The protocol, drafted by Deputy Secretary of Energy Daniel Poneman in February and revised in May, also expresses the U.S. intent to facilitate commercial projects to develop Mongolia's uranium deposits, to help the country become a fuel supplier to new nuclear power plants to be built in the UAE and elsewhere in the developing world.
The U.S. Congress approved a "123 Agreement" of nuclear cooperation with the UAE in 2009, with a clear view of warning Iran and reassuring Arab countries in the Gulf that the U.S. would counter Iran's nuclear ambitions with technology and political support.
The U.S.–UAE agreement specifically states that the UAE will not engage in uranium enrichment, a sticking point with Iran. However, the new protocol with Mongolia calls for U.S. assistance to Mongolia to "cover all aspects of the fuel cycle, including supplying, converting, and enriching uranium."
The protocol calls for Mongolia to begin providing nuclear fuel services within just 12 months of its adoption, an unusually short time period for matters of such sensitivity, especially since Mongolia has just begin exploration of its uranium deposits and has no known nuclear fuel production facilities.
The immediate purpose of the Memorandum of Understanding (MoU) appears to be to build a new spent fuel repository in Mongolia, not nuclear fuel fabrication. A Mongolian government delegation will visit the Idaho National Nuclear Laboratory in August to get briefed on advanced fuel cycle technologies developed for use at the now shuttered Yucca Mountain disposal site in Nevada.
Given the extreme poverty of Mongolia, the Obama administration may believe its efforts to build an international spent fuel dump in Mongolia will encounter fewer objections and little oversight, in stark contrast to the longstanding U.S. government plans to bury spent fuel deep beneath Yucca Mountain.
After decades of research that cost taxpayers billions of dollars, Nuclear Regulatory Commission chairman Gregory Jaczko summarily shut the Yucca Mountain site earlier this year without even consulting his fellow commissioners.
Long unpopular with environmental groups and Nevada Sen. Harry Reid, Yucca Mountain was the only site worldwide that was designed as a long-term repository for spent nuclear fuel.
NRC chairman Jaczko is a former staff assistant to Sen. Reid and was widely criticized by NRC staff members and by fellow commissioners during Congressional oversight hearings last month.
When Japan's Mainichi newspapers first revealed the plans to build a nuclear fuel repository in Mongolia in May, the U.S. Embassy in Tokyo issued a sharply worded denial.
"The U.S. government is not negotiating a deal to send spent nuclear fuel to Mongolia," the U.S. Embassy said in an official statement on May 10.
But the draft nuclear cooperation agreement obtained by Newsmax shows to the contrary that building a spent fuel repository in Mongolia and helping Mongolia to become a nuclear fuel supplier were precisely the intent of Deputy Energy Secretary Daniel Poneman and his deputy, Edward McGinnis.
In discussions with Japanese nuclear regulatory officials on Feb. 3-4, McGinnis said the U.S. has "no interest" in short-term nuclear fuel storage in Mongolia, but was seeking a long-term repository to replace Yucca Mountain.
One reason for this emphasis is purely commercial. Companies such as Toshiba, which now owns the Westinghouse nuclear power division and was deeply involved in negotiating the four-party protocol, must pay significant fees for short-term storage of spent fuel. But once the fuel is buried in a long-term repository, title passes to the host country as does all liability for what happens to it hundreds or even thousands of years later.
The four-party MoU recognizes this problem, since the "expansion of use of nuclear energy is highly dependent on the existence of a global nuclear liability regime" that allows power-plant operators to manage their liabilities in case of accident.
The MoU bears the stamp of the Obama administration's commitment to nuclear energy as a solution to "the challenges of climate change, energy security, and economic development," the draft protocol states.
The MoU makes extensive reference to international agreements, and emphasizes the United States commitment to "multi-lateral" solutions for the supply of nuclear fuel and nuclear waste disposal, rather than unilateral American solutions such as Yucca Mountain.
In regard to Mongolia, it recognizes "the intent of the Government of Mongolia to develop a comprehensive fuel services (CFS) program for Mongolia origin fuel, with an emphasis on emerging markets."
But even though Mongolia's president came to Washington in May, he was not handed a copy of the MoU, informed sources tell Newsmax.
One reason for the delay was the ongoing crisis in Japan's own nuclear power industry, following the earthquake and tsunami in March that caused a meltdown at Japan's Fukushima Dai-ichi nuclear power plant.
In an apologetic email sent to Poneman last week, a senior aid to Japan's nuclear power minister, Banri Kaieda, wrote that the minister was preoccupied with restarting Japan's nuclear power industry and answering critics of nuclear power. "To be frank, I am not sure if Minister Kaieda has read your e-mail at all."
Poneman had written Kaieda on July 6, urging him to move ahead to approve the agreement "by the end of calendar year 2011."
"Putting together a concrete commercial deal would go a long way to realize President Obama's vision for a new international nuclear framework and Mongolia's vision for its Nuclear Initiative," Poneman wrote.
"For the UAE and Japan this could offer a solid business opportunity, but far more than that — it is a political commitment to nonproliferation and a new nuclear energy future," Poneman added.
Poneman and his top aide have developed very close ties to Toshiba and urged the Japanese company to negotiate the nuclear fuel agreement between Mongolia and the UAE, sources in Japan indicated.
Indeed, DoE took the unusual step of inviting Toshiba officials to attend a negotiating session in Washington, D.C., on Feb. 2-3 with Mongolian and other government representatives.
But Kaieda's aide now frowns on the Toshiba involvement in the Mongolia project. "I know Toshiba is still very positive but the [Government of Japan's] position is not necessarily the same as the position of a certain private company," the aide wrote Poneman last week.
Why U.S. officials would be more vigorous in promoting the interests of a Japanese company than the Japanese government remains unclear.
But in conversations with Japanese officials, McGinnis said the United States was unhappy that Russia had offered to supply nuclear fuel for the UAE reactors and that the United States was looking for an alternative.
According to the Mainichi newspapers in Japan, "the deal would enable Japan and the U.S., which lack disposal sites of their own, to counter efforts by Russia and France to market nuclear technology internationally by selling reactors and the disposal of nuclear waste services together as a set."
