Late last year, all attention on the Middle East seemed focused on Iran and the questions surrounding its nuclear program. Despite statements from its leadership that it was developing nuclear power for civilian use, the widely held suspicion in the West and among Iran’s Arab neighbors was that Iran was actually pursuing a nuclear weapons program. The prospect of a preemptive strike by Israel against Iran entered the public sphere, and later it was revealed by The New York Times that the U.S. and Israel developed a computer worm to attack computers used by the Iranians in their nuclear facilities.
But since a massive earthquake and tsunami crippled Japan’s Fukushima nuclear power plant in March, concern has shifted to the safety of nuclear plants around the world. Every facility has come under close local scrutiny and faced demands for tighter safety protocols. The ongoing nuclear crisis in Japan has also raised concerns in the Middle East, a region that is just beginning to develop its nuclear power capabilities.
At the end of 2008, the Gulf Cooperation Council (GCC) authorized nuclear development for its Gulf members. The first among them to launch a civil nuclear program was the United Arab Emirates (UAE). It plans to build four nuclear energy plants in its Western region, and the first plant is expected to be completed by 2017.
But authorities in the UAE have already been forced to prove these plants will be safe, as public opinion has soured on nuclear energy following Japan’s nuclear crisis. According to the Abu Dhabi-owned The National newspaper, a television poll found that only 5% of UAE residents would choose nuclear power as an energy source, because of Japan’s problems. As a result, the UAE’s nuclear regulator has asked the South Korean firm building the plant to explain what lessons has it learned from Fukushima. Hee-Yong Lee, senior vice-president at Korea Electric Power Corporation (Kepco), said in a report his firm would build in the UAE the "world’s safest nuclear plant."
Despite the concerns, there will likely be no stoppage of work on the plants. "In comparison with Germany or Italy where they face controversy about nuclear energy, the UAE has no political problem," says Lady Barbara Judge, the former chairman of the U.K. Atomic Energy Authority. "The whole government, and the many rulers, think nuclear is a good idea. Nuclear development is a national project, which everybody is behind."
Oil Wells To Nuclear Plants
At first glance, the need for an oil exporting country to develop alternative energy resources does not seem obvious. The UAE has just roughly 10% of the world’s total oil reserves, according to the Abu Dhabi National Oil Company. But the country sees its own power demands increasing in the near future, and has determined oil and gas will not be enough. "They have the highest energy consumption in the world sustained by high subsidies," says Samuel Ciszuk, senior energy analyst for Middle East and North Africa at IHS Global Insight. "These oil-rich countries can simply not afford a blackout. Nuclear is the only option on short notice."
The UAE estimates that its peak demand for electricity will reach more than 40 gigawatts by 2020, twice the current capacity. Saudi Arabia expects the same energy need for 2030. At the same time, an oil production peak could be reached in 20 years, according to the International Atomic Energy Agency. Gas reserves are also difficult to estimate. Although new gas pockets are regularly discovered in the region, Qatar is the only Gulf country to have sufficient gas reserves. "None of the hydrocarbon reserves would be able to meet the 7 to 15% annual growth of energy demand in the Gulf," says Jim Krane, Gulf expert and author of City of Gold: Dubai and the Dream of Capitalism.
There is also the economic imperative. "The Gulf countries prefer to import natural gas — or LNG — rather than burning crude oil," Krane adds. Selling oil abroad is obviously more profitable than burning it to make domestic energy or selling it to local consumers, since Gulf countries have long subsidized oil for domestic use. The demand from the burgeoning economies of India and China has also provided vast, lucrative markets for oil. In 2009, Saudi oil exports to China reached one million barrels per day (bpd), or 20% of its total oil imports and nearly double the number of barrels it exported the previous year; in contrast, U.S. imports of Saudi oil fell to less than one million bpd in 2009 for the first time in over two decades.
Renewable energies are in development, such as the effort by Abu Dhabi to create Masdar City, a carbon-neutral city, but they are not mature technologies and cannot alone satisfy demand. Cost is also an important factor: Since launching the Masdar development, authorities have tried to lower its costs, but it still is expected to have a final price tag of US$16 billion. The nuclear plants the UAE are developing are not cheap either — the initial contract for all four is worth US$20 billion. But past the initial investment in nuclear power, the plants are expected to generate power at a quarter of the cost of gas-produced electricity.
There has been hesitancy in the Gulf region to employ nuclear power, partly because of concerns of vulnerability in case of an accident. "If any accident occurs, the disaster will hit all the six GCC countries," Krane says. "A release of nuclear waste will contaminate the sea water which is vital for the entire Gulf. For that reason, no one was happy with the nuclear development in Iran."
In the 1960s, Egypt, Algeria, Turkey and Iran, were considering nuclear energy programs. By the early 1980s, Egypt had the most advanced program, aside from Iraq, which had its nuclear reactor at Osirak destroyed by Israeli jets in 1981 because of its efforts to develop nuclear weapons. The first oil crisis in 1973 significantly increased the interest in nuclear power, as a cheaper form of energy.
"Egypt and Turkey didn’t master the technology skills on a similar level as in the West, but they made an effort to prepare the expertise," says Hamid Aït Abderrahim, deputy director-general of SCK-CEN, the Belgian Nuclear Research Centre. "When they achieved that level, after a normal 15-year process, the Chernobyl disaster occurred. By coincidence, the oil price had fallen as well. Nuclear power became too expensive and the process was put on hold. The educated experts left the Middle East for Western countries where nuclear power was still developed," Abderrahimgf adds.
Different Than Iran
Ever since it was labeled a member of the ‘Axis of Evil,’ Iran has come under scrutiny for its nuclear program. Despite repeatedly denying it wants anything other than to develop nuclear power for civilian use, the international community has long suspected Iran has a program to enrich nuclear fuel, possibly for use as a weapon.
To avoid such negative associations, the UAE has strived for complete international support for its own program. From the beginning, international experts have been involved in its efforts to develop nuclear knowledge. The UAE has signed high-level cooperation deals with the U.S., the U.K. and Russia. The International Advisory Board (IAB) was founded to provide the UAE with nuclear program expertise and knowledge for peaceful nuclear energy. The IAB meets twice a year and works in co-ordination with the IAEA to monitor the transparency and safety measures to which the country has committed.
"They tell us what they do, we ask questions and they give us more explanations," says Judge, a member of the international board that advises the UAE on its nuclear development. "We do a lot of due diligence too. But we haven’t seen the power plant site yet." Plans for the UAE’s plants were recently displayed in Vienna at the fifth review meeting of the convention on nuclear safety, held by the IAEA.
Additionally, the UAE signed the Non-Proliferation Treaty, alongside its fellow Gulf Countries. The Gulf countries have committed to declaring their activities and to allowing the IAEA to do on-site inspections. "It is peaceful and transparent. Abu Dhabi nuclear development will be a model for the rest of the world," added Judge, a Wharton Alumni.
The UAE has also insisted on safety and best practices, she adds. "Abu Dhabi has the gold standard of nuclear projects. They work hard, they put the best experts on the project, they want good technology, and they ask for high safety standards. It is very impressive. The UAE is really willing to succeed in civil nuclear. They started from scratch, and they’ve put plenty of effort and money into this project."
The Emirati legislature passed nuclear legislation, and the federal government set up regulatory bodies. "The UAE is used to borrowing framework legislation," says IHS’s Ciszuk. "They copied the free zones from the U.K., with success. This is something they are doing for nuclear use too. It accelerates the nuclear preparations."
Currently, legislation is being drafted in order to regulate import and export of nuclear materials. Due to the Fukushima disaster, another law, which will determine what happens in case of a nuclear accident, has taken even greater importance. Both pieces of legislation would come into force before any nuclear fuel arrives in the UAE, according to officials.
But critics raise concern about the non-independence of the different institutions. "Ultimately, all the institutions are held in the hands of the ruling family," Krane says. "Without separate oversight, there is not really a division of responsibility, no real control in the balance."
Safety After Fukushima
The UAE’s choice to build its nuclear power plants, South Korean contractor Kepco, beat out competition from a French consortium consisting of Areva and Suez, and an American-Japanese consortium. The major element taken into account was price. Kepco claimed it could build four nuclear reactors for US$20 billion. Following the Fukushima disaster, a choice based primarily on price does not seem wise. The South Koreans were good at lowering cost, while other consortiums were more expensive because of the many safety systems they added.
Ciszuk suggests that some of the safety measures offered by the Western companies were impractical. "Europe and America go a step too far by adding an unnecessary amount of safety levels," he says. "All these safety mechanisms added on top, reduce the cost efficiency." On its part, Kepco assured that its technology, the Advanced Power Reactor APR-1400, is safe. The devices can cope with meltdown or hydrogen explosion, strong earthquakes or a tsunami, the firm says. ENEC, the Emirati nuclear company that will work with Kepco, added the plant would manage high air and water temperature and sandstorms. Kepco will review its proposal and add safety levels if needed.
The UAE also turned down the American-Japanese and the French consortiums, because they proposed new technology, while the South Korean reactor is already operational on ten sites in South Korea. "A new design increases the chance to have a potential delay. The UAE wanted the plant as fast as possible," Krane says. The UAE expects to have a first plant operational by 2017. Many experts doubt the deadline will be met. "The year 2017 is not unthinkable timing. Similar reactors have been built in 56 months in China. The record was 46 months in China. South Korea built its last reactor in 60 months, or 5 years. In this way, the 2017 target is not completely foolish once the Emirati regulator will give the authorization," Abderrahim says. Kepco expects the final UAE nuclear reactors to begin operating by 2020.
The Abu Dhabi nuclear power plant site of Braka in the UAE’s Western region was also chosen carefully. Braka is far from any city (300 km from the capital), yet far enough from the sea to neither contaminate water in the case of leakage, nor be situated in an earthquake or tsunami zone. The selection met or exceeded international standards, according to international evaluations. Conversely, a future Iranian power plant in Bushehr has worried all of the GCC countries, particularly Kuwait, which is closest to the site. They fear there are insufficient safeguards at the Iranian plant, though it is built by Russia. The Islamic Republic refuses to communicate about it and remains very sensitive about any outside intervention in its nuclear program.
The next Arab countries to develop nuclear energy for domestic energy needs are Saudi Arabia and Jordan. While Saudi Arabia has the luxury of being able to finance their projects, Jordan desperately needs to produce cheap energy, given that 90% of its energy is imported. Jordan signed a contract with the French company Areva, while Saudi Arabia is in talks with companies from the U.S. and Japan.
"Jordan is moving quickly, its legal system is more mature, but funding is still a problem," Ciszuk says. "Saudi might have the support of the royal family. But the Kingdom will face legal issues since the Islamic clergy is very powerful and has to approve everything. It won’t be easy to have an independent regulatory body. Nuclear development is not impossible but will be difficult. For me, the next country to adopt nuclear power would be Egypt. They have looked at nuclear for years, and they have a more solid base now. Egypt hopes to open a tender later this year or next year."
No other Gulf country is close to launching a nuclear power plant soon. Qatar continues to build its gas resources, although it has slowly prepared the first steps toward nuclear power, in co-operation with France and Russia. Oman signed a deal with Russia in 2009. "Kuwait chose the French consortium which lost the Emirati tender," Ciszuk adds. "But the state has difficulties in parliament and the ruling family working together in order to set up a nuclear legal framework. Bahrain is interested, because it imports a lot of power, but faces financial and population issues. A last country in the region where nuclear would exist, might be Iraq."
Nuclear energy might have a long future in the Gulf. But there are wider energy concerns that also need to be addressed to ensure sustainability, Krane says. "The UAE and other Gulf countries should rather work on reducing the energy consumption instead of increasing the supply. They can afford it now because they are wealthy countries."
