As the full cost of the Fukushima nuclear accident continues to climb—Japanese officials now peg it at $64 billion or more—nuclear power’s future is literally headed south. Developed countries are slowing or shuttering their nuclear-power programs, while states to their south, in the world’s hotspots (think the Middle East and Far East), are pushing to build reactors of their own. Normally, this would lead to even more of a focus on nuclear safety and nonproliferation. Yet, given how nuclear-reactor sales have imploded in the world’s advanced economies, both these points have been trumped by nuclear supplier states’ desires to corner what reactor markets remain.
Certainly, nuclear sales opportunities are far less flush than they once were.
This spring, Germany permanently shut down eight of its reactors and pledged to shutter the rest by 2022. Shortly thereafter, the Italians voted overwhelmingly to keep their country nonnuclear. Switzerland and Spain followed suit, banning the construction of any new reactors. Then Japan’s prime minister killed his country’s plans to expand its reactor fleet, pledging to reduce Japan’s reliance on nuclear power dramatically. Taiwan’s president did the same. Now Mexico is sidelining construction of 10 reactors in favor of developing natural-gas-fired plants, and Belgium is toying with phasing its nuclear plants out, perhaps as early as 2015.
Even the most pro-nuclear of states have experienced post-Fukushima reactions that have jilted their plans. China—nuclear power’s largest prospective market—suspended approvals of new reactor construction while conducting a lengthy nuclear-safety review. Chinese nuclear-capacity projections for the year 2020 subsequently tumbled by as much as 30 percent. A key bottleneck is the lack of trained nuclear technicians: to support China’s stated nuclear-capacity objectives, Beijing needs to graduate 6,000 nuclear experts a year. Instead, its schools are barely generating 600.
Neighboring India, another potential nuclear boom market, is discovering a different set of headaches: effective local opposition, growing national wariness about foreign nuclear reactors, and a nuclear liability controversy that threatens to prevent new reactor imports. India was supposed to bring the first of two Russian-designed reactors online this year in tsunami-prone Tamil Nadu state. Following Fukushima, though, local residents staged a series of starvation strikes, and the plant’s opening has now been delayed. More negative antinuclear reactions in the nearby state of West Bengal forced the local government to pull the plug on a major Russian project in Haripur. It’s now blocking an even larger French reactor-construction effort at Jaitapur.
These nuclear setbacks come as Prime Minister Manmohan Singh is straining to reconcile India’s national nuclear-accident-liability legislation with U.S. demands that foreign reactor vendors be absolved of any responsibility for harm that might come to property or people outside of a reactor site after an accident. Singh recently announced that he would try to persuade his Parliament to cap foreign vendors’ liability to no more than $300 million (even though Japan has pegged Fukushima damages at no less than $64 billion). In India, a country that saw at least 3,000 die in a 1984 chemical explosion at a U.S.-owned Union Carbide plant in Bhopal, it’s unclear if the prime minister will succeed.
In the United States, new-reactor construction has also suffered—not because of public opposition but because of economics. Even before Fukushima, a superabundance of relatively clean-burning natural gas and a dearth of financing for projects whose construction costs were escalating out of control suggested the nuclear renaissance was imploding. Then Fukushima threatened to be the catalyst for tougher, yet-to-be-determined safety regulations. The bottom line is that in 2007, U.S. utilities applied to the Nuclear Regulatory Commission to build 28 nuclear-power plants before 2020; now, if more than three come online before the end of the decade, it will be a major accomplishment.
Finally, there’s France—per capita, the world’s most nuclear-powered state. Frequently heralded as a nuclear commercial model for the world, today it’s locked in a national debate over a partial nuclear phaseout. President Nicolas Sarkozy, to be sure, is still backing nuclear power, but his Socialist opponent, François Hollande, now well ahead in the polls, has proposed cutting nuclear power’s contribution to the electrical grid by more than a third by 2025. Hollande is following a clear shift in French public opinion, from two thirds who backed nuclear power before Fukushima to 62 percent who are now favoring a progressive phaseout. In addition, the French courts just awarded Greenpeace €1.5 million against the French nuclear giant EDF for illegally spying on the group. Public support of this judgment and the French Socialist Party’s wooing of the French Greens makes the likelihood of Hollande backing off his pledge minuscule.
What, then, is the good news for nuclear power? A handful of new reactors may be built in Eastern Europe and the U.K., and several more in South Korea, but in the North that’s pretty much it. If you head south, though, nuclear power’s prospects look much brighter. Russia is pushing reactor projects in Bangladesh, India, Vietnam, Iran, and Turkey. The United States, France, Japan, and South Korea are all working to nail down similar deals in Jordan, Vietnam, Turkey, and Saudi Arabia, as China continues to expand Pakistan’s reactor fleet.
None of these nuclear customers, it should be noted, has a nuclear-safety regulatory system worthy of the name. Nor, outside of Pakistan, do any of them have enough trained technicians to build or operate large nuclear-power programs. More than a few—Turkey, Syria, Iran, Algeria, Egypt, and Saudi Arabia—have either toyed with or actually developed nuclear-weapons options. (And, of course, Pakistan actually has nuclear weapons.) And Egypt, Turkey, Jordan, Vietnam, and Saudi Arabia have refused repeated American requests that they forgo making nuclear fuel—a process that can bring states within weeks of acquiring nuclear weapons. Besides Iran, Egypt, Algeria, and Syria have been caught violating International Atomic Energy Agency (IAEA) safeguards.
So what’s driving the world’s nuclear suppliers to service such nuclear pariahs?
First and foremost: cash. As the prospects for reactor sales in the world’s advanced economies have dried up, most nuclear vendors have been forced to go after less developed—and potentially quite lucrative—markets in the Middle and Far East. In fact, vendors are falling all over themselves to do this, particularly South Korea, which made its debut as a nuclear exporter with a $20 billion deal to build four reactors in the United Arab Emirates.
Russia, meanwhile, is angling to build on its reactor work at Bushehr, Iran, with what Moscow hopes will be at least four additional large Iranian reactors. Not to be outdone, Riyadh announced after Fukushima that it intends to spend $112 billion to buy 16 of these machines along with the necessary nuclear infrastructure by 2030. Finally, Turkey, which already has Russia building it one reactor, has a bid open for another, and plans to complete 18 more by 2030. This could add up to serious money.
The second driver is geopolitics. In Turkey’s case, Russia is selling a reactor to Ankara at or below cost. Why? Moscow is eager to get leverage on a neighbor that could short-circuit Russia’s own gas-pipeline plans. With Iran, Russia likes being viewed as the indispensable superpower in position to arbitrate Tehran’s international nuclear disputes.
As for Vietnam, the United States can’t openly say it’s trying to contain China with its proposed reactor deal. Securing a cooperative agreement with Vietnam, though, shows that the United States trusts Hanoi with the most sensitive of equipment and know-how; this opens the door for other potentially strategic technological sales. These benefits, moreover, accrue without the U.S. actually having to sell Vietnam any reactors directly (Japan, which builds U.S. reactors, may do this instead). It is also politically easy: formal U.S. civilian nuclear cooperative agreements can be blocked only by a highly unlikely House-Senate supermajority. Effectively, initialing such agreements is as good as bringing them into force.
Then there’s Saudi Arabia. It’s no secret that the Saudis have toyed with getting the bomb. “We cannot live in a situation where Iran has nuclear weapons and we don’t,” a Saudi official was quoted as saying in June. “It’s as simple as that. If Iran develops a nuclear weapon, that will be unacceptable to us and we will have to follow suit.” Tehran is widely suspected of engaging in efforts to develop atomic arms, though it insists its program is entirely dedicated to peaceful power generation. As an additional hedge, Riyadh is planning to buy $60 billion in advanced arms from the United States.
Yes, Saudi officials have mulled transferring a bomb from Pakistan. They’ve also considered building up a “peaceful” nuclear program as a down payment on developing a nuclear-weapons option of their own. To reassure their neighbors that their nuclear program is peaceful, though, the Saudis maintain they are running out of oil and natural gas. They also insist that they must subsidize these fuels domestically to prevent political turmoil. Never mind that letting domestic oil and gas prices rise would prevent depletion for many decades; the Saudis want modern reactors.
And the ones the Saudis like most are American-designed. This makes securing a U.S. cooperative agreement desirable. Senior Obama officials justify striking a deal not primarily for industrial but for nonproliferation reasons. Their line of thinking is reminiscent of 18th-century British arguments for staying in the slave trade to control it, and it might be credible but for one detail: their boss, President Obama, is currently opposing proposed legislation that would tighten nonproliferation requirements for U.S. nuclear cooperation.
Last April, the House Committee on Foreign Affairs voted H.R. 1280 out of committee 34-0. The bill requires that both houses vote to approve any U.S. nuclear cooperative agreements made with nations that refuse to forswear making nuclear fuel or that fail to adopt intrusive IAEA inspections. The rationale here is that since the U.A.E. agreed to such conditions in its U.S. nuclear agreement, the U.S. should try to secure the same of as many other states as possible.
The Obama administration, which heralded these conditions as a new gold standard when the U.A.E. deal was finalized, now has a different take: it wants nothing to do with this legislation. The Saudis, meanwhile, have hired the Pillsbury law firm, one of Washington’s top lobbying guns, to secure a U.S. nuclear cooperative agreement free of these conditions.
Whether or not Congress pushes back and gets Obama to work harder to persuade the world’s nuclear suppliers to adopt the U.A.E. conditions for their reactor exports remains uncertain. What’s clear is that if they fail, and nuclear power continues to head South, avoiding another Fukushima-like accident will be an ever greater challenge. But this challenge will be minor compared with the test of preventing a nuclear-arms race in the Middle and Far East.
Henry Sokolski is executive director of the Nonproliferation Policy Education Center in Arlington, Virginia, and is editor of Nuclear Power’s Global Expansion: Weighing Its Costs and Risks (2010) and The Next Arms Race (forthcoming).