Policy Report | July 27, 2008

Nuclear Fuel Banks: Moscow, Washington to Lead on “Mergers”

The United States and Russia are the giants of nuclear power, accounting for more than half the world's enriched uranium production, and can create a natural partnership to secure nuclear material.. 

Executive Summary

The United States and Russia are still the giants of nuclear power, accounting for more than half the world’s enriched uranium production. Twenty-five percent of the world’s nuclear power plants are found in the United States and half of those power plants use Russian uranium. Russian nuclear fuel now constitutes 10 percent of the U.S. power generation mix. The interdependence arising from existing trade in nuclear fuel points toward a natural partnership.

The two countries, however, have been unable to capitalize as well as they might on this potential at the bilateral level or in important multilateral forums. Both the United States and Russia would benefit from demonstrating stronger joint leadership to promote civil nuclear energy frameworks on two levels: domestically, to satisfy rising power demand and to align foreign investment regimes; and internationally, to restrain nuclear proliferators and/or contain rising insecurity about proliferation threats. Aside from the benefits for energy security, bilateral cooperation in this field could also rejuvenate stalled United States-Russia dialogue on other matters of global strategic importance.

This potential for an effective political framework for cooperation will remain unrealized until and unless both governments step up and make concrete commitments to move this promising agenda forward beyond current plans.

The civil nuclear dossier has often been held hostage to serious divergences between Moscow and Washington over larger global strategic issues, including Iran. There are profound differences in opinion between Russian and U.S. (and Western) security experts and elites as to the range of cooperative possibilities in the nuclear energy relationship. The delay in ratifying the United States-Russia Civil Nuclear Cooperation Agreement by the Senate has been one of the most recent policy developments that reinforce this perception of almost insurmountable differences. The delay overshadows the points on which the two countries have a commonality of interest and see eye to eye. On the U.S. side, one of the major concerns is the lack of openness of Russian nuclear industry to foreign investment and competition.

But there is reason for optimism as the stage is already set for closer cooperation between the United States and Russia. A proliferation-resistant, closed fuel-cycle solution for civil nuclear energy is a point on which both countries can agree. Add in complementary expertise in nuclear power generation and you have an ideal match. The United States and Russia should build on these foundations by promoting technical cooperation between their respective civil nuclear industries that would significantly advance national energy security and bring tangible commercial benefits.

The United States and Russia share a vision of a sustainable energy future less reliant on dwindling and environmentally damaging fossil fuels. A joint U.S.-Russian initiative on civil nuclear energy would be a step closer to this goal. Such a partnership could also help to close the door on past rivalry between these two major powers while simultaneously promoting global security. Given the likely benefits of cooperation that would accrue to both states, it would be careless to let past suspicions overcome prudence.

Key recommendations to the Governments of Russia and the United States

  • Commit to a firm date such as 31 June 2009 for making a joint proposal on an international fuel bank that effectively merges the separate proposals of each (U.S. Global Nuclear Energy Partnership and Russian Fuel Bank Initiative), while incorporating the most promising elements of other related proposals from countries like
    Germany and Japan.
  • Create a bilateral inter-governmental commission to map concrete technical parameters for civil nuclear cooperation and to smooth over potential non-nuclear obstacles.
  • Put in place a firm framework for transfer to developing countries of affordable and proliferation-resistant technology through a multilateral nuclear technology knowledge bank based on public-private cooperation under the auspices of the International Atomic Energy Agency.
  • Use the knowledge bank to develop a set of political and business incentives that promote a clear and rapid move to new power generation solutions, such as thermo-nuclear fusion.
  • De-couple bilateral civil nuclear cooperation from U.S.-Russian negotiations on Iran and third party non-proliferation issues.