Special Reports 06

www.moderndiplomacy.eu

Anis H. BajrektarevicAnis H. Bajrektarevic is a Professor and a Chairperson for International Law andGlobal Political studies at the Austrian IMC University of Applied Sciences. He is edi-tor of the NY-based Addlton’s GHIR Journal (Geopolitics, History and Intl. Relations),as well as the Senior Editorial member of many specialized international magazines,including the Canadian Energy Institute’s Journal Geopolitics of Energy.

For the past 15 years, prof. Anis has organized dozens of public events by hostingnumerous heads of missions to the IAEA and CTBTO, many of them while being inthe Board of Governors as members or chairing that key IAEA body. Nuclear issueshave been extensively discussed at these public events when professor was hostingambassadors of the US, Russia, China, France, the UK, India, Korea/ROK, Japan, Iran,Israel, Brazil, Turkey, Egypt, Indonesia, Malaysia, Kazakhstan, Australia, South Africa,Mexico, Argentina, Ukraine, Italy, Germany, Spain, Sweden, and many other coun-tries that use nuclear technology. For the same period, professor also organizedsome two dozens of study visits for his students to the Vienna and Geneva basedsafety/security-related organizations (such as OSCE, IAEA, CTBTO, OOSA, ECE, DACom., ITU, WMO, IRC, etc.)Contact: [email protected]

Petra Posega Petra Posega is a master`s degree student on the University for Criminal justice andSecurity in Ljubljana. She obtained her bachelor`s degree in Political Science- De-fense studies. Contact: [email protected]

Special Report 06 | December 2014

Nuclear Commerce – fundamentals Security, politico-military, legal

and socio-economic aspects

Introduction

The Power of Atoms and Nuclear PhysicsNuclear FissionNuclear Fusion

Military Applications of Nuclear TechnologyThe Other Side of the Military Nucleus

Primary Energy Mix and Primary Energy Supply with a(double) Environmental Twist

Changing the Patterns of our PEM- Ageof a Nuclear Renaissance?

Nuclear Commerce Marketsand the Future Potentials

06

08

28

34

The Nuclear Commodity MarketNuclear Plant Construction- Fundamental Considerations

Nuclear Safety

The World of Atomsand its Legal Framework

The International Atomic Energy AgencyThe Non-Proliferation Treaty

The Nuclear Commerce Regime

The IAEA frameworkThe Zangger Committee

The Nuclear Suppliers GroupThe Wassenaar arrangement

UN Security Council Resolution 1540

Conclusion

36

44

52

58

s the world keeps devel-oping at an even higherpace than predicted andbecoming even more en-ergy dependent in everyaspect possible, the sup-

plies to fulfill these demands are crucial fora sustainable future. As anticipated by theInternational Energy Agency (IEA) our over-all energy demands will increase by 44%until the year 2030 – which necessitatesboth energy efficiency and energy security(reliable energy supply). An energy short-age today (but even more so in the near fu-ture) would have dramatic impacts on thestates and their economies, due to such areliance on a steady energy supply. In thismission to keep national energy demandssteady, we face two available alternatives:either a production of energy from one’sown available resources or a confirmationof supply guarantees from cooperativecountries with greater supply capabilities.

There are many alternatives out there andthey all have their positive and, respectively,negative sides. Finding one to replace exist-ing methods which is good for the econ-omy and environment and at the same timeproves sustainable and efficient is no walkin the park. The security of energy supplywill definitely be one of the key issues in theyears to come due to the fact that the cur-rent system has not proved itself to be ade-quate to cope with the rising demand.

The world would benefit from a clean andstable energy supply with a low CO2 emis-sion rate, which in today’s situation is diffi-cult but more so applicable with nuclearpower (set aside the fact of managing thenuclear waste which will be discussed fur-ther on in this paper). With new and moreefficient technologies in the pipeline, aswell as new deals being signed especially inthe developing world, the nuclear industryseems to be approaching a turning point. Itwill have to prove that it is able to satisfy thenational and public energy needs and at thesame time convince the public of its safety,which is more important now than everconsidering the unfortunate disaster inJapan (Fukushima) in March 2011, whichonce again casted a cloud over nuclearpower after some relatively trouble freeyears since the Chernobyl accident in 1986.

A

Will the nuclear industry be capable of meeting the in-creased energy demand, decreasing external dependences(especially on the side of OECD countries), and altering ourcurrent PEM-s towards de-carbonization?Will the Nuclear energy in future be of an acceptable com-mercial, but also socio-environmental, security and politico-military affordable prize?Can the current framework in the field of nuclear com-merce function as a suitable non-proliferation tool, espe-cially in the field of double use technology (peaceful andmilitary)?Does the current nuclear non-proliferation frameworkhinder the development of nuclear commerce?

The questions of most importance we seek answers for are:

Introduction

SPECIAL REPORTS | 06

he foundation for nuclear physic, similarto other modern science fields, can befound in the classical studies of chemistryand physics, dating back a few centuries.More recently, they are greatly intertwinedwith modern studies of atom and its struc-

ture. This new era for nuclear physics began with 5 inter-connected scientific breakthroughs with their respectivefounders: Crookes, who achieved ionization of a gas by anelectric discharge; Thompson, who identified the electronas the one charged particle that is responsible for electric-ity; Roentgen, who discovered the X- rays; the Curies, thatidentified the first radioactive material radium and Ein-stein, who provided the relationship between matter andenergy with his theory of special relativity(1) . The practical implications are significant since there areonly four basic forces: gravitational, electrostatic, electro-magnetic and nuclear (2). Associated with different typesof basic forces is an energy, which can be stored, released,transformed and transferred in natural processes as wellas in man- made devices (3).There are two distinctivepossibilities for creating en-ergy in nuclear physics; thewidely used process of nu-clear fission and the experi-mental process of nuclearfusion.

T

(1) Murray and Holbert (2014), p. 217-218(2) Murray (2001), p. 9(3) Murray and Holbert (2014), p. 11-12

The Power of Atomsand Nuclear Physics


Nuclear fission is the process which takesplace in nuclear power and should not beconfused with nuclear fusion. The sourcematerial which is used in nuclear fission isuranium-233, uranium-235 or plutonium-239, which is retrieved from uranium´s nat-ural state “238”.This reaction creates energy and in turngenerates heat, which in a NPP (Nuclearpower plant) can be used to boil waterwhich in turn drives a turbine with thesteam created.Due to the fact that a nuclear power plantis dealing with temperatures of the extremeit is of crucial importance to keep NPP con-trolled and regularly inspected for anyforms of defects and also involving a thirdparty for safety precaution. The accidents inChernobyl (Ukraine) and Fukushima (Japan)received criticism for being sloppy with in-spections.

“Nuclear fission is the process of splitting thenucleus of a heavy atom (target nucleus) intotwo or more lighter atoms (fission products)when the heavy atom absorbs or is bom-barded by a neutron. Fission releases a largeamount of energy along with two or moreneutrons. The large amount of energy re-leased is due to sum of the masses of the fis-sion products being less than the originalmass of the heavy atom. When a heavy atomfissions, it releases neutrons which can be ab-sorbed by other heavy atoms to induce furtherfissions. This is called a chain reaction. If eachneutron releases two more neutrons fromsuch fission, then the number of fissions dou-bles each generation.” (Washington State De-partment of Health (2003), p.2)

Nuclear Fission

DEFINITION Nuclear Fission

Nuclear Fusion

net. “If you have an unsolvable dilemma, en-large the context(1)”. However, scientists have yet to construct aself-sustaining fusion reactor. The words ofa Nobel laureate for physics, Pierre- Gilles deGennes, sum up the problem in a very ele-gant way: “We said we will put the sun intoa box. The idea is pretty. The problem is, wedon`t know how to make the box. (2)”The currently most promising experimentalfusion reactor is being built in France, calledthe International Thermonuclear Experi-mental Reactor (ITER). The project is run byseven member entities- China, EU, India,Japan, Russia, South Korea and the US andis, as mentioned, currently in constructionphase, planned to come to an end by 2019.The first full scale fusion tests are notplanned to start before 2027 and the proj-ect is facing plenty technical difficulties dueto the challenging and overwhelming na-ture of the project (3).

The concept of nuclear fusion has been adiscussion and experimental topic for over50 years, and consists of creating nuclear re-actions between light elements from heav-ier elements. This concept and its discussedtechnology has several big advantages, in-cluding an almost infinite supply of energy,rather small amounts of mostly short-livedradioactive waste, no possibility of an acci-dent with significant off-site consequences(since the collapse of the plasma at any timewould instantly stop the fusion reaction andtherefore, would produce no residual heat)and lastly, no concern for the proliferationof nuclear weapons, because there is no re-quirement for such materials and technolo-gies in nuclear fusion.

The very idea of a working fusion reactorsolves practically every problem we havewith nuclear fission and in this sense per-fectly embodies the saying from Jean Mon

(1) Bajrektarevic (2012), p.1)(2) European Commission:Futurium 2014(3) http://www.iter.org/

But it is important to remember that if theidea of nuclear fusion is realized, we arelooking at practically endless energy source,environment and budget friendly with verylittle negative consequences. Nevertheless, despite the many positiveand promising sides there are to nuclearpower, nuclear inconveniences and thethreats they hold are what people mostcommonly associate nuclear power with.Although this deep-rooted fear is very un-derstandable, if not balanced with informa-tion of what NPPs (Nuclear Power Plants)are capable of in relation to other sources ofenergy the public mass will continue to re-late it with:

Safety incidents such as Chernobyl/UKR,Three Mile Island/USA or Fukushima/JPN.Nuclear waste managementRadiation exposureMilitary applications of nuclear technologyand the WMD (Weapons of mass destruc-tion)Terrorism through WMD or on NPPs.

H.E. Mr. Tang Guoqiang, Ambassador of China, Prof. Anis H. Bajrektarevic

ex Foreign Minister of Norway Mr. Jan Petersen

H.E. Mr. John Macgregor, UK Ambassador

But a decrease in frequency of nuclear test-ing does not mean that the military side ofthe atomic energy is becoming any less sig-nificant in the contemporary world politicsand power play among states. Exactly because of the immense capabilityof a nuclear weapon this should come as nosurprise. But, lucky or not, this capability isalso the main driver between two conflict-ing forces; deterring the political opponentsand extreme curiosity when handlingthreats with this arsenal.

Mutually assured destruction (with deliber-ate or coincidental, but nevertheless verysuitable acronym MAD) is a concept no-body should forget, even (especially) past1991, for its strange balance of fear for mu-tual annihilation when having sufficientconfigurations and quantities of nuclearweapons is still very much applicable for theworld more than 20 years after the fall of theBerlin wall.

Like many other great scientific and techno-logical breakthroughs, nuclear energy hasits roots in the military sector. The first CP-1reactor, built by Enrico Fermi and his col-leagues, was a crucial step in what was laterknown as the Manhattan project(1) . The rest is history. With the introduction ofa nuclear weapon to the world the safety ofhumanity and planet as a whole suddenlybecame dangerously questionable, sincethe damage done with the deployment ofa nuclear weapon is immensely overwhelm-ing. The development of this weapon came at agreat cost, with nuclear testing taking placeon the geopolitically less important sites allover the world and escalated to the pointwhere nuclear weapons stockpile danger-ously approached the 100 000 limit. Aftergaining momentum in the midst of the ColdWar, the trend of nuclear testing is nowa-days on a very insignificant level, especiallyconsidering the level it was on some 30years ago.

Military Applications of Nuclear Technology

WORLDWIDENUCLEARTESTING 1945 - 2013

CTBTO 2013

The attacks on Hiroshima and Nagasakibear witness to the escalating power ofmodern human weapon technology. Wecan be sure to say that the nuclearweaponry arsenal was created for one andone reason only: to prevail above every-body. This goes in line with the realistic the-ory on international relations, arguing thatthe power of the state is based solely on thebrute strength of its own resources, mainlyland, people and military capabilities, in aHobbesian way of struggle of each againstall. The realistic theory also introduces avery dangerous concept of absolute secu-rity in contrast to relative security, morebroadly envisioned in the liberal theory oninternational relations.

Absolute security can, respectively, neverbe reached, but there are many things thatcan be done in the name of absolute secu-rity, breaching every possible rule, provisionor international agreement. This introducesus to the prospective of the constructivisttheories, which argue that people givemeaning to words, concepts and institu-tions. And people giving meaning alsomeans people exploiting this in the process. Concepts of absolute security (along withthe concept of means justifying the end)and exploitation of power was clearly seenin the Little boy and Fat man catastropheand their example has, quite understand-ably, formed a completely legitimate fear ofmany people when thinking of the non-peaceful nuclear possibilities. At the moment, these are most commonlyassociated with contemporary instability inthe Middle East, creating regional insecuritydue to the fact that Israel and Pakistan are

undeclared nuclear powers with many oth-ers having clear ambitions (such as Libya,Syria, Iraq, Saudi Arabia, Turkey, and cer-tainly Iran as the most advanced countrynot just in nuclear technology but also inballistic missiles). All the periodic disputesbetween South- and North Korea are bur-dening the nations of both countries in thehighly sensitive and difficult geopoliticalneighborhood. The North has become anundeclared nuclear power, of uncertaintypes, configurations and quantities of thebomb, which additionally burdens theneighbors.All this combined is making con-fidence building measures conducted bytheir allies nearly impossible and efforts toachieve it an obsolete undertaking. Nevertheless, some continue to argue thatbeing a nuclear warhead state generatessafety to a country and its people whilstmaintaining national pride and extendingnuclear protection onto its allies. But onemust also take into consideration the polit-ical implications and the implications ofperpetual nuclear arms race for the interna-tional political balance. The best way toavoid an atomic dilemma would be to getrid of the atomic arsenals altogether, some-thing that seems absolutely inconceivableat the moment though, especially consider-ing the aggressive position that US holds re-gardless of the fact that the Cold War andnuclear race is long over. Or, to quote for-mer US secretary of state Donald Rumsfeld“…the US nuclear arsenal remains an impor-tant part of our deterrence strategy, andhelps us dissuade the emergence of poten-tial would-be peer competitors, by under-scoring the futility of trying to reach paritywith us …” (1)

(1) Prepared Testimony for theU.S. Senate Foreign RelationsCommittee regarding theMoscow Treaty, 2002

Mostly, we would beg to differ the logics ofcontinuous threat perception as good andbeneficial for the world but instead arguethat nuclear weapons lead to more severeglobal tensions. Likewise, many states haveemphasized that unless and until the worldcommits itself to complete nuclear disarma-ment they refuse to end their own nuclearprogrammes.Therefore, nuclear deterrenceis mostly viewed as a direct cause for thenuclear culture which dehumanizes oppo-nents, exaggerates threats to national secu-rity and downplays the consequences forhuman life and the environment as a whole.Not to mention the effects of test pro-grammes for people living in the South Pa-cific, centre of Australia and (the allegedly)remote places of US of the former SovietUnion (Dodds (2005), Engdahl (2010).Also, the aggressive stance has not gone byunnoticed. If we calculate recent globalevents, highlighting especially the Ameri-can tendency to control all the major oil andenergy flows in the world, establishment ofa new network of military bases in Eurasia,updates to the latest technology in the nu-clear triad and the B-52 bombers, we canhope that there is no dr. Strangelove thatwill stop worrying sometime in the futureand learn to love the bomb just hardenough. When it comes to the legal framework onthe nuclear weaponry, different interna-tional treaties (such as, for example, theSTART treaties) managed to bound the twomost prominent nuclear forces, US and Rus-sia (as a successor to the dissolved SovietUnion) to commit themselves to a worldwith fewer nuclear warheads and reducetheir stockpile for almost four times

(although it is questionable how much wasthis a step out of altruism and pacifism andto what extend was it caused by economiccalculations, considering the major ex-penses connected with maintaining an ac-tive nuclear warhead). But nevertheless, asalready described in this chapter, we haveto consider that a handful of nations are stillwilling to use these weapons as boththreats and deterrent. Considering all this,the nuclear weaponry in numbers todaylooks as follows :

(*) The data on the actual number of nuclear weapons differs vastly dueto the national- security related secrecy of the subject.


Along with the prominent military applica-tion, the peaceful application had also rap-idly picked up speed after WWII. As weknow, the geographical proliferation of nu-clear commerce has to be executed with ex-treme caution if we want to experience anuclear boom on a domestic level. Almostevery conceivable human activity in theworld depends on energy. Only shortagesin its supply lead to a self-realization of thedimension currently experienced. To exploitthe potential of nuclear energy, there is thepreviously mentioned differentiation intopeaceful and non-peaceful possibilities. The foundation for an international focus onpeace in regards to nuclear power has itscore in U.S. President Dwight D. Eisen-hower's speech “Atoms for Peace” in 1953:

“I feel impelled to speak today in a languagethat in a sense is new – one which I, who havespent so much of my life in the military profes-sion, would have preferred never to use. Thatnew language is the language of atomic war-fare”.

The Other Side of the Military Nucleus

After President Eisenhower´s speech TheUnited States launched an "Atoms forPeace" programme which consisted of sup-plying information and equipment toschools, hospitals and research institutionswithin the U.S. and around the world. But itis important to understand the non- fabri-cated, hidden factors behind the pretty fa-cade of this Atoms for peace programme.Although resulting in the more widespreadpeaceful applications of nuclear technol-ogy, its origins could not be more militaryof geostrategic in nature.

After the US deployed their super weaponryon Japan and terminated two entire citiesin order to bring a quick end to the WW2 inthe Pacific, the nuclear dilemma of peacefulvs. military became startlingly clear. Veryhastily, a commission was established todraw up an international control regime onnuclear power. The immediate result wasthe Acheson- Lilienthal report that sealedthe idea of interdependence and inter-changeability of atomic energy and atomicweaponry(1) .

The trust in countries worldwide in their in-tentions was considered not to be implicitand therefore an international regime ofcontrol needed to be established. Later on,this report was revised and presented to theUN as the Baruch Plan in 1946, and some ofits provisions are clearly still alive in today`sworld of nuclear legal regime: International control over possibly danger-ous atomic energy activities; Control would be exercised within an inter-national organization, that would also havemandatory power to control, license and in-spect all the peaceful atomic energy activi-ties; The international organization would takea vanguard in fostering the beneficial us-ages of atomic energy.

The preposition was at the time not real-ized, since the Soviet Union rejected it. Al-though on the surface everything seemedvery altruistic it also meant, consequently,that the US was trying to implement a veryrigid system of controls (e.g. by buying upall the available uranium and thorium re-serves in order to prevent the mass prolifer-ation). Since the Fat Boy and Little Man hadalready done its disastrous deed, it was toolittle too late to play the peaceful gate-keeper to the world of atomic energy.

Continuing from this point on, the SovietUnion was trying everything in their powerto equalize the stakes set by the US. In 1949the inevitable happened, when they ob-tained their first nuclear weapon, realizingthe American worst nightmare. Afterwards,the balance of power was set in equilibriumagain and the change of strategy wasneeded to fit more adequately to this newreality. President Eisen-hower and his adviserscame to the tough con-clusion that it is there-fore necessary for theUS to change its policyof secrecy regardingnuclear power. The So-viet Union was able togain a major upperhand in the propa-ganda race from thatpoint on, especially inthe Third World (with abig emphasis on themore and more impor-tant and, what was con-sidered the worst of all,Communist China).

(1)This view can be challenged on many lev-els, we are just going to mention a few mostimportant ones: all the Nuclear weaponstates developed their nuclear weaponrybefore launching their nuclear energy initia-tives; so in a spirit of what came first,chicken or the egg, nuclear weapons takethe lead; most of the countries embarkingupon nuclear energy were developing thesecapabilities solely for this goal; althoughhaving capabilities to operate with civil nu-clear energy does have certain relief consid-ering time consumption and know- how,diverting civil programme into a nuclearone is very costly (not just logistically speak-ing but also considering the political price);hence, most countries would not embarkupon time consuming and costly process ofdiverting peaceful nuclear programmes intomilitary and would instead start up a mili-tary programme in the beginning (Lubi(1999), p. 27)


If they decided to break the silence on thisstrange new power and be the first ones toshare its secrets with the world, that couldmean a devastating blow for the Americaninfluence around the globe at the begin-ning of the new, post WWII world order. Bylaunching the Atoms for peace programme,Washington was actually limiting the possi-ble Soviet primacy in the Third World coun-tries and their own poor choice of decisionson the matter. Undoubtedly, that meantthat certain countries would benefit greatlyin the following years by gaining access tothe brave new world of nuclear power. Oneof the beneficiaries of this programme wasalso Iran that at the time still had a more fa-vorable regime under the Shah. But, as weknow, realities in world politics change con-stantly and it seems that this change comeseven faster if you are an US ally.

This trend was abruptly cut short with theThree- Mile Island nuclear plant accident(Later investigations revealed that the criti-cal valves were illegally and manuallyclosed before the accident, preventing cool-ing water entering the steam generator sys-tem of the reactor (1) because of another,much more important geopolitical gamegaining its momentum in world politics.

(1) Fusion energy foundation1979. (2) As the most traded commod-ity in the world, the final con-sumer price of oil is alwaysdetermined (largely influenced)by the NY and London city. Thiswas a case, despite the deliveryinterruptions, even in 1973.(3) Another interesting thingabout the US dollar currency isthat it is not really state owned.If we look at the banknoteclosely, it says very clearly Fed-eral Reserve note, which is a pri-vate, not state owned entity.

The origins of this new reality were forgedduring the Nixon presidency, when the USunilaterally suspended dollar convertibilityto gold. This effectively tore apart the essen-tial provisions from the Bretton Woods andintroduced the wild floating exchange ratesin the world monetary system for the firsttime. But the dollar currency needed some-thing to make it stable again and this iswhere the 1973 oil crisis came, seeminglyjust at the right time.

The oil, as we know, has since the beginningbeen sold in dollars only (for a brief time inBritish Pound Sterling, too). The shockingskyrocketing prices of crude oil ‘due to theOPEC countries’ (2) triggered shortage ofsupply have increased the dollar demandfor almost 400% at the time. One can seehow that affected the standpoint of thePetrodollar (3) on the monetary market.And since many countries in Europe, Asia,Africa and Latin America found themselvespaying four times as much for the sameamount of oil supply, there came an everlouder talk about an alternative energysource to replace the oil- bound industries.

This is when nuclear energy returned intothe international energy spotlight. In the1970s, many agreements were made be-tween the countries regarding nuclear en-ergy, most notably between Germany andFrance on the giving end and Brazil, SouthAfrica, Pakistan and Iran on the receivingend.

ex Korean Foreign Minister Kim Sung-Hwan while he wasambassador in Vienna

This effectively envisioned the (otherwiseulteriorly motivated) spirit of the Eisen-hower`s Atoms for peace programme,meaning the developed countries wouldhelp the selected developing countries es-tablish a much more efficient and ulti-mately, of course, less expensive worldelectricity generation. But that would, in ef-fect, mean less dollar demand on the mar-ket. Combined with other complicatedfactors, regarding nuclear energy (includingthe financial and infrastructural overwhelm-ing nature of these projects), that is why the“bloom from the nuclear rose(1) ” had to betaken away (and this modus- operandi hasrepeated many times since then…for exam-ple, in November 2000, Iraq along with Iran,Libya, Venezuela, Russia and Indonesiaagreed to sell their oil in Euro currency, too.

The agreement, sadly, became a dead letter,following the now infamous American at-tack on Iraq in 2003, that set an example forevery country wanting to escape the dollar-dominated crude oil market. In this spirit,we would like to encourage the reader toreconsider the trail of American foreign pol-icy towards the above mentioned countriesever since the year 2000) and that is whyevery alternative energy option has bigger-than-should-have geopolitical conse-quences. To put it simply, the mail problemwith green/renewable energy is not com-plexity, expense or lack of technological so-lutions; the problem lies within the fact thatit calls for a geopolitical breakthrough.

Luckily though, not everyone has given upon nuclear (or any other alternative) power,because we have to realize that if we wish ade-carbonized future society there is noother possible scenario without the nuclearenergy taking a vanguard in the energy mix.But this will demand a major shift in theglobal (geo) political mindset, because oil,as mentioned, represents far more than justenergy. It represents “socio-economic, psy-chological, cultural, financial, security andpolitico-military construct, a phenomenonof civilization that architectures the worldof controllable horizontalities which is cur-rently known to, possible and permitted,therefore acceptable for us” (2). And no mat-ter how optimistic we wish to be, this mind-set- shift scenario still seems very unlikelyto happen because at the moment, it is veryhard to imagine anyone bringing down theAmerican Petro- security, Petro- financialand Petro- military primacy, because all theother major global players are also veryPetro- dependent: Russia, Central Asian re-publics, Brazil, Canada, Mexico, Norway,Venezuela, etc on the supply end and India,China, Australia, South Africa, etc on the re-ceiving end. For now, it seems that human-ity has been involuntarily caught in a crudeoil vicious circle.

(1) Engdahl (1992), p.158(2) Bajrektarevic (2013), p. 4

H.E. Mr.Aviv Shir-On, Ambassador of Israel


Primary Energy Mixand Primary Energy Supply with a (double) Environmental Twist

Today, nuclear energy holds the 4th placein the total primary energy supply mixture,following the still dominating coal, oil andnatural gas holding a staggering 80% of theworld primary energy supply (1). To makethis statistics more instructive, we can addthat the primary energy supply in 2013reached 13 217 Mtoe (2) and the final en-ergy consumption stopped at 546,8Mtoe(3), which evidently shows that notonly is the energy demand still in a steadyrise (although very different from the onewe experienced in the years 2002 leadingup to 2012), we still demand more than weactually consume. This is another factorpointing at the already mentioned obses-sion of the industrialized world with energysecurity: reliable/uninterrupted supply, af-fordable/competitive supply and accessi-ble/available supply. An unhealthyobsession (politically and security wise),combined with the fact that we are nocloser to achieving global energy efficiency,is especially sad if we consider that human-ity is now in the peak- time of its technolog-ical age.

Depending on which country is being dis-cussed, the total energy share provided bynuclear power differs vastly, however withinthe EU we are talking about a rough num-ber somewhere around 15%, and this num-ber drops to about 6-7% when discussingthe world as a whole(4). When looking atthe figure presented below we notice howsources of energy production have shiftedthroughout the past 30 years (photo 1) Inthe future, non- fossil fuels are (according tomost predictions) expected to rise globallyand the growth is expected to be faster inthe non- OECD world. They are still about tobe dominated by hydro and nuclear energy,while renewables are yet a mystery as towhether or not they will gain significantly inthe energy mix of the future, due to sub-sidiary costs. Hence, besides the basic prob-able course of events, it is very hard topredict how the future of energy produc-tion will look like. But hydro, renewable(solar) and nuclear power will definitelyhave to show their individual strengths asthe price for oil continues to rise and we arebecoming more dependent on electricity.

(1)OECD 2012(2)Enerdata Global EnergyStatistical yearbook 2014(3)EIA International EnergyOutlook 2013(4)U.S. EIA 2009, Nuclear en-ergy today 2012

photo 1 IEA 2010

BP Energy Outlook 2013

The importance of this development is alsovery crucial because it will play a key role insetting directions for the future of ourplanet. The current one is applied in the so-called Ecological footprint, arguing that itshowcases the difference between our cur-rent way of living, especially our consump-tion and demand, and the planet`s ability toprovide for these needs. To put it plain sim-ple, it is (supposedly the right) answer to thequestion of how many Earths do we needto sustain the current lifestyle of the entirehuman kind?

As you can see from the shown charts, theyimplicate we demand much more than wecan receive. However, when striving to per-ceive such predictions, it is important tokeep the focus on the implied word “sce-nario”. Meaning these are not forecasts, butrather theories, constructed from a collec-tion of different (subjective) assumptions.Well constructed scenarios can be very con-vincing but it is hard to predict whether ornot they will play out the way they weresuggested to. Therefore, it is decisive tokeep a critical rationale about it and com-bine scenarios with other available knowl-edge and solid scientific evidence.Ergo, we have to be very careful in distin-guishing between proper, scientific infor-mation versus propaganda and sensationalism. Fact is, that the current lifestyleprobably does burden our planet morethan it should and a shift towards a differenttype of energy mix in the future, together

with (not so very new) innovations such asthe electric car, cannot be considered abad/idealistic idea, arguably more so be-cause it would also bring a very beneficialgeopolitical shift towards a multipolarworld. Sadly, as in so many scientific fieldsnowadays, the global well-being of ourplanet has turned into a religion, which canas well be called The Global climate changeof the latter days. It is not based on concernbut on practicality- climate change offers avery strong (and seemingly justified) con-trol mechanism for the global affairs. In thisspirit, we would like to incorporate some“warning” charts from the InternationalPanel for Climate Change (IPCC). Not be-cause they are so accurate, because wehave to consider that many (scientific andamateur alike) voices consider theirreport/charts/graphs to be somewhere inbetween environmental alarmism and en-vironmental sensationalism, but becauseIPCC (as a reputable international body) hasa (larger than should have) impact on thestate, corporate and nongovernmental de-cision-makers around the world.

Accordingly, the most important thing toremember is that these are very inaccuratecomputer scenarios (not one major predic-tion has been realized for now). And any se-rious climate scientists will be very vocalthat earth`s climate is a complex mixture ofmany intertwined factors including solar,cosmic, oceanic, atmospheric and terres-trial.


(1)Driessen (2014), n.p.a.(2)Green, Armstrong andSoon (2013), n.p.a.

intertwined with development) of peopleleaving in the poorly rated HSDI states is, atthe end of the day, unsustainable. Also, thischart seems to confirm our previous argu-ment that the environmental sensational-ism, most notably in the form of IPCC,serves mostly as a control mechanism.Please notice the rank change of US andChina; it does serve as a curious fact that wecontinue to hear that China is the mainguilty party for the CO2 emissions, butstrangely enough, on the HSDI chart itseems to gain 9 places for their sustainabil-ity.

For now, nobody can fully understand thetrue complexity of this interrelated ele-ments. And while computer climate modelscan be very helpful in improving our knowl-edge on concpetual understandings be-hind major climate forces, they are terribleat actually predicting accuratelly(1) . Leastof all computer models from IPCC, becausethey seem to be blisfully ignorant towardsall other important factors save for thehuman one. The wild inaccuracies and thetendency to politicize are the reason whysome authors refer not to the science ofIPCC, but to the science fiction of IPCC (2).

Another, very interesting statistic on thistopic is a modern twist on the old UNHuman development index (HDI), called theHuman Sustainable Development Index(HSDI). The idea is to update the old formulafor the HDI (health+ wealth+ education=development) to the new, contemporarilymore adequate formula of health+ wealth+education+ per capita carbon emissions=sustainable development. This twist is due to the fact that develop-ment comes at a price and the HSDI showswhat is the cost of one country`s quality oflife to another`s. And, as expected, thebiggest difference in comparing HDI toHSDI happen at the top: notice especiallyUS, Australia and Canada. To put things sim-ply, the lifestyle (inevitably

And, to compliment everything written sofar, below is another curious index dis-played, the Commitment to developmentindex (CDI). It shows the ratio between thecapacity of developed states to help the de-veloping countries and the reality of theirefforts. It would be nice if this index couldserve as a conscience to the developed na-tions in the world, reassessing the balancebetween their privileges and their empathytowards the rest, not so privileged world.

uclear energy, as dis-cussed in the previouschapter, is therefore notyet displaying its full po-tential and attaining abetter position within the

PEM, although it is capable of providing thepeoples with CO2 free energy at a low price.The latter, combined with the rising energydemand, is thus the key in the recent trendof renewed interest in nuclear energy. Whentalking about nuclear commerce in general,one refers to a worldwide trade centered onnuclear energy. Since the mid 2000´s therehas been frequent talk about an “atomicrenaissance”, due to the market´s energyneeds and nuclear power´s capability tomeet them. The boom in nuclear power canbe seen all over the world in forms of powerplants in construction and increased busi-ness opportunities taken within nuclearpower. China, with 27 power plants under

construction and additionally 50 planned,makes it the country with the momentarilyfastest growing nuclear industry. (Russiawith 10 under construction and 14 planned,and India with 4 under construction and 20planned) .(1)

The last comprehensive analysis on the sub-ject has been published in 2010 by the IAEAand it stated that 65 countries had ex-pressed an interest, were considering orwere actively planning for nuclear power,which represented and upward trend fromthe 51 countries in 2008. However, since theChernobyl accident, only four countries,Mexico, China, Romania and Iran havestarted new nuclear programs. On the otherhand, Italy, Kazakhstan and Lithuania haveclosed all of their reactors(2). Regardless,the nuclear energy demand appears to stillbe in the growth phase, only not in thecountries where it has been before.

(1)IEA 2011(2)World nuclear industrystatus report 2012

N

Changing the Patternsof our PEM- Age

of a Nuclear Renaissance?


The growth markets for the nuclear energyin the next decade, according to the marketexperts, will continue to be China, Russia,India and South Korea(1) .The main obstacles in enhancing andstrengthening the position of the nuclear inthe overall energy mix are shifts in the po-litical support, struggles in finding the cap-ital needed, market forces, linked tocompeting technologies, for example gasand renewables, and an apparent globaldecline in interest for low- carbon technolo-gies. Or, as Bob Evans of the Enercon Serv-ices said, the “countries continue to “talk thetalk” of carbon dioxide reduction, whilebeing unwilling to “walk the walk” (2) .

The below tables show the current trend inworld nuclear energy:

Today, there are 30 countries with activecivil nuclear power plants and 40% of thoseare developing countries. Also, the majorityof the states planning or proposing nuclearpower plants are developing countries.Looking ahead, lower capital costs and sim-plified operational requirements of the in-novative small power reactor designs,currently under development, could makenuclear energy more available.

(1)Maize (2014)(2)Report from the Centre for nuclear non- proliferation and disarmament 2013

The future of nuclear commerce heavily de-pends on positive political will which is ex-pected to also help to influence andincrease a positive public opinion in time.Sometimes it seems that the resentmentand rejection of nuclear energy amongpeople is so powerful, that psychologistscall this phenomenon a technologicalstigma; attributing solely certain qualities tocontroversial technology that are in essencedeviant, imperfect or unwanted. In thisprocess, the bad features of this technologyare the only ones that seem to matter; pos-sible positive perspectives are forgottenand seldom reflected upon (Polič (2013),p.91) .

This seems to be the case with nuclear tech-nology in general which is regrettable sinceit offers clear and attaining advantagescompared to the current fossil- fueled dom-inated energy mix; and without nuclear en-ergy, especially considering the presentlyavailable technologies, we cannot signifi-cantly change our PEM. To omit this trend,in addition to positive political will the shiftin thinking will also be deeply connected totechnical improvements that will strive to-wards eliminating possibilities for a largescale nuclear disaster and the effective re-cycling of nuclear waste. Unfortunately, tothis day, no fully satisfactory recyclingscheme has been developed.

There has been a lot of discussion lately onthe possible usage of californium, a littleknown fringe element, discovered in the1950s. Research has proven that californiumshows potential for storing, even recyclingradioactive waste into fuel, which has beenthe subject of many heated debates on nu-clear power for decades now. There is nodoubt that radioactive waste presents acomplicated issue within the field of nuclearpower and its facilities. Fact is that theprocess of nuclear decay can take thou-sands of years to break down into less dan-gerous isotopes; in the meantime, plentycan go wrong. Nuclear waste has to besealed in airtight steel or concrete contain-ers; if we consider how much can an aver-age Joe complain for having to sort hiswaste, respectively, it`s even worse when itcomes to nuclear waste. Not to mentionthat the stockpiles of this waste will becomea problem for generations to come, withpast weighting on the future.

The thing so encouragingabout californium is thefact that it shows signs ofextreme resistance againstradiation damage; the ele-ment can bond and sepa-rate other materials, evenchange the structure ofmaterials stored within it.In this sense, californiumcould be used to separatedifferent elements in thenuclear waste and there-fore recycle the fuelbyproducts for reuse in nu-clear power plants.


United States Ambassador,H.E. Mr. Gregory Schulte

Another propitious research was conductedon MIT, where scientists believe they havefound a brilliant way to eliminate nuclearwaste. By recycling it into clean electricity,this could power the entire world until2083(1). Of course all of this sounds verypromising, but future will tell which of thescientific breakthroughs will be applicablefor nuclear waste managing. We also haveto consider the money and the establish-ment, running the current business of nu-clear waste disposal and storage and theobstacles that can pose for introducing awhole new system of managing. Other signs which point to a nuclear renais-sance are the international co-operationsand ambitions taking place between majoractors within the industry:

U.S.-India civil nuclear agreementIn July 2005 India together with the US tooka huge step in regards to nuclear safety andcooperation on a global level. India agreedto separate its civil and military nuclear fa-cilities and place all its civil nuclear facilitiesunder International Atomic Energy Agency(IAEA) safeguards and, in exchange, theUnited States agreed to work toward fullcivil nuclear cooperation with India. (2)

This was a major stepping stone for nuclearcommerce regarding the fact that India hasexcluded itself from the Non-proliferationtreaty, and had previously not cooperatedwith western countries concerning nuclearpower. The Indian government was always espe-cially critical towards hypocrisy of the US,regarding the issue of nuclear restrictionstowards South Asian and Middle Easternstates while at the same time permitting theambitions of Israel, who has avoided anyIAEA inspections since the beginning of itsnuclear programme. In June 2010, India andCanada (The largest exporter of uranium)signed a nuclear cooperation agreement.This was also an additional positive signconsidering Canada has one of the most re-strictive legislations regarding its uraniumtrade.

Russian & Chinese ambitionsAfter the fall of the Soviet Union, Russia losta lot of nuclear influence which it previouslyhad. However, in the past two decades Rus-sia and its two largest nuclear companies(Rosatom and Atomstroyexport) havesigned multiple deals with “untouchable”countries like Burma/Myanmar and Iran.This brought forward a new level of globalnuclear stability, since Western countrieswere unsuccessful in reaching the abovementioned states. As for China, having seenan economic boom unlike anything everseen in human history, the nuclear projectsplanned are enormous. The public accept-ance of nuclear power in China comparedto western countries is also a factor whichhelped the industry grow exponentially.

(1)Ross (2014), Gaffigan(2009) and Tarantola (2013)(2)Georgewbush-white-house.archives.gov

H.E. Mr.Aviv Shir-On, Ambassador of Israel

EU energy strategyGiven the fact that the European Union im-ports half of the energy it consumes, it hasreached a crucial point in time to plan formeans of secure energy supply. In most re-cent documents, Energy roadmap 2020 andEU nuclear energy policy forecast 2014, nu-clear energy is represented as a possible de-carbonized scenario for the future, since theEU is strongly committed to the low-carbonsociety. Nuclear energy is seen as a “keysource of low- carbon electricity generation”and “as a largescale, low- carbon option,[nuclear energy] will remain in the EUpower generation mix” (1) . Still, the greatestconcerns are reserved for safety issues andwaste management. New technological breakthroughs are seenas the key factor in securing and expandingnuclear share in the EU power generationmix. Besides that, a great factor will also bea change in the European Parliament; withthe election, held in 2014, there is a possi-bility for change in the stance of the politi-cians in the parliament (considering a veryinteresting, to say the least, mixture of rep-resentatives elected), along with the factthat the Energy Commissioner GüntherOettinger ended his mandate in October,2014 . (2)

Oil imports are reaching record high pricesand the EU economy itself keeps wobbling.With foundations such as EURATOM (TheEuropean Atomic Energy Community) andthe International Atomic Energy Agency(IAEA), with its headquarters in Vienna, ithas a major role in informing the publicabout nuclear power and help meddlingbetween politicians in hopes of further nu-clear cooperation between member coun-tries.Of course, there are also those who arguethat the whole premise behind the conceptof nuclear renaissance is essentially flawed.They go on to claim that the investments inrenewables are on a steady rise and in con-trast, the amount invested in nuclear en-ergy represented only one tenth of whatwas invested in other fields of green energy.They also point out that the number of op-erational reactors has decreased in the lastyears, while the “nuclear fleet” is aging witheach passing year, with an average age of25. The statistics shown are also believed tobe misleading, since the large number of re-actors “in construction” or “in operation” didnot produce any electricity in 2009, andmany of them represent plans from a differ-ent political era, not likely to ever fully ma-terialize.

(1)European Commission2012, Foratom 2014 (2)At the time of finishing thisarticle, the new EuropeanCommission has just been es-tablished, hence we cannot(yet) evaluate their future de-cisions and policies.

Ambassador of Russian Federation, H.E. Mr. Alexander Zmeyevskiy


Also questionable in this context is the cost-competitiveness (1) with existing conven-tional technology, operational safety, ra-dioactive waste disposal and publicacceptance. Some from the inside circles inthe IAEA concluded that nuclear industrywill lose a 11% of market share by 2020, be-cause investors seem to be more interestedto fund renewable projects rather than nu-clear plants.Another significant claim is that the contin-uously interested new markets for nuclearpower plants, Asia, are not able to constructand operate such overwhelming projects.Especially worrying are supposed to be

meeting the safety requirements, on-goingissues with corruption, the threat ofterrorism and civil unrest, the lacking ofphysical infrastructure needed to supportand operate the plant and the financial set-backs (2) .But despite these critiques and skepticism,reality taking place is hard to deny: the in-crease in new nuclear projects and politicalincentives seem to support the claims of anuclear renaissance. And underestimatingAsian markets and the capability andknowledge in that region can never be asmart outlook, even less a strategic consid-eration.

(1)A study conducted on MITshows that to make buildingof a new nuclear plant cost-effective, one must impose acarbon tax of nearly 200$ aton on the conventionalpower plants to get the nec-essary funds. (2)Sovacool, B.K. (2011), p. 6-12

ex Kazakh Foreign Minister Yerzhan Kazykhanov

ince the first NPP in 1957, alot concerning the nuclearmarket has changed. The Nu-clear market has beenopened up to private busi-nesses which make the whole

commerce procedure a lot easier and moreefficient. As a result of the oil embargo onthe US, western Europe and Japan, imposedby OPEC (Organization of the Petroleum Ex-porting Countries), the opportunity for nu-clear power expansion was tremendous tobe set free from their dependence on oil. Intheory, there has been a huge capability fornuclear power leading up to today, and thereason it struggled is due to all the legal andpolitical barriers as well as very strong lackin public support. (Except France with a nuclear energy supplyrate of 75-80%; this is due to strong politicaland governmental support).

At the end of the day a lot of it comes downto economics and sustainability. In otherwords; which methods are most cost effi-cient and least damaging? Reasons for whynuclear power is an attractive source of en-ergy can be explained by four main pointsof argument:It offers a stable supply of energy in timeswhere the demand is increasing and otheralternatives are not developed enough ortoo expensive. The NPP today are Generation III powerplants and the new reactors have evolvedtremendously, with larger capacities, (even)lower failure rates and the economic figuresare constantly improving. Its increased momentum for business.Classed as a green energy, i.e. provides en-ergy without interfering with climatechange, as shown in the next table, display-ing greenhouse gas emissions by electricitygeneration

S

NuclearCommerce Markets

and the Future Potentials


Obviously building a nuclear power plant isa huge project and requires large sums ofmoney which have to be invested upfront,while carrying a risk for 30-60 years. Oncedone, the plant requires operation/mainte-nance costs as well as nuclear fuel cyclecosts (Uranium), however a large portion ofthe price set by NPP together with energycompanies are to large extents made upfrom the decommissioning expenses aswell as the future plant shutdown price. The danger that a NPP is linked with is anobvious but very important fact, especiallyconcerning professionalism of on-site work-ers as well as inspection professionals.Reservations regarding nuclear power havetheir focus on the threat of a nuclear acci-dent, insurance cover and decommission-ing of outdated NPPs and wastemanagement.The result of the tsunami in Japan (Feb.2011), which severely damaged theFukushima power plant, occurred at a verysensitive moment of time for nuclear devel-opment and its industry. At a point whennuclear power was entering a “renaissance”and had upheld many trouble free years, arain of negative media hit the industry.

Many of us started questioning nuclearpower (once again) and the incident alsostartled East Asian and South-East Asiancountries which are located in the sameearthquake troubled zones. However, theyhave not interfered with current nuclearprojects (a total of 110 which areplanned/under construction ) because ofthe setback in Fukushima:

In Japan, the new government is re-evalu-ating the decision of their predecessor onphasing out the nuclear programme,Chinese government announced the re-placement of the planned Generation II re-actors with the improved Generation IIIreactors, which will meet the safety require-ments but slow down nuclear expansion inthe country due to higher costs,India has affirmed plans for boosting thenuclear capacity by 2032,Taiwan, South Korea and Vietnam areproceeding with their announced plans,Malaysia is considering the option for nu-clear power,Thailand and Indonesia have delayedtheir nuclear programmes, but most likelybecause of high costs.

Although the long-term impact of theFukushima disaster on the nuclear pro-grams is not yet clear, the predictable con-sequence is likely to be the rise in costs dueto more rigorous safety requirements andan increase in finance costs, reflectinglenders` reassessment of the commercialrisks. (WNA – 2010)

ccording to the WorldNuclear Association(WNA), the commercialworldwide demand foruranium is around 68 500tons of uranium per

year(1) .To simplify this, one must under-stand that USA (with its 104 NPPs) has a de-mand of 18 816 tons per year, whichcorresponds to about 28% of the worldmarket(2) . Again it is the OECD with theNEA which provides account of the Ura-nium reserves in the form of their so calledRed Book, a biennial report on uranium re-serves. Canada, who has been by far thebiggest supplier with some 11,500 tons ofU-3O8 per year until 2009, has been re-placed by Kazakhstan that produced a stag-gering 21 300 tons in 2012. Both countriesare followed by Australia, Nigeria andNamibia(3). The table is surprising, consid-ering that Australia holds the largest known

recoverable resources of Uranium, 31%.Also worth mentioning is that among ura-nium-exporting countries, Australia andCanada have some of the strictest condi-tions relating to the use of its uranium.These safeguards (inspections and account-ing procedures) ensure that exported ura-nium is used for peaceful purposes only andis not diverted for military purposes or usedin a way which adds to the proliferation ofnuclear weapons. This tells us that there is apossibility for a nuclear commerce frame-work that serves as an efficient non- prolif-eration tool. Further on, United States as well as Chinaand India rely mainly on imports, therebyneglecting any more extensive domesticproduction.

A

(1)World nuclear Association 2012(2)NEA (2010), p.6, World Nuclear Association 2014 (3)Stockinterview.com (2006); p. 96, World NuclearAssociation 2014

The NuclearCommodity Market


However, this also poses a problem for in-vestors wanting to partake in nuclear powerdue to the long time-lapse of twenty yearsfrom the day of discovery to the start of pro-duction(3). However, searching for uraniumis in a way much easier than for other min-eral resources because of the radiation sig-nature from uranium`s decay products thatmakes these deposits identifiable from theair. The second option would be to extract thehuge amounts of enriched uranium andplutonium stocks from nuclear warheads,which is not an easy task. Nevertheless, amajor secondary supply of uranium is al-ready provided by the decommissioning ofnuclear warheads by the USA and Russia.Since 2000, 13% of global uranium require-ment has been provided by this ex-militarymaterial(4) . In the years 2005-2007 theworld witnessed a uranium price bubbletaking place. This coincided with significantrises of stock price of uranium mining andexploration companies. Luckily for the nu-clear commerce and its market the price perpound for uranium stabilized to a fairly “nor-mal” price in 2010.

As for the companies engaged in this field,it was again the 1990’s that brought move-ment into the market. Cancelled nuclear en-ergy related projects paired with lowuranium price pushed profits down to alevel that made any new involvement quiteunattractive. The consequence was atakeover and consolidation wave, leaving 8different enterprises with a combined worldshare of 81 percent(1) . The big three,namely Cameco(15%), KazAtomProm(15%)and Areva(14%) alone make up for half ofthe worldwide extraction(2) .

Although the nuclear industry has a steadysupply of uranium resources, companieshave been relying on current mine sites andcurrent resources. The demand for uraniumhas in no way been a linear curve through-out time. During post WWII times as well asduring the cold war excavation rocketed,and for the time in between and after wenotice a remarkable decrease. The first avail-able option for the nuclear market would beto increase the number of existing mines.This is crucial if we seek a rise in nuclearpower in this century.

(1)WNA (2007), n.p.a.(2)UNFC (United NationsFramework Classification forFossil Energy and Mineral Reserves and Resources) 2013(3)Stockinterview.com (2006),p.128(4)World Nuclear Association2012

Thorium is a possible alternative source ofnuclear fuel, but the technology for exploit-ing it is not yet established. Thorium re-quires conversion to a fissile isotope ofuranium in a nuclear reactor. However, sup-plies of thorium are abundant, and the ele-ment currently has no commercial value.Accordingly, the amount of resource is esti-mated rather than directly measured, aswith uranium. And although the benefits ofthorium often appear overstated, thereseems to be some great theoretical advan-tages regarding primarily sustainability, re-ducing radiotoxicity and reducing proliferation risk.

The greatest interest for developing tho-rium fuel cycle is visible in India and China;India has major thorium reserves and thepossible use of thorium reactors has beenunder discussion there for decades now.However, the Indian estimate is that abouttwo decades of research and developmentare needed to assess the performance ofthorium reactors, before replicating the ini-tial prototype. China`s interest in thorium isquite new, but nevertheless has started asubstantial research programme on thesubject. In January 2013, there were 150 PhD scien-tist already working on the project. Becauseof the vast thorium reserves, China has apossibility of powering their electricity onthorium basis for generations to come,given the results in the field prove promis-ing(World Nuclear Association 2014 ).

While traditional theories argue that stiffcompetition generally provides for incen-tives to innovate, the sheer magnitude ofnuclear projects and the strict legislativeframework around it makes it very hard forsmaller enterprises to enter the industry.The nuclear industry could definitely bene-fit from a more liberal market in terms of in-novation and progress.

H.E. Mr.Ali Asghar Soltanieh Ambassador of Iran

United States Ambassador, H.E. Mr. Gregory Schulte

Nuclear Plant ConstructionFundamental Considerations

The sector of nuclear power plant construc-tion is the most important area for future in-novation and development, and it is alsothe area that has seen most changes withinthe nuclear industry over the years. Expert-ise in the industry is the key to success, andthe demand for educated and professionalengineers cannot be too high. The worldhas yet to see a nuclear power university,which could aid the industry tremendously.The current market leaders, which “domi-nate” the nuclear industry, are:

AREVA – French/GermanAtomenergoprom- RussianCameco- Canadian (1)

The biggest issue companies have to dealwith when constructing a NPP, is that everynew plant is treated as a completely newcase. This makes the whole process a lotmore time consuming and expensive ascompanies make their way through the bu-reaucratic jungle that surrounds this busi-ness. There are plans for constructingGeneration IV power plants, designed tooffer higher levels of safety, economics,non-proliferation and sustainability thanthe current Generation III.

An international cooperation framework,known as Generation IV international forum(GIF) has been set up to establish a platformfor creating systems, identified as mostpromising. The generation IV systems areexpected to enter into force in estimated 20years.

Another innovation in the field is an idea forSmall Modular Reactors; the adjective“small” standing for the electrical powerinput that should not exceed 300 MW,which is a significant decrease from largeGeneration III reactors currently used. Otheradvantages of Small Modular Reactorswould include a high level of modularity indesign and construction and the possibilityto expand them with adding modules togenerate even as much power as a larger re-actor. Success ful development of the SmallModular Reactors could attract new coun-tries to the nuclear club, who do not needthe size and/or do not have the means to fi-nance the costs of conventional 1,000 MWand larger plants . These ideas could provevery promising in a sense of making nuclearpower more socio- economically suitablefor the interested parties.

(1)World Nuclear Report 2012

Nuclear safety stands for the process ofeliminating unintended conditions orevents that lead up to radiological releasesfrom the otherwise legal and authorized ac-tivities. Nuclear safety is closely linked tonuclear security and nuclear safeguards, al-though we have to distinguish the three:

nuclear safety covers the activities aimedat preventing nuclear and radiation acci-dents or to limit their consequences in themanagement and activities of nuclearpower plants, other nuclear facilities, trans-portation of nuclear materials and theuse/storage of nuclear materials for uses inthe fields of medicine, power, industry andmilitary (although the oversight on militarynuclear programs is usually executed by dif-ferent agencies than those operating incivilian sector),

nuclear security stands for preventing in-ternational misuse of nuclear and other ra-dioactive materials by non-state actors tocause harm, mainly by enhancing securityat the nuclear power plants and in theprocess of transportation of this materials,

nuclear safeguards are focused on re-straining the activities of (primarily, but notexclusively) rogue states that could lead upto acquisition of nuclear weapons(1) . The most extensive fields to cover when itcomes to nuclear safety are without a doubtthe safety of nuclear power plants and thesafe management of nuclear waste mate-rial. This importance also results in the factthat these two issues are the most politi-cized themes in the nuclear safety field.When it comes to power plants, statisticsshow that only three major nuclear acci-dents happened in over 15 000 cumulativereactor years in 33 countries, concludingthat nuclear power plants are a safe way toproduce electricity.

NuclearSafety

(1)World Nuclear Associa-tion 2014, Petrangeli (2006).


In the above table, five- level approach tomaintaining safety at a nuclear powerplants is shown. Unfortunately, like in the aviation industry,there can be a lot of bad publicity regardingnuclear safety and its accidents, and notenough evidence- based facts and conclu-sions. This was also visible in the latest nu-clear power plant disaster in Japan. Theauthors of a book on the subject,Fukushima: the story of a nuclear disaster,sum up this matter very well by saying:“There are lessons to be learnt from whatwent wrong at Fukushima. There are equallyimportant lessons to be learnt from whatwent right ”. (1)An auditor for global nuclear safety is theIAEA, which prescribes safety proceduresand has since obtaining this role estab-lished a system of reporting even the mostminor accidents that occur. State safety in-spectorates for nuclear power plants alsowork very closely with the agency and theseactivities only enhance the importance ofthe role that the IAEA has today. In the nuclear safety field, there is also agreat and important role reserved for stateand non- state actors on a national level.

State and local governments, local watch-dog groups, concerned citizens and themedia all play a significant role in obtaining,enhancing and maintaining nuclear safety. An additional important aspect of nuclearsafety is the human factor, therefore the re-lationship and mismatch between humanand technology.

The human factor analysis offers an insightinto human capabilities, characteristics, lim-itations, behavior patterns and motivation.In nuclear safety the human factor can bevisible on the macro-level, with the wrongdecision- making process at the time of nu-clear accidents but also on the micro- levelin reduced productivity and the on-site de-meanor that endangers employees` health.As a result of such crucial importance to ad-here to safety procedures and protocols,there is an emphasis on the human factor indesign, operation, maintenance and de-commissioning of nuclear power plants. Inthis aspect, proper training and substantialsafety culture of employees is essential, ifwe are to expect the technological meas-ures in securing the nuclear power plant towork as anticipated(2).

Petrangeli (2006), p.90.

(1)Lochbaum/Lyman,/Stranahan (2014), p. 84(2)Stanton (1996), p.5

Another key part of nuclear safety, the legalframework behind it, started to gain mo-mentum after the Chernobyl accident in1986 (in contrast to the Fukushima accidentthat left the world mum) when the nuclearindustry and world governments realizedthat substantial steps will be needed to re-gain public trust in nuclear energy.

This hastened a series of new legal docu-ments and agreements, the most importantbeing the Convention on Nuclear Safetythat is a principal treaty on nuclear safety. Itapplies on nuclear power reactors and has75 parties; most notably missing in the sig-natory parties is Iran (Egypt also, that plansto start its nuclear energy programme in thefuture). Complimentary to the Conventionon Nuclear Safety are the Convention onEarly Notification of a Nuclear Accident andthe Convention on Assistance in the Case ofa Nuclear Accident. These two conventionshave 114 parties, including all the stateswith nuclear power reactors and most ofthe states with any significant nuclear activ-ities. As always, there are exceptions to thegeneral rule: North Korea, Syria, Uzbekistanand Venezuela.

Another really important treaty on nuclearsafety is the Joint Convention on the Safetyof Spent Fuel Management and the Safetyof Radioactive Waste Management. Theconvention and its provisions apply mainlyon spent fuel and radioactive waste mate-rial from civilian nuclear reactors, their safemanagement and also trans- boundarymovement. It has 64 parties although it isconcerning that many states with operatingnuclear power plant reactors are not partiesto the Convention, namingly Armenia,India, Iran, Mexico and Pakistan.

We need to consider nuclear safety (alongwith nuclear security and nuclear safe-guards) as one of the main fields impactingthe public trust in the nuclear energy.Hence, this makes it of highest importancefor the established provisions to work. Andas written before, citizens can also play arole in this process, helping to make smallsteps for the nuclear energy and its security,while also ensuring a big step for a brighterfuture of the whole planet.

Prof. Anis H. Bajrektarevic with his students in front of the IAEA


he first thing about nuclearcommerce […] is that it isthe most politically regu-lated commerce in theworld, the most politicallycontrolled commerce”. (1)

The evident reason for this is due to the factthat it is embedded in the double use of nu-clear technology. The threat in transfer frompeaceful technology into military or terror-ist threats remains a vision feared by many(although, to be fair, a terrorist budget doesnot comply with the budget, needed to cre-ate and maintain a nuclear warhead. There-fore the biggest realistic threat is the breachin nuclear safety and security, not in nuclearsafeguards).

Often regarded as the watchdog of nuclearpower, The IAEA plays an important role forthe business related to it. The IAEA wasfounded in 1957 and is an intergovernmen-tal, science and technology-based organi-zation which is part of the UN family. Sinceits creation up to this day the IAEA followsthe same aims, which are known as theaforementioned “Baruch-Plan” (however,the organization itself has started taking re-sponsibility outside of its agenda in recentdays due to the international trust) (2)

T

(1)Chellaney (2007)(2)Bailey/Guthrie/Howlett/Simpson (2000), p.3

The International Atomic Energy Agency

The World of Atomsand its Legal Framework


International managerial control or own-ership of all potentially dangerous atomicenergy activities;An international organization whichwould have the power to control, licenseand inspect all peaceful atomic energy ac-tivities;An international organization whichwould have the duty of fostering the bene-ficial uses of atomic energy;An organization which would perform re-search and development tasks in order tokeep it in the technical vanguard of atomicenergy, so as to enable it to recognize thepossible misuse of atomic energy.IAEA programs and budgets are set throughdecisions of its policymaking bodies - the35-member Board of Governors and theGeneral Conference of all Member States.

IAEA´s 2014 budget amounted to 344 mil-lion Euros, and all major decision makingtakes place at their Vienna headquarters;which is ironic given the fact that Austria isthe only country worldwide where civil nu-clear power is illegal. After the 2011 incident in Japan, IAEAstated that its international role in surveil-lance needs to be increased. Having thirdparties interfere with inspections of powerplants or communicating with NPPs is lesseffective and does not promote as muchsafety and security for the public, which is afundamental topic for the organization(www.iaea.org).

IAEA member states as of February, 2014

Member states

Approved states: Brunei, Cape Verde and Tonga

Withdrawn membership: North Korea

Non-members

The Non-Proliferation Treaty

Key provisions in the NPT were:The mother of all legitimate nuclear tradethese days is without a doubt the NPT. Thenon-proliferation (non-spread) treaty (NPT)was brought forth in 1968 by Ireland andFinland, and carried into force in 1970. Theobjective of the treaty is to limit the spreadof nuclear weapons all across the globe, andcurrently has 189 member states . Five ofthe treaty members (USA, Russia, U.K.,France and China) are recognized nuclearwarhead states (NWS) and received specialpermissions to join into the treaty althoughobtaining nuclear warheads. The main points of provision are as follows:

prevent the wider dissemination of nuclearweaponsmake peaceful applications of nuclear tech-nology widely availablepromote cessation of the nuclear arms raceand move toward nuclear disarmamentseek to achieve discontinuance of test ex-plosions of nuclear weapons

This led to an immediate separation of theworld´s nations into two groups; the nu-clear weapon states (NWS) and the non-nu-clear weapon states (NNWS).


Some critics argue that the issue, not con-sidered enough in the NPT, is the distinctionbetween nuclear latency and nuclear hedg-ing. Nuclear latency can be described as in-advertence, where a particular state hasbasic capabilities to produce fissile materi-als for nuclear weapons but has no foresee-able intentions of doing so. Such countrycan as well be called a virtual nuclear state.Whereas nuclear latency is therefore unin-tentional, nuclear hedging is a deliberatenational strategy, aimed at acquiring nu-clear weapons technology relativelyquickly(1). This can result in virtual nuclear race thathas a possibility to consequently escalatinginto real arms race, resulting in break- outsfrom the NTP, in the worst case scenarioeven nuclear war(2). This is where politicstends to step in to fill the scientific gap inthe NTP provisions, ruling one state`s ac-tions as latent and other deliberate, de-pending on the current ally- foe axis.

Consequently, this can also affect the nu-clear commerce process for selected coun-tries, following the trends shown in thelatency/hedging deliberation. This is veryevident if we turn our focus to the turnkeynuclear technology countries: for instance,Japan and Germany are tolerated for havingsuch possession (therefore, we considertheir capabilities as nuclear latency), whileIran is currently in the global spotlight andin the midst of very tough international de-liberations and negotiations to be given thesame opportunity (and is therefore sus-pected of nuclear hedging, although we aretalking about the same technologies).

Pakistan and India, which are non-signatorycountries to the treaty, are confirmed NWSbut have declined signing the treaty. Thetwo countries combined carry an estimated250 nuclear warheads, and do not intend tosign the treaty in the near future accordingto the India´s External Affairs MinisterPranab Mukherjee who in 2007 stated: "IfIndia did not sign the NPT, it is not becauseof its lack of commitment for non-prolifera-tion, but because we consider NPT as aflawed treaty and it did not recognize theneed for universal, non-discriminatory ver-ification and treatment”. Signing the treatywould mean that both countries wouldhave to give up their nuclear defense capa-bilities. That is why many believe that thecurrent non- proliferation framework is im-proper, because it allows some countries toenjoy the fruits of nuclear technology whilehinder this process for others, ruled nottrustworthy and dangerous.

(1)In this sense, there are two types of nuclear proliferation; mate-rial- technical and political proliferation. Whereas material- techni-cal proliferation is a necessary basis for creating a nuclear weapon(having all the required materials and technology), that does notnecessarily imply this happening as the final result. Another com-ponent is political proliferation, which means a rational decision ofthe political apparatus to create a nuclear weapon, taking into ac-count different foreign and domestic political factors, also not ne-glecting the security and economic consideration. As a result,nuclear proliferation is predominantly a political occurrence. (Lubi(1999), p. 22) (2)Report from the Centre for nuclear non- proliferation and disar-mament 2013

This is particularly hypocritical consideringthe fact that the only country that has everdeployed a nuclear weapon on anothercountry has a very prominent and patroniz-ing role in the current nuclear non- prolifer-ation framework.

North Korea, who in 1985 ratified the treaty,violated it by continuance of nuclear war-head production, which resulted in their2003 withdrawal from the treaty. This hasled to further international instability withregards to recent confrontations betweenSouth and North Korea in 2010. The nuclearthreat North Korea still poses the world isinevitable.

Libya is a country which has been under in-vestigation for many years concerning al-leged of secret nuclear warheaddevelopment programs. In 2003, togetherwith USA and UK, Libya allegedly com-menced a WMD elimination program(1). In2011, when instability broke in Libya, fur-ther importance on the subject wasbrought forward. By 2012, when Gaddafiwas ousted and killed by the rebel forces,very possibly backed by western intelli-gence agencies, a new era for the elimina-tion program began. By January 2014, newgovernment in Libya destroyed the entirecategory 1 chemical weapons stockpileunder the supervision of Organization forthe Prohibition of Chemical Weapons. Also,in 2012, IAEA announced Program frame-work 2012-2017, designed to use nucleartechnology and resources for economic de-velopment(2).

(Iran is part of the NPT, but was found innon-compliance with its NPT safeguardsagreement and the status of its nuclear pro-gram remains in dispute and so does itsmembership with the NPT. Worth mention-ing is a breakthrough, reached in Novem-ber, 2013, when Joint Plan of Action wassigned in Geneva by Iran, US, Russia, China,France, United Kingdom and Germany. Thepact called for a short- time freeze of sec-tions of the Iranian nuclear programme, inexchange for decreased economic sanc-tions that were imposed on the country. Inaddition to this interim agreement therewas also one signed between Iran and theIAEA that established a framework for coop-eration in resolving issues, concerning theIranian nuclear programme. All of the abovementioned does not mean we are obliviousto the fact that the process of hindering theIranian nuclear programme has widergeopolitical implications, stretching from Is-rael, Riyadh to Wall Street.)

(1)ISIS (Institute for scienceand International Security) –June, 2004(2)Arms control 2013


After its formation the Unites States and theSoviet Union agreed on various protocols toguarantee a non-nuclear attack pact, whichis still in force today.

To ensure that the NPT is respected by allmember states, a conference to the treaty isheld every five years. (A meeting was heldin 2010 in New York, after having failed tomeet in 2005.) At the meetings, discussionsare held regarding the future of the NPT andany related measures that need to be taken.The introduction of the NPT in turn led totwo additional treaties of great interna-tional importance; the Limited Test BanTreaty, and UN´s creation of the NWFZs (Nu-clear-Weapon-Free Zone). It also reflectedon the underlying issue of continued pro-duction of fissile materials; resulting in thetryouts to ban the production altogetherwith a Fissile Material Cut-Off Treaty.

Limited Test Ban Treaty: Treaty that pro-hibits all tests of nuclear weapons exceptthose conducted underground. U.S.-Soviettest-ban talks began after concerns arose inthe 1940s and '50s about the dangers of ra-dioactive fallout from above-ground nu-clear tests as well as an attempt to slowdown the nuclear arms race.It was signedand ratified in 1963 by USA, U.K. and the So-viet Union, and today contains signaturesfrom 116 countries(1).

(This was later followed by U.N.´s compre-hensive test ban treaty (CTBT) which statesthat no nuclear detonations are allowed.The treaty was adopted in 1996 but has notcome into effect yet. Also, most prominentnuclear force, USA, has still not ratified theTreaty although the Obama administrationrepeatedly called for support of the Treatyin the Senate. However, 162 countries haveratified it and are obeying its points of con-duct. Until the treaty enters into force, theorganization behind the proposed legalframework is the so called Preparatory com-mission for the CTBT. The main purpose ofthe Preparatory commission, which is basedin Vienna, Austria, is to promote the treatyand to establish a proper verificationregime, so once the treaty enters into forceeverything will be prepared and opera-tional (2). The current system within theCTBT for global nuclear test monitoring hasproved to be far more efficient than antici-pated just a decade ago, and furthermore,proved to be a good addition to the existingtsunami warning centers.

(1)US Department of State2011(2)http://www.ctbto.org

It is believed that the entry of the CTBT inforce would increase the global leverage,needed to contain the North Korean nu-clear programme, deter Iranian leadershipand their ambitions in the nuclear strength-ening, reduce nuclear tensions betweenIndia and Pakistan on the one hand andChina and India on the other and thereforehelp to enhance the stability and security inthe Asian region(1).

NWFZ: This agreement with the United Na-tions bans the use, development or deploy-ment of nuclear weapons in a given area.This, however, does not cover internationalwaters or transit of nuclear missiles throughspace, nor does it count small regions orcountries which have forbidden nuclearweapons by national law, i.e. Austria´s“Atomsperrgesetz” which came into force in1999. There are five major NWFZ:

Latin America and the Caribbean, South Pa-cific, Southeast Asia, Africa and Central Asia.In addition to the above recognized legalvacuum, there are also separate treatiesbanning the deployment of nuclearweapons in Antarctica, Mongolia, on thesea-bed and outer space(2). There has beenan interesting turmoil concerning NWFZ.On the one hand, states that pushed for theNWFZ to become applicable for their re-gion, argue that they are trying to win thegeopolitics of nuclear testing sites, meaningthat the whole nuclear weapons processwas to a large extent dominated by theNorthern- hemispheric countries, testingtheir weapons in the supposedly “empty”South. On the other hand, states that hinderthe process argue that this is just a cleverway to prevent the Third world states toenjoy the benefits of the technology theNorth has been enjoying for decades.

(1)Preparatory Commissionfor the Comprehensive Nu-clear-Test-Ban Treaty Organi-zation (2010), Pickering(2013), p. 7—8(2)Arms control 2014


This is another good example of how diffi-cult it is to reach an agreement on the inter-national level on seemingly clear issuessuch as national security and safety of theplanet and its inhabitants. But, as always,the important part is also the interests andthe domestic situation of the given actorsin the global community.

Fissile Material Cut- Off Treaty: Since1993, when the UN GA adopted a resolution48/75 with consensus, there was a clear rec-ommendation to establish a non- discrimi-natory, multilateral treaty banning theproduction of fissile materials (the key in-gredient to produce a nuclear weapon).However, the conclusion to these efforts isstill pending because many nuclear weaponstates have major discrepancies on thetreaty`s substance and therefore the treatyhas yet to be negotiated and its terms haveyet to be defined. To most difficult ones toreach consensus on are, to name just a few:

The extension of the treaty: the US andUK do not wish to extend the framework onthe exiting fissile material stockpiles; whileothers, like Pakistan, see this as unaccept-able and as a threat to Pakistani national se-curity (clearly signaling towards the rivalneighboring nuclear India); The scope of the treaty: some feel that inaddition to banning the production of plu-tonium and highly- enriched uranium, thetreaty should also ban materials like trinium,which is used as an amplifier for thestrength of nuclear weapons; others include

elements like depleted and natural ura-nium, neptunium, curium, californium andamericium (though not fissile materials,they are also used in the nuclear weaponsprogrammes)Verification system under the treaty: themost substantial issues with the proposedincorporated verification mechanism hadthe US under the Bush administration thatlobbied for the ad hoc system of verifica-tions. However, under Obama the supportfor the treaty`s idea grew considerably. Butsince the treaty and its provisions have notyet been established, much less ratified, it isunclear what the future position of US onthe verification matter will be;Including mechanisms for the manage-ment of existing fissile material;

Intertwining other similar issues to thetreaty: Russia and China both wish to incor-porate this treaty into the larger frame of aprevention of arms race in the outer space.

Such differing positions on the matter havefor now prevented to fully draft and intro-duce a comprehensive treaty and it is notclear how the events will unravel in the fu-ture. The biggest issue seems to be the NWSstates themselves (since others alreadycomply to the idea of this treaty throughthe NTP provisions) and other states thatare producing large amounts of fissile ma-terials for non- military purposes, such asJapan and Canada. And when it comes tosuch contradictory power- plays, global pol-itics is known to fail time and time again.

n the nuclear field non-prolifera-tion and commerce are two sub-jects not easily separable. Anexport control regime has twopurposes: it has to stop the worldwide proliferation of sensitive nu-

clear material or technology through the es-tablishment of clearly defined norms and atthe same time it should not hinder trade inthis sector. The establishment of a workingand relevant non- proliferation regimewithin the nuclear commerce has beenchallenging not just due to the pure natureof this issue, but also because of the chang-ing global market forces and rapid techno-logical improvements. The increase of statesthat can act as traders of sensible nucleartechnology is consequently creating amuch more diverse global playground thathas to be monitored. Another, interrelatedfactor is the process of globalization, that iseffecting military and peaceful nuclearcommerce efforts;

diversifying source of funding into alsolargely private stakeholders represents an-other complex factor. Combined with therapid evolvement of communication tech-nologies, that make it all the more easier toshare the know- how on the matter and theadditional technological leap in nuclear sec-tor as well, the nuclear commerce regimehas to cover manifold and complex issues,while at the same time prove efficient whenit comes to the basic security considera-tions. In other words; a nuclear export controlregime means a struggle between the de-mands for security and the free flow ofgoods. Such trade has been explicitly al-lowed for in the NPT. Unfortunately, just asthe nuclear commodity market has not leftbeen entirely to free market forces, thesame goes for the nuclear non- proliferationand the nuclear commerce regime: many ofthe decisions made are still more (geo)po-litical than economic/commercial.

I

The Nuclear Commerce Regime


Nevertheless, the system of multilateral ex-port measures has greatly evolved overtime. Before the conclusion of the non-pro-liferation treaty the intention to set up ruleshad to come entirely from an individual

state, whereas in the time after the NPT thiswas shaped by multilateral incentives; themost important ones are underlined in thefeaturing Table, and they will also be furtherdiscussed on the following pages:

We have already discussed the immenserole that IAEA has taken upon itself; to playthe global nuclear watchdog. Now, we alsohave to discuss the three most importantpillars in the IAEA framework that are im-pacting the working nuclear commerceregime and its organization. These are:

Safeguards and Verifications, for they rep-resent the control mechanism for countriesto oblige to the agreed upon safeguardsand a way to monitor adherence of memberstates to the rules;Safety and Security, for they represent allthe necessary procedures to be taken in thefield of nuclear commerce and the final de-cision if a certain country is suitable to be apart of nuclear commerce and under whichconditions; Science and Technology, for they repre-sent all the newest scientific breakthroughsto reckon with for better control of nuclearcommerce and less chance to convertingthe purchased commodities into militarycapabilities.

The ZC is the oldest of the currently existingnuclear export control measures. It is prob-ably also the legally most legitimate controlstructure.

“The committee is named after its firstChairman, Prof. Claude Zangger, and wasformed following the coming into force ofthe Nuclear Non-Proliferation Treaty, toserve as the "faithful interpreter" of its Arti-cle III, paragraph 2, to harmonize the inter-pretation of nuclear export control policiesfor NPT Parties.

The Committee has been focusing on whatis emphasized in Article III.2 of the Treaty by"especially designed or prepared equip-ment or material for the processing, use orproduction of special fissionable material."The Zangger Committee maintains a Trig-ger List (triggering safeguards as a condi-tion of supply) of nuclear-related strategicgoods to assist NPT Parties in identifyingequipment and materials subject to exportcontrols.

The IAEA framework The Zangger Committee


Today the Zangger Committee has 38 mem-bers including all the nuclear weaponStates, and the Trigger List and the ZanggerCommittee's understandings are regularlypublished by the IAEA (Intl. Atomic EnergyAgency). (www.zanggercommittee.org)(Current Chairman, since November 2010, isMr. Shawn Caza of the Canadian Mission inVienna.)

The NSG was founded in 1974 in responseto the Indian nuclear test earlier that year,and they describe themselves as follows:

“The Nuclear Suppliers Group (NSG) is a groupof nuclear supplier countries which seeks tocontribute to the non-proliferation of nuclearweapons through the implementation ofGuidelines for nuclear exports and nuclear re-lated exports. The NSG Guidelines are implemented by eachParticipating Government in accordance withits national laws and practices. Decisions onexport applications are taken at the nationallevel in accordance with national export li-censing requirements.”

Therefore, the most important subjects, co-ordinated by the NSG, are national exportcontrols on nuclear equipment, nuclear- re-lated materials and technology and thespecified dual use items. The controls arefully compliant with the NPT and, what isalso important, member states of the NSGinclude some of the major developingcountries, such as Argentina, Brazil, China,Kazakhstan, Mexico, South Africa andTurkey. Today the NSG guidelines are being pub-lished by the IAEA as INFCIRC/25434. A con-sultative body was created in order toconsult on issues associated with it. (NSG(2001), p. 7)

The Nuclear Suppliers Group

One of the most interesting of the pub-lished guidelines is a reference to the estab-lishment of multinational control oversensitive nuclear programs, or as written “Ifenrichment or reprocessing facilities, equip-ment or technology are to be transferred,suppliers should encourage recipients toaccept, as an alternative to national plants,supplier involvement and/or other appro-priate multinational participation in result-ing facilities. Suppliers should also promoteinternational (including IAEA) activities con-cerned with multinational regional fuelcycle centers” (IAEA 2012).

The most important objective in any of themultilateral approaches in the nuclear safe-guards field is to establish technical and in-stitutional barriers that would preventstates to misuse enrichment and reprocess-ing capabilities. Hence, the less control in-dividual state has over such capabilities, theharder it will be to misuse them. Of coursenone of the barriers can be totally effective,but a multilateral approach to the mattercan make misuse more difficult to conduct,leaving a substantially larger window oftime opened for international intervention.Of course, such arrangements are acceptedwith distrust due to the abuse of “interna-tional interventions”, particularly on the sideof the US.

What is optimistic is that examples of suchmultinational approach already exist in re-ality: such as European Enrichment Groupand the International Uranium Enrichment

Centre in Siberia. The latter was establishedby Russia, with the ultimate goal of en-abling equal possibility for all countries tobenefit from atomic energy, with ensuringthe access to relevant materials and tech-nology. Rallying enough support for theprocess of multilateralization of the prolif-eration- sensitive stages of the nuclear fuelcycle will no doubt be challenging, but thepractical precedents, such as the abovementioned Uranium Enrichment Centreand the European Enrichment Group, holdoptimistic prospects for the future.

The Wassenar arrangement (WA) is a multi-lateral export control regime, aimed at con-tributing to regional and internationalsecurity and stability by promoting and ad-vocating better transparency and responsi-bility in transfers of dual- use technologiesas well as conventional arms. The Arrange-ment has 41 participating parties, but sinceit is not a treaty, it is not legally binding.Each member state obliges to the arrange-ment in accordance with their national lawand policies which means that in the end,the decision to permit or deny the transferof certain technology/weapons is entirelyon the state level.But in compliance withthe arrangement, the participating statesseek to ensure that transfers of conven-tional weapons/dual-use technologies donot encourage or speed up the process ofbuilding military capabilities.

The Wassenaar arrangement


The WA regularly publishes a list of specialdual- use goods and technologies and am-munition list that are preferable to be a sub-ject of export control regime. The last suchlist has been published in 2013 by the deci-sion- making and governing body of theWA, the Plenary, consisting of membersfrom each participating state(1) .

Although not legally binding, the WA stillrepresents a set of standards of good prac-tices regarding parts of the significantlylarger overall nuclear commerce regime.

The United Nation´s Security Council Reso-lution 1540 was adopted in 2004 and estab-lished binding obligations on all UNmember states under Chapter VII of the UNCharter for the first time to take and enforceeffective measures against the proliferationof weapons of mass destruction, theirmeans of delivery and related materials. Allof the UN member states were required toadopt and enforce laws as well as othermeasures of domestic control.

Resolution 1540 also forms part of series ofresolutions on terrorism adopted by the UNSecurity Council after the terrorist attacksagainst the United States in 2001(2) , andhas therefore been a subject of controversyin many countries due to the agenda de-signed after US´s preferences. What makesResolution 1540 so special is that it is onlythe second time that the Security Councilhas used its power to make a decisionwhich is legislative in its nature(3) . As a con-sequence, all members to the United Na-tions have to adhere to these newly createdcommitments and are thereby obliged tosend their report to the 1540 Committee.

(1)http://www.wassenaar.org(2)EUJA(3)Vertic (2007), n.p.a.

UN Security Council Resolution 1540

he commerce for nuclearpower has been envelopedin secrecy ever since the be-ginning of the applied nu-clear/atom physics and itsexperiments – after the WWI

in Europe and during the WWII in the US. Itsfuture is surely not yet determined. Thenon-proliferation framework and other ef-forts to restrict the number of users and todivert it to the peaceful usage only as wellas the efforts to enforce it (including thelater CTBTO monitoring of compliancemechanism) has been of highest priorityever since the beginning of nuclear tests.Deployment of the nuclear bomb sevendecades ago on Hiroshima and Nagasaki, aswell as the accidents in the nuclear powerplants (such as ‘3 mile’, Chernobyl and re-cent Fukushima) have surely darkened thepublic image regarding the atomic power.They have also shown the need for closer in-ternational cooperation and collaboration,combined with transparency and account-ability. Especially the Fukushima accidentshows that the world needs a new balancebetween national and international inter-ests concerning nuclear energy.

Another point for nuclear fear is the possi-ble double use of the technology. Withglobal scares in the past, weapons of massdestruction are a good reason for why manyof us take a step back when considering nu-clear power. These negative elements makeit difficult for nuclear power to make abreakthrough in the energy industry how-ever, in recent years a vast amount of coun-tries have signed contracts for constructionof nuclear power plants. France in turn setsa favorable example for countries gettinginvolved in nuclear power, with its almost80 percent reliance on atomic energy. Thisis a very good example that should be mim-icked by many more in the followingdecades if we are really determined to intro-duce a green growth and more of themankind towards the decarbonized futurecommunity. Another point in favor of in-creased nuclear activities is the availabilityof uranium resources and the emergingpossibility to use thorium as a fuel, anotherfairly abundant natural resource. Quite par-adoxically, the rise of uranium prices has notharmed the industry, but rather helped toattract more interest in the exploration ofnew deposits.

T


Conclusion

Prof. Anis H. Bajrektarevic with his students in front of the UN Geneva

The questions of utmost importance for thefuture of the nuclear industry will bewhether or not:

The nuclear industry will be capable ofclosing the emerging energy generationgap at a competitive price.The current framework in the field of nu-clear commerce can function as a suitablenon-proliferation tool, and specifically inthe field of double use technology.The nuclear non-proliferation frameworkhinders the development of nuclear com-merce.The industry can provide proof of publicsafety regarding the management of theresidual waste as well as the power plantsthemselves.

Asia, with its huge economy which contin-ues to grow, is an enormous market for nu-clear power, but knowing that many partsof eastern Asia is located in an earthquakesensitive zone puts a different perspectiveon it all when looking at the Fukushimaplant in 2011.

The most important lesson learnt should bethe upgrade of emergency power genera-tors that will also be resistant to a tsunamihit, since the back-up system at nuclearpower plants all over the country (includingthe Fukushima power plant) proved to be(only) earthquake- proof.

Most probably a complete merger betweenthe Zangger Committee and the NSG couldbe highly beneficial for the future and secu-rity of nuclear power; this way the support,backing up the industry, would have moreeffect as well as authority than if they workas two individual organizations. Althoughthe IAEA was created as a nuclear watch-dog, its competence can in reality only berealized to a certain extent.The IAEA has alimited budget to work with which createssome restrictions for the organization`sreach of its operations. (This is highly imper-fect since the stakes are far too high to notbe controlled to 110 %!)Secondly, the IAEA´s powers in safeguardrelated issues need to be adapted to recentdevelopment and industry improvements.

Having closer ties between IAEA, The Zang-ger Committee and the Nuclear SuppliersGroup would definitely create strongerglobal co-operation, enhanced nationalcontrol systems and help to free additionaldonations because of better coordinatedfund-raising activities. The nuclear future relies heavily on publicas well as political support. Over the last fewdecades initial steps in the right directioncan already be identified and this is shownin the amount of new projects and politicalincentives in recent times. Politicians’ re-sponsibilities to inform the public about nu-clear power and its potential are not beingexecuted efficiently which is why many ofus are against nuclear power. By providingthe public with accurate knowledge andimpressive numbers, people are more likelyto make educated conclusions. This willthen, in turn, make nuclear power moresocio- economically suitable and throughthat, also more acceptable in the politico-military frame.

The new Generation III plants offer a com-pletely new dimension for nuclear com-merce, with its highly efficient plants andwith less failure risk. However, another nu-clear disaster within the next few yearscould perhaps permanently damage the in-dustry in developing to its full capacity. Reforms in energy sources can only happenon a gradual basis. When discussing nuclearpower it is of utmost importance to bringreal facts and figures in comparison to otherenergy alternatives to get a clear overviewof the situation.

Nuclear will not be able to reform the en-ergy market or even play a key role, how-ever by teaming up with renewable formsof energy in an attempt to create a lowemission energy mix represents the mostrealistic and viable option we have if we areinterested in introducing a new, (preferably)fossil- fuels free primary energy mix. In thisrespect nuclear energy could providesomething renewables are still strugglingwith: base load capacity.

At the end of the day, humanity shouldstrive towards an energy source which is to-tally renewable, efficient, economically sus-tainable, and environmentally friendly. It isa decisive civilizational battle.The pattern ofgreen- house gas emissions and to it relatedclimate change should be challenged.

At a present stage of our techno logicalbreakthrough, this will be impossible toachieve without serious deployment of nu-clear energy for pacifistic purposes, includ-ing the increased investment into the ITERproject for fusion reactors. And while the ul-timate answer to life, the universe andeverything may not be 42, it should besomewhere close to a new, balanced andmore harmonic relationship between hu-manity and nature. Not to go into thischange rapidly, radically and chaotically,but with a clear head, right information anda little more altruistic approach to ourplanet.


1. The UN Development Program: Human Development Report 2013 (IHD Index,Poverty and Inequality);2. Bajrektarevic, A. (2010), Arctic and Antarctic – Security Structures Surrounding theTwo Poles, Geopolitics, History and International Relations 2 (2): 218-219, Addleton Pub-lishers 20103. Bajrektarevic, A. (2012), Geopolitics of technology and the hydro- carbon status quo,Geopolitics of Energy, CERI Canada 34(9) 20124. Bajrektarevic, A. (2012), Climate change: Humans remain the same, Addleton Aca-demic Publishers, NY, CRLSJ 4(1) 20125. Bajrektarevic, A. (2013), Is There Life After Facebook – Geopolitics of Technology andother Foreign Policy Essays, Addleton New York 6. IAE, International Energy Agency – World Energy Outlook 2014, /Part B/, (Preliminaryversion, to be released in November 2014), IEA Paris 2014; 7. The UN Framework Convention on Climate Change, UN FCCC/1992/84, GE.05-62220(E) 200705 and the Kyoto Protocol to the UN FCCC of 1998, UN Office of Legal Affairs;8. Future Conflict Studies (2009), Understanding Human Dynamics, Report of the USDefense Science Board Task Force, March 2009; 9. Bajrektarevic, A. (2012), Why Kyoto Will Fail Again, Geopolitics of Energy, 34 (1), CERICanada 2012 10. The Rio Declaration on Environment and Development (1992), UN CED – Earth Sum-mit, Rio de Janeiro, 199211. World Bank (2010), World Development Report 2010: Development and ClimateChange, WB Publications12. World Bank (2014), World Development Report 2014: Risk and Opportunity – Man-aging Risk for Development, WB Publications13. OECD (2014), OECD Economic Outlook (Preliminary Version, May 2014), OECD Pub-lications14. WWF, GFp, IoZ and ESA (2012), Living Planet: Biodiversity, biocapacity and betterchoices, Report 2012 15. Mumford, L. (1970), The Myth of the Machine – Pentagon of Power (Technics andHuman Development Vol.2), Mariner Books (Ed. 1974)16. Dresner, S. (2002), The Principle of Sustainability, EarthScan London17. Smith, L.C. (2010), The World in 2050 – Four Forces Shaping Civilization’s NorthernFuture, Dutton (by Penguin group)18. Engdahl, F.W. (1992). A century of war: Anglo- American Oil Politics and the NewWorld Order. Wiesbaden: Dinges&Frick.

19. Engdahl, W.F. (2009). Full spectrum dominance: Totalitarian Democracy in the NewWorld Order. Wiesbaden: Dinges&Frick.20. Dodds, K. (2005). Global geopolitics: a Critical Introduction. Essex: Pearson EducationLimited21. Lochbaum, D., Lyman, E., Stranahan, S. (2014). Fukushima: The Story of a NuclearDisaster. New York: The New York Press22. Petrangeli, G. (2006). Nuclear Safety. Oxford: Elsevier Butterwirth- Heinemann23. Gaffigan, M. (2009). Nuclear waste management. Washington D.C.: GAO24. Maize, K. (2014). Worldwide nuclear commerce. Power mag.25. Murray, R.M and Holbert, K.E. (2014). Nuclear energy: An Introduction to the concept,systems and application of nuclear processes. Oxford: Elsevier inc. 26. Ross, P. (2014). Could Californium Solve Nuclear Energy`s biggest problem? The Busi-ness Times. 27. Tarantola, A. (2013). The Future of Nuclear Power runs on the Waste of Nuclear Past.Gizmodo.28. The New Scientist. (2011). Cut nuclear power`s umbilical cord to the military. n.a.a. 29. Pickering, T.R. (2013). U.S. Leadership Needed to Prevent Nuclear Testing by NorthKorea, CTBTO Spectrum nbr. 20: 7-8. 30. Fusion Energy Foundation. (1979). Fusion. (The piece received the Freedoms Foun-dation Award for outstanding Journalism)31. Armstrong, J.S., Green, K.C. and Soon, W. (2013). The science fiction of IPCC climatemodels- OpEd. Eurasia Review. 32. Driessen, P. (2014). Just assume we have a climate crisis. Eurasia Review. 33. Sovacool, B.K. (2011). Contesting the Future of Nuclear Power: A Critical Global As-sessment of Atomic Energy. Singapore: World Scientific Publishing Co. Pte. Ltd.34. Stanton, N.A. (1996). Human Factors in Nuclear Safety. London: Taylor and FrancisLtd. 35. Sagan, S.D. and Waltz, K.N. (2002), The Spread of Nuclear Weapons: A Debate Re-newed, NY W.W. Norton36. Waltz, K.N. (2012), Why Iran should get the Bomb – Nuclear Balancing would meanStability, Foreign Affairs Magazine 91 (4) 2012 37. Polič, M. (2013), Ljudje in jedrska energija: od navdušenja do stigme (People andNuclear Energy: from Enthusiasm to Stigma), Ljubljana: Filozofska fakulteta.38. Lubi, D. (1999), Jedrsko širjenje po hladni vojni (Nuclear Proliferation after the ColdWar), Ljubljana: Fakulteta za družbene vede39. Bajrektarevic, A. (2014), 25 years after 9/11 – How Many Germanies should Europehave?, Modern Diplomacy.

LIST OF REFERENCES


EIA report, 2009 WASHINGTON STATE DEPARTMENT OFHEALTH (2003), p.2U.S. EIA 2009IEA 2010 (n.p.a.)WNA – 2010NEA (2006), p.6Stockinterview.com (2006), p.128Georgewbush-whitehouse.archives.govISIS (Institute for science and InternationalSecurity) – June, 2004US Department of State 2011, Annual re-portPreparatory Commission for the Compre-hensive Nuclear-Test-Ban Treaty Organiza-tion (2010)www.zanggercommittee.orghttp://www.state.gov/t/isn/c18943.htmCTBTO 2013 Federation of American scientists 2014European Commission: Futurium 2014http://www.iter.org/Enerdata Global Energy Statistical year-book 2014EIA International Energy Outlook 2013BP Energy Outlook 2013

Global Footprint Network 2012International Panel for Climate Change As-sesment Report 2013United Nations University 2011Centre for Global development 2013World nuclear industry status report 2012Report from the Centre for nuclear non-proliferation and disarmament 2013World Nuclear Association 2014World nuclear Association 2012UNFC (United Nations Framework Classifi-cation for Fossil Energy and Mineral Re-serves and Resources) 2013World Nuclear report 2012European Commission 2012Foratom 2014Arms control 2013Arms control 2014http://www.ctbto.orgIAEA 2012http://www.wassenaar.orgIAEA/NEA Red book on Uranium: Resources,Production and demand 2014World Nuclear Association Report on Life-cycle Emissions from Electricity Generations2011

ADDITIONAL REFERENCES


Special Reports 06

Documents

Transcript of Special Reports 06