Sunday, April 27, 2008
Nuclear fuel markets and the looming oligarch
Natural uranium contains 0.7 percent of U-235 atoms, against 99.3 percent of mostly U-238 atoms. To use it as nuclear fuel the proportion of U-235 atoms has to be increased to 3 to 5 percent. To do so, the uranium must first be purified and converted into a gas. In this form, batteries of centrifuges can filter out a few of the heavier U-238 atoms in a long and energy swallowing process. Risks in the enrichment process are those of the chemical industries and not so much the low radiation. This uranium is not suitable to make bombs. For bombs you need a degree of enrichment of at least 90 percent.  If a country, as for instance Iran, decided to develop such highly enriched uranium, it could take 3 to 5 years to produce sufficiently for a bomb. Besides, according to scientists, for high enrichment much larger centrifuge facilities are used. The oft-repeated but mistaken belief, that one could fabricate unnoticed highly enriched uranium in a civil nuclear plant, now serves Bush’ contention that enrichment should remain in the hands of world’s nuclear-weapon states.
Birth of a new world order
The idea of limiting enrichment capability to the nations that already have it is not entirely new. The accusations against Iran, the successful misleading of journalists, politicians and diplomats had created the ideal circumstances to speed up its realization. The idea appeared in a UN brochure in 2004. Then it was still in the form of a call for a voluntary and time-limited moratorium on the construction of new facilities for enrichment and reprocessing. In February 2005, the United Nations further elaborated the idea as the Multilateral Nuclear Approach (MNA). Already in April 2005, Ambassador Kenzo Oshima of Japan’s mission to the UN put the question, “if the MNA would not unduly affect the peaceful use of nuclear energy by those non-nuclear-weapon states that carry out nuclear activities in faithful and transparent compliance with their NPT obligations.”
On February 6 2006 the US’ Department of Energy announced its version of the idea in their plan for the Global Nuclear Energy Partnership (GNEP). The following day, at the Oarai Conference in Japan, this GNEP is presented as an idea of IAEA’s head El Baradei and a proposal of Bush. And, of course, such a supreme idea should not lack of glamour. So, a few days later, DOE compliments itself as follows: “Finally, the partnership arrangement between fuel-cycle and reactor-only states envisioned by GNEP will help supply the world with clean electrical power by offering non-fuel-cycle nations commercially competitive and reliable access to nuclear fuel, in exchange for their commitment to forgo the development of enrichment and recycling technologies. “
The new world order comes in the form of new safeguards within the IAEA control system (that enable the permanent monopoly or oligarchy of nuclear fuel markets globally by a few). Considering the spirit of the Additional Protocol, we should not count on equal rights or fair relations.
Within the Non-Proliferation Treaty countries, only the nuclear-weapon states, plus Germany, the Netherlands and Japan have enrichment facilities today. The rest of the NPT countries would see their rights to enrich uranium taken away. In exchange, they will get the solemn promises of the nuclear-weapon states, that the latter will always deliver the nuclear fuel. Promises? Weren’t these the countries that promised in 1968 to strive for their nuclear disarmament? As we know, they did not keep their word up to now. Worse, France has even developed a new generation of nuclear weapons to make the step to nuclear war easier and progressive. This year, France and the US are still using their nuclear arsenal to threaten the world. Should non-nuclear-weapon states should now give up more rights and become dependent of IAEA’s club of nuclear fuel suppliers?
To seduce non-nuclear-weapon states, this new plan promises lower electricity prices. Today, on a global scale, enrichment facilities would have about twice the capacity the world needs. By preventing the construction of new enrichment facilities, a better use could be made of the existing capacities. This would enable lower prices for enriched uranium, and thus for electricity. Should we believe these words? The enrichment industries are not driven by the concern to lower world’s electricity prices. In spite of the world’s over-capacity, the Europeans are considerably expanding their production in the UK, Netherlands and Germany. They strive for more market share and more profit! And if by new IAEA regulations no new competitors are allowed into the market, this can only result in excessive pricing of enriched uranium, and thus of electricity.
The new plans foresee a highly regulated and closely monitored fuel supply distribution system. The IAEA would become the intermediate between fuel producing and fuel consuming members. At first glance, this may look like a trustworthy construction, since the IAEA is a UN body. However, the IAEA is also the policeman in the system. I do not think it is wise to let policeman trade with the parties they should inspect. Besides, the UN is not some sort of democratic and integer government that would be able to guarantee its policeman’s impartiality.
The plans for the distribution system recommend minimal national stocks and joint regional buffers in different host-countries. Strange, isn’t it? The purpose of minimal stocks inside the countries and regional stocks elsewhere is hard to defend as a security issue. Even with enormous stocks of 3.5 percent enriched uranium you cannot produce any nuclear weapon. Why would the IAEA want countries to dispose of only small quantities of fuel at a time? I fear there is only one plausible answer: to keep the non-nuclear-weapon states in a firm grip. That is a lot of power for our NPT-watchdog. This power goes far beyond what is needed for their inspections. Even far beyond the needs of a safe nuclear fuel distribution system. This is pure power to overrule nations’ sovereignty. If a nation does anything that the watchdog or its masters do not want, the fuel tap can simply be closed to obtain its immediate submission. It smells like a dictatorship on world-level. Of course, the fuel supplying countries will never be affected. They produce their own fuel.
In theory the master of the IAEA is the United Nations Organization. But does it work that way in reality? The IAEA has a difficult role, because it cannot ignore tensions and conflicts of interest between NPT members. The IAEA’s independence from parties’ national interests is constantly under strain. Its limited budget forces the IAEA to make choices, which are influenced by occurring conflicts and funds donors. During the embargo against Iraq, we witnessed an IAEA driven crazy by Bush, who demanded each time more and more thorough controls. The dog was sent out over and over to make sure Iraq could be safely invaded. Although the IAEA has the obligation to keep all sensitive information from their investigations undisclosed, the US military constantly received sensitive information, with which they prepared the invasion in 2003. (And finally, to invade Iraq, Bush simply overruled the UN’s Security Council…)
Today, we see the same US influence in the IAEA’s investigations in Iran. Bush shouts and the dog runs to search for the stick. The rules for the new world order are presented as “an idea of El Baradei and a proposal of Bush.”. I presume that both plans, the IAEA’s Multi-National Approach (NMA) and Bush’ Global Nuclear Energy Partnership (GNEP), will merge into a final version dictated by the US.
Of course, getting a firm grip on all non-nuclear-weapon states as soon as they get addicted to nuclear energy is a major strategic coup. But there are far more advantages for the nuclear fuel suppliers. United under the umbrella of the IAEA, the market will be completely regulated. As all of them cooperate in the same organizations and all of them will be interested in the highest possible earnings, together they will set world’s nuclear fuel price. Just like today’s world’s oil prices are decided on the market places of IPE and NYMEX, nuclear fuel prices will be decided by the happy few.
Now comes the tricky part. Nuclear fuel has to be paid for. The question is: in what currency (or currencies) will the customers have to pay? These currencies will become the most needed and wanted currencies in the world. You can compare it to today’s US-dollar.
Apparently these currencies have not been decided yet. But, if each fuel supplier asks to be paid in its own currency, the world would widely accept Japanese yens, Chinese Yuan renminbi, Russian Rubles, euros, English pounds and US-dollars. There will probably be some preferential order due to each supplier’s capacity to deliver nuclear fuel. Each of these countries will know the advantages of the supply of their currencies to the rest of the world. Of course, in the long run, each of them will also experience the negative effects on their economies and, after decades, let their currency collapse to get rid of the built up debt. In short, this is what can happen with multiple world currencies. However, the fact that the plans mention, that the IAEA should become the intermediary between suppliers and customers, makes it reasonable to suppose that the IAEA will decide in which currency the customers will have to pay. Bush surely hopes that this will be the dollar. When nuclear fuel has to be paid exclusively in dollars, demand for US-dollars and therewith the US hegemony will be assured for many decades to come.
The UN theatre
With the project for a new world order prepared discreetly in the background, we now have an anti-Iranian alliance of the US and E3. They smell the opportunity for a coup to seize world’s nuclear fuel markets. To succeed, they would just need some legal sauce on the prohibition of uranium enrichment by non-nuclear-weapon states, with Iran as example. And a UN Security Council resolution would be enough, if it legalizes IAEA’s stand that it can forbid countries to enrich uranium.
Of course, they would make it impossible for Iran to stay within the Non-Proliferation Treaty then. To succeed in their coup, they will have to take care, that Iran does not leave the organization before a resolution is successfully voted. For if so, there would not be any ground for a resolution anymore. Countries outside the Non-Proliferation treaty, like Israel, India, Pakistan, Cuba and Brazil are free to enrich uranium and do what they want.
The question is: will the US and E3 succeed in seducing Russia and China? In the event, that such a coup of the nuclear-weapon states could succeed, it would probably put the Non-Proliferation Treaty and the UNO under enormous strain. These organizations might loose all credibility and see many non-nuclear-weapon states leave. The result may be the opposite of what these organizations were designed for.