ul><ul><li>Since SWU-cost is a small fraction of the “levelized” fully-amortized cost of nuclear-generated electricity, such tariffs would not adversely affect economic viability of nuclear power. </li></ul>
  19. 19. <ul><li>INFCA Proposal is compatible with perceived Article IV “right” under the NPT to “fullest possible exchange” of peaceful nuclear technology </li></ul><ul><li>Such a right may be claimed to exist, however, only when assurance of Article I and II NPT compliance is high </li></ul><ul><li>INFCA Proposal provides such assurance </li></ul><ul><li>Advances global institutional basis for FMCT and reduces known barrier to global nuclear weapons elimination </li></ul><ul><li>Proposal compatible with current ownership, management and market structures for global nuclear fuel services </li></ul>
  20. 20. <ul><li>Removes “peaceful atom” cover story from economically non-viable efforts to deploy SNF in support of prospective or beginning nuclear power programs </li></ul><ul><li>Requires up-front political/legal commitment removing civil dual-use fuel-cycle facilities from any future role in nuclear weapon hedge strategies </li></ul><ul><li>Creates strong economic /technology incentives for joining control regime to ensure long-term market access to most advanced, cost-effective nuclear fuel services </li></ul>
  21. 21. <ul><li>Requires and promotes international nuclear cooperation and transparency regarding inherently sensitive activities </li></ul>
  22. 22. END

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