Nuclear Energy through 2035: Key to Growth or Source of Armageddon?

Presentation By

Henry SokolskiExecutive Director

The Nonproliferation Policy Education Centerwww.npec-web.org

npec@npec-web.org202-466-4406

Washington, DC 20036

“Strategic Security and the Financial Markets”Ditchley Park Estate, England

May 5-7, 2006

Two Top Questions Posed by This Seminar’s Sponsors

1. Is nuclear energy the “key to growth”?

2. Is nuclear energy “the source of Armageddon”?

1. Is Nuclear Energy the Key to Growth?

• Economic growth assumed to be delimited by legal environmental and safety restrictions

• Closely related to the question posed: Will nuclear power itself grow significantly?

• Time frame under consideration is 30 years, – longest period individuals make large investments (e.g., a home

mortgage)– Roughly equivalent to a human generation– A decade more than the average age of current reactors– 30 years backward is already equivalent to 2/3rd of the entire

operating history of civilian nuclear power.

Number of Reactors In Operation Has Been Nearly the Same for Last 20 Years

2/3rds of Nuclear Power is Produced in 5 Economically Mature States

Nuclear Boosters Focus on Number of New Reactors Under Construction

World List of Nuclear Power plants

Source: Nuclear News, World List of Nuclear Power plants, Dec 31st 2004

Reality 1: Mean Reactor Shutdown Age is 20.7 Years

Reality 2: Median Age of Current Fleet of Reactors is 21.6 Years

Reality 3: Even With Major, New Builds – i.e., Nearly 400 More Reactors – Nuclear Power Will

Only Stay Roughly Even Through 2035

Nuclear Power’s Relative Role in Reducing Carbon Emissions Is Slipping

Natural Gas and Renewables’ Role in Electrical Generation: Projected to Grow

eia.doe.gofirstgov

Suborn Facts Through 2035

1. The capital costs and time needed before a new re actor comes on line are likely to remain much higher (up to 3 t imes more according to the IAEA) than alternatives.

2. The cost to decommission a nuclear plant is likel y to remain as high as the costs to build one.

3. Nuclear liability, financing will continue to dem and government backing that is at least as generous as current lev els

4. Uncertainties regarding modes of electricity gene ration, consumption levels, and distribution will likely be more significant and grow faster than any change in nucl ear costs

5. High capital costs will persist in pushing constr uction of largereactors that will be difficult and costly for emer ging nations’relatively smaller grids to handle

6. Energy efficiency enhancements are likely to be f ar more leveraged to produce carbon and fossil fuel reducti ons (by factors of 3 to 7) than investments in nuclear oror its alternatives.

Conclusion

• Nuclear power will remain a significant supplier of electricity in mature economies but, even with projected builds, will remain a relatively small proportion of total electricity output in emerging economies like China and India.

• Nuclear power is unlikely to grow globally and may even decline relative to current reactor deployments over the next three decades

• Growing gains in energy efficiencies (electrical and otherwise) and in the deployment of alternative energy systems will keep nuclear power’s role in providing carbon-free energy as that of a steady base factor rather than that of being “the key” to this sector’s growth through 2035.

• Governments may intervene now to make decisions to support nuclear power with additional taxpayer and ratepayer subsidies and based on projections that go out beyond 2035 but will do so at their own peril.

2. Is Nuclear Energy “the Source of Armageddon”?

• Assumption that “nuclear energy” refers to civilian nuclear energy and that the “source of Armageddon” includes - nuclear instability caused by an increase in the numbers of weapons ready nations (i.e., those that make nuclear fuel).- acts of nuclear terrorism with nuclear explosives made with diverted HEU or separated plutonium

• Again, the time frame is 30 years– Last 30 years saw a doubling in the number of nuclear

weapons states as well as at least two denuclearizations

– Next 30 years could easily see a doubling in the number of nuclear weapons ready-states

Timely Detection of Bomb’s Worth of Weapons Usable Material Not Yet at Hand• Could we know if there was a

theft of enough material to make a bomb by a Sellafield

State or a terrorist?

• Material Unaccounted For (MUF) at nuclear fuel making plants routinely exceeds what’s needed to make many bombs.

– 69 kgs of pu at after only 6 years of operation at Tokai-mura Plutonium Fuel Production Facility (1994)

– Over 8 kgs of separated pu scrap MUF at Tokai-mura (1996)

– 206 kgs of separated pu MUFat Tokai-mura reprocessing (2003) Tokai-mura

– 19 kgs of separated pu MUF at Sellafield (2004)

– 29.6 kgs of separated pu MUF at Sellafield (2005)

IAEA is Wide of Affording Timely Warning of Critical Diversions Generally

• IAEA lacks near-real time surveillance for nearly 70% of inspected plants (100% of most worrisome sites). On 12 occasions over last 6 years IAEA discovered months after it examined camera recording that the lights were off for more than 30 hours at several plants – enough time conceivably for an undetected diversion to covert reprocessing or enrichment plants and possible bomb making.

• IAEA detection goals are egregiously generous. Time needed to convert key nuclear materials into bombs is much lower than IAEA claims and inspection periods are much longer (e.g., IAEA conversion times for separated plutonium is 7-10 days but IAEA goal for inspection frequency, which it has yet to meet, is one month). For lightly enriched uranium, the official IAEA conversion time is 3 to 12 months rather than several weeks to several months, which is the real time. IAEA proposed inspections under “integrated safeguards” soon will come only once a year.

• IAEA-mandated false alarm rates limits are frighten ingly low :No more than 5% false alarm rate is permitted (versus 100 percent at TSA inspections at airports).

Kerosene on the Fire: Increased Civilian Nuclear Fuel Production

Plutonium reprocessing and uraniumenrichment plants and the fuels they can Resendemake can be quickly converted to make bombs;The IAEA says the world already has enough enrichment capacity to supply reactors for next 20 years

Yet Brazil and Iran are starting up new enrich-ment plants at Resende and Natanz Natanz

US planning new enrichment and Reprocessing/recycling plants

Japan is completing a large reprocessing plantat Rokkashommura Rokkashomura

India is planning to increase reprocessing, MOXand fast breeding in the coming decade

Pakistan is planning on expanding itsenrichment plant at Kahuta for both military Kahutaand civilian purposes

Canada, Australia, Turkey, Algeria, Egypt, RoK, Argentina and others preserving are preserving their options.

The Amount of Weapons-usable Civilian Plutonium Is Eclipsing Military Holdings

GNEP – US Proposed Technical Fix: Questionable and Well Over the Horizon

FastReactors(200 plants)

Pyro-Processing(5, 10, 20 plants?)

Fast reactor spent fuel

Fast reactorfuel fab

UREX(20 plants)

Hundreds of new reactorsboth US and foreign (1,000 by 2050)

Spent fuel

YUCCA

100 current reactors Real

Idea or lab stage: 10-20 yrs. from being validated

Fission productsin surface storage(Scores of sites)

Where Are We Headed Assuming These Challenges Are Not Met?

“The regime will not be sustainable if scores more States Develop the most sensitive phases of the fuel cycle and are equipped with the technology to produce nuclear weapons on short notice – and, of course, each individual State which does this only will leave others to feel that they must do the same. This would increase all of the risks – of nuclear accident, of trafficking, of terrorist use, and of use by states themselves.” – The Secretary – General of the United Nations, NPT Review Conference, May 2, 2005

An NPT Right to the “Entire Fuel Cycle” ?

• NPT aim as stated in a 1965 General Assembly resolution GA Res. 2028 (XX) Nov. 19, 1965) was to write a treaty “void of loop-holes which might permit nuclear or non-nuclear Power to proliferate, directly or indirectly, nuclear weapons in any form”

• Enrichment and reprocessing not mentioned in the NPT text

• Spanish, Mexican NPT proposals to make sharing “the entire technology of reactors and fuels” a “duty” explicitly rejected in 1967.

• Swedish NPT negotiators’ interest in setting forth criteria against nuclear fuel making.

• “Inalienable right” to peaceful nuclear energy only available if exercised “inconformity” with the NPT’s other prohibitions

• Standard legal practice favors tight construction

Recent Recognition of These Points

• French Non-paper to NPT Preparatory Review Conference May 2004

• Thought pieces within Australian and U.S. Government

• US NPT Review Conference Representative statement that no per se duty exists for nuclear states to assist others to enrich or reprocess because it could violate Article I and II. Implication: There is no per se right by NPT nonweapons states to develop such capabilities either.

Current Proliferation Seems Manageable

With More Nuclear-Ready States: Ramp Up to a Nuclear 1914?

Conclusions (1): If Reactor Fuel Making Is Not Restricted, Nuclear Risks Will

Increase Significantly

If nothing is done to restrict the further deployment of nuclear fuel making capacity, the ease and chances of nuclear diversions by states or terrorists will rise significantly over the next three decades making nuclear breakout or surprise much more likely

No serious action to date has yet been taken to enhance material accountancy capabilities of the IAEA at reactors for fresh and spent fuel. These capabilities must be augmented along with the ability of nations to detect illicit covert nuclear fuel making efforts merely to keep current threat levels constant.

Conclusions (2): Increased Use of Market Mechanisms to Identify Dubious Nuclear

Projects Would Help• Eliminating or Curtailing government investments in

– “development” projects connected to electrical grids or commercial fuel cycle (e.g., GNEP paid for by nuclear waste fund surcharges or taxpayer funding; Brazilian enrichment, Indian three-phased Thorium program, U.S. DoE commercial nuclear design work; Japanese and French government-required reprocessing, etc.)

• Reducing or eliminating taxpayer payments for– Nuclear insurance – bank guarantees for nuclear exports– Nuclear safeguards – Tax credits for construction, licensing etc.

• Internalizing costs associated with pollution, terr orism, nuclear proliferation, global warming, oil dependence, nuclear waste storage etc. and letting the market then set the price of electricity accordingly versus letting governments pick winners and losers and distorting market prices.

• Identifying economically dubious nuclear projects f rom a market perspective before they are built (e.g., Bushier, Indian nuclear civilian program to date, etc. )

• Alternative in the US to using such market mechanis ms on major nuclear decisions may be the gradual, Congressionally-mandated nationalization o f nuclear power (through ratepayer fees) and perhaps of the entire electrical grid system.

Hurdles to Implementing this View

• Are we willing to distinguishing what nuclear activities and materials can be safeguarded from those that can only be monitored?

• We will be serious enough about discouraging unnecessary, “uneconomical” fuel making to abstain from it ourselves?

– Will we back restraints on expanding declared civilian reprocessing/recycling construction?

• Multilateral “centers”• Japan, China, Russia, Argentina, India, Algeria, U.S.

– Can we back a moratorium on the net expansion of uranium enrichment beyond the current surplus capacity globally?

• Allow enrichment modernization but no net capacity increase? (in US, and France)

• Enrichment R and D? (in Iran, Canada, Australia)• Fuel making expansion? (Japan, Brazil, Russia, India, China)