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Taking It to the Fuel Bank

russia-signs-agreement-on-worlds-first-nuclear-fuel-bank-2010-03-30_l There’s a nuclear fuel bank open for business. And to think, it was approved by the IAEA just the other day.

The 35-nation board of the International Atomic Energy Agency approved an IAEA-run repository for nuclear fuel on [December 3], in a move meant to limit proliferation by reducing the incentive for starting domestic uranium enrichment programs.

Oh wait, not that fuel bank:

The first international nuclear fuel repository in the world formally launched operations on Friday at a uranium enrichment facility in Angarsk, Siberia, the International Atomic Energy Agency announced.

This one has also been approved by the IAEA. The point behind both fuel banks is fairly straightforward:

The [Russian] site, approved in 2009 by IAEA governors, would enable countries free of proliferation histories to purchase nuclear power plant fuel on an apolitical basis as an alternative to developing production capabilities that could also generate nuclear-weapon material.

So it’s a way to keep proliferation concerns at bay because countries that have a reliable supply of uranium will not be tempted to open their own enrichment facilities.

A fuel bank also ensures a reliable source should a country not be able to acquire uranium on the open market. That’s important because it damps down problems that could occur if, say, tensions flare between a uranium buyer and seller and the supply dries up.

One fuel bank too many? The more the merrier? The test will come when some countries that haven’t had nuclear energy industries prepare to switch on their first plants – Vietnam, Abu Dhabi – and then run into some kind of supply difficulty. Until then – well, the banks bank the uranium.

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This last point raises some eyebrows. Steve Kidd, the World Nuclear Association’s Deputy Director General, put it this way:

“Hardly any of the South East Asian nations will be tempted to develop their own enrichment program and so this provision of a fuel bank is largely unnecessary. The market works very efficiently and is very competitive and there shouldn’t be a problem in these countries sourcing uranium.”

That sound like a free marketeer argument the Heritage Foundation might embrace, but there’s more:

“Lack of uranium didn’t stop Japan. It very rapidly built a large nuclear program without its own uranium. It wasn’t a barrier for them and I don’t think it need be a barrier in Asia. Countries like Malaysia, Thailand and Indonesia won’t have any problem in sourcing uranium and enrichment from the world market.

Well, that still seems like a free market argument, doesn’t it?Interestingly, though, the idea isn’t to supplant the free market, but to supplement it when it falls down. Kidd’s argument seems to be that that will never happen. He may be right – and it might not matter that he’s right to countries that feared the possibility. This argument seems a non-starter in the face of a perceived need that’s now being answered. You can read the rest of Kidd’s comments about this here.

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I wouldn’t care to associate Kidd with an Iranian ambassador, but they may have the same fear in mind:

The establishment of a nuclear fuel bank, approved by the main global nuclear watchdog, would amount to "nuclear apartheid," Iran's ambassador to the group [the IAEA] said Saturday.

This CNN story doesn’t name the ambassador, but if he or she believes the IAEA means to replace the commercial market, the bank would have to be reconfigured – right now, it isn’t offering uranium in competition. Later, Iran decided to okay the bank:

Iranian Foreign Minister Manouchehr Mottaki says Tehran agrees to the creation of a global nuclear fuel bank provided that a branch is set up in Iran.

Well, one can ask, anyway.

Shake hands on it: IAEA Director General Yukiya Amano (L), and Sergei Kirienko, head of Russia's Rosatom {the country’s nuclear energy authority) agree to a fuel bank last March.

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