Underground at Anhalter Bahnhof and waiting for the S2 train a couple of mornings ago,  a reporter rang me up to talk about Iran.

He had read this piece written a few days before, in which I had run down why the Russians had become increasingly perturbed in recent months about Iran’s claim that it needed to enrich and fabricate fuel for its Bushehr-1 reactor. Based on what Russian sources have told me since November, I’m nearly certain that vendor Rosatom has no real desire to permit Iran to make this fuel anytime soon, regardless of my encouragement back in the beginning of 2013 that Russia and other powers negotiating with Iran seriously think about that long-term option.

The journalist, Jonathan Tirone of Bloomberg, roped me into a discussion (by this time I was coasting on the S-Bahn through Berlin-Zehlendorf) about whether Iran, in lieu of fabricating fuel for Bushehr, could scratch its itch by enriching some uranium and shipping it off to Russia to be fabricated into fuel for the reactor.

That conversation contributed to this story which Tirone’s editors sent out on the wire later the same day. Going beyond the point that everyone and his uncle had noticed the day before–that the Iranians were openly using separative work units (SWU) instead of the number of centrifuges as a benchmark in framing their “practical needs” to enrich uranium–the piece established that, in principle, a gambit could be thought up permitting Iran to enrich some fuel for its power reactors, as I had suggested 18 months ago.

Thinking along those lines, and going beyond what made it into print in the wire article, the powers and Iran, were they so inclined, could agree to something like this:

  • Iran could use a specified and limited number of centrifuges (or instead installed centrifuge capacity expressed in SWU/year) to produce enriched uranium product (EUP) which would be shipped to Russian fuel fabricator TVEL to make a limited amount of fabricated fuel for the reactor at Bushehr.
  • Iran might initially be permitted to enrich up to about 10,000 SWU/y (roughly consistent with the number of centrifuges Iran is currently operating), and gradually increase this amount.
  • The agreement would expressly allow the enrichment for the purpose of producing a specific amount of EUP dedicated to fueling specific reactors in Iran only.
  • Since a Russo-Iran understanding from 1992 calls for Russia to supply the fuel for Bushehr for the entire operating lifetime of the reactor, going this route would penalize Russian industry. So Iran and the powers would have to work out a deal to compensate Russian industry for the revenue it would forfeit in permitting Iran to enrich the uranium.
  • This arrangement would obtain for as long as the comprehensive agreement between the EU3+3 and Iran remained in force. Thereafter Iran would be free to tailor its nuclear fuel production infrastructure to meet its “practical needs” by a combination of domestic activities and reliance on the world market.
  • With that end in sight, the powers and especially Russia could in coming years negotiate with Iran a longer-term cooperative arrangement underpinned by political incentives (not necessarily limited to nuclear energy) that would encourage Iran to rely on outside sources for fuel and enrichment services for most of what it needs after the “final step” expires.
  • How much centrifuge capacity Iran would be permitted under the comprehensive agreement to produce EUP for its reactor (or reactors, should enrichment for the IR-40 unit be included in such a deal) would depend on the extent to which Iran satisfies the EU3+3 on issues it believes essential.
  • Accordingly, the longer the term of a comprehensive agreement, and the more Iran cooperates with the IAEA in answering PMD-related questions, addresses concerns about the IR-40, and permits access and verification beyond what’s in Iran’s Additional Protocol (AP-plus measures would be developed in part from what the IAEA learned from Iran about its nuclear weapons-related capabilities), the more centrifuges Iran would be permitted to produce the EUP it needs.

 

If, as we have heard, the negotiation between EU+3 and Iran is getting hung up over the number of centrifuges Iran is allowed to operate, the above approach might overcome that impasse, especially if Iran accommodates the powers on other significant matters as I suggest above, and Russian industry is compensated.

Breakout is the Bottom Line

But every plan which has been advocated so far to deal with Iran’s demand for “enrichment equity” has come with its own potential risks and perceived downsides.

My boss George Perkovich, for example, last week dusted off the proposal that, instead of allowing Iran to enrich uranium for Bushehr or fabricate the fuel in Iran, Russia should fabricate several years’ requirements for fresh fuel for Bushehr which could be stored in Iran. That’s a good idea. But it, as well as a separate plan put forth by colleagues at Princeton, would also encourage Iran to transition to far more powerful centrifuges.

At least until recently, some people looking in at the EU3+3 group, thinking about the future of Iran’s centrifuge R&D program, aimed to blunt development of more advanced centrifuges by Iran, at least for as long as the comprehensive agreement with Iran would be in force. They were not comfortable with a deal that would suspend for a limited time uranium enrichment by Iran but allowed Iran without restraint to develop centrifuges capable of producing significant quantities of weapons-grade uranium far more quickly than P-1s and which–as soon as the comprehensive agreement expired–could be set up in more compact and more easily-hidden cascades. (Question: Would the EU3+3 also inform NSG members they may permit export to Iran of the carbon fiber and other nuclear and dual-use items it needs for advanced centrifuges? You may bet that Iran will request this courtesy.) The counterargument is that ultimately, after the expiration of the comprehensive agreement, nothing can prevent Iran from revving up its centrifuge R&D effort, and that, from the point of view of verification, it won’t matter to the IAEA how capable Iran’s centrifuges are.

The alternative approach I put forth above presents completely different problems.

Using recent long-term enrichment contracts as a benchmark, the cost of compensating Russian industry (in fact, Tenex) for foregone enrichment business in Iran during the term of the comprehensive agreement might be something like $14 million per year if Iran were eventually to enrich enough uranium for one reload per year. That’s peanuts compared to the $20-billion barter deal which Iran and Russia have reportedly put together, or an equivalent-priced arrangement for four new VVER power plants not yet finalized.

The deal I outline above puts Russia onto a slippery slope, however, as it could be expected that, once Russia honors Iran’s demand to enrich uranium for a portion of the Bushehr fuel, Iran would squeeze Russia to permit Iran to enrich all the fuel needed for Bushehr and any new reactors. If Iran and Russia eventually conclude the sale of four more VVER power plants, if we assume an operating regime based on quarter-core reloads, these plus Bushehr-1 (beyond the first cores) would annually require about 500,000 SWU/y–the equivalent of perhaps 700,000 P1 centrifuges or about 20,000 advanced machines if Iran’s throughput estimate of 24 SWU/machine/y is credible. At that point we’re talking serious money for Russian industry:  If Iran enriches all the uranium needed for these reactors, the Russians would forfeit maybe $70-million per year in revenue from performing enrichment services under long-term contracts with Iran.

But at the end of the day, and for better or worse, any plan permitting Iran to enrich its own power reactor fuel anytime soon runs aground on the formidable iceberg of the Joint Plan of Action’s breakout logic–developed in part to come up with hard numbers to persuade critics of diplomacy in Israel and the U.S. Congress that the JPOA right from the outset would turn back Iran’s clock to dash to a bomb.

The western powers–and until now Russia has been in agreement with them–don’t want to see Iran justifying more enrichment by producing power reactor fuel–period. According to Bob Einhorn, who has transmitted quite a bit of U.S. government thinking about the negotiations into the public space, Iranian demands for “an enrichment capacity greater than a few thousand first-generation centrifuges would give Iran an unacceptably rapid breakout capability” and therefore be a “show-stopper.”