I am delighted to join Vice-Chancellor and Foreign Minister Steinmeier and other distinguished participants at this international conference. I am grateful to the governments of Germany, the Netherlands and the United Kingdom for organising this timely event to address the critical issue of assurance of supply of nuclear fuel.
Since the dawn of the nuclear age more than sixty years ago, the international community has been struggling to cage the military atom while encouraging the use of the peaceful atom - in other words, to contain the threat and maximise the opportunity. The first moves to develop a scheme to control atomic energy came very soon after the end of World War Two. In November 1945 - a few months after Hiroshima and Nagasaki demonstrated the horrific destructive power of the atomic bomb - the US President and the Prime Ministers of Britain and Canada proposed that the entire field of atomic energy should be put under international control. Nations would share scientific information for peaceful ends and atomic weapons would be eliminated. Seven months later, in June 1946, the United States put the so-called Baruch Plan before the newly created United Nations Atomic Energy Commission. The Plan proposed entrusting "all phases of the development and use of nuclear energy" to a new international authority. The manufacture of nuclear bombs would cease and existing bombs would be disposed of.
This, however, was not to be. There was no agreement on the Baruch Plan. By 1948, the Soviet Union had its own nuclear weapons and the nuclear arms race was underway. Instead of trust and cooperation, we got Mutual Assured Destruction and the balance of terror. I mention this, however, as a reminder that, when we talk about better control over the nuclear fuel cycle and nuclear disarmament, we are simply returning to unfinished business and unfulfilled visions, not embarking on something new. The difference is that we now have a chance to learn from the mistakes of the past and an opportunity not to repeat them.
Although the vision of nuclear technology shared peacefully by all failed to become reality in the 1940s and 1950s, the world powers did agree on less ambitious forms of international cooperation in the nuclear field. In due course, this became the non-proliferation regime as we know it today, with the IAEA and the nuclear Non-Proliferation Treaty at its centre. Last year we celebrated the 50th anniversary of the establishment of the IAEA. This summer marks the 40th anniversary of the signing of the NPT. The regime they embody has broadly, but imperfectly, managed to curb proliferation and enabled developing countries, through the IAEA, to benefit from nuclear science and technology. But, regrettably, it has not so far been very successful in achieving nuclear disarmament.
A growing number of countries are looking seriously at introducing or expanding the use of nuclear power as part of their energy mix. The use of nuclear power for electricity production seems certain to rise significantly in the next few decades. This is primarily because of the huge need for additional energy as the world´s reserves of fossil fuels are inexorably depleted and concerns about global warming mount. Some leading Green thinkers have concluded that nuclear energy is the only viable way ahead - although, since some of them also believe that most of humanity will soon be wiped out by global warming, I am not sure how many of us will be left to appreciate its benefits.
Energy is the engine of development. At the expanded G8 Summit in St. Petersburg in 2006, I emphasized the importance of "global energy security," which means fulfilling the energy needs of all countries and peoples. These include the 1.6 billion people who have no access to electricity, and the 2.4 billion who continue to rely on traditional biomass fuels. Today´s gross inequalities in access to energy are staggering: In some African countries, per capita electricity consumption is around 50 kilowatt-hours per year. That translates to an average availability of 6 watts - less than a normal light bulb - for each person. By contrast, the developed countries that make up the Organisation for Economic Cooperation and Development (OECD), on average, consume electricity at a rate per capita of 8 600 kilowatt-hours per year - roughly 170 times higher.
To date, the use of nuclear power has been concentrated mainly in industrialised countries. But of the 35 new reactors currently under construction, 17 are in developing countries. Recent expansion has been primarily in Asia and Eastern Europe. It is vital that the expected increase in the use of nuclear power is managed properly, taking into account all economic, safety, security and non-proliferation requirements.
If expectations of a surge in nuclear power materialise, the question arises - how will the nuclear fuel cycle in general be managed and, specifically, where will the nuclear fuel come from? Will it remain in the hands of the few existing suppliers? Or will additional States develop their own national enrichment and reprocessing capabilities? I believe it is possible - and indeed essential - to create a new mechanism that will assure supplies of nuclear fuel and reactors to countries which want them, while strengthening non-proliferation through better controls over the sensitive parts of the nuclear fuel cycle - uranium enrichment and plutonium separation - by way of a multinational approach to the front and back ends of the cycle.
Different Starting Point
The non-proliferation regime is, in many ways, at a crucial juncture. Our starting point, as we consider how to strengthen it, is clearly very different from 60 years ago. Instead of one State with nuclear weapons - with allies and rivals hot on its heels - we have nine that we know about. Despite welcome cutbacks in nuclear arsenals, there are still some 27 000 nuclear warheads in the world today. All aspects of nuclear technology are "out of the tube." Nuclear threats have become more dangerous and more complex. Virtually all States with nuclear weapons are extending or modernizing their nuclear weapon arsenals. Other States have tried to develop clandestine nuclear programmes. Terrorist groups have made clear their interest in acquiring nuclear explosive devices.
There have, of course, also been some positive developments. We now have a well functioning IAEA safeguards system to verify that nuclear activities are peaceful, and more than 100 countries in many regions of the world have got together to establish nuclear weapon-free zones.
It is, naturally, for States to decide how to respond to the challenges posed by the growth in the use of nuclear energy, especially questions associated with the fuel cycle. So far, 12 proposals have been made on different ways of assuring supply of nuclear fuel since I first suggested in 2003 that we urgently needed to revisit this important issue. The 12 proposals cover a broad spectrum, from establishing an IAEA-controlled last resort reserve of low enriched uranium to providing backup assurance of supply and setting up international uranium enrichment centres.
In developing such a mechanism, I can envisage a three-stage process. The first step would be to establish a system for assuring supply of fuel for nuclear power reactors - and, if necessary, supply of the actual reactors. The second step would be to have all new enrichment and reprocessing activities in future put exclusively under multilateral control. And the third step would be to convert all existing enrichment and reprocessing facilities from national to multilateral operations. For this to happen, a prerequisite will be to conclude a global, verifiable treaty on the prohibition of fissile material production for nuclear weapons, the FMCT, as it is called.
This is, clearly, a tall order. However, if we fail to achieve such a solution, the alternative will be the mastery of sensitive parts of the fuel cycle by more and more countries, not only for economic reasons but, equally, for deterrence purposes. This will lead to the emergence of more and more nuclear-weapon capable States, in addition to the States which already have nuclear arsenals. This, in my view, would be a dangerous setback. Rather than moving towards a nuclear-weapon-free world, we would find ourselves living under a security system that is more dependent on nuclear weapons, and therefore more precarious and unpredictable, than the one we have today, or indeed the one we had during the Cold War.
Elements of a Supply Mechanism
What are the key requirements if an assurance of supply mechanism is to work?
First, I believe, it must be unambiguously under some form of multinational control, not just managed by the leading nuclear powers or a few suppliers. Consumers and suppliers should be equal participants. Otherwise, the mechanism would fail to win the confidence of countries considering a nuclear energy programme.
Second, an assurance of supply mechanism would be available to all States, based on equal rights and obligations for all participants. Equality is key to the success of the mechanism.
Third, the release of nuclear material to a consumer State should be determined by non-political criteria established in advance and applied in an objective and consistent manner.
Fourth, assurance of fuel supply must be part of an over-arching multilateral nuclear framework. The global political environment will be critical in determining whether such a venture will succeed or fail. In particular, there is a symbiotic relationship between nuclear non-proliferation and nuclear disarmament. Neither will function without the other. The United States and Russia have a special responsibility. As holders of the largest stockpiles of nuclear weapons, their actions help to shape the actions of others. Their continued reliance - and that of the other weapon States - on nuclear weapons as the cornerstone of their security sends the wrong message. At the NPT Review Conference in 2000, the nuclear-weapon States gave an unequivocal undertaking "to accomplish the total elimination of their nuclear arsenals." They must not lose sight of that goal.
In the long term, a new nuclear framework would be helped by truly innovative reactor and fuel cycle technology which is safer than what we have at present and proliferation-resistant - in other words, designed in a way that makes it more difficult or impossible to mis-use for weapon purposes. It would also require the application of a robust IAEA safeguards system, in which a comprehensive safeguards agreement and an additional protocol are the universal standard. And we will need equally stringent international nuclear safety and security regimes.
The three big challenges we face, therefore, are to strengthen nuclear non-proliferation, accelerate the nuclear disarmament process and ensure that the benefits of nuclear energy - for power generation and other applications including in health, water and food - are made available to developing countries to help them lift their people out of poverty. The IAEA can help States to meet all three of these challenges.
To focus on the subject of this conference, our Statute already gives us the authority to provide fuel cycle related services to Member States. Many of the existing proposals on assurance of fuel supply envisage a key role for the Agency. For example, the Nuclear Threat Initiative (NTI) offered $50 million in 2006 to create a stockpile of low enriched uranium to be managed by the IAEA, provided matching contributions of $100 million could be found. Last December, the U.S. Congress authorized a matching $50 million contribution. Norway has pledged $5 million. Once the remaining $45 million needed to move this project forward is secured, I will put this project before the IAEA´s Board of Governors for their consideration.
The Russian Federation has already begun work to set up an international uranium enrichment facility housing a low enriched uranium reserve which the Agency can draw upon. We are continuing our dialogue and discussions with the Russian Federation to see when the proposal can be presented to the Board of Governors. Germany has proposed setting up an entirely new multilateral enrichment plant on an "extraterritorial" basis, with the IAEA exercising control over exports of low enriched uranium from the plant and also offering a supply assurance.
Let me reiterate my conviction that a multilateral approach to the nuclear fuel cycle has great potential to ensure safe and secure use of nuclear energy for peaceful purposes, while minimizing the risk of proliferation.
German President Horst Koehler recently highlighted the importance of trust and cooperation in international relations and said: "The best way to build trust is disarmament, arms control and non-proliferation." He also noted that trust has a key ingredient: "Whatever we demand of others, we must also demand of ourselves," he said. "Nowadays, there is no way double standards can be concealed."
I believe we will not succeed in creating a world in which the benefits of peaceful nuclear energy are available to all countries which want it, while preventing the spread of nuclear weapons, unless trust is established at every stage and at all levels: trust that access to nuclear technology will be guaranteed and not interrupted for political reasons; trust that no new countries will seek to develop nuclear weapons; and trust that the nuclear weapon States will learn to live without the protection which they believe their nuclear weapons provide.