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Nuclear News - 2/9/2006
RANSAC Nuclear News, February 9, 2006
Compiled By: Roman Sehling

A.  Nonproliferation Diplomacy
    1. Russia needs only one uranium enrichment center - official , RIA Novosti (2/8/2006)
    2. America Will Split Uranium With Russia, Mikhail Krasnov, (2/7/2006)
    3. Russia, US nuke initiatives compatible-US deputy secr of energy, Andrei Sitov, ITAR-TASS (2/7/2006)
    4. US proposes global N-power 'partnership' ENERGY STRATEGY, Ben Bain , Financial Times (2/7/2006)
B.  Russia - Iran
    1. Talks format on Iran issue must be broadened - security expert , Denis Malkov, RIA Novosti (2/9/2006)
    2. Russian Lawmaker Says Iranian Nuclear File To Be Solved With China, India , Interfax-AVN (2/8/2006)
    3. Russia walking fine line in Iran nuclear standoff, Prime-TASS (2/8/2006)
    4. Moscow is not happy about Iran's position, Pyotr Goncharov, RIA Novosti (2/7/2006)
    5. Iran's Penultimate Chance, Sergey Karaganov, Rossiyskaya Gazeta (2/6/2006)
    6. Tehran Agrees to Talks with Moscow. Pentagon Hints at Military Option for Resolution of Iranian Nuclear Problem, Arthur Blinov, Nezavisimaya Gazeta (2/6/2006)
C.  G8 Global Partnership
    1. Russia Faces Its First G8 Test, Stephen Boykewich , Moscow Times (2/9/2006)
    2. Kremlin: Dialogue on Russian G8 Priorities Proceed Smoothly , Interfax (2/6/2006)
D.  Global Threat Reduction Initiative
    1. NNSA To Hold Private Sector Dialogue To Discuss Contracting Options In Global Threat Reduction Program, National Nuclear Security Administration (2/8/2006)
E.  Nuclear Industry
    1. Russia needs integrated nuclear energy structure - energy expert, RIA Novosti (2/9/2006)
    2. Federal Atomic Energy Agency to Surrender Assets to Atomprom, Kommersant (2/9/2006)
    3. The world will not do without nuclear power engineering , Yevgeny Velikhov , RIA Novosti (2/9/2006)
F.  Nuclear Forces
    1. Russian Nukes Redux; Looking to recapture lost glory, Moscow is building a new nuclear warhead designed to evade U.S. defenses, Owen Matthews, Newsweek (2/13/2006)
    2. Russia launches project to create next-generation nuclear sub, Interfax (2/8/2006)
G.  Border Security
    1. Russia: Belgorod Customs Seize Radioactive Gadgets From Ukrainian , ITAR-TASS (2/7/2006)
H.  Submarine Dismantlement
    1. Nerpa shipyard finished dismantling of nuclear submarine sponsored by UK, Bellona Foundation (2/8/2006)
I.  Chemical Weapons Destruction
J.  Official Statements
    1. Opening Statement for Hearing on New Initiatives in Cooperative Threat Reduction, Office of Sen. Richard Lugar (2/9/2006)

A.  Nonproliferation Diplomacy

Russia needs only one uranium enrichment center - official
RIA Novosti
(for personal use only)

One uranium enrichment center would be sufficient for Russia's nuclear energy needs, a top nuclear energy official said Wednesday.

Sergei Kiriyenko, the head of the Russian Federal Agency for Nuclear Power, said: "It will be enough for Russia to have only one uranium enrichment center, and four or five similar centers internationally, for the main regions."

Russian President Vladimir Putin had said on January 31 that uranium enrichment centers could be set up in other "nuclear club" countries, providing access on a non-discriminatory basis to nations seeking for nuclear fuel for power stations.

Kiriyenko said it was necessary to solve several tasks in the nuclear energy sphere, including international ones. Among these he cited the formation of an international center for uranium enrichment, an international center for the maintenance of spent nuclear fuel, and an international nuclear energy training center for personnel. He also said new discoveries in the sphere of nuclear energy must be integrated into the nuclear program.

He also said it was important to form a national holding for the nuclear energy sector.

"The holding must incorporate the whole technological cycle of the civic nuclear energy," Kiriyenko said. "That is why we must not only restore, but expand the technological chain of the Ministry of Medium Machine Building."

Most of the nuclear power infrastructure of the former Soviet Ministry of Medium Machine Building fell to Russian hands after the disintegration of the Soviet Union, but some of its elements are located in other Commonwealth of Independent States countries. Uranium is mined in Kazakhstan, while Ukraine produces turbines.

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America Will Split Uranium With Russia
Mikhail Krasnov
(for personal use only)

America is reckoning on setting up a joint venture together with Russia to sell nuclear fuel to third-world countries. The main aim of the United States is to keep new hopefuls out of the nuclear club. Experts regard this project as dubious both economically and politically.

The US Administration will suggest to the Senate that it take into account in the budget the possibility of setting up a joint venture with Russia to sell nuclear fuel to countries which do not have access to advanced nuclear technologies. It is proposed that the Russian-US organization will also export spent nuclear fuel for subsequent processing, thereby preventing the creation of nuclear weapons in third-world countries. (Passage omitted)

However, experts are certain that the US proposal is not of interest to Russia. "Russia can cope perfectly well itself with the sale and processing of spent nuclear fuel," Brokerkreditservis analyst Vyacheslav Zhabin believes. "This is more a political statement on America's part based on a desire for total control of this environment. If the joint venture is set up, we will get a lot of problems with monitoring, and the Americans will be constantly restricting Russia. As for the United States emerging onto the nuclear fuel market, this is, rather, a strategic area of secondary importance."

In the opinion of experts, the idea of setting up an international monitoring organization appears more attractive. "Russia has spoken out repeatedly on this, and the IAEA option aired earlier seems more interesting," Vladimir Poplavskiy, deputy director of the Physics and Power Engineering Institute, said. "For example, Zheleznogorsk, where the first spent nuclear fuel storage facility will appear by 2008, could well become the basis for such a center."

But organizational problems could badly delay the creation of such an organization. "In addition to the financial component, we periodically get stuck while working out the juridical component," Vladimir Poplavskiy warned. "Given the will, of course, everything can be overcome, but the process will drag on a long time."

"The US initiative should be viewed in the context of the terms on which an agreement may be concluded," Anton Khlopkov, deputy director of the PIR-Center, pointed out. "But, on the whole, I regard the idea as interesting, although it is my opinion that the creation of a bilateral venture is unlikely, for other countries will most likely want to participate in the project.

"But if the United States names the cessation of Russia's cooperation with Iran as one of the conditions for setting up the joint venture, then in that case the project will not be implemented. This is unacceptable to Russia.

"As for the economic advantage, once again everything will depend on what the United States demands. If the idea is depoliticized, we can count on additional funding from America. In addition, the Americans will hardly participate in the construction of nuclear stations in Iran -- that is obvious. There is another aspect: Russia is still unable to cooperate actively with a number of countries in the sphere of processing spent nuclear fuel. The point is that most of the nuclear fuel in South Korea or Taiwan, for example, is of American origin. The Americans do not give Russia permission to process spent nuclear fuel from third countries for a number of reasons. If Russia obtains such permission as a result of creating the joint venture, then this will be highly advantageous economically."

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Russia, US nuke initiatives compatible-US deputy secr of energy
Andrei Sitov
(for personal use only)

New initiatives of Russia and the United States in the sphere of nuclear energy are compatible with each other, US Deputy Secretary of Energy Clay Sell said on Monday answering an Itar-Tass question at a briefing for journalists.

As the curator of the new programme Global Atomic Energy Partnership he presented it to the press in connection with the publication of the US draft federal budget for 2007.

Two weeks ago Sell together with US Under Secretary of State for Arms Control and International Security Robert Joseph made a tour of the countries in which Washington sees potential partners in the implementation of its new plan. They visited Moscow, as well as London, Paris, Beijing and Tokyo, i.e. the capitals of the countries possessing the full nuclear fuel cycle. A separate meeting was held with Director General of the International Atomic Energy Agency (IAEA) Mohammed ElBaradei in Vienna.

The Americans presented their proposals the essence of which is to jointly develop new technologies that would make it possible to process spent nuclear fuel without the extraction of plutonium. It would settle one of the most dangerous problems of nuclear proliferation. Simultaneously it would be necessary to create new fast-fission reactors that are capable of burning spent nuclear fuel.

As a result there is hope to obtain an international regime permitting the leasing of nuclear fuel and its subsequent return to the country possessing the full nuclear cycle, Sell said.

Russia has recently proposed to create a system of international centres for the provision of nuclear fuel cycle services, including enrichment, under the IAEA control, on the basis of non-discriminatory access. The proposal was made soon after the Sell and Joseph trip. The US administration initially favourably treated the Russian initiative and now has confirmed that it is compatible with its own plans.

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US proposes global N-power 'partnership' ENERGY STRATEGY
Ben Bain
Financial Times
(for personal use only)

The US Energy Department yesterday proposed a broad-based nuclear power plan designed to meet surging domestic and world energy needs by encouraging the construction of nuclear power plants in the US for the first time in a generation, and setting up an international programme for the exchange of nuclear fuel.

The initiative, called the Global Nuclear Energy Partnership (GNEP), would seek a partnership with other established nuclear countries such as the UK, France, Russia, China and Japan to export nuclear fuel waste to developing countries and encourage them to use so-called fast reactors that burn plutonium and other by-products from conventional reactors.

The US and other countries would then dispose of the final waste, reducing the overall waste burden and preventing nations from acquiring weapons-grade nuclear material.

Clay Sell, US deputy secretary of energy, said he had travelled recently to capitals from London to Beijing consulting foreign officials and nuclear experts on the proposed programme. The response had been positive.

"The reason we think this can work from a non-proliferation standpoint is that we are seeking to provide commercially attractive incentives for countries to lease fuel rather than make investments in their own fuel cycle," Mr Sell said.

The GNEP proposal represented a "nuclear renaissance" that was crucial to meeting the world's growing energy needs, which were expected to double by 2050, as well as cutting the overall amount of nuclear waste.

The Energy Department announced the Dollars 250m (Euros 208m, Pounds 147m) GNEP initiative as part of President George W. Bush's Advanced Energy Initiative and included it in the administration's 2007 budget proposal, released yesterday.

The department's overall proposed budget for 2007 remains fixed at Dollars 23.6bn, but the department is requesting a Dollars 500m increase in science funding for Mr Bush's American Competitiveness Initiative.

The department is also proposing significant increases in funding for alternative energy sources, such as biomass and solar energy, that were highlighted in the president's State of the Union pledge to end America's "addiction to oil". But overall spending on energy efficiency and alternative energy would rise by just 0.2 per cent under the proposal, which calls for eliminating funding for development of hydropower and geothermal technologies and would cut funding for new vehicle technologies.

The GNEP seeks to harness new technology that can reprocess nuclear fuel without separating plutonium - technology that was not available when the US stopped reprocessing fuel more than 35 years ago due to proliferation fears. The new reactor technology reduces the threat that the transferred fuel can be used for nuclear weaponry, advocates say.

The recipient of the fuel would then use Advance Burner Reactors, or "fast reactors", capable of burning down the spent fuel for power and then return it to its country of origin.

But critics say that "fast reactors" have proved unreliable, and that the programme would make the US and its allies far less safe by making it easier for countries to acquire nuclear fuel.

"There are two proliferation concerns that you need to worry about - one is terrorists manufacturing weapons from stolen material, and the other is a state like Iran or North Korea using the technology and diverting the technology and or the material for state weapons," said Thomas Cochran, of the Natural Resources Defense Council, an environmental advocacy organisation.

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B.  Russia - Iran

Talks format on Iran issue must be broadened - security expert
Denis Malkov
RIA Novosti
(for personal use only)

The talks format on the Iran nuclear issue needs to be expanded, bringing the United States, Russia, and China to the negotiating table, a Russian security specialist said Thursday.

Vladimir Yevseyev, a specialist at the International Security Center of the Russian Academy of Sciences, said the existing format of Iran plus the European Union trio of Germany, France, and the United Kingdom, needed to be broadened.

"The countries that are now attempting to resolve this problem have reached a dead-end, they cannot offer Iran what it is actually in serious need of, and cannot help it resolve its security problem," Yevseyev said.

According to the expert, Iran is not concerned about guarantees of uninterrupted supplies of nuclear fuel, but its own security. Tehran will make substantial compromises in its nuclear program if it is given security guarantees, i.e. that the country will not be attacked. This guarantee should come first and foremost from the U.S., he said.

There are currently 140,000 U.S. troops in neighboring Iraq and both President George Bush and Defense Secretary Donald Rumsfeld have refused to rule out the use of force against Iran, which they have said must be prevented from developing nuclear weapons.

"In the event of possible use of force, only two states could take part in an attack on Iran - the U.S. and Israel - and even Israel would not attack Iran alone, without agreeing its position with the U.S.," Yevseyev said.

Iran's controversial Natanz nuclear research facilities are located about 1,700 kilometers (1,000 miles) from the border with Israel, which has a fleet of F-15I warplanes that can fly about 4,500km without refueling. The country destroyed suspected nuclear facilities in Iraq in an air strike in 1981.

According to Yevseyev, if the U.S. gives a guarantee on the matter, then expanding the talks' format will be possible. Russia and China may have substantial economic and political interests in maintaining partner relations with the Islamic Republic, but the talks would be pointless without an eighth participant, the U.S., he said.

"Unfortunately, the U.S. still does not want to seriously consider this problem, and is taking a passive position."

Some members of the U.S. administration support the policy on Iran employed under President Bill Clinton, of looking for a rapprochement, whereas others see the use of force as the best solution, he said.

"As a result, the current position in Washington is that of a bad policeman - 'reach agreement, and if that doesn't work out, we'll interfere'," he expert said. "This is an unconstructive position, as a great deal depends on it [the U.S.]."

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Russia walking fine line in Iran nuclear standoff
(for personal use only)

With global attention focused on the West's nuclear standoff with Iran, Russia has found itself caught in the middle of the conflict between the two sides. While Russia seeks to maintain good relations and further develop economic and political ties with Iran, it also has signed international nuclear non-proliferation treaties and has expressed strong opposition to any attempt by Iran to obtain nuclear weapons. As a result, Russia is playing the role of a mediator in a conflict with an increasingly uncertain outcome.

"Iran is a neighbor, Russia and Iran deal with each other over the Caspian Sea. Russia is involved in Iran's nuclear energy program and wants to revive its influence in the Middle East," Michael Heath, political analyst at Aton Capital, said. "Given all these factors Russia has a lot more at stake here than other countries. Pushing too hard on this issue would possibly alienate Iran and polarize the situation even more."

"Naturally Russia is inclined to be supportive of Iran, but at the same time Russia has nuclear non-proliferation treaty obligations and they are not going to mess around with those," he said.

In mid-January, defying the International Atomic Energy Agency (IAEA), Iran said that it would resume research on the nuclear fuel cycle, after a voluntary suspension. The U.S. and other Western countries say that Iran is pursuing a nuclear weapons program. Iran insists its program is entirely peaceful and devoted solely to providing nuclear fuel.

On February 4, the IAEA's 35-nation board of governors voted to report Iran to the U.N. Security Council, which has the power to impose economic and political sanctions.

Russia and China agreed to support the resolution on condition it did not contain any immediate threat of sanctions against Iran.

Tehran responded by saying it would start full-scale uranium enrichment and bar surprise inspections of its facilities. The Security Council is not expected to take any measures until March 6, when the next meeting of IAEA's board of governors is expected to take place.

While Iran's nuclear ambitions have been loudly condemned by the E.U. and the U.S., Russia has been intent on steering a neutral course, ensuring that Iran does not become a nuclear power while at the same time avoiding a rift in relations with that country.

"Russia used to have a much more difficult relationship with the Arab world and Iran after the Afghanistan war and it is only since the second Gulf War that it has also managed to build a better relationship," Chris Weafer, chief strategist at Alfa Bank, said.

"It seems to me that since President Vladimir Putin took office Russia has tried to both steer a middle ground in global politics and has been very careful to avoid being categorized as part of one group or another," he added. "In this way it has steadily built up a good relationship with countries like China, India, the E.U. and also the U.S."

In the meantime, Russia's ability to help with the Iran crisis seems limited at best. Russia has proposed to Iran the creation of a joint venture for the enrichment of uranium on Russian territory, an idea that was warmly received by the U.S. and the E.U. but to which Iran has not yet agreed.

Iran is said to want China to be involved in the enrichment project as a hedge against the use of the venture by Russia to put pressure on Tehran. Following talks in Moscow late last month, Iran's top nuclear negotiator said Tehran was open to participation by other nations but that the prospect of Chinese involvement was not specifically discussed.

Russia has also said it is open to the prospect of third-country involvement in the project.

"Russia can play the role of the honest broker, as its relations with Iran are better than Europe's or the U.S'," Heath said. "The question is whether Iran is really ready to allow that and the ball is really in Iran's court. Russia has put forth the idea of creating a joint venture for uranium enrichment on Russian territory as a way of defusing the situation and preventing Iran from getting nuclear weapons. However, if Iran wants nuclear weapons it is not going to agree to the proposal and there is nothing Russia can do about it. If that is the case Russia will find itself aligned with the U.S. and Europe."

Indeed, a senior Russian lawmaker said Tuesday Moscow has practically no leverage over Iran.

Konstantin Kosachev, the Kremlin-connected head of the foreign affairs committee of the lower house of parliament, told Moscow Echo radio station that all previous attempts by Moscow to influence Tehran had failed.

"We have practically no levers to put pressure on Iran," Kosachev said when asked whether the Russian-Iranian talks set for next week could achieve a breakthrough.

A high-ranking Iranian delegation is set to visit Moscow February 16 to discuss Russia's offer to enrich uranium for Iran.

Putin has said he does not believe Iran has nuclear weapons or is trying to develop nuclear weapons. He also has said that Russia will only stop building a nuclear power plant in the Iranian city of Bushehr if Iran violates the requirements of the IAEA.

"We are cooperating with France, the U.K. and Germany and with our U.S. colleagues. We consider the decision made by the IAEA's board of governors as balanced. We will clarify to our Iranian partners the essence of this decision," Putin said in an interview with Spanish journalists ahead of his two-day state visit to Spain which began Wednesday.

In addition to the joint venture proposal, Putin has been calling for the creation of an international system under which nations with enrichment technology would carry out the process for others that want nuclear power. He said Russia could lead the way in creating enrichment centers. "If you look at Putin's statements he is trying to drag out the process as much as possible to provide a chance for a compromise solution," Heath said. "I'm not sure economic sanctions and/or military action are such a certainty yet, (but if that becomes the case) Russia is unlikely to endorse economic sanctions and definitely not military action against Iran. Russia would probably try to craft something that is short of either or it may abstain from voting on a resolution authorizing either."

Possible military action against Iran may be a long way off, but it remains a possibility as the U.S., the country most likely to lead any military campaign against Iran, has said the military option "remains on the table." Israel has also repeatedly said it would not tolerate a nuclear-armed Iran.

Another war in the Middle East would inevitably shake investor sentiment and have a negative effect on global equity markets, however Russian markets would be insulated to some degree, analysts said.

"If something happens with Iran, which is a stronger and more dangerous country than Iraq, it wouldn't be positive for anyone, Russia included," Heath said. "However, any military action would likely cause the price of oil to remain high or likely go higher and, since Russia sells oil and gas, that would protect Russian markets somewhat."

In a greater sense, Russia's approach to the Iran crisis is in keeping with the Kremlin's principle foreign policy goal, which is to maintain the status quo, analysts said.

"Russia does not wish to be identified as part of any geopolitical grouping but would like to keep an open relationship with all major countries and regions. That provides the ideal combination for the Kremlin, i.e. it is good politics and good economics," Weafer said.

By keeping open contact with countries that have a difficult relationship with the U.S. (and to a lesser extent, the E.U.) such as North Korea, Venezuela and Iran, Russia can use this neutral status to be a bridge between those countries and others, he said.

"In this way Russia can actually enhance its global role and be more relevant. For example, amongst the G8 countries Russia is the only one that has an open dialogue with those three troublesome states," he added.

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Russian Lawmaker Says Iranian Nuclear File To Be Solved With China, India
(for personal use only)

Russia and several other influential players on the global political arena, primarily China and India, have not exhausted the possibilities of influencing Tehran in order to settle the situation around the Iranian nuclear program, Andrei Kokoshin, chairman of the State Duma committee for CIS affairs and ties with compatriots, said on Wednesday.

"After the IAEA Board of Directors decided not to hand over the "Iranian dossier" to the UN Security Council, Tehran got the chance to take a mutually acceptable course and confirm previous statements on its unwillingness to obtain nuclear weapons," Kokoshin told Interfax-Military News Agency.

According to him, the problem of providing enriched uranium for the Iranian nuclear energy industry can be solved on the basis of Moscow's proposal to set up a joint venture on the Russian territory. "It is now important that Tehran makes a final decision on this project as soon as possible," he said.

"It is also important that China has backed this proposal, because China has a serious technological backlog in the nuclear sphere and substantial financial resources," Kokoshin stressed.

"Now we are on the Iranian side, so to say, and we need to get intelligible and unambiguous responses to Russian proposals, taking into account the break that has emerged as a result of the vote in the IAEA," he added.

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Moscow is not happy about Iran's position
Pyotr Goncharov
RIA Novosti
(for personal use only)

Three major Russian news agencies - RIA Novosti, ITAR-TASS and Interfax - have published a statement by a certain "expert", who is closely involved in the negotiations on the Iranian problem.

To quote the expert, "the situation around Iran is very bad and is going from bad to worse." "A number of Iranian leaders are deliberately escalating the tensions," he said.

What is Moscow displeased about? What does it fear?

To start with, Moscow was disappointed by Iran's response to the decision of the International Atomic Energy Agency Board of Governors to transfer the Iranian file to the UN Security Council. "IAEA has made a rational decision, and Moscow is frustrated with Tehran's spontaneous response to this decision," said the expert. He seems to be hinting that IAEA could have made a much less favorable decision, and that Iran should not pretend it is not aware of this.

Moscow is also disgruntled about Tehran's reaction to its offer to set up a joint venture with Russia on uranium enrichment. Moscow believes that under the circumstances Iran has only one option: to make a political decision on uranium enrichment on Russian territory. The expert said that the negotiations on this issue were very difficult. He said that the Iranians "did not want to listen to reason, and were resorting to tricks", that they were "trying to exploit our pseudo-dependence on cooperation with them, that it is difficult to conduct negotiations using rational arguments pro and contra."

Moscow is not happy about Tehran's general political line, primarily about its deliberate efforts to step up tensions.

There are several reasons behind this line, but the main explanation is that the new President and his entourage cannot give up their election slogans. "They have sunk into this rhetoric and cannot get out of it, revealing lack of competence and experience, which leads to the wrong positioning, and misinterpretation of Iran's place in the world arena".

The Russian official media have openly admitted Moscow's attitude to Iran's negotiating tactics for the first time. This suggests another question: is Moscow going to change its position on Iran? Or is it going to give in to the U.S.?

The expert doesn't think so. He points out that the only option is "to show patience and continue dialog (with Iran) although the negotiators, including Russian representatives, find it very difficult". "Withdrawal from the talks would mean loss of control, in which case the situation will develop in line with Iranian logic," he said, apparently describing the worst-case scenario.

He did not rule out a possibility of a military operation against Iran by the U.S. and its allies. "The U.S. and its allies are bound to have a plan of a combined missile and bomb attack against Iran, but after all, the U.S. has a similar plan against any other country, including Russia, which it has kept since the Cold War times." He said it was "abundantly clear that the U.S. has started playing the Iranian card to distract attention from its other setbacks, if not failures. U.S. leaders are inciting Congress and Israel. The situation is very bad."

It goes without saying that simultaneous coverage of these statements by the three major Russian information agencies is not accidental. It is clear that the journalists have been invited to the Foreign Ministry, and perhaps even to the Kremlin. It is also obvious that these statements are designed for export rather than domestic consumption. They were made to send Tehran a signal that there is a limit to Russia's patience, and that its ability to protect Tehran against the referral of its nuclear file to the UN Security Council is not boundless, all the more so since Tehran is doing everything for the file to land there, as it follows from its conduct during the IAEA emergency session and after it.

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Iran's Penultimate Chance
Sergey Karaganov
Rossiyskaya Gazeta
(for personal use only)

The struggle surrounding Iran's nuclear program has entered the endgame. For a long time the European trio on the one hand and Russia, on the other, tried to talk Iran out of those parts of the program which in theory could lead to the creation of a nuclear bomb. The United States played the role of "bad cop," but in the past year elements of flexibility began to show up even it its line.

The International Atomic Energy Agency (IAEA) acted in parallel. Its inspectors sometimes found the indications of military research in Iran's programs or the concealment of one program or another, but as a rule they maintained that, formally, Iran had not strayed outside the framework of the commitments it had assumed under the Nuclear Weapons Non-Proliferation Treaty.

By and large we used to regard Iran, and still do regard it, as a friendly state and potentially valuable geopolitical partner in the region. Iran has managed to curb population growth and has created, as a supplement to its great and ancient culture, a relatively modern system of education and even before the oil boom began it had secured a small increase in per capita GDP which contrasted sharply with the situation in the vast majority of countries surrounding it.

We also proposed that Iran create on Russia's territory a joint production facility for the enrichment of uranium for Iranian nuclear power stations so as to eliminate suspicions that Tehran was creating nuclear weapons. Negotiations began, but as far as is known, they did not proceed very successfully.

The cogency of the arguments of experts who considered that Iran needed a nuclear program solely in order to exchange it for a way out of its semi-isolation and for strengthening its international standing, weakened.

Tehran fiercely rejects suspicions of trying to create a bomb. But it is not believed. Just as any country with a closed political system is mistrusted and just as assurances of the USSR's peaceful intentions were disbelieved. For Tehran the situation has been exacerbated following several statements about Israel from its president. The image that was being cultivated of a responsible country started rapidly to fall apart.

Let me qualify my remarks straightway. The Iranian do have a moral right to wish to possess nuclear weapons. They are in a very dangerous region. In the south there is nuclear Pakistan which could explode at any moment. In the west there is unstable Iraq with its US troops and further on there is nuclear Israel which Tehran declares to be its worst enemy. (Although to a large extent this is the problem of Tehran itself which is cultivating an enemy for itself).

The Iranians have a valid complaint about the international community's, in many ways unjust, attitude toward them. They recall that during the Iran-Iraq war everyone -- both the United States and the USSR -- helped Iraq and even maintained a shameful silence when Iraq used chemical weapons against the Iranians.

But the problem lies in the fact that the acquisition of nuclear weapons by Iran is unacceptable both for the states of the region and for the Great Powers and above all for Russia which is located in the immediate proximity of Iran and within the range of potential Iranian nuclear weapons delivery vehicles.

The nuclearization of Iran will, with a high degree of probability, provoke the creation of an "Arab nuclear bomb" by Saudi Arabia and Egypt. One will have to forget about the concept of strategic stability which the old nuclear powers achieved having passed several times along the borderline between the life and death of humankind. The probability of nuclear war with unknown consequences is growing by an order of magnitude. No one knows how a nuclear Tehran will behave and whether there will be a victory in its leadership for those elements that are calling even now for the destruction of other countries and for the closing of the Persian Gulf. The Non-Proliferation Treaty will be finally killed off. There is a sharply increasing risk of all kinds of preemptive strikes even before the acquisition of nuclear weapons by Iran, although no one, the Americans included, wants to resort to them, realizing their limited military usefulness, and their unlimited political harmfulness.

In this situation we were unable, and we did not have the moral right, bearing in mind the vital interests of our own safety, to continue to counter the appeals and the intensifying pressure of the West for the Iranian nuclear dossier to be passed to the UN Security Council. All the Great Powers agreed that on 2 February the IAEA should inform the UN Security Council about this dossier. Its examination in the Security Council can begin only a month later, after the IAEA's final report. Moscow managed to bargain for this "window of opportunity" for Tehran and even after this, there will be some time left before the introduction of possible sanctions.

Things are now down to Tehran. Its representatives are saying that the handover of the dossier to the Security Council closes the opportunity for negotiations. This is not the truth. Others are asserting that the parliament and the people will not tolerate such a concession. It is also difficult to believe such assurances. In conditions of a highly "managed democracy" in Iran and of mass media that are under virtually total control, making reference to society just does not wash.

Tehran is faced with a historical challenge and it is necessary to respond very rapidly to this challenge. Either Iran right now trades a renunciation of its potential nuclear weapons (by accepting, for instance, Russia's proposals) in exchange for a way out of international isolation and for recognition as one of the responsible players of the new world. Then investment will flow into Iran, the country will accelerate its growth, and its prestige and international clout will grow rapidly.

Or Tehran will try in the future too to continue its nuclear program which looks bellicose. Then there will be sanctions and a frigid, if not actually hostile, encirclement, a shrinkage of the opportunities to draw on external resources and technology, a slowing of economic development, and it will be doomed to backwardness. And there will be the constant expectation of preemptive strikes against facilities of the nuclear and, maybe industrial infrastructure.

I would very much like to hope that the heirs of that resplendent Persian culture -- the highly intellectual elite -- will be able to surmount the old resentments and suspicions and the remnants of religious fanaticism and to pull Iran out of the "nuclear noose," and that they will open up before the country the path to transformation into a great power of the future and not of the past, into a bulwark of regional stability and not into a force that undermines stability. Everyone has a vested interest in that.

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Tehran Agrees to Talks with Moscow. Pentagon Hints at Military Option for Resolution of Iranian Nuclear Problem
Arthur Blinov
Nezavisimaya Gazeta
(for personal use only)

The Iranian authorities confirmed yesterday that Russian-Iranian talks on uranium enrichment on Russian Federation territory will begin in Moscow 16 February. Iranian Foreign Ministry Press Secretary Hamid-Reza Asefi said in this connection: "The situation has changed. We will take part in talks with Russia."

A day earlier US Defense Secretary Donald Rumsfeld said in Munich that he is not ruling out "any options" for the resolution of the Iranian problem. This was viewed by participants in the International Security Conference, at which Rumsfeld was speaking, as a threat to use military force against Tehran.

On Saturday (4 February) Iranian President Mahmud Ahmadinezhad gave the order for IAEA inspectors' surprise visits to the country to be suspended and research and industrial work on the nuclear program to be initiated. That is official Tehran's reaction to the resolution adopted on Saturday by the IAEA's Board of Governors in Vienna. This resolution makes provision for the referral of the Iranian nuclear dossier to the UN Security Council in March if Tehran fails to "restore the international community's trust in its nuclear program."

With his decision to cancel surprise inspections Ahmadinezhad effectively predetermined the Iranian dossier's referral to the UN Security Council. The only thing that can prevent that outcome is successful talks with Moscow on the issue of uranium enrichment for the Iranians on Russian territory. Today US President George Bush is expected to announce the United States' readiness to enrich uranium in conjunction with Russia for nonnuclear countries.

The IAEA resolution was not adopted without argument. And these arguments concerned not only the Iranian nuclear program itself but also the threat of nuclear weapons' worldwide proliferation as a whole. It only proved possible to include the latter point in the document after an appeal for the Near East to be transformed into a nuclear-free zone was incorporated -- Arab countries striving to secure Israel's nuclear disarmament are pressing for this.

The result of the vote was impressive -- of the 35 members of the IAEA Board of Governors 27 voted in favor of the resolution, three opposed it, and five abstained. Those in favor included representatives of all the UN Security Council permanent member countries. According to the resolution, the IAEA general director is to report to the UN Security Council on the steps that Tehran needs to take to dispel the suspicions regarding its intention of developing nuclear weapons. The agency will also send the UN Security Council a report which it will submit at the session of the IAEA Board of Governors in March and a draft resolution which is to be adopted then.

Iranian President Ahmadinezhad has not only announced Iran's withdrawal from the Additional Protocol to the Nuclear Nonproliferation Treaty, which makes provision for IAEA surprise inspections, but also voiced his skepticism a few days earlier regarding Moscow's proposal to carry out uranium enrichment for the Iranians on Russian territory.

However, yesterday the most influential Iranian leader in the nuclear field, Gholam-Reza Aqazadeh, vice president of Iran and head of the Atomic Energy Organization, provided assurances that Tehran has not rejected the Nuclear Nonproliferation Treaty itself and is not giving up further discussion of the Russian proposals.

The chief Iranian nuclear specialist explained that inspections of Iran's nuclear facilities will continue within the Nonproliferation Treaty framework and the IRNA official news agency, citing a source within the presidential administration, rejected a Mehr agency report that Ahmadinezhad has given orders for the Iranian Atomic Energy Organization to resume the uranium enrichment process.

Meanwhile it became known that the US Administration is ready to come up with a plan that develops Moscow's proposal on uranium enrichment for the Iranians,

George Bush is to announce today the idea of setting up uranium enrichment centers in the United States and Russia which could produce fuel for nonnuclear states. Thus, the Russian proposal to Iran is developing into a Russian-US plan.

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C.  G8 Global Partnership

Russia Faces Its First G8 Test
Stephen Boykewich
Moscow Times
(for personal use only)

Energy security will top an ambitious and politically charged agenda for the first major event of Russia's G8 presidency, a two-day meeting of the group's finance ministers starting in Moscow on Friday.

But as Moscow seeks to end doubts about its place in the club of the world's richest democracies, it will face ongoing anxiety about its own reliability as one of the world's largest energy suppliers.

Finance ministers from Britain, France, Italy, Japan, Germany and the United States were set to attend the weekend's meeting, as were World Bank President Paul Wolfowitz and IMF Managing Director Rodrigo de Rato. It was not clear Wednesday evening whether James Flaherty, who was appointed Canada's finance minister on Monday, would attend, but a ministry representative said Canada would be sending a delegation.

Representatives from China, Brazil, India, South Africa and Austria -- some of the countries tipped as possible future members of the elite club, should it choose to open the books to new members -- were also expected to attend.

The meeting will provide the first peek at the likely direction of the group's discussions under Russia's G8 presidency. President Vladimir Putin and his G8 sherpa, or point man, Igor Shuvalov, have reiterated the three main themes in recent days: energy security, education and combating infectious diseases.

Russia's Finance Ministry, however, has been slow to disclose specifics of the finance ministers' Moscow schedule, aside from saying they would be meeting with Putin on Saturday.

A copy of the agenda provided by the German finance ministry, though, showed Moscow to be ready to face energy security fears head-on, with the overheated oil market, alternative energy sources and energy inefficiency in developing countries all high on the list.

This weekend's meeting will also focus on the impact of disease on the global economy and restricting funding and money laundering opportunities for terrorists.

Meanwhile, exchange rates, a staple of G7 finance meetings, will not be discussed.

In previous years, Russia has attended only one of the group's four annual finance meetings, the pre-summit ministerial meeting. The other three finance meetings include the seven countries' central bankers.

Exchange rates are not on the agenda this weekend as the central bankers will not be attending, Interfax quoted a Finance Ministry source as saying Monday.

The topic of debt relief to poor countries was set to provide continuity with Britain's G8 presidency last year, which was devoted to combating African poverty. U.S. Treasury officials plan to push the issue in Moscow, Reuters reported Wednesday.

Ahead of the meeting, Finance Minister Alexei Kudrin said Tuesday that Russia would write off $688 million in debt to 16 of the world's poorest nations, including Benin, Tanzania and Zambia. Russia also this week declared its intention to write off $10 billion in debts from Afghanistan, dating from the time of the Soviet occupation of the country.

On Tuesday, Interfax quoted an unidentified Finance Ministry official as saying Russia would pay off $11 billion to $12 billion of its Paris Club debt in the next six months. The official suggested the money could fund the World Bank's International Development Association aid programs to poor nations.

But record-high oil prices -- and jitters in the wake of Russia's bitter gas dispute with Ukraine -- seemed destined to take center stage at the start of a G8 year devoted to energy security.

"Prices are way too high," U.S. Treasury Secretary John Snow told reporters at a Washington briefing on Tuesday. Finance ministers "can continue to call attention to the oil-producing countries to take steps to expand capacity and technology," he said.

G7 finance ministers have repeatedly called for increased transparency and open markets in oil-producing countries -- which would seem to put them at odds with recent trends in Russia's energy sector.

Yevsei Gurvich, head of the Economic Expert Group, a Moscow think tank, said he was "concerned by expanding state control of the energy sector," which could be a stumbling block for Russia in G8 meetings.

"I see this as a threat to economic efficiency and our future sustained growth," Gurvich said Wednesday.

And though Putin continues to insist on Russia's reliability as an energy provider and dismiss criticism that it has used energy supplies as a political weapon, last month's gas crisis has done lasting public relations damage to Moscow, said economist Clifford Gaddy, a Russia specialist at the Brookings Institution in Washington.

"The fundamental question is: 'Can you rely on Russia?'" Gaddy said by telephone Tuesday. "Acquiring trust is a matter of years and years, and Ukraine set back Russia's reputation enormously. It's almost completely irrelevant whether Russia was in a strict sense justified."

The ministers' talks are to be held in the National Hotel, which played host to numerous world leaders during last year's celebrations for the 60th anniversary of the end of World War II.

Perhaps unsurprisingly for a group that holds the world's purse strings, money seems to be no object: A hotel representative said the ministers would stay in the Presidential and National suites -- which ordinarily cost $1,725 and $2,050 per night, respectively.

Friday's ministerial meeting is to be followed by a reception in the Kremlin, while Saturday's schedule is to include a WTO-themed discussion with the Chinese, Indian, Brazilian and South African delegations, followed by an afternoon meeting with Putin.

The weekend's talks will also set the tone for next month's meeting of G8 energy ministers, as well as for the culminating summit of national leaders in St. Petersburg in July.

Gurvich said he expected this weekend's talks to "substantially affect the overall productivity of Russia's chairmanship year."

"I expect the Moscow meeting will lay the groundwork to make concrete resolutions at the G8 summit," Gurvich said.

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Kremlin: Dialogue on Russian G8 Priorities Proceed Smoothly
(for personal use only)

Discussion of the issues Russia plans to make priorities during its term in
the G8 presidency in 2006 are proceeding smoothly, Igor Shuvalov,
presidential aide and head of the interdepartmental commission on Russia's
participation in the G8, announced Monday.

"We have prepared and submitted for preliminary debate, a set of documents
on three priority themes proposed by Russia for discussion in the G8. And we
suggest examining seven more items," Shuvalov told a roundtable in the State

The top items on the agenda at the G8 sessions include energy security, the
prevention of infectious diseases, and joint efforts in the educational sphere,
he said.

Earlier, Russia came up with proposals on cooperation in strengthening the
nuclear nonproliferation regime, combating international terrorism and
counterfeit products, and other problems, Shuvalov said.

"Corresponding work is already under way in ministries and departments with
50-60 events due to be conducted this year," he said.

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D.  Global Threat Reduction Initiative

NNSA To Hold Private Sector Dialogue To Discuss Contracting Options In Global Threat Reduction Program
National Nuclear Security Administration
(for personal use only)

On Thursday, February 9, the National Nuclear Security Administration's (NNSA) Global Threat Reduction Initiative (GTRI) will hold a town hall-style meeting to discuss NNSA's expanding use of private industry to carry out its global security mission.

The meeting will serve to discuss NNSA's contract procurement process, upcoming opportunities for the private sector as it relates to the GTRI mission-critical work, and to receive feedback on the proposed procurement approach. For more information, go to

"This informational discussion will bring both NNSA and private industry representatives together for an open dialogue on potential contracting opportunities. The private sector plays an important role in helping NNSA accomplish its critical global security mission. Thursday's meeting will hopefully bring to light even more opportunities for each of us to work together," said NNSA Principal Deputy Administrator Jerry Paul.

GTRI is focused on identifying, securing and removing and/or disposing of high-risk, vulnerable nuclear and radiological materials around the world - as quickly and expeditiously as possible - that pose a potential threat to the U.S. and the international community. NNSA works with other countries and organizations, including private industry representatives, to carry out its global security mission.

Established by Congress in 2000, NNSA is a semi-autonomous agency within the U.S. Department of Energy responsible for enhancing national security through the military application of nuclear science. NNSA maintains and enhances the safety, security, reliability and performance of the U.S. nuclear weapons stockpile without nuclear testing; works to reduce global danger from weapons of mass destruction; provides the U.S. Navy with safe and effective nuclear propulsion; and responds to nuclear and radiological emergencies in the U.S. and abroad.

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E.  Nuclear Industry

Federal Atomic Energy Agency to Surrender Assets to Atomprom
(for personal use only)

In Russia, a powerful state holding is to be created to consolidate all enterprises subordinate to Federal Atomic Energy Agency and a raft of independent operators, Sergey Kirienko, who heads the Federal Atomic Energy Agency, made it clear yesterday.

The analysts say the consolidation roots in aggressive attempts of the United States to get control over Bushehr nuclear plant currently constructed in Iran. On the other hand, the project of Atomic Agency is hardly to be implemented in no time, as it calls for reconciling positions of a number of parties, including Gazprom Group, which owns industry’s key assets – Atomstroiexport and United Heavy Machinery.

As to Federal Atomic Energy Agency, it won’t be reorganized but play the accumulating role, Kirienko specified. Its target is to shape the atomic industry of Russia “in view of logic of the Ministry of Middle Engineering of the USSR.”

Russia needs a big holding, the so-called Atomprom, to compete with transnational atomic corporations both on domestic market and in the world. Atomprom will be in charge of the whole engineering cycle of civil atomic power, starting from uranium production to the waste reclamation, Kirienko pointed out.

Atomprom is planned as an asset management company with the state ownership of 100 percent, said a source in the nuclear industry’s community of Russia. “It will consolidate all assets, both the state enterprises and the state stakes. Some companies (private, for instance) will be able to merge as separate entities,” the source said adding the vital details of the industry’s reform, including the swap of the assets or buyout of enterprises, haven't been elaborated so far and the program is too general yet.

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Russia needs integrated nuclear energy structure - energy expert
RIA Novosti
(for personal use only)

The formation of an integrated holding would allow Russia to become the world leader in the nuclear energy sector, a senior industry official said Thursday.

"Such a step would allow for the implementation of Russia's strategy toward leadership in the nuclear sector and needs to attract significant investment," said Alexander Nyago, president of Russian state-owned TVEL Corporation, a leading world manufacturer of nuclear fuel.

Nyago, whose comments came on the back of top Russian nuclear power official Sergei Kiriyenko's unveiling Wednesday of plans for developing the sector, said it was vital to conform to modern economic trends. He said the goals outlined by Kiriyenko included bringing the energy production of nuclear power stations in the country up to 25% of the total by 2030 and building nuclear power plants (NPP) abroad.

Kiriyenko, head of the Federal Agency for Nuclear Power and a former prime minister, estimated the global market for nuclear energy at 600GW. He said the threat of an unprecedented power crisis in the country was looming, as Russian electricity consumption is increasing 50% faster than the country's energy strategy had previously assumed, with nuclear power currently accounting for 16% of Russia's electricity production.

"Kiriyenko believes we [Russia] could target a 20% share of the international NPP-construction market, which means 60 units with a total capacity of about 60GW in the next 25-30 years. This kind of a goal requires the significant development of mineral resources and industrial capacities. These plans cannot be implemented by separate companies. Consolidation on the state level is needed to win," Nyago said.

"I am convinced that the formation of a vertically integrated structure would raise Russia's competitiveness on the international [nuclear energy] market," he said. "These types of holdings exist and are being developed in western countries."

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The world will not do without nuclear power engineering
Yevgeny Velikhov
RIA Novosti
(for personal use only)

I am an optimist, and I don't think that natural energy resources will be depleted anytime soon.

At any rate, oil and gas rather than nuclear power will continue to be the main source of energy, which will be sufficient to ensure the world's steady development until the middle of this century.

In addition, we still have coal. As for atomic power engineering, its role during this period will be to stabilize the world's energy situation, which appears to be extremely complicated.

Certain countries possess a prevailing amount of natural resources due to their uneven distribution in the world. For this reason, the energy issue is intertwined with politics, and sometimes becomes a trump card in a political game. Nuclear power engineering is capable of reassuring all those who are not certain about having sufficient energy today and tomorrow. There is no doubt, that it is the only source of energy which can ensure the world's steady development in the foreseeable future. Today, this fact is understood not only by physicists, but also by politicians, who have to accept it as an axiom.

In the modern world people are actively striving to improve the quality of life, but better amenities require a great deal of energy. Several billion people, whom the nations of the golden billion only recently considered poor and an object of charity, are today consuming as much energy as they need. This allows them to achieve fast economic progress. Many of them (China, Korea, India, Malaysia, and others) are reaching the level of the world's leaders. New powerful consumers are emerging on the energy market.

Experience shows that all known sources of energy are at the service of people, and have a role to play in their lives. Although nuclear power will be moving to the fore, I do not rule out that mankind will develop alternative sources of energy as well. The energy of the sun, wind, tides, and biomass will find a niche. The use of these energy carriers is justified and they harmoniously supplement each other.

However, nuclear power engineering has indisputable advantages over alternative sources of energy. For instance, it takes many echelons to transport coal, but it can be easily replaced with several kilos of uranium.

Nuclear power engineering will not only relieve transport of a titanic burden, but will also give an addition reserve of fuel. Oil and gas prices keep growing, and it is clear that they are not going to fall. This situation may cause a collapse of the economy or of individual industries. In the United States, for one, the price of gas is so high that its chemical industry is losing its ability to compete on the world market. Other countries are faced with similar problems as well. Nuclear power engineering will be the only energy alternative in this situation.

Although this industry is very complicated, and requires huge investment and proper security, it is still the best option in the final count. In the European part of Russia it makes more sense to build nuclear power stations than gas ones. Gas may be used more rationally in the chemical industry, or sold abroad at a good price, which will contribute to the national budget. Replacement of gas with nuclear energy is a strategic cause for Russia.

Today, Russia is at the world's average level in the use of nuclear energy. Its contribution to the common energy pot averages 17%-18% (up to 30% in the European part of the country). If we look three or four decades ahead in order to evaluate Russia's nuclear energy requirements, we will see that its share should be increased by at least 25%, if not more.

Russia is not the only country to recognize the value of nuclear power engineering. The French nuclear power plants account today for up to 80% of national energy consumption. In his recent State of the Union Address President Bush spoke about the need to replace non-renewable energy sources with nuclear energy. Supplies of cheap Russian gas to Europe put a certain restraint on the development of nuclear power engineering. Germany was even considering giving it up altogether. But now everything is changing. Rational Europeans have realized that nuclear power engineering is indispensable. As for India and China, it is difficult even to imagine these giants making progress without such a powerful source of energy.

True, they are rich in coal (for the time being!). But the burning of coal generates large amounts of carbon dioxide, which is fraught with unpredictable climatic changes, for instance, accelerated global warming. There is another problem: coal is linked to the appearance of aerosols, which are the main source of lung cancer. I do not mean to say that coal mining has no future. People will learn to burn coal without these side effects, just as they have coped with a number of problems in nuclear power engineering. I think that today the latter industry has left others far behind in terms of security and ecology. As for the negative impact on the climate and environment, it can well compete with any other power generation, including solar and wind energy.

The advantage of nuclear power engineering is that it is not accompanied by hothouse emissions or pollution of the atmosphere. The 1986 technogenic Chernobyl disaster slowed down the advance of nuclear power engineering, and the public lost interest and trust in it. But the progressing market difficulties with hydrocarbons have compelled the world to turn to nuclear power engineering once again. Today, many countries, Russia among them, have placed their bets on this industry.

By the middle of the century we physicists are hoping to see rapid development of another, more progressive type of nuclear power engineering - thermonuclear synthesis. Let me remind you that all life on Earth is a stream of solar energy of thermonuclear origin. Will thermonuclear energy meet mankind's requirements? Of course, there is no magic wand, which would make energy sources last forever. But thermonuclear energy is very promising. It is not for nothing that it is called the Sun of the Earth (150 million degrees inside the reactor). For the time being this type of energy is very expensive, and commercially unviable. Experts will have to solve a whole package of scientific problems, and upgrade a number of technologies in order to make the thermonuclear power plant competitive with other energy sources.

Seven participants in the unique project - Europe, Japan, Russia, the U.S., China, Korea, and India have agreed to invest five billion dollars into the construction of a thermonuclear experimental reactor (ITER - Russian acronym), and use for this purpose their intellectual resources, industrial capacities, and technologies. The site for it has already been chosen -- Cadarache in Provence, France. When will this project be implemented? If we start building it by a well-orchestrated effort this year, its construction will be completed in ten years. Another five years will be spent on designing an electric power station, and another 20 years on extensive research. The fast track suggested by Tony Blair's advisor Sir David King, is aimed at building the first thermonuclear electric station by 2030. If this experience succeeds, the world will receive very powerful sources of energy -- thermonuclear electric stations. This will be an effective cure for the headache caused by the energy problem for a long time to come.

ITER's history is an amusing illustration of how politicians have advanced the cause of nuclear power engineering. A perfect balance of mutual interests has taken shape: politicians have no choice but to vote for atomic power engineering, whereas its destiny largely depends on the political will of governments. It is no secret that on the one hand, politicians express national interests, whereas on the other hand, they are speaking for themselves with an eye to elections, populist motives, personal prestige and ambitions. Decision on the ITER project was a strictly political one, and credit for it goes to the political leaders. In 1985, Russian physicists convinced the then President Mikhail Gorbachev of the advantages of thermonuclear energy. In turn, he had a fruitful discussion with Francois Mitterand, who appeared to be well versed in the subject and took it further by convincing U.S. President Ronald Reagan of its benefits. As a result, an agreement on ITER was signed the same year in Geneva.

This is not the end of the story. Credit for the choice of the site in France goes to another French President, Jacques Chirac, who put huge pressure on other participants. Moreover, Chirac managed to persuade Japanese Prime Minister Junichiro Koizumi, who was very enthusiastic about Japan hosting ITER. He finally gave in, but not for nothing. The Japanese were happy about a brilliant idea suggested by Russia - to start designing a commercial thermonuclear power station in Japan on a par with the experimental ITER project in France. This idea received universal support.

Under heavy pressure from his domestic opponents, President Bill Clinton was forced to withdraw from the ITER project. But the new President, George W. Bush, made a rational decision on the return to the project. He even urged the nation to view ITER as a priority of American energy policy of the future. Russian President Vladimir Putin called on the world to give credit to nuclear power engineering at the Millennium Summit in New York in 2000. Thank God, today's world compels politicians to think about the future.

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F.  Nuclear Forces

Russian Nukes Redux; Looking to recapture lost glory, Moscow is building a new nuclear warhead designed to evade U.S. defenses
Owen Matthews
(for personal use only)

Is energy the nuclear weapon of the 21st century? In recent months, Russia has shown that control of gas supplies to its neighbors can be a potent political tool. But when Vladimir Putin was asked exactly that question last week, he disagreed. "We still have plenty of nuclear rockets too," boasted Putin. "We recently carried out tests on new ballistic-weapon systems, weapons which no other country in the world has." The new Russian systems, he said, "don't care if there is a missile-defense system or not." In other words, for Putin, nukes are the nukes of the 21st century.

Only one country in the world--America--is actually developing a missile defense system. So why, in an era when Russia and the United States enjoy friendly relations, do Russian leaders feel the need to revamp the country's nuclear arsenal, and add a new nuclear warhead designed specifically to penetrate the U.S. defenses? For the Kremlin's part, Putin sees nukes as Russia's membership card to the world's top table. Asked last week whether Russia really belonged in the G8 club of the world's leading industrialized nations, Putin's response was that Russia was a major nuclear power and couldn't be ignored. Putin makes no secret of his wish to see Russia great again--and since it's unlikely to join the ranks of the world's richest countries any time soon, staying in the nuclear game is a key part of that strategy. "Putin picked up on these weapons as a political slogan," says military analyst Pavel Felgenauer. "He is promoting this warhead as proof that we can still do things, still stay in the game." No one is suggesting that Putin intends to nuke Washington. But he does want to ensure he and his successors have that option.

To that end, Russia has been giving its nuclear-weapons arsenal a major face-lift. The new targetable warhead Putin mentioned--a unique system no other country has so far tried to replicate--is specifically designed to counter U.S. anti-missile technology. The warhead is fired into space on a conventional ballistic missile. But instead of falling to earth on a predictable trajectory, it then detaches and maneuvers as it re-enters the atmosphere, like a cruise missile. This maneuverability, analysts say, would confound U.S. missile defenses, which work by plotting an incoming warhead's trajectory and intercepting it as it homes in on a target. Tests last year showed that for the first time, prototype targetable warheads can shift trajectory at Mach 8, making them almost impossible to shoot down. It will take several more years (and a lot more money) before the new warhead goes into production. But Defense Minister Sergei Ivanov promised last December that Russia would have a "new generation" of strategic missiles by the end of the decade.

The idea of a targetable warhead has been around since 1983, when the Soviet Union sought an answer to Ronald Reagan's "Star Wars" Strategic Defense Initiative, which envisioned a missile shield mounted on satellites in space. Even though the SDI system was never actually built, Reagan's apparent determination to go through with it rocked the cold-war world. Then-Soviet leader Yuri Andropov ordered up the new warheads as Russia's "asymmetric response" to Reagan. By the time the Soviet Union fell, Moscow had sunk more than $20 billion into the project--three times more than the Pentagon actually spent on Star Wars. Indeed, for a while, the United States switched its attention to theater defense systems--ground-based rockets like the Patriot that can intercept small, low flying missiles.

Twenty years later, the threat of rogue states has given new life to the old idea of a missile shield. An influential report drafted by Donald Rumsfeld in 2000, before he became George W. Bush's hawkish secretary of Defense, argued that the United States should urgently develop a system to defend itself against a rogue nuclear attack. September 11 gave that fear wings, and the U.S. government instituted a $100 billion missile-defense program. Five years on, the system is starting to take shape. In November, a U.S. Aegis warship launched a missile that successfully intercepted a dummy incoming rocket off Hawaii. Sixteen similar land-based interceptor rocket stations are scheduled to be deployed in Alaska this year (even though in two of the last three tests last fall, the rockets failed to launch).

Building America's new anti-missile shield has meant unilaterally tearing up the 1972 antiballistic-missile treaty with Russia. That treaty's logic--to preserve the balance of mutually assured destruction between the superpowers--limited Soviet and U.S. anti-missile defense systems to just one station of 100 anti-missile rockets so that neither side would be able to attack the other and expect to survive an answering attack. "Bush argued that cold-war logic shouldn't stand in the way of America's ability to defend itself," says a senior Western military source in Moscow, who requested anonymity because of the sensitivity of the subject. "What the Russians had to say about it didn't really matter."

It turns out, though, that the Russians do have something to say. "I'm not saying this [system] is our response to missile defense," said Putin last week--apparently meaning exactly the opposite. Essentially, Putin's answer has been the same as Andropov's to Reagan a generation before. "They took the old system out of the locker and shook the dust off it," says Arbatov.

The United States, for its part, doesn't seem too worried: Washington "does not perceive Russia's nuclear modernization activities as threatening," says State Department spokesman Adam Ereli, and added that what Russia is doing is consistent with existing treaties. Washington can afford to be relaxed because Putin's talk of nukes probably has more to do with boosting the reputation of his beleaguered military at home than making preparations for war with the United States.

Putin likes to cast himself as a defender of Russia. He has boosted funding for the military by 15 percent to more than $24 billion in 2006. But that's just a drop in the ocean. The Army, argues analyst Alexander Golts, is still geared to fighting a world war, rather than local separatist conflicts that are Russia's biggest threat. Transforming the military into a smaller, more professional fighting force would mean spending more money--and taking on more vested interests--than Putin's ready for. Easier, then, to announce a terrifying new secret weapon than to tackle the more serious problems of Russia's creaky military. "Our Duma deputies were delighted as children when Putin made the announcement of our new system," says Arbatov. "And our generals, too."

What makes Putin's boasts a little hollow, however, is that a new warhead alone isn't enough to create a new-generation nuclear arsenal. Russia almost certainly has the know-how--given time and money--to make a targetable warhead system work. But its delivery systems, both rockets and submarines, are rapidly aging. Of Russia's six Typhoon-class strategic nuclear missile subs (featured in Tom Clancy's cold-war classic "The Hunt for Red October"), only one, the Dmitry Donskoi, is actually refitted and serviceable. And a further seven Delta-4 class subs, a newer class built in the late 1980s, will also reach the end of their service life by the end of the decade. Just two replacement subs are planned thus far. Russia's missiles are degrading fast, too. In 10 years, analysts say, Russia's heavy SS-18 and SS-19 strategic rockets will be too old for use, and are being replaced by new Topol M's at a rate of only seven a year. In sum, says Arbatov, Russia is likely to have just 500 warheads in a decade, to America's 2,000 state-of-the-art nukes.

But while Russia's new warheads may be more about posturing than substance, they're a symptom of something much more worrisome--a wider breakdown in the cold war's systems of controlling weapons of mass destruction. The ABM Treaty is now history, but the more important Non-Proliferation Treaty of 1970 could go the same way. The treaty, signed by almost all of the world's nations, was designed to control the spread of nuclear weaponry beyond a small club--the United States, Russia, the United Kingdom, France and China. India, Pakistan and presumably Israel have already broken the treaty and developed nukes of their own, and North Korea boasts that it has (though no one is quite sure). Last week, Russian intelligence warned that Iran may have enriched enough uranium to make a simple nuclear bomb--even though it still lacks an effective delivery system. "Disarmament has fallen apart," says Arbatov. "This has very bad consequences for proliferation."

Some Westerners have taken solace that Russia's nuclear scientists are gainfully employed, rather than seeking freelance work from terrorists. Indeed, Putin has vowed to revive Russia's military industrial complex, consolidating 60 companies under an umbrella organization, Rosvooruzheniye, controlled by Viktor Ivanov, deputy chief of the presidential administration. Under the new management, the company has landed some lucrative deals, including a $1 billion contract to supply Iran with antiaircraft defense systems signed last December.

Financially, however, the firm faces an uphill struggle. Salaries are still puny and unlikely to tempt back specialists who emigrated in the 1990s, says Felgenhauer, "and that's a major problem in an industry where most of the best experts are pushing 60." And, complains Col. Gen. Anatolii Sitnov, former head of the Defense Ministry's armaments department, quality standards are lax and many of the systems produced "inferior." Russia's new warheads may sound fearsome, but the real threat to world security is likely to come from upstart nuclear powers like Iran. Before too long, both cold-war rivals may have to retarget their warheads at new and less familiar enemies.

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Russia launches project to create next-generation nuclear sub
(for personal use only)

Russia's Navy Command has approved a project to design and build a next-generation submarine with limited displacement, Anatoly Shlemov, head of the Defense Ministry's Naval Orders, Deliveries, Armaments and Hardware Department, told Interfax.

"A submarine of this class will guarantee the combat reliability of Yury Dolgoruky-class strategic nuclear-powered missile submarines and fulfill other tasks performed by multipurpose nuclear submarines," Shlemov said.

"The displacement of this class of submarines must be 5,000-6,000 tonnes," the military said.

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G.  Border Security

Russia: Belgorod Customs Seize Radioactive Gadgets From Ukrainian
(for personal use only)

Belgorod customs officers have seized radioactive aviation gadgets from a
Ukrainian citizen traveling by the Moscow-Sevastopol train, a source at the
Russian Federal Customs Service told Itar-Tass on Tuesday.

"The man was detained at the Dolbino railroad checkpoint of the Belgorod
customs office," the source said. "A stationary system detecting fissile and
radioactive materials sounded alarm when the passenger train was passing
through the radiation control zone. The system identified the train car, which
contained the source of radiation."

The train was stopped. "The Ukrainian citizen was carrying a cardboard box
with two radioisotope icing sensors for planes and helicopters. The permissible
radiation level was exceeded 280 times. There was a radiation warning and a
radiation hazard sign on the sensors," the source said.

"Experts said that the sensorsaed sources of radio-nuclides, which can be
handled only by authorization and exported only with a special license," the
source said.

The dangerous freight was seized and stored in a safe place, and the
Ukrainian was charged with contraband.

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H.  Submarine Dismantlement

Nerpa shipyard finished dismantling of nuclear submarine sponsored by UK
Bellona Foundation
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A group of the RWE Nukem specialists from UK inspected the final stage of the nuclear submarine Victor-III dismantling at the Nerpa shipyard in Snezhnogorsk, Murmansk region.

The UK Department of Trade and Industry sponsored the project.

The Nerpa’s chief engineer Rostislav Rimdenok told Interfax, that it was much safer to ship the retired submarines to the Nerpa than to Zvezdochka plant in Severodvinsk for dismantling as Nerpa is closer to the submarine bases. Besides, the shipyard operates the US-made “guillotine” capable to produce 73 tonnes of scrap metal per hour out of the submarine remains. Rimdenok said Victor-III was scrapped 3 months ahead of schedule.

The UK representatives were shown the empty reactor compartment, which would be shipped to Sayda bay for long-term storage. The RWE Nukem chief consultant said to Interfax, that this is the last submarine dismantled in the frames of Russian-British program, but there will be other programs before summer. It is expected that Nerpa will continue cooperation with Norway and Germany.

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I.  Chemical Weapons Destruction

BBC Monitoring International Reports
(for personal use only)

Russia's senior official in charge of overseeing chemical weapons destruction has denied that the scrapping of chemical weapons is a threat to the environment and the people. He has praised the government's policy and programme of action.

Deputy head of the Federal Industry Agency Viktor Kholstov told Mayak radio's "Panorama" programme on 8 February that Russia is doing its utmost to make the process safe for people and the environment.

"The issues of safety in the course of scrapping chemical weapons are very topical in the context of possible rumours and unverified information. I would like to say that in accordance with Federal law No 76 of 1997 "On destroying chemical weapons in Russia" the focus is on the safety of the entire process of storing and destroying chemical weapons. This is why experts view the problem comprehensively at all stages of preparing the chemical weapon for scrapping," he said, adding that ordinary people should be given more information on what a chemical weapon is, and about the different kinds.

"There are universal technologies, for instance, incineration. But this technology cannot be used for all toxic substances. For instance, products containing arsenic should not be incinerated because some components may leak off into the atmosphere," he said, adding that "scrapping of chemical weapons in Russia takes place in two stages". The first stage is devoted to extracting the toxic components of weapons and the second stage is scrapping the remaining low-toxic residues, he said. He said that Russia chose this technological cycle after long-term experiments. He did not disclose any other specific details.

When asked about the system for transporting chemical weapons for scrapping from old depots to new ones, he said that scrapping facilities are built near places where weapons are stored. He enumerated the types of chemical weapons as liquid, artillery and aviation munitions. "We have three categories of weapons. Firstly, substances stored in liquid form in big reservoirs. They cannot be transported anywhere for destruction. Secondly, artillery ammunition with chemical substances. It is possible in theory to transport them, but it is better to leave them where they are, if possible. It is impossible to take them to a scrapping place for liquid weapons because a different technological process is required. The third type is chemical weapons in aviation munitions. They also have their own peculiar features and differences in construction related to their sizes and the type of poison. Again, this requires specific technological processes in order to ensure that chemical weapons are destroyed and deadlines are met in accordance with the convention," he said.

He also said that it is a state policy to create safe social settings for people involved in the scrapping of chemical weapons. "The programme envisages that up to 10 per cent of the money spent on constructing facilities in the area of a scrapping facility or in that region is allocated for developing the social infrastructure. The list of facilities included in the social infrastructure is determined together with the local authorities, with a focus on hospitals and other health care institutions," he said.

He said that building new health centres and hospitals does not mean scrapping facilities have an adverse effect on people's health. He insisted that these health care institutions were in place because usually these areas are remote and did not have proper hospitals or clinics.

When asked whether the scrapping facilities can later be used for producing something else, Kholstov pointed out that decisions will be made approximately three years before the end of the programme. The programme quoted an article from the 'Rossiyskaya Gazeta' newspaper analysing the situation around scrapping chemical weapons; the paper believed that these scrapping facilities will not be used again as they will need too much decontamination when the programme is over. Kholstov disagreed with the paper and said that market demands will dictate what can be done closer to the time when the programme is about to be completed.

"This is a complex problem, but the new edition of the programme document has looked into it," he said, adding that when the programme is over, people involved in implementing it will be redeployed and there will be a vision of how to use all these resources that have been freed up.

Original source: Radio Mayak, Moscow, in Russian 0915 gmt, February 8, 2006

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J.  Official Statements

Opening Statement for Hearing on New Initiatives in Cooperative Threat Reduction
Office of Sen. Richard Lugar
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U.S. Senate Foreign Relations Committee Chairman Dick Lugar made the following statement at today’s hearing on new initiatives in cooperative threat reduction:

The Foreign Relations Committee meets today to examine U.S. policies and programs in two critical threat reduction areas: conventional weapons dismantlement and counter-proliferation assistance.

Senator Obama and I observed first hand U.S. efforts in both of these areas during visits to Ukraine and Azerbaijan last August. These visits and our subsequent joint research convinced us that the United States can and should do more in both of these areas. On November 1, 2005, we introduced S. 1949, the “Cooperative Proliferation Detection and Interdiction Assistance and Conventional Threat Reduction Act.” Modeled after the Nunn-Lugar program, our new legislation seeks to build cooperative relationships with willing countries to secure vulnerable stockpiles of conventional weapons and to strengthen the ability of other nations to detect and interdict illicit shipments of weapons or materials of mass destruction.

The Nunn-Lugar program must, and will, remain our flagship nonproliferation program. The elimination of threats at their source is the most effective means of preventing the spread of weapons of mass destruction. But the United States has the ability to perform multiple missions in response to proliferation threats. Focusing more attention on the threats posed by conventional weapons and improving the capabilities of other nations to interdict weapons of mass destruction can be achieved without negative consequences for the Nunn-Lugar program. The lessons learned from the Nunn-Lugar experience should be applied to other fronts in the fight against terrorism and weapons proliferation. To do less would be irresponsible and would forfeit critical national security opportunities.

The first part of our legislation would energize the U.S. program against unsecured lightweight anti-aircraft missiles and other conventional weapons. There may be as many as 750,000 man-portable air defense systems in arsenals worldwide. The State Department estimates that more than 40 civilian aircraft have been hit by such weapons since the 1970s. In addition, loose stocks of small arms and other weapons help fuel civil wars in Africa and elsewhere and provide the means for attacks on peacekeepers and aid workers seeking to stabilize war-torn societies. In Iraq, we have seen how unsecured stockpiles of artillery shells and ammunition have been reconfigured into improvised explosive devices that have become the insurgents’ most effective weapon. Senator Obama and I are attempting to ensure that everything possible is being done to secure such stockpiles worldwide.

American efforts to safeguard conventional stockpiles are under-funded, fragmented, and in need of high-level support. The U.S. government’s current response is spread between several programs at the Department of State. The planning, coordination, and implementation of this function should be consolidated into one office at the State Department with a budget that is commensurate with the threat posed by these weapons.

The second part of the Lugar-Obama legislation would strengthen the ability of America’s friends and allies to detect and intercept illegal shipments of weapons and materials of mass destruction. American forces cannot be everywhere at once. Our security depends not just on the willingness of other nations to help; it depends on whether they have the capabilities to be effective. The State Department engages in several related anti-terrorism and export control assistance programs. But these programs are focused on other stages of the threat, not on detection and interdiction. Thus, we believe there is a gap in our defenses that needs to be filled.

The Proliferation Security Initiative has been successful in enlisting the help of other nations for detection and interdiction operations. But some PSI countries lack the capabilities to be active and effective partners. Lugar-Obama seeks to improve the capabilities of foreign partners by providing equipment, training, and other support. Examples of such assistance may include maritime surveillance and boarding equipment, aerial detection and interdiction capabilities, enhanced port security, and the provision of hand-held detection equipment and passive WMD sensors.

The legislation would create a new office at the State Department to support and coordinate U.S. assistance in this area. Existing foreign assistance law contains discretionary authority for the Secretary of State to establish a list of countries that should be given priority in U.S. counter-proliferation funding. It is our view that these efforts have been insufficient. As a result, we believe that such a program should be mandatory.

The Lugar-Obama bill sets aside $110 million to start up the program and proposes an innovative use of current foreign military financing assistance. Under the bill, the President would ensure that countries receiving foreign military financing would use 25 percent of these funds on WMD interdiction and detection capabilities, unless he determines that U.S. national security interests are not served by doing so. This offers a potent but flexible tool to build a robust international network to stop proliferation.

Senator Obama and I have sought to work closely with the Administration on our legislation. We have raised the issue in several venues and have been given general statements of support. Today, we are eager to finally receive an official reaction from the administration and to discuss ways in which our legislation can be perfected.

I believe that the Bush Administration recognizes the problems that we are trying to address. Last month, Senator Obama and I wrote to Secretary Rice urging full funding for programs aimed at counter-proliferation and safeguarding conventional weapons stockpiles. I am pleased that funding for the Nonproliferation, Antiterrorism, De-mining and Related Programs account received a $43 million increase in the Administration’s budget request over the amount enacted last year.

Historically, however, new threat reduction techniques and proposals have not always been warmly received by the executive branch. I remember well the initial executive branch reaction to the introduction of the Nunn-Lugar Program in 1991. Senator Sam Nunn and I were told by the Administration that the United States was already doing everything necessary to address the problems posed by the proliferation of weapons of mass destruction and the collapse of the Soviet Union. We were astounded by this response, because other sources, including Russian military leaders themselves, were describing rampant difficulties with the security around weapons of mass destruction. They voiced their fears of an emerging black-market in WMD fueled by economic desperation and collapsing governmental authority. Only months later, after Defense Department officials were on the ground in Russia witnessing the problem, did the administration begin to recognize the urgency of the situation.

The proliferation threats that Senator Obama and I have witnessed may be less comprehensive than those that confronted the United States at the genesis of the Nunn-Lugar program. But the problems are obvious, nonetheless. Moreover, these security gaps exist in an era when we know that terrorist groups are actively seeking both weapons of mass destruction and lethal conventional arms.

We have seen these vulnerable stockpiles in person, and we are resolved to do something about them. We understand that the United States cannot meet every conceivable security need everywhere in the world. But filling the security gaps that we have described should be near the top of our list of priorities. We are asserting that these problems have not received adequate attention.

Senator Obama and I are hopeful for a constructive response that recognizes the nuances of the threats involved and the necessity of preventing bureaucratic obstacles to action. We are hopeful for a partnership with the Administration that assigns these tasks a high priority. We look forward to working closely with the Administration to get this done.

To assist the Committee in our evaluation today, I am pleased to welcome Undersecretary of State Bob Joseph. Undersecretary Joseph has been a good friend of this Committee and a tireless advocate for U.S. national security through his work on the Proliferation Security Initiative, Libya’s renunciation of weapons of mass destruction, and other important projects. We especially appreciate his willingness to appear today, given the intense schedule he has undertaken with regards to the Iranian nuclear issue. Thank you for being with us to share the Administration’s views of the legislation and to help us think through important nonproliferation and threat reduction issues.

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Senator Richard Lugar
Federal News Service
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SEN. LUGAR: Mr. President, Distinguished Ambassadors, Ladies and Gentlemen: I am grateful for the opportunity to address the Security Council and for the warm welcome that you have extended to members of the Senate Foreign Relations Committee today. I want to thank especially Ambassador John Bolton for his assistance in facilitating our visit and for the attention and insights he has provided to members of the Senate during his tenure as the U.S. Ambassador.

The Foreign Relations Committee is united in its belief that an effective United Nations is a vital component to addressing the trans- national problems confronting each of its member states. The four Committee members here today, Senator Chuck Hagel of Nebraska, Senator Norm Coleman of Minnesota, Senator George Voinovich of Ohio, and myself, have all spent much time thinking about international affairs and the role of the United Nations. Although our approaches are not identical, each of us has chosen to serve on the Foreign Relations Committee because we understand that America's problems cannot be solved in isolation from the world community. We have chosen to serve on this Committee out of a solemn belief that the United States of America will be stronger, safer, and more prosperous if it engages the world in a search for cooperative solutions. We also believe that the United States has a moral obligation, as the oldest democracy on earth and as one of the wealthiest, to be an advocate for human and religious rights and political freedoms and to be a generous contributor to international efforts that address poverty, disease, environmental degradation, and other problems that hinder human advancement.

We understand that the United States must not only speak clear truths, it must also listen and learn from others. We know that we are part of a much larger world that has intellectual, scientific, and moral wisdom that can supplement our own knowledge and experiences.

In that spirit, we have come to the United Nations to converse with you about the direction of this institution and about problems that must be solved cooperatively. Strengthening the U.N. through Reform Because we value an effective and credible United Nations, we have advocated a United Nations reform agenda in our work in the U.S. Senate and during our visit today. Ensuring that the operations of the United Nations are transparent and efficient is important to the United States and the American people. Each of us hears from our constituents on a weekly basis about this issue. Most Americans want the United Nations to succeed. They want the U.N. to be able to facilitate international burden sharing in times of crisis. They want the U.N. to be a consistent and respected forum for diplomatic discussions. And they expect the U.N. to be a positive force in the global fight against poverty, disease, and hunger.

In my home state of Indiana, we are particularly proud of our native son, Jim Morris, who heads the World Food Program. We celebrate his achievements and recognize how much U.N. agencies like the World Food Program, UNICEF, and the World Health Organization are doing to benefit humankind. But Americans, like people throughout the world, also want to ensure that the United Nations is free of waste and corruption. They are deeply concerned by the Oil-for-Food scandal and the evolving investigation of kickbacks and rigged contracts in the U.N.'s own procurement division. They understand that the influence and capabilities possessed by the United Nations come from the credibility associated with countries acting together in a well- established forum with well-established rules. Profiteering, mismanagement, and bureaucratic stonewalling, squander this precious resource. If accountability and transparency are lacking in the way the U.N. does business, increasingly it will find itself on the sidelines of diplomacy and major multilateral security initiatives.

I have written to Secretary General Annan calling for the resolute and timely implementation of ten reforms that I believe would be a major step forward for the United Nations. I applaud his affirmation on U.N. reform that "2006 must be [a year] of visible results."

I appreciate his vocal advocacy for a constructive reform agenda. Several of the ten reforms that I have advocated have already been initiated, including the funding of an Ethics Office that will enforce lower gift limits, the establishment of a zero tolerance policy regarding sexual exploitation by U.N. personnel, the strengthening of the Office of Internal Oversight Services, the launching of a review of U.N. mandates that are more than five years old, and the creation of a whistleblower protection policy. The U.N. also must overhaul its procurement system to prevent bribes and kickbacks, establish an oversight body that will be able to review the results of investigations, fund a one-time staff buy-out to allow for a more efficient use of personnel, and improve external access to all U.N. documents. Each of these reforms is currently being discussed.

One reform that is critically necessary is establishing a respected Human Rights Council to replace the Human Rights Commission, which has been discredited because of the membership of repressive and undemocratic regimes. The membership criteria of the new Council must ensure that those elected to it observe human rights and abide by the rule of law. These ten reforms confer no advantage on the United States, they do not conflict with the U.N. Charter or its mission, they would improve management practices and morale, and they would enhance the U.N.'s global standing. I believe that they could be implemented quickly, without irresolvable controversy.

The adoption of these reforms would not end the reform debate, nor should it. Many other potentially useful updates to U.N. organization have been suggested. Moreover, reform cannot be treated like a one-time event. Rather, it should be an inherent part of the United Nation's operating culture. Any organization or government unit should continually review its rules and practices to ensure that mechanisms are working to prevent waste, fraud, and abuse.

In the short run, the effective implementation of this list of reforms would generate substantial confidence that the United Nations is committed to ensuring transparency and efficiency in its operations. It would also signal a willingness to embrace new standards and practices at the U.N. that would strengthen the United Nations for the monumental tasks that lie ahead. The United Nations and this Security Council must be prepared for the heavy lifting of the coming decades. You must be ambitious in the tasks you undertake because the world is confronted by problems of great magnitude.

Controlling Weapons of Mass Destruction

Today, I want to call to your attention two challenges, in particular. I believe that how we address these two challenges will determine whether we will live in peace and whether both developing and developed nations will continue to enjoy economic growth and human advancement.

The first challenge is the proliferation of weapons of mass destruction, a threat that has been on the Security Council's agenda for more than a half century. This is not just the security problem of the moment. It is a universal economic and moral threat that will loom over all human activity for generations. The non-proliferation precedents we set in the coming decade are likely to determine whether the world lives in anxious uncertainty from crisis to crisis or whether we are able to construct a global coalition dedicated to preventing catastrophes and to giving people the confidence and security to pursue fulfilling lives.

On September 11, 2001, the world witnessed the destructive potential of international terrorism. But the September 11 attacks do not come close to approximating the destruction that would be unleashed by a nuclear attack. Weapons of mass destruction have made it possible for a sub-national group to kill as many innocent people in a day as national armies killed in months of fighting during World War II.

Given economic globalization, there will be no safe haven from catastrophic terrorism or a nuclear attack. Distance from the site of a nuclear blast, will not insulate people from the economic and human trauma that would result. We must recognize that these threats put the domestic hopes and dreams of our respective citizens at grave risk. Does anyone believe that proposals for advancing standards of living, such as expansions in education for our children, stronger protections for the environment, or broader health care coverage, would be unaffected by the nuclear obliteration of a major city somewhere in the world? They would not. The immediate death toll would be horrendous, but the worldwide financial and psychological costs might be even more damaging to humanity in the long run.

Such a catastrophic event would bring years, if not decades, of massive health care and environmental clean-up costs to the nation where the attack occurred. But the economic damage would not be confined to a single country or region; it would be global. The value of world investment markets would plummet and urban real estate could suffer the same fate. Regaining investor confidence and restoring capital flows would be a slow process. Enhanced security measures in the wake of the tragedy could hinder commerce and trade. Insurance costs would rise worldwide, and governments inevitably would transfer national assets to security measures, exacerbating budget deficits and leaving fewer assets devoted to increasing economic productivity and to providing for the needs of citizens.

The world would not see a catastrophic terrorist attack as a one- time tragedy. Rather, it would change the expectations of people throughout the world. If one such terrorist attack could be mounted, could not other attacks be imminent? If some nuclear material had been diverted from safe keeping to terrorists, why not more? We would see greater restrictions on personal freedom, stricter controls on travel and international study, more barriers to international commerce, and a massive increase in psychological disturbances and suffering. The constricting effect on international interaction would be felt in every country of the world.

Last year, I surveyed 85 top international proliferation and arms control experts about the prospects for averting attacks with weapons of mass destruction. According to the experts surveyed, the possibility of a WMD attack against a city or other target somewhere in the world is real and increasing over time. The group estimated that the risk of a nuclear attack somewhere in the world in the next five years was 16 percent. When the time frame was extended to 10 years, the average response almost doubled to more than 29 percent. The estimates of the risks of a biological or chemical attack during the same time periods were each judged to be comparable to or slightly higher than the risk of a nuclear attack.

Even if we avoid disaster scenarios, the open-ended nature of the threats associated with weapons of mass destruction deeply affects our ability to deliver domestic improvements. Our future economic prospects rest squarely on our collective ability to secure weapons and materials of mass destruction to a degree that encourages investment, improves public confidence, and protects world commerce against severe economic shocks. If we fail to organize and stabilize the world against proliferation, the world economy will never reach its potential.

The Cold War was an unconventional war, as is the struggle with terrorist ideologies. The irony of our situation today is that victory in the current struggle depends on cleaning up the remnants of the previous war and enforcing arms agreements written in the earlier era. The international community is not powerless. We can come to agreements on actions designed to enforce international norms and agreements that are vital to collective security.

We must perfect a worldwide system of accountability for nuclear, biological, and chemical weapons. In such a system, every nation that currently has weapons and materials of mass destruction must account for what it has, safely secure what it has, and demonstrate that no other nation or cell will be allowed access. Meanwhile, we must work to contract existing stockpiles and prevent further proliferation. If a nation lacks the means to participate in this effort, the international community must provide financial and technical assistance.

As one of the authors of the Nunn-Lugar Cooperative Threat Reduction Program, I have witnessed extraordinary outcomes based on mutual interest that would have seemed absurd from the vantage point of the Cold War. In 1991, the vast nuclear, chemical, and biological arsenal of the former Soviet Union had become an immediate and grave proliferation risk. Many weapons sites lacked adequate defenses and safeguards. The Russian economy was struggling, increasing incentives for bribery and black market activity. Moreover, many weapons sites were located outside of Russia, in newly independent states such as Belarus, Ukraine, and Kazakhstan. This created the possibility of an expansion of nuclear powers with unpredictable results.

Former United States Senator Sam Nunn and I came together to write and promote legislation to establish a program that devoted American technical expertise and money for joint efforts to safeguard and destroy these vulnerable weapons and materials of mass destruction. The program received invaluable encouragement, support, and insight from leaders in the former Soviet Union who recognized the dangers of inaction.

Since its inception, Americans and Russians have worked closely under the Nunn-Lugar program to deactivate 6,828 former Soviet nuclear warheads, destroy 1,174 ballistic missiles, and decommission hundreds of missile silos, strategic bombers, cruise missiles, submarine missile launchers, and nuclear test tunnels. Perhaps most importantly, Ukraine, Belarus, and Kazakhstan are nuclear weapons free as a result of cooperative efforts under the Nunn-Lugar program. In addition, Nunn-Lugar is building a facility at Shchuchye, Russia, to eliminate some two million chemical weapons. It is also employing weapons scientists in peaceful pursuits and working at many bio-weapon sites and nuclear warhead storage facilities to establish security controls and dismantle weapons infrastructure.

While American and Russian experts have been cooperating on dismantlement operations in the former Soviet Union, the United States has been meeting its obligations under arms control treaties to dramatically cut its own nuclear arsenal. By 2012, the United States will have reduced its nuclear stockpile by 75 percent since the end of the Cold War.

No one would have predicted in the 1980s that Americans and Russians would be working side-by-side on the ground in Russia destroying thousands of nuclear weapons systems, as well as biological and chemical weapons. Similarly, from the vantage point of today, few observers would predict that the international community would eventually participate in dismantlement operations in North Korea or, perhaps, Iran. The future is not clear in these states, but if a peaceful outcome is to be secured and weapons of mass destruction are to be eliminated, we should not rule out such extraordinary outcomes.

Since 1992, the United States has spent more than $17 billion on non-proliferation and threat reduction assistance, most of it in the former Soviet Union. The rest of the world collectively has spent about $2 billion on this objective during that period. I commend those nations that have pledged additional non-proliferation funds, and I urge them to follow through on their commitments, but the world needs to do much more in this area. Almost four-fifths of the non- proliferation experts that I surveyed last year said that their country was not spending enough on non-proliferation objectives. None of the experts believed that their country was spending too much on non-proliferation. More than half of the experts recommended an increase of 50 percent or more in their nation's non-proliferation budget.

Beyond a commitment of more resources, peace depends on the willingness of responsible nations to look past short-term economic gain and assert themselves when nations violate their treaty agreements. Without dismissing the economic needs of any nation, I would submit that nuclear proliferation is not in the interest of any national economy over the long run. Whatever short-term economic gains that may be realized by tolerating non-compliance with international non-proliferation norms will be overtaken by the risks and costs associated with greater instability.

The world must be decisive in responding to nations that are violating the Nuclear Nonproliferation Treaty or other international arms agreements.

Diplomatic and economic confrontations are preferable to military ones. In the field of non-proliferation, decisions delayed over the course of months and years may be as harmful as no decisions at all.

In this context, if Iran does not comply with U.N. Resolutions and arms agreements, the Security Council must apply strict and enforceable sanctions. Failure to do so will severely damage the credibility of a painstaking diplomatic approach and call into question the world's commitment to controlling the spread of nuclear weapons. The precedent of inaction in this case, would greatly increase the chances of military conflict and could set off regional arms races.

Meeting Energy Challenges The second major global challenge that I wish to emphasize is energy. Like the proliferation of weapons of mass destruction, the potential scarcity of energy supplies and the imbalances that exist among nations represent grave threats to global security and prosperity.

Up to this point in history, the main concerns surrounding oil and natural gas have been how much we pay for them and whether we will experience supply disruptions. But in decades to come, the issue may be whether the world's supply of fossil fuels is abundant and accessible enough to support continued economic growth, both in the industrialized West and in large rapidly growing economies such as China and India. When we reach the point that the world's oil-hungry economies are competing for insufficient supplies of energy, fossil fuels will become an even stronger magnet for conflict than they already are.

In the short-run, dependence on fossil fuels has created a drag on economic performance around the world, as higher oil prices have driven up heating and transportation costs. In the long-run, this dependence is pushing the world toward an economic disaster that could mean diminished living standards, increased risks of war, and accelerated environmental degradation.

Increasingly, energy supplies are the currency through which energy-rich countries leverage their interests against energy-poor nations. Oil and natural gas infrastructure and shipping lanes remain targets for terrorism. The bottom line is that critical international security goals, including countering nuclear weapons proliferation, supporting new democracies, and promoting sustainable development are at risk because of over-dependence on fossil fuels.

This dependence also presents huge risks to the global environment. With this in mind, I have urged the Bush Administration and my colleagues in Congress to return to a leadership role on the issue of climate change. I have advocated that the United States must be open to multilateral forums that attempt to achieve global solutions to the problem of greenhouse gases.

Climate change could bring drought, famine, disease, mass migration, and rising sea levels threatening coasts and economies worldwide, all of which could lead to political conflict and instability. This problem cannot be solved without international cooperation.

The time is ripe for bold action by the international community because much has changed since talks first began in 1992 on what became the Kyoto treaty. For one, China and India, who won exemptions from the treaty's emission-cutting requirements, have enjoyed rapid growth.

They are now much greater sources of greenhouse gases than anticipated, but also far stronger economies, more integrated into the global system.

Our scientific understanding of climate change has also advanced significantly. We have better computer models, more measurements and more evidence -- from the shrinking polar caps to expanding tropical disease zones for plants and humans -- that the problem is real and is caused by man-made emissions of greenhouse gases, including carbon dioxide from fossil fuels.

Most importantly, thanks to new technology, we can control many greenhouse gases with proactive, pro-growth solutions, not just draconian limitations on economic activity. Industry and government alike recognize that progress on climate change can go hand in hand with progress on energy security, air pollution, and technology development.

A road map to this outcome is contained in a recent report from the Pew Climate Center, a non-partisan organization, which assembled representatives from China, India and other countries and from global industrial companies, as well as from the U.S. Senate Foreign Relations Committee staff. This diverse group agreed on the need for fresh approaches beyond Kyoto.

They said the U.S. must engage all the major economies at once, including India and China, because experience has shown that countries will not move unless they can be sure their counterparts are moving with them.

The United States, the world's richest country and the largest emitter of greenhouse gases, should seize this moment to make a new beginning by returning to international negotiations in a leadership role under the Framework Convention on Climate Change. I believe that the United States is prepared to do that. Our friends and allies should embrace this opportunity to achieve a comprehensive international approach to global warming.

Finally, in addition to security, economic, and environmental considerations, anyone who professes to being concerned with economic development must be concerned about the ability of developing nations to pay for the energy they need.

The economic impact of high oil prices is far more burdensome in developing countries than in the developed world. Generally, developing countries are more dependent on imported oil, their industries are more energy intensive, and they are able to use energy less efficiently.

Reliance on oil imports has grown dramatically in developing countries as they have become more industrialized and urbanized. In 1972, developing countries (excluding OPEC) spent less than one percent of their GDP on imported oil. The United Nations Conference on Trade and Development estimates that, today, they spend 3.5 percent of their GDP or more on imported oil -- roughly twice the percentage paid in the main OECD countries.

Direct effects of oil-price increases on poor households include higher costs for petroleum-based fuels used for cooking, heating, and transportation. Small and medium-sized businesses are ill-equipped to cope with substantial fuel bill increases. Many governments subsidize petroleum, which can distort their economies. In these cases, high oil prices also consume national budgets, thus limiting other types of social spending.

World Bank research shows that a sustained oil-price increase of $10 per barrel will reduce GDP by an average of 1.47 percent in countries with a per-capita GDP of less than $300.

Some of these countries would lose as much as 4 percent of GDP. This compares to an average loss of less than one half of one percent of GDP in OECD countries.

What is needed is a diversification of energy supplies that emphasizes environmentally friendly energy sources that are abundant in most developing countries. Nations containing about 85 percent of the world's population depend on oil imports. These nations could reap many security and economic benefits by breaking their oil import chains.

For example, one of the most promising energy technologies for much of the developing world is cellulosic ethanol. This is a renewable fuel derived from biomass such as grasses, plants, trees, and waste materials. Such fuel is environmentally friendly and would not require significant changes to current automobiles.

Previously, ethanol could only be produced efficiently from a tiny portion of plant life - mostly corn and sugar. High production costs and limited grain stocks made a broad transition to ethanol fuel impractical. But recent breakthroughs in genetic engineering of biocatalysts make it possible to break down a wide range of plants. As conversion efficiency increases, cellulosic ethanol will become competitive with oil. Reductions in processing costs of ethanol are inevitable. We must remember that ethanol processing remains a relatively young industry. Oil processing has had the comparative benefit of a century of intensive research and development.

There is a virtual consensus among scientists that when considered as part of a complete cycle of growth, fermentation, and combustion, ethanol contributes no net carbon dioxide to the atmosphere.

Although burning ethanol releases carbon dioxide into the atmosphere, it is essentially the same carbon dioxide that was fixed by photosynthesis when the plants grew. In contrast, the carbon dioxide released by burning fossil fuels would have remained trapped forever beneath the earth had it not been extracted and burned.

The full commercial emergence of cellulosic ethanol would provide a cash crop to any region that could grow grass, trees, or other vegetation. This would help rural development, improve the developing world's balance of payment position, and reduce its reliance on oil.

Biorefineries producing biofuels and biochemicals can be modularized, simplified, and sized to meet the needs of communities in remote areas. Such a democratization of world energy supplies would reduce armed conflict, lower the risk of global recession, and aid in the development of emerging markets.

Cellulosic ethanol is just one of several promising energy sources, including clean coal technology, biodiesel, and hybrid cars, which can move us away from extreme dependence on oil.

The task is to make this happen before a global crisis occurs. The economic sacrifices imposed by rising fossil fuel prices have expanded concerns about energy dependence. But in the past, as oil price shocks have receded, motivations for action also have waned. The international community cannot afford to relax in our effort to democratize energy supplies. Oil's importance is the result of industrial and consumption choices of the past. We now must choose a different path.

I am pleased by the attention being given to energy development by the United Nations Development Program, which has asserted that "Energy is central to sustainable development and poverty reduction efforts. It affects all aspects of development - social, economic, and environmental - including livelihoods, access to water, agricultural productivity, health population levels, education, and gender-related issues. None of the Millennium Development Goals can be met without major improvements in the quality and quantity of energy services in developing countries." The UNDP currently supports 153 full scale projects in renewable energy with a total program value of $556 million. I would argue that this is a good start, but members of this body should examine how more international resources can be brought to bear on achieving energy self-sufficiency in the developing world.

We also need to think creatively about how countries can cooperate with each other to address today's global energy challenges. For example, last November, I introduced in the U.S.

Senate, "The United States-India Energy Security Cooperation Act of 2005." This bill would promote greater cooperation between the U.S. and India on clean coal technology, ethanol, and other energy sources. I am developing additional legislation of this type to encourage bilateral and multilateral energy cooperation with many other nations. I am hopeful that member states will embrace these opportunities. Likewise, I am hopeful that the United Nations and the Security Council will elevate the importance placed on dialogues about energy.

I am confident that the challenges that I have underscored today are not insurmountable.

In fact, I believe that we possess the technology and experience necessary to revolutionize energy supplies and secure our future against the threat of WMD proliferation. It is our job as political leaders to supply the most elusive ingredients - the political will and international cohesiveness that will make achievement of these objectives a reality. I urge you to embrace these tasks and work together with determination and compassion for the benefit of all the people of the world.

Thank you for the honor of addressing the Security Council.

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Federal News Service
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SAMUEL BODMAN (secretary of Energy): Hello again. Thank you all for being here as we will be discussing the Global Nuclear Energy Partnership that we alluded to in the other room.

GNEP is part of the President's Advanced Energy Initiative, the one that he announced last Tuesday evening in the State of the Union. If we are successful in implementing GNEP, we will be able to increase energy security, both here in the United States and abroad; we'll be able to encourage clean economic development around the world; and we'll be able to improve the environment.

The idea is that GNEP will leverage new technology to effectively and safely recycle spent nuclear fuel without producing separated plutonium. That's the whole idea behind it. By doing so we will extract more energy from nuclear fuel, reduce the amount of waste that requires permanent disposal, and greatly reduce the risk of nuclear proliferation. If we can make GNEP a reality, we can make the world a better, cleaner and safer place to live.

We're very pleased with the President's request of $250 million, which is an initial investment in what we believe will be a very ambitious plan to accelerate the development of nuclear technologies. GNEP, like other aspects of the President's Advanced Energy Initiative and the American Competitiveness Initiative, is based on the idea that scientific discovery will ultimately hold the answers to the questions that the world is facing today, and in particular, the questions that we in the energy department are facing today.

Deputy Secretary Sell is going to walk you through the details of the GNEP policy, but before he does, I want to thank the many people here at this department who have worked so hard on this initiative, both here in the headquarters building as well as in our laboratories. These include the Deputy Secretary himself, who I asked to undertake the leadership in this area of looking at the questions related to the development of a nuclear initiative when he came on board about 10 months ago, 11 months ago.

They also include Under Secretary Dave Garman and Linton Brooks, both of them, and I want to thank them for their participation in this; Ray Orbach, who is here, who is the Director of the Office of Science; and the Acting Director of the Office of Nuclear Energy, Shane Johnson; as well as the Acting Assistant Secretary of the Civilian Radioactive Waste Management Program, Paul Golan. These people and their teams have provided quite extraordinary insight and direction, and they have worked really day and night to develop a program that we all believe has the potential to change the world -- we believe that.

I would also say, before introducing the Deputy -- and that the Deputy Secretary, by tradition in the government is -- looks after the day-to-day operations and is in effect the chief operating officer of the department. And I have chosen to associate with that job the person who is the chief budgeting officer that makes the tough decisions, and he has worked very closely with Susan Grant and her folks in the CFO's office, and in my judgment, he's done a first-class job.


MR. SELL: Thank you very much, Mr. Secretary, for your opening remarks and your very kind remarks.

I'm pleased today to finally gather together today with you and discuss the Global Nuclear Energy Partnership. And the Global Nuclear Energy Partnership at its core is a way that we anticipate dramatically expanding nuclear power here in the United States, but also in the world in a way which effectively addressed two of the great concerns that have historically been associated with nuclear power here in the United States, but also in the world, in a way which effectively addresses two of the great concerns that have historically been associated with nuclear power. Those are what do you do with the waste and what about the proliferation of technologies that can lead to the bomb. We think the Global Nuclear Energy Partnership effectively addressees both of those great questions in a way which will enhance the expansion of nuclear power worldwide. Those are the policy goals.

I want to spend a little time on this next chart and step back and really focus on the problem that we are contemplating. In the next 50 years, world energy demand is expected to double, and not only is it expected to double, it is our great desire that it double. Large segments of the world today are still coming up the development curve, and those countries need great increases in the amount of power in order to come up the curve, and we're going to have a lot more people in 2050.

Now if we try to manage that increased energy growth on the backs of fossil fuels, we will have a very significant greenhouse gas concern and a very significant pollution concern, and it is our view here in the Department of Energy that we need all alternatives to address this. We need a great expansion of renewables, we need a great expansion of biomass, we need a great expansion of clean coal technology, but we must -- anyone that fairly looks at this question whether you're from the energy side of the debate or the environmental side of the debate concludes that nuclear power must play a significant role in meeting this dramatic growth in energy demand.

I'd like to make a point about nuclear. The world has recognized that nuclear power must play a significant role in meeting this demand. There are over 130 nuclear power reactors either under construction, in the planning stage or under consideration around the globe. Now when I started briefing this slide a few months ago, the United States was nowhere on this list. Now, fortunately, due to the provisions that the president signed into law in the Energy Policy Act last summer, there is now talk and consideration of new nuclear power plants, even here in the United States.

But the point of this slide is nuclear power is going to go on without us. We can either be a part of it or we can observe, and it's our view that from a non-proliferation standpoint, from an economic -- U.S. economic standpoint, we are in a much stronger position to shape the future if we are part of it and if we are building it.

MR. : (Off mike.)

MR. SELL: Yes, the green bar -- on the bottom this is 5, 10, 15, 20. The green bars are reactors under construction. The blue bar is reactors planned or approved for construction, and the yellow bar is reactors formally under consideration in each of these various countries.

And so really the initiative began with us thinking forward to the year 2050, a world with perhaps 1,000 nuclear reactors in it, and thinking about what are the technologies, what are the policies, what are the international regimes we would want to have in place when we get there, and that is the origin, and that's what we seek to address in the Global Nuclear Energy Partnership.

The provisions of GNEP are consistent, quite frankly, with the policies that were laid out in the President's National Energy Policy five years ago. It was a -- I recall -- I was working on the Hill at the time. I recall what a dramatic thing it was when the President called for an expansion of nuclear power five years ago, and that he advocated developing advanced reprocessing/recycling technologies. Now it is accepted, really, that the world must have a great expansion of nuclear power, and the United States must have an expansion of nuclear power. And as that realization has set in, our thinking as to what policies and technologies we need have also evolved.

As the Secretary indicated, GNEP is going to start with $250 million budget in fiscal year '07. We do have some monies in fiscal year '06 that we think we can dedicate towards it to get moving on it, and this budget is expected to increase dramatically in the coming years, and most notably in the three years remaining in this administration.

The benefits of -- if we can in fact expand nuclear power in concert with the way we think about the Global Nuclear Energy Partnership, we think the benefits are substantial. It will allow us in the United States to dramatically reduce America's dependence on fossil fuels: certainly coal; certainly natural gas, which we are increasing our imports of and plan to dramatically increase our imports of, but in the future as we think about a transportation sector more dependent on the electricity sector, through hybrid vehicles or through hydrogen fuel cells, nuclear power and the electricity power generation sector will have a growing impact on the transportation side as well.

And I would also add, to the extent we dramatically expand nuclear power worldwide, that can significantly reduce world demand for oil. Many countries around the world generate a significant amount of their electricity with fuel oil and, in fact, much of the increased demand and growth out of China over the last few years has been driven by their greater use of diesel generation in that country. So to the extent we can replace diesel and fuel oil generation for electricity with nuclear power, that can significantly affect and reduce the growth in demand for oil worldwide.

The impact -- the second point, the impact of nuclear power on greenhouse gases, is not questioned. It is the only large, mature technology capable of baseload generation of electricity that does not emit any greenhouse gases.

To the extent -- on the third point, to the extent we can recycle used nuclear fuel, the secretary indicated in the earlier press conference it dramatically minimizes the amount of waste that we ultimately have to dispose of.

On the fourth point, we think there are significant non- proliferation benefits to the Global Nuclear Energy Partnership, which I will elaborate on later in the presentation.

The fifth point -- through recycling and utilization of the actinide fuel and fast reactors, we are able to get much greater efficiency from nuclear fuel. Today in our policy we burn spent nuclear -- we burn nuclear fuel once and then it goes for ultimate disposition, and when it goes -- under current policy, when it goes in Yucca Mountain, it will still have over 90 percent of its energy value to it.

Under the Global Nuclear Energy Partnership and advance recycling technologies, we can utilize a great -- much greater percentage of the energy value in fuel. And then if we are able to do that, we will dramatically reduce the volume and radiotoxicity of the material that ultimately has to be disposed of, and instead of having to build many Yucca Mountain-like facilities over the course of this century, we think we can dramatically grow nuclear power and dispose of all of the waste that would be generated in one Yucca Mountain facility, and we would not have to face the prospect of building a second, third, fourth, fifth or sixth throughout the century.

I want to focus on one of the key -- the benefits of GNEP here and the key program elements are in developing the technology and in facilitating a regime of the future that allows for fuel leasing. And there's really -- there's a key non-proliferation benefit that I want to focus on, that is today much of the world has gone on. The other major nuclear economies have continued with reprocessing. The United States stopped reprocessing in 1970. We stopped reprocessing because the technology of that day separated plutonium, and that presents a significant proliferation concern, but the rest of the world -- France, Japan, Russia, the United Kingdom -- went on and continued to develop these reprocessing technologies, and we now have over 200 metric tons of separated civil plutonium around the globe today.

It is our goal to develop, in partnership with these other nations, technologies that will allow for the recycling of spent fuel but not separate plutonium, and in the process of developing those technologies and coupling them with fast reactors that can burn down the spent fuel. We hope to develop an international regime that will allow for fuel leasing so that fuel can be leased to a county interested in building a reactor and taking fuel, but then the fuel can be taken back to the fuel cycle country.

I'm going to tick through a number of the key elements here, kind of stepping back and going through the seven elements of GNEP. Certainly the first part of it is to expand the use of nuclear power, consistent with the provisions in the Energy Policy Act, Nuclear Power 2010, and the other provisions that have been passed. We're confident that a number of current-generation or next-generation reactors will be built in the United States. I've talked about the goal -- the importance of minimizing the nuclear waste. I've talked about the advanced recycling demonstration. That's a key part of what we're going to try to accomplish in the next few years. The technologies on this will be -- there are two key technologies that we're looking at -- one called UREX Plus -- which, instead of separating out pure plutonium combines the plutonium with other actinides and some portion or uranium so that it is not attractive or usable as weapons material. And the other technology is dry reprocessing, or pyroprocessing, which uses a slightly different technology.

And of course, in addition to the recycling piece we will couple that with fast reactors. We've built a number of fast reactors in this country over the years. Japan, France, Russia have also developed fast reactors. The key will be developing a fast reactor which can burn the actinide-based fuel and reduce that down, and we hope to demonstrate that technology over the course of the next 10 years. Once again, that will allow a system of reliable fuel services, which is elaborated -- I can elaborate somewhat on with this chart.

It is our hope to develop this technology in partnership with a number -- with the other great nuclear economies of the world. Two weeks ago the Undersecretary of State for Nonproliferation Bob Joseph and I visited the other capitals of the leading nuclear economies. We went to London, Paris, Moscow, Beijing, Tokyo. We also stopped to see Dr. ElBaradei in Vienna to lay out our vision of reordering the global nuclear enterprise. And it would be our hope to work in partnership with these other countries to develop these advanced recycling technologies to a state where they could be deployed in the existing countries that have the full elements of the fuel cycle. And once those advanced technologies are deployed, that will lead us to a situation where we can sell reactors to other countries that are interested in the benefits of nuclear power, lease that fuel to those countries, and then take it back for recycling and for waste disposition.

Now, the value in that -- we have found that it is unproductive often to talk in terms of rights, and what rights do the countries have to develop the fuel cycle? Well, what we're hoping to do is develop commercially attractive incentives so that a country interested in bringing the benefits of nuclear power to the their economy can purchase a reactor and then lease fuel and not have to worry about making their own investments in the fuel cycle. So the goal here and the reason we think this can work from a nonproliferation standpoint is that we are seeking to provide commercially attractive incentives for countries to lease fuel rather than make investments in their own fuel cycle.

It is also a key element of this initiative that we would cooperate with existing fuel cycle states or any other country in the development of small-scale reactors. And we think there is a great opportunity here to enhance our nuclear cooperation with many countries on developing reactors of a size and with the nonproliferation benefits that would be appropriate for the developing world. It would be of a smaller scale appropriate for smaller grids.

Another key aspect of the initiative is enhanced nuclear safeguards and ensuring that we install best practices on handling nuclear material and in building the advanced fuel cycle of facilities. And so what are the next steps? We're going to continue to work to expand nuclear power here in the United States by implementing the provisions in the Energy Policy Act and making progress on Yucca Mountain as quickly as possible. It is our goal, with the GNEP initiative, to raise the level of debate and to make progress more quickly on Yucca Mountain than we have in the past. And as part of this we will be sending for a legislative package in the coming weeks that will make a number of legislative changes to the Nuclear Waste Policy Act that will allow us to make progress much more quickly on Yucca Mountain. We hope to join in partnership and broaden our consultation with other countries to develop the advanced recycling technologies and we hope to continue to build on the -- build the global consensus for this GNEP vision, and that is that we need a world with a dramatic expansion of nuclear power. We must recycle in order to manage the waste. We should recycle in a way that does not separate plutonium, and we should develop a fuel-leasing regime that ensures we do not see a greater proliferation of the key aspects of the fuel cycle which worry us the most, which are the enrichment technology and the reprocessing technology.

So in conclusion, we think the U.S. and the world are faced with a set of challenges related to energy supply, nuclear proliferation and global climate change. And the global nuclear energy partnership, we think, uniquely addresses these challenges to meet the rapidly growing energy demand, reduce carbon emissions, enable the clean development of the world, and avoid proliferation.

And so with that I'll take your questions.

Q Andrei Sitov from TASS, the Russian News Agency. You mentioned you went to Moscow. Could you tell us what the response was from the Russian side? Generally speaking, how does this initiative correlate with the recent proposal from President Putin for basically the same thing?

MR. SELL: We think it's consistent. In our meetings in Moscow, as well as our meetings elsewhere, the vision, the goals, were all very well received -- in some cases enthusiastically received. But as is the case between partners, there are different perspectives and different angles and there are many details to be worked out, and quite frankly, many more consultations to occur with those countries that we've been to as well as other countries. But the ideas were very well received in all of the capitals.

Q One of the details that you probably mean is this reprocessing thing. Do you mean to take back nuclear waste for reprocessing in this country?

MR. SELL: What we mean to do is develop the technologies that allow us to effectively deal with waste on the backend. If we can do that -- and, sir, it's our view that those technologies should be in existing fuel cycle states. If we can do that there is certainly -- you know, if you look at the existing fuel cycle states, that's almost 70 percent of the nuclear reactors in the world. And so certainly those countries have a significant incentive and economic reasons to make investments in the full elements of the fuel cycle, including in ultimate repository.

But what we really want to do is develop the technologies that allow us to deal with the waste. And whether the final waste is ultimately disposed of in a repository in a fuel cycle country, or whether it is ultimately disposed of in a repository elsewhere, the nonproliferation goals have been met.

Yes, sir.

Q (Inaudible.) My question is aimed at what you're going to be doing with this waste. From what I understand, when you separate it, over 90 percent is depleted uranium. Is this then going to be put back into a fast reactor or re-enriched and then put into a fast reactor to create more energy, or does it need to be disposed of?

MR. SELL: Either way. It could be re-enriched or it could be disposed of, but if it's disposed of I believe that it would be disposed of as low-level waste. And so the cost of doing something -- the cost of that is substantially less, but it certainly -- we contemplate that it could be re-enriched, and the market may drive it to be re-enriched in the future.

Q Just one quick follow up. So would this depleted uranium -- if you're not going to dispose of it, it would need to be put somewhere as a temporary basis. Is that right? I mean, how would we set up some -- would there have to be a new sort of schematic to deal with that?

MR. SELL: To deal with the depleted uranium?

Q With the depleted uranium, the storage of it.

MR. SELL: Yes.


Q Hi. Dan Whitten with Inside Energy. Looking at the legislation, would it expand the capacity of Yucca Mountain -- would your legislative proposal expand the capacity of Yucca Mountain, and do you envision retrieving the waste from Yucca Mountain for reprocessing, or would it be stored somehow above ground? And then finally, is there anything related to GNEP authorization in the legislation, or is that separate?

MR. SELL: That was several questions. I'll try to get them all.

Q Sorry about that.

MR. SELL: As far as what we intend to do over the next few years, specifically as it relates to GNEP, we will work with the Congress on that, but it is our view that we have sufficient authority under the Atomic Energy Act to proceed. As to Yucca Mountain, it is our great desire, and it is in the nation's interest, and it is the interest in facilitating a nuclear renaissance, which we greatly need, that we get Yucca Mountain licensed and that we get it opened. And once we get it opened, then we can start moving spent fuel there. And we would certainly contemplate it as possible that fuel could move there and then be recycled, or it is possible that we would build recycling centers -- and I think there will be significant interest from various states in building these centers in which spent fuel would be staged there temporarily while it is in the process to be recycled and before it ultimately goes to Yucca Mountain for disposition.

Q Matt Wald, New York Times. Do you have a target price in mind for uranium and a target year at which point it makes sense to use something besides virgin newly enriched uranium -- would make sense to use actinides or something else instead, or are you putting some dollar value on the kilos of waste that don't go into Yucca?

MR. SELL: We think, from a -- the scale of what we are proposing to undertake is massive, and this is still a technology development and demonstration program. And so there is significant uncertainty about the cost of it. But a few things we are confident in. One, the cost of disposing of once-through spent fuel in Yucca Mountain is significant. It is very significant when you contemplate what we will do in order to license a facility for a million years, which is what is contemplated. The spent fuel going into Yucca Mountain will not have its peak dose until approximately year 1 million. And so, in order to license a facility with material like that in it, we are going to have to spend a tremendous amount of money and build massive packaging materials in order to ensure that that is possible.

So one of the benefits of disposing of recycled waste is that it's much more stable, it has a much lower radiotoxicity, and therefore it is a simpler and more straightforward proposition to ultimately dispose of it, and that will result in significant cost savings on Yucca Mountain, or the multiple Yucca Mountains that would have to be built over the coming years.

Secondly, there are significant, we believe, nonproliferation benefits in recycling and burning down spent fuel. And we start from the view that economics, the environment, clean development, and concerns about greenhouse gases are going to drive the world to many, many more nuclear power plants, and that is going to present a significant proliferation challenge if we have not thought through and presented a well organized way to address it, and the way we think is appropriate to address it is by recycling that spent fuel in a way that does not separate plutonium, and building an international regime that allows for fuel leasing and take back to eliminate concerns about proliferation.

So the nonproliferation benefit of what we are talking about is quite substantial, and it's also quite difficult to quantify, but we are seeking to develop these technologies, we are seeking to lessen the amount of uncertainty as to what it would cost to build these facilities on a commercial scale, and ultimately we hope to be in a position to make a judgment about the commercial viability of this approach in the coming years.

Q Very quick follow up. You are implying that the 1 mil per kilowatt hour won't pay for Yucca. Is that right? I mean, you have the money in hand from commercial sources to pay for waste disposal.

MR. SELL: Each year under the Nuclear Waste Policy Act the Secretary is called upon to make a judgment as to whether the 1 mil fee is sufficient. And certainly it is my view that in the coming years, if we do not develop a better way, we may come to the conclusion that it's not sufficient.


Q Thank you. Just a brief clarification. I am -- (unintelligible) -- from Kyoto News Japanese Wire Service. You mentioned that you have visited United Kingdom, France and Russia, China and Japan to discuss this partnership. Are these all the countries you plan to working on this partnership?

MR. SELL: No. This was just the initial round of consultations, and we expect to have many more consultations and with many other countries, but the countries that we've been to certainly today represent the most advanced -- the countries that have mad the most significant investments in the commercial fuel cycle.

Q Sorry, just a brief -- would you name one or two other countries you are going to work on?

MR. SELL: We would contemplate in the future that once India has met the nonproliferation commitments that it has made and that were memorialized in the joint statement between our two heads of state last summer, that they would be a great candidate for participation as well. But we also anticipate that there are many countries that have significant technologies, particularly as far as reactors, that we would look forward to participating with.

MR. : In part this is voluntary. We're going to see who's interested.

Q I'm John Fialka with the Wall Street Journal. Could you describe to me what this separated fuel does to the problem of making a nuclear weapon? You have now mixed up the actinides with the fuel. Does that make it impossible to make a nuclear weapon?

MR. SELL: It makes it dramatically more difficult because the radiotoxicity of the material and the quantity of the material, and we believe if we -- we only contemplate deploying these technologies on a commercial scale in existing fuel cycle countries. And we contemplate doing that with the most sophisticated of safeguard arrangements. And it is the ability to have these advanced recycling technologies, and most importantly the ability to dispose of the actinides, which offer the great nonproliferation benefit over the coming decades.

Yes, sir.

Q Tom Doggett with Reuters. To be clear, so when you recycle this fuel and you're going to loan it to other countries for fuel for their reactors, if they give it back, if we had it working today, this program, would we have these worries we do now about Iran, if indeed they wanted to have a nuclear program for electricity production? Would we loan this to future countries like Iran to make sure they don't develop a nuclear weapon? Will this avoid that?

MR. SELL: All countries that are signators to the Nonproliferation Treaty, like Iran, have the right to develop the fuel cycle for commercial nuclear purposes. It is our concern that that right -- and we've seen it in history -- has been used as a cover to develop a clandestine weapons program. As far as GNEP we have found the discussion of rights to be unhelpful. But what we hope to do is provide commercial, attractive -- or commercially attractive opportunities for countries that are genuinely interested in bringing the benefits of nuclear power to their country, to buy a reactor, build it, and then lease fuel and return that fuel to a fuel-cycle state for ultimate recycling, and we think we can offer that on terms that would be very attractive commercially, and in exchange that country would agree to suspend any investments in the fuel cycle, and we think that can be a very workable framework going forward to greatly discourage the proliferation of the fuel cycle.

Yes, ma'am.

Q I am Suzanne Struglinski with the Deseret Morning News, serves Salt Lake City. In December, several companies dropped out of the private fuel storage program. I was wondering if the administration presented this plan to them at that point and if you could talk a little bit more about what the industry and how they are involved at this point and what their opinions are on the waste storage ideas that you are talking about.

MR. SELL: We did not present this plan to industry, but certainly last year we saw a significant up tick under the leadership of Chairman Hobson in the House. I had discussion of advanced recycling. And so certainly that prospect has been out there, but I don't know of any direct link between our initiative and what has transpired with PFS. It is our view I would say that Yucca Mountain is the right answer and PFS is not.

Yes, ma'am.

Q You have talked about this program as a technology development effort at this point. What about the implementation? And do you have any target dates for when GNEP would be a viable program for implementation or is it something that could be done in stages with other countries with the technologies such as -(inaudible)- or reprocessing or what not to begin implementing right away.

MR. SELL: As far as the technologies it is our goal to work in partnership with our nations to develop these technologies and to demonstrate them on an engineering scale. The reprocessing technologies, the recycling technologies that we have talked about have only been demonstrated at a laboratory scale, and so we need to demonstrate those on an engineering scale, and make judgments, and understand them better so that each of the involved countries can make a judgment on commercialization. We would hope to demonstrate those technologies over the next five to 10 years and then be in a position to make judgments on the next round of investments thereafter.

Q To follow up on that, is it too soon -- is it too soon at this point to be talking about whether the United States is contemplating the building of new nuclear power plants or are these recycling facilities that you talked about in certain states, where those would go, how you would negotiate with states to build them. Is all that too far down the road?

MR. SELL: As far as new nuclear power plants, that is an issue that is before us now, and there are a number of states that are interested; there are a number of potential applications to the nuclear regulatory commission for new plants, and that is something that is quite exciting and quite encouraging.

As far as the recycling and fast reactor piece, we are still in the mode of demonstrating the technology and future decisions on siting will be exactly that, decisions of the future.

Yes, sir.

Q Martin Schneider with Weapons Complex Monitor. You mentioned about plans for a significant increase in the investment in GNEP. Do you have plans money wise at least what the requests are going to be in this administration going forward in the out years, '08, '09.

MR. SELL: We have an understanding and one of the -- the scale of what we are proposing is substantial, and the level of R&D and demonstration funding that would be required of this country is significant.

That was discussed at length on an interagency basis as we developed this proposal with OMB and they are aware and committed to a level of investment, which will get us where we need to be.

We hope to do this and we seek to do this on a partnership basis with significant foreign contributions as well but we would contemplate that the budget would increase substantially or could increase substantially over the next few years, and there is agreement within the administration to do that.

Q Is that more or less a billion dollars?

MR. SELL: I am going to go with my answer the way I said a while ago.

Q (Off mike) -- Financial Times. Has any thought been given to who would decide what countries could be eligible for the renting on this fuel? For example, Beijing might be more interested in working out something with a place like North Korea than Washington might feel more comfortable with that? Would it be determined by the United States? Would it be something that would be done in conjunction with other partners of the IAEA play into this at all? How would it work out?

MR. SELL: We expect that that IAEA will play some role in this. Certainly the proposal is attractive to user nations only if they can have some sense of energy security, and energy security comes from a diversity of potential suppliers. And so certainly that is a key element of this, and that is why we contemplated early on developing these technologies in the existing major nuclear economies including China, including Russia, so that there would be a diversity of potential fuel cycle nations that could supply on a commercial basis to user nations.


Q Yeah, hi. Steve Tetreault, Las Vegas Review Journal. I want to make sure I understood. Does this plan envision that GNEP fuel at the end would be disposed at Yucca Mountain, and if so, does that necessitate any further design changes or legislative changes to accept this type of fuel?

MR. SELL: If ultimately a -- we do contemplate. You did understand correctly that we contemplate disposing of the ultimate disposition, the ultimate waste in Yucca Mountain. We think it is absolutely the right place and it is the place that we should do it. Certainly the design requirements for disposing of once through spent nuclear fuel are dramatically different than the design requirements for the product that would ultimately be disposed because the product after recycling is a substantially lower radio toxicity. It is in a stable glass form. And so the packaging that would be association with it and the design requirements associated with disposing of it would change.

Paul, would you like to elaborate on that? This is Paul Golan from our Office of Civilian Radioactive Waste Management.

PAUL GOLAN: Sure. And today we contemplate putting reprocessed waste in Yucca Mountain, the glass that was manufactured at Savannah River at West Valley and the glass that will be manufactured at Hanford. So it is already contemplated as part of our waste acceptance criteria -- also the spent nuclear fuel from the Navy and from the commercial sites are and our designed case right now is to accommodate all of that fuel certainly as this moves forward. We are just going to keep our eye on that but we are going forward with all of the things that currently Yucca Mountain is envisioned to accept today.

Q This is one of the current designs?

MR. GOLAN: This would fall under the umbrella of the current design.

Q How about fuel that has been foreign and back?

MR. GOLAN: The only fuel that we have in our current inventory today is university fuel that went out in the '50s and '60s that the United States is accepting today, and it's U.S.-origin fuel, and so that is included in our waste acceptance criteria, but it's a very small fraction of the total fuel that is envisioned at Yucca.

Q What about fuel that has been used overseas and that is coming back for disposal? Is that getting ahead?

MR. SELL: I think it is an open question in my mind when we think about the vision, and this is still -- this is a vision as to how the world we would like to see in 50 years and it is dependent on a number of things, the development of the technology, international agreements, and other things, and it is an open question in that vision as to where the ultimate waste material would go. It is certainly possible that it could stay in a country where it is recycled and burned down, but it is also possible that it could go back to the user nation as well. But once that material has been recycled and burned down, it does not present the proliferation risk that spent fuel does today.

Q Dan Horner from McGraw-Hill Nuclear Publications. A couple points of clarification: Since you're talking about fuel supply in the context of this initiative I gather you are talking about supplying mixed oxide fuel rather than low enriched uranium fuel, and if you could talk about that a little bit and all of that. And secondly, the $250 million for this year, how much of that is new money and how much of that is existing programs that are now just being grouped for better cohesion under the rubric of GNEP? Thanks.

MR. SELL: Let me address your first question. We did not contemplate a MOX fuel cycle as part of GNEP and I want to be clear on that. This issue came up when we were in Paris. The French have moved forward with commercial reprocessing using the PUREX, which separates plutonium and then burning that plutonium in light water reactors in a MOX fuel cycle. We do not concur in their -- (audio break, tape change) -- use of an actinide-based fuel so plutonium and other actinides to be burned in a fast reactor, what we call the advanced burner reactor. That is the GNEP vision that will allow for a significant burn down in reduction of the world actinide inventory.

Q I'm sorry, if I could just clarify that. So what we're talking about -- having the separation facilities and the fast reactors only in a limited number of countries, not to the countries that are being supplied or are you envisioning fast reactors in the recipient countries of the fuel supply as well?

MR. SELL: We would anticipate -- I mean, certainly there are some small reactor technologies that may involve fast spectrum technology. But as it relates to the recycling facilities and the burn down of the actinide-based, plutonium-based fuel in fast reactors, we contemplate that all occurring within fuel cycle nations, not the user nations. We anticipate the sale of many, many more light-water reactors all around the globe to user nations as well as to fuel cycle states in the decades to come.

Q (Off mike) -- question about the $250 million?

MR. SELL: Oh, how much of that is new. Shane, can you address that?

MR. JOHNSON: Yes, in our current fiscal year 2006 we have an appropriation of 80 million for advanced real cycle initiative. The GNEP program, which is an acceleration of our advanced real cycle is the 250. So do the math here -- about $170 million of due money.

MR. SELL: Yes.

Q I'm Ben Grove, Las Vegas Sun. Can you outline what Yucca Mountain-related items there are in the legislation, the DOE is proposing.

MR. SELL: The legislation that we're working to send forward would address a number of issues associated with the project including providing a secure funding stream for the project; it would -- what are the other key elements of it, Paul? Do you want to talk about that?

MR. GOLAN: There is a couple of things. First is the funding stream. The second large aspect of that is land withdrawal, and we have to permanently withdraw 147,000 acres of land as a condition for getting a license to receive and possess on the nuclear regulatory commission.

I think that is what I am prepared to talk about today on that as we have to get clearance from our office and management and budget before we can talk much more.

Q (Off mike.)

MR. GOLAN: It is the 147,000 acres that surround the Yucca Mountain repository area. So part of that is BLM land; part of that is Department of Energy land today, and part of that is Air Force land. So it would be the area surrounding the Yucca Mountain repository.

Q (Off mike.)

MR. GOLAN: No we don't.

ANNE KOLTON: One more question.

Q I don't know -- have you had any discussions with Congress yet as of the -- Jeff Thompson of CQ. Had you had any discussions with Congress yet? I mean, as of last week there had no official briefings and there are already some eyebrows raising about the appropriations moving forward.

MR. SELL: We have had a number of discussions with key congressional leaders and others.

MS. KOLTON: Okay, one more question.

Q That is all right.

Q Yeah, I just wondered where you expect your most significant proposition -- (off mike).

MS. KOLTON: I'm sorry, we are going to take the question from the gentleman in the back.

Q David Kestenbaum, Nation, al Public Radio. It is my understanding that reprocessed fuel can be used in a bomb, that it is not the best stuff to work with but you can still make a nice kiloton explosive. So to be clear, you're saying that reprocessed fuel will not be sent to other countries to be used as fuels in reactors there?

MR. SELL: Let me -- the premise of your question, which is reprocessed fuel can be used in a bomb -- using existing technology, PUREX-based technology, it results in separated plutonium.

Q But even the stuff that comes out of UREX (sp) Plus?

MR. SELL: The stuff that comes out of UREX Plus provides significant non-proliferation benefits from the -- from its radiotoxicity, its handle-ability, as well as the quantity that would have to be utilized. And all of these advanced recycling facilities would only be built as we contemplate in existing fuel cycle states. The most important thing from a non-proliferation standpoint is the burn down of that material to your question would occur in these burner reactors in the fuel cycle states and that would not be exported or we would not contemplate that that would be exported to other what we call user nations.

Q What was wrong with GNEI as a name for this as I understand was the original working title? G-N-E-I.

MR. SELL: We have working titles then the communicators take over. (Laughter.)

Q Not something that should be kept in a bottle? Is that one of the advantages of GNEP?

MR. SELL: I guess. We do not intend to keep GNEP in a bottle. (Laughter.)

Q Thank you very much.

MS. KOLTON: Great. Thank you very much, everybody.

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