UAE EVALUATING NUCLEAR POWER

C O N F I D E N T I A L SECTION 01 OF 03 ABU DHABI 000045

SIPDIS

SIPDIS

STATE FOR NEA - GRAY, NEA/ARP
STATE FOR ISN -ROOD, MCNERNEY, ISN/CPI - FOLEY
NSC FOR PAN
ENERGY FOR MOLLY WILLIAMSON, AND GEORGE PERSON
UNVIE FOR SCHULTE

E.O. 12958: DECL: 01/10/2018
TAGS: ENRG KNNP ECON EINV AE
SUBJECT: UAE EVALUATING NUCLEAR POWER

REF: 07 ABU DHABI 1021

Classified By: Ambassador Michele J. Sison for reasons 1.4 (b & d).


1. (U) This is an action request. Please see para 12.


2. (C) sUMMARY: The UAE is evaluating the development of
peaceful nuclear power. UAE Foreign Minister Sheikh Abdullah
bin Zayed Al-Nahyan (ABZ) summoned nuclear supplier states'
ambassadors on January 10 to present a white paper and
solicit comments before the UAE publishes the paper in
February. According to ABZ, the UAE is interested in
evaluating a fully transparent nuclear power program that
would not lead to additional proliferation risks for the
region. ABZ emphasized that the UAE wanted to show the
region, "in particular Iran" that "this is the right way to
go forward." The UAE is committed to renouncing any domestic
enrichment or reprocessing capability in favor of long term
arrangements for the secure external supply and reprocessing
of nuclear fuel and favors proliferation-resistant designs.
His comments track with those heard from other Abu Dhabi
government officials. U.S. firm Thorium Power is advising
Abu Dhabi on the development of nuclear power and has told us
that Abu Dhabi is considering building ten plants and wants
to bring plants on line by 2017. Thorium also noted that
French firm Arriva is aggressively pursuing a nuclear power
deal. We understand that President Sarkozy will sign a
nuclear cooperation agreement during his January 15 visit to
Abu Dhabi. End Summary


3. (c) uae Foreign Minister Sheikh Abdullah bin Zayed
Al-Nahyan (AbZ) summoned Ambassadors from nuclear supplier
states (U.S., UK, France, Russia, China, Japan, Korea, and
Germany) on January 10 to explain that the UAE was evaluating
nuclear power and to stress that the UAE wanted to be fully
transparent with its allies and wished to seek their
assistance in the program. He stressed that the UAE would
take necessary steps to ensure that it pursued a fully
transparent program and met all its commitments to the
international community and the IAEA. He introduced Hamad
Al-Kaabi, the UAE's first (and only) nuclear engineer, as the
UAEG lead on the project (bio note para 11).


4. (C) Al-Kaabi explained that the UAE had carefully
evaluated projected electricity demand as tripling by 2020
(rough average annual growth of around nine percent),which
is slightly higher than the seven and a half percent average
annual electricity demand growth the UAE experienced over the
last five years. He stated that the UAE had carefully
reviewed the alternatives (hydrocarbon, renewable, nuclear),
and concluded that nuclear power made sense on both
environmental and economic grounds. The UAE will ensure that
any pursuit of nuclear power will be done in a completely
transparent fashion. The UAE commits to ratifying and
enforcing all major international non-proliferation
instruments (including the IAEA Additional Protocol to the
Safeguards Agreement and the NSG export guidelines) and
international safety instruments (including the IAEA
Convention on Nuclear Safety).


5. (C) The UAE will renounce any domestic enrichment or
reprocessing capability and to developing the security
infrastructure to protect nuclear facilities and materials.
The UAE is also committing to introducing a comprehensive
national legal framework covering all aspects of nuclear law
and establishing an independent and effective regulatory
authority empowered to implement the highest standard of
regulation and safety management across the sector. The UAE
will require help from the UAE's allies, ABZ emphasized. As
a first step, the UAE is seeking comments on its white paper
(via the Ministry of Foreign Affairs) before it goes public
in February. (Note: White Paper has been scanned and
e-mailed to desk, ISN, NSC - Pan, and Department of Energy.
End Note.)


6. (C) AbZ then explained that the UAE would evaluate all
feedback seriously. He noted that the UAE planned to publish
the white paper in February and hoped to receive comments
before then. ABZ added that the UAE was prepared to invest
considerable sums in this project over the next few decades
and hoped that it would be seen as a model. "To be frank,"

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he added, "we want to show the region, but in particular
Iran, that this is the right way to go forward." He stressed
that the UAE would enlist government-to-government assistance
and request technical cooperation from the IAEA and other
non-governmental bodies. He emphasized that the UAE would do
its utmost to fulfill obligations to the IAEA and the
international community, as well as to the UAE people.

Additional Background
--------------


7. (C) On January 7, Ambassador met with Thorium Power
President Seth Grae and Vice President and former U.S.
Ambassador Dennis Hays to discuss Thorium's contract with the
Emirate of Abu Dhabi to evaluate nuclear power. Grae
explained that Abu Dhabi was interested in moving forward as
quickly as possible to evaluate the feasibility of nuclear
power. Abu Dhabi, he stressed, wanted to move quickly.
Given supply constraints, a short delay on the front end of a
project could lead to long delays later in the project. He
explained that Thorium's role was to provide advice on
regulatory matters and on setting up a safe, transparent
nuclear power program, which would not contribute to
proliferation and would not have an enrichment capability.
Grae also stated that the UAE would also be interested in
investing in Thorium.


8. (C) According to Thorium, Abu Dhabi is evaluating a number
of sites in the UAE with a goal of building 10 reactors (at a
cost of USD 6 billion each). Due to power grid
considerations, Thorium believed that 1,000 MW reactors made
the most sense, although he noted that French Company Arriva
was pushing 1,600 MW reactors. Abu Dhabi's goal is to bring
initial power plants on line by 2017. Grae gave his
impression that Abu Dhabi was moving out ahead of the GCC
program, out of a belief that the GCC would move at the speed
of its slowest member. He also noted that Abu Dhabi
officials did not seem to understand that "nuclear power was
different" and needed much more lead time to bring on line.


9. (C) Grae also stressed Abu Dhabi's interest in developing
a peaceful nuclear program and avoiding any indications that
it would pursue nuclear weapons capability. He emphasized
Thorium's close cooperation with the U.S. Department of
Energy's non-proliferation office. Grae also explained that
the French company Arriva was actively pushing for business
in Abu Dhabi. He explained that under French law, French
nuclear fuel is reprocessed in France, but then the plutonium
is shipped back to the owner of record (i.e., Abu Dhabi). He
stressed that Thorium would share information with the U.S.
government, but that Arriva would be a black hole. (Note:
We understand that the French plan to sign a nuclear
cooperation agreement with the UAE during President Sarkozy's
January 16 visit to Abu Dhabi. End Note.)


10. (C) Comment: Despite having the fifth-largest proven gas
reserves in the world, the UAE is not producing enough gas to
meet its current power needs and is facing massive increases
in power requirements to meet ambitious development plans.
Abu Dhabi has already taken some steps to meet increased
demand, including via the Dolphin Project importing natural
gas from Qatar and putting out for tender a plan to develop
the Emirate's significant sour gas reserves. It estimates
however, that the volumes of natural gas available to the
power sector will be insufficient to meet projected demand.
In addition, some Emiratis have noted that oil and gas have
more value to Abu Dhabi when sold or used as feedstock than
burned to generate power. It is apparent, however, that Abu
Dhabi is pursuing this option independently and is not
inclined to wait for the rest of the GCC. End Comment.


11. (SBU) Bio Note: Hamad Al-Kaabi has a master's degree
(2007) in nuclear physics from Purdue University. He works
for Abu Dhabi's Executive Affairs Authority and as the
advisor on nuclear affairs for the MFA. He is 27 years old
and the UAE's only nuclear scientist. He is also the son of
MG Ali Mohammed Al-Kaabi, UAE Land Forces Commander. End Bio
Note.


12. (C) Action Request: Please provide Embassy with comments
on the draft white paper as soon as possible. In addition,

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the UAE will be looking for cooperation and assistance and
will likely be sending teams to the U.S. (and other
countries) for discussions. The issue of nuclear power is
very likely to be raised by the UAEG during the upcoming
POTUS and Energy Secretary Bodman visits. End Action Request.
SISON