Before Saudi Arabia Goes Nuclear, It May Have to Follow Iran’s Lead

(Bloomberg) -- International monitors reminded Saudi Arabia this week that it still has work to do before delving deeper into an ambitious nuclear program that could transform how the kingdom generates its energy.

Focus on Saudi Arabia's nuclear program has risen in the last month after the U.S. Congress opened an investigation into the potentially illegal transfer of sensitive technologies to the kingdom. This week the International Atomic Energy Agency, responsible for verifying that countries don't divert material for weapons, weighed in on what its inspectors need before the kingdom can start generating nuclear power.

Riyadh's nuclear program is developing “based on an old text” of safeguard rules, even as it expects to complete its first research reactor this year and plans to tap uranium reserves, according to IAEA Director General Yukiya Amano, who told journalists this week in Vienna that he's “appealing to all countries to rescind” those old ways of doing business.

“We're encouraging all countries to conclude and implement an additional protocol and that includes Saudi Arabia,” said Amano, who's also in charge of enforcing the 2015 nuclear deal struck between Iran and world powers. The Japanese career diplomat has called the set of rules established by that accord, which U.S. President Donald Trump withdrew from in May, as “the most rigorous monitoring mechanism ever negotiated.”

Rising power consumption and desalination costs are pushing Saudi Arabia to look at nuclear energy. The world's top crude exporter currently burns oil to generate most of its power and provide drinking water. Pivoting toward nuclear would reduce greenhouse gas emissions and free up more crude to sell on world markets.

But the IAEA comments could strike a precautionary note among vendors lining up to service the kingdom's nuclear ambitions. Receiving the imprimatur of IAEA inspectors, who account for gram-level quantities of nuclear material worldwide, is a precondition for receiving technologies and fuel. Without reaching a new understanding with monitors, Saudi plans for 3.2 gigawatts of atomic power by the end next decade could flounder.

Saudi Arabia didn't respond to emails and phone calls placed to its IAEA mission in the Austrian capital.

In order to get its nuclear program on track, Saudi Arabia may need to look at the allowances made by its regional rivals in Iran, according to Robert Kelley, a U.S. nuclear engineer and former IAEA director.

The Iran deal “is unprecedented in terms of previous monitoring regimes,” according to Kelley, who worked in the Department of Energy's nuclear-weapons complex before overseeing inspections in countries including Libya, South Africa and Iraq.

Maintaining that level of IAEA access to Iran's nuclear program is the reason that China, France, Germany, Russia and the U.K. continue to defy U.S. calls to abandon the 2015 deal and reimpose sanctions. Diplomats from those countries convened Wednesday in Vienna in their first meeting since the European Union established a trade channel to skirt U.S. threats.

For Saudi Arabia, which threatened a year ago to develop nuclear weapons if Iran did, aligning its atomic rule book with current best practices may be the best option for it to accelerate its nuclear program.

“It has a ridiculously weak agreement right now,” Kelley said. “The additional protocol is the gold standard and has some teeth to it. Getting that in place should be straightforward.”

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Rob Verdonck, John Deane

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