Letter to Secretary Clinton regarding Nuclear Policy

Letters
August 30, 2012
The Honorable Hillary Rodham Clinton
Secretary of State
U.S. Department of State
2201 C Street, NW
Washington, DC 20520
 
Dear Secretary Clinton:
 
On behalf of U.S. businesses and industry, we are writing to express our views on international nuclear energy cooperation agreements. We urge the administration to pursue a pragmatic approach to the negotiation of these agreements that will allow U.S. industry to participate in international nuclear markets and thereby strengthen the global nonproliferation regime. To achieve these twin objectives, we urge the administration to avoid unilateral restrictions on uranium enrichment and reprocessing (E&R) technology in nuclear cooperation agreements that could threaten the ability of the United States to finalize these agreements in a timely manner.
 
The global expansion of nuclear energy to meet the growing demand for low-carbon electricity offers the United States an opportunity to promote several complementary national imperatives, but only if we are able to negotiate mutually acceptable nuclear cooperation agreements that open markets to U.S. industry. Exporting U.S. advanced reactor designs as well as America’s operational expertise ensures the highest possible levels of nuclear power plant safety and reliability around the world, and increases U.S. influence over nuclear nonproliferation policy and practices. It also maintains U.S. leadership in nuclear energy technology and creates tens of thousands of American jobs.
 
In this context, we are concerned that, if the United States insists that countries forswear uranium E&R as a condition for a U.S. nuclear cooperation agreement, most countries would refrain from concluding such agreements with the United States. Foreign governments and industries would turn instead to other nuclear energy suppliers. The U.S. economic interest in the global commercial market for nuclear energy is significant. Worldwide, 67 commercial nuclear reactors are under construction and an additional 158 reactors are planned or on order. The Commerce Department estimates the commercial opportunity over the next decade may be worth as much as $740 billion. If U.S. suppliers were able to capture nominally 25 percent of this market, they would create or sustain up to 185,000 high-paying American jobs. Further, the success of U.S. business and industry overseas advances U.S. nonproliferation goals because U.S. industry supports efforts to limit the spread of E&R technologies.
 
U.S. companies compete across the breadth of the commercial nuclear supply chain, from nuclear power plant design, to component and fuel manufacturing, to architect/engineering services and more. Beyond construction of a nuclear power plant, U.S. firms may be engaged in operational support, training, fuel supply, and other services over several decades of operation. But American suppliers may compete only in countries with a U.S. nuclear cooperation agreement in force.
 
Two nuclear cooperation agreements have expired this year, and seven others — including agreements of major commercial importance with China, Taiwan, South Korea and the IAEA — will lapse by 2015. Without prompt renewal, the economic and strategic benefits of commercial nuclear cooperation will be at risk. Given the industry’s long-lead items and use of long-term contracts for nuclear fuel and services, it is critical that the United States be regarded as a stable, reliable trading partner.
 
Countries such as Jordan, Vietnam, and Saudi Arabia are not waiting for a U.S. nuclear cooperation agreement to develop nuclear power programs. A nuclear cooperation agreement with Jordan has been under negotiation for more than three years, and disagreements about conditions relating to E&R have delayed its completion. Jordan has nearly finished the technology selection process for its first nuclear power plant, scheduled for completion in 2020. Vietnam also has sought alternatives to U.S. cooperation, including a $9 billion agreement with Russia to build two reactors and another with Japan to build two reactors. Saudi Arabia, which plans to complete 16 reactors by 2030 at a cost of more than $100 billion, has already concluded nuclear cooperation agreements with France, Russia, South Korea, China, and Argentina.
 
We encourage the administration to continue to leverage the range of available bilateral and multilateral policy instruments, including Nuclear Suppliers Group guidelines, assurances of fuel supply, multilateral guarantees of fuel supply and used fuel disposition, other bilateral commitments and export controls, and other assurances required by the Atomic Energy Act. Taken together, these instruments and policies can effectively serve U.S. government and industry nonproliferation goals without creating adverse consequences for U.S. exports, job creation, and global nuclear safety.
 
Refusing to conclude a nuclear cooperation agreement with countries that decline to forswear E&R would be self-defeating for U.S. interests in nuclear nonproliferation and security. Nuclear cooperation agreements include significant commitments to safeguard materials, prevent material diversion for non-peaceful purposes, and provide security for materials. 1’hey also provide for consent rights over the enrichment, reprocessing, and retransfer of U.S. materials exported under the agreement. If the United States insists that our trading partners forswear E&R, we will fail to conclude nuclear cooperation agreements, losing the nonproliferation benefits of these agreements and undermining the long-term influence of the United States on global nonproliferation matters.
 
We respectfully urge you to avoid unilateral restrictions on E&R technology as a condition for negotiating international nuclear cooperation agreements. Doing so will open new international nuclear markets to U.S. industry and bolster global nonproliferation efforts.
 
Sincerely,
 
Jay Timmons
President and CFO
National Association of Manufacturers
 
Marvin S. Fertel
President and CEO
Nuclear Energy Institute
 
Thomas J. Donohue
President and CEO
U.S. Chamber of Commerce
 
cc: The Honorable Steven Chu, Secretary of Energy