RD Exclusive: Anton Khlopkov, Director of the Moscow-based Center for Energy and Security Studies, discusses the impact of the Highly Enriched Uranium (HEU) Agreement on U.S.-Russia nuclear collaboration.

One of the most important outcomes of the Megatons to Megawatts project was that it contributed a lot to the integration of the Russian nuclear industry into the global market. Photo: AP

The Megatons to Megawatts program, also known as the Highly Enriched Uranium (HEU) Agreement, was one of the most successful examples of U.S.-Russia collaboration in the nuclear sphere. As its name implies, it has enabled the conversion of megatons of destructive nuclear power to megawatts of electricity. This was achieved by turning 500 tons of highly enriched uranium from Russian nuclear warheads dismantled as part of disarmament initiatives into fuel for U.S. nuclear power plants.

The program has set a precedent for a nuclear disarmament initiative being implemented using commercial mechanisms. The amount of weapons-grade material disposed of as part of the program would have been sufficient to make 20,000 nuclear warheads. That material was turned instead into enough nuclear fuel to provide electricity for our whole planet for five months, the United States for two years, or Russia for seven years.

Russia Direct talked with Anton Khlopkov, the Director of the Moscow-based Center for Energy and Security Studies (CENESS), who was directly involved in drawing up and implementing the program, to discuss the implications for nuclear security and future cooperation between Russia and the U.S.

How Megatons to Megawatts changed US-Russia relations. Video by Pavel Inzhelevsky.

Russia Direct: The Megatons to Megawatts program is a unique and outstanding example of U.S.-Russia cooperation in the nuclear sphere. Can you tell us more about it?

Anton Khlopkov: The project started in the early 1990s shortly after the collapse of the Soviet Union. At that time, more than one million scientists and engineers were working in the nuclear industry of the Soviet Union.

The industry was not well-funded at that time. The problem was how to fund it. I remember when I spoke a few years ago with Victor Mikhailov, the first Minister of Atomic Energy of the Russian Federation. He told me, “Once I came to President Yeltsin and asked for funding for the industry.” Yeltsin replied, “We don’t have money. So just go outside, try to increase your sales abroad.”

At that time, the big issue for the Russian nuclear industry was how to find contracts abroad.  So, it was a win-win situation.

First, the Megatons to Megawatts project helped a lot and contributed a lot to irreversible nuclear disarmament.

Second, it supported to a significant extent the Russian nuclear industry. During the early 1990s sometimes just 10 percent of the budget needed was received from the central government. It means that these funds were vital for the survival of the industry.

The third important outcome of the project was that it contributed a lot to the integration of the Russian nuclear industry into the global market. Just one example: In 1995, when the first supply of the low enriched uranium (LEU) as part of the Megatons to Megawatts project took place, the annual sales of Russian enrichment services were close to $800 million. At the time the Megatons to Megawatts project came to a close, this amount had almost tripled to more than $2 billion.

So, the Megatons to Megawatts project contributed a lot to the improvement of Russia’s reputation in the market.

RD: What was the role of this program in improving U.S.-Russian relations?

A.K.: I think that both sides were quite pragmatic in implementing this project. Again, [here’s] another example from the history of the project.

During the so-called “U-Turn over the Atlantic,” Prime Minister [Yevgeny] Primakov decided not to go to the United States and returned back to Moscow because he had received the information that NATO would start a military campaign against Yugoslavia. In spite of that, some very important documents related to the Megatons to Megawatts project were signed exactly the same day because people well understood that if they were not able to sign it, it would be most likely the end of the project.

It was important for the United States [as much as for Russia] because 50 percent of the electricity produced by the nuclear power plants in the U.S. used the uranium from the Russian Federation starting from 2000.

The same is true with regard to Russia. On average, it was $1 billion per year [annual income from the project], and it was quite a significant amount of funds for the Russian nuclear industry, especially in the 1990s and early 2000s.

RD: Why wasn’t the program extended?

A.K.: I think that the time has changed. I think it is good for the Russian nuclear industry, especially after the appointment of Sergey Kirienko as the head of the Russian nuclear industry, the funding of the Russian nuclear industry has improved significantly. From that point of view, there is no need any more for Russia to cooperate with the U.S. in this field under any kind of conditions.

We should keep in mind that the Megatons to Megawatts project (i.e. the HEU deal) was signed between the Tenex company, which is part of the Rosatom family, and USEC (the United States Enrichment Corporation), which played the role of a trade agent.

It means that for this project, Russia was not able to receive 100 percent of the cost of the product that it delivered. In addition, there was a political decision that it was time to go for direct cooperation between the Russian nuclear industry and the U.S. energy utilities which produce fuel, that burn nuclear fuel in their reactors.

And since the mid-2000s, starting around 2004-2005, the Russian nuclear industry increased its efforts to sign an agreement between Russia and the U.S. [The goal was] an intergovernmental agreement, or umbrella agreement, for nuclear cooperation between the nuclear industries of Russia and the U.S. Finally, the agreement was signed and entered into force in January 2011.

So, it was a political decision for Russia that it was time to change the format of cooperation.

We are still interested to continue the cooperation with the U.S. in the nuclear field because the U.S. is the biggest market. There are, in total, about 440 operational power reactors today, and 100 of them are in the U.S. It’s a huge market. We would like to be there, but we believe it’s time to change the conditions of this cooperation.

The good news is that U.S. energy utilities are ready for that. For example, the current portfolio of Russian enrichment company Tenex for cooperation with the U.S. is about $11.5 billion. This is the value of contracts that have been signed until 2025.

RD: Why wasn’t this kind of program possible with any other state except the U.S.?

A.K.: At that time, the U.S. was the only choice because this was the biggest market and, as I mentioned, 50 percent of the low enrichment uranium (LEU) that was used in the U.S. reactors came from Russia.

Probably, we could sign a similar agreement with Japan or South Korea but it would take 50 years or a hundred years to downblend the same amount of high enrichment uranium (HEU) that was downblended to LEU and then used as fuel in the U.S. power reactors.

I would not exclude that in the future this example can be used for other countries. And I do think that we still have more HEU from military programs than we actually need. And the same is true with regard to other countries with nuclear weapons, including the U.S., France, and the UK.

Some of the elements of the Megatons to Megawatts program can be used in the future in other programs, not only as part of U.S.-Russian cooperation.

RD: This leads us to the final question. How can the Megatons to Megawatts experience be used in the future or in other spheres of U.S.-Russian relations?

A.K.: We should try to use this project as an example of how pragmatic and efficient two countries can be because anti-Russian sentiments are still strong in the U.S. and vice versa in Russia.

I don’t think that many Americans know much of how Russian uranium is used to produce electricity in the U.S. And the same is true in Russia. Not many people are familiar with the fact that we are good in this industry, we are competitive, and we can provide state-of-the-art product not only domestically but also internationally.

And this is important [for Russia’s perception abroad]. The recent Olympic Games demonstrated how much still needs to be done to improve Russia’s image abroad. Sometimes, [it appeared] people who came to Sochi were trying not to enjoy the Games but rather, were trying to find what was wrong.

Regarding the nuclear industry, the big question is what is next. This program engaged many experts from both sides, which is unique not only about LEU-delivery, but also about transparency measures, control, and verification. So I think we should find a way to preserve this experience.

One of the key values of the Megatons to Megawatts project is that it was commercially oriented. It was not a non-proliferation project like many others during the 1990s.

We should also pay attention to the fact that the whole project, including the concept of the project, was designed by a scientist, by an expert, and this is unique as well: When a professor designs an idea and it turns out that it’s permanent, and that it has saved Russia’s nuclear industry at that time. This is a good example how a scholar can be important for Russia-U.S. relations.

And it should be a good example for Russian scholars and think tanks to be creative. When one person is able to generate an idea and to design a project that costs $17 billion, it means something.

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