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NEI Says Full Engagement in Global Nuclear Trade Vital for US

Jan. 30, 2014—Continued U.S. government and commercial involvement in other countries’ new and expanding nuclear power programs is a vital tool to advance global nuclear safety, security and nonproliferation goals, the nuclear energy industry said today.

“To create American jobs and support critical U.S. foreign policy interests, the United States must be fully engaged in the global expansion of nuclear energy already under way,” NEI President and CEO Marvin Fertel said in remarks prepared for a Jan. 30 Senate Foreign Relations Committee hearing on Section 123 agreements.

The agreements are named after a provision in the Atomic Energy Act of 1954 that allows countries to obtain U.S. support to develop civil nuclear energy in exchange for their commitment not to engage in diversion of nuclear materials for non-peaceful purposes.

While the United States may have entered the postwar era as the largest supplier of nuclear technology and expertise abroad, Fertel wrote, other nations such as France and Russia have steadily increased their share of the global commercial nuclear market. In addition, South Korea and China are beginning to enter the technology export business.

Over the past 20 years, Fertel said, economically attractive supplies of nuclear fuel have become available from an increasing number of supplier nations such as Kazakhstan and Australia.

There are 71 nuclear energy facilities under construction worldwide, with an additional 172 in the licensing and advanced planning stages. Virtually all of these plants will be built abroad.

Continuing U.S. commercial engagement in this expanding global nuclear market—which the U.S. Department of Commerce estimates at $500 billion to $750 billion over the next 10 years—ensures that the highest possible levels of nuclear power plant safety and reliability are maintained worldwide, Fertel said.

Full engagement in the global nuclear marketplace supports U.S. leadership in nuclear energy technology and maintains U.S. influence over global nuclear nonproliferation policy and practices. It also provides a unique opportunity to create and maintain tens of thousands of domestic jobs and preserve a healthy manufacturing base for nuclear energy technology and services, Fertel added.

According to Department of Commerce estimates, every $1 billion in nuclear technology exports has the potential to create or sustain between 5,000 and 10,000 U.S. jobs.

“The U.S. nuclear industry is competitive, but we must be allowed to compete,” Fertel said.  This requires that appropriate Section 123 agreements be concluded in a timely manner.

While the nuclear energy industry supports efforts to limit the spread of uranium enrichment and used fuel reprocessing technologies consistent with current U.S. policy, it opposes initiatives requiring new conditions that potential partners will not accept and that other supplier nations do not impose.

“Pragmatism should continue to guide the United States as it negotiates Section 123 agreements,” Fertel said. “NEI supports the flexibility in the Atomic Energy Act that allows the executive branch to negotiate agreements based on the concerns and imperatives specific to each nation or region.”

The industry also supports prompt and proactive negotiation of new and renewal Section 123 agreements with nations expanding their peaceful nuclear energy programs, such as South Korea and Taiwan, and those with new programs, such as Vietnam.

A two-year extension to the existing South Korea Section 123 agreement was approved this week by Congress and now awaits President Obama’s signature. An update to the Section 123 agreement with Taiwan and an extension of the International Atomic Energy Agency agreement are being reviewed on Capitol Hill, and a Vietnam agreement is expected to be submitted shortly.

Fertel encouraged the Obama administration to “secure agreements early and with a broad set of partners rather than to sit idly by as these nations partner with other nuclear suppliers.”

“Without these agreements in force,” Fertel added, “we forfeit exports, jobs and commercial benefits, and we will fail to influence these programs in terms of their nuclear safety, security and nonproliferation norms.”

An archived webcast of the Jan. 30 hearing is available on the Senate Foreign Relations Committee website.