Equal Opportunity: Historical Challenges and Future Prospects of the Nuclear Fuel Cycle

Lawrence Scheinman

Since the beginning of the nuclear age, the international community has attempted to provide an institutional framework for peaceful nuclear activities, most notably power generation, in order to minimize the risk that acquired nuclear knowledge, technology, and assets would be misused to make nuclear weapons. These efforts notched some partial successes but stopped shy of more ambitious undertakings for broader international controls.

In recent years, several developments, from a revival of interest in nuclear power to Iran’s development of nuclear enrichment technology, have led to a spate of new initiatives aimed at increasing control over nuclear expertise and materials. History cautions, however, that a successful effort will require states with nuclear weapons or sensitive technologies to make difficult concessions that they have been unwilling to make in the past.

The first systematic consideration of how best to regulate peaceful nuclear activities came in the 1946 Acheson-Lilienthal report. One of its central conclusions was that as the ability to produce special nuclear material constituted a critical step toward nuclear weapons, “a system of inspection superimposed on an otherwise uncontrolled exploitation of atomic energy by national governments will not be an adequate safeguard” and could not therefore assure effective separation of civil and military uses of nuclear technology. It recommended establishing an international agency with managerial control or ownership of all atomic energy activities potentially dangerous to world security and with authority to control, inspect, and license all other atomic energy activities. This far-reaching proposal for an international order based on the principle of sovereign states was subsequently incorporated in the U.S.-sponsored Baruch Plan at the United Nations. Any chance that it would be accepted, however, was foreclosed by the Cold War tensions that dominated post-World War II relations.

Simultaneously, the United States, in the Atomic Energy Act of 1946, established a policy of secrecy and denial, prohibiting any foreign nuclear cooperation until Congress was satisfied that effective international safeguards were in place. That policy was superseded in 1954 in favor of Atoms for Peace, a policy of nuclear cooperation and assistance. This was in response to changing circumstances, such as the entrance of the Soviet Union and the United Kingdom into the “nuclear club,” increasing concern about the security implications of a nuclear arms race, and the emergence of national nuclear programs not subject to any form of international control in an increasing number of countries. A new effort to establish an institutional framework for nuclear energy emerged based on the concept of regulated transfers and safeguards.

The Safeguards System

Initially applied bilaterally at the discretion of the supplier country, safeguards ultimately were institutionalized and applied by the International Atomic Energy Agency (IAEA). The Atoms for Peace plan was envisioned as an international focal point for promoting civil nuclear cooperation as well as for verifying peaceful use through a system of safeguards. Although the Acheson-Lilienthal report judged the international safeguards system inadequate, others deemed it the biggest step possible given the sensitivity of states to limitations on their activities. Little has changed over the past 50 years.

The 1968 conclusion of the nuclear Nonproliferation Treaty (NPT) brought with it the requirement that all non-nuclear-weapon states party to the treaty conclude a comprehensive safeguards agreement with the IAEA, making that institution and its safeguards system a centerpiece of the nonproliferation regime. The treaty also incorporated the principle that states had an inalienable right to develop nuclear energy for peaceful purposes, consistent with the nonproliferation purpose of the treaty, and an undertaking by nuclear-weapon states to pursue negotiations in good faith on ending the nuclear arms race and achieving nuclear disarmament.

Although safeguarded states were obligated to declare all nuclear material and the agency had the right to ensure that this was the case, in contrast to earlier IAEA safeguards that were facility specific, in practice the focus was on material accountancy and verification of the correctness of state declarations rather than on whether the declaration was complete. Inspectors did not tend to check to see if a state had materials or sites that it was not declaring. States not party to the NPT were subject only to those safeguards required of them as a condition of nuclear cooperation by the supplier state.

1970s Initiatives

India’s 1974 nuclear test prompted renewed attention to institutional arrangements that would limit access to technologies that could lead to the acquisition of weapons-usable material. India’s nuclear device was developed using assistance it received from states supporting the country’s ostensibly civil nuclear energy efforts. The renewed attention took several forms, including an IAEA-led study on Regional Fuel Cycle Centers, a U.S.-initiated International Nuclear Fuel Cycle Evaluation, an International Plutonium Storage arrangement, and formation of the Nuclear Suppliers Group (NSG).

Ultimately, only the NSG took root. Following a U.S. initiative, the key nuclear suppliers in the mid-1970s agreed on a code of conduct for international nuclear transactions, including a nonproliferation commitment by recipients; acceptance of international safeguards on designated transfers of materials, equipment, and technology; retransfer restraints; and provisions for physical protection for transferred materials and equipment. Restraint has in fact been the de facto practice of NSG members; cooperation in sensitive nuclear technologies such as enrichment and reprocessing has been limited to states that already had the technology in hand. These guidelines govern the export policies and practices of 45 member states today. Resented by some as a supplier cartel, the NSG is on the whole seen as an important contribution to nonproliferation and as facilitating rather than impeding legitimate international civil nuclear cooperation. A 1976 U.S. initiative to curb states from engaging in sensitive nuclear transfers resulted in an agreement only to exercise restraint in such transfers and to urge recipients to accept supplier involvement or other appropriate multinational participation in such plants as an alternative to purely national facilities. Notwithstanding failure to agree to such restraints formally, members of the group in practice henceforth exercised great restraint, effectively foreclosing further transfers of sensitive facilities.

Strengthened Safeguards

The 1991 Persian Gulf War and the discovery in Iraq of extensive undeclared activities associated with a clandestine nuclear weapons program underscored significant safeguards deficiencies both in authority and practice. In response, the IAEA took steps to strengthen safeguards by seeking additional authority in the form of a Model Additional Protocol to comprehensive safeguards agreements. This measure was approved by the agency’s Board of Governors in 1997.

The core elements of the Model Additional Protocol are increased access to information through an expanded state declaration and expanded rights of inspector access to sites. Adherents are supposed to declare all fuel cycle-related research and development activities whether nuclear material is present or not; the location of nuclear fuel cycle-related research and development not involving nuclear material, as well as fuel-cycle development plans for the ensuing 10-year period; and the location and operational status of uranium mines and concentration facilities. As for access, it entails complementary physical access to enable credible assurance of the completeness and correctness of information provided and of the absence of undeclared nuclear material and activities. Safeguards are not viewed as alternatives to other institutional approaches to the nuclear fuel cycle, but rather an essential component of an integrated system of controls that includes other institutional arrangements.

Unlike the comprehensive safeguards agreements which are required of all non-nuclear-weapon states-parties to the NPT, the Additional Protocol is voluntary. At present, 10 years after the IAEA Board of Governors approved it, only 79 states have signed and implemented a protocol agreement. Unless and until this gap is closed and all NPT states with comprehensive safeguards agreements also adhere to the Model Additional Protocol, the IAEA will not have the authority it needs to root out clandestine nuclear activities.

In this regard, it must be emphasized that even a strengthened system is not a panacea for preventing the misuse of nuclear technology. Although safeguards are essential to the acceptability of widespread use of nuclear energy for civil purposes and can be very effective if fully supported by the international community, alone they are not a sufficient means to prevent proliferation.

As pointed out by a former chairman of the Israeli Atomic Energy Commission, David Bergmann, the basic fact remains that “by developing atomic energy for peaceful uses, you reach the nuclear weapon option. There are not two atomic energies.”[1] In other words, whether a state would cross the weapons threshold or not is a matter of motivation, incentive, and political decision, all considerations that largely derive from factors beyond technical capacity, although related to it. Safeguards can verify observable use, but not intentions. These considerations provide added justification for exploring new institutional and structural options for the nuclear fuel cycle, in addition to international safeguards.

New Challenges

Taking stock of the nuclear nonproliferation regime, IAEA Director-General Mohamed ElBaradei recently commented that, “in regard to nuclear proliferation and arms control, the fundamental problem is clear: Either we begin finding creative, outside-the-box solutions or the international nuclear safeguards regime will become obsolete.”[2]

This judgment reflects the significant changes that have taken place in the past decade. At least five developments can be identified that collectively characterize the current nuclear environment and confirm the need for resourceful and pragmatic initiatives to address the challenge of reconciling the development of nuclear energy for peaceful purposes with preventing states using their nuclear capacity to acquire nuclear weapons.

First, with the end of the Cold War and the discipline it imposed on state behavior, regional political-security agendas have become more important. Some states, whose sense of security is more tenuous, may feel a greater need to develop a nuclear deterrent. For others, aspirations to regional predominance or international standing may motivate a similar interest. In either event, regional and international stability stand to suffer if those incentives translate into concrete actions.

Second, over time, sources of supply of sensitive nuclear technologies or their components, particularly dual-use items, have multiplied and expanded to more states and beyond states to illicit, black market transfers as underscored by the revelations of the prolific activities of Pakistani scientist Abdul Qadeer Khan. Among states, not all adhere to the nuclear supplier guidelines or exercise sufficient controls on the transfer of sensitive technologies or dual-use items by companies or industries under their jurisdiction.

Third are the cases of NPT states-parties either conducting clandestine weapons-relevant activities (Iraq, North Korea, and Libya ) or using their NPT status to openly and legally accrue fuel cycle capabilities that could put them in a position to transition to nuclear-weapon status should they decide to invoke the NPT withdrawal clause (Iran the potential current case in point). As the unfortunate case of North Korea shows, there is the latent risk of a state withdrawing from the NPT and retaining control over facilities capable of producing weapons-usable material. That facilities and activities be declared and under international safeguards is critically important, but that speaks only to capabilities and not to motivations and intention.

Fourth, national security and international stability is now threatened not only by the risk of state proliferation but also by the potential of organized transnational terrorist organizations obtaining access to nuclear weapons or weapons-usable material. The experience of the September 11 terrorist attacks looms large in this regard. The larger the number of potential sources of such materials, the greater the risk to the social order.

Fifth is the prospect of a surge in nuclear power development and with it the potential for more states eventually to seek full fuel-cycle capacity. Environmental concerns, in particular global warming, have rekindled interest in harnessing nuclear energy in ways and at levels not heretofore considered likely. A nuclear renaissance will bring with it increased demand for nuclear fuel and increased interest in developing fuel cycle activities along with power reactors, either in pursuit of increased self-sufficiency or to join advanced industrial states in having a full array of nuclear technologies. The latter may be driven, for instance, by the desire to support domestic consumption, to compete in international markets, or to be counted among the advanced societies of the world.

Unlike the 1970s, of particular concern here is the technology for creating fresh nuclear fuel. Although international safeguards have been quite effective in deterring the diversion of declared nuclear material, they face a challenge in detecting undeclared nuclear activities, in particular uranium-enrichment facilities based on centrifuge technology.

A spate of initiatives have been put forward to address the array of concerns outlined above, at least nine according to one report.[3] These include, among others, proposals by Russia (Global Nuclear Power Infrastructure), the United Kingdom (enrichment bonds), and a six-country proposal on Reliable Access to Nuclear Fuel. Virtually all seek to limit the further spread of enrichment and reprocessing technology and include provisions for assurance of nuclear fuel supply for civil power reactors. Among the most prominent are the U.S. proposal for a Global Nuclear Energy Partnership (GNEP) and ElBaradei’s idea of placing enrichment and reprocessing facilities under some form of multinational control.

The Situation Today

President George W. Bush has proposed that NSG members agree not to transfer sensitive nuclear technology to any country that does not already have a fully operational enrichment or reprocessing capability and to ensure those who forgo national enrichment and reprocessing a reliable supply of nuclear fuel for civil purposes. Separately, Bush has also endorsed GNEP, a much broader enterprise. This initiative has similar goals but places more emphasis on opportunity than on constraint and denial.

GNEP is aimed at supporting the expansion of domestic and international use of nuclear energy, the pursuit of proliferation-resistant recycling of spent fuel, the development of advanced reactors, and the establishment of reliable global fuel services by a consortium of suppliers. It calls for supplier responsibility for dealing with spent fuel—a cradle-to-grave concept of supply assurance. Without explicitly challenging the right of NPT states-parties to pursue fuel cycle development for peaceful purposes in conformity with the purposes of the NPT, GNEP effectively seeks to finesse the incentive to do so by offering a better alternative that would be more cost effective and reliable than indigenous development. States accepting that offer would qualify for nuclear fuel assurance.

ElBaradei’s proposal is the other approach currently being explored. It starts from the premise that, under the NPT, sensitive nuclear technology development and use for civil purposes is not proscribed; states can have that capability and not be breaching the treaty. Nevertheless, as the technology also enables a state to produce sensitive nuclear material for military use, more control is needed over fuel cycle activities. The ElBaradei proposal endorses a strategy that although dependent on international safeguards, reaches beyond them to some form of multinational control both effective and equitable.

In pursuit of that objective, ElBaradei appointed an international committee of experts to examine ways and means to manage the fuel cycle, with particular attention paid to how to effectuate multilateral oversight for sensitive activities as well as assurance of nuclear supply. They also examined options for dealing with spent fuel storage.

The outcome of that study was the identification of a layered approach beginning with strengthening existing commercial market mechanisms through long-term contracts and transparent supplier arrangements with government backing. Additional layers included developing international supply guarantees with IAEA participation. Particular attention was paid to involving the IAEA as a guarantor or manager of a nuclear fuel bank; promoting voluntary conversion of existing facilities to multilateral enterprises; establishing through voluntary agreements new regional or multinational facilities involving joint ownership, potentially including co-management; and in the longer run, and assuming significant expansion of nuclear energy, development of a nuclear fuel cycle with stronger multilateral arrangements, possibly by region, but also involving the IAEA.

A key difference between the two approaches is that one employs a restrictive strategy while the other emphasizes a cooperative one. The former entails a non-nuclear-weapon state agreeing not to have technology related to sensitive nuclear fuel-cycle activity. The latter focuses on institutional alternatives to national operation of such activities as enrichment or reprocessing. Both are reinforced by a reliable assurance of supply mechanism. A restrictive approach raises a basic issue regarding the provisions in Article IV of the NPT concerning the “inalienable right of non-nuclear weapon state parties to develop nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty” and the undertaking of all states-parties to facilitate and cooperate in “the fullest possible exchange of equipment, materials, and scientific and technological information for the peaceful uses of nuclear energy.”

This is a nuclear third-rail issue for many. During the course of the deliberations of the expert group appointed by ElBaradei, the point was made on more than one occasion and by many of the participants that any attempt to redefine the conditions for peaceful use must take into account that any arrangement deemed unfair could put the nonproliferation regime at risk of unraveling. In addition, limits on the right to technological development, to be acceptable, will have to be applied universally, with no exceptions.


In the end, it gets down to equity, fairness, and nondiscrimination, and that gets us to the division of the world into classes of states. These include not only differences between those who possess sensitive nuclear technologies and those who do not but also the divide between a few states with nuclear weapons and the large number without them. If skepticism about the political acceptability of discrimination with regard to the fuel cycle is evident in the context of developing nuclear energy for peaceful purposes, it is further complicated by another issue: nuclear disarmament.

The prospect that non-nuclear-weapon states will willingly forgo a right widely regarded as inherent in Article IV of the NPT while nuclear-weapon states continue to retain and in some cases enhance their arsenals with weapons seen to be developed for use rather than deterrence is remote. The only way in which progress can be achieved is through some kind of multilateralization of the fuel cycle as called for by ElBaradei. This arrangement would somehow level the playing field with respect to tightening controls over the nuclear fuel cycle but in a way that is nondiscriminatory, placing the same obligations and constraints on all parties while assuring all of equitable and timely access to required nuclear fuel for a civil nuclear program. “All parties” means all states, including the nuclear-weapon states.

If the objective is to have states abstain from exercising a right in a treaty, the result should not be a further distinction between classes of states and discrimination, but rather the opposite. Conceptually, there are a range of options by which this might be achieved, including creating the opportunity for interested states to invest in large-scale enterprises as partners. The benefit of this is priority access to services, participation in decision-making, and profit sharing in exchange for agreeing not to engage in developing national capabilities or to seek access to the technology in question. Conclusion of a fissile material cutoff treaty (FMCT), which would halt the production of highly enriched uranium and plutonium for nuclear weapons or nuclear explosive purposes, would be a significant step in the direction of reducing discrimination with respect to the fuel cycle, capturing not only the five states acknowledged as nuclear-weapon states under the NPT, but India, Israel, and Pakistan as well.

For many, it is a diversion to contend that the solution to nonproliferation rests in limiting technological rights for states that are in compliance with their treaty undertakings while avoiding coming to grips head-on with nuclear disarmament and its relationship to a system of genuine collective security.

It is therefore not surprising that current efforts to rein in access to the means to produce special fissionable material—keeping that capacity in the hands of the few while curtailing access to the many—would present a significant political challenge. At the same time, it is impossible to deny the risks associated with widespread access to the means to produce material that could be diverted from intended peaceful use to extraordinarily dangerous weapons. Innovative institutions built on the foundation of equity, fairness, and mutual acceptance offers a more promising way forward than most readily available alternatives. We are not any closer today than we were 60 years ago to the point where an Acheson-Lilienthal initiative for international ownership and control of the fuel cycle would be acceptable. Yet, with the proliferation of nuclear know-how, technology, material, and equipment and a world rife with tensions and instabilities that go beyond the nation-state to include substate transnational terrorism, there is no option but to persevere in pursuing the means to keep the nuclear risk under control.


Three Nuclear Fuel-Cycle Initiatives That Fell Short

In the 1970s, states sought and failed to achieve three initiatives to limit access to technologies that could lead to the acquisition of weapons-usable material.

Regional Fuel-Cycle Centers

This 1975 International Atomic Energy Agency (IAEA) initiative, endorsed initially by Secretary of State Henry Kissinger before the UN General Assembly, focused on the prospect of developing one or more regional nuclear fuel-cycle centers primarily for reprocessing. The study concluded that, in economic, environmental, and nonproliferation terms, such an approach was better than national alternatives. This concept fell by the wayside after a slowdown in the growth of nuclear energy, a drop in uranium prices, and the emergence of U.S. resistance to reprocessing and the use of plutonium in power reactors during the Carter administration. Still, it has direct relevance today regarding the front end of the fuel cycle, given that many of the same economic, security, diversion, and nonproliferation considerations apply both to enrichment and reprocessing.

International Nuclear Fuel Cycle Evaluation

International Nuclear Fuel Cycle Evaluation was inspired by a number of factors, including India’s 1974 nuclear test, expectations of rapid growth in nuclear power, and concern regarding dissemination of sensitive nuclear technologies, especially reprocessing. Technical measures, strengthened safeguards, and institutional options to minimize proliferation risk all fell within the purview of the two-year exercise. Such options included placing facilities under multinational auspices or in the framework of regional fuel-cycle centers as well as assuring nuclear fuel supply for civil purposes through an international nuclear fuel bank. The evaluation concluded that there were no technical silver bullets to prevent abuse of civil nuclear power. Institutional arrangements were deemed to have greater potential than purely technical approaches, but the best prospect for avoiding proliferation lay in a combination of technical, safeguards, and other measures. These conclusions remain relevant to current issues regarding the fuel cycle.

International Plutonium Storage

Article XII.A.5 of the IAEA statute specifies circumstances in which the agency could require that excess special fissionable materials from peaceful use be deposited with the IAEA to be returned for peaceful use under safeguards. A 1976-1982 study identified several possible models for a storage mechanism but the group conducting the study could not reach agreement on any of them. The key points of difference related to how to define excess material and what conditions should apply for their release. The same issues would have to be addressed if the concept were revisited.



Lawrence Scheinman is a distinguished professor at the Center for Nonproliferation Studies in Washington, D.C., and was formerly assistant director of the Arms Control and Disarmament Agency. He was the policy adviser to the International Atomic Energy Agency’s 2004-2005 expert group Multilateral Nuclear Alternatives study.



1. Avner Cohen, Israel and the Bomb (New York: Colombia University Press, 1998), p. 16.

2. Mohamed ElBaradei, “Rethinking Nuclear Safeguards,” The Washington Post, June 14, 2006, p. A23.

3. Oliver Meier, “The Growing Nuclear Fuel-Cycle Debate,” Arms Control Today, November 2006, pp. 40-44.