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Nuclear News - 10/1/2007
RANSAC Nuclear News, October 1, 2007
Compiled By: Justin Reed

A.  Nuclear Cooperation and Threat Reduction
    1. U.S. Progress in Dismantling Warheads, H. Josef Hebert, Associated Press (9/30/2007)
    1. N Korea Nuke Talks End, No Deal, Associated Press (9/30/2007)
C.  Iran
    1. Iran Says Will Work With IAEA to Avert Sanctions, Reuters (9/30/2007)
D.  Nuclear Industry
    1. U.S. Trade Court KOs Uranium Duty , Alena Kornysheva and Dmitry Butrin, Kommersant (10/1/2007)
E.  Nuclear Smuggling
    1. US Congressional Investigators Report Problems with Border Security, Alex Villarreal, VOA News (9/27/2007)

A.  Nuclear Cooperation and Threat Reduction

U.S. Progress in Dismantling Warheads
H. Josef Hebert
Associated Press
(for personal use only)

The U.S. is dismantling unneeded nuclear warheads at a faster pace than forecast as it substantially reduces its atomic arsenal under terms of an arms control treaty with Russia, government officials said Sunday.

The Bush administration planned to announce Monday that it has taken apart three times as many reserve warheads in the just-completed budget year than it had projected and expects the rapid pace of dismantlement to continue.

At the same time, a report by an independent science advisory group has concluded that "substantial work remains" before a new generation of warheads will be fit for certification without underground nuclear testing.

The findings are expected to provide congressional opponents of the warhead program with additional reasons to hold back money for the project. The administration views development of the replacement warhead as essential for keeping a secure and more easily maintained nuclear stockpile as warheads age.

The National Nuclear Security Administration, part of the Energy Department, reports a 146 percent increase in dismantled nuclear warheads during the 2007 budget year, which ended Sunday. That is triple the agency's original goal.

The agency is believed to be dismantling thousands of warheads, taking out their plutonium, uranium and non-nuclear high explosive components. The agency did not said how many warheads it had taken apart, nor how many remain to be worked on because the numbers are classified.

The progress "sends a clear message to the world that this administration remains committed to reducing the number of nuclear weapons in the U.S. nuclear stockpile," said the agency's administrator, Thomas D'Agostino.

The government will not provide any numbers on the overall size of the nuclear stockpile, but there are believed to be nearly 6,000 warheads that either are deployed or in active reserve.

Under the 2002 treaty with Russia, the U.S. is committed to reducing the number of deployed warheads to between 1,700 and 2200 by 2012.

Three years ago, President Bush said he wanted the overall stockpile reduced to half of what it was in the 1950s, or to a level of about one-quarter of its size at the end of the Cold War.

The group of scientists who regularly advise the government on nuclear weapons matters has told Congress that the proposed replacement warhead will require further development and experiments to assure against possible failure, absent actual underground testing.

"Substantial work remains on the physical understanding" of the mechanisms involved to assure the warhead will perform reliably, according to a report to Congress on Friday.

Officials at the nuclear agency said they were gratified that the report supported the idea that the replacement warhead can be developed without actually detonating a device in an underground test. That has been an important criteria for moving forward with the program if Congress provides money.

D'Agostino says the warhead is necessary to make the nuclear arsenal more secure, safer and reliable in the future.

"We embrace the ideas of continued study and peer review," he said in a statement in response to the report.

Last May, the agency chose a research effort at Lawrence Livermore National Laboratory in California for the replacement warhead. The administration hopes to develop a clearer timetable and cost estimate for the project in the next year, but so far some members of Congress have been skeptical about the program.

The House stripped away money for the replacement warhead program from the Energy Department's upcoming budget, while the Senate agreed to only partially fund the program. A final budget has yet to be approved in Congress.

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N Korea Nuke Talks End, No Deal
Associated Press
(for personal use only)

Six-nation disarmament talks on North Korea ended Sunday without an expected agreement and with envoys instead opting to send a detailed, draft plan on shuttering the North's nuclear programs to their governments for approval.

S Korea envoy Chun Yung-woo (L), N Korea envoy Kim Kye Gwan (C), Japan envoy Kenichiro Sasae (R).

The four days of talks, which began on an optimistic note after North Korea agreed to disable its programs by year's end, were supposed to set specifics for the disabling, among other issues.

Envoys described the talks as recessed. Host China said that they may reconvene in 48 hours depending on what the six governments -- China, the U.S., Japan, Russia and the two Koreas -- decide about the draft blueprint.

The draft "lays out an entire roadmap until the end of the year" for the North's nuclear disarmament, U.S. Assistant Secretary of State Christopher Hill told reporters before boarding a plane for New York.

"We're into the nuts and bolts now of implementing de-nuclearization," Hill said. The level of detail, he said, made it necessary for him to return to Washington for consultations.

Though Hill declined to disclose details and the draft was not released, South Korean envoy Chun Yung-woo said the proposed blueprint set some deadlines for North Korea and for the other parties to meet.

The recess is the latest glitch for the six as they try to push forward a February agreement under which communist, impoverished North Korea agreed to declare and dismantle all its nuclear programs in return for one million tons of heavy fuel oil or other assistance.

The latest talks aimed to set terms for the North's declaration and the dismantling that under the February deal should have been agreed to five months ago.

Talks have dragged on for four years, but if ultimately successful would roll back a nuclear program that a year ago allowed North Korea to detonate a nuclear device and that experts say may have produced more than a dozen nuclear bombs.

Though some negotiators may remain in Beijing to resume the talks, no members of the U.S. delegation were staying behind to take part in further negotiations, the U.S. Embassy said.

Envoys characterized the meeting as a step forward. South Korea's Chun said the draft represented "a tentative agreement among the chief envoys." He praised North Korea -- an often stubborn negotiator -- for showing flexibility.

"Many countries exerted the spirit of compromise. In particular, North Korea made many concessions," Chun told reporters. "The North showed its resolve to bring an agreement home. They expressed enthusiasm and made many concessions."

Under terms in the draft, North Korea reiterated its December 31 deadline for declaring and disabling its nuclear programs and accepted that other parties would not be able to deliver all aid within that time, Chun said. He said that South Korea by year's end would only have delivered about a third of the economic and energy assistance it promised.

While the U.S. also restated its intention eventually to remove North Korea from a list of countries that sponsor terrorism, the draft did not set a deadline, Chun said.

Envoys, however, did not comment on whether the draft addressed earlier sticking points. During the recent talks, disagreement arose over the definition of disabling. Hill, the U.S. envoy, said earlier that the U.S. wants a dismantling process that means a nuclear facility could not be made operational for at least 12 months.

Washington also wants North Korea to declare a suspected uranium enrichment program along with the plutonium program that has produced nuclear bomb material.

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C.  Iran

Iran Says Will Work With IAEA to Avert Sanctions
(for personal use only)

Iran will continue its cooperation with the U.N. atomic watchdog to defuse a row over its nuclear programme, an Iranian official said on Sunday, accusing some Western states of trying to disrupt the process.

Six world powers agreed on Friday to delay a vote on tougher U.N. sanctions on Iran until late November at the earliest, to wait for reports by the International Atomic Energy Agency (IAEA) and European Union negotiator Javier Solana.

The United States and France had sought swifter action to step up economic and political pressure on Iran for refusing to halt uranium enrichment, which the West suspects is aimed at developing nuclear arms. Iran denies those charges.

"The process that certain radical countries have followed so far is to disrupt the positive climate that has been put in place through the cooperation of the Islamic Republic of Iran with the agency," Foreign Ministry spokesman Mohammad Ali Hosseini said.

"That has not helped them, therefore they have been forced to be patient," he told a news conference, adding that other states were backing Iran's cooperation with the IAEA.
He was speaking at a news conference broadcast by Iran's English-language Press TV, which translated Hosseini's comments.

"To put a stop to possible sanctions, we are going to continue working with the agency and our diplomatic efforts will continue unabated," Hosseini added.

Foreign ministers of the United States, Russia, China, Germany, France and Britain asked Solana to hold more talks with Iran's nuclear negotiator, Ali Larijani, while the IAEA tries to clear up doubts about past Iranian nuclear activities.

The decision to make another stab at the European Union-led diplomacy while brandishing the threat of fresh sanctions if it fails reflected a compromise among the major powers.

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D.  Nuclear Industry

U.S. Trade Court KOs Uranium Duty
Alena Kornysheva and Dmitry Butrin
(for personal use only)

The U.S. Court of International Trade struck down a 112-percent antidumping duty on Russian uranium in a ruling on a suit brought by Tekhnabexport on October 28. Although the Russian atomic fuel producer will not have access to the American market for two more months under the court's decision, it makes it possible then to deliver Australian uranium enriched in Russia to the U.S., where the market has been closed since 1991.

Federal Atomic Energy Agency (Rosatom) head Sergey Kirienko announced on Friday that Tekhnabexport won its suit against the U.S. Department of Commerce in U.S. court, where it challenged the legality of antidumping duties on the import of Russian-produced low-enriched uranium (LEU) into the U.S. Kommersant has learned that the decision was made by the court on September 26. Two days were required for the official formulation of the ruling. The court ordered the Department of Commerce to define the scope of the antidumping procedure and exempt Russian LEU uranium from it.

The antidumping investigation that led to the prohibitive 118-percent duty on Russian low-enriched uranium was imposed in 1991, when cheap uranium from Russia caused prices on the world market to collapse. In 1994, Russia and the U.S. signed an intergovernmental agreement that HEU (highly enriched uranium) from Russian nuclear weapons be processed into LEU for delivery to the U.S. through 2013. Forty-four percent of the 103 atomic energy plants operating in the U.S. run on fuel received on the HEU-LEU contract.

Combined with the antidumping duty, the agreement meant that delivery of low-enriched uranium was effectively prohibited supplies of LEU in excess of the HEU-LEU quota. All uranium that appeared on the American market as a result of the HEU-LEU contract was bought by the U.S. government's executive agent, USEC. USEC, which had sales of $1.85 billion and net profits of $106 million in 2006, was privatized in the 1990, but was a state agency when the contract with Russia was signed. Rosatom sources say, however, that Russia receives $400-800 million per year in income on the contract � obviously, the delivery price is substantially below market prices.

Deliveries of uranium under the HEU-LEU contract amount to 23.5-24 million lbs. of uranium oxide per year. A pound of uranium sells for about $85 on the spot market now. Over the summer, that price hit $138. Russia sells LEU under the HEU-LEU contract at a fixed, non-market price. No exact price information about the supplies has been made public. Tekhnabexport estimated when it filed suit in 2006 that $1.1 billion in profits were lost because of the antidumping measures. Taking into account price growth on the world market, calculations made by Kommersant and experts in the nuclear industry indicate that the sum increased to $1.9 billion this year. According to data published on the USEC website, Russia was paid $4.6 billion for uranium supplies under the HEU-LEU contract between 1994 and 2006. The full cost of the contract is $7.6 billion.

Kirienko declared the court's decision �a great victory for Rosatom both legally and politically.� The removal of the 118-percent duty, which, as Tekhnabexport noted this summer, was profitable for Russia to pay at certain times, creates the opportunity for Rosatom and Tekhnabexport companies to supply uranium to the U.S. at market prices. USEC has just begun building its own enrichment plant, which is expected to be operational at full capacity by 2012. In 2013, the HEU-LEU contract expires and USEC and Tekhnabexport will be competitors. Until then, the Russian company will remain the market leader in enrichment.

Enforcement of the court's decision will not give Russia full access to the American market. After Russian fuel uranium is removed from Commerce Department antidumping list, the lack of an agreement between Russia and the U.S. on the peaceful use of the atomic energy may become an obstacle to deliveries. Usually, trade in atomic energy plant fuel is carried out as part of an agreement of that type. The HEU-LEU contract takes the place of such an agreement now, but it does not envisage supplies outside of its bounds. Kirienko stated that the situation needs to be settled through negotiations �in order not to break into the market by force but operate under conditions that are normal for both sides.�

In two months, Tekhnabexport's window on the U.S. market opens. At the beginning of this month, Russian President Vladimir Putin signed a new agreement on the peaceful use of atomic energy with Australia. Rosatom is in negotiations on the enrichment of Australian uranium. Preliminary negotiations are underway on the purchase by Russia of 4000 tons of uranium per year from Australia. Australian uranium enriched in Russia could easily find its way onto the U.S. market, since uranium enrichment services are also being removed from the antidumping list.

In any case, the decision of the U.S. court is a step toward opening the U.S. market to Russian suppliers. Kommersant has learned that the court's decision was unexpected at the Commerce Department, and the agency intends to appeal the decision to the U.S. Supreme Court.

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E.  Nuclear Smuggling

US Congressional Investigators Report Problems with Border Security
Alex Villarreal
VOA News
(for personal use only)

Speaking before the Senate Finance Committee Thursday, Director of Special Investigations at the U.S. Government Accountability Office, Greg Kutz, said the protection of U.S. borders is woefully inadequate.

His testified during the third in a series of hearings on the GAO's investigations of border security.

Kutz said the investigators found entering the United States illegally is easy, especially through the northern border with Canada. "Our work clearly shows substantial vulnerabilities on the northern border to terrorists or criminals entering the United States," he said.

He said at one site, they succeeded in simulated smuggling of radioactive and other contraband materials into the United States.

Deputy Chief of U.S. Customs and Border Patrol Ronald Colburn agreed with GAO findings that the border is not as secure as it should be, but said improvements have been made. "As of September 23, 2007, the total of overall illegal activity throughout the United States along our borders is down 20 percent," he said.

But Kutz said progress is not occurring everywhere. Although it still has vulnerable areas, he said the southern border appears to be benefiting much more from security efforts.

About 12,000 border patrol agents are currently deployed along the southern border, compared to about 1,000 in the north. Of those one-thousand, Colburn said only 250 are on duty at any given time.

Democratic Senator Ken Salazar expressed concern over the lax protection of the northern border. "How can you tell me that we're securing our most vulnerable areas when we have a five-thousand mile border where the GAO just demonstrated what it is that you can do in terms of coming across with a dirty bomb or any other kind of terrorist weapon that would do harm to the people here in the United States?," he said.

Colburn said less than one percent of illegal activity occurs on the Canadian border, and the rest on the southwest border.

But the Canadian border is where Executive Director of the Partnership for Global Security Ken Luongo said nuclear materials are most likely to enter. "There's been evidence to suggest that the northern border is a significant threat as a terrorist point of entry. Some have claimed that it's more dangerous than the southern border," he said.

The Canadian Security Intelligence Service reports that more international terrorist groups are active in Canada than anywhere else in the world. The group says terrorists from 50 different organizations around the world have posed as refugees to try to get into the country.

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DISCLAIMER: Nuclear News is presented for informational purposes only. Readers are encouraged to visit the websites from which the source material originates. Views presented in any given article are those of the individual author or source and not of RANSAC. RANSAC takes no responsibility for the accuracy of information contained in any article presented in Nuclear News.

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