NPEC

The promised progress from the Iranian nuclear deal appears still to be far from materializing.  The deal, or more formally, the Joint Comprehensive Plan of Action, was signed on July 14, 2015.  On September 10th, the last attempt to block the deal in the US Congress failed.  Almost immediately, a magical array of coincidences began.

1)  September 12:  Iran finds an "unexpectedly high" reserve of uranium.  According to Reuters, extraction will begin soon.  Prior assumptions by the West were that Iran had an insufficient domestic supply of uranium, and would soon need to import.  The ability to influence import routes was implicitly viewed as a natural brake on cheating.  That brake is gone.

"I cannot announce (the level of) Iran's uranium mine reserves. The important thing is that before aerial prospecting for uranium ores we were not too optimistic, but the new discoveries have made us confident about our reserves," Iranian nuclear chief Ali Akbar Salehi was quoted as saying by state news agency IRNA.
 

Through the magic of flying machines, Iran discovers it really does have big uranium deposits.

Yup; a little magic from flying machines, and all of a sudden Iran found Uranium.  Of course, pretty much every country on earth prospects its territory for valuable natural resources, and does so all the time.  The US Geological Survey, for example, was founded way back in 1879.  It has been looking for valuable minerals ever since.  Given how focused Iran has been on the nuclear fuel cycle, the idea they just discovered a new deposit is laughable.  Alas, it is hardly the only example of laughing.

2)  October 10:  Iran tests a nuclear-capable ballistic missile, in clear violation of UN Security Council resolution 1929.  The resolution was adopted in 2010; it remains in effect until the Joint Comprehensive Plan takes effect.  But even after that,

Iran will still be "called upon" to refrain from undertaking any work on ballistic missiles designed to deliver nuclear weapons for a period of up to eight years, according to a Security Council resolution adopted in July.

Countries would be allowed to transfer missile technology and heavy weapons to Iran on a case-by-case basis with council approval.

However, in July a U.S. official called this provision meaningless and said the United States would veto any suggested transfer of ballistic missile technology to Iran.

Somebody ought to email John Kerry that no "transfer" will be needed before there's a problem, and that perhaps "calling upon" Iran not to take action isn't the best strategy to contain proliferation. 

3)  October 15:  Iranian underground missile bases enable surprise launches.  In the off chance that maybe Iran mines and enriches its own uranium and loads it into a warhead in its own ballistic missile, it's good to know that they have undergound launch bases to "store and covertly fire surface-to-surface missiles."  Although the exact location of this facility is not known, Iran is quite proud of its underground lair and published some big glossy photos.  The location shown supposedly has a complex system of very large underground tunnels, and the potential to fire the missiles through surface vents, making advance detection more difficult.  Iran has stated it has many of these underground installations, which may or may not be true.

4)  Plutonium pathways and the Joint Agreement:  unsung or not so much?  As highlighted by the New York Times, a major benefit of the deal (they term it the "unsung concession") is Iranian agreement to redesign their Arak reactor so it can't be used to produce plutonium. The Times notes that

some nuclear experts voice incomprehension at what they see as a lopsided focus on uranium in evaluations of the deal reached with Iran — under which Tehran would forsake the production of plutonium.

Greg Jones, who as worked with both the RAND Corporation and the Nonproliferation Policy Education Center (NPEC), has a somewhat less sanguine take on this part of the deal:

The reactor's original design utilized natural uranium fuel, heavy water as the moderator and had a power level of 40 MW.  This reactor would have produced nine to ten kilograms of plutonium per year.  Under the terms of the Iran nuclear deal (the Joint Comprehensive Plan of Action, JCPOA) the reactor will be redesigned to use approximately 3.5% enriched uranium fuel and have its power level reduced to 20 MW.

The reactor will still produce significant amounts of plutonium, about one to one and one half kilograms of plutonium a year.  Though Iran is required to export the spent nuclear fuel containing the plutonium, Iran is allowed to keep the fuel for at least one year, which would allow Iran to accumulate at least two to three kilograms of plutonium, enough for a nuclear weapon.  Though the Administration claims that the JCPOA blocks Iran's plutonium path to a nuclear weapon, this clearly is not the case.

While reducing the amount of plutonium produced by this reactor would seem to be an important accomplishment, it is not. The JCPOA will accelerate the completion of the Arak reactor and the start of its plutonium production by having the IAEA and countries such as Russia provide technical, material and financial assistance.

Indeed, Russia and Iran do seem to be BFF's these days.

5)  Closing the potential channel of bomb material from power reactors.  Henry Sokolski, the Executive Director of NPEC, has another interesting angle of this core issue of containing Iranian access to fissionable material.  He points out that the negotiating team has inadequately addressed the potential for military diversion from Iran's light-water power reactor (LWR) at Bushehr.  Is this a big deal?  Sokolski thinks so:  in the early 1990s, this reactor was a "key focus of international concern."

The administrations of Bill Clinton and both the Bushes initially did all they could to prevent its completion, not only because it was serving as a cover for other nuclear-weapons-related activities (e.g., uranium enrichment, the transfer of weapon design information, and heavy-water-reactor technology and hardware), but also because the reactor itself was seen as a potential source of nuclear-weapons-explosive plutonium. When it became clear, however, that Bushehr was likely to be completed and that any hope of securing Russian assistance in limiting Iran's uranium-enrichment and heavy-water-reactor projects turned on grandfathering Bushehr, top Bush officials decided in 2007 to make the concession. After this, what was done at Bushehr was treated as an intrinsically "peaceful" activity. Even the politicians and governments most suspicious of Iran and critical of the Iran deal - George W. Bush, the French, and Benjamin Netanyahu - now accept the legitimacy of Iran's present and future "peaceful" power reactors. Because such critics of the deal did not demand that there be additional surveillance of Bushehr, those focused on closing the deal didn't ask. After all, LWRs were deemed to be unambiguously "peaceful."

He notes that LWRs have long been a concern, and that lightly irradiated fuel poses the largest risk.  Three years ago, "Iran emptied all of the fuel from Bushehr after only a few months of operation," a fuel load with enough weapons-grade plutonium to make as many as 24 weapons. 

Conversion requires a chemical processing plant, but there remains a concern that such a clandestine plant does exist within Iran.  While preventing this proliferation venue entirely may not be possible, it can be greatly reduced fairly simply:  by tracking the spent fuel at all Iranian reactors via round-the-clock monitoring.  The Joint Agreement included this for most Iranian facilities; but it did not include such monitoring at Bushehr.  Sokolski quite reasonably argues it should.

The word out of Switzerland yesterday was that "Iran and and six world powers had agreed on the outlines of an understanding that would open the path to a final phase of nuclear negotiations but are in a dispute over how much to make public."  What exactly is the dispute over?  The AP noted that

Pressured by congressional critics in the U.S. who threaten to impose new sanctions on Iran over what they say is a bad emerging deal, the Obama administration is demanding significant public disclosure of agreements and understandings reached at the current round. But the officials say Iran wants a minimum made public.

Iranian leaders are opposed to two agreements, saying previous two-stage negotiations were detrimental to their interests.

If we have an agreement and nobody knows the details, we can always claim compliance

Earlier today, word of a framework agreement being reached spread over the internet.  The original AP article flagging the areas of dispute pretty much disappeared from everywhere, heading down the memory hole (nearly everywhere; I found one paper still displaying the earlier report and took a screen shot). 

In its place, AP's newest update on the successful agreement could be seen.   But descriptions of the deal remain vague, and the narrative on the disputes over disclosure disappeared.  Time will tell how these concerns were resolved, or if they were just papered over. 

Thank goodness for "Congressional critics" on this one, and let's hope the negotiators get it right before the sanctions are lifted.  While US sanctions can be implemented again should Iran fail to live up to its side of the agreement, reinstituting sanctions from the broad array of countries now participating will be near impossible.

The transparency issue remains quite important and should not be ignored even if the narrative in the press reports has shifted. There is a rather morbid irony in a country with a special police force (the Basij) focused on identifying and punishing people for the most personal of breaches of a state-defined code of morality,1 arguing that the fundamental terms of an agreement to prevent nuclear proliferation in this important region of the world should be private.  The entire line of argument is ludicrous.  What you wear, who you are with, and what you read or watch on TV?  State business.  Basic commitments to prevent nuclear weapons development?  Nobody's business.

I mean, why should the rest of us worry that Iranian consent to an agreement with invisible clauses won't actually be followed?  Greg Jones of the Nonproliferation Policy Education Center has been tracking the Iranian nuclear effort for quite some time.  Probably his documentation of past non-compliance, even when the expectations were visible, should be ignored as unimportant. We should also overlook the examples Jones' presents where Secretary of State John Kerry said there was Iranian compliance, but objectively there was not.  I'm sure that behavior won't be a factor in the current negotiations, and Kerry has learned from his past over-optimism. 

And by all means we should also ignore what seemed very much like an April Fool's Day joke headline yesterday -- but unfortunately turned out to be real:  "Iran militia chief:  Destroying Israel is 'nonnegotiable'," quoting the Basij's commander Mohammad Reza Naqdi.  You know how customized those inalienable rights can be across countries... let's just consider this the Iranian version of our own "Life, liberty, and the pursuit of happiness" and move on, shall we?

Proliferation is an externality of nuclear power

Coal power has pollution and mining accidents.  Oil has pollution and spills and security chokepoints.  Wind has bird kills and corn ethanol pesticide runoff, water and soil depletion, and overuse of antibiotics.  Every form of energy has some negative effects, and nuclear is no exception. 

In addition to very significant challenges to manage the radioactive wates and periodic catastrophic accidents, the nuclear fuel cycle has the ongoing externality of proliferation.  It is not, as many nuclear power boosters like to argue, a totally separate issue and one that should be ignored when evaluating the trade-offs and economics of their fairy-tale massive expansions of nuclear reactors worldwide.  Quite the opposite:  it is an issue that has been central to the evolution and expansion of nuclear power since the inception of the industry.

The processes and expertise for building weapons and generating electricity are not exactly the same.  But they don't need to be for there to be problems.  The civilian and the military paths are certainly interlinked, and there is enough overlap that countries frequently use claims about their need for nuclear power as cover for all sorts of other military and geopolitical aims. 

There is a strong logic to this tactic.  Working on power gives them the time and space to develop equipment, expertise, and professional (or not-so-professional) ties with people in the know.  Activities during these years enable them to build the knowledge and technical base that can easily be extended at a time of their own choosing towards weapons.  It allows them to distribute production capacity, harden production sites, and establish production redundancies that make military action to roll back programs, should the need arise to do so, much more costly in blood and treasure.

And yet the world pretends this isn't happening, and the "right" to develop "peaceful" nukes is somehow sacrosanct -- more so even than the human rights that the current Iranian government so frequently ignores.  This right to peaceful programs is claimed even if the subsidy-free price of nuclear power would be well beyond a level at which the nuclear investments would be justifiable, and at which many other alternatives would easily outcompete nuclear as the marginal source of energy. 

This right is upheld even though more rational reading of the Nuclear Nonproliferation Treaty (NPT) agreement suggests that the "rights" for non-nuclear states to pursue near-bomb capabilities can both be properly limited and properly constrained under the terms of the agreement.  Indeed, doing so could short-circuit what has become a decade-long circus of negotiators arguing about whether or not Iran is doing innocent "research," actually building a bomb, or doing research so they can build a bomb quickly when they decide they want one.

And just for fun, here's an ad from the pre-revolution days in Iran.  The ad clearly illustrates the US role in promoting nuclear power in Iran as though it were little more complicated than plopping down a windmill in a farm field somewhere.  Nuclear is presented as a resource that, with a little government help of course, can soon come to a neighborhood near you. 

Historical artifact?  Not really.  How many countries are playing out this same scenario today -- whether with the US, France, Russia, South Korea, or others as their plant subsidizer?  And without any government subsidies to financing, accidents, land, construction, waste management, and decommissioning, how many of these plants would be built based on their own economic merit?  It is a question well worth asking.

• 1A brief summary from Wikipedia: "In Iran, Basiji act as 'morality police' in towns and cities by 'enforcing the wearing of the hijab; arresting women for violating the dress code; prohibiting male-female fraternization; monitoring citizens' activities; confiscating satellite dishes and `obscene` material; intelligence gathering; and even harassing government critics and intellectuals. Basij volunteers also act as bailiffs for local courts.'

Conventional industries have it easy. Make a good product; invest in technology and engineering to make it better and keep costs in line; then crank up the output and sell it wherever you can.  Unit costs drop.  Word of mouth bolsters your smart advertising campaign to millenials, creating feedback loops on social media, driving customers to buy still more of your product and fueling double digit growth.  Grow production and sales, both in domestically and abroad.  Grow brand recognition.  Grow revenues.  Grow profit.  You are limited only by your skills and your imagination.

Economic pressures conflict with nonproliferation goals in the nuclear sector

Were the world of nuclear vendors so easy!  They've got an industrial structure that begs for high throughput because their upfront capital investment and engineering demands are so great.  More units sold (in theory, at least; FOAK1 -reality has been a good deal rougher) should bring the total cost per delivered product down sharply but for one tiny problem:  their products are linked to nuclear weapons, or the potential for nuclear weapons. 

And so, unlike a toothpaste manufacturer, n-vendors are a bit constrained in ramping up production and selling all they've got.  One can't slap reactors up just anywhere, after all.  And, despite the wishes of shareholders and managers alike, one can't sell "nuclear products" to just anyone.

Thus the dance begins.  The industry continually tries to demonstrate why they should be allowed to sell more stuff to more people, and how it won't really be a problem.  They generate colorful graphics on how everybody else outside the US is already doing what they want to do, and therefore the US firms doing it too won't cause any incremental harm.2   They run more numbers to calculate the grevious financial losses not only to the industry, but to the country overall. Political optics matter:  it is very important that this not just be seen as their problem, but instead be reframed as everybody's problem, and not just now, but in the future as well.  There are losses now from reduced exports and jobs in foreign-owned US plants; but also future costs as the "needless" restrictions on exports bleed investment and squander our technical lead in an industry we created. 

The push to sell more is so strong, one might forget that we talking about nuclear equipment, designs, and fuels, and not Crest 3D White Vivid Flouride Radiant Mint flavored toothpaste.  (And, yes, in case you were wondering, this is the first time Crest 3D White Vivid toothpaste and nuclear reactors have been linked in the same sentence, and no doubt Procter & Gamble hopes it will also be the last... Though, in a testament to the ingenuity, or insanity, of humans, radioative toothpaste -- one containing thorium, and another thorium and radium -- was actually sold in the 1950s).  But this dynamic is how we end up with industry-published documents arguing that the US' nuclear export policy should be more like Russia's (see item 2 at the link) and have some people take that argument seriously.

Nuclear cooperative agreements should protect against proliferation, but often don't

It is against this backdrop that recent testimony and related background materials prepared by Henry Sokolski of the Nonproliferation Policy Education Center is so useful.  He focused on many aspects of nuclear cooperative agreements (123 Agreements) for a hearing before the Senate Foreign Relations Committee last month (PDF version here; presentation and background slides here).

Some of the key points:

• Once passed, 123 Agreements offer limited latitude for Congressional oversight. (Testimony by Sharon Squassoni of the Center for Strategic and International Studies also speaks to this issue, highlighting the lengthening of agreement duration and their auto-renewal absent a "no" vote by Congress as examples of the dwindling power of Congressional oversite).  
• Appropriate use of Congressional power prior to passage critical.
• Industry claims about financial ($740 Billion) and job (5-10,000 jobs per $ billion) losses from "overly stringent" export restrictions need to be taken with a grain of salt.  Not only is there the common risk that numbers from self-interested parties may not be so reliable, Sokolski points out that the key companies under discussion are often "American" in name only.  Westinghouse is headquarted in the US, but entirely foreign owned; 80% of the revenues from GE-Hitachi export sales go abroad; enrichment firm URENCO's US subsidiary is entirely foreign-owned as well.  And only a small portion of current exports from these firms are even subject to 123 Controls.

Given these characteristics, why the fuss?  Sokolski argues that the main reason for the "sort-of American" industry to focus on modifying the controls governed by the 123 Agreements has nothing to do with direct exports, but rather with limits on their ability to re-export technology and components to third countries, and to recycle and enrich nuclear fuel. 

If you are foreign-owned, but still reliant on products or intellectual property derived from the US, your freedom of action to ramp up production and sales is severely constrained in two main areas:

• Equipment and design.  Transfer of US-origin nuclear reactor design information critical to other countries' (e.g., Japan, Korea, PRC) manufacture and retransfer of nuclear components to 3rd to other states, (e.g., Vietnam, UAE, Turkey, etc).
• Fuel.  Transfer of US-origin nuclear materials (e.g., yellowcake and LEU fuels) and their subsequent enrichment or reprocessing overseas (e.g., in China, RoK, Japan, etc.) if they are derived via US-exported or designed reactors.

While the industry views this as a flaw of the 123 process, Sokolski sees the restrictions as an important source of leverage to control proliferation -- and one that needs to be used much more than it has been.  Relying on existing IAEA controls is not a substitute, he argues, noting that the IAEA review process did not stop the pursuit of bomb options with reprocessing and enrichment in Iraq, Iran, Syria, North Korea, or Libya.  Weaker restrictions on fuel recycling from US-derived reactors, for example, could generate enough material for many bombs, as the slide below hypothesizes based on the reactor count in China. 

The central driver in whether or not to allow the export of nuclear goods and services from the US must be based on natural security, not commercial interests.  Sokolski:

Generally, these matters have been discussed in the context of promoting nuclear power's further expansion overseas, of increasing the number of jobs or of concluding nuclear agreements and cooperation initiatives more generally. All of these considerations are important. They are not, however, the primarily lens that should be used for weighing these matters... security concerns should be the first business of our government. Certainly, the most profound contributions Congress has made to promoting and controlling truly peaceful foreign nuclear activities were premised on putting U.S. national security first. This was true in 1946 when Congress created the Atomic Energy Commission, in 1978 when it passed the Nuclear Nonproliferation Act, in the 1990s when it conditioned the Nuclear Agreed Framework with North Korea, and today as it considers legislation relating to our nuclear negotiations with Iran.

• 1"First of a kind," is a term frequently used by industry and academics to estimate the overnight costs of new reactors. The average costs of later reactors tend to be projected at much lower costs/kWe due to economics of scale and learning, and FOAK estimates are presented as best-guesses of the first few plants, but not the "real" costs one should focus on when evaluating policy options. In reality, however, the costs of later units have often escalated rather than decreased. This has been due to low production runs of the exact same reactor type limiting scale effects, the discovery of new problems from the early units, variation across sites that makes routinized installation impossible, regulatory or financial pressures that build based on macro factors in the civilian nuclear segment overall, or some mixture.
• 2NEI President Marv Fertel frames it this way in his Senate testimony: NEI "Opposes initiatives to condition U.S. nuclear cooperation on new terms that our potential partners will not accept and other supplier nations will not require." So if our partners (that is, their potential customers) won't accept certain terms, we should drop them?

Another useful summary of the proliferation concerns associated with "peaceful" power reactors from Henry Sokolski of the Nonproliferation Policy Education Center:

At first blush, our government’s approach to head off Iranian nuclear weapons with tighter sanctions and military threats seems totally at odds with its continued effort to negotiate a disarmament deal with Pyongyang. Yet, in one key respect, both of these approaches and a broad swath of bipartisan expertise are quite unified—namely, they support these countries’ continued construction and operation of light water power reactors (LWR) for generating electricity, viewing these reactors as benign. This is not only mistaken but dangerous, and not just in the case of North Korea and Iran.

In fact, civilian LWRs can be copious producers of plutonium suitable for nuclear weapons. The argument one often hears, that the plutonium these reactors produce is unsuitable for simple weapon designs, is simply wrong. The suitability of the plutonium for weapons depends on how long the plutonium-containing spent fuel stays in the reactor. The longer the fuel stays in the reactor the more optimal it is for power production but the less optimal it is for use in nuclear weapons. The common assumption is that the reactor’s owner would not tamper with commercial refueling schedules. This assumption is simply silly.

Nonetheless, Obama administration officials and many of their critics continue to describe LWRs as a safe proposition, so long as they are inspected by the International Atomic Energy Agency (IAEA) and are not accompanied by reprocessing facilities to extract plutonium from their spent fuel or enrichment facilities to produce fresh fuel. This mistaken view got its greatest boost from George W. Bush. No friend of Iran, Bush in 2005 said the United States had no problem with the Bushehr nuclear power reactor​—​it was just Iran’s centrifuge enrichment technology that concerned us. Indeed, small centrifuge plants that are claimed by owners to be used for producing low-enriched uranium fuel for reactors are a proper proliferation concern because they could also be used to produce highly enriched uranium for bombs. But building a small clandestine reprocessing plant to extract the plutonium from LWR spent fuel is actually easier than putting up a centrifuge plant. Nonproliferation policy hasn’t been taking this possibility seriously enough.

The full article can be read here.

A quite interesting summary of the challenges associated with the Iranian nuclear program has been written by Gregory Jones, and released by NPEC.  Some key points:

• The Iranian production rate of reactor-grade enriched fuel has been increasing, not decreasing.
• The conversion of fuel grade to 20% enrichment levels for "research" purposes has been allowed, and not considered a violation of Iran's responsibilities as a signatory to the Nuclear Nonproliferation Treaty.
• Because most of work required to enrich uranium is expended at low concentrations, going from a 20% enrichment level to the 90% level needed for bomb-grade is relatively minor.  Jones estimates it would take only two weeks.  While this step would constitute a violation of the NPT, there would be little lead time to do anything about it.  Jones argues that while Iran also needs to develop a weapon in which to use the bomb-grade material, much of that process could be done in parallel.  Bottom line:  the cover provided by a wildly uneconomic civilian power program in Iran has eliminated most of the leadtime to produce a bomb. 

Tomorrow's event (November 30th), titled Department of Energy Loan Guarantees: Should Taxpayers Bear the Risks for the Energy Sector with Loan Guarantees? A Conservative Take, looks to be an interesting one tomorrow.  The discussion brings together panelists from the Heritage Foundation, the National Taxpayers Union, the Competitive Enterprise Institute, and the Nonproliferation Policy Education Center to provide views on multi-billion dollar loan guarantees to conventional and renewable forms of energy.

While conservative groups generally support property rights and competitive markets, some of the participants have also opposed elimination of subsidies to favored energy industries in the past.  Hopefully that is now changing.

More information and registration information can be accessed here.

Update:  See a December 8th joint letter issued by most of the organizations involved with this event encouraging Congress not to increase the loan guarantees to new nuclear power plants.  The letter notes that

Putting the full faith and credit of the U.S. government behind costly, risky projects that the private sector won’t finance is fiscally reckless and politically unwise. Because of the size of these nuclear reactor projects, taxpayers stand to lose more on these than any other Title XVII loan guarantee. Congress must face the reality that loan guarantees are anything but “free money” or a wise expansion of government authority and oppose further expansion of this program.

The Heritage Foundation was the only organization participating in the November 29th event that did not sign the letter.  No reason this is given on the Heritage or Taxpayers for Common Sense websites. 

In April of this year, Jack Spencer of Heritage clearly stated in Congressional testimony that these energy loan guarantees are both subsidies and distort market behavior in many unhelpful ways.  He supported more stringent guidelines on nuclear loan guarantees, as well as caps on the total taxpayer exposure.  However, he appears to support a substantially higher cap on loan guarantees to nuclear than the other groups, and this may have been the basis of disagreement.