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The Back-End of the Nuclear Fuel Cycle: An Innovative Storage Concept

The Back-End of the Nuclear Fuel Cycle: An Innovative Storage Concept

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Authors
Stephen M. Goldberg, Robert Rosner, and James P. Malone
Project
Global Nuclear Future

Stephen M. Goldberg, Robert Rosner, and James P. Malone

SUMMARY

The American ÇďżűĘÓƵ’s Global Nuclear Future (GNF) Initiative continues to advance effective policies and procedures that help minimize the international security and nonproliferation concerns associated with the spread of nuclear power. The Initiative’s leaders and advisors have identified several interconnected questions that must be addressed simultaneously in order to arrive at pragmatic recommendations for a sustainable new nuclear regime, both in the United States and abroad. These include:

  • Most terrorist prevention plans focus on protection against external threats. What impact do insider threats have on the security of nuclear facilities?
  • How can nuclear fuel cycle management options and advances in nuclear energy technologies promote or mitigate the dual-use security risk? How will multilateral fuel cycle arrangements support a safer and more secure expansion of civil nuclear energy programs?
  • How will the increasing number of nuclear newcomers (nations developing or aspiring to have civilian nuclear energy programs) affect national, regional, and international nonproliferation policies? How can we ensure that emerging exporters of nuclear technology will coordinate policies to minimize proliferation dangers?

Some of these questions are addressed in the paper Nuclear Collisions: Discord, Reform & the Nuclear Nonproliferation Regime, by Steven Miller.1 Our paper covers two of the main themes from Nuclear Collisions: namely, that nuclear aspirants should use realistic economics when making decisions about nuclear energy programs; and that international bodies such as the International Atomic Energy Agency (IAEA), the Nuclear Suppliers Group, and other formal and informal bodies should respect the interests and rights of nuclear aspirants.

A significant focus of the GNF Initiative has been the back-end of the nuclear fuel cycle,2 specifically in the international context. This paper addresses the question of whether it is possible to design a consensus-based approach to the back-end that, if fully executed, would limit proliferation risks. We consider this complex question by examining the possibilities for a viable back-end arrangement in the South and East Asia regions. These regions are the trend-setters; energy-security worries dominate discourse in East Asia and the developing countries in South Asia, where nuclear energy is seen as an important supply source to meet electricity needs.3

We describe an innovative regional storage concept that provides a built-in safety valve; that is, if recycling technology advances sufficiently to provide a proliferation-resistant and economically advantageous fuel cycle, and if future energy-security concerns require revisiting the uranium supply-and-demand balance, then the used fuel stored at an interim site could potentially be considered a valuable commodity. We recognize that our proposal requires further study and refinement, and we are cognizant of the formidable challenges ahead, including (1) preserving the inalienable rights of a state,4 whether as a customer or a provider of services; (2) making our proposal economically attractive to potential customers; (3) attracting a state to host an interim storage facility; and perhaps the most difficult challenge (4) fusing together interests that run the gamut from immediate fuel recycle with current technology to a permanent ban on any current or future advanced partitioning and potential recycle technology. To address the last point, the character and scope of a back-end R&D program located in a host state will need further development than what is documented in this paper. In our opinion, the character and scope of the R&D program is crucial to ensuring that we have a safer and more secure nuclear energy future. We offer preliminary thoughts on this matter, in full recognition that they will require additional input from all stakeholders.

We emphasize four specific actions in this paper:

  • Expanding the playing field. India and China are key in influencing future international arrangements, specifically in terms of their R&D endeavors. Both countries are important because of their explosive growth and their influence in the East and South Asia regions. If the promise for developing and deploying more proliferation-resistant technology is to be fulfilled, China and India will have to play a significant role.
  • Expanding participants and providing flexibility in a multilateral deal. Adequate capitalization is important for any nuclear fuel cycle venture. For our proposal, we designated a portion of the payments made by legacy holders of used fuel to provide working capital for the back-end venture; the proposal has been designed so that nuclear aspirants have the opportunity to opt in and out over time. We present a market-based approach that provides sufficient cash flow to sustain long-term fuel storage activities.
  • Incentivizing the host state of a back-end facility. Sufficient incentives need to be put on the table to attract a host state. We have designed two incentives: (1) one-time fee payments that the host can use as collateral for its infrastructure upgrades; and (2) a robust R&D initiative, including the possibility of siting a demonstration facility within the host state. In addition, our proposal would require a relatively small footprint, thereby mitigating siting issues for the host state.
  • Breeding success. In establishing a multinational fuel cycle regime, whether focused on the front-end or back-end, it is unlikely that one size will fit all. International fuel storage is a worthy goal, but previous efforts to create macro fuel supply and disposition approaches have revealed this task to be very large and likely too expensive. We have designed a region-centric approach, one that would initially have a relatively small footprint. Once a workable approach is demonstrated in one region, other regions will follow when they see success.

These actions are fully consistent with long-standing U.S. policy that does not encourage new civil use of separated plutonium but that does maintain existing commitments regarding the civil use of plutonium in established civil nuclear programs, particularly in Japan and Europe.

We should not lose sight of the significant challenges ahead. In general, countries in good standing with the IAEA may want to preserve all their fuel cycle options. For nuclear aspirants and for many existing nuclear states, energy-security concerns may trump all other geopolitical issues; therefore, used fuel may be viewed as an asset and not as waste. We continue to address these challenges in our discussions. Still, we believe that with additional consultations, our proposal will move the debate in a positive direction.

BACKGROUND

The GNF Initiative is addressing the safety, nonproliferation, and security concerns that arise as civil nuclear energy expands, including an emphasis on the back-end of the nuclear fuel cycle. This paper, we believe, will generate discussion among international stakeholders, and from these discussions, will help identify common interests between nuclear weapon states and non-nuclear weapon states. We consider international proposals to address used fuel management and nuclear waste disposal, and we examine how these solutions could play an integral part in international or multinational fuel supply and assurance options. Indeed, many emerging nuclear states have indicated that they do not need continuous fresh fuel assurances beyond those in normal contractual terms; rather, they would prefer assistance on the back-end to deal with used nuclear fuel and nuclear waste management. Therefore, we are exploring ideas involving the provision of nuclear waste and used fuel disposal options as incentives to join fuel supply agreements.

We are also cognizant of the findings of the U.S. president’s Blue Ribbon Commission on America’s Nuclear Future. On January 26, 2012, the Commission issued its final report, which charts a new strategy for managing the back-end of the nuclear fuel cycle. The Commission states: “The United States cannot exercise effective leadership on issues related to the back-end of the nuclear fuel cycle so long as its own program is in disarray; effective domestic policies are needed to support America’s international agenda.”5 The Commission highlights the need for the United States to employ and adequately fund a consensus-based approach. It provides several proactive recommendations, including the creation of a fair and open process for siting back-end facilities, and a reminder to maintain vigilance and pay careful attention to the lessons learned from the Fukushima Daiichi accident in Japan. As nuclear aspirants make decisions about ordering new nuclear capacity in the coming decades, these states will likely not await U.S. actions in response to the Commission’s recommendations. Appendix I summarizes the Commission’s findings and compares our proposal with several of the findings.

Meetings

A group of scholars, government officials, and industry leaders, including representatives from the United States, Japan, Malaysia, South Africa, Egypt, and the IAEA, convened in 2009 at Argonne National Laboratory to consider how best to design and promote solutions for used fuel and multinational disposal facilities while meeting their mutual nonproliferation objectives. The group examined options for minimizing the need for independent conventional-reprocessing capabilities and addressed pragmatic steps toward regional and multinational collaborations on key facilities and activities at the back-end of the nuclear fuel cycle. Participants agreed that a better understanding of previous efforts to achieve back-end solutions—both the failures (for example, attempts to establish international facilities) and the successes (for example, the national facilities in Sweden and Finland)—as well as a better understanding of user concerns and values will be necessary to arrive at a common perspective on how to engage successfully on these issues.6

As further background to this paper, we recently participated in an American ÇďżűĘÓƵ GNF conference held in Singapore; the conference convened experts and policy-makers from Southeast Asian non-nuclear weapon states, including states pursuing nuclear energy programs, to discuss the feasibility and acceptance of interim and long-term nuclear-waste storage options. The stakeholders and decision-makers7 at the Singapore meeting outlined three key points:

  1. The regional participants expressed a desire to work collectively to solve regional issues, following the model of existing regional organizations such as the Association of Southeast Asian Nations (ASEAN). However, to date, no state in Asia or elsewhere, including Mongolia, appears to have volunteered to be the first to host a regional storage facility.
  2. The demand for used fuel services in Asia, dominated by the growth spurt in China, will expand significantly and will require at least four Yucca Mountain-sized repositories (with capacity for at least 280,000 MT) by the middle of this century.
  3. The participants representing nuclear fuel consumer states expressed a strong desire to participate in follow-on discussions and research on viable back-end approaches; in their view, the nuclear fuel supplier states and the nuclear fuel suppliers should not be the “exclusive” architects.

To facilitate further discussions with decision-makers and stakeholders in the Middle East and Southeast Asia, as well as to reflect on the findings and recommendations of the Blue Ribbon Commission, this paper focuses on both the potential mechanisms for establishing regional, multinational used fuel storage facilities and the feasibility of shared ultimate disposal. We draw on the findings from the two meetings described above.

SETTING THE STAGE

To construct a viable back-end approach, it is important to consider how stakeholders—customers, fuel suppliers, and host states, among others—would answer the following questions.

  1. Are price and supply of uranium ongoing concerns for individual states?
  2. In a related vein, is the availability of the co-products of conventional reprocessing, namely, fissile uranium and plutonium, critical to the calculus of countries to consider used nuclear fuel as an asset?
  3. Could the cost of any back-end technology option be a deal breaker in deciding whether nuclear energy is too expensive?
  4. Does conventional reprocessing capacity limit any back-end solution?
  5. Are there precedent-setting steps a country takes when it adopts a conventional reprocessing pathway?
  6. Can we go forward with interim storage without knowing the final disposition option(s) for nuclear waste?
  7. How do we adapt the existing fuel supply network to any back-end approach?

We debate each of these questions and posit our views in Appendix II. In sum, energy-security issues weigh heavily in each state’s calculus of how to approach the back-end. States with plans for a small number of nuclear plants cannot economically justify the investment in conventional or advanced reprocessing. However, for states that already have nuclear energy, and that have or will have a relatively large number of nuclear plants (providing greater than 10 GW of installed power), any cost penalties associated with conventional reprocessing and recycling are likely dwarfed by the capital costs of constructing new nuclear plants. For all states, the opportunity to consider a robust interim storage program would outweigh a precipitous decision by emerging states to commit to conventional reprocessing and recycling using current technologies. As further background, Appendix III identifies current activities and plans for back-end services in countries that have existing nuclear power programs. Appendix IV highlights China’s plans for nuclear energy growth and attendant back-end activities.

In the following section, we discuss the view of many in the international community on how to secure a nuclear fuel cycle that would limit the spread of fuel enrichment and conventional fuel reprocessing and recycling capacity. Coupling the front- and back-ends of the nuclear fuel cycle is important, but the task of arriving at a viable back-end solution has been more challenging.

States that are interested in coupling the ends of the fuel cycle, such as Russia, China, India, France, and the United Kingdom, believe that because of energy-security concerns, it is important to close the fuel cycle. In their estimation, the availability of a mixed oxide (MOX) fuel inventory would provide them with a so-called hedge in case of supply interruptions or price spikes for fresh fuel.

GOALS FOR MULTILATERAL FUEL ASSURANCE AND DISPOSITION

Mohamed Mustafa ElBaradei, former IAEA Director General, articulated a three-stage process for an international fuel cycle regime.8

  • First, establish a system for assuring the supply of fuel for nuclear power reactors.
  • Second, in the future, place all new enrichment and conventional reprocessing or other chemical partitioning activities exclusively under multilateral control.
  • Third, convert all existing enrichment and conventional reprocessing or other chemical partitioning facilities from national to multilateral operations.

The first step was achieved with the recent establishment of the Nuclear Fuel Bank. On December 3, 2010, the IAEA Board of Governors further authorized the Director General to establish an IAEA-owned and -managed low enriched uranium (LEU) bank supporting the multilateral effort to assure LEU supply for power generation. Donors have pledged roughly US$125 million and €25 million to cover the establishment of the bank and its initial operational expenses. Although a location for the bank has not yet been identified, on December 17, 2010, the Russian Federation initiated an LEU reserve at the International Uranium Enrichment Center (IUEC) in Angarsk, Russia, as a “last instance” supplier to IAEA member states.9 (Figure 1 identifies the most current organizational structure.) In 2010, Kazakhstan also proposed that it would host a nuclear fuel bank. On February 8, 2012, Yerzhan Kazykhanov, Foreign Minister of Kazakhstan, stated that his country hopes to have a fuel bank facility in operation by late 2013.


Figure 1. IUEC Organizational Structure, as of December 2010

Figure 1

*Acquisition of shares from the Russian share provided that the Russian Federation maintains control (50 percent + 1 share). JSC stands for jointstock company. Source: IUEC; Yury Yudin, ed., Multilateralization of the Nuclear Fuel Cycle: The First Practical Steps (Geneva, Switzerland: United Nations Institute for Disarmament Research, 2011). Reprinted with permission from the International Uranium Enrichment Center, .


In his remarks at the 2006 IAEA General Conference in Vienna, then-President of the Nuclear Threat Initiative (NTI) Charles Curtis best captured the virtues of a multilateral fuel mechanism for the front-end of the nuclear fuel cycle:

Proponents of the establishment of an international back-up mechanism for assured supply of nuclear power reactor fuel assert that it would have a dual-objective, i.e., to address: (a) the possible consequences of interruptions of supply of nuclear fuel due to political considerations that might dissuade States from initiating or expanding nuclear power programs; and (b) the vulnerabilities that create incentives for building new national enrichment and reprocessing capabilities.10 Thus, an assurance of supply mechanism would be envisaged solely as a backup measure to the operation of the commercial market, for those States that want to make use of it, in order to assure supply in instances of interruption for political reasons. It would neither be a substitute for the existing commercial market in nuclear fuels, nor would it deal with disruption of supply due to commercial, technical or other nonpolitical reasons. While an assurance of supply mechanism would be designed to give supply assurance to States that voluntarily choose to rely on international fuel supply, rather than build their own indigenous fuel cycle capabilities, a State availing itself of such a mechanism would not be required to forfeit, or in any way abridge, its rights under Article IV of the NPT [the Nuclear NonProliferation Treaty], in connection with peaceful uses of nuclear energy.11

EU Foreign Policy Chief Javier Solana provided a larger context in which ideas about nuclear fuel services play out. In a speech to the European Parliament, he called for a fuel bank to be established before the 2010 NPT Review Conference: “The creation of a fuel bank will have a positive impact on the general climate of the NPT review conference. . . . We cannot afford to fail. If we do we may face more problems—new States that are tempted to cross the red line and go nuclear. . . . But if we succeed, we will strengthen the multilateral nuclear nonproliferation system which is a core EU objective.”12

Beyond these worthy pronouncements, there is an international consensus along three key points13:

  • Any multilateral mechanism should not disturb the international market for nuclear fuel cycle services. Multilateral fuel cycle arrangements should be implemented step by step.
  • No uniform approach would be satisfactory for all technologies and all states, and successful implementation of the multilateralization would depend on the flexibility of its application.14

–The international commercial market for nuclear fuel services generally functions well, but the push for an internationalized LEU fuel bank signals the perceived interest in adding a safety net by way of LEU reserves and, in the longer term, considering new joint undertakings to accommodate increasing demand.15 As currently conceived, arrangements for assured LEU fuel supply would need to be financially supported by the international community and administered by the IAEA.

  • Any multilateral nuclear fuel supply arrangement should offer a competitive economic advantage over indigenous development of enrichment and conventional reprocessing or more advanced chemical partitioning activities.

As pointed out in the Report of the Blue Ribbon Commission (see Appendix I), take-back of used fuel has always been viewed as a goal of these policies. Take-back entails moving fuel from nuclear consumer states to either states that can provide fuel services or states that will store used fuel on an interim or longer-term (several decades) basis. The Reliable Fuel Supply (RFS) approach is currently being explored, under the auspices of the International Framework for Nuclear Energy Cooperation (IFNEC), as a follow-on activity previously established as the Global Nuclear Energy Partnership (GNEP). The RFS objective would allow states without extensive nuclear infrastructure to more confidently adopt nuclear power as a low-carbon energy source. In the long run, the program would provide the nonproliferation advantage of centralized high-security storage for the resulting irradiated fuel.

With the RFS concept, private companies, backed by a substantial government commitment, could offer a variety of reliable fuel supply and disposition services, including interim storage and disposal, at a substantially lower cost than those associated with comparable indigenous services. In turn, these services could appeal to a variety of nuclear energy aspirants. The RFS concept seeks to explore opportunities for multinational arrangements for fuel assurance regimes, encourage discussions between and among nuclear consumer states, and prepare the way for discussions within the broader set of participants through the RFS mechanism. In this context, the RFS concept is structured so that it does not alter the stated goals and objectives of those members of the IFNEC that have chosen to use conventional fuel reprocessing technology to close the nuclear fuel cycle. As stated earlier, energy-security concerns lead several states to place significant value on closing the fuel cycle; the availability of a MOX fuel inventory, they believe, provides a so-called hedge in case of supply interruptions or price spikes for fresh fuel. France is actively pursuing a conventional reprocessing and recycling program that increases the stocks of civil separated plutonium. India and China have publicly endorsed comparable conventional reprocessing programs. To address back-end waste management concerns, the Republic of Korea is planning to undertake pyroprocessing, a batch process that could also potentially increase the stocks of civil separated plutonium.

Russia has been actively engaged in promoting both a fuel bank (as pointed out above) and potential storage of Russian-origin fuel on their territory. This arrangement would be part of a bundled reactor sale arrangement.16 The Russian proposal comes closest by accepting take-back of nuclear fuel that originated in Russia. However, their proposal lacks a commitment to either a time or a location for the disposition of used nuclear fuel. Also, the fuel cycle must fit into their plans for future reactors, taking into account the type and number of reactors that will be deployed. In our opinion, it is unlikely that Rosatom, the state company in Russia that would be charged with this effort, would take back a significant amount of used fuel from Russian-designed reactors.

Any plans for an “optimal” internationalization of the nuclear fuel cycle (defined as a sustainable, economic, and secure approach) must include a viable transition from the current state of affairs. A transition plan must take explicit account of how the existing fuel cycle arrangements will morph into the proposed future arrangements, thereby providing a sustainable pathway for a nuclear energy sector that is likely to grow in the future. Developing a transition plan—without which any future fuel cycle plans will be moot—requires extensive discussions between all affected parties, from suppliers to consumers. It is precisely such discussions that we seek to promote.

An LEU fuel bank17 is only a partial step toward providing the infrastructure for realistic fuel supply assurance. The missing component is the fuel fabricator: that is, the entity that transforms the LEU into a physical form compatible with loading fresh fuel assemblies into light water reactors (LWRs)— in other words, an entity that fashions (and delivers) completed fuel assemblies ready to be deployed and installed in operating reactors. The difficulties inherent in adopting a common international approach cannot be overstated; in the existing competitive market for fuel fabrication, the details of fuel assemblies are treated as business-sensitive information by fuel fabricators. That is, the competition in this arena is not solely related to fuel cost, but also to fuel (and thus reactor) performance. Fuel fabricators optimize fuel performance by dealing with issues such as crud formation and fretting (related to cladding deterioration of the fuel pins); the details of fuel composition and structure; and effective mixing of the heat transfer fluid (related to optimized heat transfer and overall reactor power balance). The means by which such issues are resolved are prized intellectual properties that are not readily (if ever) shared; and the consequent highly optimized, but closely held, nature of the design of fuel assemblies means that effective operation of LWRs cannot be carried out in the absence of participation by the fuel fabricators. Therefore, it is not at all clear how a functional multilateral fuel fabrication construct would be fashioned, given currently proposed fuel bank approaches. (We will address this inherent challenge in a subsequent paper.)

The final issue involves the complex question of incentives for a state to serve as host to a multilateral storage facility, a disposal facility, or both. Incentives are usually presented in terms of opportunities to create high-value employment and, in particular, to enhance the state’s scientific and technical knowledge. We include the views of a variety of parties interested in this subject as commentary to this paper (see pages 15–17).

BACK-END CONCEPTS

In Appendix V, we describe two models that capture the state of play to form multilateral mechanisms. Deficiencies common to these models include: (1) insufficient start-up capital to bring a multinational fuel storage or disposal scheme online; (2) a likely reversion to back-end systems that emphasize conventional reprocessing and recycling, thus increasing the supply of civil separated plutonium; and (3) fated attempts to adopt a “one size fits all” approach, creating protracted discussions over contract and payment terms. These models are not complete; they do not provide a path to move both nuclear fuel suppliers and consumers away from the status quo,18 and they would likely increase reliance on at-reactor pool storage and conventional reprocessing technology. In a post-Fukushima context, with heightened concerns about onsite pool storage of used nuclear fuel, moving as soon as feasible to consolidated dry cask storage would support a safer and more secure expansion of nuclear energy.

More specifically, the models we identify in Appendix V lack a detailed transition plan that describes explicitly how the proposed regime would systematically supplant the existing fuel supply regime. This absence is a particular issue for the multilateral fuel lease plan because it would entail substantial reengineering of the legal frameworks and business models of the existing fuel supply regime.

As discussed above, delivery of fresh fuel assemblies is highly dependent on the critical role of the fuel fabricator. In the current regime, fuel fabrication is carried out by firms or other institutions that are subject to either extensive governmental regulation and oversight or management (or both). Consequently, neither model is truly effective in assuring nuclear operators that they will have access to fabricated fuel: that is, to fresh fuel assemblies that can be inserted into operating reactors. As a result, these models do not provide the level of fuel supply assurance that operators need. Thus, the existing fuel fabrication market must be sufficiently robust to mitigate this constraint. Two conditions would further mitigate this concern: standby capacity of fabricated fuel at utilities in nuclear consumer states; and premium prices to fabricators for supplying those utilities with fresh fuel assemblies. In our opinion, this premium would still represent a very small increment (less than 5 percent) of nuclear fuel costs.

A SPECIFIC PROPOSAL: AN INNOVATIVE STORAGE CONCEPT19

In light of the preceding discussion and review, we propose the development of a commercial dry cask storage facility for international customers. This proposed regional storage facility (known in the industry as an independent spent fuel storage installation) would be designed to store up to 10,000 MT of used nuclear fuel (on a relatively small footprint) for up to a hundred years; it could be hosted in a state with or without an established nuclear industry. The capacity and lifetime of the facility are considered practical estimates and are used for the financial model contained in this paper. The values could change based on the needs of the region served.

The Concept

The parties.20 The concept of offering dry cask storage as a fuel cycle service to international customers is not new. Various models have been presented within the international nuclear community. Recently, the concept of reliable fuel services, wherein a fuel supplier could offer fuel take-back as part of the supply contract, has received increased attention. Our proposed storage concept is innovative because it is not tied exclusively to new fresh fuel supply and can be utilized for storage of both legacy and future used fuel inventories. Legacy used fuel could be delivered from countries such as the Republic of Korea and Taiwan. In our opinion, the facility would likely hold some interest for Japanese utilities as well.

Given that the majority of established nuclear states have yet to demonstrate an ultimate disposal solution, consolidated, dry cask storage could become an efficient, demonstrated mechanism to relieve on-site fuel pools that are nearing capacity. Many plants within established nuclear states have relatively low quantities of used fuel (for example, Taiwan, Mexico, and Brazil); establishing a dedicated dry storage facility would be economically unattractive because used fuel amounts below approximately 2,000 MT do not benefit from economies of scale.21

Used fuel from new facilities, operated by nuclear utilities, would follow the legacy used fuel and could be sourced from emerging utilities in states such as the United Arab Emirates. These emerging states would benefit politically from shipping legacy used fuel to a safe location that would be under international safeguards. Sentiment in many states with respect to nuclear power is positive; however, there is still concern about what to do with used fuel.22 Many issues factor into this decision, and no one solution is appropriate for all nuclear countries.

Though various chemical partitioning schemes and disposal solutions have been suggested and demonstrated (to varying degrees of success), many utilities and their respective countries hesitate when asked to choose the best approach for moving forward. Our storage concept provides an interim used fuel management solution, one that nuclear electricity producers can utilize to mitigate the immediate burden of used fuel management while further technological solutions are developed and political decisions are made. Our storage concept provides breathing room, giving current R&D activities in advanced fuel cycle technology time to mature and allowing for the possibility that used fuel may become a future asset.

Fuel suppliers could also use the facility as a storage site for their cradle-to-grave services. This arrangement would allow the existing front-end fuel cycle industry to continue operating as planned while maintaining flexibility on the back-end, as it does not presume an ultimate outcome for the used fuel.

A distinct advantage of our proposed concept relates to nonproliferation interests.23 If, in the future, an advanced chemical partitioning regime that is acceptable from a nonproliferation perspective and viable from an economic point of view should emerge, an amendment to any future government-to-government agreement could be put in place to maintain flexibility for the client states. With respect to existing conventional reprocessing capacity, the requirements to forgo conventional reprocessing could also be imposed on those states with legacy fuel that wish to take advantage of the opportunity to store their used fuel away from their reactors. Additional nonproliferation and security benefits associated with such a facility have been discussed by many authors24 and will not be revisited here.

The deal. We believe that there is significant flexibility in how our concept could be implemented. For example, because the facility would operate on a commercial basis, individual storage contracts could be tailored to the specific needs of each customer. The storage contracts could be signed in short-term increments (that is, twenty years) such that at the end of each segment, the customer and the regional facility operator can decide whether to renew the contract or pursue an alternative use for the material. The storage contracts could be structured so that upon acceptance of used fuel for storage, additional fuel assemblies would be transferred to an internationally sanctioned research facility.

There are several reasons to suggest a commercial approach, in the form of an international entity,25 for the operation and ownership of the regional facility. These reasons are primarily associated with the capabilities and responsibilities of the host-state entities, which may not be fully mature. In the case of a host state that does not have an established nuclear industry, it may not be necessary for the host state to develop the technical expertise or monetary backing to own and operate the regional facility on its own. These tasks could be more easily achieved by a commercial entity comprised of existing nuclear entities, which could form a consortium outside the host state. Likewise, the host state would not have to be solely responsible for funding the infrastructure developments necessary to operate the facility; revenue to the host state could be paid in the form of a land lease or other agreement with the consortium. The expertise and capital investment of the management entity26 would support expedited deployment of the facility and ensure that industry best practices are in place. If the entity is a multinational consortium that holds other nuclear facility ownership interests, it would likely invest significantly in facility safeguards, thus diminishing political mistrust over proliferation concerns among all parties to the transaction.

Benefits and Concerns for the Parties Involved

Of utmost concern when evaluating international programs is the potential benefit to the prospective parties, which include, in this case, the host state, the customers, the management entity, and the global nuclear community. Given the complexities of the nuclear fuel cycle and the hardened positions from a history of disagreement over what the optimum future nuclear fuel cycle should be, motivating the parties to adopt this proposed venture will require more than monetary benefits alone.

For customers, the important feature of the proposed regional facility is the alleviation of increasing used fuel inventories at reactor fuel pools. The recent events at Fukushima Daiichi have heightened public concerns about long-term storage at these pools. In addition, and as pointed out in the previous section, the proposed regional storage facility could reduce back-end fuel cycle liability for emerging nuclear states. Some emerging states, such as the United Arab Emirates, have expressed a desire to mitigate back-end fuel cycle concerns altogether, and would thus consider it a welcome option for used fuel to be stored long-term outside of their state in an internationally safeguarded facility. Aside from states with small used nuclear fuel inventories, it is worth noting the benefit to those states where use of nuclear power may decline from its current level; for example, as a consequence of heavy political pressure, German policy-makers recently announced an end to that state’s nuclear power industry. This concept would prompt such states to remove their used fuel stockpiles to a regional facility.

For the international nuclear community, the primary attraction of the proposed facility is the nonproliferation benefits associated with having a centralized, safeguarded storage facility as opposed to numerous isolated facilities. This facility would provide a much more economical solution than development of instate conventional reprocessing, advanced chemical partitioning, or disposal capabilities, thereby reducing the incentive for emergent nuclear states to pursue their own back-end fuel cycle capabilities. The primary concern of the international community would be siting the facility in a state with a stable government and a strong, transparent relationship with the international nuclear community.

For the host state, fees charged to the facility would generate revenue; operation and maintenance needs would create jobs; and the owner of the facility would generate revenue through long-term storage contracts with customers. Further, the host state could be home to a research facility dedicated to advanced waste forms, pre-treatment options, and understanding used fuel and storage canister behavior over extended storage periods (that is, beyond the nominal sixty-year expected life of existing dry storage systems). Additionally, the host state would benefit from infrastructure development; indeed, improvements to roads, rail, electricity, fresh water, and water treatment would all be required to move fuel into and out of the facility. Thus, the host state would profit directly, from fees related to the facility, but would also benefit from long-term employment related to facility operation, security, maintenance, and regulatory functions, as well as opportunities created by a back-end R&D facility.

The majority of host states are likely to require assurance that the facility will not become a de facto disposal solution for the region’s used fuel.27 Therefore, some means for removing the material at the end of the agreed-upon storage period should be maintained or developed. Material could be returned to the generating state if no agreeable solution is achieved, though over the long term of storage (potentially a hundred years) it is reasonable to assume that multiple solutions will be developed. The host state should also require assurances that government instability in customer states does not affect the terms of their storage contracts. Some type of monetary penalty or agreed-upon removal option may be needed for customers that default on their contracts. Likewise, as historical evidence suggests, states will do whatever they perceive to be in their best interest; therefore, it may be desirable to provide a safety mechanism to avoid returning used fuel to a state that does not intend to honor its previous nonproliferation agreements. Additional benefits could include job creation at facilities that manufacture used-fuel transportation and storage units. There will also be a need for used-fuel canisters as well as transportation overpacks and the attendant auxiliary systems and equipment.28

In sum, we believe that the proposed concept offers significant benefits to the international nuclear community (through enhanced proliferation resistance) while presenting a reasonable and manageable set of concerns. Our proposal represents a good starting point for further discussions among interested parties.

Initial Stage of Implementation and Potential Private-Sector Partners in Dry Cask Storage

Clearly, such a venture will require, at the initial stages, international cooperation at the governmental level to establish the agreements and policies necessary for the facility to function. International assistance in devising and implementing world-class safeguards and accountability measures would increase the transparency and overall acceptance of the facility.

The first step in implementing the facility would be to identify a suitable host, interested commercial fuel storage partners, and potential early customers for initial storage contracts. A public education campaign should be conducted within the host state to inform the populace of the risks and benefits related to storing and transporting used nuclear fuel. Public acceptance of the facility will be critical to its success.

Potential commercial partners should have demonstrated experience in dry cask storage operations; they might include cask manufacturers, nuclear utilities with current dry cask storage operations, facility designers, experienced nuclear fuel transporters (both land and sea), and used nuclear fuel handling and logistics experts.

Each customer may need to establish an agreement with the commercial entity29 representing the host state, though we would not expect such arrangements to involve significant effort relative to the overall scope of the program. The international legal framework necessary for this form of commerce requires additional legal analysis.

The terms of use for the customer should also be discussed early in the process. An agreement to at least one full storage term (for example, twenty years), with subsequent terms to be decided at set intervals, would provide assured revenue for the facility and allow the customer to take advantage of new developments that may occur in used-fuel management. In order to reduce capital outlay and borrowing on the part of the facility, pre-payment of the fuel acceptance fee prior to delivery may be required. An annual, per-cask storage fee would also ensure funds for maintenance and security of the casks during the storage term. A summary of an illustrative cash flow is presented in Table 1 (below) and is further discussed in the business case analysis.


Table 1. Innovative Storage Concept—Net Cash Flow

Cases Acceptance Fee
($0.001/kWe-hr)
Storage Fee
($1,000/cask-year)
Net Cash Flow
in Operating Year
($1 Million USD)
  1 5 10 Lifetime
Low 0.38 25 (80.7) 35.6 202 1,615
Reference 0.45 25 (45.8) 138 390 1,872
Medium-High 0.75 50 101 580 1,219 4,309
High 1.0 50 223 947 1,892 5,227

These estimates assume 75 percent legacy holders and 25 percent new entrants. Source: Table created by authors.


Further Implementation Steps

  • Security, Safeguards, and Safety. Bilateral agreements between the host state and customer states will need to be signed to define the nature of storage contracts and clearly delineate who holds the title and who assumes risk of loss of the material. The form that such agreements will take should be a topic of early, high-level discussions among the interested parties; whether the agreements must allow for both commerce and transfer of sensitive nuclear technologies (such as the U.S. “123 Agreements”) will depend on the level of technology transfer required to store used fuel in a given candidate host state. In our opinion, a mechanism directed solely at dry cask storage and used fuel title transfer may allow for faster implementation than an agreement permitting the much more general sharing of technologies necessary for controlled nuclear material and technology transfers. Though it is reasonable to assume that the host state may wish to pursue peaceful nuclear energy at some future date, the host state concerned could sign that agreement at an appropriate time in the future.

  • Successful implementation of the program will require multilateral assistance to the host state in the area of regulatory oversight. The host state will need an independent nuclear regulator—preferably with close ties to an existing regulatory body and a transparent mode of operations—to provide assurance not only to the citizens of the host state but also to the international nuclear community. The regulator would be charged to protect public health and safety by licensing the facility and the storage and transportation of used fuel for the regional facility owner/operator within the host state. If the host state already has a regulating body in place, then ensuring its independence and transparency would be the primary concern. If not, the process of establishing a regulator would greatly benefit from the assistance of international regulatory bodies as well as regulators in states with established nuclear programs. Existing regulatory best practices and experience with establishing new regulators in emergent nuclear states offer a framework for the host state’s regulatory needs.30

    Regulations and guidelines for implementation should be defined early in the process. Though the regulator should be an independent body, the regional facility owner/operator should maintain regular communication with the regulator to ensure timely implementation of the program.

  • Storage Contracts. Dry cask storage has been demonstrated at many facilities around the world and requires no new technology development (that is, not for the nominal life of forty to sixty years). Thus, the most difficult task in implementing the regional storage facility may be negotiating storage contracts with customers. The terms of the storage contracts will likely need to be determined on a case-by-case basis with each customer; differences in national laws and capabilities will likely make turn-key contracts impractical. For example, state A may not allow title of its used fuel to be held by another state while state B may make this allowance but prohibit transportation of used fuel within its borders by a foreign entity. States with small quantities of used fuel that have yet to implement dry storage practices may require assistance with container loading and transfer to a shipping vessel—capabilities that other states have readily available. Part of the regulatory process within the host state should require characterization of the used fuel; this process will likely call for an agent to the owner-operator of the regional storage facility to be present during container loading to verify contents and loading procedures. These examples demonstrate the important role of high-level government-to-government support, at the initial stages, in successfully implementing the proposed concept.

  • Siting and Development. Deployment of the regional storage facility may require infrastructure development within the host state, which will vary in degree depending on the particulars of the state’s current situation. Geographic location is also a factor: if transporting used nuclear fuel to the facility requires traversing neighboring states, those states may need to be involved early in the planning phase. Ideally, this regional facility would have access to a port to prevent such scenarios. However, it is not necessary to locate the storage facility near a coast; in fact, it may be better to locate it well inland to avoid the risk of flooding.

    With regard to siting, the primary concern is the availability of a suitable facility site. The land-use requirements of a concrete pad to store 10,000 MT of used fuel are relatively small—only a few acres; and the engineering requirements for the concrete pad are similar to those of an airstrip. Operating procedures for this type of storage facility are well developed and have been demonstrated at many facilities around the world; no new or novel technology developments are required. Therefore, the proposed facility can be staffed by technical personnel from the regional facility owner-operator. In training staff, the development and maintenance of a strong safety culture within the facility should be paramount. The majority of operations can be performed during an initial transition/training period by experienced personnel. We believe that training of facility personnel can lead to self-sufficiency in most, if not all, areas of operation—including the transfer of canisters into concrete storage overpacks, which can, in turn, be fabricated on-site as needed.

  • Long-term Storage. Little empirical evidence exists to model behavior of used fuel and dry cask storage systems for extended time periods (such as the proposed one hundred years). As extended dry cask storage will likely become the global industry standard, the concerns associated with this fact are ubiquitous; therefore, collaborative global R&D efforts, such as the ones proposed in this paper, are warranted to ensure continued safety and security for the stored used fuel. The U.S. Nuclear Waste Technical Review Board issued a report identifying several R&D areas, mostly associated with the ability to accurately understand and model long-term behavior of the various components of the dry cask system.31 Implementation of the proposed regional storage facility and other extended-storage options should consider these areas and work with technical experts to identify and implement methods to monitor performance efficiently over the storage duration.

Business Case

The business case for the proposed regional storage facility must consider several areas in order to offer a convincing argument for success, and all stakeholders must understand and be comfortable with its terms. There are four general categories of stakeholders: the existing nuclear fuel cycle entities, the entities within the host state(s), the customer community, and the international community.

Similar to the NTI’s support of the nuclear fuel bank, start-up or seed money provided by a philanthropist or foundation might be needed to facilitate establishing a business of this nature. The business would return the seed money upon reaching an early milestone, such as receipt of fees associated with the first 500 tons of used fuel. Further study is needed to determine the specifics, but the underlying point is that there is no need for the U.S. government to provide financial support.

An estimate of the costs and potential revenue of the regional storage facility suggests that, to service both existing and emerging nuclear power plants, capacity could be divided into 75 percent legacy material and 25 percent capacity for emerging markets.32 Legacy material would be charged a onetime fee based, in this estimate, on the burn-up of the fuel. New markets could make recurring payments while the fuel remained in the reactor to cover the future cost of storage. This legacy material would provide supporting revenue and incentive to build the regional storage facility while the emerging states are utilizing, and subsequently cooling, their first fuel load.

Table 1 provides four cash-flow scenarios for four waste acceptance fee assumptions. The estimate is not intended to be a rigorous economic assessment of the regional storage facility; it is instead a high-level evaluation to encourage informed discussions and determine whether a more detailed future analysis is warranted. A variety of experts from across the nuclear fuel storage and transportation industry provided the cost estimates that we utilized for the scenarios.

The facility is projected to begin accepting used fuel in 2023. At that point, no emergent nuclear operators will have fuel ready for dry cask storage; therefore, revenue for the first several years will be provided by legacy material. A used fuel acceptance fee of 0.45 mill/kWe-hr is assumed for the reference case; the demand component is assumed to be forty canisters per year of 40 GWday/MTHM burn-up fuel. An annual fuel storage fee of $25,000 per canister is assumed, which provides for ongoing security forces and payment of fees to the host state after the facility has reached capacity.33

Capital investments are included as expenditures prior to the first year of operation. These include the design of the facility; construction of administrative, maintenance, and concrete fabrication buildings; installation of the container transfer system and the equipment necessary for moving the containers; and fabrication and maintenance of the storage casks. Construction of the first portion of the concrete pad is included in these estimates.

The storage-related infrastructure can be built as needed and is included in the operations and maintenance cost. It includes the fabrication of storage overpacks, the concrete pad, and security infrastructure for the casks: fencing and motion and infrared detectors, for example. We assume that a medium-sized used fuel transport vessel with a capacity of forty canisters will be hired for ocean-going transportation.34

As indicated in Table 1, positive net cash flow could be obtained by year five in the facility’s operation for the low and reference cases.35 Our initial analysis takes a conservative approach: payments by the customers would precede service by only one to two years. Positive cash flow could be achieved earlier if one-time fees were received at the time of commitment to this project. Depending on industry manufacturing capabilities, the transportation overpacks, which have the highest capital expense and longest lead time, may need to be ordered several years prior to the facility opening. These expenses could be offset by early payment of the fuel acceptance fee by legacy used fuel customers. If the regional facility can be demonstrated to have a sufficient level of assurance that operations will commence on schedule, the fuel acceptance fee, in whole or part, would likely be paid by both nuclear aspirants and legacy holders prior to transportation to this regional facility. Indeed, it is likely that both nuclear aspirants and legacy holders could begin paying their acceptance fees significantly earlier than when transport begins—as early as when the regional facility needs to begin procuring the initial container shipments for the customers. Such an arrangement would reduce the amount of money the facility would need to borrow initially, thereby reducing the overall cost of storage and potentially benefiting the customer and/or host state.

The proposal of a commercially owned and operated regional storage facility allows for flexible execution and provides numerous benefits to the parties involved that may be difficult to achieve in a government-run operation. The facility would not only allow existing international fuel cycle markets to continue operation unimpeded, but it would also provide a potential economic opportunity for those markets to expand their services to include cradle-to-grave services. Based on our preliminary analysis, the cash flows are sufficient over the proposed time period to generate profits for the regional facility owner as well as revenue and job creation for the host state. The final negotiated pricing and payment terms will be a cost that the customers electing to avail themselves of the facilities should find attractive.

EXPERT COMMENTARY TO DATE

We received commentary from four technical experts in the South and East Asia regions:

  • Japan—Dr. Akira Omoto, Commissioner, Japan Atomic Energy Commission
  • Republic of Korea—Dr. Joo Sang Lee, DirectorGeneral, Korea Hydro and Nuclear Power Company
  • Malaysia—Dr. Noramly bin Muslim, former IAEA Deputy Director General and Chairman, Malaysian Atomic Energy Commission
  • Singapore—Dr. T. S. “Gopi” Rethinaraj, Assistant Professor, Lee Yuan School of Public Policy, National University of Singapore

All four experts believed that the biggest challenge for emerging nuclear power in Asia is developing human capacity to address the likely growth of nuclear energy in the region. Except for China, India, and the Republic of Korea, deployment decisions regarding the nuclear fuel cycle for countries in this region are viewed as further downstream and not as immediate a concern as capacity-building. The pace of nuclear power growth for all countries, including China, India, and the Republic of Korea, will be influential in formulating policies on the nuclear fuel cycle. All the experts reinforced several of the positions articulated in our paper, namely:

  1. All countries in good standing with the IAEA should be able to consider all fuel cycle options and not arbitrarily foreclose choices related to the back-end. Energy security concerns trump all other considerations; the used nuclear fuel could, in the near term (in the case of Korea and Japan) and in the long term (in the case of Malaysia and Singapore, if either or both countries deploy nuclear energy), be an asset and not a liability. Inherently, any chemical partitioning concept, including conventional reprocessing, and recycling of the uranium and plutonium cannot simply be “taken off the table.” In the case of Japan, Dr. Omoto has stated: “Reprocessing of used fuel is basically to be conducted within the country in view of securing the autonomy of the nuclear fuel cycle.”36
  2. One of the key provisions of our innovative storage concept—linking legacy with newly generated used fuel—is attractive, particularly in view of the difficulties all experts identified in using multiple sites for long-term on-site storage of used fuel. Onsite storage is a significant issue now in the case of Japan and the Republic of Korea37 and will be equally significant in the case of Malaysia and Singapore. Taipower in Taiwan is facing similar concerns.38 Our proposal could possibly address the storage challenges for some of the reactors in Taiwan and the Republic of Korea.
  3. Another key provision of our storage concept, technology deferral,39 is also attractive to the experts we consulted, particularly in view of the need to reduce the future nuclear waste burden. Deploying reactor systems at-scale—in particular, ones that are designed to consume actinides—will require a large investment in transformational science and technology; institutions and states that participate in back-end services would benefit from these investments.
  4. In a state that hosts a regional storage facility, a semi-scale storage facility colocated with an R&D facility for used fuel is more likely to be publicly acceptable than a full-scale commercial facility. Therefore, the initial storage capacity of the facility should be capped at 10,000 MT.
  5. The prospect of cooperation in South and East Asia on a regional repository was best characterized by Dr. Lee: “There seems to be no strong glue for all countries in the region to collaborate and to plan for a regional back-end facility.” Therefore, it was suggested that a regional forum be held, possibly under the auspices of ASEAN and including policymakers and thought leaders from Russia, China, and India.40
  6. Dr. Rethinaraj pointed out that India is particularly interested in becoming selfsustaining with regard to nuclear energy. As part of its effort to diversify its economy away from fossil fuels and insecure sources of imported energy, India is pursuing advanced nuclear energy technologies. India is a strong proponent of recycling.41 India needs to play a very active role in any innovative concept; broadening the R&D activities at the regional fuel storage complex, to encompass concepts that Indian scientists and engineers are considering, may encourage India to participate in such a project.

FINAL THOUGHTS

Our focus in this paper has been on fashioning not only a feasible scheme for a sustainable multinational fuel cycle, but also a feasible scheme for transforming the existing international nuclear fuel cycle market into our target sustainable international fuel cycle, which would integrate the back-end of the fuel cycle into the international market. That is, we believe that the structure of proposed fuel cycles (for example, the “asymptotic” fuel cycle state: that is, the vision described by ElBaradei) cannot be independent of the processes and procedures that enable the transition from the current state to this asymptotic state; in the absence of an arguably feasible transformation process, no internationalized fuel cycle proposal—no matter how attractive from the safety, security, and nonproliferation perspectives—should be entertained with any seriousness. One must always be able to answer the question, how do we get there?42

We believe that our proposed initial concepts for multinational arrangements will benefit from input by decision-makers and stakeholders in nuclear consumer states. Listening to their goals and objectives, as well as what they see as the constraints, will inform discussions and the attendant R&D that could produce a true “game changer.”43 Up to now, leaders from the public and private sectors in nuclear supplier states have dominated the discussions. We expect to begin more inclusive conversations on these concepts in the Middle East (in the United Arab Emirates, in particular, and via the Arab League) and in the Asia region.

We believe that we have considered this complex question using the best principles of a Rogerian approach; that is, we have addressed a divisive and controversial issue through dialogue that is nonconfrontational and aims for consensusbuilding. Traditional argument structure begins with an assertive stance and frequently incites resistance on the part of one’s “target” audience. To soften this resistance and, concurrently, to find common ground with our audience, we have attempted to remain neutral toward the back-end issue. In place of the traditional argument structure—claim, support, counterargument, and conclusion—we have wrestled with the nonproliferation, safety, and security questions surrounding the back-end issue; we have considered and proposed alternatives; and we have posited a conclusion/compromise position. After all, the goal of Rogerian argument is to “win” by building bridges between opposing views.44

The time has come to discuss tangible as well as intangible incentives to support a proliferation-resistant fuel assurance regime. Commercial, nonproliferation, and sovereign interests all have to be a part of the conversation. This paper has attempted to elucidate the conditions for discussion and has presented an initial proposal that requires refinement, but that can begin the conversation nevertheless.

ENDNOTES

1. Steven E. Miller, Nuclear Collisions: Discord, Reform & the Nuclear Nonproliferation Regime, with responses from Wael AlAssad, Jayantha Dhanapala, C. Raja Mohan, and Ta Minh Tuan (Cambridge, Mass.: American ÇďżűĘÓƵ of Arts and Sciences, 2012). Miller is Codirector of the GNF Initiative and Director of the International Security Program at the Belfer Center for Science and International Affairs at the Harvard Kennedy School.

2. The back-end of the nuclear fuel cycle encompasses, at minimum, on-site pool storage, either on-site or off-site dry storage, and longterm waste dispos

3. For example, China’s surging economy runs mostly on coal, which fulfills four-fifths of the country’s demand for electricity. Throughout China, the consequences of that dependence are apparent: its major cities are swathed in smog; regional blackouts ensue when coal trains are bogged down on clogged rail networks; and coal mining routinely causes thousands of fatalities each year. China needs alternatives to coal-fired power.

4. In this paper, we use state to indicate a nation-state that derives its political legitimacy from serving as a sovereign entity.

5. Blue Ribbon Commission on America’s Nuclear Future, Report to the Secretary of Energy, January 2012, http://www.brc.gov/index.php?q=announcement/brc-releases-their-final-report; hereafter cited as Report of the Blue Ribbon Commission. This point is accentuated by recent remarks from Exelon CEO John Rowe: “The Blue Ribbon Commission has offered a road map. But it will take the federal government and national political will to make it a reality. Unfortunately the federal government is further away from keeping its promise on waste disposal than ever and this condition cannot be met”; John Rowe, “My Last Nuclear Speech,” American Nuclear Society Utility Working Conference, Hollywood, Florida, August 15, 2011.

6. At the same time, work with the planners of a possible European Repository Development Organization (ERDO) potentially will move forward. Thomas Isaacs (Lawrence Livermore National Laboratory) has represented the American ÇďżűĘÓƵ in efforts to explore collaborative policies and proposals on joint regional nuclearwaste repositories in Europe. The initial meeting of this group, attended by representatives from both the Alfred P. Sloan Foundation and the William and Flora Hewlett Foundation, included participation from fifteen states and resulted in plans to develop a proposal for ERDO. Alongside ERDO, it is our understanding that Arius Association is continuing to evaluate whether similar regional shared solutions would be appropriate for and of interest to emerging nuclear power programs in the Middle East and Southeast Asia. The overall aim is to assess the interest within each region in working toward regional Repository Development Organizations (RDOs) similar to ERDO. In 2011, the United Arab Emirates’ permanent representative to the IAEA raised the possibility of a regional repository. Arius Association has not yet identified a specific business proposal for regionally shared back-end facilities.

7. The AREVA representative at the conference expressed the industry view not to perturb the existing viable fuel supply network. Regional storage arrangements would be best served by harmonizing with the existing industry contractual arrangements.

8. Mohamed Mustafa ElBaradei, “Statement of the Director General,” International Conference on Nuclear Fuel Supply: Challenges and Opportunities, Berlin, Germany, April 17, 2008,

9. Following adoption of the necessary enabling legislation in January 2007, the Russian Federation established the IUEC at the Angarsk Electrolysis Chemical Combine “to provide guaranteed access to uranium enrichment capabilities to the Center’s participating organizations.” On May 10, 2007, the first agreement in the framework of the IUEC was signed by the Russian Federation and the Republic of Kazakhstan. A mechanism is being developed to set aside a stockpile of LEU that might contribute to a broader assuranceofsupply mechanism. Further, “a regulatory basis will be developed in the sphere of export control such that the shipment of material out of the State at the request of the Agency is guaranteed.”

10. In light of longstanding U.S. policy objectives, this phraseology likely refers to conventional reprocessing capabilities.

11. Charles Curtis, “New Framework for the Utilization of Nuclear Energy in the 21st Century: Assurances of Supply and NonProliferation,” Vienna, Austria, September 19–20, 2006, http://wwwpub.iaea.org/mtcd/meetings/PDFplus/cn147-chairman.pdf.

12. Javier Solana, “European Proposals for Strengthening Disarmament and the NonProliferation Regime,” September 12, 2008, http://www.europa-eu-un.org/articles/fr/article_8354_fr.htm.

13. We believe that Sweden’s paper to the IAEA provides important insights: “It would also be desirable to pay attention to joint multilateral schemes in relation to the back-end of the fuel cycle, i.e., reprocessing of spent fuel and/or final storage of spent fuel, including from other States. Final storage is a difficult proposition considering public opinion in most States, but it is possible that in large supplier States and in certain regional contexts such cooperative schemes for intermediate and perhaps final storage could be achievable”; 2010 Review Conference of the Parties to the Treaty on the NonProliferation of Nuclear Weapons, NPT/CONF.2010/WP.7, March, 19, 2010. Sweden is moving ahead on a national repository (with the possibility of extending it on a regional scale in Scandinavia); local support for repository location is very strong in Sweden.

14. These two points may be at variance with the views of many nongovernmental organizations, which tend to favor the belief that nonproliferation may trump market concerns, and that a “comprehensive,” rather than “step by step,” approach may be preferable (and more realistic).

15. This is the concept for the NTI Fuel Bank.

16. In 2009, major developments for the international nuclear fuel cycle came in the form of Russia’s marketing of new reactors with bundled fuel services and the agreement between Toshiba and Atomenergoprom on the possible joint construction of facilities for stockpiling enriched uranium. Interpreted narrowly, such stockpiles would support Toshiba’s expanding international nuclear energy business. However, if Japanese nuclear utilities were to participate in the initiative, then the stockpile would become a national enriched uranium reserve. We are unable to project a definitive account of how nuclear power will evolve in Japan in the post-Fukushima era; this remains a story to be written. Therefore, the Toshiba-Atomenergoprom agreement may not be less relevant for Japanese nuclear utilities but may be more relevant for nuclear utilities that purchase or operate Hitachidesigned reactors. If the other Asian states and the United States took part as well, it would be the beginning of the kind of international nuclear fuel bank that the IAEA has advocated. Therefore, the proposal for cooperation between Japan and Russia on enriched uranium stockpiling facilities has raised the expectations that back-end services might be part of the deal.

17. In many ways, the LEU fuel bank is a response to states such as Iran, which has claimed that states that forgo reprocessing and enrichment are vulnerable to supply cutoff for political reasons. Reprocessing in this context is likely to mean all forms of chemical partitioning, in light of the security and proliferation risks countries such as Iran present to the world community.

18. Our proposal has the added advantage of encouraging new service providers to enter the market.

19. This proposal has been crafted with the cooperation of Aaron Totemeier of Lightbridge Corporation. The proposal tries to balance the concerns of all parties and provides a flexible path forward to technology choices with regard to ultimate fuel disposition.

20. All parties have, and are likely to have in the future, significant government ownership.

21.  JosĂ© L. Rojas de Diego, “Economics of Spent Fuel Storage,” IAEA Bulletin 3 (1990).

22. The ultimate disposition of used fuel is a concern across the nuclear industry. Development of economic poststorage solutions will benefit nuclear utilities, their customers, and their governments. The proposed regional facility in no way reduces the necessity of developing final use/disposal options; it provides breathing room, allowing existing and new reactors to operate while permanent solutions are developed. Furthermore, the regional facility obviates the political challenge of the nuclear utilities and their advocates “selling” an instate disposal site.

23. We would prefer that participation in our storage concept be contingent on aspiring states agreeing to forgo enrichment on their territory and conventional reprocessing anywhere; however, we do not believe that states would forgo these rights.

24. Jor-Shan Choi, “Managing Spent Nuclear Fuel from Nonproliferation, Security and Environmental Perspectives,” Nuclear Engineering and Technology 42 (3) (June 2010).

25. One multinational corporation would provide optimum organizational structure; broadening this entity to include several international organizations would complicate the management and legal requirements. We plan to carry out more research to develop our concept in this area.

26. We plan to carry out more research to develop our concept in this area.

27. Where the financial incentives are present, such as cases in which countries can secure lucrative reactor supplier contracts that include take-back services, this concern is likely not present. Russia is one such case, and China may potentially be another. In addition, because the regional storage facility operator and its host state government are unlikely to have a strong economic bargaining position with respect to most nuclear states, some internationally agreedupon guarantees may be necessary.

28. U.S. industry is capable of providing these back-end components.

29. The commercial entity is classified as the owner-operator of the regional storage facility.

30. The World Association of Nuclear Operators could be consulted to ensure that the highest standards of nuclear safety are adopted.

31. “Evaluation of the Technical Basis for Extended Dry Storage and Transportation of Used Nuclear Fuel,” U.S. Nuclear Waste Technical Review Board, December 2010,

32. The participation of legacy holders is the most critical aspect of obtaining sufficient start-up capital.

33. This estimate involves several assumptions but suggests that there is potential monetary value to the independent used fuel storage installation operator; that value could be realized early in the facility’s life. Clearly, more detailed discussions and analyses are warranted.

34. At this stage, estimating transport distances and routes is difficult; therefore, an assumption of a tenthousandmile sea journey is used as a conservative estimate, with no overland transport assumed.

35. During the planning and early construction phases, net outflows would likely exceed planned inflows.

36. In a 2005 report, Dr. Omoto stated: “We have reached the conclusion that our basic policy is, aiming at using nuclear fuel resources as effective as reasonably achievable, to reprocess spent fuel and to effectively use the recovered plutonium and uranium, while ensuring safety, nuclear nonproliferation, environmental protection, and paying due attention to economics.” See Japan Atomic Energy Commission, Framework for Nuclear Energy Policy (tentative translation), October, 11, 2005, 33. Post-Fukushima, it is striking that this policy has been unaffected.

37. Consider this language from Article 18 of the Special Act: “No addition of Silos and removal of legacy to another site in South Korea” (translation).

38. The Mainichi Daily News reported recently on Taiwan’s plans for a dry storage facility:

Taiwan’s first interim dry storage facility for spent fuel rods is scheduled to be completed in the later part of next year and become operational in 2013, Atomic Energy Council officials said Sunday. Shao Yao-tsu, deputy director of the council’s Fuel Cycle and Materials Administration, told Kyodo News that state-run Taiwan Power Co. will apply for permission to run the facility on a trial basis next month. Taiwan has three operational nuclear power plants and six reactors, while a fourth one is still under construction. Reactor fuel rods need to be replaced with fresh ones every 18 months. Discharged fuel assemblies must be continually cooled in water pools for many years after they are no longer useful for generating electricity. The water pools at the First Nuclear Power Plant in Chinshan, 41 kilometers away from the capital city of Taipei, are nearing capacity.

See “Taiwan’s Dry Storage Facility for Spent Nuclear Fuel to be Completed,” The Mainichi Daily News, October 31, 2011.

39. This provision is attractive for both newcomers and current used fuel generators.

40. Thought leaders from India may include representatives from Bhabha Atomic Research Centre (BARC), Indira Gandhi Centre for Atomic Research (IGCAR), and the Atomic Energy Research Board (AERB).

41. According to Anil Kakodkar, former Chairman of the India Atomic Energy Commission: “Recycling of nuclear fuel is essential and inevitable for India in particular and the world in general. In fact, the world can look to India as a future leader in recycling of nuclear fuels like uranium and thorium”; quoted in Times of India,October 30, 2011. Current Atomic Energy Commission Chairman Srikumar Banerjee has also commented on India’s future recycling plans:

Integrated Plants for reprocessing of spent fuel from both thermal and fast reactors are being designed in India for the first time. . . . India also commenced engineering activities for setting up of an Integrated Nuclear Recycle Plant (INRP) with facilities for both reprocessing of spent fuel and waste management, as setting up adequate reprocessing capability has been an important element of the country’s closed fuel cyclebased programme.

Quoted in “India Designs Integrated Plants for Spent Fuel Reprocessing,” Deccon Herald, November 2, 2011. The article continues: “The Fast Reactor-based spent fuel recycling plants will be located at Kalpakkam (Fast Reactor Fuel Cycle Facility—FRFCF) while thermal reactor-based spent fuel recycle plants will be located at Tarapur.”

42. There are several key elements inherent in fashioning a realistic transition plan. The first is the idea that all participants—from the fuel suppliers and fabricators to the reactor operators and the ultimate operators of the used fuel facilities—must see profit in the new arrangements. While this notion might seem obvious, it turns out not to be obvious what all “players” gain during the transition, even though they might ultimately profit in the “asymptotic” fuel cycle regime. This is in part the reason why attention to the details of a transition to a new multinational fuel cycle regime is so essential. The second key element is the up-front realization that technological development in the area of used fuel management has not yet fully matured; and that, aside from political considerations, reasonable people can therefore differ on the present-day management of used fuel. For this reason, any transition plan must allow for these differences in viewpoint. This element has led us to the realization that the base case for multilateral fuel cycle arrangements to be realized today must involve interim (and thus retrievable) used fuel storage, coupled with various incentives for the host nation of the interim storage facility. (This is not to exclude the possibility that some used fuel host candidates might be willing to entertain nonretrievable storage—for example, final used fuel disposal in a permanent repository—but rather is meant to broaden the range of possibilities [and candidates] for used fuel disposition today.) The incentives could take a variety of forms, including support of R&D activities related to strengthening the robustness and longevity of interim storage technologies. That is, the “carrot” for used fuel storage hosts should not be limited solely to financial incentives; rather, it might be better focused on technology development within the host nation.

43. The GNEP and cradle-to-grave activities are characterized by the fact that supplier states have developed the proposals. Our conversation provides a complementary component for developing proposals from the vantage point of the consumer states.

44. An alternative, less-workable approach is the Ringi-sei System, whereby decisions are made from the bottom up. This process was common in eighteenth- and nineteenth-century Japan, especially in the bureaucracy. Under this system, lowranking officials (lowerlevel managers in the private sector) draw up an initial plan, which is then circulated among higher-ranking officials to receive their seals of approval. We believe that this system is still at work in Japan and may have contributed to the management flaws surrounding the Fukushima Daiichi accident.