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If the US turns them down, other countries will supply the reactors
The United Arab Emirates (UAE) is getting ready to make its case with Congress to acquire nuclear reactor technologies according to a report by the Associated Press. At the heart of the debate is whether a country that counts Iran as one of its major trading partners can be trusted to control nuclear reactor technology for a civilian power program.
The UAE has plenty of oil, but also depends heavily on natural gas which has a finite future. The plan is to replace gas with nuclear with two new reactors by 2017. U.S. and French companies have already held “supplier summits” in the UAE to make their case for up to $60 billion in construction and services contracts to be awarded this December.
The UAE is reportedly developing a short-list of firms to be named to compete for the tender reportedly scheduled to be released in September. U.S.-based Westinghouse, which is owned by Japan’s Toshiba, and French firms Areva and GDF-Suez are among the leading contenders.
Bush signed an agreement last January
The pending nuclear agreement with the US was signed last January by the outgoing Bush administration after being negotiated by then Secretary of State Condoleezza Rice, but it was not submitted to Congress for review.
The new Obama administration is reported to favor the deal, but has not commented formally on it. To get things moving President Obama must sign off on the deal and ask Congress to amend it or reject it. Congress will have 90 days to think it over. So far, the Obama administration has not set a date for these actions.
In terms of nonproliferation issues, which President Bush wanted to showcase relative to Iran, the UAE has agreed not to develop uranium enrichment capabilities. It will import its nuclear fuel and retrograde the spent fuel to the supplier. The country has signed up for regular and snap inspections by the IAEA.
Critics point to smuggling cases and human rights abuse
In Congress a small but active bipartisan group of legislators are not sure they want to approve the deal. Rep. Illena Ros-Lehtinen, R-Fla, and Ed Markey, D-Mass are the leading critics of the deal. They claim that the UAE allowed its ports to be used as way stations in the world-wide nuclear smuggling network organized by Pakistan’s A.Q. Khan.
This criticism sends the UAE’s ambassador to the U.S. Yousef al Ottaiba right into orbit. According to the AP, he denies that the UAE is a way station for transfer of sensitive technologies to Iran and points to examples where his country stopped the smuggling activities.
High-powered lobbyists hired, but can they make a difference?
In the US the UAE has ramped up a lobbying campaign through the US-UAE Business Council which is a typical move for a country seeking international trade deals that require congressional approval. There is a robust website which is updated with news about the pending agreement.
The UAE has also hired high powered lobbyists composed of former Democrats and Republicans. AP named Vic Fazio, a former 10-term California congressman and Richard Armey, the former House Majority leader from Texas based on a review of foreign agent registration records on file at the Justice Department.
The public relations campaign may have suffered a significant setback as a result of a video tape that was recently obtained by the AP and ABC News. The wire service reports it shows Sheik Issa bin Zayed al Nahyan, a member of the country's royal family, brutally torturing a man who allegedly shortchanged him on a grain delivery.
AP reported that Issa is the brother of the Sheik Mohamed bin Zayed al Nahyan, crown prince of Abu Dhabi, the country's capital, and deputy supreme commander of the UAE armed forces.
Rep. James McGovern, D-Mass., co-chairman of the House Human Rights Commission, viewed the tape and told AP it can't be ignored. "I, for one, would feel very uncomfortable about extending our relationship to nuclear cooperation," he said.
AP did not report whether Issa will be held accountable for his actions or whether al Nahyan will disavow them in return for congressional support. So far the UAE has described the incident as an internal matter.
U.S. firms already doing business in the UAE
While the Obama administration is making up its mind whether and when to submit the deal to Congress, other US companies are already working in the UAE. They include Thorium Power (OTC:THPW) and CH2MHill. A five-year deal with Thorium Power is helping the UAE develop its own version of a nuclear regulatory agency. CH2MHill is helping develop the Emirates Nuclear Energy Corp which will select prime contractors and provide project management for construction once the planned reactors break ground. Good Harbor Consulting, a firm headed by former White House national security official Richard Clarke, is looking at issues related to the safety of reactors that the UAE plans to build and operated by 2017.
Rejection of the deal leads to loss of leverage
If Congress rejects the nuclear deal with the UAE, the country will just buy its reactor technologies, nuclear fuel, and components from other countries. Unlike India’s deal in Fall 2007 with the Nuclear Suppliers Group, which had to overcome three decades of distrust, the UAE is not limited in terms of who it can do business with or why when to comes to building at last two nuclear reactors.
Rejection of the deal would mean the US would lose whatever leverage it might otherwise obtain on the transfer of nuclear reactors to the UAE. US firms would also lose the business. Those possible outcomes might not stop current critics from making their case and seeking to prevail in the debate.
AP reported that for US businesses to compete the nuclear trade agreement needs to be in place. If not, the UAE. plans to proceed with its nuclear energy plan.
"We'll proceed with the other countries that are involved, mainly Japanese and French companies at this point, and we'll still have nuclear power in 2017. It just won't be with the benefit of U.S. industry," Ambassador al Otaiba said.
So far US firms have not benefitted from a similar deal with India. There issues related to protection of intellectual property, e.g. reactor technologies, and indemnification in case of accidents, have stalled US firms from signing construction contracts. Meanwhile Russia signed a deal with India for four new reactors and Areva has a deal for two new reactors as well.
Until Congress is actually asked by President Obama to review the UAE deal, all that is going on right now is positioning for the debate. The outcome is unknown, but much rides on it.
Prior coverage on this blog
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Idaho Samizdat is a blog about the political and economic aspects of nuclear energy and nonproliferation issues. It covers the nuclear energy industry globally. Additionally, the blog has regional coverage on uranium mining in the western U.S. Link to original post
