$100B Business at Stake in US-India Nuclear Deal

As the Indian parliament gets ready for a confidence vote this week, the fate of the government of Prime Minister Manmohan Singh and the US-India nuclear deal hangs in the balance.
The Indian government is pulling out all stops to win this vote to salvage the US-India nuclear deal. In addition to the Indian people, the international community and the nuclear suppliers group (NSG) are also watching the vote closely.

The NSG's interest lies in the estimated $100 billion worth of nuclear business in India over the next two decades. U.S. companies hope to capture as large of a share of that business as possible. Private studies suggest that if U.S. vendors win just two civil nuclear reactor contracts, they would create 3,000–5,000 new direct jobs and 10,000–15,000 indirect jobs in the United States, according to US International Trade Administration.

It has now been three years since the signing of the historic agreement between President Bush and Indian Prime Minister Manmohan Singh. During this period, political parties and media in India have been debating the merits and pitfalls of the agreement.

India has also asked the International Atomic Energy Agency to place the draft India-IAEA Safeguards agreement before its Board of Governors. After the board's approval, the U.S. will seek an exemption from the international Nuclear Suppliers Group that would allow the deal to proceed. The final step will be a vote in the U.S. Congress on the so-called 123 Agreement.

As the deal makes its way through the Indian parliament, the IAEA, the NSG and the US Congress, there is heavy lobbying taking place on all sides. The US nuclear suppliers lobby is actively pushing for passage in the US Congress, even if it requires a lame-duck session after the November elections. Some nonproliferation advocates in the U.S. have also stepped up their campaign against the deal. They claim the agreement will facilitate a new nuclear testing by India, and thereafter will allow India to upgrade its nuclear arsenal. Non-proliferation advocates have also argued that India could expel IAEA inspectors in the future and thwart the IAEA inspection regime.

The US legislation passed in 2006 -- the so-called Hyde Act -- that gave preliminary approval to the U.S.-India agreement, requires that Congress be in 30 days of continuous session to consider it. Congressional aides said that clock can begin to tick only once India clears two more hurdles -- completing an agreement with the International Atomic Energy Agency, and securing approval from the 45 nations that form the Nuclear Suppliers Group, which governs trade in reactors and uranium. Because of the long August recess, less than 40 days are left in the session before Congress adjourns on Sept. 26, according to the Washington Post.

India is said to be running short of uranium needed to fuel its reactors. It is anxious to win "clean" agreements with the IAEA and the NSG that would not result in fuel cutoffs if it decides to resume testing nuclear weapons.

Sen. John McCain, the Republican presidential candidate, is a strong supporter of the agreement, but Sen. Barack Obama, his Democratic rival, is more skeptical. During the congressional debate on the Hyde Act, Sen Obama added language in the bill limiting the amount of nuclear fuel supplied to India from the United States to deter nuclear testing. Though proliferation is a constant concern raised in the US, there has not been much discussion of the implications of this deal for other nations in the neighborhood: Pakistan, Iran and China.

Pakistan's nuclear fuel needs are currently very modest and they currently are met by China. China has promised to help Pakistan achieve its target of generating 8,800 MW of nuclear power by 2030 by speeding up the delivery of the six nuclear plants and supply the necessary fuel, according to various reports. At the same time, Pakistan is building a $1.2 billion facility to develop the capability to manufacture full-cycle nuclear fuel and power plants. The Iranian situation is currently very murky with the US and EU threatening sanctions if Iran continues to enrich uranium.

If India wins the IAEA and the NSG approvals that would not result in fuel cutoffs in the event it decides to resume testing nuclear weapons, it could easily bypass any US restrictions and obtain needed nuclear supplies from other nations eager to do business with India.

Here's a brief video clip with Dr. Leonard Weiss, an NPT expert, explaining the US-India nuclear deal:

Comments

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Riaz Haq said…
Here are some excepts from BBC's Soutik Biswas on anti-nuke protests at Jaitapur in India:

...By all accounts, the violence was allegedly instigated by a right-wing regional party which is struggling to regain lost political ground in the Konkan coastal area where Jaitapur is located. The upshot of such cynical politics: one 'protestor' dead when police fired on irate villagers, at least 20 wounded, a hospital damaged and passenger buses gutted by the mob.
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This is tragic because there are much more significant and vexing issues at stake in Jaitapur. After the disastrous tsunami-induced meltdown in Fukushima, Japan, should India reconsider its push towards nuclear energy? (With the landmark nuclear deal with the US under its belt, India can now import reactors and nuclear fuel.) Will acquiring large tracts of land for nuclear power stations again set the government on a collision course with sections of the unwilling - and sometimes uninformed - farmers?
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Critics like Praful Bidwai believe that India's nuclear energy drive will sound the death knell of precious ecosystems - six 1,650 megawatt reactors will be built at Jaitapur on the west coast, it is planned, in what would turn out to be the world's largest 'nuclear park'. They say the government has forcibly acquired farmland using a colonial law to build the plant. Mr Bidwai, who visited Jaitapur, writes that the nuclear plant will be situated on fertile farmland, not barren wastelands as the government would have people believe. Then there is the threat the plant poses to thriving fisheries. Officials say no local will be displaced from his land, although more than 2,000 people have had to sell parts of their land. So are the protests about better compensation for land, and guarantees about safety?

Most scientists I spoke to dismiss a lot of what the campaigners say, insisting that nuclear power is really the only option India is left with to meet its growing energy needs. An astonishing 400 million Indians continue to live in the dark, without electricity. "You have to choose the lesser evil - more carbon dioxide or the threat of radiation," one told me. Smoke-belching thermal power plants use the atmosphere as a "sewer" and impact climate change. Solar and wind energy cannot meet India's energy demands, they say. Ergo, nuclear power, they say, is the only sensible and clean option. That is why India is planning to set up some 30 reactors over as many years and get a quarter of its electricity from nuclear energy by 2050.

Scientists agree the government has to tread carefully in building consensus at the grassroots and while acquiring farmland to set up the nuclear plants - there is no room for forcible acquisition of land at unremunerative prices.

Then there is this shrill debate over the safety of the plant. Critics point out that the French-built reactor meant for Jaitapur has still not been approved by nuclear regulators worldwide. They say that the site is seismically hazardous - the area was apparently hit by 95 earthquakes between 1985 and 2005 - and since it will be built on the coast will be prone to tsunamis.

Scientists dismiss these arguments as naive and ill-informed. India, they say, will not buy these third generation reactors until international and local regulators clear them. India's nuclear regulators say that Jaitapur is in a "significantly low seismic zone" compared with Japan and Fukushima. Also, the reactors will be built on a cliff 82ft (25m) above the mean sea level. With its 20 reactors, India, scientists insist, has a good safety record. (There was a turbine room fire at a plant in 1993, and a sodium leak in another in 2000). "There have been no serious incidents. There has been no radiation leak. Our record is clean," one official said....
Riaz Haq said…
Here's an excerpt from a piece by Paul Leventhal, Nuclear Control Institute, about US's secret help that led to India's 1974 nuclear test, with the US being a proliferator:


At that time (1974), I was working on legislation to reorganize the AEC into separate regulatory and promotional agencies. I had begun investigating the weapons potential of nuclear materials being used in the U.S. Atoms for Peace program, both at home and abroad. The official wanted me to know there was no need to consider remedial legislation on nuclear exports because the plutonium used in India's test came not from the safeguarded nuclear power plant at Tarapur, supplied by the United States, but from the unsafeguarded Cirus research reactor near Bombay, supplied by Canada. "This is a Canadian problem, not ours," he said.

It took me two years to discover that the information provided me that day was false. The United States, in fact, had supplied the essential heavy-water component that made the Cirus reactor operable, but decided to cover up the American supplier role and let Canada "take the fall" for the Indian test. Canada promptly cut off nuclear exports to India, but the United States did not.

In 1976, when the Senate committee uncovered the U.S. heavy-water export to India and confronted the State Department on it, the government's response was another falsehood: the heavy water supplied by the U.S., it said, had leaked from the reactor at a rate of 10% a year, and had totally depleted over 10 years by the time India produced the plutonium for its test.

But the committee learned from Canada that the actual heavy-water loss rate at Cirus was less than 1% a year, and we learned from junior-high-school arithmetic that even a 10%- a-year loss rate doesn't equal 100% after 10 years. Actually, more than 90% of the original U.S. heavy water was still in the Cirus reactor after 10 years, even if it took India a decade to produce the test plutonium---itself a highly fanciful notion.

We also learned that the reprocessing plant where India had extracted the plutonium from Cirus spent fuel, described as "indigenous" in official U.S. and Indian documents, in fact had been supplied by an elaborate and secret consortium of U.S. and European companies.

Faced with this blatant example of the Executive Branch taking Congress for the fool, the Senate committee drafted and Congress eventually enacted the Nuclear Non-Proliferation Act of 1978. And the rest, as they say, is history.


http://www.nci.org/06nci/04/CIRUS%20Reactors%20Role%20in%20a%20US-India%20Nuclear.htm
Riaz Haq said…
Here's a WSJ story on Pakistan buying two more nuclear reactors from China:

Pakistan is acquiring two large nuclear power reactors from longtime ally China, officials said, in a $9.1 billion deal that has raised concern in Washington that Beijing is overstepping international rules on transferring nuclear technology.

For Islamabad, the pact with China counters the nuclear energy accord New Delhi signed with the U.S. under then-President George W. Bush. Pakistan regards that arrangement as providing India with an unfair potential strategic advantage for nuclear weapons. Both countries possess a nuclear arsenal.

There is unease in the U.S. and elsewhere over the security of sensitive facilities in Pakistan, where Islamist militants have shown they can attack even the most heavily guarded installations, analysts said. There is also concern the Chinese are willing to circumvent rules locking out countries from nuclear trade if, like Pakistan, they aren't part of to the nonproliferation treaty.

Pakistani officials haven't talked publicly about this latest agreement, which was quietly signed around midyear and closed in early July.
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The reactors covered by the deal would be technologically advanced and built outside the main port city of Karachi. They each would provide 1,000 megawatts of electricity, a big boost for power-starved Pakistan. "Every country has this. We are also entitled," the senior official said. "We have to focus on adding cheaper energy supply."

China would deliver the first reactor in 70 to 80 months, with the second coming 10 months later. Nuclear reactors take several years to build. They would be installed on the Karachi coast close to a small existing reactor, the senior Pakistani official said. The Chinese will provide 82% of the financing through a loan on what another Pakistani official described as very soft terms.
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With the 2005 U.S.-India Civil Nuclear Agreement India, which also isn't part of the nonproliferation treaty, won an NSG exemption to buy nuclear power technology. But legal complications have subsequently stalled the anticipated sale of American nuclear plants to India. These obstacles include the liability for compensation for accidents that now exists under Indian law, following the deadly 1984 accident at a chemical plant owned by Union Carbide, a U.S. company, in the Indian city of Bhopal. But Pakistan has objected to the pact.

Still, Pakistan, which is in a nuclear arms race with India says that accord was discriminatory. "The U.S.-India nuclear deal was very disturbing for the strategic stability of this region," said Sarwar Naqvi, a former Pakistani ambassador to the IAEA. "It put Pakistan at a disadvantage. It freed Indian uranium to be diverted to their military program."

Carnegie Endowment's Mr. Hibbs said that the design of the new 1,000-megawatt reactors that Pakistan will receive is untested, even in China. He added that the price tag doesn't suggest that Islamabad is getting any "bargain." There wasn't competitive bidding on the project.

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As part of his speech to the United Nations General Assembly last month, Prime Minister Sharif called for Pakistan to be allowed to join the Nuclear Suppliers Group. "Pakistan qualifies for full access to civil nuclear technology for peaceful purposes, to meet its growing energy needs," Mr. Sharif said.


http://online.wsj.com/article/SB10001424052702304561004579137420511807840.html
Riaz Haq said…
Here's a News report on Pakistan's civilian nuclear efforts:

ISLAMABAD: Despite facing various kinds of embargoes to obtain nuclear equipment, Pakistan will continue to develop its civil nuclear capability in a bid to diversify its energy mix and overcome power crisis, an official said.

Pakistan’s nuclear installations are safe from terrorist attacks as the outer container installed at the nuclear power plants can save them in case of missile attack or even hitting an aero plane similar to that of 9/11 attack on the twin towers in the US.

“Pakistan’s situation is quite different from that of India, as the Nuclear Supply Group has not imposed restrictions on them and even Australia is providing them uranium. We are hopeful that embargoes imposed on us for getting uranium will be lifted down the line over the next five to 10 years,” Pakistan Atomic Energy Commission (PAEC) Chairman Dr Ansar Parvez said, while briefing reporters on the occasion of media workshop organised by the PAEC on Saturday.
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In the concluding daylong workshop, the PAEC chairman said that Pakistan is facing various kinds of embargoes but the government has given its indication that whatever would be possible it would be done to install 42,000MW through nuclear power plants till 2050.

The PAEC chairman said that he was quite optimistic that time will come down the line in the next five to 10 years after lifting of embargoes on Pakistan.
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To another question about the possibility of seeking civil nuclear cooperation from the US as it did in the case of India, Dr Parvez said that there is no commercial agreement signed between the US and India.

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About the cost of nuclear power plants, he said that the nuclear energy plant costs around $4 million per megawatt that was not cheaper but in the long run, the energy generated through these plants costs cheaper as compared to other sources such as fuel and wind.

Despite all difficulties, Pakistan is continuing its nuclear energy programme with the help of China, he said, adding that three nuclear plants are already working in the country and two other are near completion.

Nuclear energy, he said, is important for Pakistan due to its sustainability and low generation cost. In the near future, PAEC is going to start building two more plants in Karachi with 2,200MW generation capacity, which are likely to be completed in 2021.

Dr Inam Ur Rehman, who is among the pioneers of the country’s nuclear programme, said that Pakistan developed the required human resource and now capable to run its programme without the help of anyone.

The scientists of the PAEC briefed about the safety measures and said that there is no safety issues with the nuclear plants in Pakistan and they are built keeping in view the extreme circumstances.

Pakistan, they said, is now using third generation nuclear equipment and that is 500 times safer as compared to the equipment installed in Fukushima and Chernobyl where nuclear accidents took place.

But, they said, that even in the case of Chernobyl and Fukushima no mass killing was observed.

Nuclear energy generation plants are not that dangerous at all, as they are perceived and all the international research reports deny that a mass killing took place after an accident in any nuclear energy generation plant.

There was no chance of leakage of radiation from these plants in any circumstances, they said.

The speakers also said that there are around 71 nuclear plants under-construction worldwide having almost 70,000 megawatts generation capacity.

All the modern and advanced countries were using nuclear power to meet their energy demands......


http://www.thenews.com.pk/Todays-News-3-229956-Pakistan-continues-to-develop-civil-nuclear-capability:-PAEC
Riaz Haq said…
The U.S. cannot afford to forget #Afghanistan and #Pakistan. #Taliban #Nukes US-#Pakistan #nuclearenergy deal #India http://wpo.st/G6Of0

A third round (Afghan-Taliban talks) was scheduled for early August in Murree (Pakistan). But it was torpedoed by the leak from Afghanistan that Mohammed Omar, the Taliban’s supposed leader, had actually been dead for two years. After a brief interlude, Akhtar Mohammed Mansour became leader of the Taliban. U.S. officials believe he launched the recent offensive in Afghanistan to consolidate his control of the group, and they’re wary of resuming the talks until the violence ebbs.

The White House is also exploring what could be a diplomatic blockbuster: possible new limits and controls on Pakistan’s nuclear weapons and delivery systems. Such an accord might eventually open a path toward a Pakistani version of the civil nuclear deal that was launched with India in 2005.


The nuclear dialogue is especially important because it would begin to address what U.S. officials for two decades have viewed as one of the world’s most dangerous security problems. A source familiar with the talks said Pakistan has been asked to consider what are described as “brackets.” Pakistan would agree to restrict its nuclear program to weapons and delivery systems that are appropriate to its actual defense needs against India’s nuclear threat. Pakistan might agree not to deploy missiles capable of reaching beyond a certain range, for example.

In return for such an agreement, the source said, the United States might support an eventual waiver for Pakistan by the 48-nation Nuclear Suppliers Group, of which the United States is a member. At U.S. urging, that group agreed to exempt India from rules that banned nuclear trade with countries that evaded the Non-Proliferation Treaty. This so-called “civil nuclear agreement” allowed India partial entry into the club of nuclear powers, in exchange for its willingness to apply International Atomic Energy Agency safeguards to its civilian program.

Pakistan prizes its nuclear program, so negotiations would be slow and difficult, and it’s not clear that Islamabad would be willing to accept the limitations that would be required. But the issue is being discussed quietly in the run-up to Prime Minister Nawaz Sharif’s visit to Washington Oct. 22. Any progress would break a stalemate that has existed since the United States detected Pakistan’s nuclear program in the mid-1980s, and especially after Pakistan exploded its first weapon in 1998.

The United States may have forgotten Afghanistan and Pakistan, but those volatile countries haven’t forgotten about the United States. The dangers are as real as ever, and so is the need for aggressive diplomacy to reduce the threat.

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