Fuel Assurance: Past as Prelude?

I just returned from an informative lunch at the Council on Foreign Relations featuring Ambassador Tetsuya Endo, who chaired a recent Japanese government task force on nuclear energy. Fuel assurance was a prominent theme in the not-for-attribution discussion, and I was surprised to hear several prominent American nonproliferation experts assert that there never has been, nor ever will be, any real fuel assurance problem.

There is a legitimate debate to be had on the reliability of the existing constellation of nuclear fuel suppliers. I am conducting a study on this question that I hope to complete in the next 6-8 weeks. My view, in summary, is that a state’s confidence in the existing commercial market for enriched uranium is primarily a function of its broader political and economic relationship with one or more of the main suppliers. I will elaborate further when the study is complete.

But there is no room for debate on whether nuclear fuel assurance has been a legitimate concern in the past. The experts were wrong — it most certainly has.

For example, it became a major issue in the 1970s when, among other disruptive developments, the United States implemented a series of changes in enrichment services contracting policy that dramatically undermined global confidence in its reliability as a supplier of enriched uranium. The effect was to “increase the pace of commitments to plutonium fuels, breeder reactors, and indigenous enrichment and reprocessing plants,” particularly in Western Europe, where Urenco and Eurodif were taking shape.

That quote comes from a masterful 1979 MIT Energy Laboratory study conducted for DOE by Thomas L. Neff and Henry D. Jacoby, entitled Nuclear Fuel Assurance—Origins, Trends, and Policy Issues. The study really captures the prevailing sentiment during this key historical period:

The evolution of commercial nuclear power and nuclear fuel supply internationally has been characterized by interdependent changes in technological, political and commercial dimensions. What was once a world in which the U.S. was the dominant force in all three dimensions—the major source of technology and fuel supplies as well as political leadership in spreading atomic power and controlling it—is now a world in which these powers must be shared with other states whose balance of interests is not necessarily the same as that of the United States. Other industrialized countries have developed their own domestic nuclear industries—first reactors and now enrichment and other fuel cycle services—thus reducing U.S. involvement and influence abroad. New suppliers have also begun to compete with the United States in the remaining export markets, notably the developing countries; this competition has been made more intense by the need to find external markets for nuclear industries whose domestic markets are threatened by public opposition or other difficulties. In addition, the rising expectations and desires for autonomy of the developing world have altered their traditional relationships with industrialized countries.

These changes have been paralleled by a new awareness of the importance of secure energy supplies to national health and security, engendered, initially, by the oil embargo and price increases of 1973-74. The countries of Western Europe and Japan—whose established economies are critically dependent on energy which is largely imported—and the developing countries—whose hopefully rapid growth is dependent on increasing energy supplies—were also more strongly affected than the U.S. by multiple failures and growing pains of the nuclear fuel supply system over the past five years.

Thus, while insecurity of fossil fuels was intensifying interest in nuclear power, there were increasing concerns about the security of nuclear fuel supply. In part these were due to conventional market development problems but they also reflected the changing political and commercial relationships between the United States and its traditional nuclear customers. Both have been responsible for the drive for nuclear autonomy represented by acquisition of LWR fuel cycle facilities and development of plutonium breeders.

This study is required reading for anybody interested in nuclear fuel assurance.

Addendum: For more on the chaotic nuclear fuel market of the 1970s, I also recommend Neff’s book-length analysis, The International Uranium Market (1984), Edward F. Wonder’s Nuclear Fuel and American Foreign Policy (1977), William Walker and Måns Lönnroth’s Nuclear Power Struggles (1983), and Michael J. Brenner’s Nuclear Power and Non-Proliferation—The Remaking of U.S. Policy (1981). Paul Joskow provides an excellent overview of the 1975 Westinghouse debacle in Commercial Impossibility, the Uranium Market and the Westinghouse Case (6 J. Legal Stud. 119 [1977]).