Rick Perry

The Daily Beast reported on March 26 that the Department of Energy has secretly approved six authorizations for U.S. firms seeking to conduct nuclear energy work in Saudi Arabia.

The approvals by DOE Energy Secretary Rick Perry, which took place under “Part 810” (10CFR810) of a key federal regulation, starting in November 2017, requires the firms to get clearance from the government for exporting nuclear technology, or for engaging in production or development of special nuclear materials, such as fuel, for export.

In this case, the Daily Beast reports the transfers appear to be documents, electronic media, or consulting expert knowledge. The transfers began in November 2017 while DOE was also negotiating with Saudi Arabia over the terms and conditions of a 123 Agreement under the Atomic Energy Act.

Congress Not Happy to Get the News

Predictably, Congress was not happy to get the news about the secret transfers from the media. Reuters reports that in a March 27 congressional hearing, Rep. Brad Sherman (D-CA) roasted Secretary of State Mike Pompeo over the issue of the transfers.

“ . . . it is an effort to evade Congress, and to some extent evade your department and provide substantial nuclear technology and aid to Saudi Arabia while [the country] refuses to abide by any of the controls we would like to see regarding reprocessing, enrichment.”

Sherman has previous introduced legislation in Congress to prevent Saudi Arabia from obtaining the means to develop nuclear weapons. A matching bipartisan bill has been offered in the Senate by Sens. Edward J. Markey, a Massachusetts Democrat, and Marco Rubio, a Florida Republican.

Roll Call report March 29 that the news of the transfers has members of both parties worried about them. The concern is whether Trump’s administration is attempting to skirt legal oversight involving a potential nuclear agreement with Saudi Arabia. The paper reported a growing number of lawmakers are worried that nuclear cooperation with Saudi Arabia will backfire.

The Hill also reported a series of rapid fire reactions over the issue.

• Senate Foreign Relations member Rand Paul in an interview with CQ said he was concerned about the administration trying to skirt congressional oversight of Saudi nuclear cooperation.

“I am very concerned about sharing any nuclear technology with Saudi Arabia,” the Kentucky Republican said. “Given the chance, I’ll vote against it.”

• Utah Republican Sen. Mitt Romney, who leads the Foreign Relations subcommittee with responsibility for Middle East issues, said he would be “happy” to examine the issue.
• Earlier this month, Rubio and Senate Foreign Relations ranking member Robert Menendez, New Jersey Democrat, wrote to the head of the Government Accountability Office, requesting an “urgent review of DOE’s interactions with Saudi Arabia regarding nuclear cooperation.”

What Really Happened?

No actual exports of equipment or special nuclear materials are reported to be taking place but transfer of technical details are just as important. Saudi Arabia’s capability to absorb any nuclear technology and execute with it is limited without outside expertise.

Note: Part 810 refers to the process set forth in 10 Code of Federal Regulations Part 810. Under the authority of section 57.b of the Atomic Energy Act of 1954. Details on the procedures for approving nuclear exports under this regulation are explained here

The companies involved in the transfers were not named in the Daily Beast reports. However, a look at the list of companies that attended the White House meeting on nuclear exports in February provides a short list of firms likely to have been involved in the six authorizations.

A plausible guess of which firms got any of the six transfers would involve firms that can deliver nuclear reactors, enrich fuel to burn in them, and provide operational expertise to run them. Saudi Arabia has a tender in place for two full size nuclear reactors. A decision on a winner is expected later this year.

Secrecy in Matters Involving Nuclear Exports

While there is nothing illegal about the government withholding proprietary information related to the transfers under 10CFR810, in addition to setting off serious angst in Congress, the secrecy in which they were done reduces confidence of other nations in what the U.S. says about 123 agreements.

The Washington Post reported on March 28 that Perry’s approvals of transfers of information under Sec 810 go back to November 2017 which means that they was going on while he was telling Congress and the press the agency was holding firm on the “gold standard” for a 123 Agreement in its negotiations with Saudi Arabia. That’s not a good coincidence of facts with narrative.

The “gold standard” is one adopted by the United Arab Emirates (UAE) which says the country will not engage in enrichment of nuclear fuel nor reprocessing of spent fuel in return for permission to import commercial nuclear reactors and the fuel to run them (U235 at 3-5%). Saudi Arabia has reportedly refused to accept these terms in its talks with the U.S.

Statements made by the U.S, and by Saudi Arabia at the Munich Security Conference in mid-February lay out their public negotiation positions which do not appear to have changed since then.

The Trump administration is looking for ways to circumvent the need for a 123 agreement. In late February State Dept. official Chris Ford did some tap dancing about using less formal means of “helping nations develop their nuclear infrastructure” e.g., management systems, regulatory and safety oversight capabilities, etc., without actually transferring technologies or violating the provisions of Sec 123 of the Atomic Energy Act.

Sec Perry points out in his statement of 3/28/19, Part 810 authorization does not allow the transfer of nuclear material, equipment or components. Also, there is a multi-agency review process.

Appearances Matter Even if All Actions were Legal

It appears that “fig leaf” of proprietary information is being used to keep some information from Congress. As a practical matter Perry would be foolish to lie about something like this because he knows that too many other agencies and people have been involved in the process. It will not play well with Congress even if all his actions are legal.

Perry’s problem with Congress is about appearances. The reason the current uproar is about appearances is that Saudi Arabia is not disposed to be held accountable for its actions regarding the murder of Jamal Khashoggi and its string of repressive measures regarding human rights. This has produced a lot of righteous speeches in Congress, but the key action has been the votes against the war in Yemen.

These votes indicate a generally hostile view of Saudi Arabia by Congress. It will influence some members of Congress to be unwilling to trust the country with nuclear technologies even if they do not involve enrichment or reprocessing. The history of Iran’s “secret” nuclear program will also be a shadow that will be cast over the Saudi 123 negotiations.

Where Perry Gets its Wrong About Russia and China and Nuclear Fuel

In an effort to justify his actions, DOE Secretary Rick Perry slammed Russia and China as being indifferent to nonproliferation issues in their commercial nuclear export deals. In other words, the U.S. has to counter a “threat” from these countries.

That’s not exactly true. Perry has been conflating (video link) their aggressive export programs of commercial reactors with violations of the nuclear nonproliferation agreements both countries are party to with the U.S., the U.K., and France, among others.

Russia – Actually, Rosatom’s term sheet for commercial nuclear deals requires the client state to buy fuel for the reactors from Russia for the lifetime of the reactor, usually 60 years, thus removing a justification for enrichment, and to return the spent fuel, once it is cool enough, to be shipped in dry casks, to Russia for reprocessing. Russia is developing advanced reactors that can use MOX fuel and has two of them in commercial revenue service.

Russia is hard over about having only Russian nuclear fuel run in its 1000 MW and 1200 MW VVER PWR type reactors which it offers as exports to countries like India, Egypt, and Turkey. Russia wants to sell the fuel to customers and wants to get the spent fuel back. It’s cash money both ways and not something Russia would willingly give up.

China – State owned nuclear firms in China have completed the fuel qualification process for fuel assemblies for its domestic design of a 1000 MW PWR – the Hualong One – which suggests it will require customers to buy their fuel for any of these units involved in export deals.

As China has not yet completed any deals for nuclear exports, we haven’t seen what their plans are for dealing with spent fuel. It is reasonable to assume that customers for Hualong One units, having no spent fuel management programs themselves, would want China to take it back.

China has kept Areva at arms length for years over plans for an 800 tonne/year plant spent fuel reprocessing plant which was first discussed in 2007. It has no domestic source of MOX fuel.

Recent bilateral talks between French President Macron and Chinese President Xi Jinping contained the usual diplomatic information about signing off on a deal, but not a schedule for inking one and breaking ground on the $15 billion facility.

Generally, and at least since 2016, China has had a long term vision of a closed fuel cycle which means the spent fuel from domestic or exported reactors comes back for future reprocessing to create MOX or to recover the U238 for use in CANDU PHWRs.

China’s position on return of spent fuel from export deals for Hualong One reactors will probably be the same as Russia’s, but until they sign one, we’ll have to wait to see what that looks like.

Separately, for nations that already have CANDU reactors, and are interested in buying new ones, their spent fuel management programs may be sufficient. Examples include Romania and Argentina.

& & &

Taken together there are a whole bunch of red flags about where the US / Saudi relationship is headed, but any actual transfers of nuclear technologies, as licensed by the NRC under the authority of a 123 Agreement, appear to be a long way off.

Congress could, given the current atmosphere, vote against approval of any 123 Agreement with Saudi Arabia that doesn’t include the “gold standard.”

For its part, Saudi Arabia has made it clear it has alternatives to the U.S. such as Pakistan for enrichment technology and China for nuclear reactors. However, neither nation is going to provide the security guarantee that Saudi Arabia has sought to maintain over time from the U.S.

The fat lady has not yet sung on the question of whether Saudi Arabia will get to buy nuclear technologies from the U.S.

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