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former IAEA Director-General

The Nuclear Third Rail: Can Fuel Cycle Capabilities Be Limited?
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Jon B. Wolfsthal

In U.S. politics, some issues are so controversial that they are known as “third rails”—touching them risks political electrocution. Social Security, for example, has often been likened to the third rail of U.S. domestic politics. In the nuclear security world, the third rail has been the nuclear fuel cycle, that is, what restrictions if any should be placed on the ability of states to produce and use fissile materials (enriched uranium and especially plutonium), which have civilian purposes but also can be used to make nuclear weapons. Past attempts to alter the status quo on these issues have produced many political headaches, but few tangible results.

On Feb. 11, President George W. Bush delivered a major nonproliferation address that approached the nuclear third rail. In addressing a long-standing concern, he stated that, under the nuclear Nonproliferation Treaty (NPT), states were “allowed to produce nuclear material that can be used to build bombs under the cover of civilian nuclear programs” and proposed to close this treaty’s “loophole.” The president said the world must create a “safe, orderly system to field civilian nuclear plants without adding to the danger of weapons proliferation.”

The following month, International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei told the agency’s Board of Governors that “the wide dissemination of the most proliferation-sensitive parts of the nuclear fuel cycle—the production of new fuel, the processing of weapons-usable material, and the disposal of spent fuel and radioactive waste—could be the ‘Achilles’ heel’ of the nuclear nonproliferation regime.”

These comments echo those ElBaradei made in September 2003 when he urged states to consider “the merits of limiting the use of weapons-usable material (plutonium and highly enriched uranium [HEU]) in civilian nuclear programs, by permitting it only under multilateral control.” At that time, he also proposed limiting to international centers the production of new fissile material through reprocessing and enrichment. “It is clear that strengthened control of weapons-usable material is key to our efforts to strengthen nonproliferation and enhance security,” he said.

Both of these leaders focused on a central issue: whether the current nuclear nonproliferation system, or the global security architecture for that matter, is capable of preventing states from—or punishing states for—making use of civil facilities for weapons purposes if at some point they decide to abandon the NPT or related commitments. This “breakout” scenario, where a state could acquire virtually all of the weapons-related capabilities it needs under the NPT’s protection, is an increasing concern. Already, the fabric of the global nonproliferation regime is weakening with a chronic crisis over North Korea’s nuclear program and continuing concerns over Iran’s nuclear future. Whether the regime rips apart or will be sown back together is an open question.

The answer will have much to do with how the Iranian crisis in particular is resolved. A successful resolution will shore up a security system based on a small and eventually shrinking number of nuclear-weapon states. A failure could help pave the way to widespread proliferation, with many states looking for a nuclear insurance policy by acquiring civil capabilities that provide a base for weapons development. They could add to the 12 countries already known to possess enrichment or reprocessing facilities for either nuclear or civilian purposes. Although a recently announced agreement by Iran to suspend its enrichment activities while negotiations with three European Union countries proceed is a good first step, it is far too early to know if the proposed nuclear deal with Iran is a model or a mirage.

Technological Realities
At the crux of this challenge is the fact that nuclear weapons and nuclear power plants depend on the same basic raw materials—enriched uranium and plutonium—to provide their essential energy. Most civilian nuclear power plants, for example, use low-enriched uranium (LEU), which is uranium that has gone through a process to increase the percentage of uranium-235 to 3 percent to 5 percent for use in civilian power reactors. However, the same facilities that produce LEU can also produce the much higher concentrations of U-235 needed for the production of nuclear weapons.

Moreover, all nuclear energy reactors produce plutonium, albeit some more than others. Some countries treat this material as waste, leaving it encased in radioactive spent fuel for later disposal. Other countries such as Russia, France, and Japan separate out this plutonium and mix it with uranium to use as so-called mixed oxide fuel, or Mox, in power plants. The plutonium-separation plants, however, can also produce plutonium that can be used for a nuclear weapon, creating a weapons potential under the cover of civilian use.

The challenge then is how to ensure that enrichment and reprocessing plants do not support weapons activities. Uranium-enrichment plants, using centrifuge technology to purify the U-235 isotope, could be reconfigured from producing LEU for nuclear power plants to produce weapons-grade material within hours. For plutonium-separation plants, even in countries such as Japan, where reprocessing facilities are designed to produce mixtures of plutonium and uranium oxide, the additional purification to a weapon-usable form is straightforward.

Inspections carried out under IAEA safeguards agreements can detect changes in plants or the diversion of materials, a capability further enhanced if the inspections are carried out in countries that have adhered to variants of the 1997 Model Additional Protocol, which grants broader rights to inspectors. Yet, inspectors cannot be everywhere at every time. Additionally, even under the safeguards, the possession of large stocks of HEU and separated plutonium is permitted under the NPT as several legitimate peaceful uses for these materials exist.

Moreover, the world lacks an ironclad system for preventing defections from the nonproliferation regime or for denying states who defect access to nuclear capabilities acquired under the treaty’s protection. States can acquire enrichment or reprocessing facilities under the guise of the NPT and then legally withdraw from the treaty, allowing these “peaceful” facilities to be used to advance a weapons program. It does not mean all states with such capabilities will do so or even think about it, but the potential exists and must be recognized. It is not surprising, therefore, that some countries may view these plants as nuclear weapons insurance or hedging policies.

A Long-standing Problem
The fact that nuclear facilities can be used both for peaceful and military ends has been known for decades. The 1965 Gilpatric report to President Lyndon Johnson stated starkly that “the world is fast approaching a point of no return in the prospects of controlling nuclear weapons. Nuclear power programs are placing within the hands of many nations much of the knowledge, equipment, and materials for making nuclear weapons.” The report said every effort should be made to ensure that “peaceful atomic energy programs do not unreasonably contribute to potential proliferation of nuclear weapons capabilities.”[1]

Yet, three years later, Article IV of the NPT stated that it is the “inalienable right of all the parties to the treaty to develop research production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty.”

Developing and many developed countries have long interpreted Article IV of the NPT as a right for all states to acquire uranium-enrichment and plutonium-separation capabilities as long as they are under IAEA safeguards. For just as long, however, some experts have questioned whether the inherent risk these facilities pose are consistent with an effective nonproliferation regime. These concerns have been echoed in U.S. and international export control policies that have sought to limit the availability of these capabilities, albeit in some countries only in the past few years.

For decades, efforts have been made to reconcile the two positions. In the 1970s and 1980s, for example, these included the International Nuclear Fuel Cycle Evaluation (INFCE), the Peaceful Uses of Nuclear Energy conference, and the six-year Committee on Assurances of Supply. Yet, all fell short of addressing this challenge or making any real adjustments to the global fuel-supply system due to concerns about the long-term availability of uranium, potential limits on industry growth, and conflicts between international security concerns and national sovereignty.

Countries that have made massive economic and technical investments in reprocessing and enrichment, such as Japan and France, have resisted any moves that might restrict their ability to engage in these activities for domestic or international export-related purposes. States such as Brazil also are pursuing enrichment capabilities to advance their own nuclear industries as well as to claim a position of technical leadership in the developing world. These institutional, economic, and political interests combine to make it exceedingly challenging to find support for major structural adjustments to the international fuel cycle.

Now, more than 20 years after INFCE, there is growing awareness that the world faces a long-term choice of either living with or seeking to adjust a system that enables states to develop virtual nuclear arsenals under the protection of the NPT and international safeguards. These issues can be addressed case-by-case, such as the current situation with Iran, or strategically to prevent such crises from emerging.

There is a reasonable international debate about the extent of the risks posed by safeguarded nuclear production facilities and fissile materials. States such as Japan with exemplary nonproliferation credentials and fully safeguarded facilities rightly point out that they have complied with all norms and should not be restricted now that countries such as Iran and North Korea have broken the rules. At the same time, as the nonproliferation regime is challenged, states can and should be alarmed at the prospect that more and more states will seek peaceful nuclear production capabilities as an insurance policy again proliferation by their neighbors. Already, South Koreans are calling for the development of a domestic enrichment capability on economic grounds, but with an understanding that it would also balance the nuclear capabilities in North Korea, Japan, and China.

In the past, the most effective nonproliferation tools have been those that reduce the perceived need to acquire nuclear weapons in the first place. Economic, political, and security integration of Japan, South Korea, Germany, and other countries once considered prone to proliferation have been critical to nonproliferation successes. Moreover, countries highly dependent on nuclear power are often dependant on outside sources for raw uranium or technical support from supplier states; and reorienting civilian nuclear plants to military production in countries such as Japan, South Korea, and Taiwan would have to be seriously weighed against the possible loss of nuclear cooperation, to say nothing of other issues, with the outside world. Yet, in the extreme circumstances where states closely allied with the United States would be actively considering nuclear options, violating bilateral or international agreements might be of lesser importance than hard security calculations.

Even if production facilities are not intended for weapons purposes, they can create tensions. South Korean officials, for example, are not shy about pointing to the large civilian stocks in Japan as a potential nuclear arsenal, even though Japan’s nonproliferation credentials are impeccable and relations between the Republic of Korea and Japan are quite strong. If the number of reprocessing and enrichment plants worldwide grows, such concerns are likely to grow as well. The bottom line is that states that do not possess the ability to produce nuclear materials are obviously less capable of acquiring nuclear weapons, except by theft or via black market purchases of material. The central axiom of nonproliferation is “no nuclear materials, no nuclear weapons.”

Three Approaches to the Fuel Cycle Dilemma
There are now three basic viewpoints in relation to the fuel cycle issue. The first school believes that the current system essentially works and that adjustments are needed to ensure that no unsafeguarded or illegal transfers of nuclear production technologies take place. A second group maintains that the possession of such capabilities by peaceful, integrated, and nonproliferation-compliant states is perfectly acceptable and that the focus should be only on states with bad track records, obvious incentives to proliferate, and poor justifications for acquiring nuclear production capabilities. A third, more ambitious approach holds that the national possession of enrichment and plutonium-separation capabilities undermines the very basis for nonproliferation and that such activities should be minimized to the extent possible and exercised only under international or multinational control to provide additional assurances that they will only ever be used for peaceful purposes.

Bush and ElBaradei
Bush and ElBaradei represent the second and third of these perspectives and have backed up their statements with explicit proposals. In February, Bush called on the Nuclear Suppliers Group (NSG), an informal export control organization made up of the main nuclear exporting states, to deny the transfer of enrichment or reprocessing technologies to any country that “does not already possess full-scale, functioning enrichment and reprocessing plants.” The Group of Eight, which brings together the world’s richest countries, has since adopted a similar position in a one-year moratorium on such transfers, with the possibility of a longer-term extension. Bush optimistically stated, “[T]his step will prevent new states from developing the means to produce fissile material for nuclear bombs.” It is questionable whether even the 44-member NSG is comprehensive enough to prevent the spread of this technology.

Bush’s proposals came at the same time that the public learned of the black-market nuclear network established by Abdul Qadeer Khan, the father of Pakistan’s nuclear program. That network successfully and secretly disseminated enrichment capabilities to Iran, Libya, and North Korea. Controversy continues to rage over whether Khan’s activities were sponsored and approved by the Pakistani government. If they were, Bush’s proposal would have done little to shut down this network as Pakistan is not an NSG member.

ElBaradei has voiced his support for stronger export controls and enforcement but has also formed an experts group under the direction of former IAEA Deputy Director-General Bruno Pellaud to consider various alternatives to the current system of national control of special nuclear material production capabilities.[2] Some of the issues to be explored by the expert group are limits on the use of weapons-usable nuclear material in civilian nuclear programs by permitting it only under multilateral control and multinational approaches to managing and disposal of spent fuel and radioactive wastes.

In forming the group, ElBaradei stated, “I am aware that this is a complex issue. But we owe it to ourselves to examine all possible options. Common sense and recent experience make clear that the [NPT], which has served us well since 1970, must be tailored to fit 21st-century realities. Without threatening national sovereignty, we can toughen the nonproliferation regime.”

The group has already met twice and will hold a total of four meetings before reporting its initial findings to the March 2005 IAEA Board of Governors meeting. The leading nuclear countries, including the United States, are participating, and the panel has governmental and nongovernmental representatives with a broad background in the issue of the nuclear fuel cycle and nonproliferation.

Some hybrid solutions are also being mentioned in capitals around the world. Some have suggested that what is needed is a greater assurance that any misuse of safeguarded facilities will be challenged and the dangers counteracted. Openly discussed options include establishing clear obligations that a state must return any and all material, equipment, and technology acquired under safeguards if a violation is detected or a state withdraws from the NPT.[3] The key here, however, would be the ability and the willingness of states to enforce such an edict. Any country trying to withdraw from the NPT or willing to violate its obligations might be equally unwilling to comply with a “request” for nuclear materials to be removed. Thus, states may have to consider military actions to eliminate the potential nuclear option in such states. That, as can be seen from the Iraq experience, is no easy step.

Another set of ideas being floated by experts and officials is an objective set of criteria that might allow the international community to judge the “legitimate” need for states to acquire nuclear production capabilities. These might include the scope of the nuclear power industry and energy output of a state, the availability of other natural resources for energy production, a state’s nonproliferation credentials, and its integration into international economic and political organizations. Some would argue this would make it easy to judge between states such as North Korea and Iran on the one hand and Japan and Brazil on the other. It is not clear how such a set of criteria would be enshrined in international operations or whether it could be accepted by NPT members, many of who increasingly express their concern about the discriminatory nature of the existing regime.

A less legalistic set of approaches in a similar vein would seek to test the motivations of states seeking to acquire uranium-enrichment or plutonium- separation capabilities for civilian power applications.[4] These ideas would, in various ways, seek to outdo domestic nuclear production facilities economically by offering legally binding and economically attractive options to supply fresh fuel and remove spent nuclear fuel from states with nuclear power programs.

Such arrangements could be provided through the existing commercial market with groups of existing enrichers providing fresh fuel at attractive rates and countries agreeing to manage the spent fuel in their own countries or via international arrangements such as an IAEA-run fuel bank or internationally owned and operated consortium such as those being considered by the IAEA experts group. Refusal of viable and economically attractive options by a state would call into question its motives and possibly make it easier to galvanize the potential international response. Yet, as the Iran case demonstrates, it the difficult for states and the international community to muster political will to enforce global standards even in the face of obvious proliferation risks.

Assessment
The near-term prospects for a new international fuel-cycle system that limits the national ability of states to determine their own national capabilities are not bright. The main focus of nonproliferation efforts for the coming months and possibly years will be resolving or trying to deal with the aftermath of the dual nuclear challenges of Iran and North Korea. In the meantime, procedural adjustments to export controls and tighter enforcement through multilateral measures including the Proliferation Security Initiative, an informal coalition of states working together to enforce national export controls more effectively through legal and even military interdiction, can help slow the unsafeguarded acquisition of nuclear production facilities.

Thus, states concerned with the spread of production capabilities may be left trying to enforce a new discriminatory standard where some states are permitted to have uranium-enrichment and plutonium reprocessing capabilities and others are not. This system is inherently unstable and threatens to repeat what many consider to be the main weakness of the NPT itself.

Moreover, the two issues are intimately linked. Non-nuclear weapons states are unlikely to consider yielding to what many see as a basic right under the NPT. They will be especially resistant as many already question the commitment of the United States or other nuclear-weapon states to meet their own treaty obligations. In particular, they claim that the nuclear-weapon states have not made sufficient progress in achieving their stated goals of general and complete disarmament and their 2000 pledge that they were unequivocally committed to doing so. In other words, it will be difficult to tighten some portions of NPT implementation without states linking it to other efforts to enforce other aspects of the agreement.

What is clear is that the way the world succeeds or fails in addressing Iran will serve as a precedent in the coming years. In accepting an offer from the United Kingdom, France, and Germany to suspend and potentially abandon nuclear production plans in exchange for access to nuclear reactors, energy assistance, and fuller trade engagement, Iran and its negotiating partners may be creating a potentially useful model for others to follow. In the end, however, the choice is between trying to get ahead of the curve by changing the rules of the international system or resigning the United States and other major players to putting out nuclear fires every time a new state attempts to acquire reprocessing or enrichment technologies.

If the Iran talks fall apart or other states friendlier to the West decide to pursue nuclear production plans and are not equally opposed, the discrimination among states will be made more apparent and the underlying tensions will re-emerge. If, as many hope, the talks lead to a long-term deal to end Tehran’s fuel cycle ambitions, the United States and its allies should work to establish Iran as the model for a new norm where no new states acquire these special capabilities and those that have them move to operate them in ways that reduce the distinction between the haves and have-nots.

ENDNOTES

1. The White House, “A Report to the President by the Committee on Nuclear Proliferation,” January 21, 1965.

2. Miles A. Pomper, “ElBaradei Appoints Fuel Cycle Group,” Arms Control Today, September 2004.

3. George Perkovich et al., “Universal Compliance: A Strategy for Nuclear Security,” June 2004.

4. Ernest Moniz et al., “Making the World Safe for Nuclear Energy,” Survival, Winter 2004.


Jon B. Wolfsthal is an associate and deputy director for Non-Proliferation at the Carnegie Endowment for International Peace. He is a co-author of Deadly Arsenals: Tracking Weapons of Mass Destruction (Washington, DC: Carnegie Endowment for International Peace, June 2002).

Posted: December 1, 2004