Statement of Daniel B. Poneman

Principal, The Scowcroft Group

Before the Senate Committee on Energy and Natural Resources

July 18, 2006

Mr. Chairman, it is an honor to appear before the Committee on Energy and Natural Resources to discuss the prospects for energy cooperation between the United States and India, with particular focus on the role nuclear power can play in meeting those needs.

I will focus my remarks on three aspects of this issue:  the US-Indian energy relationship, the role of nuclear power in our energy future, and the need to ensure that our nuclear future minimizes the threat of the spread of nuclear weapons.  Now that the Senate has acted on the US-Indian civil nuclear cooperation initiative, and the Executive Branch has taken up the issue for negotiations with the Government of India and consultations in the Nuclear Suppliers Group, I do not propose to address that subject.  Instead, I will base my comments on the assumption of a US-Indian agreement for cooperation in the peaceful uses of nuclear energy, and of all requisite safeguards and approvals having been obtained from the International Atomic Energy Agency and the Nuclear Suppliers Group.

I would like to offer three perspectives for the Committee’s consideration.  First, US interests would be best served by a wide-ranging, robust relationship promoting energy cooperation in all aspects.  There is broad and deep consensus in our country in favor of strengthening relations between India and the United States.  As the world’s most populous democracies, we have much in common: our dedication to promote democracy and freedom, our commitment to promote human rights and fight terror, our efforts to increase trade and investment between our two nations, our cooperation to improve public health and to provide energy for our people while protecting our environment.  We can do much together to promote the security of each of our nations and that of the international community. 

In the energy arena, the initiatives announced by President Bush and Prime Minister Singh this past March represent an important step in building the US-Indian energy relationship.  These include India’s participation in the FutureGen international partnership to create a zero-emissions coal-fired power plant, its membership in the International Thermonuclear Experimental Reactor (ITER), and its work with the United States and other Asian nations in the Asia-Pacific Partnership on Clean Development and Climate.  It would be in our national interest to see these efforts prosper, and to strengthen cooperation across the full range of fossil and renewable energy technologies not only at the government-to-government level but also at the business-to-business level.  Expanding bilateral commercial relations between our two countries will help strengthen the political ties that bind us, thereby facilitating effective cooperation in tackling difficult political and security issues.

Second, nuclear power can play an indispensable role in meeting the growing need for large amounts of electricity without aggravating greenhouse gas emissions.   I have been working on nuclear energy issues for over thirty years.  The years since then have witnessed many trials and tribulations for nuclear power.  In addition to the concern that nuclear energy programs might be misused to help develop nuclear weapons, the Three Mile Island and Chernobyl accidents reduced public confidence in the safety of nuclear power.  Further, the chronic unresolved question of how ultimately to dispose of nuclear wastes in this and many other nations has also dogged efforts to rebuild public confidence in nuclear power.

But attitudes toward nuclear power are changing.  In part, the increased public support for nuclear power has reflected the intensive efforts of the nuclear industry to address the issues of public concern, including through the development of new and improved nuclear reactor designs of greater safety and efficiency.  In addition, the citizens of the world are increasingly and properly concerned about the growing impact of global warming, rooted in the inexorable increase of global energy demand and the alarming growth of greenhouse gas emissions should the world rely excessively on fossil fuels to meet that demand.

But it is not enough to chronicle changes in public attitude.  Given the rate of projected increases in energy consumption over the coming decades, according to the 2003 MIT Study on the Future of Nuclear Power, the world will need to exercise all of its options – increased efficiency in electricity generation and use, expanded use of renewable energy sources, capture and sequestration of carbon dioxide emissions from fossil-fueled plants, and increased use of nuclear power – in order to make a significant impact on global warming.  The MIT Study further concluded that, for nuclear power simply to maintain its current share of about 17 percent of total installed electricity generating capacity, it will need to grow from about 366 reactors today to 1000 or more reactors of 1000MWe capacity.  India – with its size, its population, its growth rates, and its existing commitment to nuclear power – is likely to comprise a key component in the global nuclear energy scene for the rest of this century.

Third, the promise of nuclear power can only be fully realized if we take aggressive measures to combat the spread of nuclear weapons.   It may be, as I have just suggested, that the world is on the verge of a major expansion in the fleet of nuclear reactors providing electricity in India and, indeed, around the world.  But this future will only be realized if nuclear power is successful in addressing all relevant concerns: cost, safety, waste management, and proliferation risks.  For the balance of my remarks, I will focus on managing the proliferation risks.

Even as we envisage the possibility of a major expansion of nuclear power around the world, we are also confronting serious challenges in combating the spread of nuclear weapons, most notably in Iran and North Korea.  While nuclear reactors themselves are not the central problem in promoting weapons proliferation, a massive expansion of nuclear power could be accompanied by a commensurate expansion of fuel cycle facilities capable of enriching uranium to use as nuclear power fuel and of processing spent fuel to separate out the plutonium from uranium and fission products.  Those fuel cycle technologies can also be used to produce nuclear weapon-grade uranium and plutonium, and therefore do pose a significant proliferation risk.  If the product of any fuel cycle plants are, in fact, diverted from peaceful to explosive purposes, it could not only lead to nuclear weapons possession by terrorists or other adversaries, but also abruptly destroy the public confidence critical to the survival of nuclear as a viable energy source. 

It is therefore critical, as we seek to promote the expansion of nuclear power, that we pay equal attention to preventing the proliferation of nuclear weapon capabilities.  That is why President Bush was correct, in my view, in proposing in February 2004 that we take steps to minimize the spread of enrichment and reprocessing facilities, and why his proposal earlier this year under the Global Nuclear Energy Partnership to provide for a reliable fuel assurance also should be pursued with vigor.

And in this respect, it may well be that India, once it is engaged in civil nuclear cooperation with the United States, may be in a position to make a signal contribution to the reduction of nuclear proliferation risks.  In the July 18, 2005, Joint Statement by President Bush and Prime Minister Singh, the Prime Minister committed to refrain “from transfer of enrichment and reprocessing technologies to states that do not have them and [to] supporting international efforts to limit their spread.”  There have been a number of suggestions and proposals regarding how the international community might effectively limit the spread of enrichment and reprocessing technologies.  Proposals in this arena have come from people in and out of government, from leaders including President Bush and President Putin, as well as from the Director General of the International Atomic Energy Agency, Mohamed ElBaradei.

How could India support these efforts, as pledged in the July 18 joint statement?  It is expected that India will decide to purchase a number of nuclear reactors from foreign suppliers.  I would certainly hope that these would include U.S. reactors, all of which require enriched uranium fuel.  India could offer to lease nuclear fuel from abroad.  Suppliers would lease enriched uranium fuel to Indian reactors, but title to the material would never pass.  The spent fuel extracted from the reactor could either be stored in India or exported for storage in another country.  Either way the material would remain safeguarded, and India would claim no right to extract or access the plutonium contained in the spent fuel.   The IAEA could guarantee a back-up fuel supply to reassure the Indian Government against the risk of an arbitrary cut-off of leased fuel.

By voluntarily refraining from enriching uranium or reprocessing plutonium for its civilian program, India would show international leadership.  It would kick-start international efforts to provide fuel assurances in exchange for country pledges to refrain from enrichment and reprocessing.    By offering an economical, reliable nuclear fuel solution to countries like Iran and Brazil, nuclear fuel leasing would reduce any justification for engaging in fuel-cycle activities that would support nuclear weapons development.

Nuclear fuel leasing would embed the emerging US-Indian cooperation in civil nuclear energy into the warp and woof of global nonproliferation efforts.  Moreover, it would not erode the NPT bargain, since India would show greater restraint than the treaty requires by voluntarily refraining from enrichment and reprocessing, neither or which are expressly prohibited by the treaty.

Nuclear fuel leasing is no panacea.  It would not purport to prevent all clandestine efforts to divert civilian nuclear programs to explosive purposes, or to block dedicated bomb builders who are pursuing purely military programs.  It would, however, help reduce the risk that the global growth of atomic energy will lead to nuclear catastrophe.  And for that India would justly earn the world’s lasting gratitude.

I would be happy to respond to any questions the Committee may have.