Saudi Ara­bia goes shop­ping for a nu­clear deal

Two pri­mary con­cerns are driv­ing Saudi Ara­bia's pur­suit of an atomic pro­gramme: en­ergy and se­cu­rity. Riyadh might sit atop the world's largest cache of oil reserves, but the coun­try has an en­ergy prob­lem.

Financial Nigeria Magazine - - Contents - “Saudi Ara­bia Goes Shop­ping for a Nu­clear Deal” is re­pub­lished un­der con­tent con­fed­er­a­tion be­tween Fi­nan­cial Nige­ria and Strat­for.

Saudi Ara­bia's crown prince was not hold­ing back any punches: “With­out a doubt, if Iran de­vel­oped a nu­clear bomb, we will fol­low suit as soon as pos­si­ble.” Mo­hammed bin Sal­man's com­ments came in an in­ter­view with "60 Min­utes" that aired just days af­ter Saudi Ara­bia's Cab­i­net ap­proved the coun­try's nu­clear en­ergy pol­icy, which clearly spells out Riyadh's in­ten­tion to de­velop its own nu­clear ac­tiv­i­ties for peace­ful pur­poses. It also comes amid the start of the crown prince's trip to the United States, as well as ne­go­ti­a­tions be­tween Wash­ing­ton and Riyadh that the lat­ter hopes will per­mit U.S. com­pa­nies to as­sist the desert king­dom in ful­fill­ing its nu­clear en­ergy am­bi­tions.

In­evitably, though, there is a catch. Saudi Ara­bia de­sires the right to en­rich and re­pro­cess fuel in any agree­ment with the United States, even though Wash­ing­ton typ­i­cally avoids en­shrin­ing the fea­ture in nu­clear pacts with other coun­tries, such as the United Arab Emi­rates and Tai­wan – es­pe­cially be­cause it can jump-start a nu­clear weapons pro­gramme. With the crown prince vis­it­ing the United States this week (fourth week in March), his state­ment will nat­u­rally do lit­tle to al­lay con­cerns about Saudi Ara­bia's long-term am­bi­tions to de­velop nu­clear weapons. Sal­man, how­ever, is hop­ing his close re­la­tion­ship with the cur­rent White House will aid Riyadh in se­cur­ing a elu­sive nu­clear agree­ment for en­ergy devel­op­ment. But Wash­ing­ton's re­fusal to play ball would be at its peril, for Riyadh has the op­tion of tak­ing its busi­ness else­where, in­clud­ing such coun­tries as Rus­sia, which has less strin­gent con­trols on en­rich­ment and re­pro­cess­ing.

Riyadh's Need for Nu­clear Power

Two pri­mary con­cerns are driv­ing Saudi Ara­bia's pur­suit of an atomic pro­gramme: en­ergy and se­cu­rity. Riyadh might sit atop the world's largest cache of oil reserves, but the coun­try has an en­ergy prob­lem. Be­fore oil prices col­lapsed in 2014, the Saudi king­dom had grown ac­cus­tomed to re­ly­ing on its do­mes­tic oil sup­plies to sub­si­dize cheap elec­tric­ity and wa­ter de­sali­na­tion dur­ing the hot sum­mer months. In the past, Saudi Ara­bia has burned over 1 mil­lion bar­rels of oil per day for power gen­er­a­tion dur­ing sea­sonal peaks. In an ef­fort to di­ver­sify, the coun­try has tar­geted the devel­op­ment of nu­clear en­ergy, re­new­ables and its own nat­u­ral gas re­sources so it can – like most of the world – cease burn­ing crude oil for

elec­tric­ity gen­er­a­tion and wa­ter de­sali­na­tion.

Riyadh en­deav­ours to con­struct 16 nu­clear re­ac­tors with a ca­pac­ity of 17.6 gi­gawatts by 2032. The am­bi­tious plans are not new; in 2009, King Ab­dul­lah is­sued a royal de­cree an­nounc­ing the king­dom's in­tent to de­velop its nu­clear en­ergy ca­pa­bil­i­ties. Two years later, it un­veiled plans for the 16 re­ac­tors, but the coun­try has strug­gled to ac­cel­er­ate the pro­gramme. Still, with so much po­lit­i­cal mo­men­tum and state-backed fund­ing be­hind Vi­sion 2030, Riyadh's am­bi­tious plan to re­duce the coun­try's de­pen­dence on oil and di­ver­sify the econ­omy, rapid progress is all but cer­tain. Riyadh has al­ready iden­ti­fied two sites, Umm Huwayd and Khor Duwei­hin, for the po­ten­tial lo­ca­tion of its first plant, along with 17 more for fu­ture con­sid­er­a­tion. In De­cem­ber 2017, Saudi Ara­bia be­gan send­ing out feel­ers to in­ter­na­tional com­pa­nies such as the United States’ West­ing­house to gauge their in­ter­est in plac­ing a bid. Ac­cord­ing to the cur­rent sched­ule, Riyadh plans to pre-qual­ify firms by the end of May and award con­tracts by the end of 2018. By next year, Saudi of­fi­cials hope the King Ab­dul­lah City for Atomic and Re­new­able En­ergy – which over­sees the nu­clear en­ergy devel­op­ment port­fo­lio – will be­gin sign­ing joint ven­tures with in­ter­na­tional part­ners.

The com­pe­ti­tion among nu­clear en­ergy devel­op­ment com­pa­nies to sign a deal with Riyadh is ex­pected to be fierce. As one of the few fi­nan­cial pow­ers wish­ing to con­struct nu­clear re­ac­tors but doesn't (un­like China), Saudi Ara­bia will draw much in­ter­est from for­eign con­trac­tors – es­pe­cially since they have suf­fered in es­tab­lished mar­kets such as Ja­pan. Saudi Ara­bia has al­ready signed a nu­clear en­ergy co­op­er­a­tion agree­ment with Rus­sia, although West­ing­house, as well as French, Chi­nese and South Korean com­pa­nies, is also ex­pected to par­tic­i­pate in con­struc­tion.

Keep­ing Up With Iran

Of all the po­ten­tial pur­vey­ors of nu­clear power to Saudi Ara­bia, the United States has his­tor­i­cally had the most strin­gent con­trols on the ex­port of the tech­nol­ogy. As a re­sult, Wash­ing­ton is likely to push Riyadh to forgo its drive to en­rich and re­pro­cess nu­clear fuel, lest it de­velop its own nu­clear weapons. Saudi Ara­bia, how­ever, has con­sis­tently told the United States that it has no in­ten­tion of aban­don­ing these goals to achieve en­rich­ment (un­like Abu Dhabi, which stated from the be­gin­ning that it did not re­quire con­trol over the fuel cy­cle), and it has gone so far as to draft plans to de­velop its own ura­nium reserves and sign a co­op­er­a­tion agree­ment with Am­man to mine the ele­ment in Jor­dan. If Saudi Ara­bia dropped its de­mands to en­gage in en­rich­ment, it could be­come be­holden to for­eign providers of nu­clear fuel, which could present a strate­gic li­a­bil­ity if re­la­tions ul­ti­mately sour with sup­ply­ing coun­tries. At the same time, Saudi Ara­bia could gen­er­ate eco­nomic growth and em­ploy­ment by at­tain­ing self-suf­fi­ciency in fuel.

Ul­ti­mately, how­ever, the per­ceived threat of a nu­clear-armed Iran un­der­scores Riyadh's se­cu­rity con­cerns and com­pels Saudi lead­ers to pur­sue a ro­bust, widerang­ing de­fense pol­icy that in­cludes de­mands for the right to en­rich­ment and, if nec­es­sary, the right to de­velop atomic weapons – even if the coun­try has been a sig­na­tory of the Treaty on the Non-Pro­lif­er­a­tion of Nu­clear Weapons for decades. If Iran were to de­velop an atomic weapon, Saudi Ara­bia could seek safety un­der the U.S. nu­clear um­brella. Out­sourc­ing pro­tec­tion to Wash­ing­ton presents risks for Riyadh, how­ever, es­pe­cially if strains emerge in their ties, as oc­curred dur­ing the ad­min­is­tra­tion of U.S. Pres­i­dent Barack Obama. Saudi Ara­bia could also find it­self out in the cold if a nu­clear-armed Iran suc­ceeded in nor­mal­iz­ing its re­la­tions with the West. In such a sce­nario, the di­min­ish­ing im­por­tance of Saudi Ara­bia's oil reserves amid the growth of en­ergy al­ter­na­tives could re­duce Riyadh's sig­nif­i­cance in the eyes of the United States, com­pound­ing the king­dom's iso­la­tion.

Ac­cord­ingly, Saudi Ara­bia is in no po­si­tion to ne­go­ti­ate away its right to process its own nu­clear fuel, even if it does in­tend to de­velop nu­clear weapons as part of its short-term and medium-term goals. While there is a sig­nif­i­cant dis­tinc­tion be­tween a nu­clear weapons pro­gramme – which re­quires both the de­vice and, fre­quently, a de­liv­ery sys­tem – and a civil­ian nu­clear en­ergy pro­gramme, they share some of the same pro­cesses, such as the en­rich­ment of ura­nium to vary­ing de­grees. Some coun­tries use a civil­ian nu­clear en­ergy pro­gramme to con­ceal the re­search and pro­duc­tion of highly en­riched ura­nium needed for a nu­clear weapon (as Iran is ac­cused of do­ing).

To rec­tify this dilemma, Saudi Ara­bia could sign the Ad­di­tional Pro­to­col with the In­ter­na­tional Atomic En­ergy Agency (IAEA), as Iran has pro­vi­sion­ally agreed to do as part of the the Joint Com­pre­hen­sive Plan of Ac­tion (JCPOA) – the nu­clear deal be­tween Tehran on one side and six global pow­ers and the Euro­pean Union on the other. The Ad­di­tional Pro­to­col does not pro­hibit coun­tries from en­rich­ing ura­nium do­mes­ti­cally but does grant the IAEA more over­sight and au­thor­ity to con­duct in­spec­tions to pre­vent any­one from de­vel­op­ing a nu­clear weapon. And with Iran al­lowed to re­tain con­trol over some of its en­rich­ment in re­turn for greater in­spec­tions, Saudi Ara­bia is ea­ger to strike a

sim­i­lar deal. As part of the JCPOA, Iran can only en­rich ura­nium to lev­els of 3.67 per­cent of ura­nium-235 – far lower than what is needed for a nu­clear weapon – and must keep its stock­piles of en­riched ura­nium at 300 kilo­grams or less. But be­cause that clause will ex­pire in 2031 (a date that U.S. Pres­i­dent Don­ald Trump is seek­ing to ex­tend with EU sup­port), Riyadh aims to cul­ti­vate a civil­ian nu­clear pro­gramme in which it en­gages in its own en­rich­ment and re­pro­cess­ing – some­thing that could be ben­e­fi­cial if Iran sud­denly de­vel­ops atomic weapons in the next two decades.

The Co­nun­drum for Congress

While the Trump ad­min­is­tra­tion and Saudi Ara­bia ul­ti­mately wish to seal an agree­ment on nu­clear power, many chal­lenges re­main. Be­fore a U.S. com­pany can trans­fer any tech­nol­ogy or equip­ment to as­sist Saudi Ara­bia in its nu­clear devel­op­ment, Wash­ing­ton and Riyadh must sign a "123 agree­ment" – so named for Sec­tion 123 of the U.S. Atomic En­ergy Act, which stip­u­lates that U.S. tech­nol­ogy trans­fers may only be used for the devel­op­ment of en­ergy pro­duc­tion. But by in­sist­ing that it main­tain the right to en­rich and process ura­nium, Saudi Ara­bia is re­quest­ing a mod­i­fied 123 agree­ment – which would re­quire U.S. con­gres­sional ap­proval.

Saudi Ara­bia could as­suage the Congress' wor­ries by promis­ing to keep en­rich­ment at a low base­line and by agree­ing to the Ad­di­tional Pro­to­col to en­able a more sig­nif­i­cant in­spec­tion process.

In mak­ing any de­ci­sion on a 123 agree­ment, Congress will weigh the longterm risk that Saudi Ara­bia could some­day use ad­vanced nu­clear tech­nol­ogy to de­velop a nu­clear weapon and pur­sue aims that diverge from U.S. strate­gic goals in the re­gion. Such con­cerns are shared by other U.S. al­lies such as Is­rael, which dis­ap­proves of Saudi Ara­bia ac­quir­ing the ca­pa­bil­ity to de­velop a nu­clear weapons pro­gramme, even though the two view Iran as a mor­tal enemy. Af­ter all, the United States and Is­rael re­mem­ber how Iran it­self rapidly trans­formed from friend to foe when it un­der­went a revo­lu­tion in 1979.

But if Saudi Ara­bia be­comes dis­con­tent at the slow pace of ne­go­ti­a­tions with the United States, or if Congress fails to find a so­lu­tion that suits Saudi de­mands, Riyadh could beat a path to the door of other nu­clear pow­ers for as­sis­tance in de­vel­op­ing a nu­clear pro­gramme. One such part­ner is Rus­sia, which has al­ready made in­roads in the Mid­dle East in places such as Egypt and Tur­key, where it is con­struct­ing nu­clear plants. At the same time, even if Saudi Ara­bia deep­ens co­op­er­a­tion with U.S. al­lies such as South Korea or France, Wash­ing­ton would still lose po­ten­tial lever­age and se­cu­rity ties if it does not suc­ceed in be­com­ing Riyadh's pri­mary part­ner in the nu­clear sec­tor.

As Sal­man ar­rives in the United States, Wash­ing­ton's del­i­cate abil­ity to dis­cuss such a deal and sat­isfy its ma­jor con­cerns will be on dis­play. The United States wishes to as­sist Saudi Ara­bia in its eco­nomic and en­ergy di­ver­si­fi­ca­tion while also main­tain­ing lever­age over the coun­try and lim­it­ing its abil­ity to ever de­velop a nu­clear weapon. In that re­spect, the United States is likely to push for some con­ces­sions, but if it de­mands too many, Wash­ing­ton will only push Riyadh into the arms of oth­ers who may grant Saudi Ara­bia greater con­trol over en­rich­ment and re­pro­cess­ing. Still, Sal­man ap­pears set to cap­i­tal­ize on the cur­rent ad­min­is­tra­tion's anti-Iran and pro-Saudi stance to se­cure a nu­clear deal that would never have been pos­si­ble un­der Trump's pre­de­ces­sor. Through it all, Iran – and the rest of the world – will be watch­ing with bated breath.

Saudi Ara­bia’s Prince Mo­hammed bin Sal­man and United States Pres­i­dent Don­ald Trump last month at the White House

Saudi and French of­fi­cials at the sign­ing of a nu­clear agree­ment in 2015

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.