IAEA: JOINT STATE/DOE LETTER URGING DG TO LEAD ON

UNCLAS UNVIE VIENNA 000069

SIPDIS

DEPT FOR S, D(S),T, IO, AND ISN
DOE FOR NNSA STEVE BLACK, NA-20 HEATHER LOONEY

E.O. 12958: N/A
TAGS: ENRG IAEA ETTC KNNP MNUC PARM TRGY
SUBJECT: IAEA: JOINT STATE/DOE LETTER URGING DG TO LEAD ON
INTERNATIONAL FUEL BANK

REF: A. REF: UNVIE 47

B. UNVIE 41

C. UNVIE 40


1. (U) SUMMARY: Both the President and Secretary have
publicly endorsed the establishment of an international
nuclear fuel bank (INFB) under the auspices of the IAEA. Our
strategy to establish a fuel bank has three elements: 1)
encouraging DG ElBaradei to resume a leadership role; 2) move
one or two concrete proposals to the IAEA Board; and 3)
engaging potential recipients of a fuel bank. To advance the
first element prior to the Board meeting, Mission recommends
a joint letter from Secretary Clinton and Secretary Chu
urging ElBaradei to play a more active proponency role
(suggested draft text para. 3). Mission recommends the
letter be sent by Wednesday, February 25, in order to
influence the Director General's statement to the IAEA Board
on March 2. END SUMMARY.

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BACKGROUND
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2. (U) A top priority in the run-up to the March Board of
Governors meeting, UNVIE continues to advance this goal.
Following the conclusion of IAEA talks with Russia on a fuel
reserve that would use Russian-transferred LEU, Secretariat
experts will advise the DG to comment on the Russian proposal
and to brief Member States on the status of the parallel
Nuclear Threat Initiative (NTI) proposal. The Secretariat
also expects Russia will provide a preview of its proposal at
the March Board under "Any Other Business" to spur Member
States to discuss the issue in more detail at the June Board.
Supportive national statements after the Russian preview
would help to advance the discussion of assuring reliable
access to nuclear fuel (RANF),a concept of which ElBaradei
was an early proponent.


3. (U) To advance toward implementation, one or more
concrete proposals for an IAEA role in RANF must come to the
Board of Governors for approval. Should IAEA DG ElBaradei's
staff be successful in positioning Russia to speak at the
March Board, Member States will hear that an agreement has
been reached between Moscow and the Secretariat on
arrangements for a reserve of LEU at the enrichment center in
Angarsk to be held for IAEA procurement and transfer under
explicit criteria. This arrangement would be grounded in two
agreements (one between Russia and the IAEA and one between
the IAEA and a potential recipient state experiencing a
nuclear fuel disruption.) These agreements would have to be
approved by the Board at a future date, potentially June.
Secretariat staff will also advise the DG to discuss the
Agency's plans to develop a fuel bank concept using the funds
contributed through the NTI challenge grant. In order to use
the NTI funds, the Board must issue a decision to this
effect. Preliminary discussion in the March Board would set
the stage for a first Board action in June to accept the
funds contributed through the NTI challenge grant and,
optimistically, approve the broad contours of the Agency's
fuel bank concept. A key worry for ElBaradei is G-77 and NAM
opposition to an INFB, which has caused him to step back from
providing leadership on this issue. In order for the issue
to gain momentum among member states, the DG must once again
assume his leadership role in establishing an INFB. The IAEA
also faces a September 2009 deadline set by NTI, already
extended once, for expenditure of its funding.

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Joint State/DOE Letter
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4. (U) Mission proposes a joint letter, signed by Secretary
Clinton and Secretary Chu urging ElBaradei to move forward on
this issue quickly. Mission proposes following text:


Dear Dr. ElBaradei,

We look forward to working with you in our capacities as
Secretary of State and Secretary of Energy. The
International Atomic Energy Agency is of enormous importance
to the United States and other countries around the world.
President Obama has made clear his strong support for the
Agency.

President Obama also supports the establishment of new
mechanisms, including an international fuel bank, to help
assure supply of nuclear fuel to countries interested in

nuclear power while safeguarding against the proliferation of
bomb-making technologies.

The proposal for an IAEA-administered international fuel bank
mechanism would serve this purpose. The U.S. supports the
NTI proposal, as reflected by the Department of Energy's
contribution of nearly $50 million to match the NTI challenge
grant.

The complexities of establishing a fuel bank are many, and we
are grateful for your early and strong support. As member
states continue to grapple with this issue, we rely on your
leadership role in bringing concrete proposals to the Board
of Governors for consideration. With your support, a
carefully managed discussion in the Board can help member
states work together to make the fuel bank a reality. END
TEXT
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