THE BLOG
11/14/2014 08:30 am ET Updated Jan 14, 2015

An Offer Iran Can't Refuse: P5+1+Iran Fuel Fabrication Joint Venture on the Iranian Territory

ASSOCIATED PRESS

The P5+1 nuclear negotiations with Iran has entered the last stretch before the November 24 deadline.

The main impasse and biggest stumbling block seems to be over Iran's uranium enrichment capacity -- the maximum that the US would allow Tehran to keep reportedly is around 4,000 centrifuges, while Iran would like to keep all of its assembled 19,000 centrifuges, and Ayatollah Ali Khamenei, the supreme leader, has been on the record and indicated that he would like to see Iran operate even 10 times of that number.

Iran contends that it needs this "industrial scale" level of uranium enrichment primarily to fuel its already single unit operating Russian-made Bushehr nuclear power station and for at least two more units that it plans to build in the near future on the same site. However, there is a serious concern among the P5+1 countries about Iran's excessive uranium enrichment capacity. Some analysts, such as Mr. Robert Einhorn, even contended that Iran's "plan to produce Bushehr fuel independently by 2021 is not only unnecessary and uneconomical, it is also technically unfeasible, legally questionable, and highly unrealistic in terms of time frame. If Iran somehow managed on its own to fabricate and load fuel into Bushehr, major safety issues could arise." Moreover, they believe that this level of enrichment capacity will afford Iran a short "breakout time" -- should it decide to build a nuclear bomb, it is the time for amassing the needed amount and level of critical mass of highly enriched uranium for a bomb.

Iran, for whatever reasons -- self sufficiency for assurance of nuclear fuel supply, face saving, sunk costs, etc. -- is determined to keep and grow its uranium enrichment capacity and would not like to transfer its low enriched uranium to another country, for example to Russia, for fuel fabrication. While the P5+1, on the other hand, for whatever reasons -- hegemony, lack of confidence, fear of breakout, etc. -- is determined to curtail and tightly control this capacity.

Thus, a jointly optimal solution to this vexing problem of two seemingly divergent objective functions is to set up the "P5+1+Iran Fuel Fabrication Joint Venture" (PIFFJV) on the Iranian territory. Its function will be to directly convert Iran's domestically produced enriched uranium to fuel rods, which could then be used either in Iranian reactors or to be exported and sold to various nuclear power plants around the world.

The formation of the PIFFJV on the Iranian territory is quite consistent with the thrust of the Joint Plan of Action (JPOA) agreement, which was signed by the P5+1 countries and Iran in Geneva on November 24, 2013. The JPOA foresaw and granted that a "comprehensive solution" for Iran's nuclear program would "include international civil nuclear cooperation... and the supply of modern nuclear fuel as well as agreed R&D practices."

Iran like any other country in the world that operates a nuclear power plant is concerned about security, price and the long-term assurance of fuel supply for its reactor. When it comes to nuclear fuel, Iran has been burnt once before -- its fear is not only unreasonable, but also justified. Although being a founding member and spending well over one billion dollars as a part owner of Eurodif, a multinational enrichment facility joint venture based in France which was created in 1973, Iran was not allowed to access Eurodif services after its 1979 Islamic Revolution.

Moreover, as a recent study by the National Academy of Sciences and National Research Council concluded, "no single mechanism or strategy for assurance of nuclear fuel supply is likely to address every country's legitimate needs and desires. Each country's or region's needs and requirements may be different." (Internationalization of the Nuclear Fuel Cycle: Goals, Strategies, and Challenges, U.S. Committee on the Internationalization of the Civilian Nuclear Fuel Cycle; Committee on International Security and Arms Control; National Academy of Sciences and National Research Council, 2009, Finding 2c, p. 23).

There is ample evidence that the global market for nuclear fuel is growing and, as such, the PIFFJV would not only be an optimal attractive solution for Iran, but also will be a sound business investment with handsome returns in the future for all participating parties. Looking 10 years ahead, the World Nuclear Association (WNA, 2011) Global Nuclear Fuel Market Report shows a 48 percent increase in uranium demand over 2013-23 and 23.6 percent increase in demand for decade 2020 to 2030. (WNA, Uranium Markets, Updated April 2014). Also, according to several credible studies by the International Atomic Energy Agency (IAEA) and the OECD Nuclear Energy Agency (NEA), "the supply of uranium is uncertain... [and] uranium supply shortfalls could develop if production facilities are not implemented in a timely manner" (OECD-IAEA, 2008, p. 201& 202). And "uranium requirements are growing rapidly in East Asia (in particular in China where 29 reactors were under construction at the end of 2012). By the early 2020s, demand in this region is expected to surpass both that of North America and the EU" (OECD-IAEA, 2014, p. 112).

It seems that the Persian Gulf region is destined to be dotted with nuclear power plants in the next few decades and is becoming the world's main bazaar for nuclear reactor vendors in the near future. Both the United Arab Emirates (UAE) and Saudi Arabia have plans to have operational nuclear power plants before 2020. The UAE have already signed contracts with a South Korean consortium to build four reactors; concrete was poured for two -- Barakah Unit 1 &2 -- in Abu Dhabi; they expect to become operational in 2017 and 2018. Saudi Arabia announced plans to construct 16 nuclear power reactors over the next 20 years; other Persian Gulf states have also expressed interest in nuclear power for electricity generation and seawater desalination purposes. With proper safety precaution, technical provisions, and licensing agreements, the fuel for these nuclear plants could potentially be supplied by the PIFFJV.

Some noteworthy and major recent developments at the international level bode well and can pave the way for formation of the PIFFJV. For instance, in March 2011, the IAEA approved a proposal for nuclear fuel assurance led by the United Kingdom, co-sponsored by the member states of the European Union, the Russian Federation and the United States. As a response to this initiative, Germany proposed the establishment of a multilateral uranium enrichment plant administered by the IAEA, referred to as the Multilateral Enrichment Sanctuary Project (MESP). According to the OECD-IAEA (2014, 129), "the proposal foresees the construction of one or more enrichment facilities under the exclusive supervision of the IAEA. The MESP is designed to allow independent access to nuclear fuel cycle services, complementing other proposals on assurances of supply of nuclear fuel." The PIFFJV can be coupled with a MESP.

Moreover, PIFFJV could also help to realize one of Russia's stated goals for international nuclear cooperation. As, during a meeting of the Council of the Eurasian Economic Union in January 2006, Russian President Vladimir Putin outlined a Global Nuclear Power Infrastructure (GNPI) initiative to give all interested countries equal access to nuclear energy via, among others, creation of International Uranium Enrichment Centre (IUEC) to "provide nuclear fuel cycle services." Three to five such IUEC could be established in major regions around the world [Multilateralization of the Nuclear Fuel Cycle: Assessing the Existing Proposals, by Yury Yudin, United Nations Institute for Disarmament Research (UNIDIR), 2009, p. 26-28]. It was also reported last year that Russia's Rosatom might build up to eight generating units in South Africa and its possible that its nuclear fuel corporation, TVEL, may build a fuel fabrication plant in that country.

Another noteworthy and positive byproduct of the PIFFJV solution/mechanism is that the most efficient control on technological matters is obtained through the systemic integration of one country's technology with that of other countries, such that no one component (or subsystem) of the system could operate independently of the total system. Tight integration, inter-dependency and correlation among technologies of different countries provide much more oversight, control, and assurance than does a policy of restrictions and economic or technological embargo. This approach, which is based on engaging and integrating Iran's technological infrastructure, rather than further isolating and sanctioning it, constitutes a paradigm shift in foreign policy. It not only will reduce the risk of nuclear breakouts and accidents, but also it will provide a much more assured and effective control, and accurate verification of nuclear technologies in the future.

In summary, establishment of the "P5+1+Iran Fuel Fabrication Joint Venture" (PIFFJV) on the Iranian territory, which is in the spirit of the JPOA, provides a jointly optimized and politically correct solution for the complex problem of Iran's uranium enrichment capacity and the P5+1 countries' rampant worries about it.

___________________

Najmedin Meshkati is a Professor of Civil/Environmental Engineering, Industrial and Systems Engineering, and International Relations at the University of Southern California (USC). He was a Jefferson Science Fellow and Senior Science and Engineering Advisor, Office of Science and Technology Advisor to the Secretary of State (2009-2010). He has been conducting research on human performance safety culture of nuclear power industry and has inspected many nuclear power plants around the world, including Chernobyl (1997) and Fukushima (2012). He has also been a member and technical advisor of the National Academy of Sciences/National Research Council Committee on Lessons Learned from the Fukushima Nuclear Accident for Improving Safety and Security of U.S. Nuclear Plants, which has recently published its report entitled, Lessons Learned From the Fukushima Nuclear Accident for Improving Safety of U.S. Nuclear Plants (2014, ISBN 978-0-309-31177-9, the National Academies Press). He is the author of "Engineering diplomacy: An underutilized tool in foreign policy," Science & Diplomacy (published by the American Association for the Advancement of Science, AAAS, June 2010).