By Tariq Rauf
On August 27, the International Atomic Energy Agency (IAEA) and Kazakhstan signed an agreement establishing a fuel bank of low-enriched uranium (LEU).
to make joint contributions from their stockpiles of normal uranium and fissionable materials to an International Atomic Energy Agency…[that] could be made responsible for the impounding, storage, and protection of the contributed fissionable and other materials. The ingenuity of our scientists will provide special safe conditions under which such a bank of fissionable material…would be allocated to serve the peaceful pursuits of mankind. Experts would be mobilized to apply atomic energy to the needs of agriculture, medicine, and other peaceful activities. A special purpose would be to provide abundant electrical energy in the power-starved areas of the world.1
Origins of the LEU Bank
In September 2006, the co-chairmen of the Nuclear Threat Initiative (NTI), former U.S. Senator Sam Nunn (D-Ga.) and Ted Turner, offered $50 million from NTI adviser Warren Buffett to help create an IAEA-owned and -operated LEU bank on the condition that the IAEA raise $100 million from other sources for that purpose.7 To provide a location, Kazakhstan offered to host the IAEA fuel bank.8 By May 2009, the IAEA had received funds and pledges in excess of $100 million9 from the European Union, Kuwait, Norway, the United Arab Emirates, and the United States, thus meeting the NTI funding criterion.
• The recipient state has a comprehensive safeguards agreement in force with the IAEA.
• The agency has drawn a conclusion on the nondiversion of declared nuclear material for the state in the most recent Safeguards Implementation Report, and there currently are no issues relating to safeguards implementation regarding the state under consideration by the IAEA board.
• The supplied LEU shall be used by the state exclusively for fuel fabrication for the generation of energy at the power plant experiencing disruption of fuel supply and shall remain at the power plant unless the state and the IAEA have agreed on a different location.
• The supplied LEU and any special fissionable material13 produced through its use, including subsequent generations of produced special fissionable material, shall be stored or reprocessed or otherwise altered in form or content by the state only on conditions and in facilities agreed with the IAEA.
• The supplied LEU shall not be further enriched, retransferred, or re-exported by the state unless agreed with the IAEA.
• The supplied LEU shall be subject to the conditions necessary for the IAEA to implement its obligations to the state or states from which the LEU originated or in which the LEU was processed.14
• The supplied LEU shall not be used by the state for the manufacture of any nuclear weapon or any nuclear explosive device, for research on or the development of any nuclear weapon or any nuclear explosive device, or in such a way as to further any military purpose.
• The safeguards rights and responsibilities of the IAEA provided for in Article XII.A of the Statute of the IAEA, regarding safeguards and noncompliance, are applicable to the supplied LEU and shall be implemented and maintained by the IAEA.
• Article XII.C of the IAEA Statute, regarding the reporting of noncompliance to the UN Security Council, shall apply with respect to any noncompliance with the provisions of the supply agreement.
• The applicable IAEA safety standards and measures are to be followed by the state for the transport, handling, storage, and use of the supplied LEU and for the operation of the power plant.
• Adequate physical protection measures shall be maintained by the state with respect to the supplied LEU, in accordance with the applicable IAEA fundamentals and recommendations.
• The recipient state shall take responsibility for all liability for nuclear damage caused by a nuclear incident associated with the use, handling, storage, or transport of the supplied LEU from the time the material leaves the IAEA fuel bank for shipment to the recipient state, and it shall hold the IAEA harmless against any such liability, but in any case covered by an international civil nuclear liability convention, liability for nuclear damage shall be addressed in accordance with the provisions of that convention.15
Thus, the conditions required by the IAEA to be accepted by a member state requesting LEU from the IAEA fuel bank are more stringent and comprehensive than any national export controls and the guidelines of the Nuclear Suppliers Group. In addition, the agency must buy LEU or its components only from sources that will accept the IAEA flag and will not insist on their own national flag. Furthermore, the LEU or its components acquired for the fuel bank will need to be free of any previous unresolved commercial disputes or other burdens that could in any way impair or affect the purposes of the bank.
Assurance of Supply
More than a half century after Eisenhower articulated his vision for the IAEA, there finally were concrete steps toward realizing that vision. An IAEA LEU reserve was set up in March 2010 at Angarsk, the United Kingdom’s government-to-government Nuclear Fuel Assurance took effect in March 2011,21 the United States’ American Assured Fuel Supply22 came into force in August 2011, and the IAEA fuel bank in Kazakhstan is expected to be operational in 2017 when it receives its stock of LEU. These achievements together mark the evolution of a new framework for the utilization of nuclear energy that supports the exercise of the “inalienable right” of all states-parties to the NPT to develop and use nuclear energy for peaceful purposes, as acknowledged in Article IV of the treaty, and strengthens nonproliferation measures with regard to the sensitive parts of the nuclear fuel cycle.
1. Papers of the Presidents of the United States: Dwight D. Eisenhower, 1953 (Washington, DC: Government Printing Office, 1960), pp. 813-822.
2. “Curbing Nuclear Proliferation: An Interview With Mohamed ElBaradei,” Arms Control Today, November 2003; Tariq Rauf and Fiona Simpson, “The Nuclear Fuel Cycle: Is It Time for a Multilateral Approach?” Arms Control Today, December 2004.
3. Tariq Rauf and Zoryana Vovchok, “Fuel for Thought,” IAEA Bulletin, No. 49-2 (March 2008), https://www.iaea.org/sites/default/files/49204845963.pdf.
4. International Atomic Energy Agency (IAEA), “IAEA Sees Global Nuclear Power Capacity Expanding in Decades to Come,” September 8, 2015, https://www.iaea.org/newscenter/news/iaea-sees-global-nuclear-power-capacity-expanding-decades-come.
5. Nuclear Energy Institute, “FAQ About Nuclear Energy,” n.d., http://www.nei.org/Knowledge-Center/FAQ-About-Nuclear-Energy.
6. Urenco is jointly owned by the Dutch government, the UK government, and two German utilities.
7. Nuclear Threat Initiative (NTI), “NTI Commits $50 Million to Create IAEA Nuclear Fuel Bank,” September 19, 2006, http://www.nti.org/newsroom/news/nti-commits-50-million-iaea-nuclear-fuel-bank/.
8. IAEA, “Communication Dated 18 May 2009 Received From the Permanent Mission of Kazakhstan to the Agency Enclosing a Position Paper Regarding the Establishment of IAEA Nuclear Fuel Banks,” INFCIRC/753, May 19, 2009; IAEA, “Communication Dated 11 January 2010 Received From the Permanent Mission of the Republic of Kazakhstan to the Agency Enclosing a Position Regarding the Establishment of IAEA Nuclear Fuel Banks,” INFCIRC/782, January 15, 2010.
9. The European Union contributed 25 million euros; Kuwait, $10 million; Norway, $5 million; the United Arab Emirates, $10 million; and the United States, $49.5 million. See IAEA, “Assurance of Supply: Proposal for the Establishment of an IAEA Low Enriched Uranium (LEU) Bank: Report by the Director General,” GOV/2009/30, May 20, 2009, para. 5 (hereinafter 2009 IAEA assurance of supply proposal).
10. IAEA, “Assurance of Nuclear Fuel Supply,” GOV/2010/70, December 3, 2010.
11. 2009 IAEA assurance of supply proposal, n. 9.
12. IAEA, “Request by the Russian Federation Regarding Its Initiative to Establish a Reserve of Low Enriched Uranium (LEU) for the Supply of LEU to the IAEA for Its Member States,” GOV/2009/76, November 11, 2009, art. I(2), art. I(8); IAEA, “Assurance of Supply: Establishment of an IAEA Low Enriched Uranium (LEU) Bank for the Supply of LEU to Member States,” GOV/2010/67, November 26, 2010, attachment 1 (articles III and VI of the “Model Agreement” between the member state and the IAEA in order to obtain LEU from the agency) (hereinafter 2010 IAEA assurance of supply establishment document).
13. Special fissionable material is defined by the IAEA as “plutonium-239, uranium-233, uranium enriched in the isotopes 235 or 233, [or] any material containing one or more of the foregoing.” IAEA, “IAEA Safeguards Glossary, 2001 Edition,” International Nuclear Verification Series, No. 3 (June 2002), p. 30, https://www.iaea.org/sites/default/files/iaea_safeguards_glossary.pdf.
14. This does not mean national export control obligations, but rather relevant provisions of the IAEA statute and criteria approved by the board in IAEA document GOV/2010/67. An internal IAEA Secretariat historical note of February 29, 2012, on the IAEA fuel bank said the secretariat would interpret any supplier-state conditions on the provision of LEU to the agency for the fuel bank in accordance with the IAEA statute, meaning that the LEU would be made available to any eligible member state as determined by the director-general in accordance with the agency’s criteria as established by the board in GOV/2010/67.
15. 2010 IAEA assurance of supply establishment document.
16. The fixing of the tails assay is an economic compromise that balances the unit costs of feed material against the unit costs of separative work. If feed is cheap and separative work is expensive (for example, if the cost of electricity is high), then a relatively high tails assay is advisable. As the price of natural uranium rises and enrichment processes become more energy efficient, the appropriate tails assay should drop to lower values.
17. See, for example, the publications Ux Weekly, NuclearFuel, and Nuclear Market Review.
18. 2010 IAEA assurance of supply establishment document, para. 17.
19. U.S. Government Accountability Office, “Nuclear Nonproliferation: IAEA Has Made Progress in Implementing Critical Programs but Continues to Face Challenges,” GAO-13-139, May 2013, http://www.gao.gov/assets/660/654714.pdf.
20. International Commercial Terms consist of a series of predefined commercial terms that are widely used in international commercial transactions or procurement processes. They deal with costs and risks associated with the transportation and delivery of goods. See International Chamber of Commerce, “The Incoterms Rules,” n.d., http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010/the-incoterms-rules/.
21. The Nuclear Fuel Assurance guarantees supply of nuclear material from the UK to an IAEA member state, provided that the state meets the supply criteria established by the IAEA board. See IAEA, “Assurance of Supply for Nuclear Fuel,” October 31, 2011, https://www.iaea.org/OurWork/ST/NE/NEFW/Assurance-of-Supply/nuclear-fuel-assurance.html
22. U.S. Department of Energy, “Notice of Availability: American Assured Fuel Supply,” 76 Fed. Reg. 160 (August 18, 2011), p. 51357.
Tariq Rauf is director of the Disarmament, Arms Control and Non-Proliferation Programme at the Stockholm International Peace Research Institute. He was head of verification and security policy coordination at the International Atomic Energy Agency, reporting to the director-general, from 2002 to 2011. He was coordinator for the agency’s activities dealing with its planned fuel bank and other fuel-supply assurances from 2003 to 2012. The views expressed in this article are those of the author.