Decision Time for the HEU Deal: US Security vs. Private Interests

By Neff, Thomas L. | Arms Control Today, June 2001 | Go to article overview
Save to active project

Decision Time for the HEU Deal: US Security vs. Private Interests


Neff, Thomas L., Arms Control Today


Because USEC has control of LLS. enrichment facilities and supply from Russia, the future of the nation's nuclear fuel supply is effectively in the hands of a single private company.

In 1992, the Bush administration initiated a program with Russia to destroy 500 metric tons of highly enriched uranium (HEU) from Russian nuclear weapons-the equivalent of about 25,000 nuclear weapons-and turn it into fuel for U.S. nuclear power plants.' Codified in a 1993 government-to-government agreement, this program has become the centerpiece of U.S. efforts to prevent the nuclear arsenal of the former Soviet Union, and the personnel responsible for it, from proliferating around the world.

The flow of nuclear fuel from Russian nuclear weapons has also become essential to the 100 nuclear power plants in the United States, which supply more than 20 percent of the nation's electricity. Half of all U.S. nuclear fuel now comes from Russia, with the other half being provided by a single aging domestic facility and imports from Western Europe, which are restricted by capacity limits. This makes a secure supply of nuclear fuel from Russia at reasonable prices critical to U.S. electricity supply.

The Highly Enriched Uranium Purchase Agreement, or "HEU deal" as it is called, is thus now fundamental to U.S. energy security, as well as national and international security. Although the HEU deal was originally administered by the U.S. government, it is now run by the private U.S. Enrichment Corporation (USEC), formerly a government company under Washington's direct control. When USEC was privatized, it was given control of U.S. enrichment facilities and supply from Russia, effectively putting the future of the nation's nuclear fuel supply in the hands of a single private company.2

USEC's actions as a private company have often been in conflict with the public objectives of the HEU deal, but two recent actions the corporation has taken to better its financial situation have now brought this tension to a crisis point.

Late last year, USEC filed a trade action with the Commerce Department against the only other foreign suppliers of nuclear fuel to the United States, the European companies Urenco and Eurodif, potentially eliminating competitive supply to U.S. utilities. A successful trade action, together with exclusive control over Russian supply and U.S. domestic production, would give USEC monopoly power over the U.S. nuclear fuel supply and drive up electricity prices in the United States.

USEC is also in the process of renegotiating the terms of its contract to purchase Russian HEU and is seeking to pay a far-below-market price, a strategy that threatens the non-proliferation goals of the agreement. In 1996, before USEC was privatized, the United States directed the company to enter into a five-year, fixed-price contract with Russia. Under the terms of that contract, USEC paid Russia a discounted, but acceptable, price below what USEC resold the material for. However, that contract expires at the end of this year, and the new terms USEC has proposed could, given current and expected market conditions, result in a profit markup for USEC of 50 percent or more.'

As the only U.S. authorized buyer, USEC has tremendous power to dictate low prices to Russia. This power is limited only to the extent that the U.S. government is willing, or even able, to direct USEC's commercial activities. The great danger is that a Russia forced by USEC and the United States to accept a bad deal will lose political support for, and ultimately end, a program that is important not only to U.S. national security but also to domestic energy supply. A situation in which USEC can survive only by charging high prices to U.S. utilities while paying Russia prices far below market levels is a thus a serious threat to the United States, and steps must be taken to change it.

The HEU Deal

Nuclear fuel is made by enriching uranium so that it contains higher levels of the isotope U235 (from the naturally occurring 0.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Decision Time for the HEU Deal: US Security vs. Private Interests
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?