A US–Saudi nuclear agreement should not depart from strict non-proliferation standards, argues Mark Fitzpatrick.

By Mark Fitzpatrick, Executive Director, IISS–Americas

Ten years ago, in discussing its nuclear energy plans with US government officials, Saudi Arabia signed a memorandum of understanding (MOU) expressing an intent not to create indigenous uranium enrichment and plutonium reprocessing capabilities, and to instead rely on the international market for fuel for the reactors it intended to introduce. Bahrain, Jordan and the United Arab Emirates (UAE) signed similar MOUs.

The MOUs were encouraged by the George W. Bush administration as a key non-proliferation policy. By forgoing these sensitive areas of the nuclear fuel cycle, US partners could enjoy streamlined access to civil nuclear technology without raising concerns about the potential for exploiting the atom for non-peaceful purposes. In the absence of either enrichment or reprocessing, it is impossible to build a nuclear weapon.

According to then-principal deputy assistant secretary for International Security and Nonproliferation Patricia McNerney, who negotiated the MOUs, the four Arab states ‘deliberately set themselves as counter-examples to Iran’, which was vigorously pursuing enrichment as a nuclear hedging strategy. Iran had halted its nuclear-weapons programme in autumn 2003, but it clearly wanted a potential weapons capability for the future. If Arab states could show a contrasting model for nuclear energy development, it would help to undermine the Iranian narrative that Tehran’s interest was only in peaceful nuclear purposes. Limiting the spread of the sensitive nuclear technologies was also a non-proliferation goal in its own right, one that the Bush administration sought to apply globally.

Among the four Gulf states which signed the MOUs, however, only the UAE put it into practice. In 2009, it signed a nuclear non-proliferation agreement with the US in which the Emirates accepted the non-proliferation ‘gold standard’ of forgoing enrichment and reprocessing capabilities as a condition for receiving US nuclear technology. This ‘123 agreement’ (named after Section 123 of the US Atomic Energy Act) paved the way for the negotiation of a commercial deal with the Korea Electric Power Corporation to construct four nuclear reactors. (The US-origin technology content in those reactors required the 123 agreement.) The UAE’s reactors, which are on schedule to start operation within the next two years, will be far safer than the Iranian reactor across the Gulf in Bushehr. Six and a half years after that reactor started up, Iran still is not a party to the 1994 Convention on Nuclear Safety.

Some time after 2008, the other three Arab states in question developed second thoughts about what had been non-binding statements of intent. After coming ‘very, very close’ in 2011 to signing a 123 agreement with those conditions, Jordan could not bring itself to actually do so, apparently as a matter of principle. It also wanted to retain the right to exploit the large uranium reserves in the country and add value by enriching uranium. With plans to build two nuclear power plants by 2025 delayed due to financial difficulties, Jordan’s 123 negotiations have been suspended. Bahrain, not having a nuclear-power development plan, never entered into 123 negotiations.

Negotiations on a US nuclear cooperation agreement with Saudi Arabia also got bogged down. Recently, however, the Saudis accelerated their ambitious plans for nuclear energy – 16 large reactors over the next 20-25 years – and thus resumed the talks. With a tender for the first two reactors scheduled to be awarded this year, the technology agreement with the US has taken on urgency. This would be straightforward except that Riyadh is balking at the gold standard. Its stated reason for reluctance is based on economic grounds. Expressing a future goal of ‘self-sufficiency in producing nuclear fuel’, Saudi Arabia says it wants to be able to tap its extensive uranium resources. Yet every independent study shows that unless a state has a very large nuclear-power programme, it is more economical to buy nuclear fuel. The Saudis acknowledge that they do not anticipate enriching for the next 25 years.

Saudi Arabia’s real concern is in keeping pace with Iran. The Saudis also have a nuclear hedging strategy. With Tehran’s uranium enrichment programme having been granted international legitimacy via the 2015 Joint Comprehensive Plan of Action (JCPOA), Riyadh insists on a similar right. As former assistant secretary of state for International Security and Nonproliferation Tom Countryman has impishly noted on Twitter, however, the Saudis naturally are not interested in replicating the price Iran paid for its nuclear programme in terms of the international opprobrium and remaining sanction it is under, and the intrusive inspections to which it had to submit.

Saudi Arabia has yet to accept the Additional Protocol that the International Atomic Energy Agency (IAEA) has said should be an integral part of every country’s nuclear safeguards arrangement. The Saudis also have yet to accept another safeguards protocol that the IAEA has been seeking since 2005. This is the modified version of the ‘Small Quantities Protocol’ that would eliminate a loophole which allows a number of safeguards measures to be held in abeyance.

In addition to the gold standard on sensitive technologies, the UAE early on accepted the Additional Protocol. It has also adopted the highest-standard conditions for nuclear safety, nuclear security and transparency, signing every nuclear treaty, convention and protocol available to it. Among nuclear ‘good guys’, the UAE enjoys platinum status.

For the US to sign a 123 agreement with Saudi Arabia that did not include the gold standard on enrichment and reprocessing would be a major change of policy that has guided both Republican and Democratic administrations. It would also effectively invalidate the UAE promise, because of a clause in that country’s 123 agreement allowing renegotiation if any other country in the Middle East receives an agreement on more favourable terms.

In short, when Crown Prince Mohammed bin Salman visits on 19 March, the US should stick to standards that would allow for the expansion of nuclear energy in the Middle East that is as safe, secure, and non-threatening as anywhere else in the word.

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