The US Role in Global Nuclear Energy Market

In “The US Shouldn’t Abandon the Nuclear Energy Market” (Issues, Winter 2020), Travis Carless’s argument that the United States should not abandon the nuclear energy market serves as a deft defense of the national security merits of government investment in the nuclear industry. Surprisingly, climate change receives only a brief mention at the end. Carless does a good job illustrating the shift in the nuclear energy market away from US primacy, and making the case for investment in US capacity. But there are other ways the United States could pursue its nonproliferation goals, such as investments in diplomacy, inspection technology, and international institutions, without an industrial policy favoring investments in nuclear energy over other energy sources.

The author’s picture of the state of the global industry is persuasive. The supply of nuclear energy technology is shifting east, to suppliers in China, Japan, Russia, and South Korea, and the United States is no longer a dominant player in the commercial market. Carless warns that nuclear newcomer countries in search of technology may be especially vulnerable to debt-trap diplomacy by Russia and China. The introduction of advanced reactor designs from these new suppliers creates new safety and security risks in need of revised mitigation strategies.

Paradoxically, while pointing out safety vulnerabilities abroad, Carless proposes loosening rigorous regulatory requirements at home to ensure US competitiveness on the global nuclear energy market. However, the stringent safety requirements of the US Nuclear Regulatory Commission are arguably a selling point for the nation’s nuclear industry. Reputation is something difficult to earn, but easy to lose. Perhaps talented researchers such as Carless can help make progress in identifying which regulations should be reformed and how—or how regulation of new technologies can become more dynamic.

The risks that other nuclear suppliers pose to US nonproliferation goals may be overstated. The heralded “nuclear renaissance” has not come to pass, and emerging energy markets may balk at the cost of even a small nuclear reactor and creating (or re-creating) lasting dependences. The threat of Russia and China recolonizing the world with nuclear deals pales in comparison with the scale of their existing investments, such as China’s Belt and Road infrastructure initiative and the many “deals” that Russia’s state nuclear energy company, Rosatom, brags about (though many of those are still at a very early stage).

There is much the United States can do to further nonproliferation goals, including reinvesting in diplomacy, strengthening the International Atomic Energy Agency and the Non-Proliferation Treaty, and working with allies including South Korea to supply peaceful technology. There are other ways to pursue nonproliferation and nuclear deterrence goals besides nuclear exports.

From the perspective of the nuclear industry, the future is uncertain, but market signals—combined with investments in new research and engineering test facilities—may provide some guideposts. Will nuclear fusion prove feasible? Is there a commercial market for small, modular reactors? Will new reactor designs prove cost-effective at scale? There are no clear answers to these questions, but market signals can help guide investment over the medium to long term. There is a lively debate in venture capital circles over whether government investment should help firms survive the “valley of death” between initial idea and commercial production. Perhaps the nuclear industry needs more investment in the research and experimental phase before it can prove market viability. Fortunately, scholars such as Carless can help chart a path forward and identify new areas for the research and development funding that he recommends.

Patrick Roberts

Sonja Schmid

As Travis Carless explains, US nuclear suppliers have become much less significant players in the global commercial nuclear marketplace. This decline in prominence, however, doesn’t necessarily mean that the United States will cease to contribute to setting the nonproliferation, security, and safety standards of civilian nuclear operations worldwide. The influence of the United States in these areas will depend far more on its prioritization of fair and reasonable standards and its use of diplomatic, political, and scientific tools to induce cooperation among nations on nuclear policy-making than on its domestic nuclear energy capacity and global market share.

Carless describes a situation where “emerging markets’ reliance on Russia and China for low-barrier, quick pathways to nuclear power can create several nuclear proliferation, safety, and strategic risks.” Although there are consequential differences in the conditions put in place by Russian and Chinese nuclear suppliers (compared with the United States), those nations still have considerable incentives to ensure that commercial nuclear deployments don’t lead to accidents or weapons proliferation, and they are party to most of the same nuclear nonproliferation and nuclear safety agreements as the United States.

If Carless’s argument is extended to its logical conclusion, a rejuvenated US domestic nuclear industry would be expected to lead to increased safety, security, and nonproliferation standards globally. But this would be far from a certain outcome. The United States has a long history of conditioning civilian nuclear cooperation on the adoption of and adherence to nonproliferation and safety standards. In many of these instances, though, US leverage was as much about broader security and political conditions as it was about the supply of commercial technologies. A far more consistent determinant of US leverage on nuclear nonproliferation, safety, and security policy-making has been the emphasis placed on these matters by US policy-makers, and the willingness of these policy-makers to insist on fair and reasonable standards, in light of the competing economic, security, scientific, and energy interests of partner countries. Where the United States has offered a range of inducements and been consistent in its requirements of partner countries, influence on nonproliferation and nuclear security has more assuredly followed.

Government support for US domestic nuclear energy development could be a worthwhile investment, but arguing that it is essential to the nation’s leadership on nuclear nonproliferation, security, and safety is misleading. These objectives can and should be pursued regardless of the state of the US domestic nuclear industry.

Jonas Siegel