Publication: Eurasia Daily Monitor Volume: 3 Issue: 36

In the wake of the Iranian nuclear crisis, Moscow has advanced a new, or rather seemingly new, proposal to build a center for spent fuel from Iran and other states and for the enrichment of uranium for these states as well.

Under this plan Iran and other states could supposedly obtain a full nuclear-fuel cycle while being constrained from using the fuel for military purposes. Thus their nuclear programs would also remain within the purview of the Non-Proliferation Treaty. As Russian President Vladimir Putin stated, “The key element of such an infrastructure should be a system of international centers producing nuclear fuel cycle services, including uranium enrichment under close supervision of the International Atomic Energy Association on a nondiscriminatory basis.” Russia would also retain the spent fuel from any Iranian or other reactor.

This proposal remains on the table, but Tehran has hitherto reacted skeptically to it, repeatedly insisting, “It has a legal right to a complete nuclear-fuel cycle.” Although touted as a new proposal, the idea of Russia retaining Iran’s spent fuel has been around for at least three years, with repeated promises of a signed agreement ensuring that Iran would return spent fuel to Russia. But despite numerous statements that the agreement would be signed, nothing has happened. So to some degree Russia is selling the same horse again.

But this proposal also has other, less visible, purposes. As Putin indicated, this latest incarnation was first made at a January 2006 meeting of the Eurasian Economic Community. At that session Putin made clear that the proposal was connected to the economic integration of the Commonwealth of Independent States — around or under Russian leadership — and specifically to Uzbekistan’s joining the Eurasian Economic community (EURASEC).

But in fact one major purpose of the proposal, coming as it did during the energy crises with Ukraine and Georgia, is to ensure that, as is the case with natural gas, the nuclear energy potential of CIS states is subordinated to the uses and interests of Russia, not their own national interests. This proposal would therefore allow Russia close control over the course and direction of any CIS state’s overall energy program. Moreover, just as Russia uses Central Asian natural gas to subsidize its own consumption at lower-than-market prices while it sells its own gas to Europe at market prices, Russia wants to be able to sell nuclear energy abroad under this proposal, while using Central Asian energy to subsidize its own growing needs.

The irony here is that despite Russia’s abundant energy endowment, its own monopolistic practices have prevented it from fully exploiting that endowment for its own and its people’s profit and benefit. Instead, it subsidizes its citizens’ wasteful consumption and tries to control Central Asian states’ energy output so that it will not compete with Russian energy abroad and will be directed to the subsidization of this wasteful consumption. Since Russian officials predict an enormous need to expand Russia’s own peaceful nuclear-energy network to meet rising demand for its oil and gas production, this proposal amounts to another opportunity for meeting that demand at the expense of the Central Asian and other CIS governments.

Thus a hidden aspect of this proposal is Moscow’s intention to further long-standing priorities of the Putin regime, i.e. subordination of the CIS energy economies to its own direction and their continuing subsidization of its economy while Moscow blocks them from exporting energy abroad to the world market. A final aspect of this proposal is the attempt to capture the agenda and leadership of the G-8’s forthcoming St. Petersburg conference. Russia is the chairman of that conference and the prospect of its leadership filled many European capitals, not to mention Washington, with considerable concern even before the gas wars erupted with Georgia and Ukraine. Those episodes only reinforced the widespread uneasiness that Russia was an unreliable partner, especially with regard to questions of honoring contracts to provide energy. This public alarm quickly became clear to Moscow in the wake of the Ukrainian crisis. So in order to reestablish its bona fides vis-à-vis the other members of the G-8, the Kremlin developed this proposal to appear as a trustworthy steward of both the anti-proliferation campaign and of responsible energy use in general.

However Iran continues to stall Russia and insist on its right to a full nuclear-fuel cycle as stipulated in the Non-Proliferation Treaty despite Tehran’s blatant violations of that treaty. Moreover, with its recent sale of anti-aircraft missiles and other weapons to Iran Russia has made clear that it will not exact a meaningful penalty upon Iran for moving ahead with unilateral uranium enrichment. Iran’s continuing obstinacy regarding uranium enrichment and its right to the full nuclear-fuel cycle calls the viability of this proposal into question. And, upon closer examination, the content and the motives behind the offer suggest that it is just another example of Russia’s efforts to have CIS regimes subsidize its economy and subordinate themselves to Moscow while allowing Moscow to present itself as a deserving member of the G-8. In reality, it is not the responsible effort to tackle the vexing question of nuclear proliferation that Putin pretends it to be.

(RTR TV, January 31; Kommersant, January 26; Itar-Tass, January 20, 26, and February 3; Vedomosti, January 23; Nucleonics Week, January 19)