We had dinner last night at Akershus Castle in Norway. Our host, Norwegian Foreign Minister Jonas Gahr Støre, made a big announcement — Norway will provide $5 million for the IAEA Fuel Bank.
The pledge is a significant development — In September 2006, the Nuclear Threat Initiative, in an effort funded by Warren Buffet, pledged $50 million for an IAEA fuel bank, provided that one or more IAEA member states contribute an additional $100 million.
In the Fiscal Year 2008 Omnibus Appropriation, the United States generously gave half ($50 million), leaving the IAEA with $50 million to go. The Norwegian commitment , then, will cover ten percent of what remains.
Despite my grumbling about the ludicrously strong Kroner — you can easily drop $15-20 for a beer in Oslo — the pledge is still a generous and welcome development.
Sorry to be a curmudgeon, but $5 million? Please. With oil pushing $100+ a barrel, Norway can surely do better. But maybe this will at least inspire additional countries to provide resources.
Indeed, there are political advantages to financing a fuel bank through a series of smaller donations as opposed to a handful of large donations. First, one can imagine some skepticism about the reliability of the assurance among potential customers if the United States was the only financial backer; having a more diverse range of financial backers could make the fuel bank’s assurance mechanism somewhat more credible. Second, it is generally easier for a government to ask their parliament for a comparatively small amount of money than a large amount, which makes it less likely that it would withdraw financial support down the road. Third, if a country did withdraw financial support, the overall impact on the initiative’s budget would be comparatively modest; other supporters could step in and make-up the difference.
So now let’s see if other countries pony up….
It remains unclear just what a fuel bank will achieve, frankly. Proposals for its creation overlook fundamental issues associated with safeguards, essentially ignoring the bigger questions of “should simply giving up the fuel cycle be enough” to justify fuel supply to places like Burma. More generally, where will the fuel be fabricated? Under which national laws will it be controlled? And why do you think this is more likely be successful than all the other assurances of supply mechanisms contemplated in the 1970s and 1980s like CAS? What are the criteria that will govern supply? How much fresh fuel will be allowed for storage at any given utilization facility? Who will take back the SNF? The best option will be to simply get the BOG to agree on the criteria in a model supply agreement, but I seriously doubt we will get much past that.
Of the countries in the 7 Nation Coalition, -Australia, Chile, Indonesia, Norway, Romania, South Africa and the United Kingdom – I would suggest that you chose Chile for your next meeting, pints are going for .63 cents. http://www.pintprice.com/
Jeffry,
Of course, you’re talking about drinking more than one beer, right? I paid $8.00 for one in Bergen in 1992. Has it gone up that much?
Norway’s beer prices have little to do with the strength of the Kroner and a lot to do with alcohol being exorbitantly taxed. Norwegian culture is more than a little schizophrenic about alcohol consumption.
With respect to Mr. Grotto’s suggestion that Norway should pay more: it occurs to me that there are 4,3 million Norwegians, when the US offers up more than $352 million, he can bitch. Until then, Mr. Grotto, suck it up.
Cheers,
Alan Tomlinson
Anyd – Norway’s oil isn’t what it used to be
Ah, but why?
What is the actual value of an international fuel bank? Does it really help address concerns about the spread of weapons-usable technology? How would it actually help in the “hard” cases, let’s say, Iran and North Korea?
The better answer is to succeed in those cases w/o a fuel bank, and convince everyone else not to pursue nuclear power plants.
Though I don’t subscribe to all his points, see Henry Sokolski’s interesting testimony on this, at: http://foreignaffairs.house.gov/110/sok051007.htm
Especially:
“Backing the construction of large nuclear reactors in Libya, Jordan, Egypt, and Turkey (as the U.S. is currently doing) and the construction of similar plants in Saudi Arabia and Yemen (as Russia and the IAEA are) is not only uneconomic in the near and mid-term when compared with developing fossil-fuel-fired alternatives, but also could easily prompt a not-so-peaceful nuclear competition in one of the world’s most war-torn regions. The nuclear industry may benefit initially from the construction of a few additional reactors, but the security fallout from any war could more than wipe these gains out. As for extending fuel assurances to nations that do not currently make their own fuel, these offers, if not properly caveated, these could increase the pace of proliferation. This is particularly so if they are designed to deal less with narrowly defined “market disruptions” caused by natural disasters, breach of contract, and terrorism than to make fuel “affordable.”
I actually went looking through my receipts.
I recall being shocked at the price at the Grand Cafe, but a review of other beverage purchases reveals a mean closer to 10 dollars than 20.
I will not comment on sample size.
I’m pretty sure that Article IV of the NPT was an “assurance” too…and look how not assuring that is in practice.
Can confirm Jeff’s estimate of the ridiculous beer prices. Might be better outside the center of the tourist district, hope to find out in the next couple of days.
On the $5 million, even that figure could annoy Norwegians, who are rather well established in the anti-nuclear power camp.
Norway generates virtually all of its electricity from hydro power.
Support for the fuel bank could rightly be viewed as a subsidy for nuclear power.
So, while Norway could certainly afford to pay more from a financial perspective (even with its comparatively small population), it may not be able to pay more without leaders suffering significant political damage.
Alan, what’s with the bile, dude? I mean, this fuel bank has a cost of $200 million, so what would a U.S. donation of $352 million accomplish? Also, if you had taken the time to read what I wrote (as opposed to taking a cheap shot), you’ll see that I think a fuel assurance mechanism paid for entirely by the United States would hardly be reassuring.
In the end, I agree with Gelfant’s point that there hasn’t been nearly enough thought put into precisely what this fuel bank would achieve. And I can’t say I’ve been exactly inspired by the degree of international support where it really counts: financing. Money talks.
Actually, the fuel assurance is (now) nearly totally paid for by US, given not just appropriations of $50m, but also the commitment of 17.4 MT of HEU for down-blending for such an effort, so we are talking about $50m plus $1billion worth of HEU. So I am sure $5m from Norway will really make everyone see the light.
For once, I agree with Andy. 200 million IS pocket change and the Europeans wouldn’t have any trouble raising that money if they thought the fuel bank idea had any real traction.
Because it’s not enough to build a bank unless you have customers. Nearly all the customers you’re really looking for are deeply suspicious of any entity controlled by the US or its allies. We are drifting back to a bipolar world and that might have been inevitable, but I still think the US has really overplayed its hand as the “sole superpower.”
If the fuel supply is vulnerable to any sactions unrelated to non-proliferation, the customers will balk. That’s just a fact. Being able to cut off an uncooperative nation’s energy supply would be irresistable to the West, which is in love with sanctions, applied to all sorts of trade, for all sorts of reasons, whether they are related to the dispute at hand or not.
Price of beer / sample size.
If you refuse to divulge sample size, will you at least tell us +/- how many standard deviations is your quoted price?