In its final week in the White House, the Clinton administration approved an amended contract to implement the U.S.-Russian Highly Enriched Uranium (HEU) Purchase Agreement. If approved by the Bush administration and the Russian government, the as-yet-unsigned deal would allow for the continued implementation of the agreement when its current contract expires at the end of the year.
Under the 1993 deal, the United States pledged to purchase, over a 20-year period, 500 metric tons of Russian weapons-origin uranium blended down to low-enriched uranium for use in commercial power reactors. Since 1995, Russia has converted and shipped to the United States 111 metric tons of bomb-grade uranium—enough to make 5,000 nuclear weapons. The so-called HEU deal is implemented in Russia by the government-run Techsnabexport (Tenex) and in the United States by the privately owned United States Enrichment Corporation (USEC).
With the expiration of the current implementation contract approaching, USEC and Tenex began negotiating an amended contract in the spring of 1999. Faced with a declining market price for enriched uranium, USEC sought to tie the HEU deal to market prices and pay a discounted price for the blended-down uranium so that it would be able to make a profit. In exchange, USEC agreed to purchase from Russia a limited quantity of commercially produced low-enriched uranium—in addition to the material blended down from weapons-grade uranium—in order to provide the Russian Ministry of Atomic Energy with an additional revenue stream it sought.
Both USEC and Tenex were prepared to sign the agreement last May, but the U.S. Enrichment Oversight Committee (EOC) declined approval. Established by executive order in 1998, the interagency EOC has oversight responsibility for USEC and the HEU deal. According to former Undersecretary of Energy Ernest Moniz, who served as the Energy Department's representative to the committee, the EOC had become concerned that, because USEC had recently decided to close the Portsmouth enrichment facility, one of its two domestic enrichment plants, the HEU deal could leave the United States vulnerable to disruption of its uranium supply. Currently, Russia supplies about half of U.S. low-enriched uranium needs, which include both domestic nuclear power reactors and statutory commitments to supply fuel to other countries.
Political concerns, most notably fears about layoffs raised by unions representing workers at the Portsmouth facility, also appear to have played a role in the election-year decision not to approve the amended contract in May.
Following its refusal to endorse the contract, the EOC worked to craft an acceptable compromise that would permit continued implementation of the HEU deal, which, at its conclusion, will have removed from Russia enough material to make some 25,000 weapons, reducing a major proliferation risk. According to Moniz, the committee tried to find a solution that "preserved the existing non-proliferation program in full bloom" while meeting domestic energy security needs.
In the end, the EOC was able to address its concerns and approve the amended contract, as originally written, by clarifying with USEC that the purchase of commercially produced low-enriched uranium was a "one-time" offer, by deciding to keep the Portsmouth enrichment plant in a standby mode for five years, by assuring there would be no layoffs at USEC's other enrichment plant, and by restarting research and development on a less expensive domestic enrichment capability.
Congress Raises Concerns
In a January 30 letter to White House national security adviser Condoleezza Rice, a bipartisan group of House Energy and Commerce Committee members raised concern about the long-term implications of the amended contract. In the letter, Commerce Committee Chairman Billy Tauzin, ranking member John Dingell, and six other congressmen expressed concern that the amendment "dilutes the important non-proliferation objectives of the HEU Agreement" and may negatively impact the "struggling domestic uranium industry."
The congressmen appear to be concerned that the purchase of commercially enriched uranium, rather than additional weapons-origin material, is contrary to the intent of the original agreement and that the Russian commercial uranium would displace equivalent domestic production. The legislators also claimed that the Clinton administration had ignored a recommendation to assess the national security and domestic impact of the amended contract, contained in a December 2000 General Accounting Office report commissioned by the committee. Rice responded to Tauzin in a February 7 letter, stating that the administration would review "recent decisions related to this agreement."
Before USEC and Tenex can sign the contract, the Bush administration and the Russian government must approve it. USEC Vice President for Corporate Communications Charles Yulish stated in a February 22 interview that Tenex was prepared to sign the amended contract last May and that USEC "still" considers the prospects for Russian government approval "very good." If approved, the new contract will run through the end of the HEU deal in 2013.