When supply is more than demand, price of any commodity will fall. This is true whether it is onion or tomato, potato or uranium. It happened in the 90s. This was one of the reasons for Dr. Thomas Neff, a physicist at the Massachusetts Institute of Technology to propose what was later called the Megatons to Megawatts programme in an editorial titled "A Grand Uranium Bargain" in The New York Times on October 24, 1991,
Dr. Neff noted that “the Soviets have been selling increasing amounts of natural and enriched uranium in Western commercial markets, feeding a downward price spiral that has driven some uranium producers out of business and threatened the uranium enrichment business of America's Energy Department, the world’s largest supplier of commercial fuel.”
“The Soviet Government is struggling to transform itself economically and politically while maintaining control of more than 24,000 nuclear weapons in the newly independent republics,” he cautioned
Russians wanted to dismantle a few thousand; they had little cash to do it safely so that the material would not fall into wrong hands. It was vital to carry out the programme cautiously keeping its non proliferation objectives intact.
“The warheads contain substantial amounts of valuable material that can be processed for use in commercial nuclear power plants. It may be advantageous for the U.S. to buy or barter for such materials and turn them safely to commercial use. This can be done in ways that protect Western and Soviet commercial and security interests,” Dr. Neff proposed.
Natural uranium contains 0.71 per cent of Uranium-235. Enriching uranium increases the amount of Uranium-235. The nuclear fuel used in the majority of reactors contains about 3 per cent to 5 per cent of Uranium-235. Enrichment to levels of 20 per cent or greater produces highly enriched uranium which is used in research reactors and military applications. Highly enriched uranium may be down-blended or diluted so that the amount of U is low enough to be suitable for commercial reactors. The Megatons to Megawatts programme was successful; it organised the down-blending of Russia’s surplus, highly enriched uranium commercially.
In the NYT editorial, Dr Neff warned that if U.S. does not buy the material, agents in the former Soviet Union, perhaps uncontrolled by central authority, may flood commercial nuclear-fuel markets with material from arms programs or even seek to sell weapons-grade materials to the highest bidders!
The possibility that such a strategically important material may be virtually auctioned in the open market will unnerve any one. Dr Neff deftly played the economics and commercial card as well.
He estimated that a typical nuclear warhead might yield nuclear fuel worth $200,000/- A back of an envelope calculation shows that 10,000 warheads would bring in $2 billion.
The U.S. and Russian negotiators initialled the 20-year agreement in Moscow on August 28, 1992; President George W. Bush announced the agreement three days later. President Clinton signed and initiated the agreement in 1993.
Under the proposal, Russia down-blended 500 tons of enriched uranium into 15,259 tonnes of reactor -grade uranium over a period of 20 years.
The U.S. gave back to Russia a similar quantity of natural uranium to that used to down-blend the highly enriched uranium (HEU). U.S. paid to Russia the charges to down-blend or dilute the highly enriched uranium
The US Enrichment Corporation and Techsnabexport (Tenex), acted as agents for the US and Russian governments respectively and executed the project.
Russia shipped the down-blended fuel for the first time in 1995.
For Russia, it was a rich bonanza of about $ 13 billion. USA also benefited; uranium from 20,000 warheads fuelled the US nuclear power reactors and provided 10 per cent of electricity produced in USA over the past 20 years. The Nuclear Energy Institute, a nuclear advocacy group claimed that the fuel produced under the programme was enough to power the entire USA for two years.
This historic project which concluded on December 31, 2013 is the largest and most successful nuclear non-proliferation program to date. Dr Thomas Neff proposed the grand uranium bargain at the right time and was a win-win programme for everyone.
K.S. PARTHASARATHY
Former Secretary, Atomic Energy Regulatory Board
ksparth@yahoo.co.uk
