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A Year After Communism Collapse, Revolution Still Rolling

By Thomas W. Lippman
The Washington Post

WASHINGTON

President Bush announced Monday that the United States has agreed to buy bomb-grade uranium from Russia's dismantled nuclear warheads and convert it into fuel for commercial nuclear power plants, marking the biggest swords-into-plowshares agreement of the post-Cold War era.

Under a contract to be negotiated over the next year, Russia would receive hard currency for one of its few exportable commodities and use some of the money to make badly needed repairs to its nuclear power plants. The United States would benefit by acquiring relatively low-cost nuclear fuel and ensuring that the Russian material is no longer available for use in weapons.

"This agreement will help ensure that nuclear weapons-grade material does not fall into the wrong hands, while providing funds to promote economic reforms and the transition to a market-based economy" in Russia, Bush said in a statement. "At home, this agreement will secure long-term supplies of less expensive fuel for U.S. nuclear power stations to the benefit of American consumers, with no adverse impact on American jobs."

He added an election-year note: "This U.S.-Russian agreement illustrates how foreign policy accomplishments can promote our domestic economic well-being while making the world a safer place to live."

U.S. purchase of weapons-grade Russian uranium had been under consideration within the administration for months, as part of an overall policy review of what to do with the surplus uranium and plutonium recovered from the reduced nuclear arsenals of both countries.

Russian Atomic Energy Minister Viktor Mikhailov officially offered a deal along the lines of the one announced Monday when he visited here in July.

But despite its apparent logic, the agreement could be controversial for reasons having to do with nuclear non-proliferation policy and the depressed state of the U.S. uranium industry.

Longstanding U.S. policy has been to keep weapons-related uranium programs entirely separate from commercial nuclear power, thus limiting the opportunities for unauthorized access to bomb-grade material. Blending weapons-grade uranium into commercial fuel would mean abandoning that policy.

In addition, the U.S. uranium industry has shrunk to about a fifth of its 1980 peak output, in large part because of a surge in low-cost imports of commercial grade fuel from Russia and other republics of the former Soviet Union.

The Commerce Department has made a preliminary finding that Russia is "dumping" uranium in the United States at unfairly low prices. That ruling did not apply to highly enriched, bomb-grade uranium, because no such material had been sold commercially.

But a final ruling, due this autumn, could be amended to apply duties to the bomb-grade material if it is intended for commercial use, lawyers in the case said.

Bush's assertion that importing more uranium would not result in any U.S. job loss is based on the fact that the Energy Department's uranium plants are extremely inefficient, money-losing electricity guzzlers. By obtaining Russia's highly enriched uranium, diluting it and then feeding it to U.S. power plants, the uranium plants would require less electricity and thus could actually save money.

Under the agreement announced Monday, the United States would buy at least 10 tons a year of highly enriched Russian uranium for five years, and at least 30 tons a year after that.

No price was given, but uranium industry analysts said a price estimate can be calculated this way:

One metric ton of highly enriched uranium can be diluted to produce roughly 600,000 pounds of low-enriched uranium oxide for power plant use. The spot market price for uranium has recently been about $7.50 a pound. Therefore, the 10 tons to be sold by Russia in the first year would have a market value of about $45 million, minus the cost of diluting it and transporting it.

Paul Leventhal, director of the Washington-based Nuclear Control Institute, a proliferation watchdog group, said that "overall the idea of blending down the bomb-grade uranium is good and should be encouraged." But he objected to a part of the agreement which stipulates that much of the Russian material would be transported to this country for processing.

"Long distance transport of (weapons-grade) uranium should be avoided if at all possible," he said, because the material could fall into the hands of terrorists or rogue governments. Highly enriched uranium, he explained, is easy to make into nuclear explosive devices.