UPDATE: US-Russian nuclear pact shelved by president over Georgia– though US leaves door open to future collaboration

Nils Bøhmer/Bellona

Publish date: September 9, 2008

Written by: Charles Digges

The United States announced it was freezing a much heralded bilateral civilian nuclear pact with Russia, and President George Bush formally asked Congress to withdraw the pact from consideration in a sign of protest against Moscow’s military aggression in Georgia, US State Department and Administration officials said yesterday.

The yanking of the civilian nuclear pact appears to be the first casualty in the escalating war of words between Washington and Russia over Russian aggression in the former Soviet republic, which has basked in the spotlight of US attention.

The pact has been the target of fierce environmental criticism, and environmentalists in Russia across the board agree that sinking the pact is an environmental victory.

Yet it took a western political reaction to Moscow’s bully politics to shoot it down – though the Kremlin’s gunpoint diplomacy will likely play a role in the kinds of nuclear cooperation deals it is able to secure from other nations as well. The most notable of these is Australia, which is reconsidering exporting thousands of tons of Uranium to Russia for enrichment over the Georgian crisis. .

“The bottom line is that withdrawing the pact is better for the environment,” said Bellona’s Russian nuclear industry expert, Igor Kudrik.

Washington alerted Moscow of its decision early on Monday, and that it would be reconsidered at some point in the future, the US State Department said.

Russian response to the withdrawal of the pact from consideration by Congress was greeted with a shrug of the shoulders, diplomats interviewed by Bellona Web said.

Sergei Novikov, spokesman for Russia’s state nuclear corporation Rosatom, refused to comment on the broken deal.

In formally notifying the Congress of his decision, Bush wrote that the Russian government had taken actions that are "incompatible with peaceful relations with its sovereign and democratic neighbour Georgia," Agency France Presse reported.

“We’ve made it clear that Russia’s behavior has to be condemned and there have to be consequences that flow (from its actions) in Georgia – this will be an example of that” one State Department said in an interview with Bellona Web Friday.

The pact
The US-Russian civilian nuclear pact would have opened the doors for the two countries to collaborate on an international uranium enrichment centre and fuel bank – something that has been hotly contested by environmentalists over the waste enrichment produces.

The agreement also provided for Russia being able to reprocess US-controlled spent nuclear fuel – a long coveted prize for the Russian nuclear industry – on its territory. The United States controls some 80 percent of the world’s nuclear fuel, and Russia has been locked out of bigger reprocessing deals ever since Russia amended legislation allowing for the import of spent nuclear fuel in 2001. 

Another important element of the agreement that will go by the wayside is the lifting of US tariffs on Russian Uranium. Until last May, Russia could only ship uranium to the United States within the framework of the HEU-LEU agreement, which takes highly enriched weapons uranium from Russia, down-blends it, and puts it to work in American reactors for a price fixed by the United States Enrichment Corporation, which is well below market value. This agreement expires in 2012.

But US trade courts in May lifted those restrictions earlier than the agreements expiration, and Rosatom saw a gold mine in uranium imports to the United States.

But Russian experts are concluding that uranium sales to the United States are unprofitable.

According to Bulat Nigmatulin, Russia’s former deputy minister of atomic energy, any agreement on exporting uranium would be a financial mistake for Russia.

“It is senseless to sell uranium now – we need to find an occasion and get out of the HEU-LEU agreement,” Nigmatulin said.

“Selling uranium was interesting before 2003, when there was active money in the industry.”

The uranium that is now being sent to the United States under the HEU-LEU agreement, said Nigmatulin, is best kept in Russia for use in it’s own reactors.

Politics and the environment
Freezing the pact has nothing officially to do with environment, but it has been a lighting rod for attacks from Russian and international environmental agencies since it’s inception. The Russian environmental community has largely characterised the signing of the pact as Vladimir Putin’s last cynical gesture as president, essentially making Russia the world’s official nuclear dumping ground.

And though the rhetoric between Washington and Moscow over Georgia has been a Cold War flashback, the bloodshed has inadvertently upended a very environmentally dangerous agreement.

“The latest developments in Russia underscore the fact that Russia is not yet a stable and worthy country to which you would ship large amounts of spent nuclear fuel, either reprocessing or to store it in an international repository,” said Bellona physicist and daily manager Nils Bøhmer . “

“Let’s hope that the US decisions will be permanent, and that the USA will now focus on solving their own nuclear problems on their own soil.”

Also upset by Washington’s decision, noted Kudrik, are Russia’s desires to achieve uranium trading preferences, and cooperation with the United States on breeder reactor technologies.

“So it is a good that the US is abandoning the nuclear cooperation, and it should instead focus its efforts on clean energy,” said Kudrik.

Political repercussions
Beyond the break up of the US-Russian pact, many say the background of the conflict in Georgia on which it occurred will likely make other nations think twice before entering into cooperation with Moscow.

“The (nuclear) deal, signed four months ago, is dead in this Congress, but a new Congress will have a look,” Columbia Professor Steven Sestanovich, a specialist in Russia affairs under the Clinton administration, told The Washington Post.

“Even if this is only a defacto sanction, the Russians have to ask themselves, is this a part of a negative reaction to what they have done that is only going to get bigger if they don’t retreat,” he said.

Vladimir Kuznetsov of Russia’s Green Cross said the US withdrawal of cooperation, for the moment, will have an impact on international investment that is crucial to completing the international fuel bank set forth in the pact.

The United State Congress and the nonproliferation NGO, The Nuclear Threat Initiative, pledged a combing $100 million for the building of the Centre, but the US government has made no commitments to it’s long term up-keep and operation.

“The Russian-America agreement doesn’t envision financial support of the (centre) from the United States, but other countries will be looking to America, which now might refuse cooperation with Russia,” said Kuznetsov.

Further, said Kuznetsov: “The United States, as the largest donor to the International Atomic Energy Agency, could pressure other countries in the agency to take stricter sanctions against Russia.”

As it stands, getting partners for the International Uranium Enrichment Centre has progressed in fits and starts. In the two years since the initiative was announced, the centre has attracted only one prospect – Kazakhstan, which owns 10 percent of the facility.

In June of last year, Russia and Ukraine signed a protocol of understanding, but no other agreements have been forthcoming from Kiev. To the contrary, Ukraine’s Energoprom signed a contract with American’s Westinghouse for the delivery of nuclear fuel from 2011 to 2015.

Other potential clients and partners in the center have included India, Japan, Iran, South Korea and some African nations.

Chance to resubmit pact to Congress
Both Bush and Secretary of State Condoleezza Rice, who was the first to announce the decision, said the pact could be resubmitted to Congress if circumstances change.

"We make this decision with regret," Rice said in a statement read by her spokesman Sean McCormack. "Unfortunately, given the current environment, the time is not right for this agreement."

Russia reacts with ambivalence

"Such a step is regrettable" and is "out of keeping with bilateral relations," according to a Russian foreign affairs ministry official quoted by Interfax.

However, "Russia does not need civilian nuclear cooperation with the United States more than (Washington)," said the official who asked to remain anonymous.

US nuclear nonproliferation expert Richard Einhorn agreed, and played down the harm that canceling the agreements is supposed to bring to Russia.

“It would be a boon to both countries as they promoted nuclear nonproliferation and sought to ensure that terrorists did not acquire sensitive material,” he said.

“The Russians would like this agreement but they are not dying to get it,” said Einhorn.

“They are prepared to live without it. The benefits fall just about equally to both sides. This is not a big favor we have done for the Russians, and so this is not a great punishment to deny it to them,” he said.

Who to thank for the waste?

Rosatom for years has been gathering waste to reprocess in some kind of international centre, but it has thus far been gathering dust. Since 1996, the Angarsk Electro-Chemical Combine in Siberia – the chosen site for the International Uranium Enrichment Centre – has been receiving from 130 to 290 tons annually of depleted uranium hexafluoride, or uranium tails, from Germany’s Urenco and France’s Eurodif

The uranium tail imports are, in fact, a deal to import nuclear waste: a very small quantity of uranium is extracted from the tails and sent back to the West, and the remaining 90 percent stays in Russia. Some 700,000 tons of this toxic and radioactive waste has piled up in Russia.

Rosatom has already declared the deals to be a mistake, and Rosatom chief Sergei Kiriyenko has said he will not renew them. The remaining question is: who does Russia have to thank for the radioactive waste pile up?

Former minister of atomic energy, Yevgeny Adamov – who in February was found guilty of defrauding the Russian government and given a suspended sentence – suggested more than 10 years ago that Russia allow the import of spent nuclear fuel into Russia, apparently prefers to avoid unpleasant questions on the subject.

“Due to the fact that (Adamov) has a good memory, he will never talk to Bellona,” his secretary told Bellona Web in a telephone request for comment.

Vera Ponomareva contributed to this report from St. Petersburg.

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