The UAE Nuclear Debate
By Dominic Moran for ISN
The UAE is moving to assuage concerns and build crucial partner relations as it pushes ahead with plans for what is likely to be the Arab world's first energy reactor program.
Opponents' hopes that a series of regional civil nuclear announcements could pass without significant progress toward implementing energy reactor programs appear to have been dashed.
A number of other Gulf Cooperation Council (GCC) states have shown an interest in independent nuclear generation, but all eyes are firmly on the UAE, where key moves to establish the legal, institutional and regulatory framework for a program are being made and key decisions on future development appear pending.
While all would-be Arab nuclear states have committed to peaceful development, the potential for the further destabilization of the regional power structure through the promotion of civil nuclear programs is of concern.
Generating controversy
With ongoing planning for a full joint GCC reactor program yielding little apparent momentum, the initiative appears to have shifted to individual state players.
International Institute for Strategic Studies research analyst Ben Rhode told ISN Security Watch, "The UAE has very valid energy reasons for wanting nuclear power: They have booming economic growth and their electricity demand is going up by some incredible percentage."
In unveiling preliminary plans for a full reactor program, the UAE has external pageacknowledged that diesel and oil generation would be sufficient to counteract a projected failure of natural gas stocks to offset an expected electricity generation shortfall. Official figures speak of an estimated year-on-year cumulative peak energy demand rise of nine percent per annum to 2020, with bolstering extant oil and diesel generation rejected on the basis of environmental concerns and cost.
Referring to the nuclear industry, European Renewable Energy Council Policy Director Oliver Schafer said, "They are not very trustworthy on their cost projections." He gave as an example the reactor currently being built in Finland, which is experiencing massive cost overruns and is running at least two years behind schedule.
While UAE officials are pondering an up-to-14 reactor program, it is likely that the Emirates will start with a two-reactor plant. The Abu Dhabi Water and Electricity Authority (ADWEA) was external pagereportedly behind a Total/Areva/Suez consortium proposal in January 2008 to build two European Pressurized Reactors in the emirate.
The current status of the consortium approach remains unclear, with a final decision likely awaiting the results of talks with a large number of foreign state and corporate players.
The issue of cost is less of a concern to the UAE than many prospective would-be Middle East nuclear states given the likely ability of the Emirates to deal with the economic fallout of possible reactor construction delays and cost overruns.
Here it is important to note that the impact of the world economic crisis has varied within the Emirates, with oil-rich Abu Dhabi seemingly less affected than Dubai. "Abu Dhabi is actually the one that is behind the nuclear program," Rhode said.
Greenpeace Mediterranean Peace and Disarmament campaigner Sharon Dolev told ISN Security Watch that she believes that an opportunity is being missed to transform the UAE's impressive record on renewable energy development into a wider regional program – underlining that the dangers of radioactive waste and aquifer pollution from reactor operation remain unresolved.
"Any factory has accidents but you pay for a reactor accident for generations," she said. Schafer agreed, opining that nuclear industry claims that new reactors are "safer" does not mean they are safe.
Iranian influence
The timing of the initial GCC announcement of interest in a joint nuclear program (December 2006) and the subsequent effort of some member states to chart a path toward independent atomic development indicate that the international failure to rein in the Iranian program is having a direct influence on Arab states' planning.
Rhodes disagrees somewhat: "I wouldn't say at all that it is a direct response and they [UAE] are trying to mirror the Iranians in any way, but there is an element in Iran's behavior impacting their decision, certainly."
The UAE has traditionally enjoyed a closer relationship to Tehran than most Gulf states; a relationship currently premised on the presence of a significant ethnic Persian minority and of significant Iranian business interests in the Emirates.
This relationship has increasingly come under pressure in recent years with growing concerns in the Gulf regarding the development of the Bushehr reactor and Natanz enrichment facility and the potential militarization of the Iranian program; missile tests and naval exercises; and growing Iranian influence in Iraq, Lebanon and the Palestinian Territories.
Gulf states' fears have been further exacerbated by the Iranian transfer of the Strait of Hormuz to Revolutionary Guards control in September 2008. This, as UAE-Iranian bilateral relations suffered a further blow with the Iranian decision to site maritime offices on a disputed island situated adjacent to key shipping lanes last year.
As tensions rise, the UAE is emerging as a key player in the developing Gulf conventional arms race.
The US Congress was notified in September 2008 of the external pageproposed sale of the Theater High Altitude Air Defense (THAAD) system, and Patriot PAC-3 and AMRAM missiles to the UAE in a deal estimated at US$6.95 billion. The UAE may also purchase advanced air-to-air missiles.
At the recent IFEX arms show in Abu Dhabi, the Emirates external pagereportedly signed deals totaling US$5 billion that included the purchase of an anti-submarine warship and military transport planes.
The UAE has a stated commitment with the GCC to a nuclear weapons-free Gulf and has made direct appeals to Iran on this issue.
Proliferation concerns
The UAE has made a clear commitment to pursuing nuclear development on the basis of program transparency, eschewing nuclear fuel cycle and reprocessing work; this, in part, to address proliferation concerns informed by illicit trade and trans-shipment ties with Iran.
The January UAE-US "123 Agreement" confirms many of the pledges made in an April 2008 Emirates policy paper on nuclear development. The pact establishes the basis for US firms to compete for Emirati nuclear contracts and for the future transfer of technologies and nuclear fuel and US aid in establishing the nuclear knowledge base crucial to future program indigenization. The agreement is still awaiting congressional debate.
Rhode explained that the UAE "couldn't have tried harder to make clear that their purpose in developing a civil nuclear program is purely civilian."
The US-UAE agreement is a sign that deep concerns regarding Dubai's long-term function as an entrepôt for trade with Iran and past role in the AQ Khan nuclear smuggling network have been overcome to an extent by recent UAE reform efforts.
"Abu Dhabi has been keen for Dubai to clean up its act. And they put in an export control law," Rhode noted, adding, "You hear varying reports: Some people say they are cracking down. If you are an Iranian expat living in the UAE it is a lot harder to set up these businesses or to open a bank account. Then you also hear people say, 'Yes, but there are ways around it.'"
On 3 March, the IAEA Board of Governors accepted the UAE ratification of the Additional Protocol, allowing significantly boosted inspections and the provision of information on putative UAE nuclear facilities and activities by the nuclear watchdog.
Schafer believes that it is "impossible" to firewall civil nuclear programs against dual use: "When it comes to building reactors in more unsafe regions with more terrorism, proliferation is definitely an issue."
Prospects for partnership
The UAE is casting the net wide in its search for nuclear partners signing a full atomic cooperation agreement with France (January 2008) and MoUs with the UK (May 2008) and Japan (January 2009) .
In October 2008 a 10-year civil deal was signed with US consultancy CH2H Hill Cos Ltd for aid in civil nuclear development. An MoU with Rolls Royce followed in November and a deal with Thorium Power Ltd has also been reported. However, the decision regarding a primary contractor for reactor fabrication does not appear to have been made.
Ultimately, the US, if it chooses, can play an important role in applying significant pressure on the UAE to quietly drop its civil nuclear program. The maintenance of the US nuclear umbrella has been a key brake on Gulf nuclear development in the past.
However, there are indications that the Obama administration - constrained by a clear strategic imperative not to undermine its bilateral relations with a key Gulf ally and energy producer - will be unwilling to shoot down the 123 Agreement. Indeed, Washington appears intent on holding up the deal as an exemplar for other regional states (notably Egypt) in pushing ahead with their own nuclear programs
As noted above, in the agreement the UAE commits to important transparency measures. However, in light of the weakness of the NPT regime and seeming unwillingness of other states to follow the UAE lead, the deal may serve to promote regional reactor development in a milieu marked by the absence of adequate nonproliferation and oversight mechanisms. This threat is conflated by the likely emphasis in each state on rapid technology and workforce indigenization and a dearth of international mechanisms to regulate nuclear exports.
Rhode does not believe the UAE deal will have a negative regional impact: "I don't think it will contribute to tensions. It doesn't have a military component. It is not like they are saying that they are developing an enrichment plant."
Dolev disagrees: "As soon as you introduce any nuclear technology into a conflict zone like the Middle East it increases the tension immediately."