U.S. Nuclear Trade Policy Concerns Mounting on Capitol Hill

This article was originally published in Global Security Newswire, produced independently by National Journal Group under contract with the Nuclear Threat Initiative. NTI is a nonprofit, nonpartisan group working to reduce global threats from nuclear, biological, and chemical weapons.

“I think a lot of the concerns that I have seen expressed relate to a policy that does not exist,” said the Energy deputy secretary, speaking at a three-day symposium on nuclear deterrence in Arlington, Va.  “There is actually a significant amount of misunderstanding that underpins what seems to be a conflict that may not be.”

The nonproliferation objectives being sought by lawmakers are shared by the Obama administration, he said.

“We have not changed our policy. We have not given up,” Poneman said.  “Our objective, like I believe everyone on Capitol Hill, is to minimize the spread of these dangerous technologies. The only question is the best way to do it. We have found over time that the case-by-case approach has been the most successful in permitting this.”

Enrichment or reprocessing can be used for energy production, but also can increase the risk that a nation would secretly divert sensitive materials to the development of nuclear arms. Iran is widely believed to have proceeded down that path under the cloak of a civil power program, but has long insisted that its efforts remain entirely peaceful.

From the administration’s perspective, Washington might have more influence on nonproliferation concerns with its trade partners if it retains a freer negotiating hand, and in the process can offer a boost to the flagging U.S. nuclear sector.

“We need to negotiate agreements that our partners can accept and that open doors to U.S. industry,” according to last month’s Tauscher-Poneman policy letter.  “We are concerned that other options could have the opposite effect, by reducing the number of future U.S. partners, minimizing our nonproliferation influence, and raising questions about our reliability as a supplier.”

In remarks at this week’s symposium, Poneman argued that proposals for offering U.S. comprehensive fuel services to partner states could effectively allow foreign nuclear energy activities to proceed without a need for enrichment or reprocessing inside the borders of those nations.

“It has always been U.S. policy to approach each potential 123 agreement on a case-by-case basis, so that it can be negotiated with regard to the specifics of the country involved,” Poneman said, referring to nuclear trade pacts governed by Section 123 of the Atomic Energy Act.  “There is a misperception that by not having legally binding language in place [in a trade pact] that the United States is advocating the transfer of sensitive technologies.  This is not the case.

“Further, nothing precludes us from asking for legally binding language on ENR, under case-by-case consideration,” he added.

President Obama “envisions an international framework that supports access to nuclear energy by those who wish to access, done in a safe, secure, responsible way,” Ed McGinnis, deputy assistant Energy secretary for international nuclear energy policy and cooperation, said at a Jan. 24 nuclear industry event.  “And whereby the access is realized without increasing risks of proliferation.”

A growing number of policy experts, though, argue that the case-by-case approach holds sparse hope of achieving that goal.  Even if U.S. nuclear trade negotiators vigorously pursue the gold standard in coming months and years, the Tauscher-Poneman letter could undermine that effort by signaling interlocutor nations that they could hold out for a deal that omits any enrichment or processing prohibition, said one congressional staffer.

The policy letter “robbed us of any credibility in pursuing [the gold standard] with anyone else,” the senior Senate aide said this week.  This congressional source and several others spoke on condition of not being named, saying they were not authorized to address the matter publicly.

It is unclear whether more permissive terms for Washington’s nuclear trade partners would result in increased sales for the U.S. atomic energy industry, which has found it challenging to compete against French, South Korean, and Russian companies that typically offer lower prices thanks to government subsidies, according to issue experts.

“So then you’ve got a hollow 123 [pact] with no sales, but now also no nonproliferation pledge, either,” the Senate staffer said.

Ros-Lehtinen also warned the policy determination could make it yet more difficult to handle the simmering crisis surrounding Iran.

“This reversal on an issue of central importance to U.S. national security cannot but undermine our urgent efforts to stop Iran from acquiring nuclear weapons, as the U.S. apparently will now be in the business of promoting nuclear programs throughout the Middle East and beyond, perhaps even including countries that are interested in their use for military purposes,” according to her new letter.

Ros-Lehtinen's reference appeared directed at Saudi Arabia, a Persian Gulf nation with which Obama administration officials have said they might pursue a nuclear cooperation agreement (see GSN, July 28, 2011).  A member of the Saudi ruling family has warned on multiple occasions that his nation would develop or acquire atomic arms if rival Iran succeeds in making a nuclear weapon (see GSN, Jan. 26).