UN nuclear watchdog ponders international 'fuel bank'

As the International Atomic Energy Agency meets this week for its 50th congress, a key focus will be a vision even older than the UN nuclear watchdog itself: the creation of a world nuclear-fuel "bank."

Such a bank would store enriched uranium vital for nuclear energy – fissile material that, if enriched further, could make an atomic bomb. The bank would then disburse it to member states that have agreed not to produce the material.

IAEA officials say they hope a "road map" emerges from several proposals. Forty-plus states possess the advanced technology to produce nuclear fuel – but not all of them do so. The notion of multilateral control of fuel supply has been revived by states under pressure from both higher oil prices and post-9/11 concerns that highly enriched fuel could get into terrorists' hands and be weaponized.

"This idea has been discussed for awhile, and I can understand when people say they're skeptical," says Vitaly Fedchenko, a nuclear-security researcher with the Stockholm International Peace Research Institute. "But it looks like the current state of play makes it a little closer to reality than ever before."

But some analysts have expressed concern that a US proposal could trigger a nuclear-fuel "race," as it aims to limit the number of states that could produce fuel, possibly spurring some states to move to join the club before the door closes. And, they say, economic incentives may not be enough to overcome longstanding hurdles of complex logistics and perceived infringement on sovereignty.

"The idea that you're going to get everyone to hold hands and internationalize the ownership and operations of what is essentially a process that brings you within days – or at most, weeks – of the bomb, strikes me as fanciful," says Henry Sokolski, executive director of the Nonproliferation Policy Education Center in Washington.

Uranium, when mined in its natural state, contains just 0.7 percent of uranium-235 and uranium-238 – key ingredients for nuclear fuel. Billions of dollars and decades of effort later, the original nuclear states – the US, Soviet Union, Great Britain, France, and China – were able to enrich the uranium to the 3 to 5 percent needed for nuclear energy.

From there, analysts say, it's more or less a matter of "leaving the switch on" to enrich the uranium up to the 90 percent-plus for a bomb.

President Eisenhower first broached the idea of an international uranium bank in 1953. But as the cold war intensified, no country wanted outside control.

In 1970, the Nuclear Non-proliferation Treaty (NPT) assured the "inalienable right ... to develop research, production, and use of nuclear energy." Countries had to submit to IAEA safeguards and forgo developing nuclear weapons. This "right," though, has sometimes been interpreted as a carte-blanche sovereignty issue, as Iran is doing today.

The fuel-bank idea made little headway over the next two decades, despite a flurry of initiatives. But in 1991, after the Gulf War, the IAEA discovered the secret nuclear-weapons program of NPT signatory Iraq. In 2004, Pakistan's nuclear-program chief, A.Q. Khan, admitted to illicitly transferring technology to Libya, Iran, and North Korea. In recent years, NPT signatory Iran has divulged some details of its once-secret nuclear program.

Multilateral control of the fuel supply is no silver bullet, experts say, but only one prong of what ought to be a multifront campaign. They argue as well for greater barriers and restrictions on transfers and technologies, enhanced security and political commitment, and production of "proliferation-resistant technology."

A fuel bank wouldn't be "a cure-all, but an added layer of oversight," says Tariq Rauf, the IAEA head of verification and security-policy coordination. "None of these steps reduces the risk to zero, but we can build in more protective measures that decrease the chances of misuse."

The IAEA proposal in play this week emphasizes economic incentives: a "guaranteed" supply at below-market prices.

A Russian proposal would create international centers, starting in Russia, in which nuclear fuel would be produced under IAEA safeguards – and sold "nondiscriminatorily" to any state, regardless of whether they are under a cloud of suspicion.

The US proposal would forbid technology transfer to countries that don't already have an advanced system. To garner support, US envoys have reportedly been encouraging countries that had frozen their programs to get inside the tent of what could be a lucrative business. The media have cited Australia, South Africa, Argentina, Brazil, and Canada as making noises about getting back into the game.

"Any arbitrary system that creates a new set of 'haves' and 'have-nots' is unsustainable, because nobody wants to be a have-not," says Jon Wolfsthal, a nonproliferation fellow at the Center for Strategic and International Studies. "But if there are clear economic benefits to buying in, you'll get a majority of countries to go along."

A central challenge will be to convince those who argue for sovereignty on such decisions to consider a new system.

"It will require leadership, and preferably a multiheaded leadership, involving leading suppliers and important consumers," says Lawrence Scheinman, who wrote fuel-bank proposals for the Carter Administration and now teaches at the Center for Nonproliferation Studies at the Monterey Institute of International Studies in California. "Where will that leadership come from? Would the international community feel comfortable with US leadership? The US has in the past led constructively – and still can."