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HOME > TOPICS > Nuclear Power Economics      
Nuclear Power Economics
What is the relationship between the economics of nuclear power and the proliferation of nuclear weapons? When security and arms control analysts list what has helped keep nuclear weapons technologies from spreading further than they already have, energy economics are rarely, if ever, mentioned. Yet, large civilian nuclear energy programs bring states quite a way towards developing nuclear weapons and it has been energy economics, more than any other force, which has hampered most states’ plans to develop such projects. read more
Aug 05, 2020 Unsafeguardable - - Enriching Uranium and Reprocessing Spent Fuel
Last week's revelation that Saudi Arabia has been secretly collaborating with China to produce uranium yellowcake put a spotlight on the Saudi's worrisome nuclear program. Admittedly, producing yellowcake is only the first step toward enriching uranium. The long pole in the technical tent to make nuclear bombs is enriching uranium and reprocessing spent reactor fuel. The Saudis insist they want to enrich. Once they do, however, preventing possible military diversions to make bombs will be nearly impossible. The attached in-depth research by Greg Jones, "Can Bulk Nuclear Fuel Facilities Be Effectively Safeguarded?" drives this point home. His short answer to his own question about enrichment and reprocessing plants is no, effective safeguards are not possible. First, would-be bomb makers can hide enrichment and reprocessing facilities from international inspectors, make a bomb and not get caught until one or more weapons are in hand. Second, even declared enrichment plants making low enriched uranium that can't be made into bombs can be converted so quickly to produce weapons-grade uranium that little can be done before a nuclear weapon is built. Finally, measuring what declared enrichment and reprocessing plants produce is still so inaccurate that a would-be bomb maker could incrementally divert enough nuclear explosive material to make one or more bombs worth without tipping off any inspector. For all these reasons, it's best to prevent enrichment and reprocessing activities from ever starting in countries that lack nuclear weapons.  This is especially true of a country like Saudi Arabia, which, in addition to hiding its latest nuclear collaboration with Beijing, lied about Jamal Khashoggi's ghastly murder, and covertly bought a Chinese missile factory. These three strikes ought to make cooperating with Riyadh on nuclear energy, much less, trusting them with enrichment or reprocessing, out of bounds.  Greg Jones' analysis, of course, speaks to much more than just the Saudi case. It clarifies what kind of nuclear activities -- reprocessing and enrichment -- the U.S. and other nuclear supplier states should say no to. Thinking that we can let safeguard nonweapon states from diverting enrichment and reprocessing to bombs, is a mistake.
Occasional Papers & Monographs
Jul 17, 2020 "Federal Financing of U.S. Nuclear Exports - Under What Conditions?," Bulletin of the Atomic Scientists
Late last week, the Trump Administration’s newly created foreign investment agency, the Development Finance Corporation, opened its doors to financing U.S. nuclear reactor export projects. Previously, their rules forbade this and with good cause:  Even small modular reactors are projected to cost one half to several billion dollars and large ones can cost more than 10 billion dollars per unit. Those numbers could empty the bank. The reactors also pose safety and nuclear weapons proliferation risks. That’s why no private bank will finance such exports.  You would think that would recommend due diligence and caution. Yet, as Victor Gilinsky and I note in “Trump’s new foreign investment agency: Itching to build on nuclear quicksand,” in The Bulletin of the Atomic Scientists, the Development Finance Corporation has been quite content with its decision. Its press release on lifting the nuclear ban extolled the virtues of advanced reactors for the developing world. Nor was there any hint of what sorts of conditions might apply to the corporation funding nuclear reactors.   Would recipient countries have to have sound safety regulations? Would they have to meet security requirements? Would they have to allow international inspections? Would U.S. financing be limited to exports subject to the requirements of the Atomic Energy Act’s Section 123? Could corporation financing also cover equipment purchases from other suppliers? Could corporation financing be used to buy shares of foreign nuclear companies? Nobody yet knows. The agency has not yet offered any guidelines. It should. After all, the corporation’s original purpose was to focus on the developing world and to compete with China’s One Belt One Road initiative. Instead, the development corporation has opened itself up to nuclear industry pleading (which has already begun) to support large reactor projects in Western and Eastern Europe.   What should be done? Congress, which created the Development Finance Corporation, needs to exercise oversight. In specific, it should urge the corporation to produce guidelines for nuclear projects and make them subject to public comment for 60 days as if they mattered as much as any “high-risk” project the corporation might finance. Congress could also hold a hearing. Just one would do.  
Op-Eds & Blogs
Jun 25, 2020 "The Energy Department's Dangerous Plutonium Dream," The American Interest
Late last month, the Department of Energy (DoE) again floated the idea of chemically extracting or "reprocessing" nuclear weapons explosive plutonium from spent fuel reactor fuel. Why? To keep up with Russia and China in building multi-billion dollar fast "advanced" reactor commercial demonstration programs that make current expensive nuclear electricity look dirt cheap.  But as Victor Gilinsky and Henry Sokolski argue in "The Energy Department's Dangerous Plutonium Dream," published in The American Interest, following Moscow's and Beijing's command nuclear programs is a mistake. Russia and China are pushing fast reactors and reprocessing to "save" uranium left in spent reactor fuel, which they and DoE officials see as a resource that is being "wasted." This view, however, is like insisting that moonlight and ocean wave energy is going to "waste" because it has yet to be captured, while ignoring the fantastic costs needed to harness them. Uranium, in fact, is plentiful and dirt cheap. "Saving" it by reprocessing it and plutonium from spent fuel, on the ohter hand, is dangerous and extremely expensive.  Reprocessing and fast reactor proponents actually know this. That is why they are eager to internationalize commercial advanced fast reactor and fuel cycle demonstration projects. This includes exporting American spent reactor fuel to be reprocessed abroad in France, India, and even Japan. All of this will burn financial holes in our pockets and, if we are unlucky at all, help would be bomb makers. It surely is the wrong way to compete with Russia and China. 
Op-Eds & Blogs
Jun 16, 2020 Needed: Clear Conditions for Federal Financing Nuclear Exports
Last week, the Development Finance Corporation (DFC), a new federal financing organization that Congress created to help the developing world, announced it was lifting a prohibition on supporting US civilian nuclear exports.  This announcement triggered a 30-day public comment period. There’s only one problem:  There’s next to nothing to comment on. As I and former US Nuclear Regulatory Commissioners Victor Gilinsky and Peter Bradford note in a letter below to the House and Senate foreign affairs committee chairmen and ranking members, the DFC has yet to reveal what rules would apply to such nuclear projects.  This all but renders the 30-day comment period meaningless. To fix this, Congress needs to get the DFC to clarify what conditions, if any, the corporation plans to place on such projects. Would the DFC financially support nuclear reactor projects for countries that lacked full-scope International Atomic Energy Agency (IAEA) safeguards on their nuclear activities or were not members of the Nuclear Nonproliferation Treaty (NPT)?  Might the DFC use its new equity investment authority to purchase shares of foreign firms, such as the Saudi Nuclear Energy Holding Company based in Riyadh?  Would it matter how few American jobs a nuclear project produced compared to alternative investments? Would the DFC evaluate the energy investment it might make (nuclear or nonnuclear) by asking if it was the most economical way to meet a given country’s energy and environmental requirements?  Will the DFC secure such country-specific analyses in advance and, if so, how?  In the case of proposed nuclear projects, will the DFC rely on the assessments of nuclear lobbyists firms say? The Senate and House foreign affairs committees and their staff should find out. They oversee the BUILD Act that created the DFC. If they are still in the dark on these matters before the 30-day comment period runs out July 8th, the DFC should not proceed to make any nuclear-related decisions. This is all the more so since Congress lets the DFC operate behind closed doors.  
Official Docs & Letters
May 28, 2020 "Advanced" US Reactors: New Foreign Policy and Security Concerns
 Over the last few weeks, Defense and Enery officials have made a number of remarkable announcements promoting the export and overseas deployment of "advanced reactors"-- nuclear plants as small as several megawatts electrical (and up) that use new types of reactor fuels. Overturning decades of U.S. policy not to encourage the separation of weapons-usable plutonium overseas, the Energy Department's assistant secretary for nuclear energy announced earlier this month the department's desire to send U.S. spent fuel to France, India, and Japan for reprocessing. This would be part of a larger effort to develop plutonium-based fuels for several proposed U.S. advanced reactor designs. The Energy Department also wants to expand American uranium enrichment capacity to produce nearly 20% enriched fuels for other proposed reactor systems. Small versions of these reactors are intended for export. The Energy Department wants to develop these reactors and their fuel cycles with advanced nuclear nations (e.g., Japan, South Korea, India). The Department of Defense, meanwhile, let out contracts for a microreactor it hopes to begin testing 2023 for deployment at the very edge of battle at military theaters like Afghanistan.    What foreign policy and security concerns do these advanced reactors raise? The short answer is plenty. For starters, they include the possible reopening of America's nuclear cooperative agreements with South Korea, India, and China and persuading other countries to let us insert military reactors on their soil.   All of this should raise eyebrows. Last week, Sharon Squasoni (of George Washington's Institue for International Science and Technology Policy) and I offered congressional staff a short brief, "'Advanced' US Reactors: New Foreign Policy-Security Concerns." The following are the Powerpoint slides, a suggested list of readings, and a brief memo on the Build Act, which the nuclear industry want to use to help finance U.S. advanced reactor exports.  
Presentations
May 15, 2020 "Bad Business: Pushing US Nuclear Exports," The American Interest
The nuclear industry and the Department of Energy (DOE) want to raid our wallets...again. This time, it’s not to save the planet, but supposedly to give industry a fighting chance against rising Russian and Chinese civilian nuclear export competition. As Victor Gilinsky and I warn in "The Nuclear Industry at the Feeding Trough," posted by The American Interest, the American taxpayer shouldn't buy this.  First, the Russian and Chinese nuclear industry is not as healthy or as influential as claimed. Second, the nuclear industry’s pleas (most recently trumpeted in DOE’s nuclear strategy report, “Restoring America’s Competitive Nuclear Energy Advantage”) presume an American commercial nuclear industry that no longer exists. Westinghouse, General Electric, and Combustion Engineering have sold themselves out to foreign partners and holding companies. US nuclear exports are no longer significant. Also, US nuclear electricity is now more expensive than gas-fired electricity, hydroelectric, and renewables.  Finally, what the industry is demanding in regulations to promote exports — a relaxed approach to nuclear nonproliferation controls — will actually undermine America's national security.   
Op-Eds & Blogs
Apr 27, 2020 "Nuclear Power's New Achilles Heel: Resilience," The Bulwark
With the Coronavirus crisis, nuclear power plants around the country have been requesting waivers from the U.S. Nuclear Regulatory Commission (NRC) to allow power plants staffs to work as quickly as possible. Meanwhile, the NRC has shifted their on-site safety inspections activities to on-line procedures wherever feasible. The men and women working at nuclear sites certainly deserve our support. That said, the crisis has revealed a new vulnerability regarding nuclear power. Industry insists nuclear power is critical to our national security and deserves special subsidies becasue it is far more resilient than its nonnuclear competitors. But as Victor Gilinsky and I point out in our most recent piece for The Bulwark, "The Hidden Nuclear Risk of the Pandemic," it's not. In fact, there are no more than a couple of dozen operators per plant. These are highly skilled personnel, licensed to operate an individual plant and cannot be substituted with operators from other plants. These individuals would stay at their posts as long as they could but having skeleton crew that is sick and fatigued operating or trying to shut the plant down is hardly optimal. Hydro, gas, or renewable electrical generators use far less staff to operate and are vastly more interchangeable. Nuclear power is not without its advantages. But when it comes to staffing, nuclear power demands constant access to scarce, highly trained staff. In this regard, it is anything but resillient.
Op-Eds & Blogs
Mar 25, 2020 Reactors Large and Small: Three Hurdles
On March 25, 2020, NPEC's Executive Director, Henry Sokolski, gave the following lecture at the University of Utah: Reactors Large and Small: Three Hurdles Assuming we survive the Coronavirus, we still will need electricity and will want to avoid the risk of global warming. What's unclear is how much might nuclear power be needed to generate electricity and keep our environment clean. To answer this question, we need to know how competitive current large reactors are against their nonnuclear alternatives and how competitive proposed small modular reactors might be. How economical, safe, proliferation-resistant are these reactors? To help us get the answers, Henry Sokolski, Executive Director of Nonproliferation Policy Education Center, has offered to give us this presentation.
Presentations; Audio & Video
Aug 08, 2019 Interview with Patrick Malone on Chernobyl and Nuclear Weapons
Henry Sokolski and Patrick Malone discuss nuclear power, next steps in treaties, and HBO's miniseries "Chernobyl" 
Interviews; Audio & Video
Jul 24, 2019 "Before Saving the Planet, Could We Please Get the Bill?," RealClearEnergy
Although it wasn't much noticed, last week Secretary of Energy Rick Perry played both sides of the national energy-environmental debate. America, he insisted, is driving down emissions globally by exporting natural gas and developing nuclear and renewables. What he failed to explain, however, is which of these energy options is subsidized, by how much, and who is picking up the tab. Unfortunately, our government does not keep score. As David Montgomery and I explain in our piece (below), "Before Saving the Planet, Could We Please Get the Bill?" in RealClearEnergy, we've fallen into the habit of taking an "all-of-the-above" approach. This strategy ends up pushing subsidies for virtually every energy option including some of the most uneconomical ones. In the case of nuclear energy, if frequently results in subsidies for exports of reactors -- machines that can serve as bomb starter kits. However much political sense an "all-of-the-above" strategy might make, it's rotten economics, encourages bad environmental policies, and can lead to risky nuclear exports. What we need to do instead is compare costs and choose the least expensive, most profitable ways to reduce emissions first. Towards this end, David and I make a number of recommendations. The first is to hold off on any new energy commercialization subsidies, bailouts or mandates and back away from any "national security" imperatives that cannot be quantified. It would also be helpful to have The McKinsel Company and its competitors release their latest environmental economic ranking models to help clarify what steps might reduce undesirable emissions quickest and most cheaply.
Op-Eds & Blogs
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The Nonproliferation Policy Education Center (NPEC), is a 501 (c)3 nonpartisan, nonprofit, educational organization
founded in 1994 to promote a better understanding of strategic weapons proliferation issues. NPEC educates policymakers, journalists,
and university professors about proliferation threats and possible new policies and measures to meet them.
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