Bush's Nuclear Deal with India Is a Disaster for World Safety and the Environment

By Alexander Zaitchik, AlterNet. Posted September 10, 2008.

A bitter closure is finally at hand for the long international debate over the Indo-U.S. nuclear deal. In a controversial statement issued in Vienna on Saturday, the 45-nation Nuclear Suppliers Group, which regulates the legal nuclear trade worldwide, granted India an unprecedented waiver to buy nuclear material and technology despite its refusal to sign the Nuclear Non-Proliferation Treaty and its possession of nuclear weapons.

The decision is the penultimate step in changing the law to allow U.S. firms to help develop India's nuclear energy sector. With large majorities in the House and Senate supporting the deal -- including senators Barack Obama, Joe Biden and John McCain -- passage by Congress is likely during the opening session of 2009, despite dead-ender opposition by a handful of lawmakers led by Congressman Edward Markey, D-Mass. Passage by Congress would end a long and bloody political process that began in the summer of 2005, when George W. Bush and Indian Prime Minister Manmohan Singh signed a joint statement in Washington outlining a new strategic partnership, including a pledge by the United States to end India's nuclear pariah status.

Saturday's vote in Vienna was a long time coming. Immediately after the 2005 announcement, proponents and critics began digging trenches on either side of the deal, which the Bush administration viewed as its best shot at a meaningful post-Iraq foreign policy legacy. Some boosters went as far as to liken it to Nixon's going to China. By the time Bush and Singh met in New Delhi in March 2006 to sign the Civil Nuclear Cooperation Agreement, the battle lines were marked and the battle cries well rehearsed.

Boosters in both capitols hailed the pact as heralding a historic geostrategic realignment, cementing ties between the world's oldest and biggest democracies. The nuclear deal, they said, would accomplish three things: It would bring India in from the nonproliferation cold by opening its civilian reactors to U.N. inspectors; help the growing country of more than 1 billion people meet surging energy demand; and reduce pressures on global oil supplies and atmospheric carbon counts. Critics decried the proposed exemption as a potentially fatal blow to the already creaking legal infrastructure of the nonproliferation regime. How, they asked, can we reward India for going nuclear without making a farce of the rules binding the rest of the world's non-nuclear nations? What's more, critics warned, sending uranium to India would fuel a nuclear arms race in South Asia.

For years the sides have waged battle in Washington, New Delhi, Vienna, New York and beyond, with overlapping political mini-dramas at times resembling a shifting pattern of Chinese trick rings. Few news stories have been so taxing on the public's attention. Supporters in Washington and New Delhi had to battle domestic and international critics, all the while recalibrating the terms of the bilateral deal. Last weekend's breakthrough comes after numerous rounds of under-the-radar negotiations and arm-twisting inside the International Atomic Energy Agency and the Nuclear Suppliers Group, both of which were required to approve aspects of the waiver before the pact could be ratified by Congress.

As recently as last month, the fate of the deal was in serious doubt. At the NSG's August meeting, an alliance of small European nations demanded, with the quiet backing of China, the insertion of a series of conditions and asterisks to the exemption that were unacceptable to India. But between the August meeting and last Saturday, the European opposition front was crushed under pressure from Washington. Bush then leaned hard on Chinese President Hu Jintao to accept to the deal, which China has never liked because of its implications for the balance of power in its dangerous backyard.

The result is an unprecedented change in international law allowing a non-NPT signatory state to purchase uranium and high-end reactor technology on the world market. In exchange, India will open its civilian plants to U.N. inspectors, in line with a much-criticized partial inspection plan approved by the IAEA last month. India's military nuclear installations, meanwhile, will remain off limits. Most importantly for India's nuclear weapons program, New Delhi can now import uranium to develop the civilian nuclear energy sector, while reserving the country's meager domestic ore deposits for the expansion of its nuclear arsenal, currently estimated to consist of fewer than 100 bombs.

Already some Pakistani officials are saying the deal will lead to an aggravated arms race between the two nuclear states, likely forcing China to participate as well.

Prominent critics of the deal say this is no surprise, and that an arms race in Asia is only the most immediate aspect of the deal's geopolitical fallout. "This is a nonproliferation disaster of historic proportions," says Daryl G. Kimball, director of the Arms Control Association. "The India-specific exemption from NSG guidelines severely erodes the credibility of global efforts to ensure that access to peaceful nuclear trade and technology is available only to those states that meet global nuclear nonproliferation and disarmament standards." Henry Sokolski, a member of the congressional commission on proliferation and terrorism, goes further, calling the deal "Nonproliferation's 9/11."

As such critics warned would happen, there has already been a small cascade effect among non-NPT signatory nuclear states, with Pakistan and Israel now raising the question of their own exemptions.

Unease over the NSG decision is not limited to professional nonproliferation activists. Many of those who ultimately went along with the NSG consensus vote under American pressure understand what is at stake. A European diplomat who participated in Saturday's Vienna meeting told Reuters, "For the first time in my experience of international diplomatic negotiations, a consensus decision was followed by complete silence in the room. No clapping, nothing." Another dismayed diplomat wondered openly, "NPT RIP?"

"The deal struck in the NSG is likely to have slow-motion, far-reaching, negative repercussions because the Indian waiver was not accompanied by compensatory steps to shore up international controls against proliferation," writes Michael Krepon, co-founder of the Stimson Center, in a recent analysis of the NSG waiver.

Among the most important of these ignored "compensatory steps," argue Krepon and others, is India's required signature on the Comprehensive Nuclear Test-Ban Treaty. At Washington's insistence, the NSG statement does not include mandatory penalties if India resumes testing. Since the NSG operates by consensus, this means that even if India resumes nuclear testing, the major nuclear powers with financial stakes in the new status quo can keep the NSG from stopping legal nuclear trade with India.

As Krepon and others point out, this omission in the NSG statement is inconsistent with the Hyde Act of 2006, which Congress passed in order to link nuclear trade with India to the maintenance of that country's current voluntary testing moratorium. In failing to include similar conditions in the NSG ruling, the Bush administration has put Congress in a position where it must either ignore or amend its own law.

Regardless of what Democrats in Congress say or do about the legal mismatch, supporters of the deal say the break with the past has been made, and that is all that matters. "Whatever glitches and conflicts occur down the road, the deal is done," says C. Raja Mohan, a foreign affairs columnist for the Indian Express and former adviser to the Indian foreign ministry. "Some provisions are clearly liable for interpretation in different ways, and the nitpickers and the nonproliferation crowd in D.C. and Delhi will scream. But our atomic energy guys are happy. The train has left the station."

So it has. The problem is, no one knows seems to know exactly where it is headed.

* * *

With so much attention focused on the nonproliferation aspect of the deal, it can be easy to forget that India's exemption from the rules was originally framed and sold as a way to help India provide power for its people, fight climate change and slacken a tightening global oil market. Typical of the early public relations efforts, Indian officials popped up at a 2005 U.N. climate conference and argued that growing India's nuke sector was a fit substitution for signing Kyoto. Shortly after the deal was announced in March 2006, Condoleezza Rice published an op-ed in the Washington Post claiming, "Civilian nuclear energy will make (India) less reliant on unstable sources of oil and gas." And last week, just after the NSG statement was issued in Vienna, Britain's foreign secretary, David Miliband, welcomed the news with the familiar refrain, "We believe (the exemption) will make a significant contribution to energy and climate security."

But most serious observers doubt the deal will make a contribution to much other than the profit margins of the world's struggling nuclear power firms. Among the companies hoping to get a piece of Indian pie are General Electric, France's Areva, Russia's Rosatom and Japan's Toshiba. (In deference to Washington's role in leading the exemption charge, New Delhi has promised to delay all bilateral contracting until Congress approves the deal, freeing up U.S. companies to land the juiciest subcontracting tenders around the corner.) Rhetoric aside, exactly how green is this deal? And will it have any impact on the global oil scramble?

The answers are "not very" and "none."

The biggest lie told about India's nuclear sector is that growing it will decrease India's oil imports. This won't happen because India uses its limited oil resources and imports exclusively for transport, not energy. What nuclear will displace is a bit of coal, which currently generates the majority of India's energy. According to the Indian government's own figures, the deal will do nothing to curb energy demand or emissions in the transport sector, where oil use will continue to keep pace with overall growth and the explosion of cars on India's roads.

No one denies that India has an energy crisis. The Indian Finance Ministry estimates that every year $68 billion in goods and services is lost due to power outages, a daily part of Indian life from cotton-belt villages to hi-tech boomtowns. But the needed megawatts (MW) are well beyond what nuclear can provide. In order to sustain India's current growth rate of 8 percent, the Indian government says 350,000 MW will be required in the coming decades. This is a tripling of current capacity, which currently meets only about half the national demand.

Nuclear can help meet this need, but not by much. Even generous estimates of the nuclear sector's growth put the top capacity at 20,000 MW by 2025. At the moment, nuclear provides less than 2 percent of the country's energy; keeping apace with growth, this number is unlikely to break the 8 percent figure.

"There's been a lot of disingenuous rhetoric about this deal," says Sudha Mahalingam, an energy specialist at New Delhi's Centre for Policy Research. "No one who understands the ground realities of India's energy market could take the government claims seriously. On cost grounds alone, nuclear power in India is a mirage. Energy security will remain elusive." According to Mahalingam, nuclear makes little economic sense compared to coal (currently providing 60 percent of India's electricity), hydro (25 percent) and gas from the Middle East and Southeast Asia, imports of which are set to rise dramatically. "The state utilities remain insolvent, and the prospects for attracting private capital are dim. Nuclear power in India will die of its own contradictions."

"Nuclear power is simply not capable of meeting more than a small fraction of India's rapidly growing electricity needs," agrees Christopher Flavin, president of the Worldwatch Institute. "Micro-solar, wind and hydro would be better investments given the needs and realities of a rural, densely populated country like India. The opportunity costs of pursuing nuclear are huge."

Indeed, the much larger potential of wind, hydro and solar is one of the casualties of so much official excitement over the nuclear deal. Some estimates place India's untapped hydro potential as high as 100,000 MW, a majority of its current total capacity and five times what the government hopes to get from nuclear in the coming decades. Wind is also experiencing rapid growth in India, the world's fourth-largest producer of wind energy. According to a study by the consulting firm Frost & Sullivan, India's untapped electrical generating capacity from hydro alone is the equivalent of 150 large nuclear plants.

The opportunity costs of ignoring these smaller-scale alternatives are borne disproportionately by India's poor. As Leonard Weiss observed in the Bulletin of the Atomic Scientists in 2006, India's energy problems are as much if not more about distribution as they are about supply.

Rural areas, where 70 percent of India's population lives, use only 13 percent of the power on the grid. It is evident that India's most pressing electrical energy issue is distribution, yet more than 90 percent of investment in its power sector goes into generation and transmission. One approach to this problem is decentralized, distributed energy generation, in which small- to medium-size facilities are located near sites of power demand, in contrast to relying on large central power plants. Because the electricity produced by distributed generation flows shorter distances to consumers, it is cheaper than relying on a vast transmission and distribution network, which has high capital, operations and maintenance costs, as well as significant energy losses. Distributed generation encompasses a number of options: wind power, biomass and waste-driven fuel cells, microturbines and solar photovoltaics.

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Alexander Zaitchik is a freelance journalist.

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