Managing the Nuclear Fuel Cycle: Policy
Implications of Expanding Global Access to
Nuclear Power
Mary Beth Nikitin, Coordinator
Analyst in Nonproliferation
Anthony Andrews
Specialist in Energy and Energy Infrastructure Policy
Mark Holt
Specialist in Energy Policy
March 5, 2010
Congressional Research Service
7-5700
www.crs.gov
RL34234
CRS Report for Congress
P
repared for Members and Committees of Congress

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Managing the Nuclear Fuel Cycle

Summary
After several decades of widespread stagnation, nuclear power is attracting renewed interest. New
license applications for 30 reactors have been announced in the United States, and another 160
are under construction or planned globally. In the United States, interest appears driven, in part,
by tax credits, loan guarantees, and other incentives in the 2005 Energy Policy Act, as well as by
potential greenhouse gas controls that may increase the cost of fossil fuels. Moreover, the U.S.
Department of Energy is spending several hundred million dollars per year to develop the next
generation of nuclear power technology.
Expanding global access to nuclear power, nevertheless, has the potential to lead to the spread of
nuclear technology that could be used for nuclear weapons. Despite 30 years of effort to limit
access to uranium enrichment, several undeterred states pursued clandestine nuclear programs,
the A.Q. Khan black market network’s sales to Iran and North Korea representing the most
egregious examples. Concern over the spread of enrichment and reprocessing technologies,
combined with a growing consensus that the world must seek alternatives to dwindling and
polluting fossil fuels, may be giving way to optimism that advanced nuclear technologies may
offer proliferation resistance.
Proposals offering countries access to nuclear power and thus the fuel cycle have ranged from a
formal commitment by these countries to forswear sensitive enrichment and reprocessing
technology, to a de facto approach in which a state would not operate fuel cycle facilities but
make no explicit commitment, to no restrictions at all. Countries joining the U.S.-led Global
Nuclear Energy Partnership (GNEP) signed a statement of principles that represented a shift in
U.S. policy by not requiring participants to forgo domestic fuel cycle programs. Whether
developing states will find existing proposals attractive enough to forgo what they see as their
“inalienable” right to develop nuclear technology for peaceful purposes remains to be seen.
GNEP has continued as an international forum under the Obama Administration, but the Bush
Administration’s plans for constructing nuclear fuel reprocessing and recycling facilities in the
United States have been halted. Instead, the Obama Administration is supporting fundamental
research on a variety of potential waste management technologies. Other ideas for limiting the
expansion of nuclear fuel cycle facilities include placing all enrichment and reprocessing facilities
under multinational control, developing new nuclear technologies that would not produce
weapons-usable fissile material, and developing a multinational waste management system.
Various systems of international fuel supply guarantees, multilateral uranium enrichment centers
and nuclear fuel reserves have also been proposed.
Congress will have a considerable role in at least four areas of oversight related to fuel cycle
proposals. The first is providing funding and oversight of U.S. domestic programs related to
expanding nuclear energy in the United States. The second area is policy direction and/or funding
for international measures to assure supply. A third set of policy issues may arise in the context of
implementing the international component of GNEP or related initiatives. A fourth area in which
Congress plays a key role is in the approval of nuclear cooperation agreements. Significant
interest in these issues is expected to continue in the second session of the 111th Congress.

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Contents
Introduction ................................................................................................................................ 1
Renewed Interest in Nuclear Power Expansion............................................................................ 3
Worldwide Nuclear Power Status .......................................................................................... 8
Nuclear Fuel Services Market ............................................................................................... 8
Yellowcake ................................................................................................................... 10
Conversion.................................................................................................................... 12
Enrichment ................................................................................................................... 12
Fuel Fabrication ............................................................................................................ 15
Final Stages of the Fuel Cycle ............................................................................................. 16
Waste Disposal and Energy Security.................................................................................... 17
Proposals on the Fuel Cycle ...................................................................................................... 18
Comprehensive Proposals ................................................................................................... 19
El Baradei Proposal....................................................................................................... 19
President Bush’s 2004 Proposal..................................................................................... 20
Russia’s “Global Nuclear Power Infrastructure” ............................................................ 21
Assurance of Fuel Supply: Supplier Guarantees .................................................................. 21
Six Country Concept ..................................................................................................... 21
World Nuclear Association............................................................................................ 22
Japan’s IAEA Standby Arrangements System ................................................................ 23
UK “Nuclear Fuel Assurance (NFA)” ............................................................................ 23
Assurance of Fuel Supply: Fuel Reserves ............................................................................ 23
IAEA LEU Fuel Bank ................................................................................................... 24
Russian LEU Fuel Reserve, Angarsk ............................................................................. 25
U.S. LEU Fuel Reserve: “Reliable Fuel Supply” Program ............................................. 26
Assurance of Supply: Enrichment Services.......................................................................... 27
International Uranium Enrichment Center (IUEC), Angarsk, Russia .............................. 27
Germany’s Multilateral Enrichment Sanctuary Project (MESP) ..................................... 28
Back-End Fuel Cycle Proposals .......................................................................................... 28
Global Nuclear Energy Partnership (GNEP) .................................................................. 28
Supply-Side approaches ...................................................................................................... 32
Discussions in the Nuclear Suppliers Group (NSG) ....................................................... 32
Group of Eight Nations (G-8)........................................................................................ 33
Comparison of Proposals........................................................................................................... 34
Prospects for Implementing Fuel Assurance Mechanisms .......................................................... 37
Issues for Congress ................................................................................................................... 38

Figures
Figure 1. The Conceptual Nuclear Fuel Cycle.............................................................................. 9
Figure 2. World Wide Nuclear Power Plants Operating, Under Construction, and Planned ......... 40

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Tables
Table 1. Announced Nuclear Plant License Applications.............................................................. 6
Table 2. Commercial UF6 Conversion Facilities ........................................................................ 12
Table 3. Operating Commercial Uranium Enrichment Facilities................................................. 13
Table 4. Comparison of Major Proposals on Nuclear Fuel Services and Supply
Assurances............................................................................................................................. 35

Contacts
Author Contact Information ...................................................................................................... 41
Acknowledgments .................................................................................................................... 41

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Introduction
Renewed interest in expanding the role of nuclear power in meeting world energy demand has
also led to increased concerns about limiting the spread of nuclear weapons-relevant technology.
Most of this concern focuses on the nuclear fuel cycle, which includes facilities that can be used
to make fuel for nuclear reactors or materials for weapons.
After languishing for several decades, nuclear power in the United States appears poised for new
growth, with license applications announced for up to 30 new commercial reactors. Two new U.S.
uranium enrichment plants are currently under development in anticipation of an increased
demand for nuclear fuel. However, no U.S. facilities are currently planned for reprocessing spent
nuclear fuel—the separation of uranium and plutonium to make new fuel. Other countries provide
commercial reprocessing services and, with several notable exceptions, have kept their
commercial and weapons fuel cycles separate.
To reduce the likelihood that nuclear fuel cycle facilities could be used for weapons programs,
several proposals have been made in recent years to discourage additional countries from
developing uranium enrichment and reprocessing capability. Because a major justification for
such facilities is to ensure fuel supplies for a nation’s nuclear power plants, proposals to
discourage fuel cycle facilities have focused on various alternative ways to guarantee supplies of
nuclear fuel. These ideas have ranged from guaranteed access to foreign fuel cycle facilities to the
establishment of nuclear fuel stockpiles, or “banks,” under international control.
Under the Bush Administration, the U.S. Department of Energy (DOE) considered nuclear power
to be “the only proven technology that can provide abundant supplies of base-load electricity
reliably and without air pollution or emissions of greenhouse gases.”1 The National Energy Policy
Development Group recommended in 2001 that President Bush “support the expansion of nuclear
energy in the United States as a major component of our national energy policy.” About the same
time, DOE created the Generation IV International Forum to collaborate with 10 other states in
investigating “innovative nuclear energy system concepts for meeting future energy challenges.”
Congress has since appropriated hundreds of millions of dollars to support several programs
related to the development of new nuclear power plants in the United States, including the
Advanced Fuel Cycle Initiative and Generation IV. In passing the Energy Policy Act of 2005,
Congress created new federal incentives for nuclear power plant construction. In February 2006,
the Secretary of Energy announced the Global Nuclear Energy Partnership (GNEP) as part of
President Bush’s Advanced Energy Initiative.
GNEP has continued as an international forum under the Obama Administration, but the Bush
Administration’s plans for constructing nuclear fuel reprocessing and recycling facilities in the
United States have been halted. Instead, the Obama Administration is supporting fundamental
research on a variety of potential waste management technologies.
Concerns about the nuclear fuel cycle have been increased by several high-profile cases of
subversion of ostensibly commercial uranium enrichment and reprocessing technologies for
military purposes. In 2003 and 2004, it became evident that Pakistani nuclear scientist A.Q. Khan
had sold sensitive technology and equipment related to uranium enrichment—a process that can

1 U.S. Department of Energy, “The Global Nuclear Energy Partnership,” Factsheet 06-GA50506-01
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be used to make fuel for nuclear power and research reactors, or to make fissile material for
nuclear weapons—to states such as Libya, Iran, and North Korea. Although Pakistan’s leaders
maintain they did not acquiesce in or abet Khan’s activities, Pakistan remains outside the Nuclear
Nonproliferation Treaty (NPT) and the Nuclear Suppliers Group (NSG). Iran has been a direct
recipient of Pakistani enrichment technology.2
The Board of Governors of the International Atomic Energy Agency (IAEA) found in 2005 that
Iran’s breach of its safeguards obligations constituted noncompliance with its safeguards
agreement, and referred the case to the United Nations Security Council in February 2006.
Despite repeated calls by the U.N. Security Council for Iran to halt enrichment and reprocessing-
related activities, and imposition of sanctions, Iran continues to develop its enrichment
capability.3 Iran insists on its inalienable right to develop peaceful uses of nuclear energy,
pursuant to Article IV of the NPT. Interpretations of this right have varied over time.4 IAEA
Director General Mohamed El Baradei has not disputed this inalienable right and, by and large,
neither have U.S. government officials. However, the case of Iran raises perhaps the most critical
question in this decade for strengthening the nuclear nonproliferation regime: How can access to
sensitive fuel cycle activities (which could be used to produce fissile material for weapons) be
circumscribed without further alienating non-nuclear-weapon states in the NPT?
Leaders of the international nuclear nonproliferation regime have suggested ways of reining in
the diffusion of such inherently dual-use technology, primarily through the creation of incentives
not to enrich uranium or separate plutonium. The international community is in the process of
evaluating those proposals and may decide upon a mix of approaches.
Most of the proposals are not new, but rather variations of those developed 30 or more years ago.5
In the 1970s, efforts to limit or manage the spread of nuclear fuel cycle technologies for
nonproliferation reasons foundered for technical and political reasons, but many states were
nevertheless deterred from enrichment and reprocessing simply by the high technical and
financial costs of developing sensitive nuclear technologies, as well as by a slump in the nuclear
market. Several developments may now make efforts to limit access to the nuclear fuel cycle
more feasible and timely: a growing concern about the spread of enrichment technology
(specifically via the A.Q. Khan black market network, as well as Iran’s efforts); a growing
consensus that the world must seek alternatives to polluting fossil fuels; and optimism about new
nuclear technologies that may offer more proliferation-resistant systems. Central to the debate is
developing proposals attractive enough to compel states to forgo what they see as their
inalienable right to develop nuclear technology for peaceful purposes.

2 See also CRS Report RL34248, Pakistan’s Nuclear Weapons: Proliferation and Security Issues, by Paul K. Kerr and
Mary Beth Nikitin.
3 “Security Council, in Presidential Statement, Underlines Importance of Iran’s Re-Establishing Full, Sustained
Suspension of Uranium Enrichment Activities,” March 29, 2006, at http://www.un.org/News/Press/docs/2006/
sc8679.doc.htm, and U.N. Security Council Resolution 1737 (2006) http://www.un.org/News/Press/docs//2006/
sc8928.doc.htm.
4 Most observers point to the obligation in Article IV that such pursuit must be consistent with a state’s obligations
under Articles II and II of the treaty. Article II refers to a state’s obligation to foreswear nuclear weapons development
and Article III refers to a state’s obligation to undertake safeguards “for the exclusive purpose of verification of the
fulfillment of its obligations” under the treaty.
5 See timeline of fuel cycle proposals, available at http://www.iaea.org/NewsCenter/Focus/FuelCycle/key_events.shtml.
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At the same time, there is debate on how to improve the IAEA safeguards system and its means
of detecting diversion of nuclear material to a weapons program in the face of a worldwide
nuclear power expansion.
This report is intended to provide Members and congressional staff with the background needed
to understand the current debate over proposed strategies to redesign the global nuclear fuel
cycle. It begins with a look at the motivating factors underlying the resurgent interest in nuclear
power, the nuclear power industry’s current state of affairs, and the interdependence of the
various stages of the nuclear fuel cycle. A number of proposals have been offered that are aimed
at limiting direct participation in the global nuclear fuel industry by assuring access to nuclear
fuel supplies:
Year Agency
Proposal
2003
IAEA
Would establish international y owned fuel cycle centers.
2004
United States
Would keep uranium enrichment and plutonium reprocessing in the hands of
current technology holders, while providing fuel guarantees to those who abandon
the option.
2005
IAEA
Explored a variety of options to address front end and back end problems and their
attractiveness to different groups of states, and surveyed past proposals.
2005
Russian Federation
Would establish international fuel cycle centers.
2006
United States
U.S. Global Nuclear Energy Partnership original y proposed that certain recognized
fuel cycle countries would ensure reliable supply to the rest of the world in return
for commitments to renounce enrichment and reprocessing; also proposed
solutions for recycling of spent fuel and storage issues.
2006
U.S., U.K., Russia,
Six Country Concept would establish reliable access to nuclear fuel.
France, Germany, and
Netherlands
2006 Nuclear
Threat
Promised $50 million for an international nuclear fuel bank under IAEA supervision
Initiative
provided another $100 million donated within two years and IAEA organizes
implementation.
2007
United States
Revised GNEP would promote an international nuclear fuel supply framework
(without explicit renunciation of fuel technology) to reduce proliferation risk and a
closed fuel cycle featuring recycling techniques that do not separate plutonium.
Renewed Interest in Nuclear Power Expansion6
Commercializing nuclear power has proved far more challenging than first envisioned. World
nuclear capacity had reached about 200 gigawatts during the 1980s, but as confidence in nuclear
power safety declined after accidents at Three Mile Island and Chernobyl, the rate of further
capacity additions fell more than 75% during the following decade.7 Today, nuclear power plants
have a total capacity of about 373 gigawatts—providing about 15% of the world’s electricity
generation. Though a significant amount, it is far less than that projected 50 years ago. High
construction and operating costs, safety problems and accidents, and controversy over nuclear
waste disposal slowed the worldwide growth of nuclear power.

6 This section was prepared by Mark Holt, Specialist in Energy Policy, and Anthony Andrews, Specialist in Energy
Policy, in the Resources, Science, and Industry Division, Congressional Research Service.
7 International Energy Agency, World Energy Outlook 2006, p. 349.
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With uranium once considered a scarce resource, reprocessing and fast breeder technology was
promised as a means of extending the energy remaining in spent nuclear fuel. In the 1980s, as the
economics of advanced nuclear technology became questionable with declining fossil fuel prices
and increased uranium supplies, national programs to develop fast breeder reactors came nearly to
a standstill. Moreover, the plutonium fuel produced by breeder reactors drew strong opposition
over its potential use in nuclear weapons.
In the past few years, however, the original promises of nuclear power have attracted renewed
interest around the world. What has changed?
Volatile prices for oil and natural gas are a fundamental factor in national energy policymaking.
Average world prices for a barrel of oil rose from below $10 at the beginning of 1999 to above
$130 in mid-2008. They then declined to around $50 in early 2009 and rose to around $75 by
early 2010.8 U.S. natural gas prices have followed a similar track, along with prices of U.S.
exports and imports.9 As a result, national governments are searching for alternative energy
sources, often including nuclear power. However, only 20% of the world’s electricity generation
is fueled by natural gas and 7% by oil (the majority of the world’s electricity is generated from
coal),10 so nuclear power’s ability to directly substitute for oil and gas is limited, at least in the
near term.
For nuclear power to have a significant impact on oil demand, long-term changes in energy-use
patterns would have to take place, particularly in the transportation sector. One possibility is that
nuclear power plants could be used to produce hydrogen, which could provide energy for fuel-
cell vehicles. The U.S. Department of Energy has been developing processes that could produce
hydrogen in a high-temperature reactor, an effort that has continued under the Obama
Administration. Another possibility is the commercialization of all-electric or plug-in hybrid
vehicles that could be recharged with nuclear-generated electricity. But even if such technologies
were to be successfully developed, it would take many years for the new vehicles and, in the case
of hydrogen, fuel delivery infrastructure to have a significant energy impact.
Government policies aside, volatile oil and gas prices are heightening interest in nuclear power by
improving current projections of nuclear power’s economic viability. In the United States, natural
gas has been the overwhelming fuel of choice for new electrical generation capacity since the
early 1990s, although coal-fired plants still generate nearly half of U.S. electricity (and 40% of
world electricity11). Because fuel costs constitute a relatively small percentage of nuclear power
costs, higher natural gas prices could make new nuclear power plants economically competitive,
despite higher uranium prices.12
Growing worldwide concern about greenhouse gas emissions, particularly carbon dioxide from
fossil fuels, has renewed attention to nuclear power’s lack of direct CO2 emissions. President
Obama’s 2010 State of the Union address explicitly included “a new generation of safe, clean
nuclear plants” as part of the Administration’s energy and environmental strategy. Policies to
reduce greenhouse gas (GHG) emissionsmay also indirectly encourage nuclear power expansion

8 Energy Information Administration, at http://tonto.eia.doe.gov/dnav/pet/hist/wtotworldw.htm.
9 EIA, http://www.eia.doe.gov/emeu/international/gasprice.html
10 World Energy Outlook, op. cit., pp. 139, 141.
11 World Energy Outlook, op. cit., p. 140.
12 CRS Report RL33442, Nuclear Power: Outlook for New U.S. Reactors, by Larry Parker and Mark Holt.
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by increasing the cost of electricity from new fossil-fuel-fired power plants above that of nuclear
power plants.
Some support for using nuclear power to reduce GHG emissions has emerged in academic and
think-tank circles. As stated by the Massachusetts Institute of Technology in its major study The
Future of Nuclear Power: “Our position is that the prospect of global climate change from
greenhouse gas emissions and the adverse consequences that flow from these emissions is the
principal justification for government support of the nuclear energy option.”13 But environmental
groups generally contend that the nuclear accident, waste, and weapons proliferation risks posed
by nuclear power outweigh any GHG benefits. The large construction expenditures required by
commercial reactors, they contend, would yield greater GHG reductions if used for energy
efficiency and renewable generation. Finally, they note that nuclear power, while not directly
emitting greenhouse gases, produces indirect emissions through the nuclear fuel cycle and during
plant construction.
Another key factor behind the renewed interest in nuclear power is the improved performance of
existing reactors. U.S. commercial reactors generated electricity at an average of 90% of their
total capacity in 2008,14 after averaging around 75% in the mid-1990s and around 65% in the
mid-1980s. Worldwide performance has seen similar improvement.15 The improved operation of
nuclear power plants has helped drive down the cost of nuclear-generated electricity. Average
U.S. reactor operations and maintenance costs (including fuel but excluding capital costs)
dropped steadily from a high of about 3.5 cents/kilowatt-hour (kwh) in 1987 to below 2
cents/kwh in 2001 (in 2001 dollars).16 U.S. nuclear plant operating costs during 2006-2008
averaged about 1.9 cents/kwh.17
Nuclear interest has been further increased in the United States by incentives in the Energy Policy
Act of 2005 (P.L. 109-58). The law provides a nuclear energy production tax credit for up to
6,000 megawatts of new nuclear capacity, compensation for regulatory delays for the first six new
reactors, and federal loan guarantees for nuclear power and other advanced energy technologies.
Under certain baseline assumptions, the tax credits and loan guarantees could determine whether
new U.S. nuclear plants would be economically viable.18
U.S. electric utilities and other companies during the past two years have announced plans to
submit license applications to the Nuclear Regulatory Commission (NRC) for about 30 new
commercial reactors (see Table 1.) NRC has issued “early site permits”—which resolve site-
related issues for possible future reactor construction—at locations in Illinois, Mississippi,
Virginia, and Georgia. The Tennessee Valley Authority in 2007 restarted construction of its long-
delayed Watts Bar 2 reactor, which had been ordered in 1970. But despite that flurry of activity,
no new reactor orders have been formally placed. No reactors have been ordered in the United
States since 1978, and all orders after 1973 were subsequently cancelled.

13 Interdisciplinary MIT Study, The Future of Nuclear Power, Massachusetts Institute of Technology, 2003, p. 79.
14 “World Nuclear Performance in 2008 Close to Output in 2007,” Nucleonics Week, March 5, 2009, p. 1.
15 Nuclear Engineering International, November 2005, p. 37.
16 Uranium Information Centre, The Economics of Nuclear Power, Briefing Paper 8, January 2006, p. 3.
17 “U.S. Utility Operating Costs, 2008,” Nucleonics Week, December 24, 2009.
18 CRS Report RL34746, Power Plants: Characteristics and Costs, by Stan Mark Kaplan.
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The recent nuclear plant license applicants have not committed to building new reactors if the
licenses are approved, but the sponsors of four of the proposed nuclear projects have signed
preliminary engineering, procurement, and construction (EPC) contracts. President Obama
announced a conditional loan guarantee on February 16, 2010, for two proposed reactors at
Georgia’s Vogtle nuclear power plant, which had previously received an NRC early site permit.
On the other hand, Entergy suspended further license review of its planned GE ESBWR reactors
at River Bend, LA, and Grand Gulf, MS, and Dominion is seeking other potential vendors for its
planned ESBWR at North Anna, VA, although it is continuing with the licensing process.
AmerenUE has suspended construction plans for a new reactor at its Callaway plant, while also
continuing with NRC licensing.
Table 1. Announced Nuclear Plant License Applications
Announced
Planned
Applicant Site Application Reactor
Type
Units
Status
Alternate Energy
Hammett (ID)
2009
Areva EPR
1

AmerenUE
Cal away (MO)
Submitted 7/24/08 Areva EPR
1
Construction plans
suspended 4/23/09;
NRC license review
suspended 6/23/09
Amarillo Power
Near Amarillo
2009 Areva
EPR
2
(TX)
Dominion
North Anna (VA) Submitted
GE ESBWR
1
Other reactor
11/27/07
vendors being
considered 1/9/09
DTE Energy
Fermi (MI)
Submitted 9/18/08
GE ESBWR
1

Duke Energy
Cherokee (SC)
Submitted
Westing.house
2
12/13/07
AP1000
Entergy
River Bend (LA)
Submitted 9/25/08
Not specified
1
Licensing suspended
1/9/09
Luminant Power
Comanche Peak
Submitted 9/19/08
Mitsubishi US-
2
(formerly TXU)
(TX)
APWR
FPL
Turkey Point (FL) Submitted 6/30/09
Westinghouse
2
AP1000
NRG Energy
South Texas
Submitted 9/20/07
GE ABWR
2
EPC contract signed
Project
with Toshiba 2/12/09
NuStart
Grand Gulf (MS), Submitted 2/27/08
Not specified
1
Licensing suspended
Entergy
Jan. 9, 2009
Bellefonte (AL),
Submitted
Westinghouse
2 NuStart
announced
TVA
10/30/07
AP1000
shift of lead unit to
Vogtle 4/30/09
PPL
Bel Bend (PA)
Submitted
Areva EPR
1

10/10/08
Progress Energy
Harris (NC)
Submitted 2/19/08
Westinghouse
2 EPC
contract
signed
AP1000
1/5/09
Levy County (FL) Submitted 7/30/08 Westinghouse
2
AP1000
SCE&G
Summer (SC)
Submitted 3/31/08
Westinghouse
2
EPC contract signed
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Announced
Planned
Applicant
Site
Application
Reactor Type Units
Status
AP1000 5/27/08
Southern
Vogtle (GA)
Submitted 3/31/08
Westinghouse
2 EPC
contract
signed
AP1000
4/8/08; Vogtle to be
NuStart lead unit;
NRC granted early
site permit 8/26/09;
conditional DOE loan
guarantee announced
2/16/10
UniStar
Calvert Cliffs
Submitted 7/13/07
Areva EPR
1

(Constel ation
(MD)
(Part 1), 3/13/08
Energy and EDF)
(Part 2)
Nine Mile Point
Submitted 9/30/08
Areva EPR
1
Licensing suspended
(NY)
12/1/09
Total Units



29
Sources: NRC, Nucleonics Week, Nuclear News, Nuclear Energy Institute, company news releases.
New reactors are on order elsewhere in the world, and several non-nuclear countries have
announced that they are considering the nuclear option. As Figure 2 shows, the vast majority of
reactors currently under construction are in Asia, with only a handful in the rest of the world.
Despite the recent positive developments for nuclear power, much uncertainty still remains about
its prospects. Construction costs for new nuclear power plants—which were probably the
dominant factor in halting the first round of nuclear expansion—continue to loom as a potential
insurmountable obstacle to renewed nuclear power growth. Average U.S. nuclear plant
construction costs more than doubled from 1971 to 1978, according to the Office of Technology
Assessment, and nearly doubled again by the mid-1980s, not including interest accrued during
construction.19 Including interest, many U.S. nuclear plants proved to be grossly uneconomic,
often with capital costs totaling more than $3,000 per kilowatt of capacity in 2000 dollars,20 and
relying on the utility regulatory system to recover their costs.
Major reactor vendors, such as General Electric and Westinghouse, have contended that new
designs and construction methods will cut costs of future reactors considerably. However, recent
projected costs for new reactors average $3,900 per kilowatt, excluding interest, making them
potentially more expensive than the previous generation of reactors.21 Capital costs of competing
power generation technologies, particularly coal, have also risen in recent years.
New U.S. nuclear plants may be helped by a new NRC licensing process that is intended to avoid
some of the regulatory problems that delayed completion of some reactors in the past. Current
reactor applications listed in Table 1 are being evaluated by NRC under the new system, but no
licenses under the new system have yet been issued.

19 Office of Technology Assessment, Nuclear Power in an Age of Uncertainty, OTA-E-216, February 1984, p. 59.
20 Jan Willem Storm van Leeuwen and Philip Smith, Nuclear Energy, the Energy Balance, July 31, 2005, Chapter 3,
p. 2.
21 CRS Report RL34746, Power Plants: Characteristics and Costs, by Stan Mark Kaplan, Table B-3.
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Many other important factors in the future of nuclear power are similarly uncertain. Prices of
competing fuels, particularly natural gas, have risen recently but have been volatile in the recent
past. If fossil fuel prices become depressed for a sustained period, as in the late 1980s through the
1990s, support for nuclear power as an alternative energy source could again be undermined.
Major accidents, such as Three Mile Island and Chernobyl, would almost certainly diminish
public support for nuclear power. Disposal of high-level nuclear waste, which reprocessing or
recycling is intended to address, will continue to generate controversy as governments attempt to
develop permanent underground repositories—none of which are yet operating.
Worldwide Nuclear Power Status
Operating commercial nuclear reactors around the world currently total 436, with total installed
electric generating capacity of 372 gigawatts.22 More than 80% of world nuclear capacity is in
member nations of the Organization for Economic Cooperation and Development (OECD), while
slightly more than 10% is in Russia and other former nations of the Soviet bloc. The remainder,
about 5%, is in developing countries such as China and India. Nuclear power supplied 27.3% of
electricity generated in OECD countries and 5.2% in non-OECD countries in 2006.23
Unlike the United States, where only one long-deferred reactor is currently under construction,
much of the rest of the world has continued building nuclear plants, although at a modest pace.
Since 1996, about 40 commercial reactors have started up, an average of about four per year.
About 30 reactors were permanently closed during that period, although many of them were
smaller than the newly started reactors.24
Current reactor construction is dominated by Asia, as shown by Figure 2. Of the 53 reactors now
under construction around the world, 35 are in Asia, while 13 are in Europe, four in the Americas,
and one in the Middle East (Iran). Planned or proposed nuclear power plants show a similar trend.
Of the 469 planned or proposed reactors in Figure 2, well more than half (254) are in Asia, while
121 are in Europe, 47 in the Americas, and 20 in the Middle East. South Africa has proposed up
to 27 new reactors.
The renewed worldwide interest in nuclear power has led to a possible expansion of the
technology to currently non-nuclear nations. Nine of the countries that are currently building or
formally planning reactor projects—Belarus, Egypt, Indonesia, Iran, Kazakhstan, Thailand,
Turkey, the United Arab Emirates, and Vietnam—have never operated nuclear power plants.
Several other non-nuclear power countries have proposed building power reactors, including
Bangladesh, Israel, and Poland.25
Nuclear Fuel Services Market
The possible upsurge in worldwide nuclear power plant construction has focused new attention
on nuclear fuel production. Chronic worldwide overcapacity in all phases of the nuclear fuel
cycle appears to be ending, evidenced by higher prices for uranium and enrichment services in

22 World Nuclear Association, http://www.world-nuclear.org/info/reactors.html.
23 International Energy Agency, World Energy Outlook 2008, pp. 508, 522.
24 World Nuclear Association Reactor Database, at http://www.world-nuclear.org/reference/reactorsdb_index.php.
25 World Nuclear Association, http://www.world-nuclear.org/info/reactors.html.
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recent years. The tightening supplies have sparked plans for new fuel cycle facilities around the
world and also renewed concerns about controls over the spread of nuclear fuel technology.
The nuclear fuel cycle begins with mining uranium ore, and upgrading it to yellowcake. Because
naturally occurring uranium lacks sufficient fissile 235U to make fuel for commercial light-water
reactors, the concentration of 235U must be increased several times above its natural level of 0.7%
in a uranium enrichment plant. A nuclear power plant operator or utility typically purchases
yellowcake and contracts for its conversion to uranium hexafluoride, then enrichment, and finally
fabrication into fuel elements (Figure 1). Commercial enrichment services are available in the
United States, Europe, Russia, and Japan. Fuel fabrication services are even more widely
available. While waiting for conversion, the yellowcake remains a fungible commodity that can
be consigned by the reactor operator to any conversion plant and the product sent to any
enrichment plant (within trade restrictions between countries).26 The sale of yellowcake had been
informal, until recently when it moved to a more formal commodity transaction basis. The
various stages of the nuclear fuel cycle are described below.
Figure 1. The Conceptual Nuclear Fuel Cycle




26 IAEA, Country Nuclear Fuel Cycle Profiles, 2nd ed., 2005.
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Yellowcake
Conventionally mined uranium ore (open-pit and underground) is milled, then acid-leached to
extract uranium oxide. The extract is then filtered, dried, and packaged as uranium yellowcake for
shipment to a conversion plant. In situ leaching avoids the mechanical mining steps by directly
injecting solvents into the ore body through wells drilled from the surface. The dissolved uranium
is pumped to the surface, where the uranium oxide is similarly processed into yellowcake for
shipment.
U.S. uranium reserves are located in Arizona, Colorado, Nebraska, New Mexico, Texas, Utah,
Washington, and Wyoming. According to the Energy Information Administration (EIA), 10
underground mines and six in-situ mines were operating in the United States in 2008, four more
than the previous year. EIA reports 53 million pounds of U3O8 were purchased for U.S. nuclear
power reactors in 2008, of which 14% was U.S. origin.27 The balance was made up in part by
imports and downblended highly enriched uranium (HEU), as discussed further below.
A typical 1,000 MW light water reactor fuel load may require converting and enriching nearly
800,000 lbs of uranium “yellowcake” (U3O8). Approximately 51,800 metric tons (114 million lbs)
of yellowcake was produced worldwide in 2008. Annual worldwide uranium demand is estimated
to be about 78,500 metric tons of U3O8. Most of the difference between annual production and
demand is covered by sales from former military uranium stockpiles.28 The International Atomic
Energy Agency (IAEA) projects that the demand for uranium will begin to exceed supply after
2010, and by as much as 10,000 metric tons by 2020.29 IAEA believes that the shortfall could be
made up by downblending more HEU released from weapons stockpiles.
Unlike gold or oil commodities, uranium yellowcake had not been offered through a formal
market exchange until quite recently. Uranium price indicators had been developed by a small
number of private business organizations, such as the World Nuclear Fuel Market (WNFM) and
the Ux Consulting Company (UxC), that independently monitor uranium market activities,
including offers, bids, and transactions. The price indicators are owned by and proprietary to the
businesses that has developed them.
NAC International (now a USEC Inc. subsidiary) established the World Nuclear Fuel Market
(WNFM) to provide uranium price information in 1974. The WNFM membership comprises 79
companies representing 18 countries.30 The WNFM provides the uranium price information
system (UPIS) for both Western and Russian yellowcake contract prices.31 A quarterly UPIS
report presents aggregated information based on actual uranium contract price data provided by
the 19 UPIS subscribers.32

27 U.S. DOE Energy Information Administration, http://www.eia.doe.gov/fuelnuclear.html.
28 World Nuclear Association, http://www.world-nuclear.org/info/inf22.html.
29 Note: Metric tons is the unit of measurement for uranium fuel. One metric ton is approximately 2,200 pounds.
International Atomic Energy Agency, Management of high enriched uranium for peaceful purposes: Status and trends
(IAEA-TECDOC-1452), June 2005.
30 World Nuclear Fuel Market website, at http://www.wnfm.com/public/default.htm.
31 Information on the Uranium Price Information System is available through NAC International at (678) 328-1211 or
e-mail at gleamon@nacintl.com.
32 Nine U.S. companies, 10 non-U.S. companies, 12 utilities, four producers, two traders, and one supplier.
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The UxC pricing index has been utilized by major nuclear fuel market participants, the federal
government, and private business. The UxC yellowcake price was one of only two weekly
uranium price indicators that were accepted by the uranium industry, as witnessed by their
inclusion in most “market price” sales contracts; that is, sales contracts with pricing provisions
that call for the future uranium delivery price to be equal to the market price at or around the time
of delivery.
In April 2007, the New York Mercantile Exchange (NYMEX) announced that it had partnered
with the UxC to provide financially settled on- and off-exchange traded uranium futures
contracts.33 A NYMEX uranium futures contract’s final settlement price is based on the UxC
pricing index for yellowcake. Uranium futures contracts are available for trading on Chicago
Mercantile Exchange Globex, and for clearing on NYMEX ClearPort.34 The size of each contract
is 250 lbs, and prices are quoted in U.S. currency. The final settlement price is the spot month-end
price published by UxC. A standard contract for trading physical uranium is currently under
development.35
Uranium is typically mined outside the countries that use it. Nearly 60% of the world’s
production in 2008 came from Canada, Kazakhstan, and Australia, while more than half of the
world’s commercial reactors are in the United States, France, and Japan.36 But security of
uranium supply, while always an underlying policy concern, has rarely been a real problem,
because production vastly outstripped demand during the first three decades of the commercial
nuclear power era—until about the mid-1980s.37 As a result, a huge overhang of military and
civilian stockpiles of uranium helped maintain a worldwide buyers’ market.
Since the mid-1980s, however, world nuclear fuel requirements continued to rise while uranium
exploration and production fell. By 2000, as U.S. spot-market prices hit bottom (at about $7 per
pound), the western world’s nuclear fuel requirements were twice the level of production. At that
point, commercial stockpiles had been drawn down enough to begin putting pressure on U.S. spot
prices, which rose slightly through 2003 and then dramatically (above $75 per pound) in 2007,
before falling back to the $50 range in 2009 and early 2010. The spot price represents about 20%
of the market but provides an indicator of future contracts, which usually run three to seven
years.38
Despite low worldwide exploration expenditures since the mid-1980s caused by oversupply and
low prices, estimated uranium resources have trended upward over the long term. As a result,
according to the OECD Nuclear Energy Agency (NEA), known conventional resources have
averaged 45 years of supply during the past 20 years, despite steadily increasing annual world
uranium requirements, currently about 70,000 metric tons. “Taken together the lessons of the past

33 New York Mercantile Exchange, at http://www.nymex.com/UX_pre_agree.aspx.
34 CME Globex is a global electronic trading platform for trading futures products. NYMEX ClearPort Clearing
provides traders an interface where transactions are posted, margin requirements are calculated, and the transactions are
processed by the clearinghouse.
35 David Stellfox, “Industry Moves Closer to Having Standardized Uranium Contract,” NuclearFuel, February 9, 2009.
36 World Nuclear Association, World Uranium Mining, http://www.world-nuclear.org/info/inf23.html.
37 World Nuclear Association, Uranium Markets, March 2007, at http://www.world-nuclear.org/info/inf22.html
38 Ibid.
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provide confidence that uranium resources will remain adequate to meet projected demands even
were requirements to significantly increase,” according to NEA.39
Conversion
In the conversion process, the yellowcake is purified, chemically reacted with hydrofluoric acid
to form uranium hexafluoride (UF6) gas, and then transferred into cylinders, where it cools and
condenses to a solid. Uranium hexafluoride contains two isotopes of uranium—heavier 238U and
lighter fissionable 235U, which makes up ~0.7% of uranium by weight. The annual U.S. demand
for yellowcake conversion is approximately 22,000 metric tons uranium (MTU). After
conversion, the uranium hexaflouride is ready for enrichment.
Five commercial conversion companies operate worldwide—in the United States, Canada,
France, the United Kingdom, and Russia (Table 2). ConverDyn in Metropolis, IL, the only
conversion plant operating in the United States, produces 14,000 MTU annually.
Table 2. Commercial UF6 Conversion Facilities
(metric tons uranium/year)
Country Company
Facility
Capacity
Canada Cameco
Port
Hope
12,500
China CNCC
Lanzhou
1,500
France Comurhex Peirrelatte
1

14,000
Peirrelatte 2
350
Russian
Minatom Angarsk

20,000
Federation
Tomsk
10,000
U.K.
BNFL
Springfields Line 4
6,000
U.S. Converdyn
Metropolis
14,000
Source: IAEA Country Nuclear Fuel Cycle Profiles, 2nd ed.
Enrichment
For use as fuel in light water reactors, uranium must be enriched in the isotope 235U above its
natural concentration of 0.7%. By heating UF6 to turn it into a gas, the enrichment process can
take advantage of the slight difference in atomic mass between 235U and 238U. The typical
enrichment process requires about 10 lbs of uranium U3O8 to produce 1 lb of low-enriched
uranium hexafluoride (UF6) product, with a 235U concentration of 3-5%.
About 90% of the world’s reactors (all except heavy water reactors) require enriched uranium
fuel. More than 90% of those uranium enrichment requirements are supplied by facilities in the
United States (including diluted weapons material), Russia, France, Great Britain, Germany, and
the Netherlands. The remainder comes from Japan, China, and Brazil. Thirty-one countries
currently operate commercial nuclear power plants. Most countries, therefore, rely on enrichment
services outside their borders. An enrichment plant to serve a country with only a few reactors

39 Nuclear Energy Agency, op. cit., p. 13.
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would appear economically nonviable, given that a single large enrichment plant can supply up to
25% of the world market (currently estimated at 45 million separative work units, or SWUs).40
Commercial uranium enrichment employs either gaseous diffusion or high speed centrifuges. In
gaseous diffusion, a thin semiporous barrier holds back more of the heavier 238U than the lighter
235U. A series of cascading diffusers successively increases the 235U concentration. Centrifuge
enrichment spins the uranium hexafluoride gas at ultra-high speeds to separate the lighter 235U. A
series of cascading centrifuges successively enriches the gas in 235U. Final enrichment will vary
depending on the requirements of a specific reactor, normally up to about 5%.
Gaseous diffusion technology was first developed in the United States and later adopted by
France and Britain. It is more energy-intensive than the newer centrifuge enrichment process.
However, the legacy gaseous diffusion plants currently operating in the United States and France
have higher capacities than the newer centrifuge enrichment plants.
Uranium enrichment services are sold in kilograms (kg) or metric tons (1,000 kg) separative work
units (SWU), which is a measure of the amount of work needed (in the thermodynamic sense) to
enhance the 235U concentration. The number of SWUs required to produce fuel depends on
several factors: the quantity of fuel required, level of enrichment required, the initial enrichment
of the feed (0.711% in the case of natural uranium), and the “tails assay,” which is the 235U
concentration remaining in the depleted processing stream. For example, to produce 1 kg of
uranium enriched to 3% 235U, at a tails assay of 0.2 235U, 4.3 kg-SWU are used to process 5.5 kg
of natural uranium.41 The price of yellowcake is an important factor in enrichment demand. Under
high price conditions, it may be economically preferable to expend more SWUs enriching a lesser
quantity of yellowcake, thus leaving a lower tails assay.
Nuclear plant operators can buy uranium yellowcake and have it converted and enriched, or buy
low-enriched uranium (LEU). Commercial enrichment services are offered by a number of
international sources (Table 3), with worldwide annual capacity of 47,855 metric tons SWU. In
2008, U.S. nuclear plant operators contracted five companies worldwide to provide 12.6 million
kilogram SWU (12,600 metric tons SWU, of which 15% was provided in the United States.42
Table 3. Operating Commercial Uranium Enrichment Facilities
(metric tons SWU/year)
Facility Name
Country
Process
Capacity
Paducah Gaseous Diffusion
United States
Gaseous Diffusion
11,300
Eurodif (Georges Besse)
France
Gaseous Diffusion
10,800
Ekaterinburg (Sverdlovsk-44)
Russian Federation
Centrifuge
7,000
Siberian Chemical Combine (Seversk)
Russian Federation
Centrifuge (downblended)
4,000
Urenco Capenhurst
United Kingdom
Centrifuge
4,000

40 Ruthane Neely and Jeff Combs, “Diffusion Fades Away,” Nuclear Engineering International, September 2006,
p. 24.
41 Thomas L. Neff, The International Uranium Market, Ballinger Publishing Co., 1984.
42 EIA, Purchases of Enrichment Services by Owners and Operators of U.S. Civilian Nuclear Power Reactors by Origin
Country and Year, http://www.eia.doe.gov/cneaf/nuclear/umar/table16.html.
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Facility Name
Country
Process
Capacity
Krasnoyarsk Russian
Federation
Centrifuge
3,000
Urenco Nederland
Netherlands
Centrifuge
2,900
Urenco Deutschland
Germany
Centrifuge
1,800
Rokkasho Uranium Enrichment Plant
Japan
Centrifuge
1,050
Angarsk Russian
Federation
Centrifuge
1,000
Lanzhou 2
China
Centrifuge
500
Shaanxi Uranium Enrichment Plant
China
Centrifuge
500
Kahuta Pakistan
Centrifuge
5
Total


47,855
Source: International Atomic Energy Agency, Nuclear Fuel Cycle Information System.
The U.S. DOE had operated gaseous diffusion enrichment plants in Oak Ridge, TN, Paducah, KY,
and Portsmouth, OH, to produce high-enriched uranium used in the nuclear weapons program.
The plants later produced low-enriched uranium for commercial nuclear power around the world,
although production at the Oak Ridge K-25 enrichment site ceased in 1985. The Energy Policy
Act of 1992 established the United States Enrichment Corporation (USEC) as a government-
owned corporation to take over DOE’s uranium enrichment services business. The corporation
was privatized as USEC Inc. in 1998. In 2001, USEC ceased uranium enrichment operations in
Portsmouth and consolidated operations in Paducah. The Paducah gaseous diffusion plant is the
only operating enrichment facility in the United States. In 2004, USEC announced plans to build
the American Centrifuge Plant on the site of the Portsmouth, OH, gaseous diffusion plant. The
new gas centrifuge enrichment plant is to have 11,500 centrifuges with an annual capacity of 3.8
million SWU.43 Construction of the plant was suspended in August 2009, with restart dependent
on DOE approval of a loan guarantee.44 USEC currently supplies approximately 51% of the U.S.
demand for enrichment services, mostly with blended-down Russian HEU, as discussed below.
Urenco, a joint Dutch, German, and British enrichment consortium, was set up in the 1970s
following the signing of the Treaty of Almelo. Urenco operates enrichment plants in Germany, the
Netherlands, and the United Kingdom to supply customers in Europe, North America, and East
Asia. Its U.S. affiliate, Louisiana Energy Services, has begun constructing the gas centrifuge
National Enrichment Facility (NEF) in New Mexico.45 NEF is expected to produce 3 million
SWUs annually when it reaches full operational capacity in 2013—meeting approximately 25%
of the current U.S. demand.46 In 2006, Urenco estimated that it provided around 23% of the world
market share in enrichment services.
Areva operates the Eurodif gaseous diffusion production plant (located on the Tricastin nuclear
site in France) to enrich uranium for some 100 nuclear reactors in France and throughout the

43 USEC to Site American Centrifuge Plant in Piketon, Ohio—Technology Expected to Be World’s Most Efficient for
Enriching Nuclear Fuel, at http://www.usec.com/v2001_02/Content/News/NewsTemplate.asp?page=/v2001_02/
Content/News/NewsFiles/01-12-04.htm.
44 USEC Inc., “USEC Provides American Centrifuge Update,” press release, November 2, 2009, http://www.usec.com/
NewsRoom/NewsReleases/USECInc/2009/2009-11-02-USEC-Provides-American-Centrifuge.htm.
45 URENCO http://www.urenco.com/fullArticle.aspx?m=1371.
46 URENCO http://www.urenco.com/fullArticle.aspx?m=1371.
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world.47 Areva provides toll conversion services and uranium yellowcake through its subsidiary
Comurhex. Areva applied to NRC at the end of 2008 for a license to build and operate a gas
centrifuge enrichment plant in Idaho.48
Under the 1993 U.S.-Russian Federation Megatons to Megawatts program, highly enriched
uranium from dismantled Russian nuclear warheads is converted into low-enriched uranium fuel
for use in commercial U.S. nuclear power plants.49 The HEU Agreement, as it is known, provides
for the purchase over 20 years of 500 metric tons highly enriched uranium downblended to
commercial grade low-enriched uranium (delivered as UF6). The agreement provides about 46%
of the current U.S. demand for enrichment.
The world uranium enrichment industry is currently undergoing a technological transformation
from gaseous diffusion to centrifuges, primarily because centrifuges need only a fraction of the
energy required by gaseous diffusion. In 1996, 57% of the world’s commercial enrichment came
from gaseous diffusion plants, a level that dropped to 35% in 2006. As noted above, the United
States’ only currently operating enrichment facility, in Paducah, KY, is planned to be replaced
with a centrifuge plant in Portsmouth, OH. The world’s only other operating gaseous diffusion
plant, at Areva’s Tricastin site in France, is to be replaced by a centrifuge plant by around 2012.50
Fuel Fabrication
Like enrichment, fuel fabrication is a specialized service rather than a commodity transaction.
The now low-enriched uranium (UF6) undergoes one final process, converting to uranium dioxide
(UO2), before the final stage of fuel fabrication. It is then sintered into pellets and loaded into
zirconium alloy tubes (fuel rods) about 12-15 feet long and half an inch in diameter. The fuel rods
are bundled into fuel assemblies, which vary from fewer than 100 to as many as 300 rods apiece.
Fuel fabrication services are offered by 16 suppliers operating in 18 countries at around 34
facilities. In 2002, IAEA estimated that worldwide fabrication capacity of 19,000 tons (fuel
assemblies and elements) exceeded the demand by 53%.51 The oversupply had existed for many
years, and, as a consequence, facilities were shut down and ownership was consolidated.
Essentially all U.S. fabrication demand is met by three companies providing fabrication service at
four facilities: Framatome ANP Inc. in Lynchburg, VA, and Richland, WA; Global Nuclear Fuel
in Wilmington, NC; and Westinghouse Electric in Columbia, SC. About 30 other nuclear fuel
fabrication facilities are in operation elsewhere in the world.52

47 AREVA http://www.areva-nc.com/servlet/ContentServer?pagename=
cogema_en%2FPage%2Fpage_site_prod_full_template&c=Page&cid=1039482707079.
48 NRC, Uranium Enrichment, http://www.nrc.gov/materials/fuel-cycle-fac/ur-enrichment.html.
49 http://www.usec.com.
50 Ibid.
51 IAEA, Country Nuclear Fuel Cycle Profiles, 2nd ed.
52 Nuclear Engineering International, 2007 World Nuclear Industry Handbook, p. 207.
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Final Stages of the Fuel Cycle
The final stages of the nuclear fuel cycle take place after nuclear fuel assemblies have been
loaded into a reactor. In the reactor, the uranium 235 (235U) splits, or fissions, releasing energy,
neutrons, and fission products (highly radioactive fragments of 235U nuclei). The neutrons may
cause other 235U nuclei to fission, creating a nuclear chain reaction. Some neutrons are also
absorbed by 238U nuclei to create plutonium 239 (239Pu), which itself may then fission.
After several years in the reactor, fuel assemblies will build up too many neutron-absorbing
fission products and become too depleted in fissile 235U to efficiently sustain a nuclear chain
reaction. At that point, the assemblies are considered spent nuclear fuel and removed from the
reactor. Spent fuel typically contains about 1% 235U, 1% plutonium, 4% fission products and other
radioactive waste, and the remainder 238U.
The last stage of the fuel cycle, after spent fuel is removed from a reactor, has proved highly
contentious. One option is to directly dispose of spent fuel in a deep geologic repository to isolate
it for the hundreds of thousands of years that it may remain hazardous. The other option is to
reprocess the spent fuel to separate the uranium and plutonium for use in new fuel. Supporters of
reprocessing, or recycling, contend that it could greatly reduce the volume and longevity of
nuclear waste while vastly expanding the amount of energy extracted from the world’s uranium
resources. Opponents contend that commercial use of separated plutonium—a key material in
nuclear weapons as well as reactor fuel—poses a nuclear weapons proliferation threat.
Commercial-scale spent fuel reprocessing is currently conducted in France, Britain, and Russia.
The 239Pu they produce is blended with uranium to make mixed-oxide (MOX) fuel, in which the
239Pu largely substitutes for 235U. Two French reprocessing plants at La Hague can each reprocess
up to 800 metric tons of spent fuel per year, while Britain’s THORP facility at Sellafield has a
capacity of 900 metric tons per year. Russia has a 400-ton plant at Ozersk, and Japan is building
an 800-ton plant at Rokkasho to succeed a 90-ton demonstration facility at Tokai Mura. Britain
and France also have older plants to reprocess gas-cooled reactor fuel, and India has a 275-ton
plant.53 About 200 metric tons of MOX fuel is used annually, about 2% of new nuclear fuel,54
equivalent to about 2,000 metric tons of mined uranium.55
However, the benefits of reprocessing spent fuel to make MOX fuel for today’s nuclear power
plants are modest. Existing commercial light water reactors use ordinary water to slow down, or
“moderate,” the neutrons released by the fission process. The relatively slow (thermal) neutrons
are highly efficient in causing fission in certain isotopes of heavy elements, such as 235U and
239Pu.56 Therefore, lower quantities of those isotopes are needed in nuclear fuel to sustain a
nuclear chain reaction. The downside is that thermal neutrons cannot efficiently induce fission in
more than a few specific isotopes. In today’s commercial reactors, therefore, the buildup of non-
fissile plutonium and other isotopes sharply limits the number of reprocessing cycles before the
recycled fuel can no longer sustain a nuclear chain reaction and must be stored or disposed of.

53 World Nuclear Association, Processing of Used Nuclear Fuel for Recycle, March 2007, at http://www.world-
nuclear.org/info/inf69.html.
54 World Nuclear Association, Mixed Oxide Fuel (MOX), November 2006, at http://www.world-nuclear.org/info/
inf29.html.
55 World Nuclear Association, Uranium Markets, March 2007.
56 Isotopes are atoms of the same chemical element but with different numbers of neutrons in their nuclei.
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In contrast, “fast” neutrons, which have not been moderated, are less effective in inducing fission
than thermal neutrons but can induce fission in all actinides, including all plutonium isotopes.
Therefore, nuclear fuel for a fast reactor must have a higher proportion of fissionable isotopes
than a thermal reactor to sustain a chain reaction, but a larger number of different isotopes can
constitute that fissionable proportion.
A fast reactor’s ability to fission all actinides (actinium and heavier elements), makes it
theoretically possible to repeatedly separate those materials from spent fuel and feed them back
into the reactor until they are entirely fissioned. Fast reactors are also ideal for “breeding” the
maximum amount of 239Pu from 238U, eventually converting virtually all of natural uranium to
useable nuclear fuel.57 Current reprocessing programs are generally viewed by their proponents as
interim steps toward a commercial nuclear fuel cycle based on fast reactors.
Waste Disposal and Energy Security
Reprocessing of spent fuel from fast breeder reactors has long been the ultimate goal of nuclear
power supporters. As noted above, fast reactors (operated either as breeders or non-breeders) can
largely eliminate plutonium from nuclear waste and greatly extend uranium supplies. But
opponents contend that such potential benefits are not worth the costs and nonproliferation risks.
Removing uranium from spent nuclear fuel through reprocessing would eliminate most of the
volume of radioactive material requiring disposal in a deep geologic repository. In addition, the
removal of plutonium and conversion to shorter-lived fission products would eliminate most of
the long-term (post-1,000 years) radioactivity in nuclear waste. But the waste resulting from
reprocessing would have nearly the same short-term radioactivity and heat as the original spent
fuel, because the reprocessing waste consists primarily of fission products, which generate most
of the radioactivity and heat in spent fuel. Because heat is the main limiting factor on repository
capacity, conventional reprocessing would not provide major disposal benefits in the near term.
To address that problem, various proposals have been made to further separate the primary heat-
generating fission products—cesium 137 and strontium 90—from high-level waste for separate
storage and decay over several hundred years. Such a process could greatly increase repository
capacity, although it would require an alternative secure storage system for the cesium and
strontium for hundreds of years.
Energy security has been a primary driving force behind the development of nuclear energy,
particularly in countries such as France and Japan that have few natural energy resources. Recent
cutoffs in oil and gas around the world have underscored the instability of oil and gas supply,
which could be mitigated by nuclear energy. For example, in 2006, a natural gas price dispute
between Russia and Ukraine resulted in a temporary cutoff of natural gas to Western and Central
Europe; in 2007, price disputes between Russia and Azerbaijan and Belarus caused a temporary
cutoff in oil to Russia from Azerbaijan and in oil from Russia to Germany, Poland, and Slovakia.

57 The core of a breeder reactor is configured so that more fissile 239Pu is produced from 238U than the amount of fissile
material initially loaded into the core that is consumed (235U or 239Pu). In a breeder, therefore, enough fissile material
could be recovered through reprocessing to refuel the reactor and to provide fuel for additional breeders. The core of a
fast reactor can also be configured to produce less 239Pu than fissile material consumed, if the primary goal is to
eliminate 239Pu from spent fuel. In that case, much less 238U ultimately would be converted to 239Pu and therefore less
total energy produced from a given amount of natural uranium.
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Moreover, temporary production shutdowns in the Gulf of Mexico and the Trans-Alaskan
pipeline, instability in Nigeria, and nationalization of oil and gas fields in Bolivia in 2006 have all
raised concerns about oil and gas supplies and worldwide price volatility. Relative to gas and oil,
the ability to stockpile uranium is widely seen as offering greater assurances of weathering
potential cutoffs.
Worldwide uranium resources are generally considered to be sufficient for at least several
decades. Uranium supply is highly diversified, with uranium mining spread across the globe,
while uranium conversion, enrichment, and fuel fabrication are more concentrated in a handful of
countries. But because most reactors around the world rely at least partly on foreign sources of
uranium and nuclear fuel services, nuclear reactors nearly everywhere face some level of supply
vulnerability. To mitigate such concern, countries such as China, India, and Japan are seeking to
secure long-term uranium contracts to support nuclear expansion goals. Efforts are underway to
establish an international nuclear fuel bank to provide greater certainty in fuel supplies, as
discussed in the next section.
Ultimately, only the development of breeder reactors and reprocessing could provide complete
nuclear energy independence. This remains the long-term goal of resource-poor France and
Japan, and Russia as well, although their research and development programs have faced
numerous obstacles and schedule slowdowns.
Proposals on the Fuel Cycle58
Proposals addressing access to the full nuclear fuel cycle have ranged from seeking a formal
commitment to forswear enrichment and reprocessing technology, to a de facto approach in which
a state does not operate fuel cycle facilities but makes no explicit commitment to give them up, to
no restrictions at all. Current proposals generally aim to persuade countries not to develop their
own fuel production capabilities by providing economically attractive alternatives that allay
concerns about politically motivated interruption to fuel supply. Most proposals focus on this
front-end problem, dealing with fuel supply and production issues. Ultimately, these proposals are
aimed at preventing an increase in the number of states that would be capable of producing
weapons-usable nuclear material.
The main proposals under discussion are outlined here in categories—those addressing the full
fuel cycle, those addressing the “front-end” or assurance of fuel supply issues (including fuel
banks and multilateral enrichment services), and those focusing on the “back-end” or waste
disposal solutions.

58 This section was prepared by Mary Beth Nikitin (Analyst in WMD Nonproliferation) in the Foreign Affairs,
Defense, and Trade Division, and Anthony Andrews (Specialist in Energy Policy) in the Resources, Science, and
Industry Division.
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Comprehensive Proposals
El Baradei Proposal
IAEA Director General Mohamed El Baradei in 2003 proposed a three-pronged approach to
limiting the processing of weapon-usable material (separated plutonium and high-enriched
uranium) in civilian nuclear fuel cycles.59 First, he would place all enrichment and reprocessing
facilities under multinational control. Second, he would develop new nuclear technologies that
would not produce weapons-usable fissile material—in other words, “the holy grail” of a
proliferation-resistant fuel cycle. In his October 2003 article in the Economist where he laid out
these ideas, El Baradei maintained, “This is not a futuristic dream; much of the technology for
proliferation-resistant nuclear-energy systems has already been developed or is actively being
researched.” Third, El Baradei proposed considering “multinational approaches to the
management and disposal of spent fuel and radioactive waste.” El Baradei did not place any
nonproliferation requirements on participation, but instead suggested that the system “should be
inclusive; nuclear-weapon states, non-nuclear-weapon states, and those outside the current non-
proliferation regime should all have a seat at the table.” Further, he noted that a future system
should achieve full parity among all states under a new security structure that does not depend on
nuclear weapons or nuclear deterrence.
IAEA Experts Group/INFCIRC/640
In February 2005, an Expert Group commissioned by IAEA Director General El Baradei
presented a report, “Multilateral Approaches to the Nuclear Fuel Cycle.”60 The Expert Group
studied several possible approaches to securing the operation of proliferation-sensitive nuclear
fuel cycle activities (uranium enrichment, reprocessing and spent fuel disposal, and storage of
spent fuel) and analyzed the incentives and disincentives for states to participate. The report
reviewed relevant past and present experience. The Group’s suggested approaches included the
following:
• Reinforce existing market mechanisms by providing additional supply guarantees
by suppliers and/or the IAEA (fuel bank).
• Convert existing facilities to multinational facilities.
• Create co-managed, jointly owned facilities.
The Group concluded that “in reality, countries will enter into multilateral arrangements
according to the economic and political incentives and disincentives offered by these
arrangements.”61 The report noted that no legal framework existed for requiring states to join
supply assurance arrangements.
In September 2006, the IAEA sponsored a conference entitled “New Framework for the
Utilization of Nuclear Energy in the 21st Century: Assurances of Supply and Non-Proliferation,”

59 “Towards a Safer World,” at http://f40.iaea.org/worldatom/Press/Statements/2003/ebTE20031016.shtml.
60 “Multilateral Approaches to the Nuclear Fuel Cycle: Expert Group Report submitted to the Director General of the
International Atomic Energy Agency,” February 22, 2005, (INFCIRC/640). Available at http://www.iaea.org/
Publications/ocuments/Infcircs/2005/infcirc640.pdf.
61 Ibid., p. 98.
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which addressed proposals to provide fuel assurances. The IAEA presented a report on fuel
assurance options at the June 2007 Board of Governors meeting analyzing the various proposals
put forth to date.62 A potential framework for nuclear supply assurances could have three stages:
(1) existing market arrangements; (2) back-up commitments by suppliers in case of a politically
motivated interruption of supply if nonproliferation criteria are met; (3) a physical LEU material
reserve.63 The report emphasizes that participation in these arrangements should be voluntary, that
progress on this question will be incremental and that many options should be explored to give
consumer states sufficient choices to meet their needs. The report is still under discussion by
IAEA Board members.
President Bush’s 2004 Proposal
In a speech at the National Defense University on February 11, 2004, President Bush said the
world needed to “close a loophole” in the NPT that allows states to legally acquire the technology
to produce nuclear material which could be used for a clandestine weapons program. To remedy
this, he proposed that the 40 members of the Nuclear Suppliers Group (NSG) should “refuse to
sell enrichment and reprocessing equipment and technologies to any state that does not already
possess full-scale, functioning enrichment and reprocessing plants.”64 President Bush also called
on the world’s leading nuclear fuel services exporters to “ensure that states have reliable access at
reasonable cost to fuel for civilian reactors, so long as those states renounce enrichment and
reprocessing.”
President Bush’s 2004 proposal was the only one that calls for countries to explicitly “renounce”
pursuit of enrichment or reprocessing technologies in exchange for reliable access to nuclear fuel,
and proved controversial. Many non-nuclear-weapon states saw this as an attempt to limit their
inalienable right to the use of peaceful nuclear energy under Article IV of the NPT and are not
willing to consider limits on peaceful nuclear technologies until more progress on nuclear
disarmament has been made.
Fundamental questions about this original formulation were raised. For example, who is included
in the group of supplier states and how is “full-scale, functioning plants” defined? Would Iran’s
enrichment program qualify today, even if it did not back in 2004? And what about non-NPT
states with the full fuel cycle as part of their weapons programs? Also, how would related
technologies be treated? For example, would restrictions also apply to post-irradiation
experiments on spent nuclear fuel, which yield significant data about reactor operations, but can
also contribute to knowledge about reprocessing for weapons purposes? Since 2004, delay in
defining these terms appears to have provided an incentive for some states, such as Canada, South
Africa, Argentina, and Australia, to expedite their pursuit of a full operational enrichment
capability so as not to be excluded when and if such a division between fuel cycle haves and
have-nots is made.

62 International Atomic Energy Agency, Possible New Framework for the Utilization of Nuclear Energy: Options for
Assurance of Supply of Nuclear Fuel, June 2007.
63 Tariq Rauf, “Realizing Nuclear Fuel Assurances: Third Time’s the Charm,” Presentation to the Carnegie
International Nonproliferation Conference, June 24, 2007, at http://www.carnegieendowment.org/files/
fuel_assurances_rauf.pdf.
64 “President Announces New Measures to Counter the Threat of WMD,” February 11, 2004, at
http://www.whitehouse.gov/news/releases/2004/02/20040211-4.html.
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Russia’s “Global Nuclear Power Infrastructure”
In January 2006, Russian President Vladimir Putin proposed the Global Nuclear Power
Infrastructure initiative that would include four kinds of cooperation: creation of international
uranium-enrichment centers (IUECs), international centers for reprocessing and storing spent
nuclear fuel, international centers for training and certifying nuclear power plant staff, and an
international research effort on proliferation-resistant nuclear energy technology. The
international fuel cycle centers would be under joint ownership and co-management. They would
be commercial joint ventures (that is, no state financing), with advisory boards consisting of
government, industry, and IAEA professionals. The IAEA would not have a vote on these boards,
but would play an advisory role, while also certifying the fuel provision commitments.
Recipient countries under Putin’s proposal would receive fuel cycle services, but access to
sensitive technology would stay in the hands of the supplier state. Russia has offered a similar
arrangement to Iran—to jointly enrich uranium on Russian territory. Iran has not yet accepted this
offer, but it is still part of ongoing negotiations with Iran over its nuclear program. Russia has also
made the return of spent fuel from the Bushehr nuclear plant it is constructing in Iran a condition
of supply, so that no plutonium can be extracted from the spent fuel.65 To date, progress has been
made is establishing the IUEC and in establishing an LEU reserve at Angarsk (see below). Russia
has also announced creation of a center of excellence for nuclear personnel at Obninsk, and
actively participates in joint research efforts on fast reactors such as the International Project on
Innovative Nuclear Reactors and Fuel Cycles (INPRO).
Assurance of Fuel Supply: Supplier Guarantees
The following proposals focus on back-up fuel supply assurances designed to complement, but
not impact or supplant, the commercial uranium market.
Six Country Concept
In May 2006, six governments—France, Germany, the Netherlands, Russia, the United Kingdom,
and the United States—proposed a “Concept for a Multilateral Mechanism for Reliable Access to
Nuclear Fuel”66 (referred to here as the Six Country Concept). This proposal reportedly developed
from a U.S. initiative following President Bush’s 2004 proposal. It would not require states to
forgo enrichment and reprocessing, but participation would be limited to those states that did not
currently have enrichment and reprocessing capabilities.
The Six Country Concept calls for a multi-tiered backup mechanism to ensure the supply of low
enriched uranium (LEU) for nuclear fuel. The proposal would work as follows: (1) A commercial
supply relationship is interrupted for reasons other than nonproliferation; (2) The recipient or
supplier state can approach the IAEA to request backup supply; (3) The IAEA would rule out
commercial or technical reasons for interruption (to avoid a market disruption) and assess

65 “The Last Word: Sergei Kirienko,” Newsweek, February 20, 2006 issue, at http://www.msnbc.msn.com/id/11299203/
site/newsweek/.
66 “Concept for a Multilateral Mechanism for Reliable Access to Nuclear Fuel,” Proposal as sent to the IAEA from
France, Germany, the Netherlands, Russia, Ireland, and the United States, May 31, 2006, IAEA GOV/INF/2006/10.
Available at http://www-pub.iaea.org/MTCD/Meetings/PDFplus/2006/cn147_ConceptRA_NF.pdf.
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whether the recipient meets the following qualifications: it must have a comprehensive safeguards
agreement and Additional Protocol in force; it must adhere to international nuclear safety and
physical protection standards; and it is not pursuing sensitive fuel cycle activities (which are not
defined); (4) The IAEA would facilitate new arrangements with alternative suppliers.
Two mechanisms were proposed to create multiple tiers of assurances: including a standard
backup provision in commercial contracts, and establishing reserves of LEU (not necessarily held
by the IAEA, but possibly with rights regarding the use of the reserves). The Six Country
Concept addressed several future options, all of which are longer-term in nature. They include
providing reliable access to existing reprocessing capabilities for spent fuel management;
multilateral cooperation in fresh fuel fabrication and spent fuel management; international
enrichment centers; and new fuel cycle technology development that could incorporate fuel
supply assurances.
World Nuclear Association
In May 2006, the private-sector World Nuclear Association (WNA) Working Group on Security
of the International Nuclear Fuel Cycle outlined proposals for assuring front-end and back-end
nuclear fuel supplies.67 Like the Six Country Concept, the WNA proposal envisions a system of
supply assurances that starts first with normal market procedures attempting to reestablish nuclear
fuel supply after interruptions. Also similar to the Six Country proposal, a pre-established
network of suppliers could be triggered through the IAEA if supply were interrupted for political
reasons. If that network then failed, stocks held by national governments could be used.
The first tier of assurances, therefore, is through commercial suppliers. The second level of
supply commitment would use a “standard backup supply clause” in enrichment contracts,
supported by governments and the IAEA. “To ensure that no single enricher is unfairly burdened
with the responsibility of providing backup supply, the other (remaining) enrichers would then
supply the contracted enrichment in equal shares under terms agreed between the IAEA and the
enrichers,” according to the proposal.
For fuel fabrication, a backup supply system would be more complicated, according to the WNA
report. “Because fuel design is specific to each reactor design, an effective mechanism would
require stockpiling of different fuel types/designs. The cost of such a mechanism could thus be
substantial,” according to the report. However, WNA noted that unlike uranium enrichment
technology, uranium fuel fabrication is not of proliferation concern.
The WNA report also noted the need for back-end nuclear fuel cycle supply assurances, to
prevent a future scenario in which reprocessing technologies spread as nuclear power programs
expand. The report recommends that a clear option to reprocess spent fuel at affordable prices be
offered to states that do not have indigenous reprocessing programs. Such assurances would be
part of a longer-term approach.

67 WNA’s report is available at http://www.world-nuclear.org/reference/pdf/security.pdf.
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Japan’s IAEA Standby Arrangements System
Japan presented a “complementary proposal” to the Six Country Concept at the IAEA in
September 2006. Japan’s concerns with the Six Country Concept centered on the implication that
it would deny the right for states to use nuclear technology for commercial purposes and because
it assured the supply only of LEU, rather than all front-end nuclear fuel cycle services. Japan
proposed instead to create an “IAEA Standby Arrangements System” that would act as an early
warning system to prevent a break in supply to recipients. With a list of supply capacities from
each state updated annually and a virtual bank of front-end fuel cycle services (from natural
uranium to fuel fabrication), the IAEA would facilitate supply to recipient states before supply
was completely stopped. States determined by the IAEA Board of Governors to be in good non-
proliferation standing by the IAEA could participate.
UK “Nuclear Fuel Assurance (NFA)”
The United Kingdom has proposed a political assurance of non-interference in the delivery of
commercial nuclear contracts, called a nuclear fuel assurance (NFA). This concept incorporates
an earlier proposal that would creates “enrichment bonds” to give advance assurance of export
approvals for nuclear fuel to recipient states. As the UK Prime Minister’s report, Road to 2010,
summarized the NFA: “The UK’s Nuclear Fuel Assurance is complementary to other proposals
put forward and provides a guarantee that export licences for nuclear fuel enrichment services
would only be withheld in the event of non-compliance with non-proliferation obligations.”68
The NFA would be a government-to-government agreement between supplier state or states and
the recipient state, with the IAEA as co-signatory. The supplier government would guarantee that,
subject to the IAEA’s determination that the recipient was in good nonproliferation standing,
national enrichment providers will be given the necessary export approvals to supply the recipient
states. It is a transparent legal mechanism designed to give further credible assurance of supply
with a “prior consent to export” arrangement. The IAEA would make the final decision on
whether conditions had been met to allow the export of LEU.69 A model agreement to be used as a
standard for an NFA could be adopted by the Board of Governors. The NFA concept has been
presented to the IAEA Board of Governors and is still under discussion
Assurance of Fuel Supply: Fuel Reserves
A fuel reserve is meant to appeal to countries concerned about a possible cut-off in their nuclear
fuel supply for reasons unrelated to nonproliferation, such as a non-commercial or political
dispute with the supplier country. A fuel bank under IAEA control has achieved initial funding
pledges but is still under consideration by the IAEA Board of Governors. The IAEA Board
approved terms for a Russian-operated “fuel reserve” in November 2009. Additionally, the United
States has declared that it would downblend excess military HEU to LEU and hold it in reserve as
part of the Six-Country Concept, under the Department of Energy’s Reliable Fuel Supply
program. These three proposals are discussed below.

68 The Road to 2010: addressing the nuclear question in the 21st century, July 2009, http://www.cabinetoffice.gov.uk/
reports/roadto2010.aspx
69 INFCIRC/707, June 4, 2007.
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IAEA LEU Fuel Bank
In September 2006, former Senator Sam Nunn, co-chairman of the Nuclear Threat Initiative
(NTI),70 announced NTI’s pledge of $50 million as seed money to create a low-enriched uranium
stockpile owned and managed by the IAEA. NTI believes that the establishment of such an LEU
reserve would assure an international supply of nuclear fuel on a non-discriminatory, non-
political basis to recipient states.
Provision of the NTI money was contingent on the IAEA taking the necessary preparatory actions
to establish the reserve and on contribution of an additional $100 million or an equivalent value
of LEU by one or more IAEA Member States.71 The latter condition was met in March 2009. The
U.S. Congress approved $50 million for an international fuel bank in December 2007 (see
below). Norway pledged $5 million to the fuel bank in February 2008.72 The United Arab
Emirates announced a contribution of $10 million on August 1, 2008.73 The European Union
pledged 25 million euros in December 2008,74 and Kuwait pledged $10 million in March 2009.75
To date, the IAEA has received the U.S. government contribution, which is being held in a
suspense account until the Board of Governors approves the LEU bank.
No policy conditions have been set by donor countries—policy questions are meant to be solved
by the IAEA and member states. Key issues still to be determined include the reserve’s content,
location, criteria for determining access to the stocks including safety and export control
standards, the fuel’s pricing, and how the fuel in reserve would be fabricated into the appropriate
fuel type for the customer’s reactor.76 Kazakhstan proposed in May 2009 that it host the fuel
bank.
The IAEA secretariat drew up draft plans for the fuel bank, which were presented to the Board of
Governors at its June 2009 meeting along with a proposal for a Russian-hosted bank and the
German-proposed multilateral enrichment project (see below). However, developing countries
reportedly rejected the director general’s proposal to negotiate details and approve these
arrangements at the September Board meeting. Opponents and skeptics cite concerns that their
legal rights under the NPT to develop fuel cycle facilities would be infringed upon if such

70 Nuclear Threat Initiative is a private organization founded in 2001 by Mr. Ted Turner and former Senator Sam Nunn.
It is now classified as a 501(c)3 public charity.
71 Nuclear Threat Initiative Commits $50 million to Create IAEA Nuclear Fuel Bank, International Atomic Energy
Agency Press Release, September 19, 2006. Available at http://www.nti.org/c_press/
release_IAEA_Fuelbank_091906.pdf.
72 “Norway Contributes $5 Million to IAEA Nuclear Fuel Reserve,” Norwegian Ministry of Foreign Affairs Press
Release No. 027/08, February 27, 2008. http://www.regjeringen.no/en/dep/ud/Press-Contacts/News/2008/
fuelreserve.html?id=50210
73 “UAE Commits $10 Million to Nuclear Fuel Reserve Proposal,” IAEA Press Release, August 7, 2008
http://www.iaea.org/NewsCenter/News/2008/uaecontribution.html; “UAE Commitment Gives NTI/IAEA Fuel Bank
Critical Momentum,” NTI Press Release, August 7, 2008. http://www.nti.org/c_press/
release_UAE%20fuel%20bank%2080708.pdf
74 “Sam Nunn Applauds EU Contribution to IAEA Fuel Bank,” NTI Press Release, December 10, 2008.
http://www.nti.org/c_press/statement_Nunn_EU_fuel_bank_121008.pdf
75 “Multinational Fuel Bank Reaches Key Milestone,” IAEA Staff Report, March 6, 2009. http://www.iaea.org/
NewsCenter/News/2009/fbankmilestone.html
76 For more detailed treatment of these questions see, New Framework for the Utilization of Nuclear Energy in the 21st
Century: Assurances of Supply and Nonproliferation, IAEA Special Event, Speech by Laura Holgate, September 19,
2006, at http://www.nti.org.
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facilities were established. Proponents counter that these arrangements would be optional, but are
meant to give countries alternatives to developing their own fuel cycle capabilities.77 As of early
2010, the IAEA secretariat was engaged in discussing questions and concerns about the fuel bank
proposal with member states.
The House (H.R. 1585) and Senate versions (S. 1547) of the National Defense Authorization Act
for Fiscal Year 2008 both authorized $50 million to be appropriated to the Department of Energy
for the “International Atomic Energy Agency Nuclear Fuel Bank.” The conference report supports
the establishment of a fuel bank and notes that “additional work will be required in order to
provide appropriate guidance to the executive branch regarding criteria for access by foreign
countries to any fuel bank established at the IAEA with materials or funds provided by the United
States.”78
Both the House (H.R. 2641) and Senate (S. 1751) Energy and Water Appropriations bills for
FY2008 recommended funding for an international nuclear fuel bank under the IAEA, and
proposed making available $100 million and $50 million respectively. The Consolidated
Appropriations Act for FY2008, which became P.L. 110-161 on December 26, 2007, provided
that $50 million should be available until expended for “the contribution of the United States to
create a low-enriched uranium stockpile for an International Nuclear Fuel Bank supply of nuclear
fuel for peaceful means under the International Atomic Energy Agency.” On August 4, 2008, the
U.S. Secretary of Energy issued an official letter to the IAEA donating “nearly 50 million” to the
international nuclear fuel bank.79 This reflects a congressionally mandated rescission that was
applied proportionally across the Department of Energy’s budget.80
Russian LEU Fuel Reserve, Angarsk
The IAEA Board of Governors in November 2009 authorized the director general to sign an
agreement with Russia establishing an LEU fuel reserve at Angarsk (GOV/2009/81). The fuel is
to be available to a country facing a disruption of supply “unrelated to technical or commercial
reasons.”81 The reserve would contain about 120 MT of LEU in the form of UF6 with an
enrichment level ranging from 2 to 4.95% and would be under IAEA safeguards.82 The Russian
government would cover the cost of safeguards and all operating costs.
The Russian plan envisions that countries facing a fuel supply cut-off would apply to the IAEA to
access the fuel reserve. The director general would assess whether the country meets the criteria
for access. To qualify, the potential recipient state would have to be a non-nuclear-weapon state

77 Sylvia Westall, “Obama-backed nuclear fuel bank plan stalled at IAEA,” Reuters, June 18, 2009.
78 H.Rept. 110-477 to accompany H.R. 1585.
79 “U.S. Donates $50 million for the IAEA International Nuclear Fuel Bank,” NNSA Press Release, August 4, 2008.
http://nnsa.energy.gov/news/2090.htm
80 Division C, Title III, Section 312 of the FY2008 Consolidated Appropriations Act rescinded 1.6 percent of
discretionary budget authority for Congressionally directed projects, this includes the fuel bank.
http://www.whitehouse.gov/omb/legislative/fy08consolidated_reductions_01_25_08.pdf
81 “Board of Governors Approves Plan for Nuclear Fuel Bank: Russian Plan to Supply Low-Enriched Uranium,” IAEA
Staff Report, November 27, 2009, http://www.iaea.org/NewsCenter/News/2009/nuclfuelbank.html
82 “Development of the initiative of the Russian Federation to establish a reserve of low enriched uranium for the
supply of LEU to the International Atomic Energy Agency for its member states,” Working Paper of the Russian
Federation, Preparatory Committee for the 2010 NPT Review Conference, May 6, 2009,
NPT/CONF.2010/PC.III/WP.25
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member of the IAEA with a safeguards agreement in effect. To release the material, the IAEA
would have to confirm that all nuclear material was accounted for in the state, there was no
indication of diversion of material, and no safeguards issues were under review by the Board of
Governors. If the criteria were met, the director general would ask Russia to release fuel to that
country. The recipient country would pay market rates for the uranium. A country would not have
to waive its right to develop its own fuel cycle capabilities in order to access the fuel reserve.
U.S. LEU Fuel Reserve: “Reliable Fuel Supply” Program
In 2005, then-Secretary of Energy Samuel Bodman announced that 17.4 metric tons of U.S.
surplus highly enriched uranium would be downblended to low-enriched uranium to be used as a
U.S. fuel reserve. The goal of the U.S. reserve is to supply fuel in the event of a disruption
unrelated to proliferation. Secretary Bodman described the U.S. reserve as supporting the “twin
goals expanding the use of nuclear power and curbing nuclear proliferation,” and said its purpose
was to “help countries to pursue nuclear power confidently, without the burden of producing their
own fuel, while curbing the spread of sensitive technology.”83
The precise terms and conditions governing the release of the fuel and its potential recipients
have not yet been determined. According to U.S. officials, the material designated for the U.S.
reserve would be kept under national control, and not be part of the IAEA fuel bank.84 Stringent
U.S. requirements on U.S.-origin material, pursuant to the 1954 Atomic Energy Act (as
amended), include safeguards in perpetuity, prior consent for enrichment and reprocessing, and
the right of return should a non-nuclear-weapon state detonate a nuclear explosive device.85
The DOE’s Fissile Material Disposition program manages this initiative, called “Reliable Fuel
Supply.” WesDyne International, LLC, and Nuclear Fuel Services, Inc., were awarded a contract
in 2007 to downblend and store the material. Nuclear Fuel Services began downblending in
December 2009 at its facility in Erwin, TN, and is expected to complete the work in 2010 or early
2011. The 17.4 MT of HEU is expected to produce about 290 MT of low enriched uranium.
According to an NNSA press release, WesDyne will sell a “small fraction” of the resulting low
enriched uranium on the market over a three to four year period to cover the project’s costs.86
According to the FY2011 Department of Energy budget request, in 2009 the program completed
all shipments of HEU for the Reliable Fuel Supply Initiative, and enough LEU has been
downblended to date for multiple commercial reactor core reloads.
In addition to the downblending of 17.4 MT of HEU, an additional 12.1 MT is to be downblended
to approximately 220 MT of LEU “to provide assurance of fuel supply to utilities participating in
the MOX program for the disposition of surplus weapons plutonium.”87 This tranche is expected
to be downblended by 2012.

83 “DOE/NNSA Reliable Fuel Supply Gains Momentum,” NNSA Press Release, November 7, 2006.
84 “News Analysis: The Growing Nuclear Fuel-Cycle Debate,” Arms Control Today, November 2006. Available at
http://www.armscontrol.org/act/2006_11/NAFuel.asp.
85 See also CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary
Beth Nikitin.
86 “NNSA Awards Contract for Reliable Fuel Supply Program,” NNSA Press Release, June 29, 2007.
87 “NNSA Announces Contract to Downblend 12 Metric Tons of Surplus Highly Enriched Uranium,” NNSA Press
Release, June 23, 2009.
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LEU from both of the above HEU disposition programs will be stored until needed at
Westinghouse’s Columbia Fuel Fabrication Facility in Columbia, SC.
Assurance of Supply: Enrichment Services
Proposals to assure supply and prevent the spread of enrichment technology have also included
the creation of commercially based multinational uranium enrichment centers. The Russian
Federation has made progress in establishing an International Uranium Enrichment Center
(IUEC) at Angarsk. Germany has proposed an internationally owned and operated Multilateral
Enrichment Sanctuary Program. Some point out that URENCO, a joint German, Dutch and
British consortium, has demonstrated a multilateral commercial model for uranium enrichment
since the 1970s. Some countries are concerned that giving support for multilateral-owned
facilities would undermine their rights to nuclear technology for peaceful purposes under the
NPT, and view the only solution to energy security as being an independent fuel cycle. However,
as this may not be economically viable for most countries, multilateral solutions continue to be
attractive.
International Uranium Enrichment Center (IUEC), Angarsk, Russia
Russia has created a model International Uranium Enrichment Center (IUEC) at Angarsk
(approximately 3,000 miles east of Moscow).88 The Angarsk IUEC began operation on September
5, 2007. Kazakhstan was the first partner,89 Armenia and Ukraine have also signed inter-
governmental agreements to join IUEC. Finland, South Korea, and Belgium are negotiating their
memberships in the IUEC.90 As part of an open joint-stock company, IUEC participants would
receive dividends from IUEC profits.
To join the Angarsk IUEC, countries must agree that the material be used for “nuclear energy
production.”91 The IUEC is “chiefly oriented to States not developing uranium enrichment
capabilities on their territory.”92 Russia now includes the IUEC on its list of Russian facilities that
could be placed under IAEA safeguards. Additional documents for implementing safeguards at
the facility are now under discussion. The safeguards would apply to the nuclear material at the
facility.93

88 Anya Loukianova, “The International Uranium Enrichment Center at Angarsk: A Step Towards Assured Fuel
Supply,” NTI Issue Brief, updated November 2008, http://www.nti.org/e_research/e3_93.html
89 A Russian-Kazakh joint venture Uranium Enrichment Center (distinct from the IUEC) is also located at Angarsk.
90 Rosatom website, “Uranium Enrichment Division,” accessed February 22, 2010. http://www.rosatom.ru/en/
energy_complex/uranium_enrichment/
91 “Russia’s Angarsk international enrichment center open for business,” Nuclear Fuel, September 24, 2007.
92 “Communication received from the Resident Representative of the Russian Federation to the IAEA on the
Establishment, Structure and Operation of the International Uranium Enrichment Centre,” INFCIRC/708, June 8, 2007.
93 Russia, as a nuclear weapon state under the NPT, has a voluntary safeguards agreement that allows, but does not
require, inspections.
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Germany’s Multilateral Enrichment Sanctuary Project (MESP)
Germany proposed in May 2007 that a new enrichment facility be built and placed under IAEA
ownership in an extraterritorial area.94 An independent management board or consortium would
finance and run the plant on a commercial basis, but the IAEA would decide whether to supply
enriched fuel according to nonproliferation criteria. Germany argues that this approach is
advantageous since it does not prohibit uranium enrichment, but does provide a commercially
viable, politically neutral option for fuel supply and could create competition on the world market
by creating a new fuel service provider. With an economically viable option on neutral ground, it
will be harder for states to justify starting their own enrichment program for commercial reasons.
A proposal was presented to the IAEA Board of Governors in June 2009, and a draft MESP
agreement (INFCIRC/765) submitted to the IAEA in July 2009. This concept has not yet been
approved by the Board of Governors but is under active discussion.
Back-End Fuel Cycle Proposals
Multilateral proposals for the end of the fuel cycle are less developed at this stage. On-site storage
of spent fuel is most common, and some countries reprocess their spent fuel rods into mixed-
oxide fuel. Multilateral solutions to the back-end issues are also motivated by the idea of
preventing the further spread of reprocessing technology, which could be used for the separation
of plutonium for weapons purposes. As with the debate over uranium enrichment technology,
while reprocessing technology may be too expensive or technologically out of reach for many
states at this stage, countries are hesitant to agree to multilateral approaches that may be
interpreted as giving up their right to develop this technology for peaceful purposes. There are no
multilateral reprocessing facilities now proposed.
Another proposal has been the establishment of an international spent fuel repository, perhaps in
Russia. While Russian law allows for the import of waste, the government of Russia has not yet
proposed such a facility, partly due to potential public opposition.
States also cooperate on joint research ventures on advanced and fast reactors such as the
Generation IV International Forum (GIF) or IAEA’s INPRO. A major U.S.-led initiative, the
Global Nuclear Energy Partnership (GNEP) was meant to inspire international collaboration on
developing a proliferation-resistance closed fuel cycle, discussed below.
Global Nuclear Energy Partnership (GNEP)
In February 2006, U.S. Secretary of Energy Bodman announced the Global Nuclear Energy
Partnership (GNEP), drawing together two of the former Bush Administration’s policy goals:
promotion of nuclear energy and nonproliferation. Recycling nuclear fuel to produce more energy
and reduce waste and encouraging global prosperity were a few of DOE’s stated aims for the
program. GNEP built on DOE’s Advanced Fuel Cycle Initiative (AFCI), a program that began in
2003 to develop and demonstrate spent fuel reprocessing/recycling technology. Today, GNEP
continues in its international capacity, but funding for the domestic portions of the program are
now only provided for fundamental research and development work. Efforts under AFCI to

94 “Safe Enrichment for All,” Handelsblatt newspaper, May 2, 2007, in English at https://www.diplo.de/diplo/en/
Infoservice/Presse/Interview/2007/070502-Handelsblatt.html.
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develop large-scale reprocessing and recycling facilities have been halted by the Obama
Administration, and the program has been renamed Fuel Cycle Research and Development.
The domestic component of GNEP originally focused on the future of nuclear energy in the
United States: What kind of future reactors will be licensed, and how spent nuclear power reactor
fuel will be handled. Existing commercial light water reactors were expected to continue as the
predominant technology for at least the next two decades. Spent fuel from existing reactors was to
be stored or retrievably emplaced at the planned Yucca Mountain, NV, repository, awaiting
possible future reprocessing and recycling.
Reprocessing facilities were to use new technologies developed by AFCI to avoid separation of
pure plutonium that could be used for weapons. However, there has been continuing controversy
over how proliferation-resistant such processes might be. High-level waste from reprocessing
(mostly fission products) would have gone to the Yucca Mountain repository, and the recycled
plutonium and uranium was to be fabricated into fuel for an Advanced Burner Reactor, a fast
reactor to be developed by DOE’s Generation IV Nuclear Energy Systems Initiative. In the longer
term, plutonium and other transuranics (elements heavier than uranium) in spent fuel were to be
fabricated into new fuel for future fast reactors. Eventually, that fuel was to be continually
recycled until all the transuranics were consumed, leaving the fission products to be disposed of
in a geologic repository.
The international component of GNEP as originally envisioned was a consortium of nations with
advanced nuclear technology that would provide fuel services and reactors to countries that
“refrain” from fuel cycle activities, such as enrichment and reprocessing. It was essentially a fuel
leasing approach, wherein the supplier would take responsibility for the final disposition of the
spent fuel. This could mean taking back the spent fuel, but might also mean, according to DOE,
that the supplier “would retain the responsibility to ensure that the material is secured,
safeguarded and disposed of in a manner that meets shared nonproliferation policies.”95 While
this describes the responsibility of the supplier, the vagueness of the language suggests that any
number of solutions, including on-site storage, could be the outcome.
GNEP foresaw a system whereby supplier states would take back spent fuel, but many nations
lack the political will to do so. Skeptics raised the question of whether the technology used in
GNEP would have been a net gain for nonproliferation efforts, since the United States does not
reprocess or re-use plutonium now. In their view, the “proliferation-resistance” of technologies
under consideration must be assessed against the major alternative: disposal of sealed, intact fuel
rods in a geologic repository. At the direction of the White House, Energy Secretary Steven Chu
established the Blue Ribbon Commission on America’s Nuclear Future on January 29, 2010, to
recommend a new national strategy for managing spent nuclear fuel and high-level waste,
including an examination of reprocessing and recycling options.
Much of the AFCI’s research had focused on a separations technology called UREX+, in which
uranium and other elements are chemically removed from dissolved spent fuel, leaving a mixture
of plutonium and other highly radioactive elements. Proponents believe UREX+ is proliferation-
resistant, because further purification would be required to make the plutonium useable for
weapons and because its high radioactivity would make it difficult to divert or work with. In

95 DOE Global Nuclear Energy Partnership home page, at http://www.gnep.energy.gov.
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contrast, conventional reprocessing using the PUREX process can produce weapons-useable
plutonium that can be processed in unshielded gloveboxes.
However, critics see the potential nonproliferation benefits of UREX+ over PUREX as minimal.
Richard Garwin suggested in testimony to Congress in 2006 that Urex+ fuel fails the
proliferation-resistance test. Since it contains 90% plutonium, it could be far more attractive to
divert than current spent fuel, which contains 1% plutonium. In other words, a terrorist would
only have to reprocess 11 kg of Urex+ fuel to obtain roughly 10 kg of plutonium, in contrast to
reprocessing 1,000 kg of highly radioactive spent fuel to get the same amount from light water
reactor fuel.96 Under the Obama Administration, the Fuel Cycle Research and Development
program is no longer focusing on Urex processes but is instead conducting long-term research
that could support a broad range of technology options, according to the DOE FY2011 budget
justification.
Another nonproliferation-related concern about GNEP was how its implementation would have
affected global stockpiles of separated plutonium. Frank Von Hippel pointed to costly plutonium
recycling programs in the United Kingdom., Russia, and Japan, where separated plutonium stocks
have accumulated to 250 tons, enough for 30,000 nuclear warheads. In Von Hippel’s view, GNEP
would have exchanged the safer on-site spent fuel storage at reactors for central storage of
separated transuranics and high-level waste, cost many times more, and increased the global
plutonium stockpile.97
A separate set of questions focused on how effective GNEP would have been in achieving its
goals. By offering incentives for the back end of the fuel cycle, GNEP was designed to attract
states to participate in the fuel supply assurances part of the framework. However, back-end fuel
cycle assurances would require significant changes in policies and laws, as well as efforts to
commercialize technologies. Further, it is far from clear that all suppliers would be able to offer
the full range of fuel cycle assurances, raising the question of the relative competitiveness of
suppliers. Critics did not necessarily argue that the overall vision of GNEP was misplaced, but
were generally skeptical that its vision could be achieved, particularly in the timeframe proposed.
GNEP itself marked a departure from a U.S. policy of not encouraging the use of plutonium in
civil nuclear fuel cycles. Supporters suggested that the U.S. policy developed in the late 1970s did
not envision a recycling process that would not separate pure plutonium, and therefore questioned
the underlying assumptions of that longstanding policy. Critics of GNEP have suggested that even
though many nations did not agree with the United States in the 1970s on the dangers of having
stockpiles of separated plutonium, the message that the United States conveyed was that
reprocessing was unnecessary to reap the benefits of nuclear power and that GNEP conveyed the
opposite message. Moreover, some critics pointed to the accumulation since the 1970s of
separated plutonium as a particular threat, given the potential for terrorist interest in acquiring
nuclear material.
An October 2007 study published by the National Academies of Science recommended that
research and development activities for new reprocessing plants continue but be scaled back, with

96 Richard Garwin, “R&D Priorities for GNEP,” Testimony to House Science Committee, April 6, 2006.
97 Frank von Hippel, “GNEP and the U.S. Spent Fuel Problem,” Briefing for Congressional Staff, March 10, 2006, at
http://www.princeton.edu/~globsec/publications/pdf/HouseBriefing10March06rev2.pdf; Frank von Hippel, “Managing
Spent Fuel in the United States: The Illogic of Reprocessing,” International Panel on Fissile Materials, January 2007, at
http://www.fissilematerials.org/ipfm/site_down/ipfmresearchreport03.pdf.
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more time and peer review before commercial plants are built. It strongly criticized DOE’s
timeline for the program, saying that “achieving GNEP’s goals are too early in development to
justify DOE’s accelerated schedule for construction of commercial facilities that would use these
technologies.”98 Congress also expressed significant concerns about GNEP in recent years,
particularly over the Bush Administration’s ambitious schedule for developing fuel cycle
demonstration facilities by FY2020.
The GNEP proposal attracted some international interest, at least among potential supplier states.
Officials from China, France, Japan, Russia, and the United States met in Washington, DC, on
May 21, 2007, to discuss GNEP and its goals. According to a joint statement issued after the
meeting, “The participants believe in order to implement the GNEP without prejudice to other
corresponding initiatives, a number of near- and long-term technical challenges must be met.
They include development of advanced, more proliferation resistant fuel cycle approaches and
reactor technologies that will preserve existing international market regulations.”
In a formal presentation of GNEP principles, made September 16, 2007, in Vienna, Austria,
participation was opened to all nations on a voluntary basis that agreed to internationally accepted
standards for a safe, peaceful, and secure nuclear fuel cycle.99 Sixteen countries joined the United
States in signing the Statement of Principles for GNEP in September 2007, and the organization’s
website listed 25 “GNEP Partners” in June 2009.100 The principles call for safe expansion of
nuclear energy, enhanced nuclear safeguards, international supply frameworks, and development
of fast reactors, “more proliferation resistant” nuclear power reactors, and spent fuel recycling
technologies in facilities that do not separate pure plutonium. They did not call upon states to
renounce or refrain from indigenous development of enrichment or reprocessing technologies but
emphasized the goal of creating “a viable alternative to acquisition of sensitive fuel cycle
technologies.” It further emphasized that participants would not be giving up any rights to benefit
from peaceful nuclear energy.
It may be difficult for the United States and others to define which states are suppliers and which
are recipients. Informally, U.S. policy currently recognizes 10 states as having enrichment
capability—the five nuclear weapon states (United States, United Kingdom, France, China,
Russia) plus Japan, Argentina, Brazil, the Netherlands, and Germany. While Argentina has a plant
(Pilcaniyeu) under safeguards, this plant has never operated commercially and it is doubtful that it
will be cost-effective, since it uses outdated gaseous diffusion technology. Brazil’s centrifuge
enrichment plant at Resende is still in the early stages of commissioning and won’t produce at a
commercial scale for several years. States such as Australia, Canada, South Africa, and Ukraine
have stated they would be interested in developing enrichment capability for export. On the
reprocessing side, South Korea has expressed interest in becoming a GNEP supplier state through
development of a pyroprocessing technique that does not separate plutonium from uranium. In the
past, the United States for proliferation reasons has rejected requests from South Korea to
reprocess U.S.-origin spent fuel.

98 “DOE’s Spent Nuclear Fuel Reprocessing R&D Program Should Be Scaled Back; Boosted Efforts to Get New
Nuclear Power Plants Online Needed,” National Academies News Release, October 27, 2007,
http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=11998.
99 “Remarks as Prepared for Delivery by U.S. Secretary of Energy Samuel W. Bodman,” 2nd Global Nuclear Energy
Partnership Ministerial Opening Session Vienna, Austria, September 16, 2007.
100Global Nuclear Energy Partnership, http://www.gneppartnership.org/index.htm.
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Despite the change in U.S. administrations, the international GNEP members have continued to
meet. The fourth Global Nuclear Energy Steering Group meeting was held in Tokyo, Japan on
April 7-8, 2009. GNEP’s Infrastructure Development Working Group (IDWG) met during May
18-20, 2009, in Manchester, England, with 18 GNEP partner and observer countries and
representatives from observer organizations participating, according to the GNEP website. The
third GNEP Executive Committee Ministerial-Level Meeting was held in Beijing on October 23,
2009, and the IDWG met in Vienna, Austria, on December 9-10, 2009.
Supply-Side approaches
Discussions in the Nuclear Suppliers Group (NSG)
Current NSG Guidelines say supplier countries should exercise restraint in transferring any
enrichment or reprocessing technologies. In the past several years, negotiations have been under
way to specify criteria for such transfers. Since the 1970s, NSG members have adhered to an
informal restriction on transferring enrichment, reprocessing, and heavy water technology to
states outside the NSG. France first proposed an approach that would lay out a set of criteria that
recipient states would first need to meet, including the following:
• Member of the NPT in full compliance.
• Comprehensive safeguards agreement and Additional Protocol in force.
• No breach of safeguards obligations, no IAEA Board of Governors decisions
taken to address lack of confidence over peaceful intentions.
• Adherence to NSG Guidelines.
• Bilateral agreement with the supplier that includes assurances on non-explosive
uses, effective safeguards in perpetuity, and retransfer.
• Commitment to apply international standards of physical protection.
• Commitment to IAEA safety standards.
The NSG also discussed including more subjective criteria in a decision to supply a state with
fuel cycle technology such as general conditions of stability and security, potential negative
impact on the stability and security of the recipient state, and whether there is a credible and
coherent rationale for pursuing enrichment and reprocessing capability for civil nuclear power
purposes.
No consensus has yet been reached on how to define these criteria, and a number of questions
remain. For example, it is clear from these requirements that states outside the NPT—such as
India, Pakistan, and Israel—would be prohibited from reprocessing and enrichment cooperation
with NSG members. To add further complications, the nuclear cooperation agreement (so-called
123 Agreement) between the US and India provides consent in principle for India to reprocess
U.S. spent fuel and agreement in principle to transfer enrichment and reprocessing-related
technology to India, pursuant to an amendment to the agreement.101 These two details suggest that
India is a reprocessing technology holder, despite not having its reprocessing facilities under

101 See CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr.
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comprehensive IAEA safeguards, and call into question criteria for distinguishing between states
that should receive assistance and those that should not, particularly since India is neither a party
to the NPT nor an NSG member.
The United States had objected to the criteria-based approach, favoring a moratorium, until spring
2008 when the Bush administration changed its policy. The U.S. reportedly would be in favor of
establishing criteria if they included a requirement that uranium enrichment be exported only
through a “black box” arrangement.102 Canada objects to this, and negotiations are still
underway.103
Group of Eight Nations (G-8)
The Group of Eight (G-8) Nations has been the forum where joint policy statements have been
made on this issue in recent years. From 2004-2007, the Group of Eight (G-8) Nations announced
a year-long suspension of any such transfers at their annual summit meetings. The 2008 Summit
declaration stated:
We agree that transfers of enrichment equipment, facilities and technology to any additional
state in the next year will be subject to conditions that, at a minimum, do not permit or
enable replication of the facilities; and where technically feasible reprocessing transfers to
any additional state will be subject to those same conditions.104
Since in 2009 there still was no agreement on the transfer criteria in the NSG, the G-8 countries said
that they would implement this policy on a national basis:
To reduce the proliferation risks associated with the spread of enrichment and reprocessing
facilities, equipment and technology, we welcome the progress that continues to be made by
the Nuclear Suppliers Group (NSG) on mechanisms to strengthen controls on transfers of
such enrichment and reprocessing items and technology. While noting that the NSG has not
yet reached consensus on this issue, we agree that the NSG discussions have yielded useful
and constructive proposals contained in the NSG’s “clean text” developed at the 20
November 2008 Consultative Group meeting. Pending completion of work in the NSG, we
agree to implement this text on a national basis in the next year. We urge the NSG to
accelerate its work and swiftly reach consensus this year to allow for global implementation
of a strengthened mechanism on transfers of enrichment and reprocessing facilities,
equipment, and technology.105

102 “Black box” or turn-key plants would be built so that recipients would not be able to replicate the facilities,
including sensitive components.
103 Daniel Horner, Mark Hibbs, “G8 adopts interim measure on sensitive nuclear exports,” Nucleonics Week, July 17,
2008.
104 See paragraph 66 of the Hokkaido Toyako G-8 Summit Leaders Declaration, July 8, 2008, http://www.mofa.go.jp/
policy/economy/summit/2008/doc/doc080714__en.html.
105 See paragraph 8 of the L’Aquila G-8 Summit’s Statement on Nonproliferation, July 2009,
http://www.g8italia2009.it/static/G8_Allegato/2._LAquila_Statent_on_Non_proliferation.pdf
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Comparison of Proposals
Table 4 provides a comparison of the major proposals currently in circulation to restrict sensitive
nuclear fuel technology development. The table is based on one created by Chaim Braun
presented at the September 2006 IAEA conference on nuclear fuel supply assurances.106


106 The IAEA proposal is “Multilateral Approaches to the Nuclear Fuel Cycle: Expert Group Report Submitted to the
Director General of the International Atomic Energy Agency,” INFCIRC/640, International Atomic Energy Agency,
February 22, 2006, p. 18. Available at http://www.iaea.org/Publications/Documents/Infcircs/2005/infcirc640.pdf.The
Six-Country Concept is “Concept for a Multilateral Mechanism for Reliable Access to Nuclear Fuel,” Proposal as sent
to the IAEA from France, Germany, the Netherlands, Russia, Ireland, and the United States, May 31, 2006. Available
at http://www-pub.iaea.org/MTCD/Meetings/PDFplus/2006/cn147_ConceptRA_NF.pdf.
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Table 4. Comparison of Major Proposals on Nuclear Fuel Services and Supply Assurances

World Nuclear
IAEA/INFCIRC/640
Putin Initiative
GNEP
Six Country Concept
Association
Goals
Identify multilateral approaches
Establish international commercially Enable expansion of nuclear
Create interim measures for
Enhance supply security.
across the fuel cycle; improve
operated nuclear fuel service
power in the United States and
front-end assurances.
non-proliferation assurances
centers in Russia, to include
around the world, promote
without disrupting market
enrichment, education and training, nuclear nonproliferation goals,
mechanisms.
and spent fuel management.
and help resolve nuclear waste
disposal issues. Provide states
with front-end and back-end
services, to provide an
alternative to the creation of
national enrichment and
reprocessing capabilities.
Target
Front-end and back-end services Supply of nuclear fuel and possibly
Front- and back-end services. It Supply of nuclear fuel.
Primarily fuel supply.
including uranium enrichment,
other fuel cycle services.
could create new class of
fuel reprocessing, and disposal
“reactor-only” states.
and storage of spent fuel.a
Methods
Reinforce commercial contracts
Commercial, long-term contracts;
Use existing enrichment and
Level I: Market
Level I: Market meets
with transparent supplier
recipients will have limited control
reprocessing services; develop
demand
arrangements with government
over joint ventures. IAEA will be
more proliferation-resistant
Level II: Fuel assurance
backing. International supply
involved.
mechanism at IAEA
Level II: Standard back-up
b
technology. Fuel supplier will
guarantees backed by fuel
be responsible for spent fuel
supply clause in enrichment
Level III: Mutual commercial
reserves.
disposition.
contracts, with IAEA
back-up arrangements
assurances
Level IV: Enriched uranium
Level III: Gov’t stocks of
reserves
enriched uranium
IAEA Role
IAEA participates in
IAEA would ensure supply with fuel IAEA would apply safeguards.
IAEA as broker. IAEA assesses
IAEA would approve
administering supply guarantees, bank created by purchasing existing
status of safeguards
“triggering” mechanism for
possibly as guarantor of service
fuel stocks and placing them under
agreements, safeguards
supply back-up. IAEA could
supplies with use of a fuel bank.
its control (IAEA would receive
implementation, safety, physical manage enriched uranium
Possible IAEA supervision of an
new funding to do so).
protection and whether a
reserve.
international consortium for
country is pursuing sensitive
reprocessing services.
fuel cycle activities.
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World Nuclear
IAEA/INFCIRC/640
Putin Initiative
GNEP
Six Country Concept
Association
Eligibility Recipient
countries
would Equal access, but prerequisite is
No requirements now (versus
IAEA-approved states that are
IAEA-approved states that
renounce the construction and
compliance with the
initial requirement for recipient in good NPT standing. States
meet all NPT obligations.
operation of sensitive fuel cycle
nonproliferation regime. Potential
states to forego enrichment
that develop national
facilities and accept safeguards of provider states could include
and reprocessing).
capabilities will not be eligible.
the highest current standards
Australia and Canada.
including comprehensive
safeguards and the Additional
Protocol.
Role of
Managing, operating centers.
Performing fuel services at
Performing fuel services, but
Perform enrichment contracts; Perform enrichment
Industry
designated center.
not necessarily coordinated.
identified need to address
contracts. No new
back-end of fuel cycle.
capabilities required.
Potential
No mechanism specified for
Incentives not specified, as well as
Lack of political will to take
Incentives may be insufficient.
Incentives may be
Concerns
assessing state’s nonproliferation compliance with nonproliferation
back spent fuel. Concerns
insufficient. How to
record.
regime. Unclear how commitments about gains for
determine price on enriched
to forgo sensitive fuel cycle
nonproliferation, if the United
uranium reserves, if they are
activities will be incorporated into
States was not reprocessing to
required.
contracts.
begin with.
a. INFCIRC/640, p. 103.
b. “Questions Abound on Proposals by Bush, Putin on Fuel Centers,” Nuclear Fuel, March 13, 2006, vol. 31, no. 3.

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Prospects for Implementing Fuel
Assurance Mechanisms
Proposals to provide an international and institutional framework for peaceful nuclear activities
have abounded since the 1940s, but few have been implemented. The U.S.-sponsored Baruch
Plan introduced at the United Nations in 1946 recommended establishing an international agency
with managerial control or ownership of all atomic energy activities. The International Atomic
Energy Agency, established in 1957, emerged as a paler version of what was suggested in the
Baruch Plan, but still retains authorities in its statute to store fissile material.
Concern about proliferation led to a flurry of proposals in the 1970s and 1980s as the United
States and others convened groups to study the issues.107 One idea studied in the mid-1970s was
regional nuclear fuel cycle centers, focused on reprocessing technologies. Several factors
contributed to its lack of success, despite support by the U.S. Congress: low uranium prices
(making plutonium recovery relatively unattractive), a slump in the nuclear industry in the late
1970s and early 1980s, and U.S. opposition to reprocessing from the late 1970s. Member states of
the IAEA also convened the International Fuel Cycle Evaluation project, which involved 60
countries and international organizations. INFCE working group reports suggested establishing a
multi-tiered assurance of supply mechanism similar to the one proposed by the Six Country
Concept in 2006. States also studied international plutonium storage in the late 1970s and early
1980s, but could not agree on how to define excess material or the requirements for releasing
materials.
As in the past, the success of current proposals may depend on whether nuclear energy is truly
revived not just in the United States, but globally. That revival will likely depend on significant
support for nuclear energy in the form of policy, price supports, and incentives. Factors that may
help improve the position of nuclear energy against alternative sources of electricity include
higher prices for other sources (natural gas and coal through a carbon tax or other restrictions),
improved reactor designs to reduce capital costs, regulatory improvements, and waste disposal
solutions.
The willingness of fuel recipient states to participate in international enrichment centers rather
than develop indigenous enrichment capabilities, and confidence in fuel supply assurance
mechanisms such as an international fuel bank, will largely determine the success of the overall
policy goal—to prevent further spread of enrichment and reprocessing technologies. So far,
proposals addressing this challenge have originated in the supplier states, with many recipient
states continuing to voice concern that their right to peaceful nuclear energy technology under the
NPT is in jeopardy. Increasingly, however, participation is being presented as a market-based
decision by countries to refrain, at least for the present, from developing their own fuel
enrichment programs.
Another factor that will shape the success of these proposals is the possible addition of other
incentives. Simply making nuclear energy cost-effective may not induce countries to forgo
indigenous enrichment and reprocessing. Such decisions may require other incentives, perhaps

107 For an analysis of these past proposals, see Lawrence Scheinman, “Equal Opportunity: Historical Challenges and
Future Prospects of the Nuclear Fuel Cycle,” Arms Control Today, May 2007.
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even outside the nuclear realm, to make them palatable. The experience of Iran may be instructive
here. Russia’s offer to provide assured enrichment services on Russian soil has gone nowhere;
instead, other, broader trade incentives may be necessary. While the case of Iran may illustrate the
extreme end of the spectrum, in terms of a country determined to develop a capability for a
weapons program, non-nuclear-weapon states will clearly take notice of how a solution develops
for Iran.
Issues for Congress
Congress would have a considerable role in at least four areas of oversight related to fuel cycle
proposals. The first is providing funding and oversight of U.S. domestic programs related to
expanding nuclear energy in the United States. Key among these programs are nuclear research
and development programs and federal incentives for building new commercial reactors.108
The second area is policy direction and/or funding for international measures to assure supply.
What guarantees should the United States insist upon in exchange for helping provide fuel
assurances? Although the Six Country Concept contains an option for a fuel bank, it would not
require participants to forswear enrichment and reprocessing.
A third set of policy issues may arise in the context of implementing the international component
of GNEP. As referenced above, in the original policy documents, GNEP participant states would
“agree to refrain from fuel cycle initiatives.” However, in recent ministerial meetings, this
language was no longer used and participation was opened to all. This is most likely meant to
increase participation in the initiative by emphasizing that GNEP is not asking states to give up
rights to peaceful nuclear technology.
Some observers believe that further restrictions on non-nuclear-weapon states party to the NPT
are untenable in the absence of substantial disarmament commitments by nuclear weapon states.
In particular, a January 4, 2007, Wall Street Journal op-ed by George Shultz, Bill Perry, Henry
Kissinger, and Sam Nunn, entitled “A World Free of Nuclear Weapons,” noted that non-nuclear-
weapon states have grown increasingly skeptical of the sincerity of nuclear weapon states in this
regard. Some observers have asserted that non-nuclear-weapon states will not tolerate limits on
NPT Article IV rights (right to pursue peaceful uses of nuclear energy) without progress under
Article VI of the NPT (disarmament). Amending the NPT is seen by most observers as
unattainable. President Obama called for the eventual elimination of nuclear weapons in a speech
in the Czech Republic on April 5, 2009.
The IAEA experts group report, INFCIRC/640, did point to the political usefulness of achieving a
ban on producing fissile material for nuclear weapons (known as fissile material production
cutoff treaty, or FMCT) to provide more balance between the obligations of nuclear and non-
nuclear-weapon states. Obama administration officials have indicated that they will pursue
negotiations on a fissile material cut-off treaty that includes verification provisions. Ultimately,
any such treaty would require Senate advice and consent to ratification.

108 See CRS Report RL33558, Nuclear Energy Policy, by Mark Holt.
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A fourth area in which Congress plays a key role would be in the approval of nuclear cooperation
agreements.109 In some cases, the United States may seek additional reassurances regarding fuel
cycle facilities during negotiations of civilian nuclear cooperation agreements. This was a topic of
controversy during the approval process for the civilian nuclear cooperation agreement with India
in September 2008.110 A civilian cooperation agreement with the United Arab Emirates was
submitted to the 111th Congress for consideration on May 21, 2009,111 and it took effect
December 17, 2009. In April 2009, the UAE had signed a memorandum of understanding with
the United States saying it would forgo “domestic enrichment and reprocessing capabilities in
favor of long-term commitments of the secure external supply of nuclear fuel.” In addition, the
nuclear cooperation agreement’s text itself states that the United States can end nuclear
cooperation with the UAE if it acquires enrichment or reprocessing facilities.


109 See CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth
Nikitin.
110 CRS Report RL33016, U.S. Nuclear Cooperation with India: Issues for Congress, by Paul K. Kerr
111 CRS Report R40344, The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation, by
Christopher M. Blanchard and Paul K. Kerr.
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Figure 2. World Wide Nuclear Power Plants Operating, Under Construction, and Planned

Source: World Nuclear Association, http://www.world-nuclear.org/info/reactors.html

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Author Contact Information

Mary Beth Nikitin, Coordinator
Mark Holt
Analyst in Nonproliferation
Specialist in Energy Policy
mnikitin@crs.loc.gov, 7-7745
mholt@crs.loc.gov, 7-1704
Anthony Andrews

Specialist in Energy and Energy Infrastructure
Policy
aandrews@crs.loc.gov, 7-6843


Acknowledgments
Jill Marie Parillo and Sharon Squassoni were original contributors to this report.

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