By Andrew Houk – US efforts to prevent the proliferation of nuclear enrichment programs in the Middle East face a new challenge- not from a rogue state, but a close friend and partner. Upon discovering uranium deposits, the Kingdom of Jordan signaled its desire to produce fuel for its national nuclear energy program. The US worries that any enrichment in the region will be a destabilizing factor. King Abdullah II argues in a recent interview that its program would be a “model of transparency” in the region. After six months of negotiations, there is no apparent win-win solution and the stakes are high for both parties.
Jordan faces deficits in power, water, and industry. Like many countries, its sees nuclear energy as a solution to looming demographic and environmental crises. By producing its own fuel, Jordan could operate independent of the market prices and suppliers. Enrichment is also a potential source of revenue. As the region’s smallest economy, exporting electricity or nuclear fuel would allow Jordan capitalize on its estimated 65,000 tons of uranium ore (tU) and 1.5 billion tons of phosphates (which contain 130,000 tU).
In preparation for a safe and secure nuclear program, Jordan has worked with the IAEA since 1978 and recently joined 8 bilateral partnerships with nuclear states to develop capacity in its institutions, legislation, and human resources. Under the authority of the Prime Minister, two commissions, JAEC (Atomic Energy) and JNRC (regulatory), were created in 2008. To train future engineers, Jordan launched nuclear education programs in its universities. Politically, Jordan’s credibility is bolstered by its close alliance with the US and its stable relationship with Israel.
The US insists that Jordan follow the example of the UAE and forgo fuel production. As a preventative measure against proliferation, this policy is the condition for a formal nuclear cooperation agreement with the US, known as “123 Agreements.” The US has these agreements with 23 countries, 6 of which enrich uranium, but there is a specific restriction on the Middle East. In a letter to the New York Times, Chairman of the US House Committee on Foreign Affairs Howard Berman explains: “Jordan is indeed a vital partner of the US… But the more states that forswear enrichment, the safer the whole region.”
As an NPT signatory, Jordan is free to pursue an enrichment program, but has political and financial incentives to do so only with US support. In 2009, Jordan received $404 million in foreign military financing and $364 million in economic support funds from the US.
From a US perspective, the best outcome may be to postpone the issue. This would allow time for Jordan’s nuclear institutions, legislation, education, and infrastructure to mature and focus on using nuclear energy to generate power and desalinate water. A freeze on enrichment plans would allow time to reassess the political and economic viability of uranium enrichment after a period of 5 or 10 years.
The international uranium market is complex, and a cautious approach may benefit Jordan in the long run. For domestic fuel, the savings on enriched uranium must outweigh the capital and energy costs of facilities. The market price of uranium is projected to rise, but as the number of suppliers increases, price volatility may occur. According to Bloomberg Businessweek, since 2000, new mines worldwide have added as much as 32,500 tons of uranium ore annually. Capital is expensive; a modern enrichment facility can cost $2-3 billion and a reactor $5-6 billion.
Prospects for commercially exporting electricity and nuclear fuel will also depend on supply and demand. Even with its new uranium, the World Nuclear Association ranks Jordan eleventh among states with known recoverable resources. Kazakhstan’s and Canada’s extraction in 2009 alone equals one-fifth of Jordan’s total known deposits. If Jordan profits from uranium-related exports, the dominant uranium producers will have incentives to begin commercial enrichment themselves.
There are three possible scenarios resulting from these negotiations; none are without costs. In the first, Jordan proceeds with uranium enrichment without reaching a cooperation agreement with the United States. This scenario entails financial and strategic downsides for both parties.
In the second, the US and Jordan successfully negotiate an agreement that permits an enrichment program. If the market price of enriched uranium is sustained, Jordan will benefit from revenue, jobs, and cheaper energy. This could also have benefits and downsides for US policy goals. While US-Arab relations may improve, an enrichment agreement would undermine US efforts to externalize the fuel cycle in the region, through an international nuclear fuel bank.
In the third scenario, the US convinces Jordan to cede its right to uranium enrichment. This move would reinforce the UAE model and strengthen efforts to keep enrichment out of the region. This scenario could be costly for Jordan politically. The two nations would have to address how Jordan should fulfill its development needs and what incentives United States might offer as compensation. While the US non-proliferation agenda would be preserved, nations may reconsider the benefits of cooperation with the US or the NPT.
Whichever solution surfaces in the coming months will have a strong impact on the compatibility of civilian nuclear energy programs with international commitments toward non-proliferation obligations. Forgoing enrichment does not have to be a permanent condition; for the time being, the concessions of nations such as Jordan may yield unknown benefits for their region and the world.
 Figures are derived from the summary tables in the Fiscal Year 2011 Congressional Budget Justification for Foreign Operations.
Photo Credit: Jordan Atomic Energy Commission, http://www.jaec.gov.jo/