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Prospects For US-Saudi Nuclear Energy Cooperation – Analysis

By Christopher M. Blanchard and Paul K. Kerr The 118thCongress may engage the Biden Administrationwith regard to U.S. policy toward Saudi Arabia’s NationalProject for Atomic Energy and the potential for future U.S.- Saudi nuclear energy cooperation. In May 2022, Saudi Arabia invited technical bids related to the planned construction of two nuclear reactors, and, in January 2023, aSaudi minister restated the kingdom’s intention touse its domestic uranium resources for producing low-enriched uranium (LEU) as nuclear fuel. Congress and successive Administrations have sought thekingdom’scommitment to forgo the most proliferation- sensitive nuclear facilities—those for enriching uranium or reprocessing spent nuclear fuel to obtain plutonium—andSaudi Arabia’sacceptance of enhanced international safeguards on its nuclear program. Previous Administrations linked prospects for a U.S.-Saudi nuclear cooperation agreement to these conditions, and Congress has limited the use of certain funds to support possible U.S. nuclear exports to Saudi Arabia unless the kingdom makes such commitments. Depending on its nature and extent, possible future U.S.-Saudi nuclear cooperation may require Department of Energy (DOE) authorizations and/or congressional approval of U.S.-Saudi agreements. Saudi Nuclear Plans and Policy In July 2017, Saudi Arabia approved a National Project for Atomic Energy, including plans to build large and small nuclear reactors for electricity production and water desalination. The project is part of a broader Saudi government effort to diversify thekingdom’seconomy and expand the use of non-fossil-fuel-based energy. SaudiArabia holds 16% of the world’s proven reserves ofcrudeoil, has the world’s fourth-largest reserves of natural gas, and consumes the second most energy in the Middle East. Oil and natural gas generate roughly 39% and 60% of thekingdom’s electricity, respectively. Saudi authorities have worked to develop required legal and regulatory frameworks with the support of the IAEA. Agency officials completed a nuclear infrastructure review in Saudi Arabia in 2018 and issued a final report in January 2019. The kingdom established a Nuclear and Radiological Regulatory Commission in March 2018, and, in March 2022, created the Saudi Nuclear Energy Holding Company (SNEHC) to develop and operate planned nuclear facilities. In 2017, the Saudi government solicited marketing information from potential international partner companies for reactor construction; it has since extended its formal bidding process several times. In May 2022, Saudi officials invited technical bids from companies in Russia, China, and South Korea related to the planned construction of two 1.4 giga-watt electric (GWe) reactors at Khor Duweihin, a coastal area between thekingdom’sborders with Qatar and the United Arab Emirates (UAE). According to Saudi officials, the kingdom intends to develop the capacity to produce nuclear fuel using domestic resources. In 2019, Saudi Energy Minister Prince Abd al Aziz bin Salman Al Saud said,“even if we scale up [nuclear power] ... we want to go to the full cycle, to producing the uranium, enriching the uranium.”The minister further stated in January 2023 that Saudi Arabia intends to use its substantial domestic uranium resources for producing LEU. Saudi Arabia is a state party to the nuclear Nonproliferation Treaty (NPT), which requires the government to accept International Atomic Energy Agency (IAEA) safeguards on all nuclear facilities. Such comprehensive safeguards agreements (CSA) impede the development of nuclear weapons. Saudi Arabia has not concluded an additional protocol to its CSA. Such a protocol would improve theIAEA’sability to investigate undeclared nuclear facilities and activities.Saudi Arabia’sCSA does include a small quantities protocol (SQP) which, according to the IAEA,“holds in abeyance” most comprehensive safeguardsagreement procedures if the government neither possesses more than a specified amount of nuclear material nor has introduced nuclear material into a facility. The kingdom submitted a request to the IAEA in July 2024 to rescind the SQP and "implement the full" CSA. Other international mechanisms are designed to restrict the spread of sensitive nuclear technology, including enrichment technology. In 2020, Saudi authorities denied press reports citing unnamed Western officials claiming that Saudi Arabia, withChina’s help, built a facility for milling uranium oxide ore.Saudi Arabia’sIAEA safeguards agreement requires the government to declare such a facility to the agency. Other press reports discussed another possible undeclared site. Threats to the security of critical Saudi infrastructure may raise concerns about the security of Saudi nuclear facilities. The U.S. government notes security threats in Saudi Arabia from terrorist groups and hostile regional actors, including missile and rocket attacks on Saudi energy infrastructure and government facilities that U.S. officials attribute to Iran or Iran-backed groups. Ongoing U.S.-Saudi security cooperation seeks to mitigate these threats and others. U.S.-Saudi Nuclear Cooperation In 2008, the United States and Saudi Arabia signed a Memorandum of Understanding (MOU) stating bilateral intent to cooperate on nuclear activities in the fields of medicine, industry, and electricity production. The nonbinding MOU stated Saudi Arabia’s intent “to rely on existing international markets for nuclear fuel services as an alternative to the pursuit of enrichment and reprocessing.” The Obama and Trump Administrations engaged the kingdom on the prospects for reaching a bilateral civil nuclear energy agreement, including through formal negotiations over the text of a proposed“123 agreement”(see below) in 2012 and 2018. The Government Accountability Office (GAO) reported in 2020 that the governments had“not made significant progress toward a nuclear cooperation agreement because of persistent differences ... over nonproliferation conditions, including U.S. insistence that Saudi Arabia conclude an Additional Protocol with the IAEA and that Saudi Arabia agree torestrictions on enrichment and reprocessing.”The State Department said in August 2020 that the United States would seekan agreement “with strong nonproliferationprotections that will enable Saudi and U.S. nuclearindustries to cooperate.” National Nuclear Security Administration Administrator Jill Hruby and Secretary of Energy Jennifer Granholm have talked to Saudi leaders about the government’s nuclear program, Hruby told the Senate Armed Services Committeein April 2023, adding that the Administration is “asking theSaudis to be consistent with nonproliferation standards thatwe have for every other country that we work with.” In June 2023, the Saudi Foreign Minister said the kingdomwould “very much prefer to be able to have the U.S. as one of the bidders” for its program. As of July 2024, China National Nuclear Corporation, EDF of France, the Korea Electric Power Corporation (KEPCO), and Rosatom of Russia reportedly were approved bidders. From 2017 to 2019, DOE granted seven “Part 810”authorizations (per 10 C.F.R. §810) for U.S. companies to engage in civil nuclear discussions, including marketing,with Saudi Arabia in response to the kingdom’s 2017request for marketing information. In 2022, U.S. and Saudi officials signed an MOU on the exchange of technical information and cooperation in nuclear safety matters. According to unnamed U.S. and Israeli officials cited in a September 2023 press report, the United States is considering a U.S.-run uranium enrichment operation in Saudi Arabia in conjunction with proposals to encourage Saudi Arabia to normalize relations with Israel. U.S. Nuclear Cooperation Requirements Section 123 of the Atomic Energy Act of 1954, as amended (AEA, 22 U.S.C. §§2011 et seq.), requires nuclear cooperation agreements for significant nuclear cooperation with foreign governments. Such cooperation includes the transfer of certain U.S.-origin nuclear material subject to licensing for commercial, medical, and industrial purposes; the export of reactors and critical reactor components; and other commodities under Nuclear Regulatory Commission export licensing authority. Foreign entities’ nuclear exports to Saudi Arabia containing U.S.-origin technology might require U.S. consent. So-called“123 agreements,” must include the terms,conditions, duration, nature, and scope of cooperation, as well as meet several nonproliferation criteria. The President must make awritten determination “that the performance ofthe proposed agreement will promote, and will not constitutean unreasonable risk to, the common defense and security.”The AEA requires Congress to review a 123 agreement for two time periods totaling 90 days of continuous session. If the President has not exempted the agreement from any requirements of Section 123(a), it becomes effective at the end of the second period, unless, during that time, Congress adopts a joint resolution disapproving the agreement and the resolution becomes law. Section 57(b)(2) of the AEA allowsfor limited cooperation related to the “development orproduction of any special nuclear material outside of the United States.” A 123 agreement is not necessary for such cooperation, which mostly involves transfers of unclassified nuclear technology and services pursuant to“Part 810 authorizations”that are not subject to congressional review. Section 123 agreements do not require recipient governments to forgo enrichment or reprocessing. The 2009 U.S.-UAE 123 agreement provides the United States the right to terminate nuclear cooperation with that country if the UAE“possesses sensitive nuclear facilities within itsterritory or otherwise engages in activities within its territory relating to enrichment of uranium or reprocessing of nuclear fuel.” An Agreed Minute states that its terms “shall be noless favorable in scope and effect than those which may beaccorded” to other countries in the Middle East. If the U.S. government concludes a more-favorable 123 agreement in the region, the Minute says the United States will, at theUAE’s request, consult with thegovernment“regarding the possibility of amending” the123 agreement with equally favorable terms. Congress and U.S. Policy Since FY2020, Congress has directed that no funds appropriated for the Department of State, foreign operations, and related programs“should” be used by the Export-Import bank to support nuclear exports to Saudi Arabia until the kingdomhas a 123 agreement “in effect”; “has committed torenounce uranium enrichment and reprocessing on its territory under that agreement”; and has “signedandimplemented” an Additional Protocol with the IAEA(most recently for FY2024 in Section 7041(h), Division F, P.L. 118-47). Proposed appropriations bills for FY2025 contain the same directive (H.R. 8771 and S. 4797). Since 2018, some Members have introduced bills that would have required a congressional joint resolution of approval before a 123 agreement with Saudi Arabia could take effect. About the authors Christopher M. Blanchard, Specialist in Middle Eastern Affairs Paul K. Kerr, Specialist in Nonproliferation Source: This article was published by the Congressional Research Service (CRS)