Nuclear Energy Insight
Winter 2012—Fifty years ago, the United States was the global leader in nuclear technology and services, the first country to harness atoms for peace, and the first to profit from it internationally.
Today, U.S. dominance of the global nuclear power market has eroded as suppliers from other countries compete aggressively against American exporters. U.S. suppliers confront competitors that benefit from various forms of state promotion and also must contend with a U.S. government that has not adapted to new commercial realities. The potential is tremendous—$500 billion to $740 billion in international orders over the next decade, representing tens of thousands of potential American jobs, according to the U.S. Department of Commerce.
With America suffering a large trade deficit, nuclear goods and services represent a market worth aggressive action.
However, antiquated U.S. government approaches to nuclear exports are challenging U.S. competitiveness in the nuclear energy market. New federal support is needed if the United States wants to reclaim dominance in commercial nuclear goods and services—and create the jobs that go with them.
“The U.S. used to be a monopoly supplier of nuclear materials and technology back in the ’50s and ’60s,” said Fred McGoldrick, former director of the Office of Nonproliferation and Export Policy at the State Department. “That position has eroded to the point where we’re a minor player compared to other countries.”
America continues to lead the world in technology innovation and know-how. So what are the issues? And where is the trade?
Effective coordination among the many government agencies involved in nuclear exports would provide a boost to U.S. suppliers.
“Multiple U.S. agencies are engaged with countries abroad that are developing nuclear power, from early assistance to export controls to trade finance and more,” said Ted Jones, director for supplier international relations at NEI. The challenge is to create a framework that allows commercial nuclear trade to grow while ensuring against the proliferation of nuclear materials.
“To compete in such a situation, an ongoing dialogue between U.S. suppliers and government needs to be conducted and U.S. trade promotion must be coordinated at the highest levels,” Jones said.
Licensing U.S. Exports
Jurisdiction for commercial nuclear export controls is divided among the Departments of Energy and Commerce and the Nuclear Regulatory Commission and has not been comprehensively updated to coordinate among the agencies or to reflect economic and technological changes over the decades. The State Department also is involved in international nuclear commerce. It negotiates and implements so-called “123 agreements” that allow for nuclear goods and services to be traded with a foreign country.
The federal agencies often have different, conflicting priorities, leading to a lack of clarity for exporters and longer processing times for export licenses.
“The U.S. nuclear export regime is the most complex and restrictive in the world and the least efficient,” said Jones. “Furthermore, it is poorly focused on items and technologies that pose little or no proliferation concern. By trying to protect too much, we risk diminishing the focus on sensitive technologies and handicapping U.S. exports.”
A case in point is the Energy Department’s Part 810 regulations. While 123 agreements open trade between the United States and other countries, Part 810 regulates what the United States can trade with another country. For certain countries, it can take more than a year to obtain “specific authorizations” to export nuclear items. Because other supplier countries authorize exports to the same countries with fewer requirements and delays, the Part 810 rules translate into a significant competitive disadvantage for U.S. suppliers.
Today, 76 countries require a specific authorization, but DOE has proposed almost doubling that number—to include for the first time countries that have never demonstrated a special proliferation concern, that are already part of the global nuclear supply chain, and that plan new nuclear infrastructure.
The proposed Part 810 rule would do nothing to reduce lengthy license processing times, said Jones. Other nuclear supplier countries impose strict guidelines on their licensing agencies for timely processing of applications. Equivalent licenses must be processed in fewer than nine months in France, fewer than 90 days in Japan and 15 days in South Korea.
One possible solution, said McGoldrick, would be to set similar deadlines for issuance of licenses. U.S. agencies “could have deadlines set forth in the new [Part 810] regulations, which would give the relevant government agencies specified times in which to act on a license. Time could be exceeded only under certain circumstances,” said McGoldrick.
Instituting Same Rules for Everyone
At stake is not just the nation’s manufacturing base, but thousands of jobs. In 2008, all exports supported more than 10 million jobs, according to “The Report to the President on the National Export Initiative.” One of the report’s recommendations was to expand opportunities for U.S. commercial nuclear exports.
“There are certain sectors in which the United States often leads global technology development and innovation, such as renewable energy; civil nuclear power, smart grid, and advanced vehicle technologies,” the report said.
—Read more articles in Nuclear Energy Insight and Insight Web Extra.