The US Must Build Saudi Arabia’s First Nuclear Reactors

This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia.

AP Photo/Nariman El-Mofty

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This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia.

Riyadh will get its atomic energy. The question is who gets the construction contracts — and the influence that goes with them.

For all the attention on Iran’s atomic ambitions and the U.S. withdrawal from a deal meant to hold them in check, there is another nuclear story unfolding in the Middle East. Saudi Arabia intends to award the contracts to build its first two nuclear reactors next year, en route to building 16 of them by 2040. It is a matter of national security that the United States re-establish its leading position in the global nuclear trade by successfully pursuing this and similar projects.

Riyadh’s nuclear ambition is not a one-off story; it represents a larger revival of nuclear power generation. Nuclear may be declining in the developed world, but it is poised for growth in the world’s emerging economies for environmental and technological reasons. The Trump administration should capitalize on these trends to fulfill its promise to revitalize America’s domestic nuclear industry while reducing risk of ceding influence to China and Russia.

While Saudi Arabia did not explicitly enshrine nuclear in its 2015 Paris commitments like other countries, it has the ninth-highest ambient air pollution. More broadly, warming in the Middle East is expected to exceed twice the world average, making the region uninhabitable by mid-century.

New designs like the nearly-commercial small modular reactor, or SMR, can also expand nuclear’s global reach. Many developing nations cannot use nuclear power because today’s 1,000-megawatt reactors are too large for smaller grids. But 50-megawatt SMR modules could fit right in.

Related: How Russia, China Use Nuclear Reactors To Win Global Influence

Even the Saudi grid, with 66 gigawatts of generating capacity, could benefit from SMRs, which could more easily replace fossil-fuel plants aging out of service. Because SMRs are compact, uniform, and factory-made, financing and construction costs would be less than gigawatt-scale designs. SMRs should also assuage safety concerns: they have simpler safety systems and can be buried for additional security, a critical consideration in the Gulf. Although SMRs are not yet ready for commercial sale in Saudi Arabia, the technology is expected to deployable in the 2020s, well within the Kingdom’s overall nuclear plans.

While the idea of a Saudi Arabia with any nuclear capability may seem dangerous, it is also inevitable. The Kingdom has already received bids from companies based in the United States, but also in France, China, Russia, and South Korea, demonstrating a global willingness to supply nuclear technology. If the United States does not build them, another country will step in.

But the U.S. nuclear industry has been in decline for a generation. Past administrations have been able to impose legally required, rigorous nonproliferation commitments from importing nations because they craved U.S. operational and regulatory experience. Despite America’s previous market leadership and strong safety and security record, its nuclear firms are no longer a clear choice.

China’s and Russia’s growing role in the global nuclear trade should worry U.S. policymakers. Moscow has a demonstrated history of leveraging energy dependencies, exploiting its dominance in the European natural gas market for political concessions. China, too, could gain similar leverage by subverting America’s security guarantees. As part of its Belt and Road Initiative, Beijing has already made predatory investments to trap countries into indebtedness. Each reactor exported could serve as an anchor for geopolitical leverage over its sixty- to eighty-year lifespan.

These emerging market dynamics will hurt international nuclear security. Both China and Russia are known for lax standards on nuclear security, poor track records on safety, and a general willingness to turn a blind eye toward partners who violate international norms — a special consideration for Saudi Arabia.

To Washington’s credit, Trump administration officials have been working diligently to secure the Saudi contract for an American firm. Energy Secretary Rick Perry has been regularly meeting with Saudi officials to negotiate a 123 Agreement, which would create the legal framework under which U.S. nuclear materials technology may be transferred. However, Riyadh has insisted upon the right to enrich its own uranium, which could potentially become weapons-grade fuel. Adding to the fire, Crown Prince Mohammed Bin Salman said that his country would pursue nuclear weapons if Iran were to develop one. It is unclear whether the United States can insist upon renunciation of uranium enrichment and still secure the Saudi contract, given that other suppliers are unlikely to impose such requirements.

U.S. nuclear experience and know-how are in decline, in part, because regulatory expansion has increased the cost of nuclear while that of natural gas has fallen amid the shale revolution. In a recent essay in The Washington Quarterly, Laura Holgate, former ambassador to the International Atomic Energy Agency (IAEA) and vice president at the Nuclear Threat Initiative, and I identified five strategies America can adopt to revitalize its nuclear industry: simplifying federal bureaucracy around commercial nuclear trade, advancing regulatory reform to expedite advanced reactor approval, lowering borrowing costs for domestic suppliers competing abroad, rebuilding the domestic nuclear workforce, and investing in innovation.

The Trump administration should use whatever influence it has with Saudi Arabia—particularly goodwill accrued from stepping away from the JCPOA—to secure reactor projects while pursuing these policies. Some country will supply the Kingdom with nuclear technology, but America is most likely to prevent Saudi Arabia from pursuing weapons and can do so without prohibiting enrichment, a measure that would make Riyadh more likely to pursue weapons development in secret. The United States should instead seek Saudi adherence to the Additional Protocol in a 123 Agreement, which would grant IAEA access to Saudi nuclear sites and materials to guard against illicit activities. By investing in innovative designs like SMRs and expediting their approval through proper regulatory channels, the United States can further work toward alleviating proliferation, safety, and security concerns by design.

The Trump administration shouldn’t miss out on the opportunity that Saudi nuclear plans represent. The White House has already pledged to revitalize the U.S. nuclear industry, and Riyadh’s energy strategy is a major step in that direction.

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