Tariq Rauf and Zoryana Vovchok
Assurance of Supply: A New
Framework for Nuclear Energy
The increase in global energy demands and pressing concerns over climate change
are driving a potential expansion in the use of nuclear energy. Dozens of states
have approached the International Atomic Energy Agency (IAEA) for guidance as
they explore the possibility of building nuclear power reactors for the first time.
With an expansion and spread of nuclear energy will come an expanded demand
for nuclear fuel, and for the management of spent nuclear fuel. Where will the fuel
supply for an expanded global reactor fleet come from? Will it remain in the hands
of existing suppliers, with expanded capacity? Will new states develop their own
national enrichment capabilities, adding to the number of states with the capacity
to produce either fuel for nuclear power reactors or material for nuclear weapons?
Or will multilateral nuclear fuel cycle facilities emerge to meet expanding demand?
Many IAEA member states have expressed mounting concern over the risks that
could be created by the further spread of technologies such as uranium enrich-
ment or plutonium reprocessing—key technologies for the production of fuel for
nuclear power reactors that could also be used to produce material for nuclear
armas.
The convergence of these realities points to the need to develop a new frame-
work for the nuclear fuel cycle that provides reliable and predictable access to
nuclear fuel and power reactors while strengthening the Nuclear Non-Proliferation
Treaty (NPT) regime. Establishing a framework that is equitable and accessible to
all users of nuclear energy acting in accordance with agreed nonproliferation
norms will be a complex endeavor and should be addressed through a series of
interlinked, progressive steps.
The first step would be to establish mechanisms that provide assurance of the
supply of fuel for nuclear power reactors—and, as needed, assurance of the acqui-
Tariq Rauf is Head, Verification and Security Policy Coordination, and Zoryana
Vovchok is an External Relations and Policy Coordination Officer, at the International
Atomic Energy Agency in Vienna. Both are working on multilateral approaches to the
nuclear fuel cycle, including nuclear fuel assurances, at the IAEA. Only personal views
are expressed in this paper, solely for purposes of discussion.
© 2009 Tariq Rauf and Zoryana Vovchok
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Tariq Rauf and Zoryana Vovchok
sition of such reactors. If states have assured access to fresh fuel for their nuclear
power reactors, they will be less motivated to pursue own development of sensitive
technologies for producing nuclear fuel. The second step would be to have future
facilities for enrichment and reprocessing—the key technologies that make it pos-
sible to produce nuclear weapons material—under multilateral operation, bastante
than under purely national control. The third step would be to convert existing
enrichment and reprocessing facilities from national to multilateral operations. En
this context, it would be crucial to negotiate and implement a global, internacional-
ally verifiable treaty prohibiting the production of fissile material for nuclear
armas. Below we focus primarily on the first of these steps.
THE NEED FOR A NEW FRAMEWORK
The first notion of fuel assurances appeared in the Baruch Plan, a 1946 A NOSOTROS. pro-
posal to the United Nations to provide international oversight of atomic energy
desarrollo. Alguno 30 años después, el 1976 international nuclear fuel-cycle evalu-
ation looked at multilaterally owned and operated nuclear frameworks. Y, 60
years after the Baruch Plan, a special event at the IAEA’s general conference held in
Septiembre 2006 focused on several new proposals for multilateral approaches,
such as commitments to supply enrichment services, international nuclear fuel
centros, and even multilateral control over all nuclear fuel-cycle facilities.
In the more than half-century since the Baruch Plan, dual-use material and
technologies have spread, with attendant risks of proliferation and nuclear terror-
ismo. Such nuclear threats affect both the future of peaceful uses of nuclear energy
and the prospects for nuclear disarmament.
The spread of nuclear fuel-cycle facilities and technologies is motivated in part
by states’ interest in ensuring reliable fuel-cycle services through indigenous capa-
habilidad. Este, entonces, is the challenge: what must be added to the existing market for
fuel-cycle services to provide enough assurance of supply to convince states that
there is no need to invest in their own indigenous fuel-cycle facilities?
This question goes to the heart of the IAEA’s mission. Not surprisingly, el
IAEA must balance the interests of all of its member states. It needs to adequately
represent the needs and interests of developing states, of nuclear-supplier states, de
states that are already relying on nuclear power, and of states that have plans to
develop nuclear power in the future, all while minimizing the risk of nuclear pro-
liferation, as stated in the IAEA Statute.1
THE ROLE OF FUEL ASSURANCES
Discussions both with nuclear supplier states and, more importantly, with con-
sumer states have made abundantly clear that different states will choose different
policies and solutions to meet their energy requirements. States’ choices will
depend on their specific situation, such as their geography, their technical abilities,
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Assurance of Supply
and the individual preferences of policymakers and members of the public. De este modo,
the IAEA must retain flexibility to respond to these demands.
The mechanisms for the assurance of supply are not intended to address com-
mercial disagreements between suppliers and consumers, but rather to prevent
interruptions of the supply of nuclear fuel due to a supplier’s political considera-
tions that are not related to nonproliferation.2 These concepts are intended to
address two particular challenges. The first is to prevent supply vulnerabilities
from dissuading states from initiating or expanding nuclear power programs. El
second is to reduce vulnerabilities that might create incentives for states to build
new national enrichment and reprocessing capabilities.
In other words, an assurance-of-
supply mechanism is envisaged solely
as a means of backing up the operation
of the current normally functioning
market in nuclear materials, fuels, tech-
nológico, etcétera. This would not be
a substitute for the existing market, nor
would it deal with disruptions of sup-
ply due to commercial, technical, o
other failures. Además, in this con-
texto, no state would be asked or expect-
ed to give up or abridge any of its rights
under the NPT.
An assurance-of-supply
mechanism is envisaged
solely as a means of
backing up the operation
of the current normally
functioning market in
nuclear materials, fuels,
and technologies.
This point about rights is a critical
uno. In the debate outside of Vienna,
the word “forgo” is used more often
than not when describing the establishment of an IAEA fuel bank. Some officials
and analysts have envisioned that states would agree to forgo their right to build
enrichment and reprocessing facilities, and in return would gain access to an
assured supply of nuclear fuel. In this day and age, sin embargo, few states are prepared
to give up any rights, and one unexpected outcome of the proposals that have been
framed in this way is that at least seven states have popped up saying that they may
be interested in establishing enrichment plants in the future and are not prepared
to compromise, dilute, or give up their right to do so. These states are Argentina,
Australia, Brasil, Canada, Kazakhstan, Ucrania, and South Africa. This represents
the greatest explosion of interest in enrichment in the nuclear age; ha sido profesional-
voked in substantial part by well-intentioned efforts to prevent the spread of
enrichment. Por lo tanto, we need to frame the debate in a way that does not demand
that states sign away their right to build enrichment and reprocessing plants, y
that helps states feel comfortable that they can maintain their rights while making
sovereign choices to rely, for the present, on the international market for nuclear
fuel. These choices must be backed up by a multilayered mechanism that includes
both assurances and a physical reserve of nuclear material. Just as the word “forgo”
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Tariq Rauf and Zoryana Vovchok
has done more to undermine than to promote progress, loose talk of loopholes or
an Achilles’ heel in the NPT, or of a need to “reinterpret” the inalienable right to
peaceful uses as recognized under Article IV of that treaty or in the Statute of the
IAEA is at best unhelpful, at worst counter-productive.
As of summer 2009, three specific and more advanced fuel-assurance propos-
als were under discussion.3 These proposals—the proposal of the IAEA Director-
General on the establishment of an IAEA Low Enriched Uranium (LEU) bank, el
Russian Federation Initiative to establish a reserve of LEU for supply to the IAEA
for its member states, and the Multilateral Enrichment Sanctuary Project (MESP)
of Germany—which are complementary, and which range from providing backup
assurance of the supply of LEU, to establishing an IAEA-controlled LEU reserve, a
setting up an international uranium enrichment center where the IAEA would
have some role in the decision making.
STRUCTURING A NEW FRAMEWORK
A framework for assuring the supply of nuclear fuel could include three levels:
primero, reliance on the existing market, based on established commercial and other
arrangements; segundo, backup commitments provided by suppliers of enrichment
and fuel-fabrication services, and their respective governments, to be used when
predetermined conditions and criteria are met following a disruption of supply for
political reasons; and third, a reserve of low-enriched uranium stored in one or
several locations under IAEA auspices, supported by agreements between suppli-
ers of fuel-fabrication services and owners of fuel intellectual property rights, de este modo
creating additional possibilities for fabrication.
The IAEA Statute, which entered into force on July 29, 1957, provides the IAEA
with the authority to carry out the activities necessary to establish and operate a
nuclear material bank (en este caso, one containing low enriched uranium). Under
Article III of the Statute, the Agency is authorized to acquire materials, services,
and equipment, and to establish its own facilities and plants, in order to facilitate
the practical application of nuclear energy for peaceful purposes. The legal author-
ity for the receipt, custody, and supply of nuclear material lies, En particular, specif-
ically in Article IX of the Statute, which provides for the supply of materials to the
IAEA, and in Article XI, which outlines the authorized scope for IAEA projects.4 In
addition, Article X refers to the possibility of member states making available to
the Agency services, equipo, and facilities that may be useful in fulfilling its
objectives and functions.
IAEA Director-General Mohamed ElBaradei, in his statement to the Board of
Governors in March 2009, said he was convinced that multilateral approaches to
the nuclear fuel cycle have great potential to facilitate the expanded safe and secure
use of nuclear energy for peaceful purposes, while reducing the risk of prolifera-
tion.5 The best approach, he argued, would be to start with a nuclear fuel bank
under IAEA auspices, based on the following principles: (1) that any such mecha-
nism should be nonpolitical, nondiscriminatory, and available to all states that are
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Assurance of Supply
in compliance with their safeguard obligations; (2) that any release of material
should be determined by nonpolitical criteria established in advance and applied
objectively and consistently; y (3) that no state should be required to give up its
rights under the NPT regarding any parts of the nuclear fuel cycle. The next steps,
as noted earlier, would be to seek agreement that all new enrichment and repro-
cessing activities should be placed exclusively under multilateral control, y luego
to convert all existing facilities from national to multilateral control so that ulti-
mately, as ElBaradei has said, no one country would have “the exclusive capability
to produce the material for nuclear weapons.”6
ESTABLISHING AN IAEA LOW ENRICHED URANIUM FUEL BANK
Among the leading proposals is one from the Nuclear Threat Initiative (NTI) eso
offers the IAEA $50 million on two conditions: (1) that IAEA member states raise an additional $100 million in material or cash donations, y (2) that the IAEA
Board of Governors sets up an IAEA-controlled reserve of LEU as a last-resort sup-
ply in the event of a politically motivated supply disruption of nuclear fuel to an
IAEA member in good standing with its safeguards obligations. All other criteria
for the fuel bank under the NTI proposal are left to the IAEA to define. Hasta ahora,
the United States has provided $49.5 millón, Norway has pledged $5 millón (y
paid $1.5 millón), and other pledges have come from the United Arab Emirates ($10 millón), the European Union (25 million Euros or about U.S.$33 million), and Kuwait ($10 millón). The total will exceed the $100 million requirement once all the pledges are fulfilled. The NTI has extended its initial two-year deadline, which would have expired in September 2008, thus allowing more time for con- sensus to be built on the structure of the reserve and for the IAEA Board of Governors to take the decision for the establishment of such a bank. The following is a general description of how the bank would work. The IAEA bank would contain a physical stock of LEU of standard commer- cial specification, with U-235 enrichment levels ranging up to 4.95 por ciento. This range of enrichment would provide the necessary flexibility to meet the require- ments for subsequent fuel fabrication for most power reactors. The IAEA envisions making purchases of LEU using its standard procedures for open tender from ven- dors willing and able to provide the material free of conditions that conflict with the envisioned purpose of the fuel bank. The LEU would be made available to a consumer state at the prevailing market price at the time of supply, and the pro- ceeds would be used to replenish the stock of LEU. At current market prices, el $150 million pledged so far would be sufficient
for the purchase of 60 a 80 tons of LEU and its delivery to the IAEA bank locat-
ed in a host state. This would be sufficient for one full core of a 1000 a 1500
MW(mi) power reactor or for three annual reloads, and would be sufficient to meet
the electricity needs of two million average Austrian households for three years.
The annual cost to operate the bank, which would be incurred by the IAEA, would
depend on a number of factors, including storage costs and the costs of other
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Tariq Rauf and Zoryana Vovchok
requirements associated with storage, such as safety and security measures. Idealmente,
such costs would be picked up by the host state.
The Russian Federation has proposed separately to establish an LEU reserve
that the IAEA could draw on. Russia has indicated that it will create a physical
reserve of 120 tonnes of uranium, in the form of UF6, with an enrichment of 2.0
por ciento a 4.95 por ciento, of which at least 40 tonnes have an enrichment of 4.95 por-
centavo. Russia has committed to provide LEU that would meet the latest commercial
specifications, and any future evolution of those standards.
The Russian Federation would, upon notification from the Director-General
of the IAEA, deliver the LEU to the IAEA in St. Petersburg for supply to eligible
IAEA consumer state(s). Eligible states would be those states for which the IAEA
has drawn the conclusion that there has been no diversion of declared nuclear
material and concerning which there are no issues under consideration by the
IAEA Board of Governors relating to the application of IAEA safeguards. The LEU
could be transferred to a non-nuclear-weapon state only when it has brought into
force an agreement with the IAEA requiring the application of safeguards on all its
peaceful nuclear activities. These criteria will need to be approved by the IAEA
board. Russia has committed to issue all necessary export controls and other
authorizations, “such that the shipment of material out of the country at the
request of the Agency is guaranteed.”7 This would include the timely transfer of
ownership to the IAEA for subsequent supply to an eligible member state, y
arrangements for the physical shipment of the LEU out of Russian territory. El
Russian Federation also would arrange for the prompt issuance of all necessary
authorizations and licenses for the import of international licensed transport con-
tainers for the LEU, as well as for their transport within and from the territory of
the Russian Federation. The Russian Federation would bear all expenses relating to
the storage and maintenance of the LEU prior to notification by the Director-
General of an impending shipment. The recipient country would pay the IAEA in
advance for the specific quantity of LEU at the prevailing market price, y el
IAEA would use the money to pay Russia to replenish the reserve.
It has been proposed, subject to the Board of Governors’ approval, that an
IAEA member state experiencing a disruption of its fuel supply would be required
to meet certain conditions to receive fuel from an IAEA fuel bank. The supply of
LEU from the bank or the reserve would be permitted to an IAEA member state
only if (1) the state is experiencing a disruption of LEU fuel supply to a power
reactor due to nontechnical, noncommercial reasons; (2) the IAEA has concluded
in the most recent annual Safeguards Implementation Report that the state has not
diverted declared nuclear material and that no specific report relating to problems
with safeguards implementation is under consideration by the Board of
Governors; y (3) the state has brought into force a safeguards agreement that
applies to the LEU being supplied through the IAEA bank.
Any other member state could also choose to establish a national LEU reserve
that the IAEA could draw upon, subject to that state’s own criteria as approved by
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Assurance of Supply
the board. (The United States, Por ejemplo, is also establishing an LEU reserve of
alguno 300 tons, down-blended from up to 17 metric tons of highly enriched ura-
nium [HEU]no longer needed for military purposes.8) Sin embargo, the LEU bank
reserves managed by the IAEA itself, as envisioned in the NTI proposal, would be
subject only to criteria and rules agreed on by the IAEA Board of Governors; como
currently envisioned, it would in principle be possible for a state that does not have
full-scope safeguards to draw on the reserve, as long as it had met the criteria out-
lined above.
How would the decision be taken to go forward with a shipment of fuel? Tiene
been proposed that the IAEA Board would agree in advance to follow this process:
• A consumer state9 that is experiencing a disruption in the supply of LEU that is
not related to technical or commercial considerations and that fulfills the pre-
scribed criteria, would submit a request to the Director General to provide a
specified amount of LEU for a power reactor, along with an explanation of the
circumstances in support of its request;
• The Director-General would assess the nature of the disruption and determine
whether the consumer state has fulfilled the criteria established by the Board
and is thereby eligible to purchase LEU from the IAEA.
• The Director-General, using a model agreement, would conclude an agreement
with the consumer state requesting the LEU. The agreement would specify the
obligations of the IAEA and of the consumer state, including all issues relating
to the amount and specification of the LEU, liability, safeguards, and the cost
of the LEU (including delivery, transport, and insurance costs) that would be
paid in advance to the IAEA.
Following the entry into force of the above-mentioned agreement, el
Director-General would authorize the transfer of the LEU to the consumer state.
The Director-General would keep the Board informed throughout the entire
proceso. Note that there would be no requirement for consumer states to sign up
ahead of time or to forgo any rights; the reserve would simply be available to be
drawn upon if needed, reducing states’ incentives to make the large investments
required to develop their own enrichment capacity.
Why the focus on a bank of enriched uranium in the form of UF6 and not on
fuel fabrication? According to the latest IAEA sources, there are now 13 enrich-
ment facilities in 9 states versus 34 fabrication plants in 18 states.10 This shows that
fuel-fabrication services are more widely dispersed than enrichment services, de este modo
justifying an initial focus on supply assurance of LEU and for fuel fabrication to be
considered at a later stage. Además, attempting to establish a bank of fabricated
fuel would be extremely difficult, as each reactor design uses a different set of fuel
designs, and each fabricator has intellectual property in the particular fuel designs
it fabricates; por lo tanto, to have prefabricated fuel suitable for every reactor in the
world would be prohibitively expensive. As noted earlier, sin embargo, the IAEA secre-
tariat has explored concepts in which there would be prior agreements among the
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Tariq Rauf and Zoryana Vovchok
fabricators to step in and provide fabrication services in the event of a disruption
from another supplier.
The bank would provide enriched uranium rather than natural uranium for
two reasons: primero, most of the world’s reactors use enriched uranium, y segundo,
natural uranium is available from a far wider array of sources since it is mined in
dozens of countries. Actualmente, 48 nuclear power plants (11% of the world total)
use natural uranium (44 pressurized heavy water reactors plus 4 MAGNOX reac-
tores) y 388 nuclear power plants (89% of the world total) use enriched urani-
um.11
Germany has offered another proposal, suggesting that the international com-
munity set up a multilateral enrichment sanctuary project (MESP),12 which would
involve a group of interested states contributing the money, tecnología, y
expertise to establish a new enrichment facility in a state that has not developed its
own uranium enrichment technology. The MESP would buy its centrifuges using
a “black box” model, in which the state that provided the centrifuges would con-
trol and operate the centrifuge cascades while the other members of the group of
interested states would control all other aspects of the operations. The MESP
would provide enrichment services to the group and to the market, and could also
provide LEU for an IAEA bank. It would be run on a commercial basis without
government subsidies, and would have to operate on a profit-making basis in order
to sustain its operations as a new producer. This would represent a new step in the
direction of multinational control of enrichment facilities.
A CAUTIOUS APPROACH
To reiterate, establishing a new framework for the nuclear fuel cycle is a complex
endeavor that will need time to develop. The IAEA Secretariat is working to lay out
the necessary legal and technical specifics, and to facilitate a full, frank, and com-
prehensive discussion with both consumer and supplier states. This preparatory
work should make it possible for states to decide whether to establish an IAEA LEU
bank or other multilateral mechanisms in the near term.
In his 1953 Atoms for Peace speech, President Dwight D. Eisenhower articulat-
ed a vision, shared by many world leaders, that would enable humanity to make
full use of the benefit of nuclear energy while minimizing its risk. This vision led
to the establishment of the IAEA. Much has changed since that time, and it is
appropriate to take stock now of our successes and failures. Most important, nosotros
must resolve to take whatever actions are required, including new ways of thinking
and unconventional approaches, to ensure that nuclear energy remains a source of
hope and prosperity for humanity as envisioned in the NPT, and not a source of
increased danger.
1. The IAEA Statute is accessible at http://www.iaea.org/About/statute.html (accessed July 14, 2009).
2. A summary of some 12 existing fuel assurance proposals is available on IAEA’s website,
http://www.iaea.org/NewsCenter/Focus/FuelCycle/index.shtml (accessed July 13. 2009). See also
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Assurance of Supply
International Atomic Energy Agency, In Focus: Revisiting the Nuclear Fuel Cycle (Viena: IAEA,
Marzo 6, 2009).
3.See Tariq Rauf and Zoryana Vovchok, “A Secure Nuclear Future,”IAEA Bulletin (Septiembre 2009),
volumen. 51, No. 1, pag. 11.
http://www.iaea.org/Publications/Magazines/Bulletin/Bull511/51104871013.pdf.
4. Other relevant articles include III.A.1, III.A.2, III.A.7, and III.C.
5. Mohamed ElBaradei, “Introductory Statement to the Board of Governors,” March 2, 2009,
http://www.iaea.org/NewsCenter/Statements/2009/ebsp2009n002.html (accessed July 13, 2009).
6. Mohamed ElBaradei, “Reviving Nuclear Disarmament,” conference on Achieving the Vision of a
World Free of Nuclear Weapons, Oslo, Norway, Febrero 26, 2008.
7. Russian Federation, “Establishment, Estructura, and Operation of the International Uranium
Enrichment Centre,” INFCIRC/708 (Viena: International Atomic Energy Agency, Junio 8, 2007),
http://www.iaea.org/Publications/Documents/Infcircs/2007/infcirc708.pdf (accessed July 14,
2009).
8. See IAEA document, INFCIRC/659 (Septiembre 29, 2009),
http://www.iaea.org/Publications/Documents/Infcircs/2005/infcirc659.pdf; and Fact Sheet on
A NOSOTROS. HEU for a Nuclear Fuel Reserve, http://vienna.usmission.gov/np_nuclear.html, accessed July
15, 2009.
9. As noted above, only an IAEA member state could request supply of LEU.
10. International Atomic Energy Agency, Nuclear Fuel Cycle Information System, A Directory of
Nuclear Fuel Cycle Facilities (2009 Edition), IAEA-TECDOC-1613 (Viena: IAEA, 2009). Ver
mesa 14 for a list of states with enrichment plants, and tables 17-22 for states with fuel fabrica-
tion plants.
11. This includes 92 boiling water reactors or BWRs, 2f ast breeder reactors, or FBRs, 14 gas cooled
reactors, or GCRs, 16 light water graphite reactors, LWGRs (incluido 12 Chernobyl-style,
Russian-design reactors, and four very small Russian reactors at the Bilibino site), y 264 pres-
surized water reactors, or PWRs. One Argentine pressurized heavy water reactor, or PHWR
operates with very slightly enriched uranium, es decir. 0.9 percent U-235 instead of natural uranium’s
0.7 por ciento, but should the supply of enriched material be interrupted, it could operate on nat-
ural uranium.
12. See Federal Republic of Germany, “The Multilateral Enrichment Sanctuary Project: A Fresh Look
at Ensuring Nuclear Fuel Supply,” INFCIRC/735 (Viena: IAEA, Septiembre 25, 2008),
http://www.iaea.org/Publications/Documents/Infcircs/2008/infcirc735.pdf (accessed July 13,
2009).
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