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With help from billionaire Warren Buffett, U.N. sets up nuclear fuel 'bank'

By Mary Beth Sheridan
Washington Post Staff Writer
Friday, December 3, 2010; 10:39 PM

After years of debate and a fundraising campaign launched by investor Warren Buffett, the U.N. atomic agency decided Friday to set up a $150 million uranium fuel "bank" aimed at slowing the spread of dangerous nuclear material around the globe.

The idea of such a bank has been floated for decades, but the concept took on new urgency with the development of Iran's nuclear program and the recent explosion of interest in nuclear energy.

The bank would guarantee the sale of fuel for countries' nuclear power plants, theoretically eliminating their need to develop it themselves. The same centrifuges used to prepare uranium for power plants can also be used to enrich it to higher, weapons-grade levels.

President Obama has touted the fuel bank, which will get $50 million from the U.S. government.

"This is a breakthrough in global cooperation to enable peaceful uses of nuclear energy while reducing the risks of proliferation and catastrophic terrorism," said former U.S. senator Sam Nunn, co-chairman of the Nuclear Threat Initiative, a private group that played a key role in getting the bank off the ground.

Although more guarded, academic experts said the bank was a positive step at a time of rising fears of nuclear proliferation.

"The bank is not a guarantee against the risk some countries might choose to proliferate," said Lawrence Scheinman of the James Martin Center for Nonproliferation Studies. "But the fewer the countries that have capacity to enrich [uranium] in the first place, the lower the prospect is they will be able to weaponize."

Nations on the Board of Governors of the International Atomic Energy Agency voted 28-0 to approve the bank, with six abstentions and one country absent.

The fuel bank, in essence, will ensure the sale of uranium for power plants to countries that are in good standing with the U.N. energy watchdog. The new institution is meant to be a backup in case countries face a cutoff from commercial suppliers.

A senior U.S. official said the bank was not likely to prompt Iran to alter its nuclear program, which is widely suspected of being aimed at developing weapons, a charge Tehran denies.

"But it does undercut their argument that they need to have an indigenous [uranium] enrichment program because they can't be confident they can rely on" outside suppliers of fuel, the official said, speaking on the condition of anonymity.

The fuel bank project got going in 2006 after Nunn approached Buffett with the idea. Buffett pledged $50 million, on the condition that governments kick in $100 million. That total was reached last year, with donations from the United States, the European Union, Kuwait, Norway and the United Arab Emirates.

But the project still had to navigate the tricky road of global nuclear politics.

Under the world's central nuclear pact, the 187-nation Non-Proliferation Treaty, countries are guaranteed the right to nuclear energy as long as they abstain from building atomic bombs. The five original nuclear-armed powers are supposed to gradually give up their nuclear weapons.

Many countries have been wary about giving up any rights to nuclear energy, including the ability to make their own fuel. They were assured the bank doesn't force them to do so.

"Essentially what we're saying to the world is, if you want to be in the peaceful use of nuclear power, you don't have to have those enrichment facilities," Buffett said in an interview. The Nebraska-based investor is a director of the Washington Post Co.

Kazakhstan has offered to host the new bank, although no decision has been made.

Russia recently set up a somewhat similar bank, which provides uranium to countries approved by the IAEA.

Buffett had initially set a deadline of September 2008 for the atomic agency to approve the project. That was extended several times.

"There is joy in Omaha," he said. "It's been over four years, so I feel terrific."

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