Only in December 2011 did Australian Prime Minister Julia Gillard’s ruling Labor Party vote to overturn a long-standing ban on Australian uranium exports to India in order to strengthen diplomatic ties between those two countries, thus elevating the relationship to a more strategic level while boosting Australia’s resources-dominated economy.
Australia, holder of the world’s biggest known uranium reserves, blocked exports of the nuclear fuel to India in the past citing the fact of India not being a signatory to the Nuclear Non-Proliferation Treaty. Since then the global environment vis-a-vis India has changed dramatically. In this respect, Phoebe Sedgman reported for Bloomberg News that India signed civil nuclear agreements with the U.S., Russia and France after a three-decade long export ban on uranium “supplies to India was lifted in September 2008 by the Nuclear Suppliers Group“.
According to numbers provided by the World Nuclear Association, the worldwide known recoverable resources of uranium in 2011 amounted to a world total of 5,327,200 tons with four countries — Australia (1,661,000 tons), Kazakhstan (629,000 tons), Russia (487,200 tons) and Canada (468,700 tons) — together controlling 3,245,900 tonnes of output or 61% of global production. Australia is clearly the top producer having alone 31% of known global uranium reserves.
Now, only recently — on July 31, 2012 — the United Arab Emirates and Australia signed another strategic agreement according to which Australia would supply the UAE with uranium as nuclear fuel for its first nuclear power plant Al Baraka, which is currently under construction in Abu Dhabi. According to the UAE newspaper Gulf News, one sticking point remains and has to be worked out before the commercial implementation of this agreement; namely, “a clear understanding of who will handle the nuclear waste”. In this respect, John Daly of Oilprice.com quotes in his article the Australian Foreign Minister Bob Carr as stating: “The UAE meets all the tests, and the tests are rigorous and extensive and we’re happy to make a big commitment to providing them with energy security. We’re underpinning jobs and investment in Australian uranium mines, and helping deliver certainty for the UAE’s domestic power needs. Strict safeguards will apply, including for the safe handling and security of radioactive material, restrictions on re-export and guarantees of use for peaceful purposes.”
Prima facie, that sounds like a win-win for everybody involved. Especially, given the fact that H.E. Mr. Carr — as John Daly mentions in his article — praises the UAE as “an excellent contrast (meaning vis-a-vis Iran) to rule out enrichment and to subject the industry to thorough safeguards and monitoring”. H.E. Mr. Carr goes on by saying: “We share the UAE’s concerns about Iran’s nuclear ambitions and the associated risks.”
I have no reason to doubt the UAE’s sincere peaceful intentions given that it is a staunch U.S. ally and given that it realistically needs to take steps in order to increase its electricity generation capacity to maintain its rapid economic growth. The Emirates Nuclear Energy Corporation(ENEC) cites a study pointing to the urgent need to develop additional sources of energy while concluding that “by 2020, the UAE’s energy demand will rise to more than 40,000 MegaWatts – a rate of 9% per year, which is three times the global average (- with) the existing and planned capacity to produce less than half of this demand.”
The problem is that this deal – even though struck for legitimate reasons as pointed out above – is only opening the pandora’s box in the Middle East further. In international relations not only intentions count but also perception. It does not help that “the UAE refused to use its right to enrich uranium on its own“. How do you think this will influence Iran’s negotiation stance and its willingness to stop its nuclear program – whatever Iran’s true intentions are?
Remember, one of the West’s main arguments against Iran’s nuclear ambitions was the concern that it could eventually lead to a regional nuclear arms race across the Middle East. The UAE — Australia nuclear fuel deal has also currently a major flaw; namely, how to deal with spent uranium fuel rods. Australia could take it back and store it properly. I doubt that this prospect will excite the Australian people and government and thus I give it a low probability. Another obvious option is to leave it in the UAE and store it on-site. Well, in this respect John Daly makes again an excellent point, and we return to my “Pandora’s box.” Daly’s logic is simple and to the point: “Without nuclear power stations there can be no nuclear weapons, no possibility of fuels being stolen to build ‘dirty bombs’, no possibility of a nuclear power station being hit by a conventional bomb and setting off a nuclear explosion.” He concludes with the following crucial question: “Do we really want the entire region pursuing nuclear power?”
Given the above, I do not think that this uranium deal is a win-win for the region itself because it makes solving the Iranian nuclear standoff only more complicated, and I am very interested to see how the arguments on both sides will be framed now in light of this recent development. This only shows that the West needs to come up with a nuclear solution for the whole Middle East given the power generation needs within the region. The West should at least not be viewed as having a double standard which is admittedly an impossible undertaking in light of too many apparent examples. The West should work on a consistent and well-devised plan. One last information to ponder is that Saudi Arabia is facing the same future power generation problems the UAE is facing. Note, that due to a lack of sufficient water supply — not really surprising given that Saudi Arabia is a desert kingdom — water desalination plants are built across the country to produce fresh water. However, these desalination plants require huge amounts of electricity. Thus, there are two options: You either go solar (very expensive), or you go nuclear (the more economical version). So, a Saudi Arabia deciding that it is time to add nuclear to its energy mix will only increase the stakes and the urgency to deal with this topic. We — the global community — do not want to be crushed by a high-speed nuclear freight train but instead keep it running at a manageable speed and ensure that the appropriate safeguards are in place for the future day certainly to come.
