Robert ZarateWill Russia Blend Down More HEU?

Greetings, Readers of the Wonk. My name is Robert Zarate, and I’m a research fellow at the Nonproliferation Policy Education Center in Washington, D.C. I’ll be guest-blogging this week, but before getting started, I wanted first to thank Jeffrey Lewis for the kind offer—and the wonderful opportunity—to do this.

To kick things off, I thought I’d write about something that dovetails with one of Anya Loukianova’s posts from last week, and share with all y’all a recent essay that I wrote for NPEC on the future of Megatons to Megawatts (M2M) in the wake of the so-called Domenici Amendment, a recent law sponsored by Senator Pete Domenici (R-NM) that creates new commercial incentives for Russia to keep blending down high enriched uranium (HEU) after 2013:

Robert Zarate, How Much More Bomb Uranium Will Russia Blend Down? Washington, D.C.: NPEC, October 31, 2008.

Quick Background on Megatons to Megawatts

To recap, Megatons to Megawatts is a Russo-American arms control program to demilitarize bomb-grade uranium—taken from dismantled Soviet-era nuclear warheads—for use in civil nuclear commerce. Under the so-called HEU Agreement, the bilateral 1993 pact that created M2M’s basic framework, Russia agreed over a 20-year period to blend down 500 metric tons of Russian bomb-grade uranium; and the United States, correspondingly, to facilitate the sale of the resulting downblended low enriched uranium (LEU) to U.S. nuclear utilities.

It is important to note that Russian LEU imports outside of the Megatons to Megawatts framework are strictly limited under the terms of a 1992 accord (known as the Russian Suspension Agreement, or RSA) in which Russia agreed to halt practically all uranium sales to U.S. nuclear utilities in return for the U.S. Department of Commerce’s suspension of an antidumping investigation on Russian uranium sales. The worry (then and now) was that Russia—which would end up inheriting some 80 percent of the USSR’s massive government-built and government-financed nuclear complex—could sell LEU and other uranium goods at below fair-market value prices, and fatally undercut America’s still-fledgling civil uranium enrichment sector.

Under Megatons to Megawatts, Russia so far has blended down some 345 metric tons of HEU, equivalent at least to 13,800 nuclear warheads, if one assumes—as the International Atomic Energy Agency does—25 kilograms of HEU per warhead. (However, as the NRDC’s Tom Cochran and Christopher Paine have argued, the assumption of 25 kilograms of HEU per warhead is high and conservative; some experts have told me that, for U.S. and Russian nuclear warheads, a more reasonable assumption might be, say, 12 kilograms.) The U.S. Department of Energy reports that the resulting downblended Russian LEU from Megatons to Megawatts accounts for “nearly half” — yes, folks, “nearly half” — of the nuclear fuel now annually consumed by America’s civil nuclear power reactors.

By the start of 2014, when the current HEU Agreement is set expire, Russia will have earned as much as US$12 billion from Megatons to Megawatts. Moscow, however, appears (at this point) not all that keen to agree to a new, post-2013 HEU downblending pact. But this is where Senator Domenici’s new law comes in . . . .

After the Domenici Amendment: Will Russia Keep Blending Down HEU?

Having watched from afar the development of the Domenici Amendment over the last few months, I must say how truly remarkable it is that it was even passed into law this year. Suffice to say, his staff pulled one heckuva proverbial “Hail Mary” pass to get this bill onto H.R. 2638, a so-called continuing resolution to sustain certain Federal appropriations until March 2009, that passed the Congress in late September.

The Domenici Amendment not only affirms the terms of an existing bilateral accord (known as the 2008 Amendment to the Russian Suspension Agreement) that will allow normal Russian LEU exports to make up as much as 20 percent of America’s post-2013 uranium market, but also promises to increase this market access up to 25 percent if Russia agrees to blend down an additional 300 metric tons of HEU. [The Amendment also creates a new and independent legal basis for the U.S. Commerce Department to enforce limits on Russian LEU imports, with the effect of specifically shielding Russian LEU import limits from any impact that the U.S. Supreme Court’s forthcoming decisions on USEC v. Eurodif and U.S. v. Eurodif might have had. — Added on 11/05/2008 @ 7:57 am.]

In addition, and in contrast to the 1993 HEU Agreement, the Domenici Amendment neither expressly calls for Russia to sell its downblended LEU exclusively to U.S. nuclear utilities (i.e., the Russians would be free to sell downblended uranium globally or to use it domestically), nor explicitly requires downblended Russian LEU to conform to the stringent isotopic standards for nuclear fuel set by ASTM International, formerly the American Society for Testing and Materials.

Will all the above incentives be enough to persuade Russia to blend down more bomb-grade uranium? As my essay discusses, it is not yet clear what effect the Domenici Amendment’s new commercial incentives will have on the possibility of post-2013 Russian HEU downblending. (If you have access to Platts publications, check out Daniel Horner’s very recent article on this question: Horner, “Russian Downblending of HEU after 2013 Unlikely, Some Say,” NuclearFuel, Vol. 33, No. 22, November 3, 2008, pp. 6-7. See also Matthew Bunn’s July 2008 essay, Expanded and Accelerated HEU Downblending: Designing Options to Serve the Interests of All Parties.)

Nonetheless, given that Russia will have an estimated 770 metric tons of bomb-grade uranium— and the United States, an estimated 675 metric tons —after the current HEU Agreement expires, you can expect to hear much more about these bilateral civil and military uranium issues in the years to come.

For more on these issues, check out my NPEC essay.

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