Friday, 12 December 2014

The complex issues associated with Ukraine's nuclear energy industry and export of urainium from Australia to Ukraine

The Australian Prime Minister Tony Abbott has said he wants to supply uranium to the Ukraine for its power industry. He said this in the same moment as expressing a desire to visit Ukraine to see established a memorial to the passengers of the downed Malaysian Airlines flight in eastern Ukraine. My initial reaction was towards the continuing absurdity of this prime minister in his obsession with issues he somehow thinks make him a hero, but which in reality make him look unsuitable for office to many Australians. Many people, I am sure, share my visceral reaction towards the notion of exporting uranium to the Ukraine. It seems desirable, however, to do some serious analysis.

This perhaps notionally simple question brings together a complex of difficult issues.

Here are key background factors:

Ukraine was for a very long time a republic within the Union of Soviet Socialist Republics [USSR] which disintegrated in 1991. At that time there were some four and a half thousand Soviet missiles aimed at the United States located in the Ukraine. Almost two thousand of these were transferred to the USSR in 1991-2, and the remainder became the subject initially of trilateral agreement between the US, Russia and Ukraine in January 1994 and then the Budapest Memorandum of December 1994 between those three plus the adherance of other nuclear weapon states notably United Kingdom. This declaration gave assurances of the territorial integrity of Ukraine, in a context of the remaining nuclear weapons on Ukraine's territory being transferred to Russia and being dismantled, and Ukraine acceding to the Nuclear Non-Proliferation Treaty (NPT) as a non-nuclear weapon state (NNWS). It is a political statement, not a treaty. In addition to the Memorandum there was annexed to it a declaration: Annex II - see the text here. I encourage you to read that. Russia argues that the continuing recruitment of former Soviet allies into NATO and placement of new defence systems in such countries was contrary to the spirit of the declaration. Please also read former Prime Minister Malcolm Fraser's appeal for sanity on this subject

The NPT recognised as nuclear weapon states those states which at the time the treaty was signed already possessed nuclear weapons: the USA, USSR, UK, France and the People's Republic of China. These countries undertook not to transfer control or capacity to develop nuclear weapons technology to NNWS. A new nuclear safeguards regime was established under the treaty to prevent diversion of nuclear materials to non-peaceful purposes. There was then, in the text of the NPT a great emphasis on the right of NNWS to have access to peaceful uses of nuclear energy. To enable which NNWS had to enter into safeguards arrangements of a new kind as set out in the IAEA's InfCirc 153.

PARENTHESIS: When I returned to the Australian Department of Foreign Affairs from an overseas posting  in January 1970 I found a great deal of agitation among my colleagues about whether Australia, having signed the NPT, would ratify. The treaty was to come into force (see Article IX in text at link above) when forty countries had ratified it. Signature is a step governments take when they put their name on a new treaty. Ratification of treaties takes place under constitutional processes of different countries. This is a debated issue in Australia (see this paper) but in 1970 all it required was the will of the executive government to do the job, no consultation with the parliament. There were substantial lobbies in Australia for both nuclear power and nuclear weapons. The decision to ratify was taken at the last moment in March 1970. Someone else can research how the US brought pressure on Australia then, or what security guarantees Australia sought. 
Had we not signed before ratification we could have acceded later, but that would have a smell of recalcitrance and leave the farm gate open for the raging advocates of Australian possession of nuclear weapons. A space had been cleared in the commonwealth owned Jervis Bay Territory for a Canadian designed CANDU reactor, which was easier to operate as it did not require enrichment of uranium (a difficult and expensive process of increasing the proportion of the isotope U235 over the predominant U238), reaction being developed by using heavy water rather than light water, meaning a need to separate the rare deuterium, H20 with an extra neutron on, easier than the separation of the heavy and toxic uranium isotopes. The nuclear advocates within and around the government would also have known that this reactor could provide a sneaky route to acquisition of weapons usable plutonium, something that only entered political consciousness in the USA in the mid-1970s and especially with the arrival of the Carter Administration and the appointment of Joe Nye as Deputy Undersecretary of State for Nuclear Non-Proliferation. When urgent steps were taken to stop Pakistan, Iran and South Korea getting CANDU reactors and plutonium separation facilities.
Few people using the car park at the end of the Jervis Bay Road
know that it was the site cleared for a nuclear power station
END PARENTHETICAL BIT... (another book)

Ukraine (in parallel with Kazakhstan, also former soviet republic) was only the second country to abandon nuclear weapons, after South Africa.

Australia's uranium export policies have, since the 1970s, with their slow evolution, maintained focus on nuclear safeguards rather than nuclear safety. This reflecting our obligations under the NPT. (Another book needed to discuss safety, but my general position is that while the technology is not bad, the problem is the absence of any evidence that any human society can be durable enough to handle operation and waste management issues for as long as needed.)

In terms of the NPT and the general drift of Australian uranium export policy, Ukraine gets a tick.

But the situation is much more complicated than that and it would, to use technical terms, be bone-headed crazy to approve uranium export on just that basis.

As another legacy from the USSR, Ukraine produces half its power needs from nuclear power stations. Ukraine consumes twice as much energy as Germany per capita. The other half of Ukraine's energy needs come from oil and gas supplied by Russia. Pipelines for supply of Russian oil and gas to western Europe run through Ukraine.

Chernobyl, the nuclear power plant whose accident in 1986 was the worst ever nuclear power station disaster, is in Ukraine. Other nuclear power stations in Ukraine are of similar age and similar design quality and maintainability as Chernobyl #4.

The political history of Ukraine since the collapse of the USSR has been to say the least complex. In the course of this, Russia has a number of times exerted pressure on Ukraine through oil supply and cut-off, usually in circumstances where Ukraine is not paying its bills.

The current agreement on continued oil and gas supplies from Russia to Ukraine also tangles with agreement to continue Russian supplies to western Europe. This is the soft underbelly to all the talk of sanctions against Russia. There may be a point when substitution may be possible away from Russian supply of western Europe, indeed, the United States has recently become an oil exporter and would enjoy that. As noted in an earlier blog entry however, the driving down of the international oil price recently by Saudi Arabia and the United States not only weakens Russia and its efforts in Ukraine and Syria, it also has grave consequences for the United States and world economy: world price now around $70 a barrel, break even for junk bond financed shale oil producers in the US around $90.

Supplying uranium to Ukraine would solve no issues, the idea is adequately described in The Australian's headline "Uranium talks thumb nose at Vladimir Putin" ... perhaps a linguistic step upwards from shirtfronting, but a very very bad approach to international relations. Yes, it's elementally of the same cloth as Abbott's conflict-promoting approach the national politics, but it's very dangerous and frivolous internationally.

It would seem likely that any sale of uranium to Ukraine would mean delivery to a United States entity most likely Westinghouse, who have been selling fuel rods to Ukraine. So the income stream from any sale of Australian uranium to Ukraine would mainly be to the enricher and fuel rod fabricators in the United States. Note this in reading any advocacy for this sale.


So, to cut this short (it really needs a book or two, submit any questions in comment section) how should we score Ukraine as a customer for uranium?

  1. NPT and nuclear safeguards compliance — 10/10
  2. Nuclear industry safety history — 1/10
  3. Current state of nuclear plant — 1/10
  4. Stability of regime, assurance of viable state control, war risks — 1/10
  5. Contribution to general arms control and conflict resolution — 0/10
  6. Solution of an energy problem — 2/10
  7. Prospect of being paid — 4/10
  8. Australian national interest — 0/10

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