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Ensuring Security and Nonproliferation in a U.S. – Saudi Nuclear Power Agreement

Ensuring Security and Nonproliferation in a U.S. – Saudi Nuclear Power Agreement

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Secretary of Energy Rick Perry will bring an interagency delegation of US officials to London in an effort to negotiate an agreement that could open the way for the Kingdom of Saudi Arabia to buy American nuclear power technology as a part of their ambitious plan to eventually build as many as 17 new nuclear reactors. Some in the media have breathlessly argued that a US-Saudi nuclear deal could signal the beginning of a nuclear arms race in the Middle East. On the contrary, with proper engagement and balanced negotiations, the United States can both ensure security and the economic benefits of nuclear exports.


The Obama Administration failed in its nuclear negotiations with Saudi Arabia because it insisted upon an unobtainable goal of forcing the Kingdom to give up its sovereign right to enrich nuclear fuel. The Trump Administration should not simply do the opposite: the U.S. must not blindly give away nuclear technology. With the planned upcoming visit of Saudi Crown Prince Mohammed bin Salman to the United States, the U.S. should seize the opportunity of a nuclear power agreement with the Kingdom of Saudi Arabia as the continuation of a long strategic relationship that can ensure security, provide clean emissions-free energy, and prevent a nuclear arms race.

Background: Nuclear Power in the World’s Largest Oil Power

In October 2017, the Kingdom of Saudi Arabia announced that it was planning to build two nuclear reactors, with a total generating capacity of 2.8 gigawatts. In a visit to the Kingdom in December, U.S. Secretary Perry pushed his hosts to strongly consider American-made nuclear reactors for the project – expected to be the first tranche of a program that could bring 17 new reactors, generating 17.6 GM of electricity – about 25% of the Kingdom’s total current generating capacity. According to reports, the United States is now one of at least five countries that is being considered, along with France, South Korea, Russia, China, and others. The Saudi government is expected to first reduce the contenders to two or three this spring, and then finalize the contract at the end of the year.


The world’s top oil exporter – with no shortage of domestic energy supplies – would seem a strange fit for a nuclear power program. However, the country says it wants nuclear power to diversify its energy mix, as a part of the “Vision 2030” agenda championed by the new, reform-minded Crown Prince, Mohammed bin Salman. The plan is to wean the economy off dependence on oil, diversifying into other areas. In many ways, they’re following the trend of smaller Gulf Monarchies, like the United Arab Emirates, in understanding that fossil fuels won’t last forever. As a hedge for the day when either they will run out of oil, or the world will move on to the next source of energy, they want to both develop alternative sources of wealth while also exporting oil as a source of capital.


The other side to this is that domestic electricity markets are heavily subsidized: every barrel of oil that is burned at home accounts as a loss, while every barrel exported accrues capital to the Kingdom. The Vision 2030 plan is about economics, sustainability, and social stability – if Saudi rulers don’t find a source of wealth and jobs for their growing population, they know they could face the same fate that rulers in Egypt or Tunisia did during the Arab Spring.


Preventing a Regional Arms Race

Unsaid in the Saudi proposal is the geopolitical aspects of a civil nuclear program. Any move into nuclear power comes with concerns about nuclear weapons, especially in a neighborhood as unstable as the Middle East. After all, there are few concerns about Saudi Arabia developing a robust domestic solar energy program. Nuclear power is different because the technology and workforce used to develop a civilian program can be diverted to a weapons program instead. In the Middle East, the last thing we need is multiple nuclear-armed states threatening each other. Even plans to start building them – as Iran had up until the nuclear agreement of 2015 – can destabilize the region.


Fortunately, there are ways for the U.S. to support development of a civil nuclear power program while monitoring it to prevent the establishment of a nuclear weapons program. The first step is agreeing to a so-called “123 Agreement” (named after a section of the Atomic Energy Act) that allows the US to share civil nuclear technology with other countries. In London, Secretary Perry will attempt to lay the groundwork for completion of this agreement.


The US already has such agreements with regional states like the UAE, Egypt, and Turkey, but has not yet been able to reach agreement with Saudi Arabia. Talks stalled during the Obama Administration over disagreements about whether the Saudis would renounce rights to enrich uranium and reprocess spent nuclear fuel. Notably, of the 23 countries which have signed Section 123 agreements with the U.S. to date, only the UAE and Taiwan have accepted this restriction.


The light water reactors the Kingdom is planning to build require their uranium fuel to be enriched to around 5 percent purity. The problem is, the same technology can also be used to enrich uranium to the higher level (about 80% purity) needed to build weapons. This was the essence of concerns over Iran’s nuclear program – that they would enrich uranium beyond the levels needed for power production to build nuclear weapons. For years, the Iranian government was violating its commitments to the Nuclear Non-Proliferation Treaty (NPT) – of which every state in the Middle East is a party to – by enriching fuel beyond what was needed for a nuclear power program. For the Iranians, one of the key parts of the 2015 nuclear deal – referred to as the Joint Comprehensive Plan of Action (JCPOA) – is that they say the world recognized their “right to enrich” as a sovereign nation.


Regional geopolitical rivalries being what they are, the Saudis have been unwilling to renounce such a sovereign right – especially one they they contend that their arch-rival Iran asserts.  That’s why the Obama Administration was unsuccessful in striking a 123 Agreement with the Kingdom: they were insisting that Saudi Arabia – a country which has always followed the NPT – forswear what they say is a sovereign right to enrichment while giving tacit blessing to Iran’s longtime violations of the NPT.


The Trump Administration should not follow the same fruitless path. It is misguided to expect Saudi Arabia to give up a sovereign right that its rival champions. If this issue continues to be a stumbling block in negotiations, perhaps a compromise can be found within the JCPOA – ask the Saudi government to sign a side-deal that they would agree to the same 10-year moratorium on enrichment that Iran agreed to.


Finally, the U.S. must recognize that this is a competition – and our competitors are not playing by the same rules. If we do not come to a 123 agreement with Saudi Arabia, we know that the Kingdom is not simply going to give up on their desire for nuclear power – they’re simply going to go to one of the other bidders. We have to assume that the Russian bid would have an advantage, after Crown Prince Muhammed bin Salman signed a deal on “Peaceful use of nuclear power” with Russia’s President Putin in 2015, similar to agreements that Russia has signed with neighboring Arab countries like Egypt and Jordan. Russian nuclear cooperation usually comes packaged with financial and diplomatic cooperation as well. There is a danger that closer Saudi-Russia cooperation would undermine American influence in the region.


Securing Dangerous Nuclear Material

In a region as unstable at the Middle East, there is another threat – that nuclear materials would fall into the wrong hands through terrorist attacks on nuclear facilities or regime change that brings a hostile actor to power. Since the attacks of 9/11, a terrorist group armed with a nuclear weapon, or even nuclear materials, has been a prime security threat. A nuclear power program represents a century-long investment – who can predict how the political and security situation of the wider Middle East will evolve over that time? The best way to ensure that hostile actors do not get their hands on nuclear materials is by direct U.S. engagement in a region-wide effort to detect and secure nuclear materials. The U.S. must ensure that international agreements like International Convention on the Suppression of Acts of Nuclear Terrorism and the IAEA’s Code of Conduct on the Safety and Security of Radioactive Sources are rigorously enforced. Nilsu Goran and Bilal Saab outline further steps in a November article in The American Interest.


Summation: U.S. Nuclear Exports Reflect an Enduring Relationship

The U.S. simply cannot walk away from our involvement in the Middle East. The United States has a clear interest in ensuring that the Persian Gulf remains a zone without nuclear weapons or the threat of nuclear terrorism. Ironically, insisting that Middle Eastern countries agree to the tightest standards of non-proliferation in a 123 Agreement could undermine that stability by pushing the Saudis to more permissive partners like the Russians or the Chinese. A nuclear contract is a part of a long-term relationship that includes financing, fuel supply, spent fuel storage, and other. It should be a key part of a long-term security relationship. If the U.S. shortsightedly allows Russia to be the centerpiece of this agreement, we will lose our ability to observe and influence the direction of Saudi nuclear security.


Nuclear power in the Middle East can help American exporters, the Saudi economy, the global  environment, and other important priorities. The U.S. should not let the high-minded pursuit of an unattainable “gold standard” undermine these goals.