US-Russian Nuclear Cooperation in the Future

I want to thank Carnegie for this opportunity to informally discuss some of the directions that we have been taking and will take in nuclear collaboration with Russia. I was asked to say few words about our trip here, upon which I am accompanied by Rose Gottemoeller, who heads our Nonproliferation and National Security Program; Jeff Hughes, who works with me and is one of the heroes of the highly-enriched uranium deal; Eileen Malloy, advisor to the Secretary for Russian issues; Steve Aoki, Director of the Office for Proliferation and Threat Reduction in the Department of State; and Lana Ekimoff, International Office of the Department of Energy.

The main reason for our visit is that the Secretary plans to come to Russia in about three weeks. This will be his second trip here as Secretary. The Secretary will travel to several sites that are important for our nuclear collaboration programs, and will also take part in the celebration of the first oil production in Sakhalin II. He will participate in discussions about broader energy matters with the Minister of Fuel and Energy, as well as discussions with Minister Adamov on a broad range of important collaborative programs, many of which I will touch upon today.

The backdrop for our collaboration on the nuclear future here in Russia is the special responsibility that both of our countries share as a result of the scale of our efforts during the cold war. That scale of effort has no clearer visual image than the monumental effort expended under the mountain in Krasnoyarsk-26. Accompanied by Mr. Koutchinov from Minatom, our group spent Sunday underneath the mountain. One cannot help but be impressed by the scale of technical and engineering achievement necessary to create that environment and sustain it over many decades. That same scale, of course, highlighted the challenge for all of us to redirect those talents and skills to peaceful means, particularly in the context of the unsettled Russian economy. Being a physicist, I should quote Einstein: some years ago he uttered the admonition that the advent of nuclear fission had changed everything except the way we think; thus we drift endlessly toward catastrophe. Our cooperation on nuclear issues is about challenging both parts of that statement. We have avoided catastrophe up to now, and now we must jointly work toward success through a new way of thinking.

I will comment on three areas of cooperation, in order of decreasing maturity, and then seek your comments and ideas: first, the stewardship of nuclear materials; second, stewardship of the nuclear complex (both physical and human); and third, collaboration on the nuclear future.

Several general themes will run through the discussion on these three areas. First and foremost, nonproliferation as out general objective. In our stewardship roles, we typically need to first stabilise the situation, and then begin reversing the post-cold-war legacies that present future dangers. Basically, it is the Theory of Holes: if you find yourself in one, you have to stop digging. Another general theme I would call "scales." The first phase-- the "stabilisation" phase-- often requires investments on the "scale" of millions to a hundred-million dollars. While the scale of resources is obviously not trivial, it is nevertheless within the reach of public funding. To sustain the second, or "reversal" phase, resources on the "scale" of billions of dollar (or even higher) may be required. This is not surprising, given the investment made to get there in the first place, but it suggests that success will often require engaging private companies. The last general theme is that there is a strong interplay between the military and civilian nuclear sectors. The future of the commercial fuel cycle can be critical to how you address certain non-proliferation goals.

Let me turn to the first subject-- nuclear materials stewardship. We have, over these decades, built huge stockpiles of weapons usable materials-- plutonium and highly-enriched uranium. This is true for both countries’ military and civilian programs in terms of separated plutonium. I believe we have made substantial progress toward the first objective of stabilising the situations. Many of you are aware of our MPC&A programs, operating for the last five years, through which we have worked with Russian colleagues to introduce new technology-based approaches to secure weapons-usable material. By next year we anticipate to have secured roughly one hundred metric tons of material in Russia. We are now working to plan the future of these MPC&A programs. Hopefully Secretary Richardson and Minister Adamov will sign a new government-to-government agreement to provide the legal framework needed to expand these agreements when the Secretary is in Moscow in few weeks.

As we go forward, we will begin a new phase, providing greater nuclear materials consolidation and therefore greater security across Russia. In fact, tomorrow our group will visit the Luch site outside of Moscow where we have launched a model project both to consolidate highly-enriched uranium (HEU) from several sites within and outside Luch into a central facility, and to simultaneously convert the HEU to Low Enriched Uranium (LEU) that does not pose a proliferation threat. In fact, after discussions at Minatom today, we believe we are on the threshold of expanding this model project into a pilot scale project next year, perhaps reaching a scale of an additional ton of HEU. This is above and beyond the 500 tons of HEU that are currently being blended into commercial reactor fuel as part of the so-called "HEU Deal". This deal illustrates the second theme, scales. In the case of the HEU deal, the scale of resources is so large that one needs to involve the private sector. The scale is roughly ten billion dollars, and those funds come almost exclusively from commercial transactions using low-enriched fuel in power reactors.

There are also challenges, and I will note that we are working with Minatom to develop a program to reduce the proliferation risk from plutonium. We are on the verge (we hope within in a month or so) of negotiating a framework agreement for the disposal of up to 50 tons of weapons plutonium on both sides. However, now we have some problems. First, there is no simple way of denaturing plutonium to eliminate its proliferation risk. One approach is to burn it in reactors. The scale is billions of dollars. But the economics are not favorable, therefore making it difficult to engage the private sector. We are working to put together public funds, trying to engage other international partners, and looking for creative ways of financing this very important nonproliferation goal.

This challenge also brings out another theme that I mentioned earlier: that of the connection between civilian nuclear power and this attempt to remove the proliferation risks of military plutonium. As I said earlier, the way to dispose of plutonium is to burn it in reactors, which requires very unique reactors. Gas turbines are inefficient for burning plutonium. But today in Russia, even if one could use all the available commercial reactors for this purpose, one could consume roughly only two tons of plutonium per year, but the problem is on a hundred-ton scale. That coupling is very important, and as you can see we have challenges, although I do want to emphasize that in the nuclear material stewardship regime, I believe we have made worthwhile progress.

Let me turn to the second issue: stewardship of the nuclear complex. As I said earlier, this involves both the physical and human complex, because nonproliferation issues revolve around not only nuclear materials but also nuclear weapons knowledge. In both countries, we built enormous nuclear-weapon complexes that have required downsizing. About five years ago, for example, the US Department of Energy had about 150,000 people in it; we now have about 100,000 people. This downsizing of the complex also has an important impact on our future arms control discussions. Arms control issues go beyond numbers of weapons and launchers. Particularly as one reaches smaller arsenal sizes, the capacity of the complex itself becomes an issue. Managing the reduction of our complexes also presents challenges for providing appropriate opportunities for our nuclear workers. We have an obvious asymmetry in terms of the health of the economies into which these individuals can be absorbed, and this underlies a number of our cooperative programs with Russia. Let me note again that this problem exists on the billion-dollar scale: if it typically takes a ten-thousand dollar investment to create a sustainable job, it takes one billion dollars to deal with over one hundred thousand people.

We are in the early stages of launching programs, one of which I will mention here: the Nuclear Cities Initiative, in which we are spending tens of millions of dollars a year to facilitate development of commercial opportunities in Russia’s nuclear cities. The programs are new-- funding of this program started in March of this year. We are starting by focusing on only three out of the ten nuclear cities: the former Arzamas-16, Chelyabinsk-70, and Krasnoyarsk-26. As I said, we were in Krasnoyarsk on Sunday, witnessing the fruits of the program-- the development of business plans in important areas. In fact, across these three cities, the ideas that are coming forward involve everything from oil and high-purity silicon for electronics to issues involving nuclear waste. While our programs facilitate direct funding, it is very encouraging that they are providing the conditions to permit success. Again, the sheer scale of many of these efforts ultimately necessitates private sector funding to develop real businesses and to sustain jobs. There are clearly challenges here: the state of the economy, the need for entrepreneurial activity, and the need for venture capital. And there are other kinds of issues, dealing with the intentionally isolated geography that was chosen for these cities, which emphasize the critical need for access-- both access to the region and access within the cities, which of course have very sensitive information. This is another challenge to be met at the political level: balancing the proper need for securing sensitive information with the requirement for access, which is an absolute prerequisite for engagement of private companies in a business idea. Here again exists coupling to the civilian power sector in the sense that the civilian sector would provide opportunities for those with nuclear technology skills. This area is somewhat less mature than our efforts in terms of stewardship of nuclear materials, but we feel that we are set off in a good direction for the next several years.

Finally, let me turn to possible collaboration on the future of the nuclear fuel cycle. This, I would say, is the least mature of the three areas in terms of collaboration. This stems partly from the fact that a quarter century ago there was a significant international debate on the future of nuclear fuel cycle. There was a fundamental divergence in the sense that the United States, emphasizing the importance of nonproliferation issues, elected the so called "open" fuel cycle and direct disposal of spent fuel, whereas other countries, including Russia, elected to pursue the "closed" fuel cycle with reprocessing of spent fuel and separation of plutonium for ultimate reuse in power reactors. This may be a time to re-engage in that discussion, perhaps because both choices are confronted with very serious problems. The nuclear waste issue certainly has not been answered to the satisfaction of the American public, and certainly those countries that chose the reprocessing approach based upon the great energy value of reuse of plutonium have found that choice to be uneconomic, and consequently have been stockpiling hundreds of tons of separated plutonium. In addition, the future of nuclear power generally is strongly influenced by dramatic changes in the energy market. In the United States, as we re-regulate the energy sector, the very definition of utility has changed dramatically. We now have utilities that actually produce no power at all but provide only service-- they provide electricity, phone lines, and various other things. This is relevant because it creates environment in which, at least in the foreseeable future, utility-generators are not going to make the kinds of large capital investments that nuclear power requires.

So in this situation, there may be an opportunity, at least with international partners, to reexamine the underlying assumptions about the fuel cycle, to plan a future in which nonproliferation is one of the organizing principles. Indeed, in July when Secretary and Minister Adamov met, they initiated some studies of relevance to this. Some would involve looking at the proliferation risks in fuel cycles, and others would look at things like international spent fuel arrangements, offering a variety of directions that could lead to a new view on nuclear future with a nonproliferation posture that we all would endorse.

To conclude, I outlined three major areas in which we have a very rich agenda in terms of collaboration with Russia. The development of collaboration in just a few years is truly remarkable, and although we have lots of interesting and collegial government-to-government discussions, the foundation of strong collaboration is really located at the scientist-to-scientist level. That is what gives me confidence in our ability to sustain this collaboration over the years as both of our governments change.

Question and Answer Session

Mr. Zobov. Regarding U.S.-Russian nuclear power cooperation in the future, what kind of legal base do we have for such cooperation? Do we have an agreement of a kind that you have with China for example, or with Ukraine, or with some of the former members of the Warsaw Bloc? It seems that there is a lack of interest in such an agreement from both Minister Adamov and Secretary Richardson. Are there any reasons other than the Iran issue?

Sec. Moniz. First, of course, we do have a variety of agreements, under which, for example, research collaborations are being performed between Unites States and Russia on nuclear power issues. But you are certainly correct—we do not have an agreement that allows for full cooperation in these areas, and certainly the principle obstacle to this is our concern about nuclear collaboration with Iran—in particular, collaboration that goes beyond the construction of a power reactor into the areas of technology that we feel presents a tangible proliferation risk. We have been working with Minister Adamov and other government officials and trying to resolve this issue, and resolving it will be a prerequisite if we are going to progressively pursue this issue.

Mr. Koutchinov. First of all, Minatom has never lost interest in this agreement. We use every meeting with our American colleagues to state that we have not lost interest in this. We must have this agreement. Moreover, with annual prolongation of the existing agreement, we reaffirm our commitment. Our American colleagues always raise the Iranian issue, although they know that we are doing nothing there but the construction at Busher.

Mr. Khromov. You said that you count on resolving the problem during discussions with Minister Adamov, and to find a compromise which will remove the Iranian issue. What did you have in mind? What is the ground for your optimism?

Sec. Moniz. There are discussions going on between the Minister and our Department of State, and my colleague Steve Aoki may want to comment on that. Secondly, we are willing to pursue, for example, what Minister Adamov suggested in terms of pointing—getting a meeting between technical experts in terms of evaluating export control regimes.

Mr. Nasonov. Dr. Moniz, how successfully is the core conversion agreement being implemented in your view? (In Tomsk and Krasnoyarsk-26.)

Sec. Moniz. We were in Krasnoyarsk-26 on Sunday, as I said, and discussed the problem. We are concerned about the schedule but noted two elements of real progress. First, we understand that Tomsk has received a license from GAN for its current operating mode, and that presumably will be followed shortly by Krasnoyarsk. Second, the plan corresponding to GAN’s concern about the core configuration tests has been submitted for evaluation, so I think with those two milestones—hopefully achieved very soon—we will be able to go back very soon and reevaluate where we are on the schedule. I might just comment on a broader issue, and that is the need to have the regulatory body engaged in the program evaluation at the earliest possible time (to avoid schedule delays) in a variety of areas: nuclear safety upgrades, core conversion, and plutonium disposition. This a lesson we have learned ourselves and we are happy to share the benefits of our experience.

Mr. Romashkin. Question to the State Department representative: whose legislation did you have in mind—that of the United States, or that of Russia—when you spoke about violations of law?

Mr. Aoki. Russian legislation.

Mr. Romashkin. As far as I know the export control law was not violated.

Mr. Aoki. We know this, and we are trying to expand our cooperation so that we can avoid future violations of the law.

Mr. Zobov. I would like to note that many seminars and conferences held in Moscow touch upon this issue. And it proceeds from, quite frankly, discussions among representatives of Russian federal agencies that there were no violations of the Russian legislation. There were ambiguous interpretations, but there were no violations.

Dr. Dyakov. Dr. Moniz, concerning the plutonium disposition issue and relevance of the proposal to import foreign spent fuel to this issue: the idea being that a portion of funds could be used for plutonium disposal, I am quite certain that you know about the idea proposed by NPT. One aspect has been neglected. When Minatom talks about import of this fuel, and its reprocessing, on the other hand the United States policy is that it does not support reprocessing. Let us get back to Taiwan and South Korea—much of the fuel from these countries would be of American origin, so the United States would have to give its consent. So what would the U.S. reaction be to this?

Sec. Moniz. First of all, there have been a variety of proposals for international spent fuel consolidation, in Russia, and in some other countries. Some proposals to consolidate fuel in Russia suggested reprocessing, but some, like the NPT, would strictly forbid reprocessing. You are certainly correct in stating that our position remains one that strictly opposes reprocessing. Nevertheless, one can see some proliferation benefits from consolidation, and perhaps from consolidation in a [nuclear] weapon state. But there are many complicated issues, environmental issues, legal issues, and transport issues with respect to Russia. The general idea of looking at international spent fuel consolidation is an interesting one, and one that should be discussed. We would clearly view any such project in a broad context of nonproliferation and the fuel cycle. And one explicit first step that Secretary Richardson and Minister Adamov have charged us with performing is to pull together a white paper that tries to define what the complex set of issues is. We will do this over the next several months, and that will be the foundation for the discussion.

Dr. Dyakov. Do you think the United States is ready to give up its policy against reprocessing?

Sec. Moniz. I personally do not see any change at present. Speaking personally, I would say, by observations, that the evidence for changing that position is not there, but what we have—and again Secretary and Minister have launched a process whereby we will evaluate the issues surrounding proliferation-resistant fuel cycles in the future—we are talking twenty years away. And the first task, in which Rose [Gottemoeller] will be one of the co-chairs, will be to define what a proliferation-resistant fuel cycle means.

Mr. Zobov. Are you against reprocessing of your own fuel, or against reprocessing Taiwanese fuel which has U.S. origin?.

Sec. Moniz. We see no benefit in reprocessing spent fuel.

Mr. Rybachenkov. A question to Dr. Gottemoeller. What is, in your view the United States Congress’ attitude towards the financial aspect of the NCI?

Sec. Gottemoeller. That is a quite a complex and interesting question. As with any new initiative coming into the Congress, there is immediately a great interest and, I would say, a predilection to say "no". That goes for programs and initiatives that affect the United States domestic economy and for programs and initiatives in the realm of foreign cooperation, including with Russia. The threat reduction cooperation with Russia has had seven-year history, and I would say the general trend has been for Congress to be more supportive than they were in 1993-94. With regard specifically to the NCI agreement, I would say here the picture is also complex, it has positive aspects and negative aspects. And since you asked me a question about financing, I will give you some specific figures for the Y2000 funding discussion. You know we must have four committees to pass on our budget every year: two authorizing committees and two appropriating committees. Our Senate Appropriations Committee gave us the full requested $30 million that; both of our authorizing committees gave us $20 million; our House Appropriations Committee only gave us $1.5 million. What happens now is a negotiation between the Senate and the House, and when I go back to Washington, that negotiation will be going on. My prediction is, because our numbers are good in the Senate Appropriations Committee, and they are fairly good from both our authorizing committees, I think we will be able to address the very low mark from the House Appropriating Committee. But you can see from the picture I painted that it is a very complex situation—we are getting good support in some areas, and other people have pretty critical attitude, so I am being pretty straightforward to you. I believe we can end up with a good result, but it will take some work.

Mr. Rybachenkov. What was the motivation of the House Appropriations Committee?

Sec. Gottemoeller. I think there are several answers to that. One has to do with the fact that as a matter of the entire appropriation they have a relatively small amount of money to work with, so they cut everything. One of the House staff— a very important person—told me that they were not going to fund any new initiative, so frankly I expected a zero mark from them. So you can see, under some circumstances a $1.5 million mark can be a victory.

Mr. Rybachenkov. This explanation does not quite convince me.

Sec. Gottemoeller. I was giving you one of the reasons, but another has to do with the history of threat reduction program. The House of Representatives has always been more negative to this cooperation with Russia than the Senate has. But let me just end by underscoring that I believe our result will be pretty good on NCI.

Sec. Moniz. Since you did not find Secretary Gottemoeller’s explanation convincing, I just want to give little more detail. In the budgeting process, the difference in the amount of money that the two committees had to work with was one and a half billion dollars, a huge amount. That must be reconciled in the end. History suggests that the reconciliation is done by adding more money to the House. It is the budgeting principle of "and then a miracle happened." So while there is no guarantee, and while there are some concerns on substance and some numbers, I wholly support what Rose said.

Dr. Novikov. My question is related to the title of today’s round-table. Speaking about cooperation, we underscore that consolidation of the nonproliferation regime is the number one priority. However, analysis of the United States national policy shows that term "counterproliferation" is gradually replacing term "nonproliferation." And these counterproliferation efforts are aimed to reduce the proliferation threat from the "third world" countries. Russia is not mentioned as a partner in this respect. Does this mean that the United States sees such cooperation with Russia as non-productive, or is this counterproliferation policy aimed against Russia itself?

Sec. Gottemoeller. In the first instance I do not really agree with one of the premises of your question that is that counterproliferation measures are superseding nonproliferation measures. I think it is important to recall that there is a whole spectrum of activities that countries undertake to deal with problems of proliferation. Some of them are formal negotiated regimes, such as the NPT, some of them are less formal cooperative measures and programs, such as CTR, and in cases where diplomatic and other cooperative measures do not work, at times we employ a stick, and that is counterproliferation. But I think the entire spectrum of measures is used in fighting against proliferation, and I would simply not agree with the notion that counterproliferation is becoming more important than nonproliferation. I really think that we have quite extensive cooperation across the entire spectrum, and I do not think that any kind of cooperation is in any way excluded, depending on the wish of the party involved.

Mr. Osinin. I agree with Dr. Gottemoeller, because there are two areas where we have good cooperation with the United States: the nuclear field and space. There were four new agencies formed in Russia: the agency formerly responsible for weapons production and conversion of the defense industry; shipbuilding; conventional weaponry and ammunitions; and command, control and communications. The main idea behind creating these agencies was to enter an international market of joint production of weapons, and secondly, single conversion projects, joint conversion projects. The cost of Russian intellectual labor, in the area of space, for example, is about one fifth of that of the West, therefore there are prospects for joint work. One of the obstacles to future cooperation is the Iran issue. My question is, though we have some problems with START II ratification, prospects for START III are not very clear, and we have difficulties with ABM treaty, in your view, how will our cooperation in the nuclear area develop?

Sec. Moniz. This is the Department of Energy’s perspective. While there are some bumps in the road in the arms control arena, I certainly feel that we are locked into an ongoing responsible reduction of our nuclear arsenals, and we will continue to have a special relationship based upon the fact that we remain, by far, the greatest nuclear powers, and we will remain very closely engaged in our nuclear complexes. The rightsizing of our nuclear complexes is itself connected to where we can go in terms of the arms control negotiations, and though there will be many questions in terms of capacity, verifications will simply demand, even in the mist of political vagaries, that we remain strongly coupled. I think that there are going to be difficulties. For example, going back to the earlier question of NCI, there is no doubt that the metrics of success in a program of that length are not as crisp as they are in something like MPC&A or disposition. So we must work very hard together to articulate the progress we are making. I am convinced that the fundamental wisdom of these programs is understood and will be supported.

One last comment. Along the lines of "miracles happen." Last year in the budget process, it was again very, very difficult, but at the end of the process, with the leadership of a very small number of members of Congress, an enormous amount of money was provided, for example, to stabilize the HEU deal: $325 million. The HEU deal is a very important nonproliferation program, but it is also probably not as well recognized here; it is a program that has very complicated domestic politics within our country. But in the end the overriding nonproliferation interest came first and the resources were made available. It will not always happen that way but I think there is fundamental commitment to stay on this course.