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29–389PDF 2018

IMPLICATIONS OF A U.S.-SAUDI ARABIA NUCLEAR

COOPERATION AGREEMENT FOR THE

MIDDLE EAST

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE MIDDLE EAST AND NORTH AFRICA

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

SECOND SESSION

MARCH 21, 2018

Serial No. 115–122

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

MO BROOKS, Alabama 

PAUL COOK, California 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

ADAM KINZINGER, Illinois 

LEE M. ZELDIN, New York 

DANIEL M. DONOVAN, JR., New York 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ANN WAGNER, Missouri 

BRIAN J. MAST, Florida 

FRANCIS ROONEY, Florida 

BRIAN K. FITZPATRICK, Pennsylvania 

THOMAS A. GARRETT, JR., Virginia 

JOHN R. CURTIS, Utah 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

KAREN BASS, California 

WILLIAM R. KEATING, Massachusetts 

DAVID N. CICILLINE, Rhode Island 

AMI BERA, California 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania 

DINA TITUS, Nevada 

NORMA J. TORRES, California 

BRADLEY SCOTT SCHNEIDER, Illinois 

THOMAS R. SUOZZI, New York 

ADRIANO ESPAILLAT, New York 

TED LIEU, California

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON THE MIDDLE EAST AND NORTH AFRICA

ILEANA ROS-LEHTINEN, Florida, Chairman 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

ADAM KINZINGER, Illinois 

LEE M. ZELDIN, New York 

DANIEL M. DONOVAN, JR., New York 

ANN WAGNER, Missouri 

BRIAN J. MAST, Florida 

BRIAN K. FITZPATRICK, Pennsylvania 

JOHN R. CURTIS, Utah 

THEODORE E. DEUTCH, Florida 

GERALD E. CONNOLLY, Virginia 

DAVID N. CICILLINE, Rhode Island 

LOIS FRANKEL, Florida 

BRENDAN F. BOYLE, Pennsylvania 

TULSI GABBARD, Hawaii 

BRADLEY SCOTT SCHNEIDER, Illinois 

THOMAS R. SUOZZI, New York 

TED LIEU, California 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Henry Sokolski, executive director, The Nonproliferation Policy Education 

Center .................................................................................................................... 8

Mr. William Tobey, senior fellow, Belfer Center for Science and International 

Affairs, The John F. Kennedy School of Government, Harvard University .... 18

Ms. Sharon Squassoni, research professor of the practice of international 

affairs, Institute for International Science and Technology, Elliott School 

of International Affairs, George Washington University .................................. 23

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Henry Sokolski: Prepared statement .............................................................. 10

Mr. William Tobey: Prepared statement ............................................................... 19

Ms. Sharon Squassoni: Prepared statement .......................................................... 25

APPENDIX 

Hearing notice .......................................................................................................... 52

Hearing minutes ...................................................................................................... 53

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 54

Material submitted for the record by Mr. Henry Sokolski: 

‘‘A New Light on the Proposed U.S.-Saudi Nuclear Agreement,’’ by Victor 

Gilinsky and Henry Sokolski ........................................................................... 55

‘‘Economic Consideration of Nuclear Power Deployment in Saudi Arabia,’’ 

by Ali Ahmad .................................................................................................... 58

‘‘Nuclear Cooperation with Gulf Arabs,’’ by Mark Fitzpatrick ......................... 66

‘‘Saudi Arabia Energy Needs and Nuclear Power’’ ............................................ 68

(1)

IMPLICATIONS OF A U.S.-SAUDI ARABIA 

NUCLEAR COOPERATION AGREEMENT FOR 

THE MIDDLE EAST 

WEDNESDAY, MARCH 21, 2018

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE MIDDLE EAST AND NORTH AFRICA,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 2:00 p.m., in room 

2172 Rayburn House Office Building, Hon. Ileana Ros-Lehtinen 

(chairman of the subcommittee) presiding. 

Ms. ROS-LEHTINEN. The subcommittee will come to order. 

Thank you so much to our panelists, thank you to the audience 

and, most especially, thank you to our—to the members of our subcommittee and some visitors that we might—we might have join 

our subcommittee today. 

And after recognizing myself and my good friend, the ranking 

member, Mr. Deutch, for 5 minutes each for our opening statements, I will then recognize other members seeking recognition for 

1 minute. 

We will then hear from our witnesses and without objection, ladies and gentlemen, your written statements will be made a part 

of the record and members have 5 days to insert statements and 

questions for the record, subject to the length limitation in the 

rules. 

The chair now recognizes herself for 5 minutes. 

Just last week in an interview aired on CBS News, the crown 

prince of Saudi Arabia stated, ‘‘But without a doubt, if Iran developed a nuclear bomb, we would follow suit as soon as possible.’’

This interview aired just days after Energy Secretary Rick Perry 

flew to London to discuss a 123, or nuclear cooperation agreement, 

with senior Saudi officials. 

Saudi Arabia is planning to build two nuclear reactors along the 

Persian Gulf in the near future with plans to expand to at least 

16 reactors across the country. 

But what should alarm us all is Saudi Arabia’s insistence that 

it be allowed to have enrichment and reprocessing capabilities and 

statements about acquiring a nuclear weapon. 

The crown prince’s interview just last week is reason enough to 

have the administration pump the brakes on the negotiations and 

insist that there will be no 123 Agreement that includes enriching 

and reprocessing. 

2

Unfortunately, from the little we do know from the administration, it is looking at this deal in terms of economics and in terms 

of commerce, and national security implications only register as a 

minor issue, if at all. 

I am not completely opposed to the Saudi—to Saudi Arabia having a peaceful nuclear program. But the idea of Saudi Arabia having a nuclear program with the ability to enrich is a major national 

security concern. 

There are security risks to consider. As we all know, the Middle 

East is a region that’s constantly ensnared in conflict and instability or on the verge of conflict and instability. 

We don’t need to look further than on Saudi Arabia’s own borders where the kingdom is leading a coalition against the Iranianbacked Houthis in Yemen. 

The Houthis already targeted Riyadh’s airport in a missile attack. Hezbollah is amassing its presence in Yemen and you can be 

sure that any nuclear infrastructure that goes up will be a target 

as well. 

There are also proliferation risks to consider and the precedent 

that we may set if we allow Saudi Arabia to enrich, as other countries in the region will want similar capabilities. 

When we negotiated the UAE 123 Agreement, our partners in 

the UAE voluntarily agreed to renounce enrichment and reprocessing capabilities and technologies. 

This was a watershed agreement and has become what we now 

know as the gold standard. The previous administration abandoned 

the pursuit of the gold standard for all nuclear cooperation agreements after the UAE deal and it appears that the current administration, sadly, is following suit. 

And that is why yesterday I joined our colleague from California, 

Mr. Sherman, in sending a letter to the administration urging it 

to pursue nothing short of the gold standard in its negotiations 

with the Saudis. 

Without those assurances, we feel it would be necessary to oppose the agreement. There are too many concerns. There is no justification for our friends in Saudi Arabia to have enrichment and 

reprocessing capabilities. 

Unfortunately, the way that the current system is set up, as you 

know, it is rigged in favor of the administration—any administration—getting its 123 agreements approved no matter what. 

When the administration submits its agreement to Congress for 

our review period, we have hearings and we debate the merits of 

the agreement. 

But then the only way that Congress can block the proposals is 

by passing a joint resolution of disapproval. Not only would Congress need a majority of votes for the disapproval, we would need 

a large enough majority in order to override the President’s veto. 

And that is not how it should work. These are agreements that 

have great national security implications, we should all have robust debate. 

All of these deals should be thoroughly vetted and then, if there 

is no gold standard, Congress should have to vote to approve the 

proposal and say in the affirmative we agree with the President—

yes, this is a good deal. 

3

And that is why Brad and I, along with Judge Poe and Ranking 

Member Keating of our Nonproliferation Subcommittee introduced 

a bill today that would amend this process. 

It’s called the Nuclear Cooperation Reform Act. We want to 

amend the Atomic Energy Act. That’s the underlying law that governs these 123 Agreements and the approval procedures so that 

Congress reasserts our proper oversight role. 

Our bill would force a vote of approval on any 123 Agreement 

that falls short of the gold standard, and that’s the way it should 

be. We should not allow these agreements to come into force passively and we should not cede our authority to oversee and approve 

these agreements to the executive branch. 

I look forward to hearing from our witnesses on this plan, and 

with that, I very much look forward to the statement—opening 

statements from our ranking member, Mr. Deutch of Florida. 

Mr. DEUTCH. Thank you, Madam Chairman. 

Thanks for calling today’s hearing. Thanks for our witnesses. For 

many members, today is an opportunity to explore both the 

positives and negatives of a nuclear cooperation agreement with 

Saudi Arabia. 

We look forward to a productive discussion about this important 

subject. We, in the United States Congress, are strongly committed 

to ensuring only responsible and peaceful use of nuclear technology 

around the world and preventing the proliferation of nuclear weapons technology. 

We also understand the role energy security plays in the prospects for long-term stability in the Middle East. As such, the 

United States has demonstrated high standards for nuclear agreements in past negotiations. 

The U.S. agreement that paved the way for the United Arab 

Emirates to begin its nuclear energy program has been praised as 

upholding the gold standard of 123 Agreements for its prohibition 

on enrichment and reprocessing. 

As more Middle East nations seek to diversify their energy portfolios and limit their reliance on fossil fuels, we now must ask ourselves if the gold standard is the bar that the United States must 

always uphold. 

I believe in working to boost the U.S. economy but not at the expense of our commitment to good decision making on sharing our 

nuclear technology. 

Saudi Arabia is a strong ally in the Middle East and has consistently shared U.S. priorities to counter terrorism and limit the 

spread of dangerous Iranian-backed groups and militant ideology. 

The kingdom, however, continues to lag on several fronts including human rights, governmental and business transparency, and 

military deficiencies. 

Its government, military, and private sector see large influx—a 

large influx of funding but still suffers from mismanagement and 

inefficiencies stemming from the reliance on patronage, corruption, 

and nepotism. 

Promotions based off lineage rather than expertise, corruption 

and other bad practices will continue, I am afraid, to limit Saudi 

Arabia from thriving and growing. 

4

Reform is happening, albeit slowly, and we should be supportive 

of the steps the government has taken to address some of these 

shortcomings. Shakeups or trying to remove corruption and make 

industries and ministries more efficient. 

The reforms have touched high levels of Saudi Arabia’s government, military, and private sector including concentrated efforts to 

root out corruption and graft at Aramco before a highly-anticipated 

public offering that aims to build investor confidence and address 

criticism of widespread corruption and a lack of transparency at 

the company. 

Only time and transparency will tell if these reforms will see 

Saudi Arabia make honest efforts to turn its back on bad practices. 

But we continue to be hopeful and we continue to watch the rapid 

pace of reforms, especially as the changes may have important implications on the country’s stability and ability to safely manage 

something as important as nuclear technology. 

This comes at a time when nuclear technology is an increasingly 

important factor in Middle East relations and the battle for influence between Iran and Saudi Arabia. 

Past discussions with the kingdom fell short when Riyadh dismissed core aspects of the gold standard agreement with the UAE, 

mainly centering on its priority to retain the right to enrich uranium. 

Concessions to Saudi Arabia could threaten the UAE deal and 

set the bar for future nuclear technology negotiations. 

Conversely, the United States maintaining a hard line on this 

matter could conceivably push Riyadh to sign a nuclear deal with 

one of the other countries it gets in discussions with, the most concerning being Russia or China, both of which have lax standards, 

quality, and restrictions. 

Russia or China being the signatory on a nuclear deal would also 

increase those nations’ sway in this key region with our key ally, 

potentially limiting American influence. 

The future of Saudi Arabia’s nuclear program also has important 

implications on the Joint Comprehensive Plan of Action with Iran, 

which limits uranium enrichment but only for a set period of time. 

The U.S. attempting to restrict Saudi enrichment may be viewed 

as unfair in light of Iran potentially having the ability to restart 

this technology if it continues to adhere to the tenets of the plan. 

Now, I have long raised serious concerns about the sunsets in the 

JCPOA. But we have to draw some distinctions. The key difference 

is that Iran was already enriching uranium and the goal was to 

prevent Iran’s enrichment program from building up its stockpile 

of highly enriched uranium that is necessary for a nuclear weapon. 

Saudi Arabia will be building this ability anew. Obviously, uranium enrichment is no small factor and its implications for a nuclear weapons program are extremely concerning. 

And while Riyadh assures the world that it only wants peaceful 

nuclear technology to boost and diversify its energy sector, the 

country also is on record saying if it believes Iran is building a nuclear weapon it will quickly follow suit. 

Last week, the Crown Prince stated, as the chair already pointed 

out, Saudi Arabia does not want to acquire a nuclear bomb but 

5

without a doubt if Iran developed a nuclear bomb we will follow 

suit as soon as possible. 

The fact that there are ample enriched uranium reserves on a 

global market that would be a higher quality and cheaper for Saudi 

Arabia to import rather than try to initiate its own enrichment capability leads me to think the catalyst for wanting this technology 

is to maintain parity with Iran rather than for energy uses. 

The potential boosts for the U.S. economy and renewal of the 

U.S. nuclear industry are indeed desirable. But it hasn’t been made 

clear what we can feasibly expect. 

It’s worth discussion today about how much funding it would 

take to revive the industry, given the amount of government funds 

most other countries that produce nuclear technology put into their 

industries. 

The risks are high and will absolutely set a precedent that will 

follow us for decades to come. We don’t take this decision lightly 

and I am very grateful to our panel. I hope for a productive discussion that may illuminate some of these key gaps. 

Thank you, Madam Chair. 

Ms. ROS-LEHTINEN. Excellent points. Thank you so much, Mr. 

Deutch. 

And now I am going to recognize the members. Mr. Chabot of 

Ohio. 

Mr. CHABOT. Thank you, Madam Chair, for holding this important hearing today and I’ll be very brief so that we can get to the 

witnesses. 

Whenever we discuss the transfer of nuclear technologies there 

is always cause for concern and, unfortunately, the conversation we 

are having today would be completely different without a resurgent 

Iran. 

The Saudis have to deal with an Iran bent on dominance for the 

foreseeable future. President Obama’s Iran deal provided Tehran 

with the cash to expand its influence throughout the Middle East 

and since the JCPOA was agreed to, we have seen the mullahs develop ballistic missiles and fight proxy wars throughout the region, 

and on and on. 

Worse, the JCPOA makes it a virtual certainty that Iran will develop a nuclear weapon. Iran’s nuclear ambitions raise the specter 

that other nations will be forced to follow suit, Saudi Arabia in particular. 

So, Madam Chair, thank you for calling this distinguished panel 

here today at this very critical time, and I yield back. 

Ms. ROS-LEHTINEN. You are so right. 

Thank you so much, Mr. Chabot. 

And Ms. Frankel of Florida. 

Ms. FRANKEL. Thank you, Madam Chair. Thank you to the ranking member. Thank you both for your very articulate thoughtful 

comments. 

I just want to start by saying that we need to do everything possible to prevent nuclear proliferation. Even a country that we think 

are our friends, you just never know whose hands these weapons 

will fall into at a later date. 

What worries me is that we have a President who wrote this 

book, ‘‘The Art of the Deal,’’ who believes that success is based 

6

upon how much money you make and I think there is some thinking in the administration’s part that our participation in this agreement could reap billions of dollars for the U.S. economy. 

I know everyone here thinks there is much more at stake than 

that. Mr. Deutch raised, I thought, an interesting dilemma, which 

is, you know, damned if you do, damned if you don’t, because if it 

was just up to us and we said no, we are not going to get into this 

agreement with you and that was the end of it, I think that would 

be easy. 

My concern is and what I’d like to hear from you is what happens if we don’t have an agreement and we just leave it for the 

Saudis to go and make one with Russia or China. I think that’s the 

big dilemma here. 

Anyway, thank you for being here and I look forward to your testimony. 

Ms. ROS-LEHTINEN. Good points, Lois. Thank you so much. 

Mr. Wilson of South Carolina. 

Mr. WILSON. Thank you, Chairwoman Ileana Ros-Lehtinen, for 

convening this important hearing. 

I applaud the Trump administration for their aggressive advocacy on behalf of the U.S. nuclear technology in Saudi Arabia. 

The energy landscape in Saudi Arabia and the entire Gulf Cooperation Council region is shifting dramatically with a strong interest in renewable energy and particularly nuclear power. 

The facts are clear. Saudi Arabia will construct civilian nuclear 

reactors. The only remaining question is who will build them. 

I believe the commercial interests and national security interests 

are intertwined, with suppliers of this technology gaining decades 

of influence over regional energy security and nonproliferation 

standards. 

Sadly, the American nuclear industry has experienced setbacks 

at home with only two reactors under construction at Plant Vogtle, 

adjacent to the district I represent in Georgia. The United States 

should be doing everything in its power to find new and emerging 

markets for its nuclear technology. 

Later today I am grateful to introduce a resolution with Congressman Don Norcross of New Jersey aimed at promoting a comprehensive U.S. strategy to engage in the developing energy market across the entire Gulf Cooperation Council region, especially 

with regard to nuclear power. 

This will include aggressive negotiation of peaceful nuclear cooperation agreements with the remaining GCC countries just as 

the administration is now doing with Saudi Arabia. 

I yield back. Thank you. 

Ms. ROS-LEHTINEN. Thank you very much, Mr. Wilson. 

Mr. Sherman of California. 

Mr. SHERMAN. Thank you for holding these hearings and allowing me to participate. 

We already have a gold standard template for 123 Agreements 

or nuclear cooperation agreements. We have one with the United 

Arab Emirates, signed in 2009, which prevents reprocessing and 

enrichment. 

7

Saudi Arabia also wants a nuclear cooperation agreement with 

us, yet they balked at the idea of such restrictions. We need a gold 

standard agreement. 

Yesterday, I joined with the chair of this committee in writing a 

letter to the secretary of energy on this issue, urging that we press 

for a prohibition of enrichment and reprocessing in the nuclear cooperation agreement. Today I join with the chairwoman, Congressman Ted Poe, and Congressman Bill Keating, the respective chairman and ranking member of the subcommittee on nonproliferation 

in introducing the Nuclear Cooperation Reform Act of 2018, to provide stronger congressional influence in the process of agreeing to 

nuclear cooperation agreements and requiring an affirmative vote 

of Congress before we enter an agreement that does not meet the 

gold standard. 

Two points I want to make about Saudi Arabia. First, just because they are anti-Iran does not mean they are a Jeffersonian democracy. And second, even if you find MBS, who’s here in Washington, to be utterly charming or pro-American, remember that the 

Shah seemed utterly charming and pro-American or at least proAmerican back in 1978 and 1979, and all the weapons under his 

control are now in the control of the Islamic Republic. 

So we need to be careful and not allow Saudi Arabia to develop 

a nuclear weapon just because we are worried about the nuclear 

program in Iran, and I yield back. 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman. 

And seeing no other requests for time, I am proud to introduce 

our witnesses. 

First, we are delighted to welcome back a good friend, Henry 

Sokolski, executive director of the Nonproliferation Policy Education Center. 

Prior to this, Mr. Sokolski served as Deputy for Nonproliferation 

Policy in the Office of the Secretary of Defense, and before that he 

worked in the Secretary of Defense’s Office of Net Assessment on 

strategic weapons proliferation issues. 

Thank you for being here with us again, Henry, and we look forward to your testimony. 

Next, we are delighted to also welcome back a good friend, Mr. 

William Tobey, senior fellow to the Belfer Center for Science and 

International Affairs and director of the U.S.-Russia initiative to 

prevent nuclear terrorism. 

Previously, Mr. Tobey served as Deputy Administrator for Defense Nuclear Nonproliferation at the National Nuclear Security 

Administration. 

Mr. Tobey also served on the National Security Council staff 

under three Presidents and we look forward to your testimony as 

well, Mr. Tobey. 

And finally, we are delighted to welcome Ms. Sharon Squassoni, 

research professor of practice and international affairs at the Institute for International Science and Technology Policy at the George 

Washington University. 

Prior to this position, Ms. Squassoni directed the Proliferation 

Prevention Program at the Center for Strategic and International 

Studies in Washington, DC. 

8

She has also served at the State Department and in the Congressional Research Service. Great to have you here, Ms. Squassoni. 

We thank all of our witnesses for braving the weather and agreeing to see this hearing through despite the snow. So we greatly appreciate your commitment to this important matter. 

And as I had said, your written statements will be made a part 

of the record. Please feel free to summarize, and we will begin with 

Mr. Sokolski. 

Probably move that microphone a little closer. Thank you. 

STATEMENT OF MR. HENRY SOKOLSKI, EXECUTIVE DIRECTOR, THE NONPROLIFERATION POLICY EDUCATION CENTER 

Mr. SOKOLSKI. Thank you very much for holding this hearing 

and showing your true grit in sticking to your flight plan, getting 

us all here despite our whining and complaints. 

This, I understand from my staff, is the thirteenth time I have 

appeared before you to testify on nuclear policy issues. 

Ms. ROS-LEHTINEN. You have got to make it interesting, like 

Elizabeth Taylor said to her fifteenth husband. 

Mr. SOKOLSKI. Well, I’d like to. [Laughter.] 

Yes. Well, I do rhyme a lot. I apologize for that. 

I think it’s a providential number at this time. I am counting on 

it. This is even not the first time I’ve testified about the legislation 

that you have pushed. 

In this regard, I want to say that it’s been a privilege to work 

with you and your staff on so many of these issues since 1995. Your 

willingness to take these issues on actually keeps my faith in this 

institution. 

Actually, it helps me to get up in the morning and not be discouraged, and I say that about your example. I hope I haven’t 

overdone it. But you can tell I actually think this. 

So I want to ask permission to put four items into the record. 

Ms. ROS-LEHTINEN. Without objection. 

Mr. SOKOLSKI. Okay. I am not going to go over detailed, 

footnoted, rather detailed testimony but to emphasize three points. 

First, I would plead with all the members here not to buy the 

prevailing narrative regarding the proposed nuclear deal with the 

Saudis. The U.S. has leverage. It should use it. 

Second, after the Crown Prince’s performance on ‘‘60 Minutes,’’ 

the key concern about the deal ought not to be to what extent it 

does or does not promote American nuclear exports, but whether it 

green lights Riyadh’s desire to get a bomb. 

Third, H.R. 5357, the Nuclear Cooperation Reform Act, which demands a congressional vote of approval for nuclear cooperative 

agreements that fail to have the gold standard with regard to WPT 

nonweapon states is long, long overdue. 

I’ll focus the balance of my time, if I may, on that narrative, 

which, roughly, is the Saudis must have nuclear power because 

they are running out of fossil fuels. We are all going to get rich 

selling them as many as 16 reactors—American reactors—but that 

if we insist on the gold standard and don’t rush to get congressional approval of an agreement that would be more permissive of 

enriching and reprocessing, our best friend in the Gulf will bolt, 

buy from the Russians and Chinese, and we will lose influence. 

9

The truth is the Saudis don’t need nuclear power to meet their 

energy and environmental goals, much less to enrich uranium or 

reprocess spent fuel. Their neighbor, the UAE, announced that it 

will not be building any more nuclear power plants but instead will 

invest in cheaper, quicker, nonnuclear energy sources. 

Ms. Frankel, I can just say to you the odds of Riyadh buying 

Russian are about as likely as them buying it from the Iranians because, effectively, they are that close and I don’t think we have to 

worry about that. Nor do I think the Chinese or French products 

for a variety of reasons, offer any attraction. I think it’s going to 

be South Korean if it’s going to be anything. 

As for getting rich, few now believe the Saudis will be buying 16 

reactors. The Nuclear Energy Institute’s own recent analysis now 

allows that by 2040, at most, the Saudis might build eight and perhaps as few as four, while others supporting a non-gold standard 

Saudi deal have even allowed that we’d be lucky if they build even 

one. 

The last point is something to focus on. If, as the Crown Prince 

made clear in the ‘‘60 Minutes’’ performance that Saudi Arabia is 

intent on getting a bomb as soon as possible, he could do so by 

using one or both of the two 100-megawatt electrical South Korean 

research reactors that he has already bought and does not require 

a 123 on. This system would afford, roughly, six times the plutonium production capacity of Israel or India or North Korea when 

they started off. 

It would be a sufficient bomb starter kit either for the production 

of plutonium or to serve as a cover to procure what would be needed to enrich or reprocess. 

The takeaway here is that we need to get the Saudis to accept 

the gold standard, even if they don’t buy American. Otherwise, we 

risk leaving the door open for them to get the bomb. 

One last comment—some argue that one bomb will neutralize another bomb—that a Saudi bomb will neutralize an Iranian bomb—

that one plus one equals zero. 

That’s fuzzy math. Where I come from, one plus one equals two 

and in the Middle East it quickly turns into a much higher number. 

Thank you very much. 

[The prepared statement of Mr. Sokolski follows:]

10


29389a-1.eps

Keeping the Middle East from Becoming a Nuclear 

Wild, Wild West 

Testimony 

By 

Henry Sokolski 

Executive Director 

The Nonproliferation Policy Education Center 

1600 Wilson Blvd, Suite 640 Arlington, VA 22209 

571-970-3187 

www.npolicy.org 

Presented before 

A Hearing of 

The House Foreign Affairs Subcommittee on the Middle East and North Africa 

Implications of a U.S.-Saudi Arabia Nuclear Cooperation Agreement for the Middle 

East 

House Rayburn Office Building 2172 

March 21, 2018 
11


29389a-2.eps

The following is divided into three sections. The first is a testimony overview. The second is a rundown 

of why Congress should be wary of any US nuclear deal with Riyadh that fails to ban Saudi enrichment 

and reprocessing as is required in the Z009 nuclear cooperative agreement with the United Arab 

Emirates (UAE), who's nuclear nonproliferation requirements Are referred to as "the Gold Standard." 

The last section makes the case for proposed legislation that would require a majority vote in both 

houses of Congress before a US nuclear cooperative agreement with a non-weapon state can come into 

force if it fails to include these Gold Standard nuclear nonproliferation conditions. 

Overview 

Failure to require Riyadh to forswear enriching or reprocessing in the text of a US-Saudi nuclear 

agreement (either by excluding this condition or proposing to put a sunset on it) risks pouring kerosene 

on the embers of nuclear proliferation already present in the Middle East. Last Sunday, Crown Prince 

Mohammed Bin Salman threatened to withdraw from the Nuclear Nonproliferation Treaty, insisting in a 

60 Minutes interview that "If Iran developed a nuclear bomb, we will follow suit as soon as possible."' 

The Saudi government also has made it clear that intends to be "self-sufficient" in nuclear fuel making-' 

This is unprecedented. Unlike official public comments made during the negotiation of previous US civil 

nuclear cooperative agreements, these Saudi statements lay bare for all to see exactly what the security 

implications of failing to get Riyadh to forswear enriching and reprocessing will be. It's quite clear the 

Saudis are interested in a nuclear weapons option that can be exercised, if needed, "as soon as 

possible." That, rather than any economic purpose, is why the Kingdom is seeking US nuclear assistance 

and is insisting on its "right" to enrich and reprocess. 

If our government green lights such Saudi efforts by failing to uphold the Gold Standard, no one will be 

fooled as to what we are doing: Instead of upholding the last 73 years of American and international 

efforts to limit the spread of nuclear weapons by tightening nuclear controls, our government will be 

doing just the opposite, playing a risky game of nuclear chicken between Riyadh and Tehran. What's 

worse, this competition will not be limited to just the Saudis and Iranians. 

Administration officials may also renew, revise, or cut additional nuclear cooperative agreements with 

Jordan, Egypt, Turkey, Morocco, and the UAE. As a practical matter, there will be tremendous pressure 

to have these understandings track whatever we allow the Saudis, turning an already troubled Middle 

East into a nuclear Wild, Wild West. In this new, nuclearized arena, not just Iran and Saudi Arabia, but 

their largest neighbors will gain the nuclear technology they need to join the nuclear-armed ranks of the 

Israelis and Pakistanis. The hope, against almost all experience, is that deterrence will work perfectly in 

one of the world's most imperfect, unstable regions. As for what might follow if such deterrence fails, 

the mind boggles- think a nuclear 1914. 

To avoid this, it is essential first to hold the line by insisting on the Gold Standard conditions in the USSaudi nuclear cooperative agreement. Second, the United States must hold the same line with 

agreements it might negotiate with Riyadh's neighbors and to work with the world's three key nuclear 

reactor supplier states - France, China, and Russia - and the three key uranium fuel supplier statesFrance, the British-Dutch-German URENCO consortium, and Russia -- to tighten nuclear restraints on 

their civil nuclear exports as well. Finally, along with others, the United States needs to convince Iran to 

back off its enrichment efforts. To be sure, this is a tall order. That said, not to try all but assures a 

failure of the most horrific kind. 

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As for the proposed legislation, the House Foreign Affairs Committee did the right thing in 2011 when it 

unanimously approved an earlier version of the bill. Given the nuclear proliferation developments that 

have transpired since the last major revision of the rules governing nuclear cooperative agreements in 

1978, approval of such legislation is long overdue. 

Why Congress should be wary of a US-Saudi nuclear agreement that fails to 

uphold the Gold Standard: 

First, it risks igniting a nuclear arms race starting in the Middle East. Language in the current UAE and 

Egyptian nuclear cooperative agreements with the US explicitly stipulates that if Washington seals a 

nuclear deal with any other Middle Eastern state that is more "favorable in scope and effect" than what 

Cairo and Abu Dhabi were able to secure, the UAE and Egypt have the right to demand "equal terms and 

conditions."3 In theory, the United States could try to resist such demands. In practice, Washington 

would be under tremendous pressure to cave. Egypt's nuclear cooperative agreement with the United 

States is up for renewal in 2021. Then, there is Turkey-its agreement is up for renewal in 2023- and 

Jordan, which the United States has long sought to strike a nuclear cooperative agreement with. Egypt, 

Turkey, and Jordan all insist they have a right to enrich and reprocess. Once our government opens the 

door for the Saudis to do so, these states will demand no less. How this impacts Israel, other than 

negatively, is unclear. Last week, Prime Minister Netanyahu told the Senate Foreign Relations 

Committee, the President, and the Israeli cabinet that the United States should cut no nuclear deal with 

Saudi Arabia unless it clearly prohibits enrichment and reprocessing.' 

Assuming our government goes ahead, it is uncertain what Israel, which already has nuclear weapons, 

might do.' It is worth noting, however, that every large reactor in the region - Israeli, Iranian, Syrian, 

and Iraqi -has either been bombed or targeted with aerial attacks. In each case, the attacking state 

was concerned that weapons plutonium or uranium was either being or might be produced. This worry, 

perhaps more than any other, is why the United States insisted in 2009 that the UAE forswear enriching 

or reprocessing in the text of the nuclear cooperative agreement. It was understood that without such a 

legally binding pledge, the UAE's program would be viewed warily by its neighbors. If the United States 

is serious about promoting peaceful nuclear power in the region, it needs to get more states in the 

region to adopt this standard, not fewer. 

Finally, states outside the Middle East are watching. South Korean President Moon Jae-in wants to build 

nuclear submarines. These would require enriched uranium fuel. The current US-ROK civilian nuclear 

*It should be noted that the last time the United States made an exception from its nonproliferation policies and 

legal requirements not to promise to transfer controlled nuclear commodities to another close friend, India, Israel 

quietly petitioned for equal treatment (See Glenn Kessler, "Israel Submits Nuclear Trade Plan," The Washington 

Post, September 30, 2007, available from [illQ:j~w. washinCJlQ!:ll!Qst.com/ytQ: 

dyn/content/article/2007/09/29/AR2007092901530.html). Neither country is a member of the NPT. The US deal 

did require New Delhi to open portions of its civilian nuclear program to international inspections. India also, 

however, accrued significant, indirect weapons benefits from the "peaceful" commerce the US nuclear deal made 

possible, which has allowed it to expand its military nuclear production significantly. (See Adrian Levy, 11 1ndia is 

Building a Top-Secret Nuclear City to Produce Thermonuclear Weapons, Experts Say," Foreign Policy, December 16, 

2015, available from http:f./foreiqnpoHcv.cofY!/2015/12116/india nuclear citv top secret china pakistan bare/ 

and Mansoor Ahmed, "Addressing South Asia's Fissile Material Conundrum," The Stimson Center, February 20, 

2018, available from https://www.stimson.org/sites/defauit/files/fileattachments/Off%20Ramps%20tv1ansoor~/020Ahmed%20-%20FinaLpdf ). 

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agreement only allows the ROK to enrich uranium if it first secures US permission, which Washington 

has yet to grant. If the United States allows the Saudis to enrich uranium and reprocess spent reactor 

fuel, though, Seoul would likely step up its demands, arguing, that as a close security ally, it should be 

afforded equal treatment for its planned submarines. Needless to say, this nuclear activity could also be 

used to support a nuclear weapons options Assuming Seoul persuaded President Trump to relent and 

honor its request, the responses of Japan, North Korea, and China could be dramatic. 5 

Second, Riyadh's interest in enriching and reprocessing is difficult to explain -unless it wants a bomb 

option. In 2012, the Saudis announced their intention to build sixteen reactors by 2032. By 2017, Saudi 

planners had pushed this back to 2040. Shortly thereafter, Crown Prince Mohammed bin Salman 

backed a national development plan for 2030 that didn't mention nuclear power but instead focused on 

investing in renewables. Most recently, the Saudis announced that instead of opening bidding on 

sixteen large power reactors, they are only soliciting bids for two. Some analysts contend that this 

slippage reflects the Kingdom's desire to finance reactor construction with its oil revenues.' With the 

price of oil dropping from $100 a barrel several years ago to roughly $60 a barrel today, the schedule for 

nuclear construction, they argue, had to slide. A more compelling explanation, however, is that Riyadh 

doesn't need nuclear power. Recent analyses have determined that the Saudis could more cheaply and 

more quickly meet their energy and environmental requirements by developing their natural-gas 

resources and investing in renewables-photovoltaic, concentrated solar power and wind. These 

analyses also found economic value in the Kingdom upgrading its electrical grid and reducing 

government subsidies that artificially drive up electrical demand. These findings are hardly surprising. 

The UAE, Riyadh's next-door neighbor, which began construction of four power reactors several years 

ago, just announced it would not be building any more nuclear plants8 Why? Cheaper alternatives: In 

addition to plentiful natural gas and wind resources, the Emirates are now investing in photovoltaic 

systems and solar thermal storage systems, which together can operate twenty-four hours a day more 

cheaply than nuclear 9 These findings also apply to Saudi Arabia, which has begun working on all of 

these options. 10 

As for the Saudis enriching their own uranium, the economic case, again, is negative. Uranium is 

plentiful globally from a variety of suppliers and priced at historic lows (less than $23 a pound)11, as 

are uranium-enrichment services. 12 If the Kingdom is anxious about security of supply, it would make far 

more economic sense for it to buy long-term contracts for uranium ore and enrichment services than to 

spend billions on a variety of plants (besides a large centrifuge facility) that would be needed to produce 

its own nuclear fuel. Even under the most optimistic of scenarios, investing in such an 

undertaking would only make economic sense after the Kingdom had most or all of its planned 16 large 

reactors up and running sometime after 204013 It currently has no reactors operating and has only 

opened a process for buying two. All of these facts help explain Crown Prince Salman's comment that if 

Iran got the bomb, the Kingdom would "follow suit as soon as possible" and why he insists his country 

should be allowed to reprocess and enrich. The two points are tightly related: One is the goal (to get a 

bomb quickly if needed); the other is the means (having the ability to produce and stockpile nuclear 

weapons uranium and plutonium). This is not something Washington should be a party to. Instead, it 

should uphold the Gold Standard, help Saudi Arabia with safer nonnuclear energy options, and push 

these policies throughout the Middle East, including Iran. 

Third, failure to secure the Gold Standard with Riyadh, when Washington has the leverage to do so, 

risks reducing US strategic influence in and outside the region. As I've explained in detail elsewhere, 

the Saudis are unlikely to buy reactors from France, the US, or China.14 In each case, the export models 

being pitched for export have not yet operated and, where they are being built, are dramatically behind 

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schedule and over budget. Meanwhile, the Russians' export reactor (the VVER-1ZOO) has an extremely 

limited, troubled safety record. More important, given the Saudis' interest in developing a bomb option, 

Riyadh will be hard-pressed to trust the Russians to keep their confidences, as the Russians have long 

provided sensitive nuclear technology to their Iranian adversaries and cooperated with Iran in fighting 

against the Kingdom's interests in Syria. 

Who might Riyadh, then, buy from? The Kingdom's original nuclear bid requirements were for two 

reactors that would produce Z,SOO megawatts. There is only one proven, operating reactor that can 

meet this requirement- South Korea's APR 1400. This reactor is up and running in South Korea, is fully 

and properly safety certified, and is being built (in the UAE) roughly on time and on budget. The APR 

1400 bid also has one other clear advantage: The construction crews finishing their work on the Korean 

reactors in the UAE are tried and true and can be easily dispatched to complete APR 14009 construction 

work in the Kingdom. In fact, the Saudis changed their bid requirements to permit reactors other than 

the APR 1400 Ql1./.y_ after US, Chinese, Russian, and French reactor vendors all complained. 

In any case, the South Koreans are most likely to win the bid. Given the APR 1400 reactor's American 

technical content, senior Korean officials are convinced they cannot export it to the Kingdom unless the 

Saudis first reach a nuclear cooperative agreement with the United States.15 For this reason (and others 

besides), Washington has serious leverage over Seoul and what nonproliferation conditions it might 

chose to place on its Middle Eastern nuclear exports. It would be remarkable if our government chose 

not to use this leverage. Seoul would surely spot this and would likely demand equal treatment 

regarding its desire to enrich. As already noted, Egypt, Turkey, Jordan, and the UAE would also take 

notice. But there's more. Besides the awkward optics of looking like a version of the Z015 Iran nuclear 

deal (which President Trump says is "the worst deal ever" because it allowed enrichment), 16 a 

permissive deal with Riyadh that failed to include the Gold Standard would make a hash of the 

President's announced desire to get Germany, the European Union, the UK, France, Russia, and China to 

work with Washington to "fix" the Iran deal and its enrichment provisions. I have already noted the 

concerns of our key ally in the region, Israel, and Netanyahu's request that the United States make a 

prohibition on enrichment and reprocessing a precondition of any nuclear cooperation with the 

Kingdom. Clearly, bending to Saudi nuclear ambitions to enrich and reprocess will only reduce, not 

increase, Washington's "wins" for nuclear influence with all of these states. 

The case for requiring Congress to vote to approve nuclear Cooperative 

Agreements that fail to include the Gold Standard 

It's been 40 years since Congress updated the Atomic Energy Act to reflect the latest insights into what 

the safety margin should be between "peaceful" nuclear activities and materials and nuclear bomb 

making. Congress incorporated its first thoughts on this issue in the Atomic Energy Act of 1946. At the 

time, Congress and the Executive Branch were wary of sharing any nuclear technology, peaceful or 

military, with any foreign government. With the further development of experimental power reactor 

designs, though, Congress reconsidered and amended the act in 1954 to promote Eisenhower's Atoms 

for Peace Program. As a result of this program, the United States actively shared the means to make 

and separate plutonium, a nuclear weapons explosive, on the mistaken assumption that bilateral and 

international inspections would be sufficient to prevent its misuse. 

India's 1974 nuclear weapons test literally blew this assumption away. Thinking it had clear assurances 

that New Delhi would not use its help to make bombs, Washington helped India get the reactor, the 

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heavy water to run it, and the reprocessing plant that produced the plutonium New Delhi used in its first 

"peaceful" nuclear test. At first, State Department officials denied that India had used US-exported 

heavy water. This, however, proved to be untrue. When Congress found out, it amended the Atomic 

Energy Act in 1978, tightening controls over reprocessing and enrichment of US nuclear materials and 

the export of the most dangerous "peaceful" nuclear technology and hardware. Congress also required 

that a majority of both houses of Congress approve any proposed US civilian nuclear agreement with 

non-weapons states that did not place all of their nuclear facilities under international nuclear 

inspections. Experts hoped that these conditions would be sufficient to afford a sufficient margin of 

safety against the possible diversion of exported civilian nuclear goods to bomb making. 

Unfortunately, the last 40 years suggest otherwise. Iraq used its internationally "safeguarded" nuclear 

program to support its nuclear weapons program. North Korea did the same, openly reprocessing spent 

fuel and stockpiling plutonium, insisting it had a "peaceful" right to do so. Syria, meanwhile, imported 

and constructed a covert nuclear production reactor from North Korea even while its nuclear program 

was supposedly under "full-scope" international nuclear inspections. Iran's insistence on a "right" to 

enrich and the worrisome practical and diplomatic fallout is too well known to need review. In each of 

these cases, though, finding a clear violation of any binding commitment was extremely difficult or 

impossible to make. Finally, in recognition of these developments, the Bush and Obama administrations 

successfully negotiated a new, tough set of nuclear nonproliferation conditions for the US-UAE deal, 

known as the Gold Standard. 

This history more than recommends yet another adjustment of what the US Atomic Energy Act specifies 

as a "compliant" nuclear cooperative agreement - i.e., one that automatically comes into force unless 

Congress passes a veto-proof law after 90 days of continuous executive session. Currently, a joint 

resolution of Congress is only required to bring a nuclear cooperative agreement into force if the 

country in question did not have nuclear weapons at the time the Nuclear Nonproliferation Treaty was 

negotiated and refuses to place all its nuclear activities and materials under international nuclear 

inspections. This is why a joint resolution of approval was needed in the case of India. 

After what we have learned about the inadequacy of such safeguards for countries that want to 

reprocess or enrich (overtly or covertly), though, it's time Congress updated the act. In specific, if a 

proposed US civilian nuclear cooperative agreement does not include the nuclear nonproliferation 

conditions contained in the US-UAE agreement, it ought to require a joint resolution of approval. 

The nuclear industry is strongly opposed to this. Having Congress vote on agreements that do not 

contain the Gold Standard, the nuclear industry argues, could jeopardize significant nuclear commerce. 

This is the same complaint industry made against the 1978 amendments, which the nuclear industry 

also opposed. This concern turned out to be unfounded, and now the industry backs those changes. 

Given the fall in US nuclear exports and the decline of nuclear power's fortunes internationally, there is 

even more reason to believe the industry's complaints today are also unfounded. 17 

But perhaps industry has things right and nuclear cooperative agreements! are important trade 

agreements. Assuming this, though, it hardly strengthens the nuclear industry's case against the 

proposed legislation. Congress, after all, must approve all significant trade agreements by joint 

resolution. Given the security equities now at play with US civil nuclear cooperative agreements -

where they are serving more and more as the equivalent of high-tech mutual security pacts (with 

emerging security partners such as the UAE, Vietnam, India and, now Saudi Arabia) - treating nuclear 

6 
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cooperative agreements that fail to include the Gold Standard as being at least as important as normal 

trade agreements, then, only makes sense. 

1. /(Saudi Crown Prince: If Iran Develops Nuclear Bomb, So Will Saudi/1 CBS News, March 15, 2018, available from 

https:/!www.cbsnews.com/news!saudi~crown-prfnce-mohammed-bin-saiman-ira!l-nuc!ear-bomb-saudi-arabia/. 

2. Sylvia Westall, "Saudi Arabia to Extract Uranium for 'Self-Sufficient' Nuclear Program," Reuters, October 30, 

2017, available from https:l!www.reuters.com/a;ticie/us-saudi-nucfearlsaudi-arabia-to-extract-uranium-for-selfsufticient-nuclear-proqram-idUSKBNlCZ10N. See also Rania El Gamal and Katie Paul, "Saudi Arabia Should Not 

Forfeit 1Sovereign' Right to Enrich Uranium: Senior Prince/' Reuters, December 21, 2017, available from 

https:l/www.reuters.comlartic/e/us-saudi-nucfear-turki/saudi-arabia-should-not-forfeit-sovereiqn-riqht-to-enrichuranium-5enior-prince-idUSKBN1EF287. 

3. "Relevant Sections of the Agreement for Cooperation between the Government of the United States and the 

Government of the United Arab Emirates," Nonproliferation Policy Education Center, 2017, available from 

http://npoilcv.org/US UAf' Agreement Relevant Sectfons.pd[. 

4. "Netanyahu Warns of Mideast Nuclear Arms Race," The Times of Israel, March 11, 2018, available from 

http.sJ/www.time.sofisroeJ.comlnetanyahu-wams-af-mideast-nuclear-arms-race/. 

5. "Moon Gets US to Agree in Principle to Let South Korea Build Nuclear Subs: Report," Asia Times, September 20, 

2017, available from http://www.atimes.com/artfc/e/moon-qets-us-a_gr_ee-principle-lt?t-!iQ!::!.t.f.!...:..korea-build-nuclearsubs-repor1/. See also Lami Kim, "Has South Korea Renounced 'Nuclear Hedging?'," Bulletin of the Atomic 

Scientists, June 27, 2017, available from httpsiJthebuJfetin oralhas-scuth-korea-renounced-''nuc/earhedqinq"'10863. 

6. See How Dark Might East Asia's Nuclear Future Be? (Working Paper 1601), Nonproliferation Policy Education 

Center, August 26, 2016, available from http:l/www.npolicy.org/2rtic!e.php?aiC-1322&rid-2. 

7. Dan Yurman, 11Saudi Arabia's Ambitious Plans for Nuclear Energy," Neutron Bytes, January 15, 2018, available 

from https://neutronbytes.com/2018/01/15/saudi-arabias-ambitious-p!or.s-for-nucfear-enerqy/. 

8. Peter Fairley, "The United Arab Emirates' Nuclear Power Gambit," IEEE Spectrum, January 4, 2018, available 

from http.s;/l'>pectrum.ieee.orq/enerqv/nuciear/the-un!ted-arob-emirotes-nuciear-power-qambit. 

9. Ali Ahmad, "Economic Considerations of Nuclear Power Deployment in Saudi Arabia," Nonproliferation Policy 

Education Center, November 27, 2017, available from 

http://noolicy.org/Artic/es(March%202018%20Drafts/Ahmad Saud/Arabia Nov17.pdf. 

10. Qamar Energy [Robin Mills], "Saudi Arabia Energy Needs and Nuclear Power," Nonproliferation Policy 

Education Center, February 11, 2018, available from 

http://npoiicy.org/Artic/esiMorch%202018%200rafts/Mills Saudi Arabia Feb18.pdf. See also Stanley Reed, 

"From Oil to Solar: Saudi Arabia Plots a Shift to Renewables," The New York Times, February 5, 2018, available from 

https://www.nytimes.com/2018/02/05/busfness/enerqy-environment/saudi-arabia-sofar-renewobles.html. 

11. "Media- In the Market," TradeTech, March 2, 2018, available from 

htto://wwvv.uranium.info/in the marketphp. 

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12. Steve Kidd, 11Uranium Enrichment- Why Are Prices Now Much Lower and What Is the Impact?," Nuclear 

Engineering International, December 8, 2016, available from 

http:;?www.neimaqazlne.com/opinion/opinionuranium-enrichment-why-are-onces-now-much-iower-and-what-ist!Je-impact-5692128/. 

13. Dan Yurman, "What Is Saudi Arabia's End Game for a 123 Agreement?" The Energy Collective, March 2, 2018, 

available from f!lW;/LVL~V.b~Qf!l§lfl!f.Co!lectivc.com/dan vurmal]/.2_4286?_lliaudi -amf!!..~end qarp_g_J~l 

agreement. 

14. Henry Sokolski, "5 Myths about Saudi Arabia's Nuclear Program," The National interest, March 6, 2018, 

ava i Ia ble from http:// nationaJinterest. orq lteatu re/5-mvths-about -saudi-a rabias-nucfear -program-24 771. 

15. Jay Solomon, 11Saudi Nuclear Talks: Risk and Limitations," The Washington Institute for Near East Policy, 

January 31, 2018, available from http://www.washinqtoninstitute.oraloolicv-onalysislviei•V/saudi-nuciear-talksrisk.s-and-Jimitations. 

16. Morgan Chalfant, "Trump: Iran Nuclear Deal an 'Embarrassment'," The Hill, September 19, 2017, available from 

http:/lthehifJ.com/homenewsladmJnistmtion/351323-trump-iran-nucfear-dea!-an-embarrassment. 

17. Jodi Lieberman, "Nonproliferation, Congress, and Nuclear Trade: Plus r;a Change, Plus C'est Ia M€me Chose," 

Center for Strategic and International Studies, November 15, 2011, available from 

https.//www.csis.orq/anaJysislnonoroliferation-conqre.ss-and-nuc!ear-trade-pfus-%C3%A7a-chanqe-piusc%E27il80%99est-fa-.m%CJ%AAme-chQ2.f. 

8 
18

Ms. ROS-LEHTINEN. Thank you very much. We appreciate it. 

Mr. Tobey. 

STATEMENT OF MR. WILLIAM TOBEY, SENIOR FELLOW, 

BELFER CENTER FOR SCIENCE AND INTERNATIONAL AFFAIRS, THE JOHN F. KENNEDY SCHOOL OF GOVERNMENT, 

HARVARD UNIVERSITY 

Mr. TOBEY. Madam Chair, Ranking Member Deutch, members of 

the committee, thank you for holding this hearing, on an important 

but often overlooked subject. 

I will distill my testimony to just six points but would be happy 

to elaborate upon your questions. 

First, the proliferation risks associated with light water power 

reactors are modest and manageable. 

Second, the proliferation risks associated with enrichment and 

reprocessing technology, however, are deep and dangerous. 

Third, Saudi Arabia is justifiably concerned about Iran’s nuclear 

program. The Joint Comprehensive Plan of Action has serious 

flaws. The durations of its key provisions are too short and it fails 

to require of Iran a complete and correct declaration of all of its 

relevant nuclear activities. 

Even if the deal endures—and I hope it does, despite its flaws, 

even though I was a critic of it before it was brought into force—

our forty-sixth President will likely face an Iran technically capable 

of producing enough fissile material for a nuclear weapon in weeks 

or months. 

Fourth, the further spread of enrichment technology would only 

compound these dangers and should be resisted vigorously by U.S. 

policy. 

Fifth, the arguments that the United States lacks leverage in 

this situation are overstated. The United States is the kingdom’s 

most important security partner and one of its largest trading partners, particularly in the realm of arms sales. If we join a race to 

the bottom, we forfeit this leverage. 

Sixth and finally, the United States has never before contemplated, let alone concluded, a nuclear cooperation agreement 

with a state that is threatening even provisionally to leave the nonproliferation treaty. 

We should have no truck with nations threatening to bolt from 

the NPT, especially not nuclear truck. 

Thank you. I look forward to your questions. 

[The prepared statement of Mr. Tobey follows:]

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William H. Tobey 

Senior Fellow 

Belfer Center for Science and International Atl'airs, Harvard Kennedy School 

Testimony Before the 

House Committee on Foreign Atlairs 

March 21, 2018 

Implications of a U.S.-Saudi Arabia Nuclear Cooperation Agreement for the Middle East 

Status of Saudi Arabia's pfansfi.Jr nuclear power 

According to the World Nuclear Association, the Kingdom of Saudi Arabia envisions building 

16 nuclear reactors over the next quarter century, each generating about a gigawatt of electricity, 

as well as smaller reactors for desalination. These plans, however, may well be subject to delays 

or deferment. The Saudis at one point also planned to install 24 gigawatts of nuclear powered 

generating capacity by 2020, a goal that proved wholly infeasible. No reactors are now 

operating or under construction in the Kingdom. Building 16 reactors in 25 years, starting from 

scratch, would be extremely ambitious. In a largely successful analogous project, the United 

Arab Emirates (UAE) will likely take about twelve years to build four reactors, from contract 

signature to full operational capacity. Still, momentum in Saudi Arabia is building with political 

commitments, organizational and ret,>ulatory infrastructure, international cooperation agreements, 

and a request for information from potential suppliers. The Saudi Energy minister said last 

December that he hopes to sign construction contracts for the first two reactors by the end of 

2018. 

On March 15, 2018, the Saudi Ministry of Culture and Information pledged in a statement 

announcing a new national policy for nuclear energy that, "all nuclear activities will be restricted 

to peaceful purposes, within the framework detined by international legislation, treaties, and 

conventions." 

What the United States and Saudi Arabia hope to gain fi'om cooperating on nuclear energy 

Saudi Arabia's announced intentions are to shift from fossil-fuel generated electricity to solar 

and nuclear energy, to reduce carbon emissions and to husband oil and gas resources for 

continued exports. Saudi Arabia would benetit from cooperating with the United States by 

gaining access to American nuclear energy technology, which has a justifiable reputation of 

unsurpassed safety and reliability. Despite its technical excellence, this technolot,>y is controlled 

by tirms facing straitened finances. 

By cooperating with Saudi Arabia, the United States could benefit from sales of technology, 

equipment, and services (e.g. the 2009 UAE deal reportedly went for up to $40 billion for 

construction and operations). The United States could also extend influence over Saudi nuclear 

energy policy through such engagement. Nonetheless, the Emirates contract, which was won by 
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a Korean-led consortium including Westinghouse Electric, demonstrates that U.S. firms would 

face stiff competition-not only from Korea, but also from France, Russia, and China. 

1i1e potential impact on nonprol!feration 

The nuclear proliferation etiects from the spread oflight water power reactors are modest and 

manageable. Saudi Arabia has a Safeguards Agreement with the International Atomic Energy 

Agency, but should subscribe to the Additional Protocol. Assured fuel supply and spent fuel 

takeback arrangements could also reduce proliferation risks. International cooperation itself, if 

structured correctly, can be a source of nonproliferation reassurance. (This is not to say that 

construction of nuclear power plants in a region subject to political instability, terrorism, and 

regular ballistic missile ±lights is manifestly sensible; that is a separate question.) 

While a nuclear power program will necessarily build some proliferation-sensitive expertise 

within a country, the most important tirebreak is whether or not a nation state possesses the 

capacity to produce weapons-usable nuclear material-highly enriched uranium and plutonium. 

These can only be produced with additional technologies and facilities for enrichment and 

reprocessing. For this reason, limiting the spread of these technologies has been a priority for 

American policy in both Democratic and Republican Administrations supported by a bipartisan 

consensus in both houses of Congress. 

The UAE committed in its nuclear cooperation agreement with the United States not to possess 

enrichment or reprocessing facilities, and thereby set the so-called nonproliferation gold 

standard. Although the Obama Administration touted its improvement of a document initially 

drafted during the Bush Administration, it also said that it would decide about such provisions in 

future agreements on a case-by-case basis. 

Saudi Prince Turki bin Faisal, a former intelligence chief for the Kingdom who reportedly 

continues to wield in±luence, has recently argued that Saudi Arabia should not adopt the gold 

standard to preserve its sovereign rights and because it must be treated on equal terms with Iran, 

which enriches uranium under the Joint Comprehensive Plan of Action (JCPOA). Indeed, 

referring to nuclear capabilities, Prince Turki said publicly in 2015, "Whatever the Iranians have, 

we will have too." There are also published reports that Saudi negotiators have insisted on 

retaining treed om to enrich uranium. Given the proposed size of the Saudi nuclear programeven at its most optimistic projections-there is no economic justification for indigenous 

enrichment and reprocessing capabilities; both could be provided more cheaply in the 

intemational market. 

Prince Turki is justifiably concerned about the Iranian nuclear program. The JCPOA has serious 

t1aws. The duration of its key restrictions is too short and it failed to require of Tehran a 

complete and correct declaration of all its relevant nuclear activities-the bed rock of any 

etiective verification regime. Even if the deal endures, and I hope it does despite its ±laws, our 

46tl' president will likely face an Iran technically capable of producing enough fissile material for 

a nuclear weapon within weeks or months, a condition Secretary of State John Kerry testi±ied 

2 
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was unacceptable. Nonetheless, theji1rther spread of enrichment technology would only 

compound these dangers, and should be resisted vigorously by US policy. 

Some now say that we cannot seek restrictions on Saudi enrichment and reprocessing because we 

permit it under the JCPOA As noted above however, the deficiencies of the Iran agreement do 

not justify making more flawed ones. A plutonium production race in the Middle East would be 

an international security nightmare, and we should do all we can to prevent it. 

A second argument sometimes made against seeking restrictions on enrichment and reprocessing 

is that if the United States resists the spread of such technology, it will open the door to less 

scrupulous providers of nuclear technology. This argument is incorrect in two respects. First, on 

principle the United States should not join in a race to the bottom leading to a more dangerous 

world. Second, and more practically, the United States has considerable leverage in the 

situation. Russian and Chinese reactors do not enjoy the same record of proven safety and 

reliability as US. technology. Saudi Arabia might not want to rely on the same company that 

supplies its self-described enemy-Iran. Korean suppliers depend on US technology, which 

requires American approval. France has evinced strong interest in nonproliferation. Moreover, 

the ties between the United States and Saudi Arabia are broad and deep, spanning political, 

economic, security, and technology realms, and are a source of considerable influence, should 

we choose to use them. 

A third argument often invoked is that it is unrealistic to expect nation states to divest themselves 

of sovereign rights. This is a straw man. Clever diplomats can formulate ways to record 

agreement that a state voluntarily chooses not to exercise a right that would be economically 

irrational, and that U.S. cooperation is premised on an understanding of that choice. 

Recommendalionsfix Congressional action 

Having been asked for recommendations for Congressional action, I would offer the following 

thoughts: 

First, nuclear cooperation agreements cover technologies invoking vital national security 

interests, plant and equipment with lifespans longer than many governments, and 

commercial agreements larger than many trade deals. They therefore should be accorded 

equal procedural standards to those that apply to security and trade agreements. 

Second, Congress should make clear to the executive branch and to our potential partners 

that it will not approve additional agreements under Section 123 of the Atomic Energy 

Act which do not in some way discourage the spread of enrichment and reprocessing. 

• Third, Congress should provide incentives for agreements to include the so-called gold 

standard such as H.R3766. 

• Fourth, in Federalist No. 75, Hamilton recognizes that creation of international 

agreements necessarily spans the separate and equal powers of the executive and 
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legislative branches, requiring their joint action. I would encourage both branches to 

consult regularly and deeply in advance of agreements, perhaps reviving something akin 

to the Arms Control Observer Group, which operated in the 1980s and 90s. The 

requirement for Congressional assent can be a source of leverage for the executive branch 

in international negotiations, which it should welcome as advancing American interests 

Finally, I would like to address a development that has unfolded over the last several days. 

According to media reports, Saudi Crown Prince Mohammed bin Salman recently warned that, 

"without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible." 

While as I noted earlier, there are good reasons for Saudi Arabia to be concerned about Iran's 

nuclear programs, we should have no truck with nations threatening to bolt from the 

Nonproliferation Treaty, especially not nuclear truck The United States should retrain from 

concluding a 123 Agreement with Saudi Arabia until it is convinced that Riyadh's commitment 

to the Nonproliferation Treaty is unconditional. Were Iran to produce nuclear weapons, the 

situation would not be improved, and could be made much worse, by a Saudi decision to follow 

suit. US political, military, and diplomatic capabilities are appropriate to address the threat of 

an Iranian nuclear breakout; Saudi nuclear weapons are not. 

4 
23

Ms. ROS-LEHTINEN. Thank you very much, Mr. Tobey. 

Ms. Squassoni. 

Thank you. You can push that little button there to activate your 

microphone. Thank you. 

STATEMENT OF MS. SHARON SQUASSONI, RESEARCH PROFESSOR OF THE PRACTICE OF INTERNATIONAL AFFAIRS, INSTITUTE FOR INTERNATIONAL SCIENCE AND TECHNOLOGY, 

ELLIOTT SCHOOL OF INTERNATIONAL AFFAIRS, GEORGE 

WASHINGTON UNIVERSITY 

Ms. SQUASSONI. Chairwoman Ros-Lehtinen, Ranking Member 

Deutch, and members of the committee, thanks for the opportunity 

to share some views on the implications of nuclear cooperation with 

Saudi Arabia for the Middle East. 

I too have six points, Will, but we didn’t collaborate. [Laughter.] 

Before my six points, I want to just give a little bit of introductory remarks. In the Middle East, countries have been slow to deploy nuclear power for a few reasons—abundant oil in some countries, fear after Chernobyl, cost issues, and sensitivity about nuclear weapons proliferation, whether it’s Israel, Iraq, or Iran. 

The first country to deploy a commercial nuclear power reactor, 

Iran, underscored the risks of proliferation. Perhaps because of 

that, the next country deploying nuclear power, the United Arab 

Emirates, took a bold step in renouncing sensitive fuel cycle capabilities. 

Separately and in its nuclear cooperation agreement with the 

U.S., the UAE rejected pursuit of domestic uranium enrichment 

and spent fuel reprocessing. 

As the members have noted, that’s been called the gold standard. 

Why did the UAE do that? 

Well, it was confident that the international market would supply its fuel while being sensitive to the need to instill confidence 

in the international community about its peaceful nuclear intentions. 

Besides, as the U.S. has proven, it’s possible to run 100 reactors 

while relying on foreign sources of uranium and/or enrichment and 

without having reprocessing at all. 

Saudi Arabia is taking a different approach. The U.S. has been 

trying for 10 years to persuade Saudi Arabia to commit to relying 

on the international market. But Saudi officials are wary. 

Technology and economics are less important here than politics. 

Saudi officials have stated consistently since 2011 that they would 

match Iranian nuclear capabilities whether just in uranium enrichment or nuclear weapons. 

For Saudi Arabia, obviously, the Joint Comprehensive Plan of 

Action with Iran is a problem because it did not completely eliminate Iran’s uranium enrichment program. 

This creates a dilemma for all nuclear suppliers, not just the 

United States. It seems risky to engage in nuclear cooperation with 

a country that has avowed its intention to pursue nuclear weapons 

under specific conditions. 

How confident are Members of Congress that Iran will not acquire a nuclear weapon? How confident are Members of Congress 

24

about Saudi Arabia’s intelligence capabilities regarding Iran’s nuclear program? 

Here are the six points. 

One, critics can debate whether a universal gold standard for nuclear cooperation agreements is feasible or desirable. But the U.S. 

has quietly implemented this approach in the Middle East since 

1981 precisely because of the proliferation risks. 

There’s no reason to create an exception to that policy for Saudi 

Arabia. 

Two, concerns about the JCPOA make it even more important to 

limit the spread of enrichment in the region. The best hope for 

reining in Iranian capabilities is to bring Iran into line with norms 

in the region. 

The JCPOA limits are the start, not the finish. 

Three, there’s no substitute for U.S. leadership in nuclear nonproliferation, nuclear safety, and security. The point is not to lower 

our standards but to raise others. 

And four, if Saudi Arabia desires flexibility for future options, it 

should sign a shorter agreement with the U.S.—an agreement with 

10 to 15 years’ duration would match phases in the JCPOA if that’s 

a concern. 

Fifth, Nuclear Suppliers Group members will discourage Saudi 

enrichment but might support a multilateral approach that could 

possibly benefit the whole Middle East. 

Finally, part of the challenge in collaborating with Saudi Arabia 

will likely be a lack of transparency. Congress can help in the following ways. I do applaud the new bill. I think it does a lot of important things. 

Saudi Arabia needs to rescind its Small Quantities Protocol or 

adopt the amended version recommended by the IAEA. An Additional Protocol is essential to its safeguards agreement but would 

also be a useful educational exercise for Saudi Arabia’s new regulatory authority. 

And finally, you should levy a requirement for the Director of 

National Intelligence to provide annual unclassified and classified 

reports to Congress on WMD-related acquisitions and transfers to 

and from Saudi Arabia. 

You used to get those reports across the board and for some unknown reason they were ended. 

Thank you very much and I welcome your questions. 

[The prepared statement of Ms. Squassoni follows:]

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Statement before the U.S. House Committee on Foreign 

Affairs, Subcommittee on Middle East and North Africa 

A Statement by 

Sharon Squassoni 

Research Professor ofthe Practice of International Affairs 

Institute for International Science & Technology Policy 

Elliott School of International Affairs 

George Washington University 

March 21, 2018 

DC 
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For seventy years, trade in nuclear materials, equipment, and technology has been heavily 

regulated by the United States and many other countries for one fundamental reason: what is 

sold or shared for peaceful purposes can be diverted to help make nuclear weapons. There is 

really no way to prevent diversion by a country determined to produce nuclear weapons but 

there are many ways to make that diversion difficult, costly, time-consuming, and detectable. 

The system of deterrence- broadly known as the nuclear nonproliferation regime- is built 

upon national, bilateral, multilateral and international mechanisms. Over the decades, each 

instance of countries acquiring nuclear weapons capabilities through peaceful trade has 

prompted measures to tighten those multi-layered mechanisms. Despite improvements, the 

risk never drops to zero because states acquiring capabilities are free to opt out of their legally 

binding commitments. 

Today, as this Committee considers the implications of an agreement between the United 

States and Saudi Arabia to share nuclear technology, the stakes could not be clearer: Saudi 

officials, including Crown Prince Mohammed bin Salman just last week and Prince Turki ai-Faisal 

in 2011, have indicated that if Iran acquired a nuclear weapon, Saudi Arabia would soon follow 

suit. This implies that Saudi Arabia is either confident that it could acquire nuclear weapons 

from another country that has them and is not bound by the Nuclear Nonproliferation Treaty 

(for example, Pakistan or North Korea) or that it has the intention to acquire latent capabilities 

that could quickly be converted to military purposes if it finds it necessary to pull out of the 

Nuclear Nonproliferation Treaty. Sensitive fuel cycle technologies like uranium enrichment and 

spent fuel reprocessing are essential to a latent capability, and Saudi Arabia is reluctant to 

renounce acquiring such capabilities. 

The United States has long opposed the spread of uranium enrichment and spent fuel 

reprocessing because of their proliferation risk and it is essential that its nuclear cooperation 

agreements reflect this, regard less of the partner. This paper assesses the impact of a potentia I 

nuclear cooperation agreement with Saudi Arabia, providing background on the role of nuclear 

cooperation agreements in nonproliferation, Saudi Arabia's plans for a nuclear program and 

what both parties hope to gain through cooperation. The paper concludes with 

recommendations for structuring a potential nuclear cooperation agreement for best 

advantage, and suggests ways to strengthen congressional oversight. 

Background 

Peaceful nuclear cooperation carries inherent risks, some of which are obvious and others not. 

The obvious risk is the potential for the misuse of peaceful nuclear energy for military purposes. 

Agreements typically outline what kinds of technology, material and equipment can be 

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transferred and what cannot. Recipient countries will almost always ask for the most 

permissive agreement and supplier countries must weigh the political and economic benefits of 

selling material, equipment, and services against the political and technical risks of 

proliferation. 

The risk of misuse of U.S. material, equipment and technology is minimized by the stringent 

requirements for approving these agreements as provided for in the 1978 Nuclear 

Nonproliferation Act (NNPA) which amended 1954 Atomic Energy Act. The nine requirements 

contained in Section 123 are: 

• Safeguards in perpetuity (whether IAEA or bilateral) on all material and equipment 

supplied; 

• A comprehensive nuclear safeguards agreement with the International Atomic Energy 

Agency; 

Assurances against use in a nuclear explosive device or any other military purpose; 

• Right of return in case of a nuclear test or abrogation of an IAEA safeguards agreement; 

• Prior consent by the United States for transfer; 

Adequate physical protection; 

• Prior consent by the United States for alteration in form or content, including 

enrichment or spent fuel reprocessing; 

• Approval in advance of storage facilities; 

• The application of all those requirements to any material, production facility or 

utilization facility "contaminated" by any material transferred under the agreement. 

Most countries that supply nuclear materials and equipment do not apply such stringent 

conditions, although over time, the Nuclear Suppliers Group (NSG) has incorporated several of 

these elements in its guidelines for harmonizing trade. The playing field for suppliers is uneven 

for many reasons, not least of which is the extent to which governments subsidize their nuclear 

industries. For example, AREVA's recent restructuring included a $5 billion taxpayer-funded 

bail-out. 

While U.S. agreements are typically more restrictive than others', a nuclear cooperation 

agreement with the United States is essential for other suppliers if their equipment contains 

U.S. components, design or technology. For example, the UAE awarded a $40 billion contract in 

2009 to Korea's nuclear consortium to build nuclear power plants, of which Westinghouse 

content is estimated to be $2 billion. The Korean deal would not have been possible without a 

U.S.-UAE nuclear cooperation agreement in place because of the U.S. content. The dominance 

of the U.S. nuclear industry has not yet faded entirely, giving U.S. nuclear cooperation 

agreements more leverage than they might otherwise have. In other words, some countries 

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may see value in negotiating a 123 agreement with the United States not because they mean to 

engage in significant trade with the U.S. but because it is the price of admission for broader 

nuclear commerce. 

In addition, U.S. peaceful nuclear cooperation agreements also pose risks that may be less 

obvious or immediate but significant nonetheless. One is the use of consent rights in such a way 

that it undermines U.S. policies to discourage uranium enrichment and spent fuel reprocessing. 

Granting consent for countries to transfer fuel to nuclear weapon states for reprocessing may 

limit proliferation, but does little for nuclear security. Consent for reprocessing could also 

encourage countries to delay finding sites for final disposal of waste. In recent agreements 

concluded by the United States, countries that have foresworn reprocessing on their soil 

(Taiwan, UAE, ROK) all have been given advance consent to send fuel out of the country 

elsewhere for reprocessing.' Instead, such agreements should have provided incentives for 

long-term interim storage. 

In particular, because the United States has been a leader in nuclear nonproliferation efforts for 

70 years, concluding a U.S. nuclear cooperation agreement is the equivalent of providing a 

Good Housekeeping seal of approval to some countries' nuclear energy programs, regardless of 

how strict or permissive the agreement may be. This was certainly the case for the U.S.-India 

nuclear cooperation agreement, which paved the way for other countries to engage in nuclear 

cooperation with India (but ironically, not the United States). Worse still, the U.S. agreement 

compounded the problem by legitimizing India's poor separation of military and civilian 

activities and anemic Additional Protocol. 

The common argument that it is better for the United States to engage in nuclear cooperation 

than for other, perhaps less scrupulous suppliers to do so conveniently ignores that 

cooperation agreements are not contracts and do not guarantee trade. Moreover, the buyer's 

market that has persisted over the last few decades makes it more likely for recipients to 

reward those bidders with the most to offer. The risks of a "race to the bottom" in terms of 

nonproliferation standards are growing as U.S. nuclear dominance fades. 

Another subtle risk has been the use of nuclear cooperation agreements to cement strategic 

relationships. Making technical cooperation agreements prestigious politicizes them. The 

more important the relationship is in terms of commercial, political and security needs, the 

greater the pressure is to adjust the balance of obligations towards facilitating engagement and 

1 While the agreement with South Korea did not contain language about South Korea foreswearing 

reprocessing (and in fact leaves the door open through future consultations regarding pyroprocessing), 

South Korea signed a joint declaration with North Korea in 1992 foreswearing enrichment and 

reprocessing facilities on it soil. Providing South Korea with advance consent to transfer spent nuclear 

fuel provides a pressure valve against pyroprocessing. 

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away from restrictions. This has been demonstrated many times over, most recently in the 

case of the agreement with South Korea.' 

U.S. Nuclear Cooperation Agreements in the Middle East 

In the early days of Atoms for Peace, the United States had nuclear cooperation agreements 

with Israel (1955-1960), Iran (1959-1964), and Lebanon (1955-1960). The U.S. signed an 

agreement with Morocco in 1980 (expiring in 2022), with Egypt in 1981 (expiring in 2021), and 

with the United Arab Emirates in 2009. The U.S. has been in discussions with both Jordan and 

Saudi Arabia for about ten years on nuclear cooperation agreements. 

The United States recognized the importance of not introducing sensitive nuclear technologies 

into the region and included restrictions on reprocessing in an agreed minute added to its 

cooperation agreement with Egypt. While the text of the agreement was standard (no 

reprocessing unless the parties agreed), the agreed minute stated that Egypt had no near-term 

plans to introduce the fast breeder reactor cycle (which requires reprocessing) or to recycle 

plutonium in thermal reactors. The agreed minute also stated that if the parties mutually 

agreed to reprocessing, it would take place in a facility outside of Egypt. Most importantly, the 

agreement with Egypt provided an assurance that U.S. cooperation with other states in the 

region would have equal terms and conditions for cooperation. Finally, "If any situation arises 

which could increase the risk of proliferation of nuclear weapons, the United States and the 

Arab Republic of Egypt, at the request of either, shall enter into consultations with respect 

thereto with a view to maintaining the objectives ofthe NPT." 

Negotiators of the 2009 agreement with the UAE clearly recognized the precedent set in the 

Middle East with the 1981 Egypt 123 agreement and adapted some ofthe provisions. While the 

UAE agreement contains an article (Article 7) that explicitly states the UAE would not possess 

any sensitive nuclear facilities for enrichment or reprocessing on its territory, the text of the 

Agreed Minute is similar to that in the Egypt agreement. The assurance of equal terms and 

conditions was also included, along with a specific reference to the possibility of altering the 

2 The ROK agreement was signed in June 2015 after long negotiations that required a two-year extension from 

Congress. South Korea's demands for advance consent for enrichment and reprocessing, which U.S. policy has 

long rejected for countries that do not currently have enrichment or reprocessing, were repeatedly framed by 

Korean senior officials in the context of the strategic ROK-US alliance. The compromise included a first-ever High 

Level Bilateral Commission (HLBC) within the agreement "to facilitate peaceful nuclear and strategic cooperation 

between the parties and ongoing dialogue regarding areas of mutual interest in civil nuclear energy, including the 

civil nuclear fuel cycle." Regarding sensitive nuclear technology, the agreement allows (per amendment of the 

agreement or by 11 a separate agreement between the Parties") transfer of SNT and technology that is not in the 

public domain concerning fabrication of nuclear fuel containing plutonium. While it does not grant advance 

consent for reprocessing, it states that uranium enrichment up to 20% U-235 is permissible if the Parties agree in 

writing on an arrangement to do so, following HLBC consultations and consistent with the Parties' applicable 

treaties, national laws, regulations, and license requirements. 

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agreement in the event that another state in the region received more favorable terms in scope 

and effect. The Morocco agreement contains more favorable terms, but predates the other two 

agreements. 

Saudi Arabia as a nuclear energy partner 

Saudi Arabia is a "nuclear newcomer." It has been involved for forty years in basic nuclear 

science, but has no commercial nuclear power plants. In 1977, the Kingdom established the 

King Abd AI-Aziz Center for Science and Technology for basic nuclear research and in 1988 

founded the Atomic Energy Research Institute, which researches "industrial applications 

of radiation and radioactive isotopes, nuclear power and reactors, nuclear materials and 

radiation protection." 

Like other countries caught up in the resurgence of interest in nuclear energy in the mid-2000s, 

Saudi Arabia reviewed its nuclear ambitions. A royal decree in 2010 established the King 

Abdullah City for Atomic and Renewable Energy (K.A.-CARE) in Riyadh. One year later, the 

scientific coordinator of K.A.-CARE announced Saudi Arabia's intention to construct 16 nuclear 

reactors to generate about 20% of the Kingdom's electricity by 2032. The announcement 

followed the March 2011 Fukushima nuclear accident that caused a few states to end nuclear 

power in their countries, and many states to pause their plans at least long enough to conduct 

safety reviews. Saudi Arabia moved ahead, however. In mid-2017, the government approved 

the Saudi National Atomic Energy Project (SNAEP) to implement a civil nuclear program focused 

on three business areas: large nuclear power plants, small modular reactors, and fuel cycle 

activities. In late 2017, the Saudi government issued a tender for bids for large nuclear power 

plants and expects to choose two or three contenders by the end of 2018. According to 

publicly available government briefing slides, fuel cycle activities are currently limited to an 

assessment of uranium and thorium reserves in Saudi Arabia (through 2022) and yellowcake 

production with Jordan. 3 

Saudi Arabia does not have one nuclear suitor in mind; it has been steadily accruing nuclear 

partners in the last decade. The Saudis already have arrangements with France (2011), China 

(2016), Argentina (2015), South Korea (2013), Russia (2015) and Kazakhstan (2016). Some of 

these have already begun training programs for Saudi nuclear workers and construction of the 

Korean SMART reactor was scheduled to begin in 2018. 

3 See K.A.-CARE's briefing to IAEA meeting, availabile at 

https://gnssn.iaea.org/NSNI/SMRP/S!lared%20Documents/Workshop%2012-

1S%20December%20201/ 1Saudi%20National?,iJ20Atomic%2UEnergy%20Project . .QQ£ 

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The two primary motivations for Saudi Arabia to pursue nuclear energy are conserving its oil for 

export and meeting soaring electricity demand. Others, according to official government 

briefings, include diversifying the country's economy, diversifying the national energy mix, 

creating jobs with high returns, developing national human resources, increasing the level of 

local industries and services, localizing and exporting technologies, and expanding other 

medical, agricultural and industrial uses of nuclear energy. In 2011, Saudi officials estimated 

that electricity production would need to triple from 40 GWe to 120 GWe by 2030. Given that 

oil and gas generate almost 60% of its electricity, finding another fuel for electricity would free 

up significant quantities of oil for export. The plan in 2011 was to generate 24 GWe, or 20% of 

expected electricity demand by 2030, from nuclear energy. Adding that kind of capacity in 20 

years was fairly ambitious and although the schedule has slipped, the current plan remains 

ambitious. A sober analysis of responses to Saudi challenges in electricity generation, 

particularly for water desalination, concluded a few years ago that ending subsidies for 

electricity could help reduce demand while deploying solar power could be cheaper than 

nuclear energy in the next decade and take advantage of peak demand during daylight hours. 4 

Saudi Arabia intends to localize and indigenize the supply chain for nuclear technology as well 

as export, not dissimilar to other recipients of U.S. technology like South Korea and China. Its 

January 2016 agreement with CNEC includes localization, as does its agreement with Korea. 

Saudi entities have also embarked on joint ventures with foreign entities, including Argentina's 

INVAP, to develop small modular reactors based on the Argentinian CAREM design. 

With regard to fuel cycle capabilities, it's not clear how Saudi Arabia would pursue uranium 

enrichment. Current plans are vague. It is clear that indigenous development would take 

decades and likely billions of dollars unless an existing technology holder transferred 

technology. Under current NSG guidelines, members are unlikely to agree to transfers unless to 

a multinational concern and even then, it's never been done. Two options for Saudi Arabia that 

would not include indigenization of technology would be purchasing equity in a foreign 

enrichment concern like Ora no (the successor to AREVA's enrichment business which owns 50% 

of the company that holds URENCO's enrichment technology, the Enrichment Technology 

Corporation) or persuading an enrichment technology holder to build and operate a plant on 

Saudi soil, without transferring technology or operating know-how. For example, URENCO built 

a centrifuge enrichment plant in Eunice, New Mexico, and did not transfer the technology, 

although it is likely that the U.S.'s nuclear weapons state status made certain processes less 

4 Ahmad A, Ramana MV, 1

'Too costly to matter: Economics of nuclear power for Saudi Arabia," Energy 

(2014), http:Udx.doi.org/m1016/j.energy.2014.o3.064 

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difficult (e.g., getting Q-cleared U.S. workers in the construction phase). Despite having the 

world's most advanced technology in the world's most advanced nuclear state, it still took 10 

years between licensing and operation of the first cascades in New Mexico. An agreement with 

Saudi Arabia would be highly contentious and likely to take longer. As noted above, Saudi 

Arabia might be more successful proposing a fully multinationally owned and operated 

enrichment facility on Saudi soil. Although multinational facilities might provide earlier warning 

of diversion, past experience with such ventures offer few paths forward: the reprocessing 

multilateral experiment in Europe, Eurochemie, made no effort to compartmentalize 

knowledge among its international workforce, and the multilateral enrichment consortium, 

URENCO, let each country (Netherlands, Germany and UK) develop its own technology before 

choosing one. 

For the part of the United States, commercial advantage, rather than technical cooperation, 

motivates U.S. interest in nuclear cooperation with Saudi Arabia. Saudi Arabia expects to spend 

$80 billion on 16 nuclear power plants and fuel supply thereafter could be similarly lucrative. 

However, Saudi Arabia may not choose U.S. vendors and may be considering supplying its own 

fuel, even though that would not be cost-effective. 

U.S. negotiations with Saudi Arabia 

After the shock of discovering in 2004 that Pakistani scientist A.Q. Khan had proliferated 

enrichment equipment, the Bush administration sought to increase restrictions on sensitive 

nuclear technology. Thus, the U.S. asked Saudi Arabia for assurances on this as it discussed 

potential nuclear energy cooperation. On May 16, 2008, then-Secretary of State Condoleeza 

Rice and Saudi Arabia Foreign Minister Prince Saud AI Faisal signed a memorandum of 

understanding on Civil Nuclear Energy Cooperation. The State Department issued a press 

release that stated, among other things, that "The United States will assist the Kingdom of 

Saudi Arabia to develop civilian nuclear energy for use in medicine, industry, and power 

generation and will help in development of both the human and infrastructure resources in 

accordance with evolving International Atomic Energy Agency guidance and standards. Saudi 

Arabia has stated its intent to rely on international markets for nuclear fuel and to not pursue 

sensitive nuclear technologies, which stands in direct contrast to the actions of Iran." 

In subsequent talks, however, the Saudis stepped back from that commitment. In the fall of 

2009, the U.S. secured the so-called "gold standard" commitment from the UAE to include a 

legally binding decision not to enrich uranium or reprocess spent nuclear fuel in the text of its 

nuclear cooperation agreement. Similar successes with Jordan and Saudi Arabia were not 

forthcoming. In 2011, the U.S. held an initial round of talks with Saudi Arabia, followed by a 

round in 2012. At the time, Saudi officials declined the U.S. proposal to sign a side letter to a 

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123 agreement that contained legally binding restrictions on enrichment and reprocessing. For 

the remainder ofthe Obama administration, talks did not advance. 

Saudi Arabia as a nonproliferation partner 

Assessments of Saudi Arabia as a nonproliferation partner should review past programs, 

present policies and potential future actions. That said, past clandestine nuclear weapons 

programs are not an automatic disqualifier for nuclear cooperation with the United States, as 

the recent agreements with India, Taiwan and the ROK have shown. The State Department will 

present its perspectives on Saudi Arabia as a nonproliferation partner in the Nuclear 

Proliferation Assessment Statement (NPAS) that must accompany the 123 agreement when it is 

submitted to Congress. That NPAS is unlikely to delve too deeply into rumors of Saudi interest 

in nuclear weapons or tales of investment in Iraq's nuclear weapons program from Saudi 

defector Mohammed Abdalla ai-Khilewi. However, it will likely have to address statements 

from high-level Saudi officials about Saudi Arabia's intention to match capabilities with Iran, 

whether in uranium enrichment or actual nuclear weapons. What's more, it will need to 

address why Saudi Arabia has been so slow to undertake additional safeguards strengthening 

measures. For example, Saudi Arabia still has a Small Quantities Protocol attached to its 

comprehensive safeguards agreement that it has not amended, even though the IAEA 

requested amendment 13 years ago. About half the states (43 of 88) with such agreements 

complied. The Small Quantities Protocol largely limits a state's responsibilities to an annual 

report of imports and exports of material and does not allow for the IAEA to conduct 

inspections until a threshold quantity of nuclear material is present in a facility. 5 The modified 

protocol amends those weaknesses. 

Saudi Arabia also lacks another key feature of the strengthened safeguards system, the 

Additional Protocol. This addendum to a comprehensive safeguards agreement, which has 

been signed by 147 countries out of 189 members of the Agency, provides for additional 

information and access by International Atomic Energy Agency inspectors. It was developed in 

response to Iraq's clandestine nuclear weapons program in the mid-1990s. Although Saudi 

Arabia joined the NPT in 1988, it did not complete its safeguards agreement until 2005; that 

safeguards agreement only entered into force in 2009. The Saudis had at least four years to 

revise the protocol before going through the ratification process. It is likely that the Bush 

administration pressured Saudi Arabia to complete its ratification after signing an MOU on 

nuclear cooperation in 2008. At that time, Saudi Arabia also signed up to join the Global 

5 See, for example, Safeguards Implementation Guide for States With Small Quantities 

Protocols, IAEA Services Series 22, Vienna, 2016. See https:/ /wwwpub. iaea .org/MTCD/P ubI ications/P D F /SVS_22_ web. pdf 

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Initiative to Combat Nuclear Terrorism (GICNT) and endorsed the Proliferation Security 

Initiative. 

Real investment in nuclear energy may make Saudi Arabia a more forward-leaning member of 

the nonproliferation community but for the time being, the U.S. should insist at the very least 

that Saudi Arabia rescind or update its Small Quantities Protocol and sign an Additional 

Protocol. 

Saudi interest in uranium enrichment 

Potential reserves of uranium are one reason for Saudi interest in uranium enrichment, but the 

fact that Iran still retains some enrichment capability under the JCPOA is another. The Saudi 

Arabian Geological Survey concluded an agreement with the Chinese National Nuclear 

Corporation (CNNC) in 2017 to jointly conduct an assessment of Saudi uranium resources. 

Saudi officials have made the case that enrichment would allow Saudi Arabia to take advantage 

of potential uranium resources. This echoes arguments made by Jordan in the last ten years. 

However, the economics are unlikely to support domestic uranium enrichment for many 

reasons. First, there are high levels of oversupply and inventories in the uranium market 

worldwide, as concluded in the Nuclear Energy Agency and the International Atomic Energy 

Agency's Uranium 2016: Resources, Production and Demand. In fact, that highly regarded 

publication concluded that "Regardless of the role that nuclear energy ultimately plays in 

meeting future electricity demand, the uranium resource base described in this publication is 

more than adequate to meet projected requirements for the foreseeable future. The challenge 

in the coming years is likely to be less one of adequacy of resources than adequacy of 

production capacity development due to poor uranium market conditions." Saudi resources 

are not covered in those estimates because there is no information or assessment about Saudi 

uranium. However, the high case for nuclear energy does assume Saudi Arabia will acquire 

nuclear power. 6 One question is whether small scale production could be cost-effective but 

more importantly, only two of the thirty countries with nuclear power match their uranium 

production to domestic needs- Canada and South Africa. For most other countries, there is a 

significant mismatch in domestic production and use, which does not seem to cause a 

problem. 7 

A second obstacle is timing. Although Saudi Arabia currently envisions reactors coming on-line 

by 2040, this is not a long period of time to develop the infrastructure to support nuclear 

power. After surveying potential resources, Saudi Arabia would need to produce the ore, mill 

6 The Red book assumed that Saudi Arabia will have installed 1.4 GWe of reactor capacity in 2030 and 2.8 

GWe in 2035 (4 smaller reactors or 2 larger ones), requiring about 440 tons of uranium annually. 

7 http://www.oecd-nea.org/ndd/pubs/2016/7301-uranium-2016.pdf See page 102. 

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it, convert it, enrich it and fabricate it into fuel. How much ofthat process is Saudi Arabia 

prepared to do itself or to contract out? The conversion and enrichment industries worldwide 

have shrunk significantly over time even in advanced nuclear states because of declining 

economics. 

A third obstacle is pricing, both for uranium and enrichment. Uranium has returned to the 

historically low prices from the 1980s (hovering around $20/lb) after a brief surge ten years ago 

to a high of $140/lb. One factor has been reduced optimism about nuclear energy following 

the nuclear accident at the Fukushima Daiichi power plant in March 2011. The Bible of the 

uranium industry, the so-called Red book, admitted that "Challenges remain in the global 

uranium market with high levels of oversupply and inventories, resulting in continuing pricing 

pressures."8 

The enrichment market is worse: while the SWU spot price managed to climb through the 

1990s to reach a high of $160/SWU in 2009, the price has dropped steadily to today's rate of 

less than $40/SWU. There are many reasons for this, including overcapacity of enrichment 

services, particularly in Russia. This is one reason that established uranium enrichment 

providers like URENCO do not add capacity without signed, long-term contracts for supply. 

While Saudi Arabia can guarantee demand in its own country (assuming reactor construction 

proceeds in a predictable way), it could never compete economically with established 

enrichers. 

Simply put, a Saudi enrichment capability is unwise and uneconomic. 

At this juncture in time, Congress needs to ask the following questions: 

a) What are the minimum adequate nonproliferation assurances in this case? 

b) What are the extenuating circumstances that could increase proliferation risk? 

c) Are there risks in walking away from a deal? 

d) What conditions that could improve the robustness of non-proliferation collaboration and 

reduce proliferation risks? 

What are the minimum adequate nonproliferation assurances? 

The nine requirements in Section 123a of the Atomic Energy Act constitute a bare minimum for 

assurance of nonproliferation. The agreement could include standard language on the 

possibility for consent to enrich or reprocess on a case-by-case basis, because in practice, such 

consent has become synonymous with refusal. To meet the "Equal terms and conditions" 

requirements of the agreements with the UAE and Egypt, the agreement with Saudi Arabia 

8 http://www .oecd-nea .org/ndd/pubs/2016/7301-u ran iu m-2016. pdf 

11 
36


29389c-12.eps

would at least need to include a statement regarding Saudi Arabia's intentions to rely on the 

international market for fuel cycle services for a foreseeable period. Rather than negotiate a 

less restrictive agreement, it would be better to negotiate a shorter agreement, even if it is only 

ten or fifteen years' duration. This would parallel the timeframe for the Joint Comprehensive 

Plan of Action with Iran, or JCPOA, which Saudi officials have criticized as flawed because it 

contains sunset clauses on Iranian enrichment capacity. 

On IAEA safeguards, the U.S. needs to insist that Saudi Arabia either rescind its Small Quantities 

Protocol or adopt the amended version recommended by the IAEA. Concluding an Additional 

Protocol would be a useful, educational exercise for Saudi Arabia's new regulatory authority. 

What are the extenuating circumstances that could increase proliferation risk? 

Saudi officials have repeatedly stated that acquisition of nuclear weapons by Iran would trigger 

their own acquisition of nuclear weapons. Bruce Riedel of the Brookings Institution suggested 

in 2016 that Saudi Arabia is less concerned about Iranian nuclear weapons than Iran's quest for 

regional hegemony because it believes it is covered by the U.S. nuclear umbrella 9 However, 

one way to counter an Iranian regional hegemony based on nuclear weapons would be with 

Saudi nuclear weapons. Whether fear or regional rivalry motivates Saudi Arabia, the result is 

the same for the nonproliferation regime-- bad. 

A key question is how Saudi Arabia would determine when it was time to break out oft he NPT. 

What threshold of evidence would be sufficient? Some experts suggest that Saudi Arabia 

would welcome the collapse of the Joint Comprehensive Plan of Action (JCPOA) with Iran. This 

week, Crown Prince Mohammed bin Salman called the Iran deal flawed, perhaps egging 

President Trump on to withhold certification ofthe deal and thus endanger U.S. compliance. 

Without a replacement for the JCPOA, collapse ofthe deal could dramatically increase 

proliferation risks in the Middle East. Collapse as a result of evidence that Iran was engaged in 

clandestine nuclear activities would be worse than a U.S.-engineered collapse in Saudi eyes, but 

either way, a collapse could be used as justification for proliferation. 

In a scenario where Saudi Arabia decides it must develop nuclear weapons to counter Iran's 

nuclear weapons, it will not matter whether the United States has successfully negotiated a 

"gold standard agreement" (wherein the Saudis have renounced enrichment and reprocessing), 

a standard agreement (with no consent rights) or a permissive agreement (with advance 

consent rights). Any nuclear cooperation that the United States had provided up to that point 

could feasibly be diverted for a military program. The only difference would be how much help 

the U.S. provided. 

9 b!tiJ;;iL"!Y~C\/Vl>.r:9.9hl~.c"il.i!l_[Jj_qg/_cn_~ rkati~Q_l_~QZ/JJLV\I)l<!_i::.!b-"..:ir~n.:<ka 1-h a_s_:_m_.?_~J.::f9_r_,s_<l_"gl::_a_@lo_i.e.: 

and-region a 1-te n sio n'J_ 

12 
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29389c-13.eps

There is the possibility that Saudi Arabia's statements are meant to deter Iran rather than 

reflecting actual policy. Such statements, however, undermine norms of nonproliferation. It 

would be hard to imagine U.S. acceptance of such statements emanating from South Korea or 

Japan, even though both countries face a growing nuclear weapons threat from North Korea. 

Are there risks (or benefits) in walking away from a deal if Saudi Arabia does not accept 

certain conditions? The common refrain that it's better for the U.S. to sell nuclear equipment 

than other countries implies that these contracts are all or nothing. In fact, Saudi Arabia may 

not choose one supplier for its entire fleet of reactors. If U.S. insistence on robust 

nonproliferation assurances resulted in the failure to conclude a nuclear cooperation 

agreement, U.S. vendors could lose between $0 and $10 billion worth of business (about 2 

reactors worth), assuming they were competitive in the first place. Regardless ofthe 

agreement, there is always the risk that no nuclear trade will result because nuclear 

cooperation agreements are merely frameworks, not contracts. The lack of a U.S.-Saudi 123 

agreement could affect South Korea's bid for a nuclear contract, but it is not yet clear to what 

extent. 

The real question is whether other countries are willing to supply what the United States is not 

willing to supply. Ultimately, Saudi efforts to acquire enrichment and/or reprocessing 

technology would have to go through the Nuclear Suppliers Group. Technically, Saudi Arabia in 

the future could meet NSG criteria for transfer but such a decision is unlikely for a group that 

operates by consensus decision-making. 

What conditions that could improve the robustness of non-proliferation collaboration and 

reduce proliferation risks? 

Congress' role over the years has been limited by the NNPA's streamlined approval process for 

new agreements, wherein agreements that meet all the requirements of Section 123 of the 

Atomic Energy Act enter into force after 90 days unless Congress passes a law otherwise. A 

resolution of disapproval is one alternative, and so is a resolution of approval that contains 

conditions. In 1985, Congress passed a resolution of approval for the first nuclear cooperation 

agreement with China, but conditions placed within the resolution effectively blocked 

exportsfor 13 years. 

If it is impossible to get language related to an Additional Protocol into the text ofthe 123 

agreement, Congress should condition its approval upon such execution, similar to the 

approach it took for the U.S.-India nuclear cooperation agreement. Or, Congress could amend 

Section 123a of the Atomic Energy Act to require that all partners in U.S. nuclear cooperation 

agreements have an additional protocol in force before agreements can enter into force. 

Another alternative would be to condition exports, rather than the nuclear cooperation 

13 
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29389c-14.eps

agreement itself on implementation of an Additional Protocol by Saudi Arabia. This could be a 

requirement in the resolution of approval for export licensing or a simple presidential 

certification that an Additional Protocol is in force a prerequisite for export license approvals. 

Other ways of strengthening oversight could include a requirement for the Director of National 

Intelligence to provide annual unclassified (and classified) reports to Congress on WMD-related 

acquisitions and transfers to and from Saudi Arabia. Since Section 721 reports were 

discontinued in 2013, there is no regular mechanism for updating Congress on WMD-related 

acquisitions and transfers. Congress could also authorize expanded export control cooperation 

between the US and Saudi Arabia. 

Part of the challenge in collaborating with Saudi Arabia will likely be a lack of transparency. 

These steps above would enhance that transparency and provide additional leverage to both 

the executive branch and the Congress. 

Lastly, Congress should consider updating the Atomic Energy Act to strengthen its oversight. In 

the last ten years, the executive branch has had to renew virtually all of its nuclear cooperation 

agreements because their 30- or 40-year durations expired around the same time. Officials 

creatively came up with new ways to limit their work and, in effect, congressional oversight: 

many agreements now have rolling extensions, automatic extensions, indefinite extensions and 

in the case of two agreements, indefinite duration. The practical effect is that Congress will 

have little to no influence over nuclear cooperation with existing partners and approval of 123 

agreements may become a historical relic. Members of Congress may want to consider whether 

specific language regarding extensions or congressional review is desirable to protect its 

equities in ensuring that U.S. nuclear cooperation does not contribute inadvertently to 

proliferation. In particular, this could include periodic Nuclear Proliferation Assessment 

Statements for agreements with indefinite or 40-50 year duration. Congress should also 

consider specifying a process for preparation of NPASes (e.g., prior consultation with 

committees and/or agreement on scope) or the content of such assessments. Additional 

reporting requirements might also be valuable. 

Specific actions for Congress are listed below: 

1) Require congressional review of ongoing cooperation under 123 agreements with indefinite 

duration and/or rolling or automatic extensions. 

2) Require all new nuclear partners (and in renewal agreements) to have Additional Protocols 

to their IAEA safeguards agreements in force before a 123 agreement can be approved or enter 

into force. Making the Additional Protocol a legally binding requirement could eventually help 

14 
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NSG adoption of that requirement, in much the same way that countries adopted full-scope 

safeguards as a condition of supply before the NSG did. 

3) Require the United States to provide favorable options or incentives to other countries in 

123 agreements to adopt interim storage over reprocessing of spent nuclear fuel. 

4) Require the executive branch to consult with Congress on the general scope of Nuclear 

Proliferation Assessment Statements or about individual NPASs before they are written or more 

substantially, specify additional reporting requirements for NPASs. 

15 
40

Ms. ROS-LEHTINEN. Thank you very much. Really excellent testimony. I will begin with the question and answer period. 

The administration and the nuclear industry are both touting the 

economic and commercial benefits of a 123 Agreement with Saudi 

Arabia. Exactly how much the U.S. economy would benefit is highly uncertain, as all of the models and all of the projections make 

heavy assumptions that are far from guaranteed. 

But this economic and commerce argument raises another question about the lack of congressional oversight. Trade agreements 

are subject to strong congressional debate. We have an up and 

down vote on approval. 

But 123 Agreements, which also impact our national security, 

are passively approved under current law. If the administration 

and the industry are touting this agreement as, essentially, a trade 

or commerce deal—however flawed that logic may be—based on its 

economic impact, then should it not at a minimum be getting the 

same treatment with an up and down vote? And so you can answer 

that when I finish my round of questions here. 

And on Monday, the Saudi foreign minister called the Iranian 

nuclear deal a flawed agreement and the administration’s next 

steps on the JCPOA are reported to be a major part of the discussions between the U.S. and Saudi Arabia officials this very week. 

And with the Crown Prince stating earlier that Saudis will get 

a nuclear bomb as soon as Iran gets one, it is clear that the JCPOA 

and the administration’s current 123 negotiations are linked. 

So I would ask the panelists what impact do you think the 

JCPOA had on Saudi Arabia’s nuclear plans and how did the 

JCPOA impact our leverage in 123 negotiations? 

And related to that, considering the JCPOA’s enrichment restrictions—they start to sunset in just 10 years—what options do we 

have with the Saudis and how can we meet our nonproliferation 

goals in the region? 

And we will start with you, Henry. Thank you. 

Put the microphone on and hold it closer. 

Mr. SOKOLSKI. Sorry. 

I think we need to think a bit bolder than even Mr. Trump, and 

that’s saying a lot because he’s a pretty bold guy. 

I think you can’t just extend the duration of the kinds of controls 

on enrichment that are in Iran. The reason your legislation and 

this hearing is important is it ought to be a wake-up call that 

maybe we have to think big and that would mean getting the gold 

standard not just for Saudi Arabia but that should be part of the 

President’s agenda. 

In this regard, the quickest smartest way to help that happen is 

to take the advice that the UAE actually is giving by not going any 

more nuclear to provide assistance to folks in the region for lots of 

things that make more economic sense. 

I have entered into the record two recent studies by leading energy economists that show what the kinds of things are that you 

would do that—where you’d make money and you don’t have to 

worry about bombs or being bombed because these facilities, when 

they’re large, get targeted. 

So that, I guess, is my brief answer. 

Ms. ROS-LEHTINEN. Thank you very much. 

41

Mr. Tobey. 

Mr. TOBEY. So, Madam Chair, if I understood your questions correctly, it was what impact did the JCPOA have on Saudi thinking 

and how did that affect our leverage in this situation. 

So it’s very clear that the weaknesses in the JCPOA drive valid 

Saudi concerns. I just happen to think that the correct way to address those weaknesses is not by a Saudi nuclear weapons program, but by other means, which are quite possible, that would 

bring to bear American influence—political, military, diplomatic—

on the situation. 

With respect to what impact it had on our leverage, those that 

say that we have no leverage on this situation because others will 

sell the reactor ignore broader aspects of the problem. 

It’s true that within the narrow focus of just nuclear matters 

there are other suppliers that would be willing to take the field. 

But Saudi Arabia would be foolish to take on Iran without American support. 

Ms. ROS-LEHTINEN. Thank you, sir. 

Ms. Squassoni. 

Ms. SQUASSONI. Thank you. 

On the question of what economic benefits we might have, I 

think it’s important to remember that a 123 Agreement is not a 

contract and, honestly, Westinghouse is not in a good position to 

be selling reactors. 

I agree with Henry that it’s likely going to be a South Korean 

contract. Now, does that mean that we should lower our standards 

to enable South Korea to get business with Saudi Arabia? That is 

not clear to me. 

On the JCPOA, I would say little impact because, really, it’s kind 

of a red herring. Without the JCPOA, Iran would be enriching. 

Let’s not forget that countries can legally acquire enrichment and 

reprocessing and they can stockpile as much material as they 

would like, right. 

If they have a big stockpile of bomb-grade plutonium or highly 

enriched uranium, they have a lot of inspections—it’s true. 

But whether or not the JCPOA has linkage to this, the fact of 

the matter is the U.S. does not support the spread of this technology. The JCPOA, even though it has sunset provisions, is giving 

us an opportunity to bring Iran around and we need to take every 

opportunity we can so that when those provisions sunset they wake 

up and realize pursuing those kinds of capabilities is not in their 

national security interest. 

Ms. ROS-LEHTINEN. Thank you very much to all of you again for 

being here. 

And now I am very pleased to turn to my friend, Mr. Deutch of 

Florida. 

Mr. DEUTCH. Thank you, Madam Chairman. 

We’ve had lots of discussion about the decision on a nuclear 

agreement with Saudi Arabia and having ripple effects throughout 

the region. 

I guess my question is this. We are at this moment where the 

President—where the President is now talking openly of pulling 

out of the Iran nuclear deal at the same time that there’s conversation about entering into a nuclear agreement with the Saudis, 

42

which may permit enrichment if—and I would like to just—you 

have touched on—each of you have touched on this a bit but if you 

could just explore what it means if both of these things were to 

happen if we—if the President pulls us out of the Iran deal and 

what that will mean in terms of Iranian enrichment, then look at 

what impact that would have on a deal like this with Saudi Arabia, 

particularly in light of the comments that I referred to earlier. 

Mr. Sokolski. 

Mr. SOKOLSKI. I am reminded of the Tom Lehrer lyric, ‘‘We’ll all 

go together when we go.’’ Let’s think this through. 

First of all, please don’t rush. If you’re going to do something 

wrong, don’t be in a rush for it. I always tell my staff if you’re 

going to do something stupid, take your time. Okay. 

Second, if it’s going to be really foolish, let’s put it to a vote. I 

will tell you why you want to do all that because your question 

goes directly to our future. 

The Saudis, clearly, are going to try to bootstrap up. If the Iranians break out of that deal or that deal is terminated, you will see 

them ramp up their enrichment almost certainly is quite likely or, 

you know, in time. 

The Saudis will then work with what they have whether they 

buy it from us or not. They have those two Korean reactors. They 

can use that. It has everything they need to do what they want to. 

They don’t even have to buy American or Russian or any of that. 

What then will happen is the UAE, if we strike this deal with 

the Saudis, will say hey, what about us—we have a clause that 

says we should at least be given an opportunity to amend ours. 

So too does Egypt and its deal comes up, I believe, in 2021. Then 

Turkey, our favorite ally—you folks must have a hearing or two on 

that—in 2023, Morocco in 2021, and let’s not forget why Mr. Sherman showed up. South Korea, they also want to enrich. At a minimum, even their current President wants nuclear submarines and 

previously the President before that wanted to do recycling. Well, 

you have a deal with Saudi Arabia—what about us, and then, of 

course, you have what Japan will do. 

You get the picture. I mean, it’s a mess. You are throwing kerosene on the embers of the current proliferation problem in expectation that with enough of it, you will snuff the fire out. 

Mr. DEUTCH. Mr. Tobey, Ms. Squassoni, what would tell—what 

would you tell the Emiratis when they come to us after a deal is 

struck with Saudi Arabia that permits enrichment and assume 

that happens. 

Assume also that the President pulls us out of the Iran deal. The 

Emiratis come and say, wait a second—in light of everything that’s 

going on in the region, you’re our ally—we assume you’re going to 

be willing to renegotiate our deal—that gold standard just doesn’t 

work anymore. 

What’s our response? 

Mr. TOBEY. The UAE deal provides for the ability to renegotiate 

it if the UAE faces terms that are less favorable than others that 

are negotiated subsequently. 

So they have the right to pursue that and there’s not much we 

can do. I actually think the UAE is unlikely to do so because I reVerDate 0ct 09 2002 11:35 May 15, 2018 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\WORK\_MENA\032118\29389 SHIRL
43

gard them as a genuinely responsible proliferation—nonproliferation player. 

Your earlier question about what the combined impact of a withdrawal from the JCPOA and a green light to Saudi enrichment 

would be, the short answer is it would be a proliferation disaster. 

I’ve been a critic of the JCPOA. But if the duration is one of your 

criticisms, taking its duration to zero makes no sense whatsoever, 

especially since the bulk of the benefits to Iran have already accrued to Tehran, whereas the benefits to us accrue over time. 

Mr. DEUTCH. Just if I may, Madam Chairman, just one last question. 

Ms. Squassoni, so let me ask what would America’s response—

what should America’s response be then to the Saudis if the question is okay, well, we would very much like to enter into this deal 

with you. 

But if you’re prepared to do it then we are just going to go elsewhere? I know Mr. Sokolski says unlikely the Russians. I understand why. But Russians, South Koreans, anywhere else, what’s 

our response then? 

Ms. SQUASSONI. Well, there’s a thing called the Nuclear Suppliers Group where we harmonize our export controls and Russia 

and China are members of that. 

Let me just make something crystal clear. We don’t give enrichment or reprocessing technology to anybody. We don’t do it. 

So what we are actually talking about and what Saudi Arabia 

wants is our consent for them to do that with our material in the 

future. So they’ve got to get it from somewhere else. 

We still, even though we stirred the pot 10 years ago with the 

India deal, we still have a lot of leverage within the Nuclear Suppliers Group. 

If the JCPOA goes away and there’s nothing to replace it, and 

we have an agreement with Saudi Arabia or we don’t, Saudi Arabia 

has to go to someone to ask them for enrichment and reprocessing. 

If no one in the Nuclear Suppliers Group will give it to them, 

they could go to North Korea or they could go to Pakistan. Either 

way, that is creating a whole other dynamic in the region. 

It would be even worse than Henry’s, you know, pouring oil on 

the fire. That would be a disaster. I am not saying it’s going to 

come to pass but they do have limited options. 

In terms of what we tell Saudi Arabia, it is you are a nuclear 

newcomer state—you do not need enrichment and reprocessing. 

We have a standard in the Middle East, which we are committed 

to upholding, and if you’re concerned in the future let’s talk about 

it in 10 years’ time. 

Mr. DEUTCH. Great. Thank you, Madam Chair. 

Ms. ROS-LEHTINEN. Thank you very much. Thank you. 

Mr. Donovan of New York. 

Mr. DONOVAN. Thank you, Madam Chairman. 

Are the international inspections—we enter this agreement—are 

international inspectors able to—I mean, are they overworked by 

the JCPOA? 

Are they going to be able to make inspections that are going to 

make us feel comfortable about Saudi Arabia following whatever 

protocols are in place? 

44

Mr. SOKOLSKI. In a word, no, and the reason why is they are 

very clear in Vienna and they’ve been very honest, if we would 

bother to listen, that they cannot absolutely guarantee that they 

know where things might be if someone wants to hide them from 

them. That’s what happened in Iraq. That’s what happened in 

Iran. That’s what happened in North Korea, and the Agency, to its 

credit, was candid about that. 

We won’t take no for an answer, though. We need to. There are 

limits. Not only that, but there are ways of operating overt facilities such that you can break out so quickly that the ability of us 

to convene a hearing, much less to do anything, might not be very 

quick. 

It’s called timely warning. We don’t have it. You can have inspections of light water reactors if you know there’s not any desire to 

enrich or reprocess. You can keep track. You can do that. 

But if there’s any reason to believe someone is covertly or overtly 

enriching or reprocessing, you’re in trouble and I think—you know, 

I share the criticisms that Will Tobey has about the Iran deal on 

that basis. I think we are kind of kidding ourselves as to how well 

that can be verified. 

Mr. DONOVAN. Do you all agree with that as well? 

Mr. TOBEY. Yes, and I would just add that it’s important to understand that the scale of enrichment capacity necessary to fuel reactors is far larger than the scale that’s necessary to have a viable 

weapons program. 

So it’s easy to hide a weapons program within this larger system, 

which makes the breakout potential even more dangerous and the 

breakout period even shorter. 

Ms. SQUASSONI. I have a slightly different perspective. I would 

say that under the JCPOA we have higher confidence than we do 

under just regular comprehensive safeguards. That was the whole 

purpose, right? 

You get more information, more access to more sites. You have 

a lot of information about the procurement chain. So the measures 

under the JCPOA are better than what we have under the Nuclear 

Nonproliferation treaty’s comprehensive safeguards agreement. 

But your question did not specify whether Saudi Arabia had enrichment capability or not. I would say we have more confidence 

if it has a simple program with light water reactors. 

When you introduce sensitive nuclear fuel cycle technologies into 

the equation, the confidence goes down. 

And let me just say one thing. Most countries with a complete 

fuel cycle are former nuclear weapon states or nuclear weapon 

states. There are few exceptions. Japan—who else? Germany. 

Mr. SOKOLSKI. Brazil. 

Ms. SQUASSONI. Well, yes. Brazil and Argentina. Brazil has a 

small enrichment program. But that came from its weapons program. 

Mr. DONOVAN. Aren’t we dependent, though, on the country 

being forthcoming, permitting access, whereas, my understanding, 

in part of the Iran deal is Iran is selecting where the inspectors go, 

what soil to test. 

They’re removing the soil and giving what soil they want tested 

rather than having the inspectors themselves choose the sites. 

45

Mr. SOKOLSKI. Two comments. I don’t know how many lawyers 

are up here. Too many. Well, but I’ve always been told—and I 

worked in the Justice Department briefly—that laws are meant to 

be broken but people don’t understand what that means. What it 

means is you have got to catch people breaking the laws and if you 

do, that’s okay. That’s part of the reason why even outrageous 

countries like North Korea are very concerned about the law and 

what they’re being asked to sign up for. It’s not for nothing that 

the Iranians negotiated as long as they did. It’s not for nothing 

that the North Koreans took so long to negotiate the things that 

they negotiated with us and it’s not for nothing that the Saudis are 

also very concerned about the letter of the law. 

You have got something here. Use it. 

Mr. DONOVAN. Thank you. 

Madam Chairman, my time has expired. Thank you. 

Ms. ROS-LEHTINEN. Thank you very much, Mr. Donovan. 

Ms. Frankel of Florida. 

Ms. FRANKEL. Thank you very much. 

So I want to go back to the statement that my chair and ranking 

member mentioned at the beginning. 

When Crown Prince Mohammed bin Salman met—let’s see, he 

had an interview with CBS and said Saudi Arabia does not want 

to acquire any nuclear bomb, but without a doubt, if Iran developed 

a nuclear bomb we will follow suit as soon as possible. 

So here’s my question. What are the steps that Saudi Arabia has 

to start to take to get to that position and what is the leverage that 

we have to prevent that from happening? 

Mr. SOKOLSKI. I will take a shot at that. 

Let’s put on our bomb-making hats. Okay. First thing you want 

to do is have a program that causes so much noise for anyone monitoring what you’re doing that it’s very hard for them to see the signal of you procuring the bits and pieces to do enrichment. 

You don’t have to buy it from the Russians, the Americans, or 

the French. You buy it by going to perhaps Pakistan, your good 

buddy, and you say, how do you go about procuring the little bits 

and pieces and who do you contact, and you put that together while 

you continue to train up and build some large reactor. 

And as I noted, even these research reactors are way big. Well, 

you have two routes then. One would be you could divert plutonium made in the research reactors and there are ways to get 

around IAEA safeguards. 

I can go into detail later if you’d like. Or you bide your time and 

put together an enrichment program. A lot of people—I am married 

to someone who’s Australian and because she worked for the government, I got to know a lot of Australians including people who 

worked on their bomb project. And it did not take more than a few 

years, as in maybe three, for them to put together a really good enrichment system. 

We are assuming that the Saudis somehow are inferior or they 

don’t know how to do long division or they can’t buy assistance. I 

think all of that’s wrong. It’s been wrong every time. We said that 

of the Indians, the Pakistanis. 

Ms. FRANKEL. What are their options on getting the reactor? 

Mr. SOKOLSKI. Well, they already have it. 

46

Ms. FRANKEL. Okay. So they need to get the material——

Mr. SOKOLSKI. In other words, they are buying two of them. They 

will be built. 

Ms. FRANKEL. And what is our leverage? What is our strength? 

Mr. SOKOLSKI. Your leverage is what the chairwoman is suggesting you all sign up to, again. You reported it out of committee 

in 2011. Do it again. Repetition is the soul of wit in politics, I am 

told. 

If you do it, it’ll mean that the gold standard will be something 

the negotiators, who are not done with our deal, will be thinking 

a lot more about. If you get that, then it won’t matter that they 

have the reactors. 

Ms. FRANKEL. Well, what is—what is our leverage to get them 

to sign that? 

Mr. SOKOLSKI. I think——

Ms. FRANKEL. If they can——

Mr. SOKOLSKI [continuing]. President Trump did a pretty good 

job on TV yesterday laying out all the things that the Saudis are 

buying. They are not just buying pieces of hardware. They’re trying 

to integrate themselves into the American security system. That, I 

would submit, is an enormous lever that, for some reason, no one’s 

thinking about. 

Ms. FRANKEL. Got it. 

Anybody else want to add something? 

Mr. TOBEY. I would say it perhaps in a more succinct fashion. 

We should tell them that U.S. support for Saudi Arabia is contingent upon Saudi Arabia’s commitment to the NPT and a Saudi nuclear weapons program will end the American security commitment 

to Riyadh. 

Mr. SOKOLSKI. That’s it. 

Ms. FRANKEL. Got it. Thank you. 

Ms. SQUASSONI. I agree with my esteemed colleagues. 

Ms. FRANKEL. Thank you very much. I yield back, Madam Chair. 

Mr. DONOVAN [presiding]. The gentlewoman yields. 

The Chair recognizes the gentleman from Virginia, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman, and welcome to our 

panel. 

I’ve got to say, Mr. Sokolski, I very much enjoy your repartee and 

your answers. It’s nice to have color in our hearings now and then. 

No, but I mean that as a compliment. You indicated, look, the 

odds of Riyadh—because we keep on hearing, well, if we press 

them too hard they’re going to go to Russia and China, and you 

said the odds of Riyadh buying Russian are about as likely as them 

buying Iranian because they’re about that close. 

Similarly, China is not an attractive option either. Could you expand on that? Because I think we hear that as if it’s a real threat. 

I’ve never been persuaded of it but I thought you’d expand on your 

statement. 

Mr. SOKOLSKI. This was an insight I got from someone from Congressional Research Service, who I don’t think thought through 

what he meant, and we both worked this up in our heads. 

Let’s say you’re interested in a bomb option. You’re a Saudi. Putting aside the quality of the product which, I got to tell you, is not 

great—the last time their export version was put up on the grid for 

47

a safety test it immediately had to be taken off the grid. Putting 

aside that when you allow the Russians into your financial dealings 

you lose money or, in the case of the South Africans, you get 

thrown out for corruption. Put all that aside. 

Mr. CONNOLLY. Or you could even get compromised politically, 

but that’s a different——

Mr. SOKOLSKI. Yes. Right. 

Put all that aside. There’s a bigger problem. Your game has to 

be to keep the world from knowing what you’re doing. Why would 

you let Russian technicians who are thick as thieves with the Iranians into your house? I am not worried about the Russians. If 

somebody wants to use that narrative to buffalo you, grab your 

wallet. Walk out. It’s not right, in my head. 

The Chinese have a different problem. They and the French have 

the same kinds of problems and, arguably, we do, and Westinghouse does. We don’t have an operating version of many of these 

reactors that we are trying to pitch them. The ones in China that 

might be exporting have not been reviewed or licensed anywhere 

in the West. They will be, but not for a few years. So, you know, 

there’s a reason why, when the original bid went out from Saudi 

Arabia it was almost rigged so only the South Koreans could win 

it. They read the newspapers. They know what’s in their interest. 

Now, we opened that up but I don’t think we should assume that 

somehow it’s immediately going to go to someone other than the 

Koreans. 

Mr. CONNOLLY. Yes. Well, thank you, and of course, the other 

thing is if we fall below the so-called gold standard we invite the 

UAE to insist on renegotiating and we have—we have basically 

dumbed down the standard for others in the region and other parts 

of the——

Mr. SOKOLSKI. Well, I mean, essentially if you buy the Russian 

argument you might as well just not pay any attention to this 

issue. 

Mr. CONNOLLY. Right. 

Mr. SOKOLSKI. You give them all the leverage and you say, well, 

whatever you want. 

Mr. CONNOLLY. That’s right. 

Mr. SOKOLSKI. I don’t think that makes sense at all. 

Mr. CONNOLLY. I agree. I thank you. 

Ms. Squassoni, in the time I have left, so if we renounce or abrogate the JCPOA—the Iran nuclear agreement—doesn’t that 

incentivize countries like the Saudis to now have their own nuclear 

development program because, clearly, the Iranians will develop a 

nuclear—will return to their nuclear threshold status and beyond 

if we renounce our own agreement roll it back or freeze it? 

Ms. SQUASSONI. I think you have to ask the question what happens if the U.S. renounces this agreement. It’s not entirely clear to 

me that everyone else will take their toys and go home. 

Iran has certain benefits from continuing to adhere to the agreement. 

Mr. CONNOLLY. I agree with your point, but forgive me—I’ve got 

35 seconds. 

Ms. SQUASSONI. Sure. 

48

Mr. CONNOLLY. But my point is should Iran say okay, fine, then 

we are going to return to our nuclear development program that 

we had rolled back and frozen at your insistence under this agreement. 

Doesn’t that mean that the Saudis—this topic we are talking 

about here—have more of an incentive to develop their own nuclear 

program because they’re now worried that the Iranians are proceeding? 

What we have on ice is suddenly no longer on ice, and Mr. Tobey, 

you look like you might want to comment as well. Real quickly, because—I thank the chair. 

Ms. SQUASSONI. I will be quick. Yes an incentive. 

Mr. CONNOLLY. Yes, go ahead, Ms. Squassoni. I am sorry. 

Ms. SQUASSONI. Yes. That will provide them greater incentives. 

There were other things that the United States can do in terms of 

security assurances, nuclear deterrence, other things like that. 

But if the Saudis are intent on matching then there’s not much 

we can do about it except put something else in place before you 

torpedo something that is currently freezing Iranian capabilities. 

Mr. CONNOLLY. Excuse me. Well, it is a novel approach to diplomacy to renounce and abrogate your own treaty. But that’s a different subject. 

Mr. Tobey. 

Mr. TOBEY. I agree with you, sir, and with Ms. Squassoni. 

Mr. CONNOLLY. And Mr. Sokolski, do you agree? 

Mr. SOKOLSKI. Yes, you’re on to something at least to this extent, 

for sure. You don’t get the Saudi agreement in such a fashion 

signed out that it permits enrichment and reprocessing before you 

find out what’s going on with Iran. 

Mr. CONNOLLY. Yes. 

Mr. SOKOLSKI. And I would urge you all to slow the train down. 

Getting that darn bill out finally again, will be the loudest signal 

to the negotiators you can possibly deliver. The last time you guys 

had an opinion, you know what you produced? The gold standard. 

Get on it again, will you? 

Mr. CONNOLLY. Thank you. 

Well, we have a checkered past but some of our opinions actually 

have efficacious value, and I appreciate your saying that. 

I do think it’s important though what we just heard from this 

panel, and then I will shut up, Madam Chairman. 

But is that renouncing Iran agreement—the JCPOA—has consequences far beyond Iran and, frankly, would have the unintended 

consequence potentially of actually proliferating, especially in countries such as the one we are talking about today—Saudi Arabia. 

So I would hope the President and the White House will take 

that into account before they make any kind of decision. 

Thank you, Madam Chairman, for your indulgence. 

Ms. ROS-LEHTINEN [presiding]. Thank you, Mr. Connolly. Thank 

you very much. 

And if I might just have two follow-up questions and then anybody would—if you wanted to you could have one. Thank you. 

But just to emphasize the need for the bill that I’ve been pushing, has there ever been an instance where Congress has ever 

49

passed a resolution of disapproval and then in fact successfully 

blocked a 123 Agreement? 

The answer is no, but go ahead. Yes, has there been one? 

Ms. SQUASSONI. No, but in the case of the China agreement, Congress conditioned its approval——

Ms. ROS-LEHTINEN. True. 

Ms. SQUASSONI [continuing]. And there were no nuclear exports 

for 13 years, and so there are various ways that Congress can put 

in conditions, can put in certifications, et cetera. 

May I just take a moment and respond to you? 

Ms. ROS-LEHTINEN. Yes, please. 

Ms. SQUASSONI. You know, the Nuclear Nonproliferation Act of 

1978 made a tradeoff. It strengthened the nonproliferation requirements but it also gave this kind of quasi fast track approval, a passive approval. 

The one thing that it envisioned was consultations with Congress 

and those have not happened. So when the U.S.-India nuclear deal 

came before you, it was already written. 

And so thank you for holding this hearing because I think you 

have to start the debate before the ink is dry. 

Ms. ROS-LEHTINEN. We need to have a voice instead of a fake 

process. Yes, Henry? 

Mr. SOKOLSKI. Actually, the fast track was locked in when we 

were in a propaganda war pushing out small research reactors in 

1954. We went along in 1978 with that again. 

Seems to me, though, that every—you had 1946, 1954, 1978—

that’s 40 years. You’re due to do an estimate of what the margin 

of safety requires. Surely you have learned something in the last 

40 years about the adequacy of IAEA safeguards, the willingness 

of people to cheat, our ability to keep track of covert facilities, and 

just how many things have been bombed. 

Take that into account. I think your bill is long overdue. It is 

something that has been—you know, the correction on what is an 

exempt agreement. It has been visited routinely. You’re due. It’s 

time for an oil change. 

Ms. ROS-LEHTINEN. Thank you. 

And as you mentioned, we have some 123 Agreements with 

Egypt, with Morocco, Turkey. They’re up soon. So let’s see what the 

administration is going to take these agreements one at a time or 

what it will do. 

Ms. Frankel, I know that you had a follow-up question. 

Ms. FRANKEL. I guess I would just——

Ms. ROS-LEHTINEN. Yes. 

Ms. FRANKEL. I am just trying to get something clarified here. 

So in listening to you, I guess we can assume that Saudi Arabia, 

hypothetically, could get a research facility and the materials they 

need without going through the United States or without the 

United States’ participation. Is that right? Yes? You think so? 

Okay. Okay. 

So yes, that’s what—because that was going to get my next step 

to that. They are now a party to the nonproliferation treaty. Is that 

correct? 

Mr. SOKOLSKI. Yes. 

Ms. ROS-LEHTINEN. Microphone on? 

50

Mr. SOKOLSKI. Yes, they are. 

Ms. FRANKEL. Yes. Okay. So I guess what I am trying to understand is, and I know I heard you say we have a lot of leverage, 

which sounds correct, over Saudi Arabia in a lot of different areas. 

But my question is, they’ve signed on to the nonproliferation 

treaty. What more can we do, let’s say, or should we do? 

Mr. SOKOLSKI. I think what Will Tobey said succinctly and I 

didn’t say succinctly, and I give him credit, is basically the Pope 

and the U.N. don’t have as many divisions as we do, and if you are 

willing to tell your good friend and ally that we are there for them 

but the prerequisite is they actually have to follow the NPT and 

not threaten to leave it and live up to the gold standard and get 

behind us leaning on the Iranians to get them to behave, it’ll work. 

That’s the reason, again, I think the legislation is reasonable and 

urgently needed. 

Mr. TOBEY. By the way, as someone who has negotiated some of 

these agreements on behalf of the executive branch, I can say that 

it really helps to have Congress in the right place on these issues. 

If we can point to the fact that we can’t get it past our Congress 

if it doesn’t have certain provisions, that’s a powerful tool and 

speaks all the more about the importance of cooperation between 

the two branches. 

Mr. CONNOLLY. Well, we are here to help, Mr. Tobey. That’s——

Ms. FRANKEL. Did you want to add something? 

Ms. SQUASSONI. I did want to add something. I mentioned this 

is in my testimony. Saudi Arabia is a member of the NPT but it 

hasn’t crossed all the T’s and dotted all the I’s. 

Because it has very little material in the country it has what is 

called the Small Quantities Protocol. 

Back after we discovered Iran’s clandestine program, the International Atomic Energy Agency said, hey, all you countries with 

Small Quantities Protocol this is a huge problem because you won’t 

let our inspectors in. 

So you either have to modify that or rescind it. They asked Saudi 

Arabia in 2005. We are still waiting. Half the countries who had 

those protocols have changed them. So that’s one thing. 

And the other thing is the Additional Protocol, which is in H.R. 

5357. We should certainly ask Saudi Arabia to sign that Additional 

Protocol because it gives inspectors more access and more information. 

Ms. FRANKEL. Thank you very much. I yield back. 

Ms. ROS-LEHTINEN. Thank you. Thank you for that follow-up 

question. 

Thank you to our witnesses. Thank you for everyone to—for 

being here. We look forward to continuing this discussion. This is 

not going away. 

And with that, our hearing is adjourned. Thank you. 

[Whereupon, at 3:15 p.m., the committee was adjourned.] 

(51)

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SUBCOMMITTEE HEARING NOTICE 

COMMITTEE ON FOREIGN AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

WASHINGTON, DC 20515-6128 

Subcommittee on the Middle East and North Africa 

Ileana Ros-Lehtinen (R-FL), Chairman 

March 14. 2018 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

You arc respectfully requested to attend an OPEN hearing of the Committee on Foreign Affairs to be 

held by the Subcommittee on the Middle East and North Atiica in Room 2172 of the Ra:,bum House Otlice 

Building (and available live on the Committee website at hi!iJjhYww.forcionAffairs.housc.goy). 

DATE: 

TIME: 

SUBJECT: 

WITNESSES: 

Wednesday, March 21,2018 

2:00p.m. 

Implications of a lJ.S.-Saudi Arabia Nuclear Coopemtion Agreement for the Middle 

East 

Mr. Henrv Sokolski 

Executive Director 

The Nonproliferation Policy Education Center 

Mr. William Tobey 

Senior Fellow 

Belfer Center for Science and lntemational AtTairs 

The John F. Kennedy School of Government 

Harvard University 

Ms. Sharon Squassoni 

Research Professor of the Practice of lntemational Affairs 

Institute for Intemational Science and Technologv 

Elliott School of lntemational Affairs 

George Washington University 

By Direction of the Chairman 
53

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COMMITTEE ON FOREIGN AFFAIRS 

MINUTES OF SUBCOMMITTEE ON _______ A_1i_d,_lle_E_·,_,s_t a_I,_d_N_o_Ith_A_:·:__fi·_ic_a ______ HEARING 

Day Wednesday Date. ___ c:..0.:.:4.=2.:.:7·=1-"8 ___ Room, ___ -=2c:.1:..:72:__ __ _ 

Starting Time 2:00p.m. Ending Time 3:15p.m. 

Recesses ( __ to __ )( __ to __ ) (____to __ ) ( __ to __ ) (____to __ ) (____to __ ) 

Presiding Membcr(s) 

Cltaimum Ro.v-Lehtineu, Clraimum Donovan 

Checl< all ~{the .following that apply: 

Open Session [2] 

Executive ~sed) Session D Televised W 

TITLE OF HEARING: 

Electronically Record!illJtaped) [2] 

Stenographic Record W 

Implications of a U.S.-Saudi Arabia Nuclear Coopemfion Agreement fm·tlte Middle East 

SUBCOMMITTEE MEMBERS PRESENT: 

GOP- Clwii·mmt Ros-Lelttinen, Reps. Cltubot, DeSantis, Zeldin, Donovan 

Dem- Ranking Member Deutch, Reps. Connolly, Frankel, Sc/meider, Lieu 

NON-SUBCOMMITTEE MEMBERS PRESENT: (Mark with an * if they are not members of filii committee.) 

GOP- Rep. Wilson 

Dem- Rep. Sherman 

HEARING WITNESSES: Same as meeting notice attached? Yes m NoD 

(If "no", please list belmP and include title, agency, department, or organization.) 

STATEMENTS FOR TilE RECORD: (J,ist any statements submilledfor the record.) 

Statement for lite Record Suhmilled by Mr. Connolly ~f Virginia 

SuhmittedflJr the Record by Mr. HeiiiJ' So/wlski: 

A New Light on lite Proposed U.S.-Smuli Nuclear Agreement by Victm· Gilinsky and HemJ' Solwlsld 

Economic Considemtion of Nuclear Power Deployment in Saudi Arabia by Ali Altmad 

Nucleur Coopel'((tion with Gulf Arabs by Murk Fitzpatrick 

Saudi Arabia Energy Neell• and Nuclear Power 

TIME SCHEDULED TO RECONVENE ___ _ 

or 

TIME ADJOURNED 3:15p.m. 
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Statement for the Record 

Submitted by Mr. Connolly of Virginia 

The United States is exploring a civil nuclear cooperation agreement with Saudi Arabia. Such an 

agreement has the potential to yield benefits for the US. nuclear energy sector, but there are important 

national security contingencies we must consider. Depending on the structure of a final deal, the 

agreement could weaken the non-proliferation standards of other U.S. nuclear cooperation agreements or 

strengthen the U S. non-proliferation regime in the Gulf In the absence of an agreement with the United 

States, Saudi Arabia may deepen cooperation with U.S. adversaries, namely Russia and China, but 

Riyadh remains wary of their simultaneous support for Saudi's rival Iran. It is in the best interests of the 

United States to pursue an agreement with Saudi Arabia that incorporates robust non-proliferation 

provisions, also known as the '·gold-standard'' of peaceful nuclear cooperation. 

Significant US. nuclear cooperation with a foreign country requires the signing of a peaceful nuclear 

cooperation agreement, known as a "123 agreement," which refers to the relevant section of the Atomic 

Energy Act (AEA) of 1954 (P.L 95-242). In November 2017, Assistant Secretary of State for 

International Security and Nonproliferation Christopher Ford said that discussions about a nuclear 

cooperation agreement with Saudi Arabia are underway. While both the United States and Saudi Arabia 

stand to benefit from enhanced nuclear cooperation, the US. Government has released no official 

estimates of potential export revenues or the impact a 123 agreement with Saudi Arabia would have on 

employment in the United States. 

Regarding the national security concerns, the devil is in the details. Many observers refer to the 2009 

U.S.-United Arab Emirates (UAE) 123 Agreement as the '·gold standard" of peaceful nuclear 

cooperation. Under that agreement, the UAE vowed not to enrich or reprocess nuclear material, and to 

obtain nuclear fuel for the reactors tram outside sources. The deal also requires that the UAE 

incorporate its Additional Protocol into its TAEA safet,'l!ards agreement before the US. approves the 

transfer of"nuclear material, equipment, components, or technology." It is important to remember that 

this agreement also includes a provision that allows the UAE to request amending the deal if other 

parties in the region are held to a less restrictive standard. It is safe to assume that the UAE would act on 

this provision if a future U.S.-Sandi deal does not constrain Saudi's nuclear activities in the same way 

Just last week, Crown Prince Mohammed Bin Salman said "Saudi Arabia does not want to acquire any 

nuclear bomb (sic), but without a doubt if Iran developed a nuclear bomb, we will follow suit as soon as 

possible." Riyadh certainly has an interest in meeting rising domestic energy demands and preserving its 

vast oil reserves for export revenue. However, as the architect of a robust global non-proliferation 

regime, tbe United States must seek to mitigate the risk of nuclear proliferation in ihe Middle East by 

pursuing a '·gold-standard'' nuclear cooperation agreement with Saudi Arabia. 
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domestic Saudi enrichment-we will set an awful precedent endorsing nuclear programs that put 

countries within anns-reach of a nuclear weapon. 

Some US supporters of a permissive US-Saudi agreement see it as a fight-fire-with-fire tactic to 

frighten Iran. The trouble with that approach is that it can easily get out of hand, with disastrous 

consequences, and not only in the Middle East. The answer is to convince Iran to back off in its 

uranium enrichment, not to open the door to others to emulate it. 

Much has been written about the dangers of having many nuclear-armed countries. As _HeJl!Y_ 

!~j_!!~_!lger t§,Illi!!lilY..9b!'§.IY~ "To assume that, in such a world, nuclear catastrophe could be 

avoided would be unrealistic." It is only a short step from that iflots of countries have easily 

exercised nuclear weapons options. lt would be an inherently unstable arrangement, one whose 

consequences are incalculable. Better to slow things down, to provide time for sober thought 

before countries reach for the ultimate weapon. 

The immediate effect of a permissive US-Saudi agreement would be to roll back the tighter one 

with Saudis' neighbor, the United Arab Emirates, which is predicated on keeping the same key 

provision in future agreements. Next, it would set a pattern for upcoming negotiations with 

Egypt in 2021 and with Turkey in 2023, neither of which will settle for anything stricter than is 

in the US-Saudi agreement. And at the other end of Asia it would bolster South Korea's 

continuing efforts to gain US approval to extract plutonium and enrich uranium. 

The two worrisome proliferation regions, Northeast Asia and the Middle East, are now coupled 

through nuclear energy deals and-it has recently emerged-security agreements. South Korea's 

2009 nuclear energy contract with UAE included secret militarv clauses. South Koreans are the 

leading contenders for the Saudi's nuclear project. Tt would not be surprising if similar clauses 

appeared in that contract. It's clear the current interest in nuclear tile! technologies in the Middle 

East and northeast Asia has a large military component, which makes it all the more important to 

maintain strict conditions. 

Washington nuclear policy "experts" tell us not to worry because the nuclear cooperation 
57

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agreements have provisions that can be used to delay Saudi enrichment, and anyhow the Saudis 

don't want nuclear weapons. Significantly, the Israelis, who otherwise line up with the Saudis 

against Iran, aren't buying this and vigorously oppose a permissive agreement. 

The ultimate art,>ument is of course the venerable one-if we don't loosen our nonproliferation 

requirements the Saudis will buy from the Russians or Chinese instead of us, and we'lllose 

influence in the Middle East. Even the premise is wrong. JJ:Le Sagdis ~.!llmost llkeJ,y:_s:hoose t]:t.£_ 

South Korean team that is coming otJ successful completion ofUAE reactors. As for switching 

to Russia or China, neither is an attractive partner. Would the Saudis trust the builder used by 

Iran? 

More fundamentally, this thinking reflects an outdated and exaggerated notion about the 

importance of nuclear energy. Its prospects have diminished radically, as has its international 

importance as a political currency. There is no chance, for example, the United States will build 

another large nuclear power plant based on current technology. They no longer make economic 

sense. Why then do we promote such plants abroad and thereby excite interest in dangerous 

technologies? 

More sensible would be to invite the Saudi Prince to discuss energy alternatives. His United Arab 

Emirates neighbors have announced they won't build anv more nuclear plants. The same 

economics applies to Saudi Arabia. That would also facilitate a reasonable outcome with Iran 

over its nuclear program. 

V.ictor .Gilinsky.served on the U,$: !\!uel'eJ~r RedutatorycohimissiorJ vnd~{f'residefllsGeralct. ford,< 

Jimrn;ca~er;a~dR¢nafci Rea"all .. Kels prbgram actViserfortlleNonpr(}lif~ratlo~·'P¢1icy. Education 

Ce~ter.H~n~.S()k~ll!.kils executive directorofthe ~ol\pro!;feratlonPoljcyEducatio~G~nter ~nd Jhe 

auth~r of Undefestimatet(. 'O(JiNot So PeacefUINul;teprf!ftu~, H~setil&d asdeput}ffot 

~onpro!if~ratlo!JpO[icy in, the oflic;e Of the. t) $.· sectetary Of d~fen;e fro~ 19$9to.1993. 
58

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Saudi Electric Company (SEC), a vertically integrated electricity company, controls 71% of the 

generation capacity and is responsible for transmission and distribution across the country7 

More recently, government refonns are pushing for unbundling of the generation, transmission 

and distribution sectors in order to encourage the entry of new producers thereby increasing 

efficiency and decreasing government spending8 

60% 

40'/h 

GT CCGT ST 

Oil 

Ftgure 1: Elt>ctrici~y generation in S'audt ~1rabia b.v ~~pe offuel and gent>ratian ft>chnologv (,)T= steam 

turhine, C'C'Cl'- C'omhined cycle gas Turhine, CT-Cas l'urhine, /Jiese/ Generators) 

By 2032, power generation capacity in the kingdom is expected to reach 120 GW9 The increase 

in electricity demand will be mostly driven by population growth, a fast-growing economy and 

an increase in consumption fueled by cheap energy prices and high government subsidies. 10 

Based on 2014 data, the maximum peak load reached in Saudi Arabia was approximately 56.5 

GW occurring during week 36 (September 1-7, 2014), while the minimum peak reached was 

31.88 GW occurring during the tirst week of that same year (December 30-January 5, 20 14). The 

high peal< load occurred in summer and low peak load occurred in winter. The difference 

between highest and lowest load in summer was 8.77 GW, the difference in the winter was 7.55 

GW11 The summer pattern is specitlc to a number of countries including the Gulf countries 

where air conditioning is widely used in summer and barely needed for heating in winter. See 

Figure 2. 

GW Winter 

o 1 3 4 s G ? B 0 10 n 12. u l<.Is 15 u ~8 ~0 20 21 n n 24 

HOL"Oftf'e day 
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Figure 2: !Iourly load in SaudL"lrabia during summer (lefl) and winler (righl) Source: Chile and .1hmad, 2017 

Nuclear Technology Options 

There are multiple reactor technologies that are available for deployment in Saudi Arabia. Many 

of the reactors that have already been sold and are being operated or under construction have 

relatively large power capacities (Table 1). 12 More detailed technical descriptions of reactor 

technologies and their relevance to the Middle East market can be found in the literature. 13 In the 

Gulf Cooperation Council (GCC), the South Korean APR-1400 technology is the only one 

currently under construction in the United Arab Emirates14 

T ahle I: Current reactor destgn.r;; availahle fhr ,\'audi Arahia 

Country Technology Reactor Design Capacity (MWc) 

Saudi Arabia's ambitious plans for nuclear power has attracted a number of nuclear vendors. Tn 

2013 both GE Hitachi Nuclear Energy and Toshiba/Westinghouse signed contracts with Exelon 

Nuclear Partners (ENP), a division of Exelon Generation, to pursue reactor construction deals 

with KA-CARE. 1

' The reactor designs proposed include the ABWR, the ESBWR and the 

API 000 The French companies Areva and EDF have also been aggressively moving into Saudi 

Arabia. In 2015, KA-CARE signed nuclear cooperation agreement with France to study the 

feasibility of constructing two EPR reactors while providing training on safety and waste 

disposal. Saudi Arabia and China signed a MoU in 2016 to build of High-temperature gas-cooled 

reactors (HTGRs) and in 2017 to study the feasibility of building HTGRs. 16 

More recently, Saudi Arabia sent a "request for information" to nuclear reactor vendors around 

the world, a step perceived as a first step towards opening a formal tender8 As a response, 

Westinghouse, which promotes the AP1000 design, has been reported to be in discussion with 

US.-based companies to forma bidding consortium9 With reports of Russian and South Korean 

companies also planning to bid, nuclear vendors worldwide look at Saudi Arabia as one of the 

most promising markets, especially with ifKA-CARE's plan to build 16 reactors is materialized. 
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29389f-4.eps

Small Modular Reactors 

Saudi Arabia's interest in small modular reactors seems to be serious. In March 2015, the 

kingdom signed an MoU with South Korea to conduct a three-year study to review the feasibility 

of constructing SMART reactors in Saudi Arabia. The agreement also calls for the two countries 

to cooperate on the commercialization and promotion of the SMART reactor to third countries. 17 

A number of SMR developers have argued that there are multiple motivations to pursue smaller 

designs, directed both at large industrialized countries and developing countries. One motivation 

is the high uptront capital cost of standard reactors, which is beyond the tinancing capacities of 

many utilities and countries. Another is to expand nuclear power to countries with relatively 

small electrical-grid capacities; a gigawatt-scale reactor could destabilize a small grid. What is 

interesting about the SMART partnership between Saudi Arabia and South Korea is that the 

kingdom falls outside the "niche" SMR market, as advocated by SMR vendors. 

However, other factors that have been offered as motivations for SMRs are claims to potentially 

greater safety due to the reliance on passive features, and enhancement in public acceptability. In 

the case of the Saudi SMART venture, the technology is also capable of producing desalinated 

water besides generation electricity. 1 

x 

The downside of SMRs deployment in Saudi Arabia, however, is the loss of economies of scale 

- smaller nuclear reactors are typically more expensive on a per unit cost basis. Detailed and 

carefully conducted elicitations showed that even experts drawn trom, or closely associated with, 

the nuclear industry expect SMRs to cost more per kW of capacity than currently operating 

reactors. 19 Based on the average of expert estimates of the extra per kW cost for SMRs, the 

percentage increase expected ranged from 12% for 225 MWe reactors to a whopping 120% for 

45 MWe reactors. 

There are currently dozens of SMR designs under development Some of these are still in the 

conceptual design phase, many are still in the R&D phase and only four have been licensed or 

currently are under construction20 The details of these SMRs are summarized in Table 2. Thus 

far, there is no sign that any of the five remaining GCC countries are considering any of these 

reactors. 

Country of Origin South Korea Russia China Argentina 

l ahle 2: Sinal/ modular reactors current~v under construction or licensed 
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The HTGR Option 

Saudi Arabia's interest in SMRs extends to the Chinese high temperature gas reactor (HTGR). In 

March 2017, KA-CARE and China Nuclear Engineering Group (CNEC) signed an agreement to 

conduct a feasibility study that will consider "the development of system solutions for the 

investment and construction of HTGRs" 21 The agreement will also examine cooperation in 

"intellectual property and the development of a domestic industrial supply chain for HTGRs built 

in Saudi Arabia". 

Since HTGRs operate at a higher temperature compared to water-cooled reactors, they can be 

used to generate process heat and hydrogen production as well as electricity. 10 On paper, Saudi 

Arabia could deploy HTGRs in their industrial regions such as petrochemical compounds and 

heavy oil recovery systems. Proponents of HTGRs claim that they possess high safety 

standards22 However, based on a review of the operational history ofHTGRs, they face some 

serious technical challenges and are prone to a variety of small failures such as air and oil 

ingress, which could trigger accidents with severe consequences. 11 12 Given the importance of 

the oil and petrochemical sector for the Saudi economy, the consequences of any accident are 

likely to be immense. Therefore, the kingdom will be taking on a substantial risk for a return that 

can be achieved using other sources of energy and technologies. 

Cosl of Electririly Generation 

The conventional way to compare the cost of electricity generated by ditferent sources is to 

calculate the levelized cost of electricity (LCOE), which can be understood as the ratio of the 

total cost to the benefits (in this case the electricity produced) with all figures being discounted to 

the same baseline year. This follows from the standard discounted cash flow methodology, 

which accounts for the time-value of money. This methodology is used to calculate the life cycle 

cost of producing electricity. 

The calculated LCOE for different energy sources are all busbar costs delivered to the grid; i.e., 

they take into account auxiliary or in-plant consumption of electricity but do not include 

transmission and distribution costs. Any large-scale expansion of nuclear power in Saudi Arabia 

would require an expansion of transmission infrastructure. Such costs are not included here, even 

though it could be significant. 

The cost of electricity generated as well as water produced by desalination from any technology 

depends on a number of parameters. An important factor is the discount rate. For the case of 

Saudi Arabia, the chosen discount rate is 5 percent Note that this is a real discount rate, and 

intlation is implicitly taken into account. This choice may seem somewhat low, but many studies 

do indeed adopt discount rates of around 5 to 5.5 percent in their evaluations of electricity 

economics in the GCCn 

Estimates of the cost of electricity generation of various sources in Saudi Arabia are shown in 

Table 3. These estimates were based on a recent study by Chite and Ahmad. 14 Estimating the 

cost of generation using prices of subsidized tile!, as usually entailed from Saudi electricity 

operators, results in very low generation costs where nuclear (and renewables) cannot compete. 
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15Fuell Technology Nuclear Gas-light oil I Gas- light oil/ Heavy Oil/ ST Diesel/ Diesel 

GT CCGT 

~ l!i~~t\~i~ ~¥:~~~~~~J~'I'k¢~~\JiJ%W~ll!lili~'~~~%5<;~~L'X',l;~'":sc:"1;;~'011~;,ll!t~:::;l"~~;;o~~~;Ri@'lli1')(;t:r!i\l~~~ 

MB~~'fi;'t;ll~itli'~~~';IIJ;xf~~i:I~i~~~~~~~~~;;v.J:~~~~\'::'il*~~"':'{$¥i'*i~:t~':l?~~(::<~?'vi~~?!f~~1~i~~!}~ 

Tab It> 3: ('osr ofelectrici~v generation in S'audi ~lrabia ofdi{f(>r('nf technologies using subsidized prices 

A special case to be considered is the cost of nuclear electricity generated by SMRs. As 

discussed earlier, SMRs are expected to have higher capital costs per kW by somewhere between 

12 and 120 percent. 16 Tn this analysis, SMRs' capital costs is assumed 25 percent higher than for 

current nuclear reactors, i.e., approximately $7,430/kW. 17 SMRs would also have higher fueling 

cost because of higher uranium requirements. 1 

R lt is also not clear what sets of conditions they 

would be licensed under, 19 and depending on the safety and security requirements imposed by 

regulatory authorities, SMRs could have higher tixed and variable operations & maintenance 

costs. In contrast to these higher costs, the construction time for SMRs is expected to be 

shorter211 For simplicity, it is assumed that all of the cost variables for current (large) LWRs are 

the same as SMRs with the exception of the capital cost. Then, with these assumptions, the 

lev eli zed cost of nuclear power from reactors rises from about $81/MWh if large reactors are 

constructed to over $94/MWh for SMRs. 

Basefoad Generation: Nuclear versus Natural Gas 

Unlike renewables that have zero fueling costs, the cost of natural gas is an important, perhaps 

overwhelming, component of the cost of generating electricity in a natural gas plant. Therefore, 

the cost comparison between nuclear and natural gas could vary from country to country. Natural 

gas prices in countries that use domestic reserves, such as Saudi Arabia, would be significantly 

lower than countries that import natural gas at international prices, and this would affect the 

relative economics of power from nuclear reactors and natural gas plants. 

The economic competitiveness of gas-fired power plants decreases as the prices of natural gas 

increase. Ahmad and Ramana estimated the cross-over value between nuclear and natural gas 

generated electricity for Saudi Arabia is at a natural gas price of $13 6/mmBTU21 

In other words, nuclear is less economical if natural gas prices are lower than the cross-over 

value. The economic prospects for nuclear power in the kingdom are not favorable in 

comparison with natural gas, even if the currently low domestic natural gas prices in Saudi 

Arabia were to rise substantially. 

What if Saudi Arabia were to increase its domestic output and start exporting gas instead of 

using it in natural gas plants? This is related to what is often termed the opportunity cost. The 

first thing to note is that such exports will most likely be in a liquefied (LNG) form. 

Consequently, the costs associated with building infrastructure, liquefaction and shipping should 

be taken into account. A study on the future of natural gas conducted by the Massachusetts 

Institute of Technology estimates the cost ofliquefaction at $2.15/mmBTU, shipping of LNG at 

$1.25/mmBTU, and regasification at $0.7/mmBTU. 22 The total of these costs amount to 

$4.1/mmBTU.23 Because of this additional expenditure, it would make economical sense for 
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Saudi Arabia to build a nuclear reactor in comparison to a natural gas plant only if the price that 

could be obtained on the international market exceeds $13.6/mmBTU over the period of the 

lifetime of the reactor. 

l'otemial of Solar Power in Saudi Arabia 

Aside from meeting the increasing energy demand, integrating solar power in the Kingdom's 

current energy mix would be both economically and environmentally advantageous. Saudi 

Arabia has one of the highest potential of solar energy in the region where annual solar radiation 

is around 2,200 kWh/m224 Moreover, integrating renewables within the energy industry would 

drive economic diversification, create jobs and facilitate the implementation of climate change 

policies. Compared to nuclear, pairing solar power plants with domestic gas turbines can also 

help with load balancing more effectively 

The Kingdom recently equipped 30 metrological stations able to conduct very accurate 

measurements including one-minute measurements of Global Horizontal Irradiance (Gill), 

Diffuse Horizontal Irradiance (DHI), and Direct Normal Irradiance (DNI). 25 GHI ranged from an 

average daily total of 5,700 Wh/m2 to the highest 6,700 Wh/m2 with the higher values found in 

inland areas and lower values found on the coast. DNl values ranged from an average daily total 

of over 6,474 Wh/m2 found on western inland areas to an average daily total closer to 5,510 

Wh/m2 found on eastern areas 26 The solar resources outlined above are optimal for the 

performance of two main solar technologies that dominate current and future energy projects in 

Saudi Arabia: Photovoltaics (PV) and Concentrated Solar Power (CSP). 

The hourly load pattern shown in Figure 2 above should offer an advantage for renewables 

mainly solar, as the high load occurs in the summer, in step with the maximum output of solar 

PV or CSP systems. However, PV systems generally suffer from reduced power output during 

the summer due to high ambient temperature affecting the performance of solar cells. On the 

other hand, CSP systems are less affected by high ambient temperature but are more sensitive to 

weather conditions like haze or sandstorms which lower the performance of solar CSP plants. 27 

In terms of costs, PV costs are divided into module costs (direct cost of photovoltaic modules); 

"hard" (inverter, racking, electrical equipment, etc.); and "soft costs" (labor, permitting fees, 

etc.). Module prices have followed a learning rate of 20 percent over the long term for the last 10 

years 28 Non-module prices, which are also known as BOS (Balance of System) are also 

decreasing, nearly at the same rate. Future improvements in the PV technology cost should come 

from a combination of improving power electronics, reducing su~ply chain complexity and cost, 

and decreasing installation costs and margins as markets mature2 ' 

The dramatic decline in solar PV costs is particularly relevant because of the long construction 

period of nuclear projects, a decade at the very least."' Even assuming that a nuclear power 

project is given the go-ahead in 2018, it will likely be 2028 by the time it starts generating 

electricity. On the other hand, there is little reason to expect the costs of nuclear power to decline 

substantially. Historically, costs of nuclear power have only increased 31 
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Recent solar PV projects benefit from lower prices. For example, the Dewa project in Dubai 

rated 260 MW is priced at $328 million, giving a capital cost of 1,225 $/kW. The plant is 

expected to produce electricity at world record of 5.85 cent/kWh. Prices are heavily influenced 

by the project location. Tn Saudi Arabia, these costs should be less than those in the US and 

Europe. Costs should decrease even further as more PV projects are installed and some parts of 

the PV system are manufactured locally. 

Investments Needs 

The total investment for the 2012 KA-CARE plan is expected to reach about $360 billion by 

2030, with CSP technologies representing the highest costs (see Figure 3)32 A cheaper scenario 

involves adding gas turbines and replacing nuclear reactors with CCGT power plants which are 

cheaper and have a shorter construction time. Tn that case, the total investments needed are 

approximately $150 billion, nearly half the investments needed by 2012 KA-CARE plan (see 

Figure 4). 
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retain the right to exploit the large uranium reserves in the country and add value by enriching uranium. With plans 

to build two nuclear power plants by 2025 delayed due to financial difficulties, Jordan's 123 negotiations have been 

suspended. Bahrain, not having a nuclear-power development plan, never entered into 123 negotiations. 

Negotiations on a US nuclear cooperation agreement with Saudi Arabia also got bogged down. Recently, however, 

the Saudis accelerated their ambitious plans for nuclear energy- 16 large reactors over the next 20-25 years- and 

thus resumed the talks. With a tender for the first two reactors scheduled to be awarded this year, the technology 

agreement with the US has taken on urgency. This would be straightforward except that Riyadh is balking at the 

gold standard. Its stated reason for reluctance is based on economic grounds. Expressing a future goal of 'selfsufficiency..l.n...P-roducing nuclear fuel', Saudi Arabia says it wants to be able to tap its extensive uranium resources. 

Yet every independent study shows that unless a state has a very large nuclear-power programme, it is more 

economical to buy nuclear fuel. The Saudis acknowledgg that they do not anticipate enriching for the next 25 years. 

Saudi Arabia's real concern is in keeping pace with Iran. The Saudis also have a nuclear hedglflg strategy:. With 

Tehran's uranium enrichment programme having been granted international legitimacy via the 201 5 Joint 

Comprehensive Plan of Action UCPOA), Riyadh insists on a similar right. As former assistant secretary of state for 

International Security and Nonproliferation Tom Countryman ~gishlv. noted on Twitter, however, the Saudis 

naturally are not interested in replicating the price Iran paid for its nuclear programme in terms of the international 

opprobrium and remaining sanction it is under, and the intrusive inspections to which it had to submit. 

Saudi Arabia has yet to accept the Additional Protocol that the International Atomic Energy Agency (IAEA) has said 

should be an integ.rnlRart of every country's nuclear safeguards arrangement. The Saudis also have yet to accept 

another safeguards protocol that the IAEA has been seeking since 2005. This is the modified version of the 'Small 

Quantities Protocol' that would eliminate a loophole which allows a number of safeguards measures to be held in 

abeyance. 

In addition to the gold standard on sensitive technologies, the UAE early on accepted the Additional Protocol. It has 

also adopted the highest-standard conditions for nuclear safety, nuclear security and transparency, signing every 

nuclear treaty, convention and protocol available to it. Among nuclear 'good guys', the UAE enjoys platinum status. 

For the US to sign a 123 agreement with Saudi Arabia that did not include the gold standard on enrichment and 

reprocessing would be a major change of policy that has guided both Republican and Democratic administrations. 

It would also effectively invalidate the UAE promise, because of a clause in that country's 123 agreement allowing 

renegotiation if any other country in the Middle East receives an agreement on more favourable terms. 

In short, when Crown Prince Mohammed bin Salman visits on 19 March, the US should stick to standards that would 

allow for the expansion of nuclear energy in the Middle East that is as safe, secure, and non-threatening as 

anywhere else in the word. 
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Contents 

Introduction ...................................................................................................................................... 3 

Current situation ............................................................................................................................... 5 

2.1 Objecti\es .5 

2.2. Oil .6 

2.3. Natural Gas .. .7 

2.4. Electricity ..... ....... 11 

Nuclear power in Saudi Arabia ...................................................................................................... 20 

4 Environment ................................................................................................................................... 22 

Ener~ Outlook .... . ...... 23 

5.1. Forecasts .. ....... 23 

5.1.1 Demand ....... 23 

5.1.2. Generation mix ... . ...... 23 

5.1.3 Erriclenc) ................................................................................................................................ 39 

5.2. Solar. . ..... .40 

5.3. Wind and other renewables .. . ...... 44 

5.4. Energy storage. ...... .45 

Conclusions .. . ...... 47 

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I. Introduction 

This report commissioned b~ the Nonproliferation Policy Education Center, assesses the prospects for 

Saudi Arabia to meet its energy and environmental requirements without the use of nuclear pov.-er. 

There are evidently many v.-ays in which those requirements could be defined and met This study coyers 

the period up to 2040 since this is the period 0\ er \\hich the countr~ has dellned its current nuclear power 

target and \\ith main focus on 2032 giYen that this was the year for its initial planned mix of nuclear and 

renewable energy. Reasonable assumptions are made for growth in electricity demand. other industrial 

enersry demand, and transportation_ based on official Saudi forecasts with independent checks and 

scenarios. including those Vi·-ith greater realised energy efficiency. The primary focus is on electricity 

given that this would be the main output of a ci\ il nuclear pO\\ er programme. so the other uses of oil and 

gas in the transportation and industrial sectors are not considered in detaiL 

Then a comparison is made of the Saudi energy system up to 2040 \\ith nuclear power at current targeted 

le\els: ''ith the current fossil-fuelled mix: and with a number or scenarios \\ith more rene\\ able energy 

and no nuclear. These three approaches are contrasted on the metrics of economic attractiveness (cost and 

\'alue): environmental outcomes; reliabilit~ and energy securit~, local economic development. Possible 

proliferation-related reasons for pursuing civilian nuclear power haYe been dealt v.-ith at length b:v others 1 

and are not considered here. 

The main scenarios considered assume that the regional political situation and climate remain broadly 

similar to toda~. Tt is assumed that, 0\er this period. transport (air, land and sea)\\ ill remain fuelled 

primarily by h~drocarbons (oil and possibly natural gas). In all scenarios. mostl~ current technologies are 

assumed. \\ith conservative vie\vs on improyements in performance and cost Of course. more rapid 

advances in rene\vable energy, unconventional h:vdrocarbons, carbon capture & storage, advanced energy 

storage or other technologies \Vould make it easier to meet the country's energy requirements \Yithout 

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nuclear po\,\er. Conversely. advances ln nuclear pO\\er (such as small modular reactors) \\Ould make lt 

relatively more attractive 

Em·ironmental requirements are assumed to be. at minimun~ compliance with Saudi Arabia's Paris 

climate change agreement submission, as \Yell as mitigating local environmental impacts of its current 

energy system. 

4 

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2. Current situation 

2.1 Objective> 

Saudi Arabia's oil and gas are its main natural resource. the foundation of its economy and its political 

system and international role. With that in mind, the key goals of Saudi energy policy can be defined as 2

: 

Maintain and increase oil and gas output to meet the needs of the domestic population, supply 

local business \\ith ener~ and feedstock, and erun export re\'enues 

Maintain its role as one of the world's leading oil producers and the dominant force in the 

Organisation of Petroleum Exporting Countries (OPEC) 

Secure markets for its oil b~ im esting in assets and relationships in its main customers 

4 Diyersify the economy by developing hydrocarbon-based and enerb'y-intensiYe industries. as \Veil 

as. more recently. non-oil industries, with a vie\Y towards the long-term diminution of oirs role in the 

global economy 

Build up substantial fiscal resenes to safeguard against oil price\ olatility 

Safeguard the security of its energy industry and colllltry generally Yia hard security measures. 

relationships/alliances and ··son power"' 

Delay or minimise emironmental measures that \\Ould reduce the use or oil in the world 

economy 

More recently, t\YO other objectives have risen to prominence, even if they do not yet eclipse the 

objectives above· 

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Jmprme ener~ efficiency. introduce non-hydrocarbon energy sources, and reform subsidies to 

reduce the fiscal burden on government and preserve oil and gas for industrial and export use, while 

bearing in mind domestic public opinion and presen·ing the competitiveness of business 

2 Improve environmental performance. including greenhouse gas emissions 

2.2 Oil 

Saudi Arabia is. of course, one of the \Yorld"s largest oil producers (12.3 million barrels per day of crude 

oil, condensate and natural gas liquids in 2016, second in the world behind the USA and ahead of Russia; 

of this, 10.46 million bbl/day was crude oil). and the world's largest oil exporter (net 8.4 million barrels 

per day in 2016'; of this 7.5 million bbl/day was crude oil and 1.5 million bbl/day retlned petroleum 

products, with 0.6 million bbl/day import of refined products.J-). It is the world's largest holder of 

com entional oil res en es with an official total of 266.2 billion barrels at the end of 20165 ( onl~ Venezuela 

has a larger figure, but the majorit~ ofVene .. wela's official resenes are extra-hea\') oil ofLUlcertain 

commercialit~). 

Saudi oil production costs are exceptionally low, probably on the order of $10 per barrel or less (capital 

plus operating costs). The reserves/production ratio is 59 years. indicating (simplistically) that production 

could continue at current rates for 59 years from the existing resen-es base. Saudi Arabia has aspirations 

to raise its total recO\ erable oil substantially_ mostl~ by increasing recm ery from the known fields. 

Saudi Arabia is also a major oil consumer, refining 2.5 million bbl/day in 2016 and consuming 3.2 

million bbl/day6

_ the fifth largest figure in the world (behind the US, China. India and Japan). Of this. a 

large proportion was crude oil burnt directly in pmver plants. Figure 1 sho\YS oil consumption by month 

during 2013-16, and it can be seen that it rises some 700-800 000 barrels per d~- in summer versus 

\\-inter. mostly due to an increase in the direct burning of crude oil and to some extent fuel oiL 

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All Saudi oil and gas production, apart from that in the Neutral Zone\\ ith Ku\\·aiL is operated b~ Saudi 

Aramco, the state-O\\lled oil company. Aramco also operates the Kingdom's oil refineries (some in 

partnership \Yith foreign companies), has a substantial petrochemical and power generation business, and 

a number of significant international investments in refining and petrochemicals in the US, China. South 

Korea Japan and elsewhere. Aramco is respected as a relatiYely efficient and technically proficient 

operator. There are plans for an Initial Public Offering (IPO) of Y% of .Aramco on the Saudi stock 

exchange (the Tadm\ ul) and a to-be-chosen international exchange, set for 2018 

2.3. Natural Gas 

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Saudi Arabia is also an important producer and consumer or natural gas, though not to the same extent as 

for oiL Official resen·es at the end of2016 were 297.6 trillion cubic feet (the 6u1-largest in the \Vorl d), and 

marketed production was I 0.6 billion cubic feet per day (the gth largest in the world). All of this gas was 

used domestically. making the Saudi domestic gas market the world's 61h largest. 

A large part of gas production is associated (a by-product of oil production) and is therefore cheap to 

collect and use but not ilexible. The proportion of associated gas. though. has fallen from -IZ% in 2005 to 

about 33% in 20158 The reserves/production ratio ror gas is 77 years, indicating ample resenes to 

increase production: however, if oil production remains constant sibrnificant increases in gas production 

would have to come from non-associated fields. The country has developed its first non-associated fields 

offshore in the Gulf, Karan and (together feeding the Wasit gas plant) the Arabiyah and Hasbah fields. 

Saudi Arabia has significant uncom entional (tighUshale) gas resources. estimated at 645 trillion cubic 

feet'J Apart from initial projects in the north-\\ est of the cOLmtry (Tabul'" Basin). shale gas production has 

consisted only or pilots. \',ith estimates or high production costs ($9/MMBtu in 2012). Hm\e\·er 

unconventional gas production is targeted to reach 4 Bcf/day by 202610 Most yersions of hydraulic 

fracturing. required to produce tight gas. use fresh water. which \Yould require desalination. BP has 

deYeloped tight reservoirs in Oman's Khazzan field, also in a desert setting, using reverse osmosis 

desalination plants. Alternatively fracturing fluids using saline v.-ater. propane or carbon dioxide could be 

employed though they ma~- be less effective. In either case. this raises the likely initial cost of tight gas 

production in Saudi Arabia 

Although it borders two of the ,\-orld's largest gas resource holders, Iran and Qatar. Saudi Arabia by 

policy does not import or export gas. Difficult political relations with these tv.-o countries (and with 

another gas-rich neighbour. Iraq, although relations here have somewhat improYed recently) make direct 

imports unlikely. Other than Yemen, whose moderate LNG exports are shut down b;.· the continuing \Yar. 

its other neighbours- Eg~·pt Jordan. UAE Oman, Bahrain and Kmvait- are thernseh-es gas importers or 

""' Q,.I,MA!i. FN:CR[l'(