Market Justifiable Nuclear Energy

Brett Madres
March 18, 2011

Submitted as coursework for Physics 241, Stanford University, Winter 2011

Introduction to the Nuclear Energy Spread

Country Date
United States 1945
Soviet Union/Russia 1949
United Kingdom 1952
France 1960
China 1964
Israel 1967
India 1988
South Africa 1982-1990
Pakistan 1990
Belarus Never
Kasakhstan Never
North Korea Never
Uzbekistan Never
Table 1: Nuclear Weapons Proliferation, 1945-2009 [2]

Nuclear energy is in the resurgent process because of the perceived economic viability of operating nuclear reactors, the ability for nuclear energy to slow climate change, and the possibility to provide energy security. [1] And although it is not entirely true, nuclear energy has been rebranded as clean, green, and secure. Due to these claims, 27 nations since 2005 have stated there intent to install nuclear power for the first time. [1] Although the Nuclear Non-Proliferation Treaty (NPT) is in place, there is still great concern with the enrichment stage in the fuel cycle because of the possibility for it to lead to nuclear weapons proliferation. Enrichment plants could be used to make enough highly enriched uranium (HEU) required to make a nuclear bomb. [1] If nuclear energy continues to advance and it becomes the least expensive way to produce electricity while abating carbon emissions then nothing except a nuclear explosion will stop its spread. Providing government support of nuclear energy commercialization projects goes against what the natural market forces would dictate and it also hides the full costs and risks associated with the technology; two factors that desperately need to be quantified. [1] Since 1950, every major government in the Western Hemisphere, Europe, Asia, and the Middle East has desired to develop nuclear energy technology, but for most the market prevented either initial investment or completion of the program. [1] Table 1 shows the countries that have developed nuclear weapons and the approximate date in which they accomplished this. [2] As nuclear technology and commercial energy programs spread, this could increase the risk of nuclear weapons proliferation and jeopardize the safety of the host nation and potentially every nation on Earth. The attacks on the United States on September 11, 2001 showed that if terrorists acquired nuclear weapons, the results would be unimaginably catastrophic.

Link Between Civilian Nuclear Energy and Nuclear Proliferation

When commercial nuclear energy projects are exported overseas, a major concern becomes nuclear energy's link to nuclear weapons proliferation. [1] All kinds of civilian nuclear assistance raise the risks of proliferation to some degree. [3] Peaceful nuclear cooperation and proliferation are connected because of the multiple uses of nuclear technology. [3] Civilian cooperation allows nuclear technology and materials necessary for a nuclear weapons program and helps educate people in the science relevant to bomb building. [3] Civilian nuclear energy programs are linked to nuclear proliferation in a few primary ways. First, receiving civilian nuclear assistance increases the probability that a nation will begin a nuclear weapons program because the expected costs will be reduced and the political leaders will have more confidence in the program's feasibility. [3] Second, a military dispute with another nation will spark the initiation of a nuclear weapons program as a security threat rises. [3] And third, nations receiving peaceful nuclear assistance are more likely to ultimately acquire nuclear weapons. Whether it is training scientists, supplying reactors, or building fuel fabrication facilities, offering nuclear aid will raise the likelihood that nuclear weapons proliferate. [3] In fact a study showed that nuclear aid increases the likelihood of attaining a nuclear bomb by approximately 360%. [3] The combination of the previously mentioned nuclear aid in tandem with military disputes increases the probability that the nation builds a nuclear weapon by approximately 750%. [3] 78% of the nations that produced a nuclear weapon needed aid to do so and no nation acquired a weapon without the use of aid between 1953 and 2000. [3]

The Need for Market Justifiable Nuclear Energy

Large civilian nuclear energy programs have shown an ability to bring a nation closer toward developing nuclear weapons and it has been market economics, more than any other factor, which has kept most nations from starting or completing their programs. [1] When the United States uses government financial incentives to promote nuclear energy programs, it will inevitably encourage other developing nations to make similar investments that these other nations could use to help move them closer to the development of nuclear weapons eventually. [1] The United States along with the other nations with nuclear power programs need to identify the full cost of nuclear energy compared to non-nuclear energy alternatives, make nuclear power operators get private financing and insurance to pay for as much of these expenses as possible, and employ market mechanisms to guide the nuclear fuel cycle and waste management decisions. [1] The most dangerous nuclear activities at this time period are building large reactors and fuel making in the Middle East. [1] The safest option is for the nations in this region to meet their energy needs through private funding. This would insure the natural selection of the financially and economically fittest energy production method (including non-nuclear). [1] In general, governments should not try to determine what energy technologies should be commercialized but instead focus on market mechanisms that might be employed to make these determinations possible. [1] Civilian nuclear projects that continue to get pushed by their governments even as they make less and less economic sense should set off more international security alarms than usual. [1] This is a sign that there are additional reasons other than the production of energy of which the government intends to use the nuclear power plant for. Promotion of market-based nonproliferation would help flag suspicious nuclear activity well before the nation got close to making bombs. [1] Spreading nuclear reactors around the world with nuclear cooperation agreements, guaranteed financing, and government backed loans is a surefire method to increase nuclear weapons-ready nations. [1] Nuclear reactors are not suited for every nation; they should only go to those that can be trusted to be out of the weapons making business and that can also profit economically from the nuclear energy program. [1]

Potential for Nuclear Terrorism

As of 2006, no terrorist organization had the ability to produce nuclear materials usable in weapons. [4] In order for a terrorist organization to build a nuclear weapon they would first need to acquire already made HEU or plutonium. [4] Without financial and industrial resources terrorists would need to steal or purchase their materials from existing stockpiles or receive aid from a nation. [4] Acknowledging the correlation between nations with nuclear energy and nations with nuclear weapons, the United States has been working to reduce the use of HEU in the civilian sector through the Reduced Enrichment for Research and Test Reactors (RERTR) Program. [4] RERTR's four objectives are to develop low enriched uranium (LEU) fuels (not weapons-usable) for research reactors, conduct operational and safety studies to determine which reactors can be converted to fuels that are not weapons-usable, help develop alternative non weapons-usable fuels, and encourage suppliers with financial and regulatory incentives to market LEU fuel. [4] The measures in RERTR make the spreading of nuclear energy less susceptible to terrorism. Starting in 1995, the United States has worked with Russia under the Megatons-to-Megawatts Program to eliminate 500 metric tons of weapons-usable HEU. [4] This program has been converting Russia's weapons-grade HEU capable of releasing megatons of explosive energy in a nuclear war to non-weapons-usable LEU to be used as nuclear reactor fuel producing megawatts of electrical power in the United States. [4] This conversion process is also known as down-blending and it is a method used in the Megatons-to-Megawatts Program to reduce the risk of outlying weapons-usable HEU that could be seized by terrorists.

Possible Solutions and Conclusions

It is not inevitable for the world to be full of nations that possess nuclear weapons. This can be avoided without government spending, military heroics, and advanced technology. [1] Determining the full cost of the implementation of a nuclear energy program is an important step that will most likely be taken by many nations in the future as carbon constraints begin to take effect. [1] While there may never be a solution to prevent proliferation and nuclear terrorism entirely there are a number of ways to dissuade nations from acquiring nuclear weapons. [1] Privatizing nuclear energy in a nation state will all but guarantee that investments will be the best economically and prevent government spending on costly nuclear programs with the hidden intent to eventually use the program to create weapons. [1] Therefore, the implementation of nuclear energy should always be economically justifiable over its non-nuclear alternatives. [1] Civilian assistance and proliferation are linked because a supply of technology and materials are being delivered that potentially have weapons applications. [3] Also once an energy program is started it makes it less expensive to begin a nuclear weapons program especially when a national security threat arises. [3] Preventing nations from starting a nuclear energy program that cannot safely and responsibly handle its demands will reduce the worries of nuclear weapon insecurity and possible terrorist catastrophe.

© Brett Madres. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] H. Sokolski, ed., Nuclear Power's Global Expansion: Weighing Its Costs and Risks (Strategic Studies Institute, 2010).

[2] E. Gartzke and M. Kroenig, "A Strategic Approach to Nuclear Proliferation," J. Conflict Resolution 53, 151 (2009).

[3] M. Fuhrmann, "Spreading Temptation: Proliferation and Peaceful Nuclear Cooperation Agreements," International Security 34, 7 (2009).

[4] C. D. Ferguson, Preventing Catastrophic Nuclear Terrorism (Council on Foreign Relations Press, 2006).